Fennec Pharmaceuticals Inc. Q4 FY2025 Earnings Call

Good morning, everyone. Welcome to Fennec Pharmaceuticals' Fourth Quarter and Full Year 2025 Earnings and Corporate Update Conference Call. As a reminder, today's call is being recorded. Now I will hand it over to Fennec's Chief Financial Officer, Robert Andrade.

Thank you, operator, and good morning, everyone. Thank you for joining us today. We are pleased to host Fennec Pharmaceuticals' Fourth Quarter and Full Year 2025 Earnings Conference Call during which we will review our financial results as well as provide a general business update. Towards the end of the call, we will conduct a Q&A session, hosted by myself starting with frequent questions that the company receives from investors, followed by our traditional open Q&A session. Joining me from Fennec this morning is our Chief Executive Officer and Board member, Jeff Hackman. I am also pleased to welcome our Chief Medical Officer, Dr. Pierre Sayad. Pierre is an accomplished industry executive with proven success leading global medical teams and oncology launches at companies such as Onyx Pharmaceuticals, Karyopharm Therapeutics, Oncopeptides, and CTI Biopharma. Dr. Sayad is a graduate of the School of Medicine of Loma Linda University as well as a Harvard Business School alumnus. Since joining Fennec in the fourth quarter of 2024, Pierre has been instrumental in advancing our medical strategy and clinical evidence strategy, expanding engagement with leading institutions and key opinion leaders and strengthening the independent data foundation supporting PEDMARK. Later in the call, Pierre will speak to the substantial progress being made on the medical front and the importance of the medical team in the education process of CIO and PEDMARK. 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. SEC. 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 our CEO, Jeff Hackman.

Thank you, Robert. Good morning, everyone. Thanks for joining us today on a very special earnings call. 2025 was a transformational year for Fennec. We delivered record net product sales of $44.6 million compared to $29.6 million in 2024. But most importantly, this growth was really driven by quarter-over-quarter expansion with our active patients as well as new and existing accounts. This reinforces the durability and demand and the effectiveness of our overall market development strategies. In the fourth quarter, given the positive momentum we saw in 2025, we made the strategic decision to further enhance our execution by increasing our customer-facing team and to try to achieve a much greater reach and frequency with our customers, so we can ultimately help more cancer patients protect their hearing. We expanded our capabilities to include new territories and high-prescribing targets in the AYA or adolescent and young adult market. We strengthened the company's financial health during the year with disciplined operating decisions and efficiency measures, including the closing of public offerings, raising over $42 million in net proceeds, which resulted in a full redemption of our debt. We were intentional about our capital allocation, focused on high-impact initiatives, and continued to enhance our operating leverage as our business scales. This balanced approach in investing in growth while maintaining financial rigor has positioned us well for long-term value creation with the strongest balance sheet right now in the company's history. Our full-service patient support program, I've mentioned before in the past, Fennec HEARS, which is designed to simplify access and support continuity of care by guiding patients through coverage, reimbursement, and providing free product for eligible individuals as well as coordinating nurse-led administration and at-home infusion services achieved a record performance in the fourth quarter. The program reached all-time highs in patient enrollments, prescribed and infused vials, active patients, and conversion rates. In fact, conversion rates were up 70% in Q4 compared to 50% in the first quarter. These results reflect not only patient need but the exceptional execution of our field organization and our operational infrastructure that we have built to ensure appropriate and efficient access for our patients. Now as we continue to increase the awareness and use of PEDMARK through our sales activities, our marketing team has been busy as well, expanding focus to activate young adult testicular patients, for example, on a broader scale. In the coming quarter, we're excited to launch an initiative around the Indy 500 race in May in close partnership with a testicular cancer advocacy group. Following that, we will also have a significant presence this year at the ASCO meeting in Chicago. We look forward to providing more updates on these initiatives and others in months ahead. Beyond commercial performance and our activities, we also made significant progress advancing our clinical evidence strategy. Shortly, you're going to hear from Pierre. He'll provide you much more details on the progress and how we are moving these forward in our medical affairs initiatives. Finally, top-line results from our investigator-initiated Phase II/III, we call it STS-J01 clinical trial for PEDMARK in Japan is progressing well. This — as you guys know, this is — we believe it's still early, but this clinical milestone is very important for Fennec and reinforces the broader applicability of PEDMARK and the opportunity to expand our impact globally, partnering and registering this product in Japan and potentially broader in Asia. As a reminder, PEDMARK is currently approved for pediatric patients 1 month of age and older with localized non-metastatic solid tumors and is also recognized by the National Comprehensive Cancer Network or the NCCN with a 2A recommendation for use in AYA patients. Now I'd like to just take a moment to thank our dedicated employees for their focus this past year. Their resilience and their belief in our mission has been instrumental in driving our performance. We've built a very strong organization with strong revenue growth and notable milestone achievements during the quarter and the year further will validate our strategic plans and objectives and market development strategies and importantly Fennec's ability to execute our plans. Further, I'm proud of our executive team and each of their respective operating functions at Fennec. Overall, we have strong performance and a strong foundation that we built in 2025 and that is going to propel us and propel Fennec into the next chapter of this organization. One is going to — and this next chapter is going to be defined, as I mentioned, with execution, global expansion, and sustained growth. So with that, let me turn it over to Pierre.

Thank you, Jeff, and good morning, everyone. I'm pleased to be joining today's call to share an update on the significant progress we've made across our evidence generation and medical initiatives. Over the past year, we have strengthened our medical affairs team significantly, building a high-performing organization capable of delivering on our strategic priorities. We expanded capabilities across clinical, field and real-world evidence functions ensuring that we can engage effectively with key opinion leaders in both academic and community settings while supporting new evidence generation initiatives in the U.S. and globally. This robust foundation positions us to execute efficiently and meaningfully in 2026 and beyond. Our 2025 efforts were focused on three priorities. First, key opinion leader development, engaging with influential clinicians to deepen understanding of our product's clinical value and real-world applicability. Second, institutional engagements partnering with leading academic institutions to advance independent research, generate new clinical data, and expand insights across additional tumor types and patient populations. And finally, improving patient and clinician experiences, driving key customer enhancements, such as the revamp of our Fennec HEARS program, designed to simplify access, support adoption, and ensure a positive experience for both the patients as well as the clinicians. These activities created meaningful traction in 2025 and into 2026 with multiple studies underway and strong collaborations forming with both academic and community oncology centers. The insights we have gained from KOLs during the year are highly encouraging. Clinicians report increasing confidence in our products, particularly better understanding the mechanism of action of cisplatin and recognizing the feasibility and ease of incorporating PEDMARK into routine practice without compromising cisplatin's antitumor activity. These discussions are not only reinforcing clinical confidence but also supporting broader adoption and integration into guidelines and standards of care. For example, last month, Fennec announced that new data supporting the potential use of PEDMARK in adults with head and neck cancers were presented at the 2026 Multidisciplinary Head and Neck Cancer Symposium, that's the MHNCS meeting. It is worth noting that these are the first new data supporting the potential use of PEDMARK since the pivotal clinical program. The findings from the multi-institutional retrospective review of 15 adults with head and neck cancers show that PEDMARK could be safely given at 6 hours after cisplatin dosing and was easy to incorporate into the real-world care plan. This strict post-cisplatin timing is a validated approach intended to preserve cisplatin antitumor activity and no disruption to curative intent cisplatin-based treatment delivery was observed as part of the study review. These new findings are critical to demonstrating the feasibility, scalability, and long-term value of PEDMARK beyond those studied in our pivotal clinical program. These findings also helped strengthen the case for broader clinical adoption in a sizable patient population at risk for permanent hearing loss. Additionally, as Jeff mentioned, at the start of 2025, we outlined a very focused strategy to expand and deepen the clinical evidence supporting our product via institution-led initiatives. Our objectives were clear. First, generate new data across additional tumor types and patient populations; second, validate and expand the product's real-world clinical value. Third, address unmet needs in vulnerable groups such as AYA and adult patients. Next, strengthen guidelines and practice adoption through independent evidence. And then finally, deepen our collaboration with influential institutions shaping oncology standards of care. I am proud to report that we have made meaningful progress across each of these priorities. Within the last three months, we have announced the initiation of two new studies with respected academic and community oncology centers. The first is with City of Hope, one of the largest and most advanced cancer research and treatment organizations in the United States. City of Hope is evaluating PEDMARK for the prevention of cisplatin-induced ototoxicity, CIO, in adult men with Stage II-III metastatic testicular germ cell tumors. And our intention is to not stop here. Cisplatin has truly transformed outcomes for patients with germ cell tumors, turning what was once a highly fatal disease into one of oncology's true success stories. However, as many as 4 out of 5 survivors are left with permanent hearing loss, which impacts the quality of life long after the treatment ends. And we are pleased to see that centers like City of Hope recognize that oncological care needs to focus on both the survival as well as the quality of life. The second study we announced earlier this month is with Tampa General Hospital Cancer Institute, that's TGH. TGH is initiating a study evaluating the real-world clinical utility of PEDMARK and reducing the risk of ototoxicity in AYA and adult cancer patients receiving cisplatin-based treatment. This evaluation will examine real-world clinical data and audiology monitoring that will help to reinforce the message that tumor efficacy is not compromised by the use of PEDMARK. Over time, this expanding data set will help to strengthen physician confidence and support broader clinical adoption. Additional investigator-initiated studies supporting the use of PEDMARK have been submitted to Fennec and are currently under review. We continue to be very encouraged by the robust conversations and engagement we've had with key opinion leaders at some of the nation's leading oncology centers and look forward to sharing additional updates on evidence generation in the very near future. In summary, our medical efforts in 2025 laid a strong foundation for future growth through expanded evidence generation and meaningful KOL development in the academic setting. The combination of a robust organization, focused priorities, and positive KOL feedback ensures that we are well-positioned to continue driving clinical confidence and impact in 2026. With that, I will turn the call over to Robert to take us through the financial highlights.

Thank you, Pierre, and a very big thank you to our entire medical team for their energy and strong momentum going into 2026. Now to the financials. Our press release contains details of our financial results for the fourth quarter and full year 2025, which can be viewed on the Investors and Media section of our website. My comments today will focus on some key financial results. For the fourth quarter of 2025, the company recorded net product sales of $13.8 million compared to $7.9 million in the comparable period in 2024, representing an increase of approximately 75%. The fourth quarter demonstrated continued momentum in delivering PEDMARK to patients with net product sales up for the fifth consecutive quarter since Jeff joined as CEO; and our new leadership team took stewardship. For the full fiscal year 2025, the company recorded $44.6 million in net product sales compared to $29.6 million in 2024, representing an increase of approximately 50%. The increase in net product sales is attributable to growth across both new and existing accounts with notable success and progress in conversion and adherence of PEDMARK patients. The company recorded $6.1 million in selling and marketing expenses in the fourth quarter of 2025 compared to $3.9 million in the comparable period in 2024. The increase in selling and marketing expenses in the quarter is largely related to increased payroll and additional marketing expenses as we focus on expanding our commercial team and augmenting our outreach to community oncology centers and the adolescent and young adult population. For the fiscal year 2025, the company recorded $18.6 million in selling and marketing compared to $18.4 million in fiscal year 2024. For the full fiscal year, selling and marketing expenses were in line as the increased payroll and additional marketing expenses in the comparable period were offset by the elimination of European expenses after the announcement of the Norgine transaction in March of 2024. On the G&A front, the company recorded $8.9 million in the fourth quarter of 2025 compared to $4.2 million in the comparable quarter of 2024. For the fiscal year 2025, the company recorded $28.8 million in G&A compared to $23.1 million in 2024. G&A expenses across both periods, quarters, and comparable fiscal years increased with higher intellectual property and legal expenses, increased payroll expenses as headcount increased and increased noncash expenses associated with equity-based remuneration. Noncash stock-based compensation increased about $2 million year-over-year. Cash and cash equivalents were $36.8 million as of December 31, 2025. The net increase in cash was primarily due to the approximately $42 million in net proceeds from the equity offering and cash collected from net product sales offset by operating expenses and $21.5 million debt paydown in November of 2025. As Jeff mentioned, the company has zero debt outstanding and has the strongest balance sheet in the history of Fennec. Importantly, we anticipate generating positive cash flow in the first quarter of 2026 as the timing of receivable collections impacted the Q4 cash flows, but on a positive note, we collected the receivables early in the first quarter of 2026 that will benefit our cash position in Q1 of 2026. Lastly, and the major milestone for Fennec, we are pleased to have announced last week the settlement of patent litigation regarding PEDMARK in the U.S. Under the terms of the settlement, Cipla will not enter the market with its generic sodium thiosulfate product until September 1, 2033 or earlier under select circumstances. We believe this settlement will save multiple millions of dollars in annual G&A that will largely be redeployed to help contribute to the expansion of the commercial team, and importantly, provide market exclusivity for many years as we continue to establish PEDMARK as the standard of care for patients to be administered cisplatin. With that, we will now commence with a Q&A format by addressing top questions that we most frequently receive from investors within the categories of medical, financial, and commercial. Starting with medical, Pierre. Number one, what is the biggest challenge or pushback from physicians or institutions when it comes to PEDMARK such as the notion that it interferes with cisplatin treatment?

Yes. Thank you for the question, Robert. It's an understandable concern, and it's an important question to address. The primary historical question from oncologists has been whether sodium thiosulfate could reduce the cisplatin antitumor activity. And this concern is understandable given the importance of maintaining such high cure rates in cancers where cisplatin is used. And I'll show two specific explanations. First, what has been encouraging is that long-term follow-up from both the COG and SIOPEL 6 trials continues to show preservation of survival outcomes while significantly reducing the risk of cisplatin-induced hearing loss. That evidence base has been critical in shifting physician confidence. In the COG ACCL0431 study, long-term follow-up approaching approximately 8 years has shown no difference in overall survival between the PEDMARK plus cisplatin arm and the cisplatin alone arm. Similarly, the SIOPEL 6 study in hepatoblastoma has demonstrated consistent overall survival outcomes with follow-up extending beyond approximately 5 years while still showing a substantial reduction in hearing loss. So what this means is, importantly, if PEDMARK were meaningfully interfering with cisplatin antitumor activity, we would expect to see a divergence in those long-term survival curves. Yet, instead, the curves remain essentially overlapping, which provides strong clinical reassurance that the anticancer efficacy of cisplatin is fully preserved. Second, and aside from this long-term durability data, as physicians become more familiar with the pharmacology and the 6-hour delayed administration strategy, it's the mechanistic rationale, which becomes clear. Cisplatin has already entered tumor cells and has already formed the DNA adducts before PEDMARK is administered. We are seeing this discussion move away from skepticism and toward implementation logistics such as the institutional protocol and pharmacy workflow. As awareness grows, many institutions are recognizing that hearing loss is a lifelong toxicity and are becoming more proactive about prevention.

Thank you, Pierre. Second question. What is Fennec's regulatory strategy for the AYA population? And are you speaking with the FDA regarding the revised or supplemental indications or working with NCCN regarding stronger guidelines placement?

Yes, Robert. As I mentioned earlier, we're building a robust evidence generation pipeline through recent data from our study in Japan, new real-world data supporting the potential use of PEDMARK in adults with head and neck cancers, two ISPs already underway and other ISPs in additional tumor types and patient populations, including AYA cancer, have been submitted to Fennec and are currently under review. We are focused on expanding the clinical evidence base that demonstrates consistent protection against cisplatin-induced ototoxicity across additional tumor types and patient population. So stay tuned for more updates over the coming months. In parallel, from a regulatory standpoint, we maintain ongoing dialogue with regulatory authorities regarding the potential pathways for label expansion as the data package matures. From a clinical practice perspective, guideline recognition is a very important milestone. As the evidence grows across different disease settings that positions PEDMARK more strongly for future guideline inclusion for strengthened recommendations. The AYA population represents a meaningful opportunity because these patients frequently receive cisplatin-based regimens and face decades of potential hearing impairment if toxicity occurs. Our strategy is evidence first. Once the clinical and mechanistic data are sufficiently robust, we have a plan and look forward to regulatory and guideline pathways naturally becoming more achievable.

Thank you, Pierre. Moving to financial. Question one, can you provide an estimate on cash operating expenses for 2026 versus 2025 in light of the commercial expansion and other awareness initiatives? With the growth of our commercial team territories and the strategic marketing initiatives to drive further awareness, specifically in AYA, we anticipate cash operating expenses to grow from approximately $35 million in 2025 to approximately $50 million in 2026. The increase in spending is across both commercial and medical. On the commercial front, we have increased headcount, expanded awareness initiatives, a few of which you heard today, and focus on execution. On the medical front, we expect additional ISPs commencing and enrolling, expanded advocacy initiatives, and a focus on positioning Fennec for additional guideline recognition and expansion. Further, from a cash EPS perspective, we anticipate a clean P&L in 2026, with a similar gross to net drop down of approximately 85% of gross sales to net sales, COGS in the mid-single digits, and noncash stock compensation in line with 2025. Important to note, the increase in spending is focused with rigor and accountability with specific metrics to grow PEDMARK utilization and net product sales. We increased spending and expanded the customer-facing teams with the expectation that they will be making material contributions by the second half of 2026. We remain intent on growing cash flow from operations in '26 and we can expect the same cadence of spending with over 60% of total cash operating expenses to be spent in the first half of the calendar year. Question two. Can you provide an update on the Norgine partnership and ex-U.S. progress? After our Norgine deal in March 2024, PEDMARQSI, the branded name for PEDMARK in Europe, was launched in the U.K. and Germany, just last year in '25 and was just approved in Switzerland last week. Importantly, Norgine is planning 8 to 10 launches in 2026 including some major EU countries in addition to the U.K. and Germany. Regarding pricing, the U.K. price was set in 2025 at approximately GBP 8,000. And the final pricing in Germany, we expect to be able to share more by the middle of this year and give you an update related to the potential milestones attached to that pricing. The key takeaway here is that Norgine is just getting started. We expect PEDMARQSI momentum to build meaningfully throughout 2026 as additional countries get launched and commercial activities expand and royalty contributions and related potential milestones impact Fennec's financials will really start to hit us in the second half of 2026. Final financial question. When will you provide revenue or EBITDA guidance in 2026? As a reminder, every additional 100 patients per year on PEDMARK has the potential to benefit Fennec's financials by approximately $30 million. That's 100 patients per year with an approximate addressable market in the AYA market segment alone of greater than 20,000 patients annually. The opportunity is significant as we ramp up our commercial teams' presence in the field here in the first half of 2026. As the year progresses, we intend to evaluate the potential for issuing both revenue and EBITDA guidance as we monitor the impact of our growth initiatives. In addition, directionally in terms of EBITDA and free cash flow, every additional 100 patients, as mentioned, can add $30 million in net revenue, but with our fixed cost base has the potential to add an estimated $0.70 per share of free cash flow or cash EPS. Moving on to commercial. Jeff, question one. You've announced the recent field force expansion in Q1. Can you elaborate on these hires and how we should be thinking about the impact on sales?

Sure. Thanks, Robert. The expansion that we announced in the first quarter here was a very targeted step for our growth. These are really focused on building our territory managers and we've seen the productivity of our current territory managers to be significant but limited in their reach and frequency. So our territory managers with our accounts that they have focused on high Tier 1 accounts and we're going to continue to see that with the increase of these folks that we brought in, so we will not only increase our reach but we'll increase our frequency. These additional hires are going to be focused on expanding coverage in regions where demand and account density support incremental investment. We believe this approach will allow us to further penetrate these Tier 1 accounts while also supporting activation of high-potential new centers. Given the productivity that we've seen from our existing territory managers in 2025, we're confident that these hires will contribute new and continued growth and ramp up through 2026 throughout the year and in the future.

Thank you, Jeff. Question two, you highlighted record enrollment and conversion rates for the quarter. To what extent is that program driving commercial demand versus addressing access barriers? And how should we think about its impact on revenues going forward?

Thanks, Robert. The primary purpose of our Fennec HEARS program is to address access barriers and to ensure that appropriate patients are able to start and complete their therapy rather than just to create demand. What we're seeing in the data is that this revamped program is functioning exactly as we intended it by helping physicians and patients navigate reimbursement and affordability challenges while also simplifying the overall access experience for PEDMARK. The record enrollments as well as prescribed and infused vials in active AYA patients are growing and they reflect both strong operational execution as well as growing familiarity with our providers and how to utilize this program efficiently. Most importantly, though, the demand for the product continues to originate from clinical adoption and physician decision-making. The patient assistance program supports that demand by removing friction from the access process as well as helping convert appropriate prescriptions into treated patients. From a revenue standpoint, we view this program as an important enabler for our sustained growth going forward. By improving this patient and clinician experience and ensuring conversion and prescribed vials to infused vials, this helps us capture appropriate utilization, which might otherwise be delayed or even lost due to administrative and financial barriers.

Thank you, Jeff. And operator, with that, we'll open it up for questions.

Our first question comes from David Amsellem with Piper Sandler.

This is Alex on for David. We wanted to dive more into the germ cell tumor and testicular cancer group of patients. Can you maybe refresh us on what you're seeing in the field from advocacy groups and the new field force? And how is penetration in this segment? And then also, are you seeing strong uptake in academic centers or community oncology practices or both? And what's the mix between pediatric patients and older segments at present?

Let me quickly address the first part because it relates to the commercial side, and then I will hand it over to Pierre. Germ cell tumors remain the largest opportunity for PEDMARK. While cisplatin is highly effective for many of these tumors, we observe significant ototoxicity in these patients. As a result, we continue to focus our efforts there. We are collaborating with advocacy groups and have several initiatives planned for this year, which I previously mentioned. Our strategy is twofold: we need to educate physicians about the importance of PEDMARK and also inform patients. This partnership with advocacy groups allows us to disseminate this educational information to patients effectively. Now, I’ll pass it to Pierre if he would like to respond.

Thank you, Jeff, and thank you for the question. Certainly, we have seen substantial interest, if you will, from both the community as well as the academic settings in terms of driving PEDMARK research. And where this is coming from is maybe twofold. So on the one hand, frankly, it's our substantial medical team. So we had in the field, a group of trained MDs, PhDs, PharmDs, true experts, if you will, engaging daily with top KOLs and academic institutions as well as very important healthcare professionals in the community setting. They are driving very deep and robust conversations. I think the second thing is how these conversations are actually unfolding. These conversations go extremely deep into the mechanistic rationale first of cisplatin. How does cisplatin actually cause the damage to the hair cells inside the cochlea? We are really able to demonstrate through data, through science, what's happening with CIO and then on the backside of that explaining the molecular mechanisms, the biochemistry of how PEDMARK prevents the ototoxicity. So you combine the talent of the team with these very mechanistic biochemistry, organic chemistry types of discussions, and yes, we are absolutely seeing an increase in KOL interest and I would say, enthusiasm for working with PEDMARK.

Our next question coming from the line of Madison El-Saadi with B. Riley Securities.

Maybe if we could double-click on the growth of the number of treated patients in Q4, making certain assumptions about pediatric revenue, it looks like the AYA patient treated count rose materially in Q4, at least by, say, 20% versus 3Q. Is that a fair assessment? And do you expect the slope to increase in the coming quarters? And then relatedly, are you seeing an increase in high-frequency prescribers?

Yes. We'll continue to see that trend grow. You see a shift in our focus in our organization towards the AYA market. Obviously, it's much larger. I think Robert has mentioned on numerous occasions. It's 10 times the size of the pediatric market. So where we're seeing the significant growth is in our AYA patients. That's where we'll focus. And that's where our efforts have been. That doesn't mean that you walk away from these pediatric institutions and the ability to be able to grow it there. We have some great relationships, and we continue those. In the institutions, you see it mixed, both in the academic and community settings for AYA. We see academic centers in certain areas of the country play a much more important role, but we also are seeing, and we've mentioned in the past that PEDMARK was put on formulary in a large community practice, oncology community practice, and we're going to continue to expand, and we have initiatives working with some very large community practices throughout the country. So stay tuned. We'd love to announce more in the future about how we grow our business in the community setting.

And just to dive a little deeper, Mad, and maybe touching on your question in terms of some key prescribers. What we saw in Q4, and we expect to continue is a nice mix of both existing accounts and new accounts. And in particular, what got us very enthusiastic is the existing accounts growth. So not only growth in the amount of patients but growth in the amount of vials of PEDMARK administered. And so that's something that we're watching closely to keep that balanced mix between both existing and new.

Our next question coming from the line from Ram Selvaraju with H.C. Wainwright.

Congratulations on all the 2025 progress. The first question is from an international commercial perspective, and there are two parts. First, when would you expect during 2026 to start to see initial revenue coming from the Norgine partnership? And with respect to Japan, can you comment on when you would anticipate having a potential partner, local regional distributor in place, and how that might relate to the timeline for potential approval and market entry? And then lastly, I was wondering if you could comment on the current overall situation vis-a-vis generic filers in the wake of the Cipla settlement. Do you anticipate pretty much everything else to more or less fall in line with that settlement? To what extent is their remaining litigation pending? How many other generic filers do you expect? And any other information on that topic that you could provide that might be germane.

Sure, Ram. I think I'll address all three points. Regarding Norgine, there are several launches planned for this year, and once Norgine establishes pricing in Germany, we expect to see significant growth in that market. We anticipate a substantial contribution to Fennec's financials from Norgine in the second half of 2026. In Japan, as Pierre mentioned, we are very enthusiastic about the results we shared in Q4, which confirm that it protects hearing without affecting the efficacy of cisplatin. Ongoing discussions are crucial, and we aim to finalize a deal soon, similar to our partnership with Norgine in Europe, to initiate the regulatory process. There is strong support from both strategic partners and investigators in Japan for getting PEDMARK approved. Lastly, regarding the settlement, it took many years and considerable resources, so we are thrilled to have it resolved. Currently, we have no other outstanding litigations. As you know about the generic and settlement processes, typically when you settle with one, it indicates a significant market presence. While this is a positive challenge, we are relieved to have settled our only outstanding litigation with Cipla and look forward to making PEDMARK the standard of care well into the 2030s and beyond. Thank you, Ram.

Our next question coming from the line from Chase Knickerbocker with Craig-Hallum.

I wanted to hear your thoughts on how you categorize unique AYA accounts or prescribers. You mentioned that those accounts are writing more vials in Q4 compared to Q3. Can you clarify whether this is an exception or the norm, particularly in terms of the number of repeat prescribers in the AYA population?

Thanks for the question. To address the last part, we're observing that prescribers are starting to prescribe more again, which has a significant impact on our growth. They are becoming comfortable with the treatment regimen, with using Fennec HEARS, and with having nurses visit patients at home, as well as getting reimbursement. Regarding reimbursement in the AYA space, the top three plans in the country show reimbursement rates of 95% to 100% for our product, which is not a barrier for us. These factors are helping physicians feel more at ease with the product and to use it more frequently. We aimed to increase our commercial footprint to reach more customers, as our previous team size limited our outreach. We have now significantly expanded our reach, and I believe our team is well-positioned for future growth, especially with the number of calls we are currently seeing in the field. This growth will become apparent quickly starting in 2026. While we don’t track the number of new accounts, the mix of new and existing accounts is well-balanced at the moment, which is what we aim for. We want to ensure physicians continue to use the product positively while also reaching out to new customers, so we are adopting a balanced approach.

Maybe just being most of the way through Q1 here. You kind of called out that kind of per patient revenue is pretty significant, that does introduce a little bit of lumpiness, right? And so as we go into Q1, most of the way through the quarter, I think it would be helpful just to get some kind of goalpost or thoughts as far as kind of current trends? I mean you grew about 11% sequentially in Q4. Maybe just a goalpost there would be, do you expect that to accelerate in Q1? Or is there some seasonality in Q1 that we should be thinking about for the business?

Well, I'll let Robert comment on some of the numbers. But Chase, we've grown this business 5 straight quarters. My plan is not to slow down here. Robert, if you want to comment on.

Yes, we have strong momentum heading into 2026. We've significantly increased our full-time employees and made commercial and medical hires. While these new hires won't make an immediate impact, we expect a substantial increase in the second half of 2026. We're committed to maintaining our growth in the first and second quarters, and we believe the contributions from this expansion will begin to positively affect our financial performance starting in the third quarter.

Our next question is coming from the line of Sudan Loganathan with Stephens.

Congrats on the great year and quarter. My first question, I just wanted to ask how are you thinking about the business development going forward, particularly in terms of priority and maybe potential areas of focus? And then the second one I have, you kind of touched on this a little bit on the prepared questions, but can you elaborate on how institutional-led research is expected to impact Fennec in both the near and long term over the long term?

Yes. The first question, Sudan, was on business development. And I'll let Jeff add here. But as you know, our opportunity in PEDMARK is very, very large, 20,000 patients in the AYA alone with the opportunities that Pierre spoke to in potentially expanding both the initiatives into metastatic and into additional populations. So that being understood as we expand our sales team, there's always the opportunity to evaluate potentially late-stage assets or commercial assets. But with our team in place, we are very enthusiastic just about the opportunity to invest in ourselves and this opportunity in front of us. Jeff, do you want to add anything?

I'll just add that we have made significant progress with our scale and expertise, demonstrating our execution over the last five consecutive quarters. This organization has proven it can effectively implement its strategies, which opens up new opportunities. Regarding your second question, our growth in partnerships with medical institutions is twofold. It's important to consider the relationships we are building and the significance of the studies and data we will obtain from these collaborations. For instance, our partnership with City of Hope is crucial for the entire organization, not just for the physicians involved in the study. Pierre, would you like to elaborate on this?

Sure, sure. Thank you for the question. As Jeff is commenting, absolutely, you got City of Hope, TGH, they're critical academic centers that are going to help us drive our understanding into new patient populations, as previously mentioned, adults, metastatic disease, et cetera. And there's many more ISPs that we are currently reviewing. So stay tuned for some more press releases here hopefully very, very soon. All that to say is that as new data is coming in, that defines our regulatory strategy. Our immediate priority is expanding the clinical evidence base that demonstrates this consistent protection against cisplatin-induced ototoxicity, yet additional tumor types and additional patient populations will allow us to drive these regulatory conversations. So in terms of expanded labels, perhaps new guidelines, new relationships with NCCN, the new data coming in will help define that entire strategy.

In closing, I want to thank everyone for the questions. I think we'll wrap it up here with a few final comments. The year 2025 was a record-setting year for the company. We have achieved remarkable things this past year, but we are not stopping here. We are positioned to enhance our commercial execution moving forward. We have deepened our medical engagement and broadened our global reach. We are now beginning to see the effects of this focus and disciplined execution within our organization. We have built real momentum as we head into 2026 with a revitalized and expanded team that has clarity and purpose. We understand where the business stands and where our efforts should be concentrated. Our field and medical teams are fully engaged, educating physicians, supporting our patients, and raising awareness of cisplatin-induced ototoxicity. The organization is aligned, energized, and excited as we move into 2026. I want to thank you all for your continued support and partnership, and we look forward to making fantastic progress in 2026 and beyond. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.