RESEARCH TRIANGLE PARK, NORTH CAROLINA--(Marketwired - Nov. 13, 2014) - Fennec Pharmaceuticals Inc. (TSX:FRX)(OTCQB:FENCF) today reported its financial results and recent developments for the third quarter ended September 30, 2014. All amounts are in US dollars unless otherwise specified.
Sodium Thiosulfate Update
The European based SIOPEL 6 study will complete patient enrollment 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 (IDMC) 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. Last IDMC review of the safety results after 80 patients concluded that the study continue enrollment. Confirmation of this data in the next and final IDMC review of 100 patients will substantially strengthen and add to the U.S. based Children Oncology Group (COG) ACCL 0431 study 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 ground- breaking 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, CEO of Fennec Pharmaceuticals.
Corporate Update Name Change to Fennec Pharmaceuticals Inc.
On September 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 us to adopt the fox with the big ears as our 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, CEO 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 September 3, 2014, the Company successfully completed a 1-for-3 reverse stock split, or "Share Consolidation". As a result of the Share Consolidation, the Company's new capital structure is as follows:
9.9 million shares outstanding
0.3 million shares upon exercise at USD $1.50, warrants expire on April 30, 2015
0.1 million shares upon exercise at USD $1.50, warrants expire on March 29, 2016
1.3 million shares upon exercise at USD $1.50, warrants expire on November 22, 2018
1.3 million shares upon exercise at CAD $4.32, warrants expire on April 30, 2015
0.8 million shares upon exercise at CAD $4.32, warrants expire on March 29, 2016
Financial Update
The Company reported a net loss from operations of $0.6 million which excludes a $0.6 million non-cash gain on derivatives for the third quarter ended September 30, 2014, compared to a net loss from operations of $0.1 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 $0.4 million from the settlement of derivative liabilities resulting from the warrant exchange which concluded in the quarter ended September 30, 2014. There was a significant difference in research and development expenses for the three months ended September 30, 2014 as compared to 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 September 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 September 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 to 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 $0.4 million from the settlement of derivative liabilities resulting from the warrant exchange which concluded in the quarter ended September 30, 2014. There was a large decrease in research and development expenses related to the conclusion of enrollment and ongoing clinical support of the Phase II 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 Unaudited Consolidated Statement of Operations:
(U.S. Dollars in thousands except per share amounts)
Three Months Ended Nine Months Ended
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Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2014 2013 2014 2013
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Revenue $ - $ - $ - $ -
Operating expenses:
Research and development 88 (224) 192 507
General and administrative 531 275 1,894 1,008
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Loss from operations (619) (51) (2,086) (1,515)
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Other (expense) income:
Unrealized gain/(loss) on
derivatives 619 (1,708) (1,855) 2,254
Interest (expense) income and
other 380 (7) 377 (5)
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Total other (expense)
income, net 999 (1,715) (1,478) 2,249
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Net income/(loss) $ 380 $ (1,766) $ (3,564) $ 734
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Basic/diluted net income/(loss)
per common share $0.04/0.03 $ (0.21) $ (0.36) $ 0.09
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---------------------------------------------Cash and cash equivalents totaled $0.6 million at September 30, 2014, compared to $1.7 million at December 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 $0.2 million from the exercise of options and warrants. At September 30, 2014, the Company had working capital totaling approximately $0.3 million.
Interim Unaudited Consolidated Balance Sheets:
(U.S. Dollars in thousands except per share amounts)
September 30, December 31,
2014 2013
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Assets:
Cash and cash equivalents 593 1,663
Other current assets 80 89
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Total assets 673 1,752
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Liabilities and stockholders' equity:
Current liabilities 402 344
Derivative liabilities 3,499 2,863
Other long-term liabilities - -
Total stockholders' equity (3,228) (1,455)
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Total liabilities and stockholders' equity
(deficiency) 673 1,752
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----------------------------The selected financial data presented below is derived from our unaudited September 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 September 30, 2014 and management's discussion and analysis of financial condition and results of operations will be available at
www.sec.gov and
www.sedar.com.
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, 2013. 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.