Fennec Pharmaceuticals (NASDAQ:FENC) reported third-quarter net product sales of $19.4 million, up 56% from a year earlier, as use of its hearing-protection drug PEDMARK expanded among new and existing customers.
Chief Executive Officer Jeff Hackman said the company benefited from a larger sales organization and increased patient enrollment in its Fennec HEARS services program. He described the quarter as the company’s eighth consecutive quarter of growth.
Chief Financial Officer Robert Andrade said Fennec entered the fourth quarter with a record number of patients, planned infusions and planned vials carried over from the prior period. A strong October also gave the company greater visibility into the fourth quarter, he said.
Sales Growth and Profitability
Third-quarter net product sales rose from $12.5 million a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization, a non-GAAP measure, increased to approximately $5.8 million, or 30% of net product sales, from $2 million, or 16%, in the year-earlier quarter.
The company reported earnings per share of $0.12, compared with a loss of $0.02 per share a year earlier. It generated nearly $7 million in cash from operations during the quarter and ended September with $48.7 million in cash and cash equivalents and no debt, Andrade said.
Operating expenses, defined by Fennec as research and development and selling, general and administrative expenses excluding stock-based compensation, were approximately $12.7 million. That was about $3 million higher than a year earlier, primarily because of marketing investments and increased commercial headcount.
Andrade said he expects fourth-quarter cash operating expenses to be the lowest of the year and full-year cash operating expenses to be in the low $50 million range.
Patient Enrollment and Commercial Expansion
Hackman said patient enrollments in Fennec HEARS rose 23% in the third quarter from the second quarter, while infusions increased 58%. He also reported record enrollment among adolescent and young adult patients.
Asked why those increases outpaced sequential revenue growth, Andrade said the timing of enrollments and infusions, as well as the mix of patients across academic, outpatient and government settings, can affect how activity translates into sales.
Fennec expanded its sales organization in the first quarter under an initiative called Project Ignite, adding 14 territories and four frontline managers. Hackman said the expanded team had been in the field for two full quarters and was reaching healthcare professionals more frequently. He said the company was seeing uptake among community oncologists and remained focused on accelerating adoption at academic centers.
The company also began using data obtained through partnerships with community practice aggregators to identify providers with patients who could be appropriate for PEDMARK. Hackman said the program helped Fennec add multiple accounts and increase use at existing ones during the quarter.
Fennec secured formulary inclusion at a large Midwestern academic center and its home infusion service. Hackman said the center contributed a few patients in the third quarter and was showing more significant activity in the fourth quarter. He said the formulary addition could potentially open access to hundreds of additional patients at the institution.
Separately, in response to an analyst’s question about a National Community Oncology Network formulary win, Andrade clarified that it was not a major contributor to third-quarter results.
Research and Future Opportunities
PEDMARK is approved for pediatric patients at least one month old with localized, non-metastatic solid tumors, Hackman said. He added that the National Comprehensive Cancer Network has a category 2A recommendation for its use in adolescent and young adult patients.
Hackman said an investigator-initiated phase 2 study in Japan showed significant hearing protection in pediatric and adolescent and young adult patients with non-metastatic tumors. He said the data also provided clinical context regarding anti-tumor activity with delayed PEDMARK administration. The company expects the full results to be published in a peer-reviewed publication.
In early January, City of Hope Cancer Center plans to present interim findings from an investigator-initiated study evaluating PEDMARK in adult men with stage 2 and 3 metastatic testicular germ cell tumors. City of Hope also plans to present real-world feasibility and observed toxicity findings based on Fennec HEARS data in adults with germ cell tumors receiving platinum-based chemotherapy.
Andrade said testicular cancer accounts for slightly more than half of Fennec’s business. Asked about a potential change to NCCN recommendations for adults, Hackman said the company could not project whether that would occur in 2027 and that additional data would be important.
Hackman said Fennec was also actively discussing a potential licensing partnership in Japan, but did not provide a timetable for an agreement.
About Adherex Technologies (NASDAQ:FENC)
Adherex Technologies was a biotechnology company focused on developing treatments for cancer. In 2014, the company changed its name to Fennec Pharmaceuticals Inc.; Fennec later adopted the Nasdaq ticker FENC. Fennec is a commercial-stage biopharmaceutical company focused on therapies that address complications of cancer treatment. Its principal product is PEDMARK, a sodium thiosulfate injection approved in the United States to reduce the risk of cisplatin-related hearing damage in certain pediatric patients with cancer.
