Fennec Pharmaceuticals Inc. (NASDAQ:FENC) (TSX:FRX), a specialty
pharmaceutical company focused on the development of
PEDMARK™ (a unique formulation of sodium thiosulfate (STS))
for the prevention of platinum-induced ototoxicity in pediatric
patients, today reported its financial results for the third
quarter ended September 30, 2017.
“The positive results from SIOPEL 6 announced in
October represent a significant step in establishing a new paradigm
in pediatric oncology with the potential to benefit the lives of
patients and their families," stated Rosty Raykov, CEO of Fennec.
"We remain focused on the steps necessary to complete the
regulatory filings in both the US and Europe for approval."
SIOPEL 6 Study
- SIOPEL 6 study met its primary endpoint demonstrating that the
addition of STS significantly reduces the incidence of
cisplatin-induced hearing loss without any evidence of tumor
protection.
- Among the 99 evaluable patients in SIOPEL 6, hearing loss
occurred in 30/45=67% treated with Cisplatin (Cis) alone and in
20/54=37.0% treated with Cis+STS, corresponding to a relative risk
of 0.56 (P=0.0033).
- Fennec plans to pursue regulatory approval for
PEDMARK™ based on the data from the SIOPEL 6 study along with
the proof of principle data from COG ACCL0431.
- STS has received Orphan Drug Designation in the US in this
setting and plans to pursue European Market Exclusivity for
Pediatric Use upon approval.
Upcoming Investor Events:
- 2017 Jefferies London Healthcare Conference -
Rosty Raykov, CEO of Fennec, will provide an overview of the
Company's business on Thursday, November 16 at 4:40 pm GMT at the
2017 Jefferies London Healthcare Conference. The Fennec
presentation will be webcast live and can be accessed by visiting
the investors relations sections of the Company’s website
at http://fennecpharma.com/investors/presentations-events/ .
A replay of the presentation will also be available and archived on
the site for ninety days.
Third Quarter Financial
Results
The selected financial data presented below is
derived from our unaudited condensed consolidated financial
statements which were prepared in accordance with U.S. generally
accepted accounting principles. The complete interim
unaudited consolidated financial statements for the period ended
September 30, 2017 and management's discussion and analysis of
financial condition and results of operations will be available via
www.sec.gov and www.sedar.com. All values are presented in
thousands unless otherwise noted.
Interim Unaudited Condensed Statement of
Operations |
(U.S. Dollars in thousands except per share
amounts) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30,2017 |
|
September 30,2016 |
|
September 30,2017 |
|
September 30,2016 |
Revenue |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
|
492 |
|
|
|
112 |
|
|
|
1,050 |
|
|
|
298 |
|
General and administrative |
|
1,694 |
|
|
|
452 |
|
|
|
3,386 |
|
|
|
1,427 |
|
Loss from operations |
|
(2,186 |
) |
|
|
(564 |
) |
|
|
(4,436 |
) |
|
|
(1,725 |
) |
Other: |
|
|
|
|
|
|
|
Unrealized gain on derivatives |
|
(183 |
) |
|
|
19 |
|
|
|
(340 |
) |
|
|
45 |
|
Sale of Eniluracil |
|
- |
|
|
|
40 |
|
|
|
- |
|
|
|
40 |
|
Other loss |
|
1 |
|
|
|
- |
|
|
|
(4 |
) |
|
|
(12 |
) |
Interest income and other |
|
16 |
|
|
|
3 |
|
|
|
24 |
|
|
|
6 |
|
Total other, net |
|
(166 |
) |
|
|
62 |
|
|
|
(320 |
) |
|
|
79 |
|
Net loss and total comprehensive loss |
$ |
(2,352 |
) |
|
$ |
(502 |
) |
|
$ |
(4,756 |
) |
|
$ |
(1,646 |
) |
Basic net loss per common share |
$ |
(0.15 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.13 |
) |
Diluted net loss per common share |
$ |
(0.15 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.13 |
) |
Weighted-average number of common shares
outstanding, basic |
|
15,740 |
|
|
|
13,643 |
|
|
|
14,533 |
|
|
|
12,469 |
|
Weighted-average number of common shares
outstanding, diluted |
|
15,740 |
|
|
|
13,643 |
|
|
|
14,533 |
|
|
|
12,469 |
|
Total research and development expenses were up
by $380 and $752 for the three and nine months ended September 30,
2017, respectively, over the same period in 2016. This increase
relates primarily to drug manufacturing activities and preparations
for registration batches. General and administrative costs
increased over the prior year in the same period primarily due to
the issuance of equity based compensation and costs associated with
the NASDAQ listing.
Changes in the valuation of derivative
liabilities are primarily driven by volatility in the Company’s
share price. Since February of 2017, the Company’s share price has
increased. This has caused a significant fluctuation in the value
of the derivative liabilities on our books. The result has been a
$202 and $385 increase in non-cash loss on derivative valuation for
the three and nine months ended September 30, 2017, respectively,
over the same period in 2016.
|
Fennec Pharmaceuticals Inc. |
Balance Sheets |
(U.S. Dollars in thousands) |
|
September 30, 2017 |
|
December 31, 2016 |
Assets |
|
|
|
Cash
and cash equivalents |
$ |
9,688 |
|
$ |
3,926 |
Other
current assets |
|
200 |
|
|
46 |
Total Assets |
$ |
9,888 |
|
$ |
3,972 |
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
Current liabilities |
$ |
657 |
|
$ |
369 |
Derivative liabilities |
|
373 |
|
|
33 |
Total
stockholders’ equity |
|
8,858 |
|
|
3,570 |
Total liabilities and stockholders’ equity |
$ |
9,888 |
|
$ |
3,972 |
At September 30, 2017, the Company had working
capital balance totaling approximately $9.2 million compared to
$3.6 million as of December 31, 2016.
Working Capital |
Three Months Ended |
Selected Asset and Liability Data: |
September 30, 2017 |
|
December 31, 2016 |
(U.S.
Dollars in thousands) |
|
|
|
Cash
and cash equivalents |
$ |
9,688 |
|
|
$ |
3,926 |
|
Other
current assets |
|
200 |
|
|
|
46 |
|
Current liabilities excluding derivative liability |
|
(657 |
) |
|
|
(369 |
) |
Working capital |
$ |
9,231 |
|
|
|
|
$ |
3,603 |
|
|
|
|
|
|
Selected Equity: |
|
|
|
|
Common stock |
$ |
83,062 |
|
|
|
$ |
|
|
74,515 |
|
Accumulated deficit |
|
(119,078 |
) |
|
(114,322 |
) |
Stockholders’ equity |
|
8,858 |
|
|
3,57 |
|
|
|
|
|
|
Cash and cash equivalents were $9,688 at
September 30, 2017 and $3,926 at December 31, 2016. The increase in
cash and cash equivalents between September 30, 2017 and December
31, 2016 is primarily due to cash received from the completion of
an equity financing in June 2017 and exercise of various warrants
and options. These increases in cash were offset by cash spent on
research and development and general and administrative activities.
The Company received $7,571 net of issuance costs from the equity
financing and $512 from the exercise of options and warrants. The
Company issued a total of 2,214 shares as a result of these
activities.
Dollar and shares in
thousands Selected cash flow
data: |
Three Months EndedSeptember
30, |
Six Months EndedSeptember 30, |
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Net cash used in operating activities |
(958 |
) |
(544 |
) |
(2,321 |
) |
(1,513 |
) |
Net cash provided by investing activities |
- |
|
- |
|
- |
|
- |
|
Net cash provided by financing activities |
414 |
|
- |
|
8,083 |
|
5,108 |
|
Increase in cash and cash equivalents |
(544 |
) |
(544 |
) |
5,762 |
|
3,595 |
|
Net cash used in operating activities for the
three months ended September 30, 2017 was $958, as compared to $544
during the same period in 2016. This increase in cash outlays
relates the preparation of registration including manufacturing of
registration batches. Net cash provided by financing activities for
the three months ended September 30, 2017 was $414 compared to $0
for the three months ended September 30, 2016. The $414 provided by
financing activities, derived from the exercise of 207 options and
21 warrants. For the same three-month period in 2016, there was no
cash resulting from financing activities. Total decrease in cash
and cash equivalents was $544 for the three months ended September
30, 2017, and for the same period in 2016.
Net cash used in operating activities for the
nine months ended September 30, 2017 was $2,321, as compared to
$1,513 during the same period in 2016. This increase is due to
increased cash outlays incurred from research and development in
addition to increased general and administrative costs associated
with the Company’s preparation for registration. Net cash provided
by financing activities for the nine months ended September 30,
2017 was $8,083 compared to $5,108 for the nine months ended
September 30, 2016. The $8,083 includes $7,571 net proceeds from
the receipt of equity financing and $481 and $31 in cash
representing the exercise of 293 options and 31 warrants,
respectively. Total increase in cash and cash equivalents was
$5,762 for the nine months ended September 30, 2017 which is an
increase of $2,167 over the same period in 2016.
Forward looking statementsExcept for historical
information described in this press release, all other statements
are forward-looking. Forward-looking statements are subject to
certain risks and uncertainties inherent in the Company’s business
that could cause actual results to vary, including such risks that
regulatory and guideline developments may change, scientific data
may not be sufficient to meet regulatory standards or receipt of
required regulatory clearances or approvals, clinical results may
not be replicated in actual patient settings, protection offered by
the Company’s patents and patent applications may be challenged,
invalidated or circumvented by its competitors, the available
market for the Company’s products will not be as large as expected,
the Company’s products will not be able to penetrate one or more
targeted markets, revenues will not be sufficient to fund further
development and clinical studies, the Company may not meet its
future capital requirements in different countries and
municipalities, the proposed sale to Elion may not be completed and
other risks detailed from time to time in the Company’s filings
with the Securities and Exchange Commission including its Annual
Report on Form 10-K for the year ended December 31, 2016. Fennec
Pharmaceuticals, Inc. disclaims any obligation to update these
forward-looking statements except as required by law.
For a more detailed discussion of related risk
factors, please refer to our public filings available at
www.sec.gov and www.sedar.com.
About PEDMARK™ (Sodium Thiosulfate
(STS))
Cisplatin and other platinum compounds are
essential chemotherapeutic components for many pediatric
malignancies. Unfortunately, platinum-based therapies cause
ototoxicity in many patients, and are particularly harmful to the
survivors of pediatric cancer.
In the U.S. and Europe there is estimated that
over 7,000 children are diagnosed with low-to-intermediate risk
cancers that may receive platinum based chemotherapy.
Low-to-intermediate risk cancers that receive platinum agents may
have overall survival rates of greater than 80% further emphasizing
the quality of life after treatment. The incidence of hearing loss
in these children depends upon the dose and duration of
chemotherapy, and many of these children require lifelong hearing
aids. There is currently no established preventive agent for this
hearing loss and only expensive, technically difficult and
sub-optimal cochlear (inner ear) implants have been shown to
provide some benefit. Infants and young children at critical stages
of development lack speech language development and literacy, and
older children and adolescents lack social-emotional development
and educational achievement.
STS has been studied by cooperative groups in
two Phase 3 clinical studies of survival and reduction of
ototoxicity, The Clinical Oncology Group Protocol ACCL0431 and
SIOPEL 6. Both studies are closed to recruitment. The COG ACCL0431
protocol enrolled one of five childhood cancers typically treated
with intensive cisplatin therapy for localized and disseminated
disease, including newly diagnosed hepatoblastoma, germ cell tumor,
osteosarcoma, neuroblastoma, and medulloblastoma. SIOPEL 6
enrolled only hepatoblastoma patients with localized tumors.
About Fennec
Pharmaceuticals
Fennec Pharmaceuticals, Inc., is a specialty
pharmaceutical company focused on the development of
PEDMARK™ for the prevention of platinum-induced ototoxicity in
pediatric patients. STS has received Orphan Drug Designation in the
US in this setting. For more information, please visit
www.fennecpharma.com.
For further information, please
contact:
Rosty RaykovChief Executive OfficerFennec
Pharmaceuticals Inc.T: (919) 636-5144
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