Group 1 - The stock of Adherex Technologies Inc. (FENC) is experiencing significant attention due to high implied volatility in the options market, particularly for the Oct 17, 2025 $12.50 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant price change or an upcoming event that could lead to a major rally or sell-off [2] - Adherex Technologies currently holds a Zacks Rank of 4 (Sell) in the Medical - Biomedical and Genetics Industry, with no analysts increasing their earnings estimates for the current quarter, resulting in a downward revision of the Zacks Consensus Estimate from 18 cents per share to 16 cents per share [3] Group 2 - The high implied volatility surrounding Adherex Technologies may indicate a developing trading opportunity, as options traders often seek to sell premium on options with high implied volatility to capture decay [4]

Summary of Fennec Pharmaceuticals FY Conference Call Company Overview - Fennec Pharmaceuticals is a commercial-stage biotechnology company focused on improving the lives of cancer patients, specifically through its FDA-approved product, PEDMARK, which reduces the risk of ototoxicity (hearing loss) from cisplatin chemotherapy [2][3] Financial Performance - The company reported a 33% year-over-year increase in revenue for Q2 ending June 30, achieving nearly $10 million in quarterly sales, marking the highest in its history [3][16] - Fennec is approaching cash flow break-even, needing to exceed $9 million in net product sales to achieve this milestone [16][17] - Total cash operating expenses for the year are approximately $35 million, with $20 million spent in the first half and $15 million expected in the second half [17] Product and Market Opportunity - PEDMARK is the first and only approved agent for the prevention of hearing loss associated with cisplatin administration, showing a 50% reduction in hearing loss in clinical trials [10][11] - The addressable market in the U.S. includes over 2,000 pediatric patients treated with cisplatin, while the adolescent and young adult (AYA) market is significantly larger, with approximately 20,000 patients annually [12] - The company has a strong intellectual property portfolio, including six U.S. Orange Book patents and seven years of U.S. market exclusivity under orphan drug designation, extending to 2039 [5] Partnerships and Collaborations - Fennec partnered with Norgine for the commercialization of PEDMARQSI (the European brand name for PEDMARK) in Europe, Australia, and New Zealand, receiving $43 million in upfront payments and potential over $200 million in sales and regulatory milestones [4][5] - Norgine has successfully launched PEDMARQSI in the UK and Germany, with further EU rollouts planned [4][11] Clinical and Regulatory Developments - The company received NCCN Clinical Practice Guidelines with a 2A endorsement for AYA patients, enhancing the market opportunity for PEDMARK [11] - A trial conducted in Japan with 25 patients is expected to yield results by the end of the year [4] Marketing and Awareness Initiatives - Fennec has focused on creating awareness and education around PEDMARK, achieving over 80% reimbursement success with major insurance plans [13][14] - The company has established relationships with key opinion leaders (KOLs) and audiologists to promote the use of PEDMARK [14][15] Conclusion - Fennec Pharmaceuticals is positioned for growth with a unique product addressing a significant unmet need in cancer treatment, supported by strong financial performance and strategic partnerships [10][16]

PART I: FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company's unaudited financial statements show key changes in assets, liabilities, operations, equity, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) The balance sheet reflects a decrease in cash and total assets, alongside an increase in liabilities and stockholders' deficit | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | Cash and cash equivalents | $18,705 | $26,634 | $(7,929) | | Accounts receivable, net | $17,502 | $12,884 | $4,618 | | Inventory | $2,201 | $1,060 | $1,141 | | Total current assets | $40,794 | $44,124 | $(3,330) | | Total assets | $44,876 | $44,946 | $(70) | | Accounts payable | $5,941 | $3,241 | $2,700 | | Total current liabilities | $8,414 | $6,919 | $1,495 | | Total liabilities | $52,339 | $50,818 | $1,521 | | Total stockholders' deficit | $(7,463) | $(5,872) | $(1,591) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) The company reported a net loss for the first half of 2025, a reversal from 2024's net income due to absent licensing revenue Three Months Ended June 30 (in thousands, except per share) | Metric | June 30, 2025 | June 30, 2024 | Change | | :-------------------------- | :------------ | :------------ | :----- | | PEDMARK product sales, net | $9,652 | $7,262 | $2,390 | | Total revenue | $9,652 | $7,262 | $2,390 | | Total operating expenses | $12,384 | $12,301 | $83 | | Net (loss)/income | $(3,152) | $(5,553) | $2,401 | | Basic net (loss)/income per common share | $(0.11) | $(0.20) | $0.09 | Six Months Ended June 30 (in thousands, except per share) | Metric | June 30, 2025 | June 30, 2024 | Change | | :-------------------------- | :------------ | :------------ | :------- | | PEDMARK product sales, net | $18,403 | $14,681 | $3,722 | | Licensing revenue | $0 | $17,958 | $(17,958) | | Total revenue | $18,403 | $32,639 | $(14,236) | | Total operating expenses | $21,943 | $23,935 | $(1,992) | | Net (loss)/income | $(4,317) | $7,284 | $(11,601) | | Basic net (loss)/income per common share | $(0.16) | $0.27 | $(0.43) | [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)%20(Unaudited)%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) The stockholders' deficit widened in the first half of 2025, driven by net losses that outweighed equity-related inflows Stockholders' Equity (Deficit) Changes (in thousands) | Item | Balance at Dec 31, 2024 | Stock-based compensation | Stock option exercise | Restricted stock release | Net loss | Balance at Jun 30, 2025 | | :---------------------- | :---------------------- | :----------------------- | :-------------------- | :----------------------- | :------- | :---------------------- | | Common Stock Amount | $145,608 | — | $557 | — | — | $146,165 | | Additional Paid-in Capital | $66,958 | $2,292 | — | $(123) | — | $69,127 | | Accumulated Deficit | $(219,681) | — | — | — | $(4,317) | $(223,998) | | Total Stockholders' Equity (deficit) | $(5,872) | $2,292 | $557 | $(123) | $(4,317) | $(7,463) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) The company experienced a significant net cash outflow from operations in H1 2025, contrasting sharply with a large inflow in H1 2024 Six Months Ended June 30 (in thousands) | Cash Flow Activity | June 30, 2025 | June 30, 2024 | Change | | :------------------------------------------ | :------------ | :------------ | :------- | | Net cash (used in) / provided by operating activities | $(8,004) | $30,660 | $(38,664) | | Net cash provided by / (used in) financing activities | $75 | $(875) | $950 | | (Decrease) / increase in cash and cash equivalents | $(7,929) | $29,785 | $(37,714) | | Cash and cash equivalents - End of period | $18,705 | $43,054 | $(24,349) | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's financial position, operations, liquidity, accounting policies, and key agreements [1. Nature of Business and Liquidity](index=9&type=section&id=1.%20Nature%20of%20Business%20and%20Liquidity) The company focuses on its approved product PEDMARK® and believes current funds are sufficient for the next twelve months - Fennec Pharmaceuticals Inc is a biopharmaceutical company with one FDA, EMA, and U.K approved product, **PEDMARK®**, designed to reduce the risk of ototoxicity associated with cisplatin in pediatric patients[14](index=14&type=chunk) - The company experienced a **net loss from operations of $(3,540) thousand** and **negative cash flows from operating activities of $(8,004) thousand** for the six-month period ended June 30, 2025, with an accumulated deficit of $223,998 thousand[16](index=16&type=chunk) - In March 2024, the company secured an exclusive licensing agreement with Norgine Pharma UK Limited for PEDMARQSI® (PEDMARK® outside the U.S) in Europe, Australia, and New Zealand, providing approximately **$43,000 thousand upfront** and potential future royalties and milestone payments of approximately **$230,000 thousand**[25](index=25&type=chunk) - Management believes current funds, including the Norgine upfront payment, provide **sufficient funding for planned activities**, including PEDMARK® commercialization, for at least the next twelve months[26](index=26&type=chunk) [2. Significant Accounting Policies](index=11&type=section&id=2.%20Significant%20Accounting%20Policies) This section outlines key accounting policies for revenue recognition, inventory, stock compensation, and segment reporting - The company operates and manages its business as a **single operating segment** focused on the production and commercialization of PEDMARK®[32](index=32&type=chunk) - Revenue from product sales (PEDMARK®) is recognized when the customer obtains control, typically upon delivery, with estimates for variable consideration (discounts, rebates, chargebacks) recorded as reserves[43](index=43&type=chunk)[44](index=44&type=chunk) - Licensing revenue from intellectual property is recognized upon transfer of control of the license, with contingent milestones constrained until probable of not resulting in a material reversal[39](index=39&type=chunk)[40](index=40&type=chunk) - Recent accounting pronouncements include ASU 2023-09 (Income Taxes) effective for annual periods beginning December 31, 2025, and ASU 2024-03 (Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures) effective for annual periods beginning after December 15, 2026[70](index=70&type=chunk)[71](index=71&type=chunk) Net Product Revenues (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross product revenues | $10,941 | $9,466 | $21,753 | $19,022 | | Discounts and allowances | $(1,289) | $(2,204) | $(3,350) | $(4,341) | | Net product revenues | $9,652 | $7,262 | $18,403 | $14,681 | [3. Loss Per Share](index=24&type=section&id=3.%20Loss%20Per%20Share) Due to a net loss in 2025, all common stock equivalents were anti-dilutive, making basic and diluted EPS identical - For the three and six months ended June 30, 2025, options, convertible debt, restricted share units, performance share units, and warrants were **excluded from diluted EPS calculation** as they were anti-dilutive due to the net loss[73](index=73&type=chunk) Net (Loss)/Income Per Share (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) / income | $(3,152) | $(5,553) | $(4,317) | $7,284 | | Weighted-average common shares, basic | 27,664 | 27,297 | 27,621 | 27,250 | | Weighted-average common shares, diluted | 27,664 | 27,297 | 27,621 | 30,354 | | Net (loss) / income per share diluted | $(0.11) | $(0.20) | $(0.16) | $0.24 | [4. Stockholders' Equity](index=25&type=section&id=4.%20Stockholders'%20Equity) The company amended its equity incentive plan to increase available shares and add an employee stock purchase program - The Company's authorized capital stock consists of an **unlimited number of common shares**, no par value per share[74](index=74&type=chunk) - On April 24, 2025, the Board approved an amendment to the Equity Incentive Plan to **increase common shares available for issuance to 8,500 thousand** and include an employee stock purchase program, which was approved by shareholders on June 3, 2025[77](index=77&type=chunk) - In May 2025, the Board approved a performance-based unit (PSU) grant, with vesting dependent on revenue performance milestones over the next year, with partial achievement deemed probable as of June 30, 2025[85](index=85&type=chunk)[86](index=86&type=chunk) Stock-Based Compensation Expense (in thousands) | Period | June 30, 2025 | June 30, 2024 | | :----------------------- | :------------ | :------------ | | Three Months Ended | $1,494 | $925 | | Six Months Ended | $2,292 | $2,116 | Stock Option Activity (in thousands) | Metric | Outstanding at Dec 31, 2024 | Granted | Exercised | Forfeited | Outstanding at Jun 30, 2025 | | :-------------------------- | :-------------------------- | :------ | :-------- | :-------- | :-------------------------- | | Number of Options | 5,855 | 498 | (107) | (168) | 6,078 | | Weighted-Average Exercise Price | $6.22 | $7.05 | $5.04 | $6.09 | $6.31 | [5. Fair Value Measurements](index=29&type=section&id=5.%20Fair%20Value%20Measurements) The company's financial assets are classified within a three-level fair value hierarchy, with most cash equivalents in Level 2 - The company held approximately **$1,984 thousand in cash accounts** and **$16,721 thousand in savings and money market accounts** as of June 30, 2025[91](index=91&type=chunk) Fair Value Measurement at June 30, 2025 (in thousands) | Asset | Level 1 | Level 2 | Level 3 | Total | | :---------------------- | :------ | :------ | :------ | :------ | | Cash and cash equivalents | $1,984 | $16,721 | $— | $18,705 | | Processa common shares | $1 | $— | $— | $1 | [6. Commitments and Contingencies](index=30&type=section&id=6.%20Commitments%20and%20Contingencies) The company is engaged in ongoing patent infringement litigation against CIPLA and has defined executive severance agreements - The company is engaged in ongoing patent infringement litigation against CIPLA Ltd and CIPLA USA concerning generic versions of PEDMARK®, asserting infringement of multiple patents (US '190, '728, '984, '793, '018, '530, '604, '026)[92](index=92&type=chunk)[94](index=94&type=chunk)[97](index=97&type=chunk)[100](index=100&type=chunk) - On July 14, 2025, the court **granted the motion to consolidate two related cases** (2:25-cv-05709 and 2:23-cv-00123) and issued an order on claim construction, adopting the company's proposed constructions for two disputed claim terms[101](index=101&type=chunk)[102](index=102&type=chunk) - Executive severance agreements include a one-time payment of **$559 thousand for the CEO** and **$344 thousand for the CFO** upon termination without cause[104](index=104&type=chunk) - The company has operating lease commitments for office spaces in Research Triangle Park, North Carolina, and previously in Dublin, Ireland (terminated)[105](index=105&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) [7. Term Loans](index=34&type=section&id=7.%20Term%20Loans) The company significantly reduced its convertible note obligations with Petrichor through a redemption in December 2024 - The company entered into a Securities Purchase Agreement (SPA) with Petrichor Opportunities Fund I LP for up to **$45,000 thousand in senior secured floating rate convertible notes**, with tranches closed in August 2022 ($5,000 thousand), September 2022 ($20,000 thousand), and December 2023 ($5,000 thousand)[110](index=110&type=chunk)[111](index=111&type=chunk)[113](index=113&type=chunk) - On December 18, 2024, the company **repurchased and redeemed $13,000 thousand in Notes** (including $1,271 thousand in PIK interest), fully redeeming the First and Third Closing Notes[115](index=115&type=chunk) - As of June 30, 2025, approximately **$19,477 thousand of Second Closing Notes** (inclusive of PIK interest) remains outstanding, due in August 2027[117](index=117&type=chunk) - Cash interest accrues at prime plus 4.5% per annum (**12% at June 30, 2025**), and PIK interest accrued at 3.5% per annum until August 24, 2024, with $1,271 thousand accrued and classified as long-term liabilities[118](index=118&type=chunk) Aggregate Annual Payments Due on SPA (in thousands) | Years Ending December 31, | Amount | | :------------------------ | :----- | | 2025 | $— | | 2026 | $— | | 2027 | $18,206 | | Payment in kind interest | $1,271 | | Total future payments | $19,477 | | Less: unamortized debt discount | $(113) | | Total term loan, net of debt discount | $19,364 | [8. License Agreement with Norgine Pharma UK Limited](index=36&type=section&id=8.%20License%20Agreement) The company secured a significant licensing deal with Norgine for European commercialization of PEDMARQSI® - On March 17, 2024, the company entered into an exclusive License and Supply Agreement with Norgine Pharma UK Limited to commercialize PEDMARQSI® (PEDMARK® in the U.S) in Europe, Australia, and New Zealand[122](index=122&type=chunk) - The agreement provided an **upfront payment of approximately $43.2 million** (€40 million) and potential future payments of up to approximately **$230 million** (€210 million) upon achievement of regulatory and commercial milestones, plus tiered royalties from mid-teen to mid-twenty percent on net sales[123](index=123&type=chunk)[125](index=125&type=chunk) - The company identified two performance obligations under ASC 606: a license of functional IP and a material right for future supply, allocating the upfront payment between recognized revenue and deferred liability[127](index=127&type=chunk) - Milestone payments are constrained and not included in the transaction price at inception due to dependence on regulatory approvals and third-party actions, and will be recognized when achieved[127](index=127&type=chunk) [9. Segment Reporting](index=38&type=section&id=9.%20Segment%20Reporting) The company operates as a single segment focused on the commercialization of its sole product, PEDMARK® - The company views its operations and manages its business in **one operating segment**, principally in the United States, focused on the production and commercialization of PEDMARK®[129](index=129&type=chunk) - The chief operating decision maker (senior executive team) uses **net loss** to evaluate segment performance and allocate resources[130](index=130&type=chunk)[133](index=133&type=chunk) [10. Subsequent Events](index=40&type=section&id=10.%20Subsequent%20Events) Management evaluated subsequent events and concluded there were no events requiring disclosure after the reporting period - No events of significance requiring disclosure were identified by management through the date of this filing[134](index=134&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting PEDMARK® commercialization, the Norgine agreement, and operational trends [Overview](index=40&type=section&id=Overview) Fennec is a commercial-stage biopharmaceutical company focused on its approved product PEDMARK® for pediatric cancer patients - Fennec Pharmaceuticals is a commercial-stage biopharmaceutical company focused on PEDMARK®, approved by the FDA (September 20, 2022) to reduce ototoxicity associated with cisplatin in pediatric patients[137](index=137&type=chunk) - PEDMARK® received European Commission Marketing Authorization in June 2023 and U.K approval in October 2023 (branded as PEDMARQSI®)[138](index=138&type=chunk) - An exclusive licensing agreement with Norgine in March 2024 provided approximately **$43,200 thousand upfront** and potential future milestone and royalty payments of up to **$230,000 thousand** for commercialization in Europe, Australia, and New Zealand[138](index=138&type=chunk) - The company holds **Orphan Drug Exclusivity for PEDMARK® until September 20, 2029**, and has six patents listed in the FDA Orange Book, with expiration dates in 2039[141](index=141&type=chunk) [PEDMARK® Product Overview](index=42&type=section&id=PEDMARK%C2%AE%20Product%20Overview) PEDMARK® is the only approved therapy to mitigate cisplatin-induced hearing loss in pediatric patients - PEDMARK® is the **first and only FDA- and EMA-approved agent** designed to reduce the risk of cisplatin-induced hearing loss (CIO) in children with localized solid tumors[144](index=144&type=chunk) - Strategic imperatives include increasing awareness of unmet patient needs, emphasizing CIO prevention, establishing PEDMARK® as the standard of care, expanding adoption beyond oncologists, ensuring seamless access, and activating patients/caregivers through disease education[144](index=144&type=chunk) - The U.S pediatric oncology landscape includes approximately **200 targeted hospital centers**, treating around 80% of pediatric cancer patients[147](index=147&type=chunk) - An estimated **10,000+ pediatric patients annually** in the U.S and Europe may receive platinum-based chemotherapy, with many requiring lifelong hearing aids due to ototoxicity[145](index=145&type=chunk) [Cisplatin Induced Ototoxicity ("CIO")](index=44&type=section&id=Cisplatin%20Induced%20Ototoxicity%20(%22CIO%22)) Cisplatin-induced ototoxicity is a permanent and irreversible hearing loss affecting a high percentage of cancer patients - Cisplatin and other platinum compounds can cause **permanent, irreversible ototoxicity** (hearing loss), which is particularly harmful to pediatric cancer survivors[150](index=150&type=chunk)[151](index=151&type=chunk) - It is estimated that **over 50% of pediatric patients** and approximately **40-80% of adult patients** may suffer permanent hearing loss as a result of CIO[152](index=152&type=chunk) [European Commission Marketing Authorization](index=44&type=section&id=European%20Commission%20Marketing%20Authorization) PEDMARQSI® received European and U.K marketing authorization, with commercial launch initiated by Norgine in early 2025 - PEDMARQSI® (PEDMARK® brand name in Europe) received European Commission Marketing Authorization in June 2023 and U.K approval in October 2023[153](index=153&type=chunk) - Norgine, the exclusive licensing partner, **launched PEDMARQSI® in Germany and the U.K in early 2025**[155](index=155&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Net product sales increased, but the absence of 2024's licensing revenue led to a significant year-over-year total revenue decline - The decrease in selling and marketing expenses for both periods is largely related to the **elimination of European pre-commercial activities** in 2024 after the Norgine transaction[157](index=157&type=chunk)[159](index=159&type=chunk) - Interest expense decreased due to a lower long-term debt balance following a **$13,000 thousand debt paydown** in December 2024[157](index=157&type=chunk)[159](index=159&type=chunk) Three Months Ended June 30, 2025 vs 2024 (in thousands) | Metric | June 30, 2025 | June 30, 2024 | Change | | :-------------------------- | :------------ | :------------ | :----- | | PEDMARK product sales, net | $9,652 | $7,262 | $2,390 | | Selling and marketing expenses | $4,354 | $4,672 | $(318) | | General and administrative | $6,956 | $6,864 | $92 | | Loss from operations | $(2,732) | $(5,039) | $2,307 | | Interest expense | $(594) | $(1,044) | $450 | | Net loss | $(3,152) | $(5,553) | $2,401 | Six Months Ended June 30, 2025 vs 2024 (in thousands) | Metric | June 30, 2025 | June 30, 2024 | Change | | :-------------------------- | :------------ | :------------ | :------- | | PEDMARK product sales, net | $18,403 | $14,681 | $3,722 | | Licensing revenue | $0 | $17,958 | $(17,958) | | Total revenue | $18,403 | $32,639 | $(14,236) | | Selling and marketing expenses | $7,301 | $9,881 | $(2,580) | | General and administrative | $13,101 | $12,736 | $365 | | (Loss) / income from operations | $(3,540) | $8,704 | $(12,244) | | Interest expense | $(1,186) | $(2,078) | $892 | | Net (loss) / income | $(4,317) | $7,284 | $(11,601) | [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and working capital decreased in H1 2025 due to higher operating expenses and timing of working capital collections - The net decrease in cash and cash equivalents of **$7,929 thousand** was primarily due to seasonally higher cash operating expenses and the timing of working capital collections[163](index=163&type=chunk) - The company's investment policy prioritizes **preservation of principal, liquidity, and return on investment**, avoiding speculative investments[166](index=166&type=chunk) Selected Asset and Liability Data (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Cash and equivalents | $18,705 | $26,634 | | Other current assets | $22,089 | $17,490 | | Current liabilities | $8,414 | $6,919 | | Working capital | $32,380 | $37,205 | | Stockholders' deficit | $(7,463) | $(5,872) | Selected Cash Flow Data (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash (used in) / provided by operating activities | $(8,004) | $30,660 | | Net cash provided by / (used in) financing activities | $75 | $(875) | | Net cash flow | $(7,929) | $29,785 | Outstanding Share Information (in thousands) | Outstanding Share Type | June 30, 2025 | December 31, 2024 | Change | | :----------------------- | :------------ | :---------------- | :----- | | Common shares | 27,733 | 27,527 | 206 | | Warrants | 150 | 150 | — | | RSUs | 485 | 324 | 161 | | PSUs | 100 | — | 100 | | Stock options | 6,078 | 5,855 | 223 | | Total | 34,546 | 33,856 | 690 | [Credit Losses](index=52&type=section&id=Credit%20Losses) The company provides for expected credit losses on trade receivables by analyzing customer classes and financial status - The company estimates and records a provision for expected credit losses related to trade receivables, considering historical collection rates, customer financial status, macroeconomic factors, and industry-specific factors[171](index=171&type=chunk) - Receivables are disaggregated by customer class, and each component is analyzed individually, establishing customer profiles based on past collections and evaluating current/forecasted financial positions[172](index=172&type=chunk) [Revenue Recognition](index=52&type=section&id=Revenue%20Recognition) Revenue is recognized under ASC 606, requiring significant judgment in estimating variable consideration and allocating price - Revenue is recognized when customers obtain control of promised goods or services, reflecting the consideration expected in exchange[173](index=173&type=chunk) - For license agreements, if intellectual property is distinct, revenue is recognized upon transfer of control, with contingent milestones constrained until probable of not resulting in a material reversal[175](index=175&type=chunk)[176](index=176&type=chunk) - Sales-based royalties are recognized as revenue when the related sales occur or when the performance obligation to which royalties relate has been satisfied[179](index=179&type=chunk) [Stock-based Compensation](index=54&type=section&id=Stock-based%20Compensation) The fair value of stock options is estimated using the Black-Scholes model, which requires significant management assumptions - The fair value of stock options is estimated using the **Black-Scholes option-pricing model**, requiring assumptions for expected volatility, expected life, expected dividends, and expected risk-free interest rates[180](index=180&type=chunk) - Performance-based units (PSUs) are expensed over the performance period to the extent that the achievement of revenue performance milestones is considered **probable**[181](index=181&type=chunk) Black-Scholes Model Assumptions (June 30, 2025) | Assumption | Value | | :-------------------- | :------------------ | | Expected dividend | -% | | Risk free rate | 3.93 - 4.19 % | | Expected volatility | 71.04 - 161.67 % | | Expected life | 1.5 - 6.0 years | [Common shares and warrants](index=54&type=section&id=Common%20shares%20and%20warrants) Common shares are recorded at net proceeds, while warrants are recorded at relative fair value as additional paid-in capital - Common shares are recorded as net proceeds received on issuance, after deducting share issuance costs and the relative fair value of investor warrants[182](index=182&type=chunk) - Warrants are recorded at relative fair value and deducted from common share proceeds, then recorded as additional paid-in capital[182](index=182&type=chunk) [Newly Adopted and Recent Accounting Pronouncements](index=54&type=section&id=Newly%20Adopted%20and%20Recent%20Accounting%20Pronouncements) This section refers to Note 2 for details on new and recently adopted accounting pronouncements - Refer to Note 2, 'Significant Accounting Policies - Recent Accounting Pronouncements' for information on newly adopted and recent accounting pronouncements[183](index=183&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item states that there are no applicable quantitative and qualitative disclosures about market risk for the company - This section is not applicable[184](index=184&type=chunk) [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the end of the reporting period - As of June 30, 2025, the company's Chief Executive Officer and Chief Financial Officer concluded that the **disclosure controls and procedures were effective**[186](index=186&type=chunk) - There were **no material changes** to the company's internal control over financial reporting during the quarter ended June 30, 2025[187](index=187&type=chunk) - The effectiveness of any internal control system is subject to inherent limitations, providing **reasonable, not absolute, assurances**[188](index=188&type=chunk) PART II: OTHER INFORMATION [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is actively engaged in patent infringement litigation against CIPLA concerning its generic version of PEDMARK® - The company is actively engaged in patent infringement litigation against CIPLA Ltd and CIPLA USA, who submitted an ANDA for a generic version of PEDMARK®[189](index=189&type=chunk)[191](index=191&type=chunk) - The litigation involves multiple patents covering PEDMARK®, including newly granted patents like US 12,311,026 ('026 Patent) in May 2025, all with **expiration dates in July 2039**[191](index=191&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[197](index=197&type=chunk) - On July 14, 2025, the court **granted a motion to consolidate two related cases** (2:25-cv-05709 and 2:23-cv-00123) and issued an order on claim construction, adopting the company's proposed constructions for two disputed claim terms[198](index=198&type=chunk)[199](index=199&type=chunk) - The company has received **Orphan Drug Exclusivity**, preventing FDA approval of CIPLA's ANDA until at least September 20, 2029[192](index=192&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the company's Annual Report for a detailed discussion of risk factors, with no material changes noted - Readers should carefully consider the risk factors discussed in the **Annual Report on Form 10-K** for the fiscal year ended December 31, 2024[201](index=201&type=chunk) - The company is not aware of any **material changes** from the risk factors previously disclosed[201](index=201&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item confirms there were no unregistered sales of equity securities or use of proceeds to report during the period - No unregistered sales of equity securities or use of proceeds to report[202](index=202&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item confirms there were no defaults upon senior securities to report during the period - No defaults upon senior securities to report[203](index=203&type=chunk) [Item 4. Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item states that mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable[204](index=204&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) This section discloses a director's adoption of a Rule 10b5-1 trading plan and the furnishing of a press release - Chris Rallis, a Board member, adopted a **Rule 10b5-1 trading arrangement** on May 19, 2025, covering the disposition of up to 18,406 common shares, set to terminate on June 9, 2026[205](index=205&type=chunk) - A press release announcing financial results for the quarter ended June 30, 2025, was issued on August 14, 2025, and furnished as Exhibit 99.1[206](index=206&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including certifications and Inline XBRL documents - Exhibits include certifications from the CEO and CFO (31.1, 31.2, 32.1), the press release for Q2 2025 results (99.1), and various Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[207](index=207&type=chunk)[209](index=209&type=chunk) [Signatures](index=62&type=section&id=Signatures) This section contains the certifying signatures of the company's Chief Executive Officer and Chief Financial Officer - The report is signed by Jeff Hackman, Chief Executive Officer, and Robert Andrade, Chief Financial Officer, on August 14, 2025[213](index=213&type=chunk)

Financial Data and Key Metrics Changes - The company reported net product sales of $9.7 million for Q2 2025, representing a 33% increase year-over-year and a 10% increase sequentially, marking the highest quarterly net product sales in the company's history [14][20][24] - Total cash operating expenses for the quarter were approximately $11 million, an increase of roughly $2 million compared to Q1 2025, driven by ongoing investments in marketing and additional headcount [22][24] Business Line Data and Key Metrics Changes - The company achieved three consecutive quarters of growth in Pedmark sales, with the addition of 14 new accounts in Q2, including large community oncology groups [15][20] - The company is focused on establishing Pedmark as the standard of care for cisplatin-induced ototoxicity (CIO) prevention, with positive feedback from existing accounts strengthening confidence in clinical value [10][11] Market Data and Key Metrics Changes - The AYA (adolescent and young adult) market is identified as significantly larger than the pediatric market, with approximately 20,000 patients treated with cisplatin in that demographic [31] - The company is seeing strong momentum in both large community practices and academic centers, indicating a growing recognition of the need for Pedmark [9][10] Company Strategy and Development Direction - The company aims to stabilize the business and build a foundation for sustainable growth, focusing on increasing awareness and adoption of Pedmark [6][8] - The strategic imperatives include enhancing patient support services, cementing Pedmark as the standard of care, and expanding educational efforts beyond oncologists to other healthcare professionals [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the scalability of the business model and the growing demand for Pedmark, anticipating significant quarterly growth in 2025 [20][21] - The company is optimistic about the partnership with Norgene in the EU, expecting to provide updates on milestones and royalties in future quarters [21][40] Other Important Information - The company has made significant progress with payers and providers to ensure smoother coverage and fewer barriers for treatment sites [12] - The company plans to ring the closing bell at NASDAQ on September 5, 2025, symbolizing its mission to help patients [14] Q&A Session Summary Question: Can you share the active prescribers number, particularly within AYA? - The company does not disclose cumulative active prescriber numbers but acknowledges the importance of protecting relationships with accounts [28][30] Question: What is the mix of new and repeat customers? - Initially, the company focused on new customers, but there is now a shift towards a higher percentage of repeat customers as the business grows [44][46] Question: Can you elaborate on the Japanese market opportunity? - Japan represents about a third of the size of the U.S. and Europe in terms of CIO usage, with ongoing discussions about regulatory approaches and potential partnerships [49][50] Question: What are the expectations for operating expenses in the second half of the year? - The company expects cash operating expenses to decrease in the second half of the year, consistent with previous years [55][56] Question: How proactive has the FDA been regarding compliance with guidance on Pedmark? - The FDA has been supportive of the use of Pedmark and continues to emphasize its status as the only FDA-approved product for preventing cisplatin-induced hearing loss [70][71] Question: What is the timeline for the Norgene partnership in the EU? - The Norgene partnership has launched in the UK and is expected to expand to other EU markets early next year, with significant enthusiasm for the product [74][75]

Group 1 - Adherex Technologies Inc. reported a quarterly loss of $0.11 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.06, and compared to a loss of $0.20 per share a year ago, indicating an earnings surprise of -83.33% [1] - The company posted revenues of $9.65 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.76%, and this represents an increase from year-ago revenues of $7.26 million [2] - Adherex Technologies shares have increased approximately 44.2% since the beginning of the year, outperforming the S&P 500's gain of 10% [3] Group 2 - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend of estimate revisions for Adherex Technologies was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] - The current consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $16.5 million, and for the current fiscal year, it is $0.15 on revenues of $48.78 million [7] Group 3 - The outlook for the Medical - Biomedical and Genetics industry, to which Adherex Technologies belongs, is currently in the bottom 41% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Oculis Holding AG, another company in the same industry, is expected to report a quarterly loss of $0.53 per share, reflecting a year-over-year change of +5.4%, with revenues anticipated to be $0.25 million, down 8.9% from the previous year [9]

Core Insights - Fennec Pharmaceuticals reported total net revenues of $9.7 million for Q2 2025, reflecting a 33% increase compared to the same quarter in 2024, driven by growth in large community practices and academic centers [1][3][9] - The company has seen a successful uptake of its product PEDMARQSI in the UK and Germany, with plans for additional EU launches [1][3] - The management anticipates results from a clinical trial in Japan (STS-J01) in the second half of 2025, which may lead to registration and potential licensing opportunities [1][3] Financial Performance - Net product sales for Q2 2025 were approximately $9.7 million, up from $7.3 million in Q2 2024, attributed to growth in the adolescent and young adult (AYA) population [9][11] - Selling and marketing expenses decreased to $4.4 million in Q2 2025 from $4.6 million in Q2 2024, while general and administrative expenses increased slightly to $7.0 million from $6.9 million [9][11] - The company reported a net loss of $3.2 million for Q2 2025, compared to a net loss of $5.6 million in Q2 2024 [11] Business Highlights - Fennec's segmentation model and data-driven targeting have led to significant growth in both new and repeat customers, particularly in large community and academic practices [6] - A large national oncology group has added PEDMARK to its formulary for patients under 40, indicating growing recognition of the need to protect younger patients from cisplatin-induced hearing loss [6] - The NCODA PQI issued for PEDMARK aims to provide clinical data and guidance for healthcare professionals managing patients on cancer therapies [6] Upcoming Events - Fennec will ring the NASDAQ closing bell on September 5, 2025, alongside PEDMARK patients and their families [10] - The company will present at the H.C. Wainwright 27th Annual Global Investment Conference from September 8-10, 2025, in New York City [10] Product Information - PEDMARK is the first FDA-approved therapy to reduce the risk of ototoxicity associated with cisplatin treatment in pediatric patients [15][19] - The product has received Orphan Drug Exclusivity in the U.S. and is commercially available in the U.K. and Germany under the brand name PEDMARQSI [28][30]

To access the live webcast link, log onto www.fennecpharma.com and proceed to the News & Events/Event Calendar page under the Investors & Media heading. Please connect to the company's website at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to listen to the webcast. A webcast replay of the conference call will also be archived on www.fennecpharma.com for thirty days. RESEARCH TRIANGLE PARK, N.C., Aug. 11, 2025 (GLOBE NEWSWIRE) -- Fennec ...

Company Performance - Editas Medicine (EDIT) has gained approximately 98.4% year-to-date, significantly outperforming the average return of -5.4% for the Medical sector [4] - Editas Medicine currently holds a Zacks Rank of 2 (Buy), indicating a favorable outlook based on earnings estimate revisions [3][4] - The Zacks Consensus Estimate for Editas Medicine's full-year earnings has increased by 0.4% over the past quarter, reflecting improved analyst sentiment [4] Industry Context - Editas Medicine is part of the Medical - Biomedical and Genetics industry, which consists of 492 companies and ranks 147 in the Zacks Industry Rank [6] - The Medical - Biomedical and Genetics industry has seen an average gain of 1.5% this year, indicating that Editas Medicine is performing better than its industry peers [6] - Another stock in the Medical sector, Adherex Technologies Inc. (FENC), has also shown strong performance with a year-to-date return of 33.1% and a Zacks Rank of 2 (Buy) [5][6]

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for profitable short-term investing, highlighting the need for sound fundamentals and positive earnings estimates to maintain momentum. Group 1: Trend Analysis - The trend in short-term investing is crucial, as it can lead to significant profits if sustained [1] - A common issue is that trends may reverse before trades are exited, resulting in capital losses [2] - Investors can utilize the "Recent Price Strength" screen to identify stocks on an uptrend supported by strong fundamentals [3] Group 2: Stock Example - Adherex Technologies Inc. (FENC) - FENC has shown a solid price increase of 68.7% over the past 12 weeks, indicating strong investor interest [4] - The stock has also increased by 7.6% over the last four weeks, suggesting that the upward trend is still intact [5] - FENC is trading at 90.5% of its 52-week high-low range, indicating a potential breakout [5] Group 3: Fundamental Strength - FENC holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6] - The Zacks Rank system has a strong track record, with Rank 1 stocks averaging a +25% annual return since 1988 [7] - The Average Broker Recommendation for FENC is 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term performance [7] Group 4: Additional Opportunities - Besides FENC, there are other stocks that meet the criteria of the "Recent Price Strength" screen, suggesting further investment opportunities [8] - The article encourages exploring over 45 Zacks Premium Screens tailored to different investing styles for potential winning stock picks [8]

Financial Data and Key Metrics Changes - The company reported $8.8 million in top-line revenue for the most recent quarter, showing growth from $8 million in the previous quarter [40][41] - To achieve cash flow breakeven, the company needs to reach a normalized revenue run rate of approximately $8.5 million to $9 million per quarter, aligning with annual cash operating expenses of roughly $33 million to $35 million [41][42] Business Line Data and Key Metrics Changes - The product Pedmark, sodium thiosulfate, is the first FDA-approved treatment for ototoxicity risk due to cisplatin in pediatric patients, with recent NCCN guidelines expanding its recommendation to patients aged 15 to 39 [5][6] - The company has seen two consecutive quarters of growth, attributed to improved marketing strategies and a focus on the adolescent and young adult (AYA) population [16][22] Market Data and Key Metrics Changes - The AYA segment presents a significant market opportunity, with approximately 20,000 patients in the AYA space receiving cisplatin, compared to about 3,000 pediatric patients [17][18] - The partnership with Norgene for European markets includes an upfront fee of approximately $43 million and royalties starting in the mid-teens, with potential milestones exceeding $200 million [44][45] Company Strategy and Development Direction - The company aims to enhance its commercial execution and has focused on increasing the competency of its medical team to engage with key opinion leaders [23][25] - Future growth strategies include targeting high prescribers of cisplatin and potentially introducing additional complementary products in oncology supportive care [56][58] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of increasing awareness of Pedmark among prescribers and improving execution in sales and marketing efforts [35][36] - The company is optimistic about achieving profitability and is exploring opportunities in Japan, where a trial for Pedmark has been completed and is under review [58][59] Other Important Information - The company has approximately $23 million in cash as of March 31, with a convertible note of $19.5 million remaining, which they plan to address as profitability increases [50][51] - Recent approvals for Pedmark in Scotland and ongoing efforts to expand into additional EU countries are part of the company's growth strategy [48][47] Q&A Session Summary Question: What is the revenue run rate needed for cash flow breakeven? - The company needs to achieve a revenue run rate of approximately $8.5 million to $9 million per quarter to reach cash flow breakeven [41][42] Question: Can you describe the partnership with Norgene? - The partnership includes an upfront fee of approximately $43 million, royalties starting in the mid-teens, and potential milestones exceeding $200 million [44][45] Question: What are the plans regarding the convertible debt? - The company has retired $13 million of the convertible note, which currently stands at $19.5 million, and plans to explore options for further retirement as profitability improves [51][52]