Mr. Rosty Raykov reports

FENNEC PHARMACEUTICALS PROVIDES CORPORATE UPDATE AND THIRD QUARTER ENDED SEPTEMBER 30, 2014 FINANCIAL RESULTS

Fennec Pharmaceuticals Inc. has released its financial results and recent developments for the third quarter ended Sept. 30, 2014. (All amounts are in U.S. dollars unless otherwise specified.)

Sodium thiosulphate update

The European-based Siopel 6 study will complete patient enrolment by the end of this year. As of this date, 112 out of 115 children have been randomized. Final protocol-specified independent data-monitoring committee review on the first 100 patients, assessing any potential concern of an adverse effect of STS on the efficacy of the cisplatin chemotherapy, is expected in the first quarter of 2015. Siopel 6 is evaluating STS in localized standard risk hepatoblastoma, where cisplatin effectiveness is known to be very high and it is used as monotherapy. The last IDMC review of the safety results, after 80 patients, concluded that the study continue enrolment. Confirmation of these data in the next and final IDMC review of 100 patients will substantially strengthen and add to the Children Oncology Group ACCL 0431 study, based in the United States, for efficacy data to support prevention of cisplatin-induced hearing loss in children with standard risk/localized disease.

"Both Siopel 6 and COG ACCL 0431 studies represent our long-term commitment to groundbreaking supportive care research in children with cancer. In the quest to reduce the devastating impact of hearing loss in children treated with cisplatin, we plan to engage discussions with regulatory agencies in 2015. Our intentions are to provide the patients, treating physicians and families with an option for the use of STS to prevent hearing loss," said Rosty Raykov, chief executive officer of Fennec Pharmaceuticals.

Corporate update name change to Fennec Pharmaceuticals Inc.

On Sept. 3, 2014, the company changed its name to Fennec Pharmaceuticals Inc.

Originating in Saharan North Africa, the fennec fox is the smallest of the foxes and uniquely adapted to high temperatures and low water environments. It has distinctively large ears, which dissipate heat and provide very sensitive hearing. These qualities of adaptability and resourcefulness led the company to adopt the fox with the big ears as its new name and logo.

"Children undergoing chemotherapy are going through an extraordinarily challenging time, and the loss of hearing only compounds the difficulty. With the company refocusing development efforts towards STS, we looked for a name that would reflect this new direction," stated Rosty Raykov, chief executive officer of Fennec. "This led us to the fennec fox, a plucky and resourceful animal with enormous ears that we found to be both evocative of our mission as a company and likely to be a ray of vulpine sunshine for children going through a difficult time."

Corporate update share consolidation

On Sept. 3, 2014, the company completed a one-for-three reverse stock split, or share consolidation. As a result of the share consolidation, the company's new capital structure is as follows:

• Shares outstanding: 9.9 million;
• Shares: 300,000, upon exercise, at $1.50 (U.S.), of warrants that expire on April 30, 2015;
• Shares: 100,000, upon exercise, at $1.50 (U.S.), of warrants that expire on March 29, 2016;
• Shares: 1.3 million, upon exercise, at $1.50 (U.S.), of warrants that expire on Nov. 22, 2018;
• Shares: 1.3 million, upon exercise, at $4.32 (Canadian), of warrants that expire on April 30, 2015;
• Shares: 800,000 upon exercise, at $4.32 (Canadian), of warrants that expire on March 29, 2016.

Financial update

The company reported a net loss from operations of $600,000, which excludes a $600,000 non-cash gain on derivatives for the third quarter ended Sept. 30, 2014, compared with a net loss from operations of $100,000 million excluding the non-cash loss on derivatives of $1.7-million in the same period 2013. The company also experienced a non-cash gain of $400,000 from the settlement of derivative liabilities resulting from the warrant exchange, which concluded in the quarter ended Sept. 30, 2014. There was a significant difference in research and development expenses for the three months ended Sept. 30, 2014, as compared with the same period in 2013 due to a gain on debt settlement during the third quarter of 2013. Research and development costs are impacted by the clinical support costs associated with the amount of patients enrolled and participating in the trial during the financial period. General and administrative expenses were up sharply for the three months ended Sept. 30, 2014, due to professional costs associated with the company's reorganization of its capital structure, name change and the issuance of share-based compensation.

For the nine-month period ended Sept. 30, 2014, the company reported a net loss from operations of $2.1-million excluding the $1.9-million non-cash loss on derivatives, compared with a net loss from operations of $1.5-million excluding the non-cash gain of $2.3-million in the same period in 2013. The company also experienced a non-cash gain of $400,000 from the settlement of derivative liabilities resulting from the warrant exchange, which concluded in the quarter ended Sept. 30, 2014. There was a large decrease in research and development expenses related to the conclusion of enrolment and clinical support of the phase 2 Eniluracil trial in 2013 and the third quarter settlement of a debt for less than it had been recorded for. This expense decrease was largely offset by the increase in non-cash general and administrative expenses associated with the issuance of stock options in 2014.

              INTERIM CONSOLIDATED STATEMENT OF OPERATIONS
            (U.S. dollars in thousands except per-share amounts)

                                    Three months ended     Nine months ended
                                   Sept. 30,  Sept. 30,  Sept. 30,  Sept. 30,
                                       2014       2013       2014       2013

Revenue                          $       --  $      --  $      --  $      --
Operating expenses
Research and development                 88       (224)       192        507
General and administrative              531        275      1,894      1,008
(Loss) from operations                 (619)       (51)    (2,086)    (1,515)
Other (expense) income
Unrealized gain/(loss) on
derivatives                             619     (1,708)    (1,855)     2,254
Interest (expense) income and
other                                   380         (7)       377         (5)
Total other (expense)
income, net                             999     (1,715)    (1,478)     2,249
Net income/(loss)                $      380  $  (1,766) $  (3,564) $     734
Basic/diluted net income/(loss)
per common share                 $0.04/0.03  $   (0.21) $   (0.36) $    0.09

Cash and cash equivalents totalled $600,000 at Sept. 30, 2014, compared with $1.7-million at Dec. 31, 2013. The decrease in cash balance of approximately $1.1-million is attributable to the company's operating expenses, offset by cash received of $200,000 from the exercise of options and warrants. At Sept. 30, 2014, the company had working capital totalling approximately $300,000.

The selected financial data presented herein are derived from the company's unaudited Sept. 30, 2014, 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 Sept. 30, 2014, and management's discussion and analysis of financial condition and results of operations will be available at the Securities and Exchange Commission website and SEDAR.

We seek Safe Harbor.