Research Triangle Park, NC, March 28, 2016 – Fennec Pharmaceuticals Inc. (TSX: FRX, OTCQB: FENCF), a specialty pharmaceutical company focused on the development of Sodium Thiosulfate (STS) for the prevention of platinum-induced ototoxicity in pediatric patients, today reported its corporate update and financial results for the year ended December 31, 2015.
“Throughout 2015 we continued to make progress on the development of STS including the positive interim safety results from SIOPEL 6 released at ASCO,” said Rosty Raykov, CEO of Fennec. “We remain focused on putting the Company in a position for potential regulatory submission upon receiving positive hearing results from SIOPEL 6.”
Highlights of Year 2015
- In December 2015, announced seasoned pharmaceutical executive Khalid Islam as new Chairman of the Board.
- In May 2015, SIOPEL 6 announced positive interim safety data results at American Society of Clinical Oncology (ASCO) 2015 Annual Meeting.
- In April 2015, Fennec’s largest shareholder exercised warrants for net proceeds of $0.5 million.
- In February 2015, the Independent Monitoring Committee (IDMC) recommended the continuation of the SIOPEL 6 Phase 3 Clinical Trial after conducting their final safety review of 100 patients.
- In January 2015, SIOPEL 6 completed patient enrollment of 109 patients in the Phase 3 trial.
Key Milestones for 2016
- Second and last protocol-specified interim analysis for SIOPEL 6 on hearing efficacy is expected to be completed in the first half of 2016.
- Prepare for NDA/MAA submissions and commercialization.
- Regulatory Agency scientific advice meetings planned in US and Europe.
Financial Update
The selected financial data presented below is derived from our audited condensed consolidated financial statements which were prepared in accordance with U.S. generally accepted accounting principles. The complete audited consolidated financial statements for the period ended December 31, 2015 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.
| Audited Condensed Consolidated | ||||||||||||||||||
| Statement of Operations: | ||||||||||||||||||
| (U.S. Dollars in thousands except per share amounts) | ||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||
| December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 |
|||||||||||||||
| Revenue | $ | – | $ | – | $ | – | $ | – | ||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development | 71 | 165 | 256 | 357 | ||||||||||||||
| General and administrative | 480 | 625 | 1,634 | 2,520 | ||||||||||||||
| Loss from operations | (551) | (790) | (1,890) | (2,877) | ||||||||||||||
| Other (expense)/income | ||||||||||||||||||
| Unrealized gain on derivatives | 11 | 2,179 | 1,237 | 355 | ||||||||||||||
| Net gain on derivative settlement | – | – | – | 349 | ||||||||||||||
| Interest (expense)/income and other, net | – | (1) | (6) | (3) | ||||||||||||||
| Total other (expense)/income, net | 11 | 2,178 | 1,231 | 701 | ||||||||||||||
| Net income/(loss) | $ | (540) | $ | 1,388 | $ | (659) | $ | (2,176) | ||||||||||
| Basic net income/(loss) per common share | $ | (0.05) | $ | 0.14 | $ | (0.06) | $ | (0.22) | ||||||||||
| Diluted net income/(loss) per common share | $ | (0.05) | $ | 0.13 | $ | (0.06) | $ | (0.22) | ||||||||||
The Company reported a net loss from operations of $0.6 million (which excludes a $0.01 million non-cash gain on derivatives) for the three months ended December 31, 2015, compared to a net loss from operations of $0.8 million (excluding the non-cash gain of $2.2 million) in 2014.
Research and development expenses totaled $0.07 million for the fourth quarter ended December 31, 2015, as compared to a $0.2 million in the same period in 2014 as the SIOPEL 6 Phase 3 trial completed enrollment in 2014 along with a wind down of expenses associated with the trial. General and administrative expenses were $0.5 million in the fourth quarter ended December 31, 2015, as compared to $0.6 million in the same period in 2014. The decrease in general and administrative expenses is primarily attributable to the non-cash impact of equity based compensation in 2014.
Total operating expenses were $1.9 million for the year ended December 31, 2015 and $2.9 million for the year ended December 31, 2014. The decrease in net loss from operations excluding the non-cash impact of derivatives was due to both a decrease in research and development expenses and general and administrative expenses. Research and development expenses were down for the year comparable for the same period as the Company’s SIOPEL 6 Phase 3 trial completed enrollment and expenses were winding down related to the trial. There was a significant decrease in general and administrative expense primarily due to a reduction in non-cash expenses associated with the issuance of stock options in 2014.
| Fennec Pharmaceuticals Inc. | |||
| Balance Sheets | |||
| (U.S. Dollars in thousands) | |||
| December 31, 2015 | December 31, 2014 | ||
| Assets | |||
| Cash and cash equivalents | $ 942 | $ 2,307 | |
| Other current assets | 77 | 65 | |
| Total Assets | $ 1,019 | $ 2,372 | |
| Liabilities and stockholders’ equity | |||
| Current liabilities | $ 389 | $ 440 | |
| Derivative liabilities | 82 | 1,319 | |
| Total stockholders’ equity | 548 | 613 | |
| Total liabilities and stockholders’ equity | $ 1,019 | $ 2,372 | |
Cash and cash equivalents were $0.94 million at December 31, 2015 and $2.3 million at December 31, 2014. The decrease in cash and cash equivalents between December 31, 2015 and December 31, 2014 was due to clinical trial expenses related to our Phase III study of STS and our general and administrative expenses offset by the exercise of options and warrants during the fiscal year. The Company received approximately $0.5 million in cash from the exercise of options and warrants.
| Working Capital | Fiscal Year Ended | ||
| Selected Asset and Liability Data: | December 31, 2015 | December 31, 2014 | |
| (U.S. Dollars in thousands) | |||
| Cash and cash equivalents | $ 942 | $ 2,307 | |
| Other current assets | 77 | 65 | |
| Current liabilities excluding derivative liability | (389) | (440) | |
| Working capital | $ 630 | $ 1,932 | |
| Selected Equity: | |||
| Common stock | $ 69,153 | $ 68,656 | |
| Accumulated deficit | (111,533) | (110,874) | |
| Stockholders’ equity | 548 | 613 | |
At December 31, 2015, the Company had working capital balance totaling approximately $0.6 million compared to $1.9 million as of December 31, 2014.
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, 2015. 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 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 10,000 children are diagnosed with local cancers that may receive platinum based chemotherapy. Localized 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 Sodium Thiosulfate (STS) 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 Raykov
Chief Executive Officer
Fennec Pharmaceuticals Inc.
T: (919) 636-5144