Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fennec Pharmaceuticals Inc (FENC, Financial) reported net product sales of $7.0 million for the third quarter of 2024, an increase from $6.5 million in the same quarter of 2023.
- The company has achieved over 90% reimbursement for Pedmark in the adolescent and young adult (AYA) population, indicating strong market acceptance.
- Fennec Pharmaceuticals Inc (FENC) has strengthened its leadership team with the appointment of experienced executives, which is expected to enhance operational efficiency and strategic execution.
- The company is expanding its market presence with plans to launch Pedmark in Germany and the UK, providing additional revenue streams in 2025.
- Fennec Pharmaceuticals Inc (FENC) has a strong cash position with approximately $40.3 million in cash, cash equivalents, and investment securities, sufficient to fund operations into at least 2026.
Negative Points
- General and administrative expenses increased significantly to $6.1 million in Q3 2024 from $3.8 million in Q3 2023, partly due to non-cash stock compensation and severance payments.
- The company is facing ongoing intellectual property litigation, which could pose financial and operational risks.
- There is an awareness gap among physicians regarding the availability of Pedmark as a preventative treatment, particularly in the AYA market.
- Fennec Pharmaceuticals Inc (FENC) is still working to convert institutions that rely on compounded versions of sodium thiosulfate to adopt Pedmark.
- The market modeling for Fennec Pharmaceuticals Inc (FENC) remains challenging for analysts, indicating uncertainty in near-term revenue projections.
Q & A Highlights
Q: Jeff, do you feel like you have everything in place to accelerate and drive growth in the AYA market? What updates can you provide on the compendium, and should we expect meaningful growth from that market sequentially?
A: Yes, we believe the commercial opportunity for Pedmark in the AYA market is significant. With new talent in marketing and medical roles, we expect incremental progress. The third quarter's achievements signal a strong growth potential, and we anticipate significant opportunities in the coming quarters. (Jeffrey Hackman, CEO)
Q: Can you comment on the potential revenue per patient in the AYA market and the number of doctors you've engaged with? How should we think about Q4, especially with the AYA comments?
A: In Q3, we initiated patient treatments in the AYA segment and achieved significant reimbursement. The incidence and interest from physicians are promising. We see a potential market of 10,000 patients annually treated with Cisplatin. For Q4, we expect growth from new and repeat customers, laying a foundation for future growth. (Jeffrey Hackman, CEO and Robert Andrade, CFO)
Q: Are you seeing any changes in purchasing departments that historically relied on compounded versions of sodium thiosulfate? What are Fennec's key business development objectives going forward?
A: We are observing a shift towards Pedmark in institutions that previously used compounded versions, partly due to side effects from compounding. Regarding business development, we are evaluating open territories like Japan, where trial results next year could present opportunities. (Jeffrey Hackman, CEO)
Q: Can you provide an update on the status of ongoing IP litigation and when you expect a resolution?
A: The IP case is ongoing, and while I can't comment extensively, our IP portfolio has strengthened significantly with six Orange Book patents. We remain optimistic about our position. (Robert Andrade, CFO)
Q: What is the impact of the Norgine deal, and how does it contribute to Fennec's future value?
A: The Norgine deal, announced in March, is progressing well, and we are enthusiastic about their upcoming launch. This partnership is expected to contribute significantly to Fennec's value in 2025, which we believe is not fully appreciated by the market yet. (Robert Andrade, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
