Fennec Pharmaceuticals Inc 10-Q for FY2025 Q1

Fennec Pharmaceuticals Inc. (FENC)

10-Q 2025-05-14 For: 2025-03-31

Added on April 06, 2026

About this 10-Q

Fennec Pharmaceuticals Inc filed this 10-Q on May 14, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).

Headline figures

Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.75M; down 65.5% from $25.38M a year earlier
Net loss: $1.17M; compared with net income of $12.84M a year earlier
Diluted EPS: -$0.04; compared with $0.41 a year earlier

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British Columbia, Canada	20-0442384
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

PO Box 13628, 68 TW Alexander Drive Research Triangle Park, North Carolina (Address of Principal Executive Offices)	27709 (Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, no par value	FENC	Nasdaq Capital Market

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐


	Page
PART I: FINANCIAL INFORMATION	3

Item 1. Condensed Consolidated Financial Statements	3

Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2025 and December 31, 2024	3

Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2025, and 2024	4

Condensed Consolidated Statements of Stockholders' Equity/(Deficit) (Unaudited) for the Three Months Ended March 31, 2025 and 2024	5

Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2025 and 2024	6

Notes to the Condensed Consolidated Financial Statements	7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3. Controls and Procedures	31

PART II: OTHER INFORMATION	32

Item 1. Legal Proceedings	32

Item 1A. Risk Factors	33

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 3. Defaults Upon Senior Securities	33

Item 4. Mine Safety Disclosures	33

Item 5. Other Information	33

Item 6. Exhibits	33

Signatures	35


	March 31, 2025		December 31, 2024

Assets
Current assets
Cash and cash equivalents	$	22,675	$	26,634
Accounts receivable, net		15,448		12,884
Prepaid expenses		2,444		3,080
Inventory		1,404		1,060
Other current assets		1,004		466
Total current assets		42,975		44,124

Non-current assets
Non-current accounts receivable, net		2,634		—
Other non-current assets, net of amortization		794		822
Total non-current assets		3,428		822
Total assets	$	46,403	$	44,946

Liabilities and stockholders’ deficit
Current liabilities:
Accounts payable	$	5,280	$	3,241
Accrued liabilities		2,843		3,428
Contract liability-current		248		248
Operating lease liability - current		—		2
Total current liabilities		8,371		6,919

Long-term liabilities
Term loan		18,206		18,206
PIK interest		1,271		1,271
Debt discount		(126)		(139)
Contract liability - long-term		24,561		24,561
Total long-term liabilities		43,912		43,899
Total liabilities		52,283		50,818

Commitments and contingencies (Note 6)

Stockholders’ deficit:
Common stock, no par value; unlimited shares authorized; 27,594 shares issued and outstanding (2024 ‑27,527)		145,979		145,608
Additional paid-in capital		67,744		66,958
Accumulated deficit		(220,846)		(219,681)
Accumulated other comprehensive income		1,243		1,243
Total stockholders’ deficit		(5,880)		(5,872)
Total liabilities and stockholders’ deficit	$	46,403	$	44,946


	☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended
	March 31,		March 31,
	2025		2024

Revenue
PEDMARK product sales, net	$	8,751	$	7,419
Licensing revenue		—		17,958
Total revenue		8,751		25,377

Operating expenses:
Cost of product sales		373		550
Research and development		94		3
Selling and marketing		2,947		5,209
General and administrative		6,145		5,872

Total operating expenses		9,559		11,634
(Loss) / income from operations		(808)		13,743

Other (expense)/income
Unrealized foreign exchange gain/(loss)		13		(38)
Amortization expense		(13)		(20)
Unrealized loss on securities		(1)		(11)
Interest income		236		197
Interest expense		(592)		(1,034)
Total other expense		(357)		(906)

Net (loss) / income	$	(1,165)	$	12,837

Basic net (loss) / income per common share	$	(0.04)	$	0.47
Diluted net (loss) / income per common share	$	(0.04)	$	0.41
Weighted-average number of common shares outstanding basic		27,578		27,045
Weighted-average number of common shares outstanding diluted		27,578		31,091


								Accumulated
				Additional				Other		Total
	Common Stock			Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Income		(Deficit)

Balance at December 31, 2024	27,527	$	145,608	$	66,958	$	(219,681)	$	1,243	$	(5,872)
Stock-based compensation - employees	—		—		798		—		—		798
Stock option exercise	55		371		—		—		—		371
Restricted stock release	12		—		(12)		—		—		(12)
Net loss	—		—		—		(1,165)		—		(1,165)
Balance at March 31, 2025	27,594	$	145,979	$	67,744	$	(220,846)	$	1,243	$	(5,880)

								Accumulated
				Additional				Other		Total
	Common Stock			Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Income		(Deficit)/Equity
Balance at December 31, 2023	27,027	$	144,307	$	62,073	$	(219,245)	$	1,243	$	(11,622)
Stock-based compensation - employees	—		—		1,191		—		—		1,191
Stock option exercise	75		627		—		—		—		627
Restricted stock release	3		—		(19)		—		—		(19)
Net income	—		—		—		12,837		—		12,837
Balance at March 31, 2024	27,105	$	144,934	$	63,245	$	(206,408)	$	1,243	$	3,014



		Chargebacks,		Rebates, Customer
		Discounts for		Fees/Credits
		Prompt pay and		and Co-Pay
In thousands		Other allowances		Assistance		Totals
Balance at December 31, 2024	$	276	$	707	$	983
Provision related to sales made in:
Current period		418		224		642
Prior periods		—		—		—
Payments and customer credits issued		(328)		(61)		(389)
Balance at March 31, 2025	$	366	$	870	$	1,236


	Three Months Ended March 31,
	2025		2024
Numerator:
Net (loss) / income	$	(1,165)	$	12,837

Denominator:
Weighted-average common shares, basic		27,578		27,045
Dilutive effect of stock options		—		3,005
Dilutive effect of restricted share units		—		214
Dilutive effect of warrants		—		34
Dilutive effect of convertible debt		—		793
Incremental dilutive shares		—		4,046
Weighted-average common shares, diluted		27,578		31,091
Net (loss) / income per share basic	$	(0.04)	$	0.47
Net (loss) / income per share diluted	$	(0.04)	$	0.41


	At Three Months Ended March 31,
	2025	2024
Options to purchase common shares	5,857	1,762
Convertible debt to purchase common shares	3,761	2,968
Restricted share units to purchase common shares	589	—
Warrants to purchase common shares	150	116


	Common Shares
	Issuable Upon Exercise
	of Outstanding		Weighted-Average
Investor Warrants	Warrants		Exercise Price
Outstanding December 31, 2024	150	$	7.71
Issued	—		—
Outstanding March 31, 2025	150	$	7.71


	Number of	Weighted-Average
	Options (thousands)	Exercise Price
Outstanding at December 31, 2024	5,855	$	6.22
Granted	180		6.50
Exercised	(55)		5.00
Forfeited	(123)		6.94
Outstanding at March 31, 2025	5,857	$	6.22


	Valuation Assumptions
Black-Scholes Model Assumptions	March 31, 2025
Expected dividend	-	%
Risk free rate	4.05	%
Expected volatility	159	%
Expected life	6	years


		Number of Restricted
RSUs Current Year		Share Units (thousands)
Outstanding at December 31, 2024		324
Awarded		283
Released		(13)
Forfeited		(5)
Outstanding at March 31, 2025		589


		Fair Value Measurement at March 31, 2025 and December 31, 2024
		(in thousands)
		Quoted Price in Active
		Market for Identical				Significant Other						Significant
		Instruments				Observable Inputs						Unobservable Inputs
		Level 1				Level 2						Level 3				Total
		2025		2024			2025		2024			2025		2024		2025		2024
Assets
Cash and cash equivalents	$	1,618	⁽¹⁾	$	1,314	⁽¹⁾	$	21,057	$	49,870	$	-	$	-	$	22,675	$	51,184
Processa common shares	$	1	⁽²⁾	$	4	⁽²⁾	$	-	$	-	$	-	$	-	$	1	$	4


Years Ending December 31,		Amount
2025		—
2026		—
2027		18,206
Payment in kind interest		1,271
Total future payments		19,477
Less: unamortized debt discount		(126)
Total term loan, net of debt discount	$	19,351


		Three Months Ended				Three Months Ended
In thousands of U.S. Dollars		March 31, 2025		%		March 31, 2024		%		Change
PEDMARK product sales, net	$		8,751		$		7,419		$		1,332
Licensing revenue			—				17,958				(17,958)
Total revenue			8,751				25,377				(16,626)

Operating expenses:
Cost of product sales			373	4			550	5			(177)
Research and development			94	1	%		3	0	%		91
Selling and marketing			2,947	31	%		5,209	45	%		(2,262)
General and administration			6,145	64	%		5,872	50	%		273
Total operating expense			9,559	100	%		11,634	100	%		(2,075)
(Loss) / income from operations			(808)				13,743				(14,551)

Unrealized loss on securities			(1)				(11)				10
Amortization expense			(13)				(20)				7
Interest expense			(592)				(1,034)				442
Unrealized foreign exchange loss			13				(38)				51
Interest income			236				197				39
Net (loss) / income from operations		$	(1,165)			$	12,837			$	(14,002)


	As at		As at
Selected Asset and Liability Data (thousands):	March 31, 2025		December 31, 2024
Cash and equivalents	$	22,675	$	26,634
Other current assets		20,300		17,490
Current liabilities		8,371		6,919
Working capital ⁽¹⁾		34,604		37,205
⁽¹⁾ [Current assets – current liabilities]

Selected Equity:
Common stock and additional paid in capital		213,723		212,566
Accumulated deficit		(220,846)		(219,681)
Stockholders’ (deficit)		(5,880)		(5,872)


Selected Cash Flow Data	Three Months Ended		Three Months Ended
(dollars and shares in thousands)	March 31, 2025		March 31, 2024
Net cash (used in) / provided by operating activities	$	(4,318)	$	39,047
Net cash provided by investing activities		—		—
Net cash provided by / (used in) financing activities		359		(1,132)
Net cash flow	$	(3,959)	$	37,915


	March 31,	December 31,
Outstanding Share Type	2025	2024	Change
Common shares	27,594	27,527	67
Warrants	150	150	—
RSUs	589	324	265
Stock options	5,857	5,855	2
Total	34,190	33,856	334


Exhibit No.		Description

31.1		Certification of Chief Executive Officer of the Company in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2		Certification of Chief Financial Officer of the Company in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.1		Certification of Chief Executive Officer and Chief Financial Officer of the Company in accordance with Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

99.1		Press Release for Quarter Ended March 31, 2024 (filed herewith).


101.INS*		Inline XBRL Instance Document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)


	Fennec Pharmaceuticals Inc.

Date: May 14, 2025	By:	/s/ Jeffrey Hackman
		Jeffrey Hackman
		Chief Executive Officer
		(principal executive officer)

Date: May 14, 2025	By:	/s/ Robert Andrade
		Robert Andrade
		Chief Financial Officer
		(principal financial and chief accounting officer)


1.	I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2025 of Fennec Pharmaceuticals Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the unaudited interim condensed consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
		(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its condensed subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
		(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
		(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
		(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

effrey
	By:	/s/ Jeffrey Hackman
		Jeffrey Hackman
		Chief Executive Officer


	1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
	2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


	Unaudited		Audited
	March 31,		December 31,
	2025		2024

Assets

Current assets
Cash and cash equivalents	$	22,675	$	26,634
Accounts receivable, net		15,448		12,884
Prepaid expenses		2,444		3,080
Inventory		1,404		1,060
Other current assets		1,004		466
Total current assets		42,975		44,124

Non-current assets
Other non-current assets, net amortization		3,428		822
Total non-current assets		3,428		822
Total assets	$	46,403	$	44,946

Liabilities and stockholders’ equity/(deficit)

Current liabilities:
Accounts payable	$	5,280	$	3,241
Accrued liabilities		2,843		3,428
Operating lease liability - current		—		2
Contract liability - Norgine		248		248
Total current liabilities		8,371		6,919

Long term liabilities
Term loan		18,206		18,206
PIK interest		1,271		1,271
Debt discount		(126)		(139)
Contract liabilty - Norgine		24,561		24,561
Total long term liabilities		43,912		43,899
Total liabilities		52,283		50,818

Stockholders’ equity/(deficit):
Common stock, no par value; unlimited shares authorized; 27,594 shares issued and outstanding (2024‑27,527)		145,979		145,608
Additional paid-in capital		67,744		66,958
Accumulated deficit		(220,846)		(219,681)
Accumulated other comprehensive income		1,243		1,243
Total stockholders’ equity/(deficit)		(5,880)		(5,872)
Total liabilities and stockholders’ equity/(deficit)	$	46,403	$	44,946