Good morning, ladies and gentlemen. And welcome to Fennec Pharmaceuticals First Quarter 2025 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 and instructions on how to participate will be given at that time. As a reminder, today's conference call is being recorded. Now I would like to turn the conference over to Fennec's Chief Financial Officer, Robert Andrade.

Thank you, operator. And good morning, everyone. We appreciate you joining us today for Fennec Pharmaceuticals first quarter 2025 earnings conference call, during which we will review our financial results as well as provide a general business update. Joining me from Fennec this morning is our Chief Executive Officer and Board Member, Jeff Hackman. Before we begin, I would like to remind you that during this call, the company will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. References to these risks and uncertainties are made in today's press release and disclosed in detail in the company's periodic and current event filings with the U.S. Securities and Exchange Commission. In addition, any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. This conference call is being recorded for audio rebroadcast on Fennec's website, www.fennecpharma.com, where it will be available for the next 30 days. And with that, I’ll turn the call over to Jeff Hackman.

Thank you, Robert. And good morning, everyone. I wanted to thank you all for joining us today as we review our first quarter performance and share the outlook for the year ahead. I'm excited to share the details and highlights of our results for Q1 in 2025. So the alignment of our organization around clear commercial priorities to enhance field execution and support sustainable growth across key PEDMARK segments really began back in Q4 2024. Much of the work was implemented, though, in Q1 of this year. Therefore, Q1 was a quarter marked by a stronger strategic focus, disciplined execution, and much more meaningful progress across all areas of our business. This was accomplished with a few critical activities. Let me go into those. The first is the development and implementation of a targeting model, a much more sophisticated model than the organization had in the past. It was data-driven, and prescriber and practice lists to guide field execution and engagement were used. This was a critical step to better understand our business and our opportunities, especially given our expansion beyond pediatrics into the adolescent and young adult or AYA patient population. This targeting includes a structured tiering of cisplatin prescribers nationally, prioritizing tiers one through five, or those who treat a high number of patients with cisplatin, allowing us to focus on engagement in key academic institutions and large community practices where PEDMARK can have the greatest clinical and commercial impact. As a result, the first quarter tier one targets prescribed for PEDMARK demonstrated early traction and validation of our focused engagement strategy. Some of the examples of these accounts are Tampa General Hospital in Florida, Rady's Children's in San Diego, Huntsman Cancer in Salt Lake, Zuni Comprehensive Health Center in New Mexico, and City of Hope, which is one of the largest advanced cancer centers in the country. These are just some accounts and others that have begun to integrate PEDMARK into their treatment plans, further validating its clinical utility and expanding patient access in real-world settings. As a part of these efforts, we continue to be encouraged by the interest and adoption we see in the AYA segment. We've mentioned on prior calls that this opportunity for the segment is very significant in the U.S. Fennec estimates that approximately 20,000 cisplatin chemotherapy patients are treated annually in the primary tumor types thyroid cancer, breast cancer, germ cell, and testicular. The market potential in AYA is greater than the size of the pediatric market and has a favorable reimbursement profile via outpatient reimbursement. We also made significant strides on the medical front, increasing positive engagements with key opinion leaders and building momentum around awareness of the impact of cisplatin-induced ototoxicity. Our medical team also strengthened their clinical messaging based upon the data and interactions and new medical science liaisons, or MSLs, that joined our team and are already engaging with national KOLs. As an example of our cross-functional alignment, in late April Fennec and our teams had an advisory board comprised of key opinion leaders from across the nation with specialties in medical oncology, urologic surgery, directors of pharmacy. This discussion focused on AYA treatment paths within academic institutions in these large community practices. During this meeting, Fennec's team gathered additional market insights to further inform and refine our executional excellence moving forward. We're also actively working to further enhance our Fennec HEARS patient support program to ensure a more seamless supportive experience for both providers and patients at every step of the PEDMARK journey. These upgrades are designed to improve access, streamline reimbursement, and expand home nursing capabilities. Fennec HEARS is critical for healthcare providers' adoption and patient adherence. We experienced improvement in patient adherence throughout the quarter, and we expect this to continue throughout the year as we bolster and support our offerings with the HCPs and patients that we serve. By removing some of these friction points and delivering a very high-touch experience across the treatment journey, we're not only supporting better care, but we're also helping to empower providers to identify and treat more eligible patients. This is essential and critical given the growing recognition of hearing loss, which is an essential part of cancer survivorship. As awareness increases, our program ensures providers are equipped with the right tools and support to proactively engage patients who may benefit from PEDMARK intervention, helping us to advance both clinical access and also outcomes to care. Now I'd like to also address the commercial launch efforts and the progress that we're making with PEDMARK outside the U.S. Following our exclusive licensing agreement that Fennec executed back in March 2024 with Norgine Pharmaceuticals, the product is now launched commercially in Germany and in the UK. Just this past week, Norgine announced that the Scottish Medicine Consortium has accepted PEDMARQSI for use in Scotland. Collectively, these recent launches mark important steps in achieving Fennec's mission of expanding access to PEDMARK and PEDMARQSI to cancer patients at risk of hearing loss in the European Union and the UK. Also on the global front, the Investigator-Initiated Trial in Japan, or SDS-J01, evaluating PEDMARK was fully enrolled as of October 2024. The clinical trial evaluates the efficacy and safety of PEDMARK in reducing ototoxicity induced by cisplatin in children and AYAs with localized solid tumors. The primary endpoint of this trial is to assess the frequency of hearing impairment at the end of treatment. Results of the trial are expected in the second half of 2025 with potential evaluation of both the registration and partnering or licensing of PEDMARK in Japan thereafter. Looking ahead, we are building a solid foundation with a laser-focused vision as we enter into 2025. This includes deepening our relationships with our key accounts, expanding adoption with new existing customers, and seeking evidence-based data generation through Investigator-Sponsored Trials. Based on our sharpened messaging, our strategic focus, and this disciplined execution in the first quarter, we made some meaningful progress across all areas of our business. We're seeing positive momentum in our strategy to move health care providers from trial to adoption of PEDMARK. The strong momentum has continued in early Q2, and I look forward to continued progress and sharing those results with you throughout the year.

Thank you, Jeff. Our press release contains details of our financial results for the first quarter of 2025, which can be viewed on the Investors and Media section of our website. Rather than read through all those details, my comments today will focus on some key financial results. For the first quarter of 2025, the company recorded net product sales of approximately $8.8 million compared to $7.4 million in the first quarter of 2024. This reflects an 18% growth compared to the same period last year and an 11% increase over the fourth quarter of 2024. Of significance, we are pleased to report our second consecutive quarter of growth in net product sales. As mentioned in March 2025, we are focusing on growing net product sales and anticipate the most significant quarterly growth in the second half of 2025, when all the foundational pillars and initiatives we are putting in place are expected to materially impact the growth of PEDMARK. The company recorded $2.9 million in selling and marketing expenses in the first quarter of 2025 compared to $3.9 million in the fourth quarter of 2024, and $5.2 million in the first quarter of 2024. The decrease on a year-over-year basis is primarily attributable to the elimination of expenses associated with European pre-commercialization activities, which occurred in 2024 prior to the announcement of the Norgine partnership. To be clear, and as stated previously, European pre-commercialization expenses are not expected in 2025. The company recorded $6.1 million in G&A expenses in the first quarter of 2025 compared to $4.1 million in the fourth quarter of 2024 and $5.9 million in the comparable quarter of 2024. For the first quarter of 2025, G&A expenses were consistent on a year-over-year basis and increased quarter-over-quarter largely due to noncash based stock compensation traditionally done in the first fiscal quarter. Cash and cash equivalents were $22.6 million as of March 31, 2025. The company burned approximately $4 million in cash in the first quarter of 2025. As stated in our March 2025 call, we remain confident in the full year cash operating expenses to be similar in 2025 to 2024, or approximately $33 million. This includes a step up in marketing expenses and increased headcount offset by the elimination of European pre-commercialization expenses. As is customary with our business, cash operating expenses are higher in the first half of the fiscal year, largely as a result of commercial and marketing spending and fiscal year spending patterns. Before concluding, I'd like to offer some initial perspective on the recent discussions regarding potential tariffs. As you may know, PEDMARK is manufactured in the United States, and as such, we don't anticipate that currently proposed tariffs will have a material impact on our gross margins or overall financial performance.

Our first question comes from Chase Knickerbocker with Craig-Hallum.

Good morning. Thanks for the question. Just a couple of metrics that I think would be helpful on the AYA side. First, now that you've got a little bit more experience in that segment of the market, can you cue us in on kind of what the average number of vials per patient per full treatment has been and how that's compared to your expectations and then what percentage of patients are making it through that full course and maybe how that has improved and how that's informed your patient support program?

Sure. Hey, Chase. How are you? Thanks for the question. Yes, we are seeing on average about 30 vials per patient in the AYA space. That can range, obviously, but on average about 30. Again, this is a kind of a weight-based dosing regimen. So, it depends on the size, as you can imagine. We're seeing, and one of the things that we're improving on is our adherence numbers, and we're seeing that range is around 50% of the patients are getting through full dose or full adherence. And so kind of some of the focus that I had mentioned was about getting Fennec HEARS in the right place. Fennec HEARS was designed for pediatric use in large institutions, but as this product now gets moved out into the community setting, where it's used more in home administration, adherence is really critical for the product, and that's why we needed to really focus our efforts on revamping Fennec HEARS and making sure that we increase those adherence numbers as high as we can get them. And we'll see that increase as we move throughout the year.

And what capabilities in the Fennec HEARS program have been the biggest drivers of improvement or where you kind of sought to drive adherence improvement from?

Yes, I think it's just redesigning the program to really be focused on giving this product and potentially in the home setting with our partners. We have partners that and organizations that we had set up to make sure this product could be administered there. So there are a whole bunch of different details, Chase, I can walk through with you offline, but those details needed to be really ironed out to make sure that experience went well when we get this product at home, right. Because remember, we're giving this product in some cases six hours after, in all cases, six hours after the cisplatin has been given. So in the home setting, all the details have to be ironed out to make sure that administration goes well.

Yes, Chase, I'll just add a little bit, as you know, but just to make other people aware, when we're administering in the AYA population, it's largely done outpatient or as Jeff did say, in the home health setting. So the education of the product, the awareness, and in particular the administration, what to expect, the antiemetics, and the proper hydration. And so we've really put a focused effort and a concentrated effort with our Fennec HEARS program and with our medical team that, as you know, we've augmented. So I think that all speaks well to what progress we've made in the last quarter, but also what we hope to happen throughout the year.

Great. And then, Robert, can you maybe just speak to OpEx being flat in Q2, and then we should see a little bit of a step down in the back half, it sounds like. And then just as far as how the launch with Norgine has gone so far, I mean, has that been along what expectations were, and how does that inform your confidence in future milestones over the next 12 months?

Sure. Yes, with the OpEx, as stated in the remarks and in the script, it's front-end loaded for the year. That's just the spending pattern. Also, as we get into, we're trying to create additional awareness contracts, generally half up front and then amortized over the rest of the year. So that's just traditional. We will see a tailing off in particular as we start Q3 and Q4. Norgine, we're very enthused. As we stated, they've launched in the UK with an official list pricing about 10% less than the U.S., but we're excited about that. Germany as well. It's early on, but we're really pleased with the progress. They've commented on some positive indicators of engagement and uptake. So we look forward to giving you more updates and material updates as the quarters progress. As it relates to the sales milestones, there are two milestones that we've communicated before that are of particular note as it relates to 2025. One is the official pricing in Germany. That has one milestone related to it. The second one would be for the first-year sales. So as we get closer towards the end of 2025, we hope to give some more progress updates as it relates to those milestones.

Our next question comes from Sudan Loganathan with Stevens.

Hi, good morning. Thanks for taking my questions. And great to hear about your new targeting strategy and how it's really showing in the stronger first quarter. On that front, do the prescribers know where they land on the tiering algorithm that you have? And are there any incentives in terms of reimbursements that they may get if a tier two, tier three prescriber were able to move up to be considered a tier one?

Yes, I mean, we don't, Sudan, thanks for the question. I appreciate it. We don’t typically share that information with our providers. Obviously, they realize they're high prescribers of cisplatin. It's one of the reasons why we're in their offices trying to educate them. Many of them realize the impact that ototoxicity is having. I think the more we see the interest and the reason why we target these high prescribers is that they do see the impact of what's happening. In some cases, there's still a significant lack of awareness, not only of PEDMARK, but also of what the impact of ototoxicity is having on their patients. It’s critical for us to start with those top tiers. When it comes to physicians, throughout that targeting process, we're starting at tier one because of our size and because of the amount of folks that we have out there. Eventually, we'll move down, but we shouldn’t see any differences in reimbursement or in our conversations as you start to move out throughout the rest of that list.

Yes, just to add, there is no difference in terms of our pricing or reimbursement as it relates to the tiers. It's really more so that we can focus our commercial team on those top-level accounts. Obviously, if we make progress on a tier two or tier three, we're just as focused and provide just equal support as well as pricing and reimbursement options.

Yes, that's great to hear. And currently, regionally, at least in the United States do you have pretty much most regions covered now among tier one? Do you have tier one accounts in each region at this point that you're honed in on or are there areas that still need to be targeted to get more of a foothold in certain areas of the United States?

We're covering, yes, we're now deploying our commercial organizations throughout the United States. This tiering is focused on large academic centers and large community centers that are being targeted by our commercial organization. So it's throughout the country.

Okay, cool. And then next, since you've been on the market now for a year, can you see differences between the pharmacy formulation, the compounding component versus PEDMARK or how much of a breakdown there could be between the two? Is more education and the ability to get out to the physicians and prescribers kind of helping get PEDMARK more traction there or do you still see a small percentage of some compounding pharmacies trying to get a solution out to patients that way too? Any way to eat into that, if possible?

Yes, no, it's a good question. I think you're asking, are we seeing any inroads even in the not just AYA, but in the pediatric setting and in accounts that potentially were compounding in the past? Our medical team has, and I've asked them to continue to target these institutions, and we've had some really exciting discussions with institutions where we may have been shut out of discussions because of the compounding issue and any issues with reimbursement and the DRGs. We're re-engaging in every instance we can with these organizations, and I'm hoping to share some successes in the future from these discussions.

Got you, great. One more last thing, if I can squeeze it in, maybe more a question for Robert. In terms of the revenue growth and the progress that you're making, maybe the second half of this year being a little bit better on that side. Is there a revenue number and with the current level of Q OpEx or maybe slightly lower that you think that you can consistently breakeven or also, obviously be EPS positive going forward? Is that something that we can maybe expect for the second half of this year?

Yes, thanks for the question, Sudan. As stated, we're pleased with two consecutive quarters of growth, and I think that should be specifically highlighted and noted, but we're not done yet. Our goal is to continue that growth throughout the year. We are focused on the back half of the year as having that growth from all these pillars and the foundation we put in place with the initiatives, including our new commercial leadership team and augmentation of staff. We look forward to giving you more progress there as it relates to cash flow breakeven, another metric that is important for us internally. We were close to it in Q4, but what hasn't changed is the total revenue product sale number that we need to get there, roughly $8.5 million to $9 million of sales. For the year, we'll have roughly $33 million to $34 million of cash OpEx. So that's how we think of it internally. From a GAAP EPS perspective, there is some fluctuation quarter-to-quarter, primarily based on the stock-based compensation with the higher parts being in Q1. If we get to those levels, $8.5 million to $9 million, we start generating cash, and we start generating earnings, and internally that's a big focus for us.

Our next question comes from Jason McCarthy with Maxim Group. Your line is open.

Hey, guys. This is Michael Okunewitch on the line. Thank you so much for taking my questions today. So I just wanted to see if you could touch a little bit on where you're making these initial inroads into the AYA setting. Is this mostly in those smaller proportion of patients that are treated at those NCI centers, or are you meaningfully penetrating now into the community setting?

Yes, we're at the NCI centers, as we've said in the past, are critical obviously for this, where they have these AYA centers of excellence, right? You see those in multiple places around the country. Those are places, obviously, we want to target because we know a lot of the AYA patients will be treated in these centers, but we're also seeing this as we move out into the community. I think our targeting has really allowed us to get into places we typically probably wouldn't have gone, not just in the center itself, but in these community settings. We're seeing growth in both places. I can't tell you that one is right now more important than the other, but we've got a team that can approach these top-tier targets and large cisplat users, whether they're in the academic or community setting.

All right. Thank you. And then just on the community setting, particularly some of the infusion centers, has the operating hours of the centers remained a challenge for this AYA setting or are some of the initiatives that you're working on kind of overcoming that challenge?

Yes. And it's a really good question because, and that's why we, as I mentioned, the Fennec HEARS enhancements that we had to make, and it is something we needed to improve. When a physician realizes he wants to prevent ototoxicity but doesn't have a chair available because their center closes at a certain time, that's when we move in with Fennec HEARS and our team to be able to assist in home health and administering outside that infusion center. Some infusion centers do stay open later, and often, they will administer PEDMARK in that center, but we want to make it seamless to the point where if a patient wants this outside of these infusion centers, we have a program available. It’s easy and allows patients to be confident that this product can be given in a home setting. We’ve achieved multiple administrations of PEDMARK AYA patients in the home, and I feel really confident this is a big opportunity for us as we move forward.

Our next question comes from Ram Selvaraju with HC Wainwright.

Hi, thanks very much for taking my questions. Just on the ex-U.S. front, can you give us a sense of your most updated thinking regarding any additional remaining ex-U.S. territories that you see as particularly strong potential future opportunities for PEDMARK? And also on the European side, if you could maybe run through for us what you expect to be the cadence of new country-by-country introductions of PEDMARQSI as we look through the remainder of 2025, above and beyond the countries in which the product obviously has already been launched.

Yes, there are the big five, right, in Europe. They're focused on moving, again, with, of course, Scotland just coming on and getting approval is exciting, but it's still a small market. You can think of countries as they focus themselves as the next up being Spain, Italy, and France. We are continuing to expand both in Germany and the UK as the launches really just started two months ago in the first quarter. The second quarter will really be the first full quarter of launches in those countries as well. We're excited and bullish on what it is they're doing. They have a great team, and we share best practices and data, and it goes both ways. We're learning from them. There are milestones that Robert talked about that are potentially achievable towards the end of this year, and we're going to stay close to them on those.

And just very briefly, secondary, you had previously talked and I suppose this is a really question for Jeff about the possibility of looking at other strategic opportunities, particularly in the context of oncology supportive care. I was just wondering if you had any updated thoughts on that front or if at this juncture, at least you can kind of give us a sense of when you think it would be appropriate to look into that further and possibly identify assets or product marketing opportunities that might be synergistic with or accretive to the PEDMARK value opportunity in the United States.

Yes, that's a good question. I wanted to come in and get the organization structured correctly and also executing correctly. The first quarter was really my second full quarter with the organization, and I now feel comfortable with the execution and the way we're structured. We have the right leadership in this organization. So now I can start to think about potential synergies. We've had people even in my time here, in the last six months reach out to inquire about supportive care. We're going to continue to look at that. Financial improvement as sales grow is definitely an option, not only here but also in Japan and potential partnership opportunities as data is finalized. We have critical opportunities ahead that are additive to our commercial organization and what we could deliver.

Thank you. I'm showing no further questions at this time. I would now like to turn it back to Jeff Hackman for closing remarks.

Thank you, and thanks for the questions, everyone, and being a participant on the call. In closing, Q1 was a pivotal and exciting start to this year for the company. It marked strong execution by our team, a strategic clarity and real momentum, and we want to continue that momentum, and you'll see that as we go throughout the year. We're encouraged by the early impact of our foundational work and remain focused on building a sustainable and valuable business through deeper engagement, smarter support, and continued innovation in this space. Thank you for joining today. I really appreciate it. Robert and I look forward to keeping you updated on our progress throughout the year. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.