Fennec Pharmaceuticals Provides Corporate Update and Fiscal Year Ended December 31, 2014 Financial Results
Marketwired
RESEARCH TRIANGLE PARK, NORTH CAROLINA--(Marketwired - Apr 1, 2015) - Fennec Pharmaceuticals Inc. (FRX.TO)(FENCF), a clinical stage biopharmaceutical company focused on the development of sodium thiosulfate (STS) for the prevention of ototoxicity from cisplatin in pediatric patients, today reported its corporate update and financial results for the year ended December 31, 2014. All amounts are in US dollars unless otherwise specified.
Mr. Rosty Raykov, chief executive officer commented, "2014 was a transformative year for the Company, reflective in our clinical and regulatory development achievements for STS, while keeping our cash burn to an absolute minimum. More importantly, the recent positive recommendation by SIOPEL 6 IDMC after final safety review of 100 patients is encouraging for patients with localized disease. We hope that these results will eventually give children an option for hearing protection during cisplatin chemotherapy."
Recent Development
SIOPEL 6 safety data abstract was submitted to the American Society of Clinical Oncology (ASCO) 2015 Annual Meeting. As we last reported, the Independent Data Monitoring Committee (IDMC) completed the final interim safety review on the first 100 patients enrolled in the study. The IDMC has been established to assess any potential concern of an adverse outcome of STS on the efficacy of cisplatin-based chemotherapy protocol treatment and to review safety according to protocol pre-specified patient numbers. Previously, the IDMC recommended continuation of the study after reviewing the safety of 20, 40, 60 and 80 patients. Their current recommendation on 100 patients to continue the clinical trial represents the last and final safety review.
Highlights of year 2014
COG and SIOPEL presented positive efficacy and safety data from their respective Phase 3 studies at ASCO 2014
European regulatory pathway established for STS to obtain 10 years of pediatric-use marketing exclusivity, once approved
Completed financing at a significant premium to market
Capital structure was streamlined by reducing outstanding warrants and completing a reverse stock split
Company name changed to Fennec Pharmaceuticals, Inc.
Added two seasoned pharmaceutical executives to the Board of Directors, Adrian Haigh and Khalid Islam, PhD
Key Milestones for 2015
Presentation of SIOPEL 6 safety data at ASCO
Meetings with Key Opinion Leaders in US and Europe
Regulatory Agency scientific advice meetings in the US and Europe
Prepare for NDA/MAA submissions and commercialization
Financial Update
The selected financial data presented below is derived from our audited consolidated financial statements which were prepared in accordance with U.S. generally accepted accounting principles. The complete interim consolidated financial statements for the period ended December 31, 2014 and management's discussion and analysis of financial condition and results of operations will be available at www.sec.gov and www.sedar.com.
The Company reported a net loss from operations of $0.8 million which excludes a $2.2 million non-cash gain on derivatives for the fourth quarter ended December 31, 2014, compared to a net loss from operations of $0.4 million excluding the non-cash gain of $1.5 million in the same period 2013. The increase in the net loss from operations excluding the non-cash impact of derivatives is primarily due to an increase in general and administrative non-cash expenses associated with equity based compensation.
Research and development expenses totaled $0.2 million for the fourth quarter ended December 31, 2014, as compared to a $0.1 million in the same period in 2013. General and administrative expenses were $0.6 million in the fourth quarter ended December 31, 2014, as compared to $0.3 million in the same period in 2013. The increase is attributable to the non-cash impact of equity based compensation.
The Company reported a net loss from operations of $2.9 million excluding a $0.7 million non-cash gain on derivatives for the twelve month period ended December 31, 2014, compared to a net loss from operations of $1.9 million excluding the non-cash gain of $3.8 million in the same period in 2013. The increase in the net loss from operations excluding the non-cash impact of derivatives is primarily due to the non-cash expense of issuing equity based compensation and select corporate administrative expenses tied to the 2014 warrant exchange, reverse stock split and corporate name change.
Research and development expenses totaled $0.4 million for the twelve month period ended December 31, 2014, as compared to $0.6 million in the same period in 2013. Research and development expenses were lower in fiscal year 2014 primarily due to a reduction in the costs associated with the Phase III study of STS as compared to the Eniluracil Phase II trial. In fiscal year 2013, the Company ceased actively developing Eniluracil.
Interim Consolidated Statements of Operations:
Three Months Ended
Twelve Months Ended
(In thousands except per share amounts)
December 30, 2014
December 31, 2013
December 30, 2014
December 31, 2013
Revenue
$
-
$
-
$
-
$
-
Operating expenses
Research and development
165
90
357
597
General and administrative
625
326
2,520
1,334
Loss from operations
(790
)
(416
)
(2,877
)
(1,931
)
Unrealized gain
2,179
1,524
704
3,777
Interest income and other
(1
)
4
(3
)
(1
)
Net income/(loss)
$
1,388
$
1,112
$
(2,176
)
$
1,845
Basic earnings/(loss) per common share
$
0.14
$
0.12
$
(0.22
)
$
0.19
Cash and cash equivalents totaled $2.3 million at December 31, 2014, compared to $1.7 million at December 31, 2013. The increase in cash and cash equivalents between December 31, 2014 and December 31, 2013 is due to the cash proceeds from our 2014 private placement, offset by clinical trial expenses related to our Phase III study of STS and our general and administrative expenses. The company also received cash from the exercise of numerous warrant and option exercises. At December 31, 2014, The Company had working capital of approximately $1.9 million. This represents a net increase over December 31, 2013 of approximately $0.5 million.
Fennec Pharmaceuticals Inc.
Selected Financial Data
(In thousands)
December 31,
December 31,
2014
2013
Interim Unaudited Consolidated Balance Sheets:
Assets:
Cash and cash equivalents
$
2,307
$
1,663
Other current assets
65
89
Total assets
$
2,372
$
1,752
Liabilities and stockholders' equity:
Current liabilities
$
440
$
344
Derivative liabilities
1,319
2,863
Other long-term liabilities
-
-
Total stockholders' equity (deficit)
613
(1,455
)
Total liabilities and stockholders' equity (deficit)
$
2,372
$
1,752
Forward-Looking Statements
Except 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, 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, 2014. 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.
