Earnings call transcript Q1 2023

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Operator

Good morning, ladies and gentlemen, and welcome to Fennec Pharmaceuticals First Quarter 2023 Earnings and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions on how to participate will be given at that time.

As a reminder, today’s conference call is being recorded.

to Robert conference Andrade. like Chief to would Officer, Financial I turn over the Fennec’s Now Please proceed.

Robert Andrade

operator, you, Thank and good morning, everyone.

that quarter call, business update. delighted Fennec as well review are you a us results join We general provide today our Pharmaceuticals financial first which, XXXX during conference as earnings we will can for

Joining Fennec is morning Officer. this me Executive Rostislav from Raykov, our Chief

the subject forward-looking U. call, would Reference release uncertainties and risks in are Securities Before Commission. remind S. event this results will company’s to that I these press are uncertainties differ detail cause in to during risks like results current the in the we statements be and Exchange discussed and may forward-looking statements. disclosed making periodic begin, that you today’s the made company to that the with and actual in and to filings from

represent today or upon In this We on forward-looking addition, only call subsequent update any any our be specifically relied statements. views any forward-looking not date. disclaim of obligation statements any as as of should to our revise as views representing made and

days. be conference for Fennec’s website, will rebroadcast is the being on This where it next recorded audio www.fennecpharma.com, call for XX available

And to with the is to call pleasure Rosti turn that, it my over Rosti? Raykov.

Rostislav Raykov

all morning to Robert, well significant many quarter months. opportunity of issued achieved underway us, U.S. ahead review the earnings and appreciate outlined recent this progress efforts We’ll PEDMARK market for the in XXXX we of as prior on this in were focus time our over as release the everyone. have our detail The to you, call. good Thank is We which press today’s past first this today. our updates morning, financial discussing results, call you’re giving of the launch be us milestones as several recent

solid opportunity about discuss would disease. have tumor non-metastatic the new or cases I’d to Each therapy. for them pediatric roughly are X,XXX platinum-based XX% there market patients of X,XXX in of be About the candidates these ahead U.S., us. First, cases of like of year localized who

Cisplatin-based these patients therapeutic greater treatment their good survival of further after tumors rate emphasizing chemotherapy majority localized have option. is for with the prognosis first quality very the than of generally standard of care the of five-year is of as XX%, These completed. importance life

roughly technically hearing in in and XX% children development even with at lifelong of the of lack requiring development as treated mild aids and as Permanent can while speech, achievement. social, cisplatin with emotional educational and can older be loss XX%, difficult adolescents with suboptimal inner loss implants. children high be Infants stages many critical seen hearing and lack development and young hearing language ear and literacy, cochlear children

PNET, with medulloblastoma neuroblastoma, hepatoblastoma. are solid The and most include including some tumors, which ones. tumors many common less germ well, of CNS as cell tumors main those retinoblastoma are common and There but the others tumors, examples indications osteosarcoma, are

localized PEDMARK loss month therapy non-metastatic age and risk solid pediatric first in only is to with the and The patients one reduce pediatric hearing older potential of the critical patients. the of of safely availability to tumors. FDA-approved for these long-term option quality was enthusiastically life rigorously breakthrough young oncology and the FDA-approved a PEDMARK represents a awaiting for increase community, of tested cisplatin-induced which

oncology among establishing responses ensuring non-metastatic product has of premier to when localized with strategy rapid the for a prescribing end, PEDMARK partner access a agent complement therapy the centered as tumor, commercial minimizing cisplatin-based been components, our community. and that To establishing Fennec to around questions and necessary the a as few solid pediatric critical choice barriers child

patient to patient have Fennec comprehensive HEARS, financial to source called which access is program and we To established designed both product these a single and a PEDMARK offering goals, services best-in-class address support support. patients connect

The requirements insurance copays eligibility can HEARS address and managing when met. or and offers coverage provide for of also certain Fennec lack systems questions of program for about and coverage can that care regardless are answer coordinators that tips PEDMARK resources type treatment. provides resources insurance the access to

out In targeting addition, access that NCCN highly U.S. the the include centers strong Oncology cisplatin we commercial U.S. pediatric launch Group, and use. those that oncology of and drive have XXX institutions NCI and PEDMARK specialist team across focused approximately that built our and a regional pediatric distribution marketing, execute to XX% of – with hospitals is on Children team the

So it’s a very effort. concentrated

we key key opinion and importantly, continue partnering, education to groups, leaders, awareness This and and interactions for pharmacy team the critical nursing community. but advocacy patient-parent also have initiatives, with is responsible audiologists, organizations, most

come the the we and to regional PEDMARK academic from to providers, time said the adoption in practices. carrying With health and received has pleased has launch, U.S. the launch centers for through major that well to been some of are profile enthusiasm see Early both have by care respect commercial such we

Geographically, HCPs month. with all and seen prescribing we seen every and target adoption territories have nice our accounts our PEDMARK, of have increasing within

seen In the germ tumors. and tumor utilization terms cell have several osteosarcomas we patient across hepatoblastomas, of patients, particularly types, but

XX% PEDMARK secured We insured, with insured the of XX% through patients patient pediatric has payer and programs. oncology reimbursement, that community, both Regarding coverage. broad another are anticipate favorable within government-sponsored approximately commercially

Services use patient believe this key additional who PEDMARK. J-Code several will April for process. or that the J-Code the and reimbursement permanent Medicaid of issued to year. became news streamline and which this that CMS leads were great effective waiting until also We also X is announced PEDMARK, This accounts a access at effective help became has the We Medicare U.S. Centers on to

country even our the to have up they PEDMARK processes academic can institutions that sometimes some take not as in formulary of year are yet a and Additionally, largest prescribing more.

processes on with access. We’re to these necessary and gain actively working formulary steps institutions the

accelerating Accordingly, and as second gain in half PEDMARK the second year centers these we quarter approval. of see the larger formulary

to an solid overall is as launch off we feel though commercial So the start. PEDMARK

a disciplined to building launch stay to are is would in our X% continuing share would these execute of share, but our at target targeted U.S. that approach the within market a is centers. cisplatin this strategic And We’re XX% XXX again, against – not confident market. in and plans and really just product

have profile team an Practice right we we And this believe physicians, right Cancer to we’re provides me to with is young patients to kids, opens Clinical some and older children, focused National adult on focused for very young of PEDMARK Network oncology important the attractive PEDMARK. be that and which with the although Earlier adolescents the opportunity actually the adolescent for and the year, drug in confident include very Comprehensive updated personally. treated places a its We’re the Guidelines for payers. this

designed began In advance It The PEDMARK until treat addition, drug PEDMARK the to this year. patients exclusivity September condition of drugs FDA market XXXX. in date orphan XXX,XXX The development of drug the granted annually. seven-year FDA for orphan and program affecting or U.S. the exclusivity – is FDA on designation the continues for fewer approval. September to January the

the label, explicitly other sodium PEDMARK directed the has FDA not prescribing approved that thiosulfate Additionally, is products. substitutable with

unmet European recommended the which and the ratification to for to Use by the June. Union recommendation CHMP recommendation March need. significant under will and now be only review by is Commission, by the the approved area in European European the early first CHMP treatment of address this The medical is PEDMARQSI of Agency expected Commission, expanding marketed a When Products Medicines XX as that the be will for Committee of formally in authorization Medicinal opinion With PEDMARK, for issued granting Europe. Europe, European PEDMARQSI and announced positive Human we approved on marketing in a regard

world, We we either as this is seek continue once the alone opportunity create significant and select, available to market, European for enable in to to months this territory evaluate shareholder question internationally. company PEDMARQSI we in and the some by it answer European Whatever best of go or later launch approved. we or alone, entire as see Europe Europe in value partner to rest larger making a course, coming of go another the rest that commercial pathway additional of the the the countries, year the the partner it pathway

to turn financial now that, With Robert over the our to over for quarter. call review the will Robert, to you. I results

Robert Andrade

Thank you, Rosti.

of of on results than viewed results. first Rather our details, through Media press comments financial today of section those our some release website. be quarter read can which all & contains details Investors my Our financial key will on XXXX, the the for focus

reported first gross PEDMARK sales product million, sales company of of quarter translating The the into net in $X.X $X.X million XXXX. of

with As is second the our building Rosti formulary centers to recent as the and the access, of issuance J-Code, large streamline process. mentioned, reimbursement momentum helping gain quarter in

of ongoing expenses. the on as basis The for XXXX expenses for quarter compares the increased as $X.X year-over-year PEDMARK administrative first which first and $X.X increase for legal and a with million, is as result $X.X were professional a of quarter XXXX. of million million well support General

R&D and and of development QX by it or traditional The general research expenses compared and as recorded cost into of costs expenses The PEDMARK. of $X.X now reduced development administrative eventually associated approval when research expense with majority received of decreased million and are PEDMARK recorded FDA product as to company XXXX. to capitalized inventory sales.

in its Selling and recently in and expenses. shipping to sales marketing related of million recorded out-of-pocket insurance, the include quarter recording when the XXXX. logistics, company and PEDMARK. $X.X it internal distribution to expanded an and marketing first advertising, include began expenses marketing force expenses payroll selling wages for The and selling launch costs, expenses commissions of Company

XXXX net of for XXXX. a million quarter loss loss the in share $X.XX or GAAP ‘XX loss per first was of compared of $X for share $X.XX GAAP Our loss net million per a the of to $X.X a or quarter first of

$XX.X debt PEDMARK our will million cash operations And XX fund for under our quarter on believe capital next drawn to convertible investment months. first facility. least in which approximately planned the ended coupled cash, our securities, when existing available be capital, revenue We includes Petrichor the and our cash with million down sufficient $XX finally, equivalents position. at to of We assumptions, with

that, And are ready with questions. for operator, we

Operator

question Knickerbocker Instructions] comes Please And from with Craig-Hallum. Chase proceed. Thank first you. [Operator our

Chase Knickerbocker

progress for morning, Thanks questions on and thus Good congrats my guys. far. taking here the

expectations. I there well and was Was just in kind play about was or to dynamics QX here us that demand customers QX in investors of forward hospitals? some guess understand it. the wins sequential larger at It help revenue stocking P&T there. think the fairly increase in those QX QX. ahead centers children’s a modest of you line. in So pulled await QX Help smaller dynamics as

Rostislav Raykov

Yes. Thank one. take you, this I’ll Chase.

no QX, we’re look or issues what’s versus QX. were if either – So you course, of QX so there by QX stocking there interesting in – at way, the there all, at starting

it’s that interesting our really quite is label specifically, broad. What’s

to one types age so that that no And age various listed the month child limit. tumor really we treat And of previously. I a from includes

are treated and they those various each children that those And cisplatin, so that with cisplatin STS keep hours post treated. in for mind require require six regimens, ones the

sizes. surface there what’s administered those is STS – also on is So interesting area. in that And are various based we body children

I what a seeing, So what think you’re patient the you relatively albeit on insignificant be a bit base of initially, mix. is – may

a a an helpful. and usage we alternatively, the larger if that’s so a getting you’re care is older hope both, usage. vial vial a And get or A to we but for patient if small getting I kid, vials. deeply And or clearly higher varies. us, you child baby, so significantly a less patient get adolescent, toddler a you’re

Chase Knickerbocker

traction those to that those is in in committees. I where you’ve point Yes. we’re mentioned your press but those talk there you certainly And guidance penetration we’re think you this about not do inference Got far XXX XX% the my then win mentioned we is in P&T release rate remarks commercial And those end larger giving here, year it. but of year at your and in in this seen would centers patients? where QX. substantial be you you could that QX the this, And there prepared What so centers starting dosing centers? know

Rostislav Raykov

Yes.

me Let can as that just sort add. Robert well, and maybe of take

that in highly institutions. them across these with highly, XXX they bureaucratic various if COG work landscape sizes. place. study at you We are They took roughly at XX look are the the of centers, So

bureaucracy. patients. I Coast, time they’re to see. the on this also and is through West the of is they’re evaluate what of the to from taking So volume ones are very the the would that primarily located those, Coast. They’re run early properly say basically They adopters, on good see East high And the hospital which

share way. In don’t terms of market share, as relatively market I moment, can you long this but is say, insignificant expect the to would stay at the that for I see,

approved this well. that had we excited and have because So are of we are as activity, already orders significant see different for repeat patients to the actually and seeing ones gone quite through P&T, level

So – different tumor with types.

when back team we’re when and exciting what – that’s through only you you actually, So really think is the our – centers. you because not doing, really, targeting what we’re step just

key hospital these protocol various tumors. targeting that diseases are in for the PEDMARK treating also and, in leaders one addition, We’re opinion of the establishing each

So process, is accounts. access a back happens I’m once you so that, and course, where through towards to all pretty the the and place of of I’ve end burdensome far. product, of P&T of want what deal to very have that the most working on seen which excited then bureaucratic we these with And we’re that,

you add know, don’t want Robert, if I that. to else to anything

Robert Andrade

access working latter has we some now are build Just centers. believe the mentioned, is And we the And formulary started hard translating, some then add on also How first as the centers. J-Code really months, just that part see to to as you doing? of And issued relationships pickup officially that six Rosti what even seen larger gain PEDMARK. the you takes within those we we’ve these the with been Yes. – team – process into as it. on, for from simplified towards well to to Thanks, repeat know that the into our within and really ordering have that’s the time. Chase. And orders,

Chase Knickerbocker

for Yes, in. maybe one, last if And guys. can the I sneak it thanks color, one

in and you of pretty get penetration it be a a with fair can funding. still make your spend. for to some at you modest think You breakeven a can earnings? about there quarter breakeven assumptions positive fair quarter a talked guys about XXXX to Is that you – months this XX is where way point, And being

Rostislav Raykov

you. turn Robert, it over I’ll to

Robert Andrade

or question, to at year. Yes. $XX Thanks $X the running up, Chase. for we a cash expenses roughly roughly just back I’ll a month million take in a million And one. Yes. are that operating

So internally, as XXXX. us and milestone we major a certainly accomplish to to us have during for for certainly feasible that accomplish

that given a PEDMARK, for that, that within to we translate market at for little million minimum breakeven. revenue to us. of in get the a would certainly – So opportunity to $X be the bit goal north a And that’s

Chase Knickerbocker

jump queue, I’ll guys. Thanks. Great. in back the

Operator

line Wainwright. of next proceed. from Thank Raghuram One please. our for you. moment Selvaraju question, with H.C. And comes it Please the

Raghuram Selvaraju

questions. taking for Thanks my

three Just quick ones here.

could larger the adopters number to to that substantially we patient larger early of centers within than you pool a if others, any of if for drill that. expect a those wondering was if the pool, mentioned I any you XXX us centers on are give can adopter granularity Firstly, account any down for you and on of early them proportionately expected effectively if patient account

effectively new that Secondly, spending R&D forward. to not the beyond you the for normal de number, persist you’re you negligible, wanted expect as about And was R&D on where this Should ask spending be first XXXX? to expect the quarter going XXXX? situation regarded which do effectively minimis, anything

could if on is comments able I to from the and into this expect rightsized second make Thanks. might some that was you think infrastructurally organization half be spending whether perspective And through if get some of a wondering G&A or currently year. you you there G&A say as to there you efficiencies the be lastly, that

Rostislav Raykov

piece proportion of take take just that the I’ll – we’re hi, the with. I’ll Yes. working centers Yes. Ram, large

some are academic really them, label, it’s centers also obviously interesting of cases, and a label. they they focus our population imagine a can on So is so our the as per see tough those those of – outside that these you because centers have right, with – but

patients, well. second-line see the disease, patients also amount good of relapsed or they but this metastatic as So a is localized disease

already P&T In have a the ones are process, terms existing that decent they of have – we won from size.

types. for to see And there. with in repeat physicians is think so important additional to very additional And encouraging the prescribe aspect also, have tumor that’s the those, orders particular, I

So it’s – and already that’s process, in and happening. the

encouraging that’s see. So to

to rest types. into just the tumor have we have coming the and we open to broaden up, other So it then

want front of do take the Robert, that’s the G&A? opportunity you in And us. spending R&D and and So the challenge to

Robert Andrade

it Ram, the Yes, pleasure. for question. my Thanks, be would

you, you opportunities tiny the minimis And expansion R&D, just So principally tick number will afford for further or yes. quarter where do mentioned to some negligible. down clinical trials line. two bit. I There We was provide a the question us investigator-initiated the support, those that expect was label de on and up hopefully first are opportunities some believe, with some we

million I the it more that But I than expenses, of if expect that’s of that. to in helpful. as operating a include number, I cash whole, wouldn’t XX% think do $XX the R&D when be of

will to be more a of little pick $XX than it bit, up So million. XX% but that not

think was third G&A. the on I question your

streamlined very a have efficient We organization.

XX really the on We our employees. on just a have Again, launch little principally that’s over XX% focused of U.S. PEDMARK. and

we the pediatric and right people to team, We we from access think the the team, our specialists – right on team, cetera. quality regional both – oncology a are our ground et to our market fit, have

is – the of certainly, opportunity is a U.S. and evaluate we feel mentioned, we caveats, perspective, One from – we course, fit we in Rosti to Europe that. good of here. a have it as are the But

Raghuram Selvaraju

that received with there a to you regulatory you activities, do the Or a launch? lastly, a for for opinion might already you Europe? item clearance be European officially potential to do anticipate positive cleared marketing PEDMARQSI is respect anticipate in board the potential comes following on formal then a And that gating partnership actual be partner possibility before

Rostislav Raykov

Well, this take one. know I’ll – as you

want European either the that – both ratifies course, of it that leaders as and obviously a for work a we where make best very know to countries what opportunity them partner approve so will the and with we have business, or well, the be on and to we this the with As as just time doing – European centers of with you of there’ll and well standalone alternatively we different we there And that are rest opinion, know, the companies. period as now few Commission years process is key well, opinion evaluate formal, is over do CHMP a it’s structured. the sure those Europe

peace, So code if of a of you sort will.

we things and And that’s entire large or – highly second are do that. all ourselves, evaluating the of would certainly we’re obviously that’s that just resources – the a just one, The standalone the unlikely those is so take. course, do what partnership, one that it can – involved and for then given continent, but but

we’ll is positive there great So There’s rights for we CHMP decision – the shortage what this, do And say evaluate that our no we suitors. is in are that I especially proposals shareholders, interest amount most of the and after best the make makes of European what’s obviously the would a and for our best sense. will opinion.

Raghuram Selvaraju

you. Thank

Operator

you. next moment Quibria proceed. with It Securities. line Capital for the Thank from question, Naureen of One our comes One Please please.

Naureen Quibria

on Thank congrats the and you. all morning, progress. Hi. Good

early represent? curious, hospitals days, comment what it’s many numbers can on of do you Just but And or the know current in repeat and I are prescriptions prescribers? customers you seeing terms how

Rostislav Raykov

let Yes, me that. take

really interesting. – yes so it’s So

So think way. of this it

would physician product patient because come the is a for their this script, So if get setting, of from in the to hospital the has to typically, write code the in to patient DRG they the this have go inpatient typically the when hospital. against bureaucracy a

once once established, it’s automatic. becomes a it versus is through P&T, then So gone everything

a the out flowing. actually and getting early of really and hospital process script difference the an versus synchronized a So being that’s whole be between adopter sort fight It’s to really, critical. to write big bureaucracy

math, – again, the you terms so WACC available. basically take is price – – in of can Now the you can simple

the take discounts, during sorry, of the can for that. sold can an kind then revenue Not you you You of that. were number first first basically vials – get and by can you quarter roughly so the fourth the quarter of quarter judge the so can and divide it substantial that kind estimate

touched because and patients vials which some And aspect, some the And patients I are that was of repeat numbers, more when patients, insignificant or vials. right, then third require with higher mix earlier, on working less require in dose repeat absolutely orders, P&T, the of terms you’re lower. and number to But tend orders the through once it’s there. patients of stretch either

Naureen Quibria

versus And insurance you Got – so commercial What covered patients of far? actually then percentage it. are covered have so the mentioned the – been government.

Rostislav Raykov

covered. So everyone is

the So is we that child U.S. have not which a behind. a great a in – policy, does policy leave have we a

there on of have how covered they And whenever vary for no will states, the And insurance, those state based various course, to private typically, region. it’s setting. And question for Medicaids, is those covered? rates – by so is, Medicaid. they reimbursement the And from are region state most at hospital DRG

Naureen Quibria

I if one Rob trials And that Okay. sneak the in. more ongoing. mentioned are can investigator-sponsored

they in what So how many and settings are of expansion for? – these label are potential the

Rostislav Raykov

Yes.

study So so that’s on interesting as these into in a with we’re working have are is The question. well. in the transplant. and new has metastatic come treatment, We basically a a tumor and relapsed. that very this – hepatoblastoma, liver a Cincinnati have They liver back way had kids good second-line actually very

of tumors, And with the liver. seems giving including and has treatment metastases they’re dose very HDAC them – already have with options in is be are of to of to very an no the time the cisplatin, them. high discovered hearing. many what difficult been new ones They’ve the cisplatin There’s a Galler] that there very for treated sensitive that [Dr.

to able he’s So well. very shrink them

the XX the hearing of basically how with ultra-ultra we cisplatin responding – idea roughly the met there, is And patients. of have to initiated course, to of hepatoblastoma it’s What’s to in hopefully, their interesting accrue is a course, years. small that And be we But they’ll able rare. you [HIIM, course, between and, it’s if so transplant so – loss. really that It’s are think there, is is patients. into see hepatoblastoma and measure to XX with of liver next of three even they rare, study number four the UCF to second-line So are MSK.]

the that need metastatic As the strong the disease We expansion. haven’t for FDA cisplatin see the FDA. expect the take an have with to given again, before discussion that to we be of we results But therapy, could decide we cisplatin second-line intensity interesting and this response discussion of with had be study track. the to the to

Naureen Quibria

Thank great. from That’s Okay, you. all me.

Operator

question. you. One of our comes next Thank Please David Wedbush moment it line with Securities. for Nierengarten And proceed. from

David Nierengarten

many for on thanks question. study, prescribing the presume taking the which the Hi, I just using are those mix of fruit, Out those, How your the of for had are Or accounts. maybe some prescribe? up targets J-Code? first that kind and or of part of ready been how have are Thanks. to waiting how on more accounts signed of many commercialization? were I the one those low-hanging of SIOPEL accounts were of the many of

Rostislav Raykov

Yes.

COG And P&T had only that. study [and account basically in actually at And roughly the it. through with X Stanford]. study. those, really the U.S., of the through the David, The that them. of waiting moment – the looking out take there’s I’ll SIOPEL majority were process vast It’s them one So of XX

majority go-to of the them is so expect these places. And to we’ve to share, least therapy sort at, kind So of there. like, are got again, of – going vast these X,XXX, got patients this are basically cisplatin right, – patients – these of we but many stay at because X,XXX of are I don’t where we’ve that X%

P&T So they them these expect protocol. once would each to – and into through process, get I disease go burdens for to this for

So remember, education doing we’re the the with KOL.

with the We audiologists. are working

the the working nurses – We’re there. nurse with

advocacy some working in cases, the are with, groups. We

to education at come one, protocols of sure start make through this it’s in you like in course, you But and to expand is from whole and to lots hospital. of there. disease get least then many possible want can as So P&T, included that with a piece it’s together, as each

David Nierengarten

it. Got Thanks.

Operator

to call final will that, I turn the you. back and gentlemen, conclude Q&A Thank we the session. for Rosti And Raykov with ladies comments.

Rostislav Raykov

the with are PEDMARK would for quarter. everyone And Well, discussing dramatically look the to forward their – of very that for I during – next like after our how or Yes. we the we of X, thank of – thrilled interest. and has increased, to April especially uptick – uptake

all you thank today the for So time the and questions.

Operator

and for participating today’s ladies gentlemen, in you, Thank program.

now may You disconnect.

Fennec Pharmaceuticals (FENC) 11 May 232023 Q1 Earnings call transcript