Fennec Pharmaceuticals Inc. (FENC) Earnings Call Transcript

Thank you. Good morning, ladies and gentlemen, and welcome to FENIC Pharmaceutical's second quarter 2026 Earnings and Corporate Update conference call. At this time, all participants are in 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 Now I'd like to turn the conference over to FedEx Chief Financial Officer Robert Andrade.

Thank you, Operator, and good morning, everyone. We would like to thank you for joining us. We are pleased to host Fennec Pharmaceutical's second quarter 2026 earnings conference call today. 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, our Chief Commercial Officer, Terry Evans, and our Chief Medical Officer, Dr. Pierre Sayad. I am also pleased to welcome our Chief Strategy Officer, Christy Chiaffi, who is joining our earnings call for the first time. Christy has more than two decades of leadership experience spanning commercial strategy, brand building, and organizational development, including nearly 15 years of expertise leading award-winning commercialization and launch strategies across the product lifecycle. She has held senior commercial leadership roles at a number of leading biopharmaceutical companies, including Shield Therapeutics, Stemline Therapeutics, USA Pharma, Karyo Pharm Therapeutics, Servier, previously Shire, Exalta, Baxter, and Abbott Laboratories, where she helps build and grow oncology, rare disease, and hematology brands from early development through commercialization. As a graduate of West Point, Christy also served our country as a decorated U.S. Army veteran and Bronze Star recipient. leading soldiers during two deployments in Operation Iraqi Freedom. Later in the call, Christy will speak to how recent cross-functional efforts are supporting our long-term growth plans. Additionally, Dr. Pierre Sayad will provide a medical affairs update, and Terry Evans will speak to our commercial progress. 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. Reference 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 United States 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. 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. I will now turn the call over to Jeff Hackman. Thank you, Robert, and good morning, everyone.

Thank you all for joining us here today. So before we dive into the quarter, I'd like to take a moment to reflect on how far we've come as an organization. Two years ago, I joined Fennec with clear objectives, build the team, sharpen our execution, and position the company for sustainable long-term growth. Over that, we've built a talented and experienced leadership team. Deep expertise across commercial, medical affairs, clinical development and corporate strategy. Today you'll have the opportunity to hear from each of them about the progress that they're making in their business. We also expanded our customer-facing team, as you know, to reach a larger prescriber target base with a greater frequency, increasing the numbers from 1,300 to roughly 5,000 targets. Together, we've built an organization that is focused, accountable, and aligned around delivering for our patients, our healthcare providers, and our shareholders. I'm proud of what we accomplished. Since I joined the company, we've increased revenue by 143%, driven by a unified strategy, consistent execution, and a disciplined focus on the fundamentals of our business. Perhaps most importantly, we've demonstrated that this isn't the result of any single initiative or quarter. It's been built through steady execution, expanding our commercial reach, strengthening our clinical evidence base, investing in targeted talent across this organization, and maintaining a strong Financial Foundation. Today's results, including our seventh consecutive quarter of growth, reflect momentum we've created and the commitment of our entire organization. I'd like to thank everyone here and take this opportunity to thank all Fennec employees for their exceptional work to help ensure that these patients face in cancer treatment can continue to hear the moments that make life most meaningful. While we're proud of our progress, we also believe we're still in the early stages of our opportunity. As you'll hear today, we're continuing to invest in the drivers that we believe will support long-term growth. generating additional clinical evidence and expanding physician engagement to building awareness and ensuring that we have resources to execute on our strategies. One of those drivers in Q2 was breaking new ground in a disease awareness campaign, bringing the conversation around testicular cancer to the Indianapolis 500 and introducing FENIC and our mission to millions of fans and forging meaningful connections across the oncology community. Kristi will go much deeper into detail and the impact of this campaign shortly. As a reminder, PEDMARC is currently approved for pediatric patients one month of age and older with localized non-metastatic solid tumors and is also recognized by the National Comprehensive Cancer Network with the 2A recommendations for use in AYA patients. As we look ahead, we believe the investments we've made across our commercial organization, the clinical evidence generation efforts and the financial foundation is translating into meaningful momentum. Encouraged by what we've seen so far in the third quarter, we are confident in our ability to continue to build on this progress and deliver sustainable growth. So with that, I'll turn it over to Chris for a more detailed update on our disease awareness efforts and our presence at ASCO. Thank you, Jeff.

As Jeff just mentioned, over the past two years, we've been very intentional about evolving not only how we position PEDMARC, but also how we engage the oncology community. In 2025, we reinvented our commercial approach with a bold, differentiated, branded campaign called Survival Should Be Loud. This campaign challenges convention, resonates strongly with oncologists, and has helped to establish a leadership position for both PEDMARC and Fennec. Building on that momentum, 2026 represents the natural next phase of that evolution. In May, we launched a disruptive disease awareness initiative to wake up a broader audience to the issue of Cisplatin-induced hearing loss, or CIO. As we've shared in the past, Cisplatin is the cornerstone of testicular cancer treatment. transforming the disease from a frequently fatal diagnosis to one with a cure rate exceeding 95%. In support of this community, we created an innovative campaign targeting testicular cancer awareness called Indy's Nuts. This campaign, with multiple strategic collaborations, launched at the Indianapolis 500, one of the world's largest sporting events. Through sponsorships with race car driver Jack Harvey and NFL linebacker Alex Singleton, the campaign was intentionally designed to stop people in their tracks. This bold, unexpected, creative concept included distribution of over 100,000 bags of peanuts. to capture attention, spark curiosity, and encourage audiences to learn more. two important objectives. First, to encourage men to perform regular testicular self-exams and promote earlier diagnosis of testicular cancer. And second, to educate patients diagnosed with testicular cancer about the importance of discussing CIO and hearing prevention with their care teams before treatment begins. Additionally, we sponsored an educational event with leading KOLs from a renowned institution in the region to deepen understanding of CIO prevention and the role of PEDMARC. Importantly, the initiative demonstrates our ability to reach and engage audiences well beyond traditional healthcare settings, further expanding awareness of both the disease and the unmet needs surrounding CIO. We are extremely pleased by our campaign performance metrics that exceeded industry norms in several categories. The momentum did not stop at the Speedway. We carried that same energy and awareness into the ASCO Annual Meeting, where the racing theme became a natural conversation starter at our booth. Through the draw of racing simulators and interactive experiences, we engaged with oncologists, advanced practitioners, nurses, patient advocates, and industry leaders in meaningful discussions about hearing preservation and the role of PEDMARC in addressing the unmet needs of CIO. Throughout the meeting, the Fennec Speedway generated exceptional engagement and quickly became one of the most talked about exhibits on the show floor. It was even featured as a part of Fierce Pharma ASCO's wrap-up article. Our cross-functional team generated hundreds of HCP leads and received overwhelmingly positive feedback from attendees who appreciated both the interactive education and the important clinical conversation the booth enabled. Pierre will speak more about ASCO shortly. For us, that was the ultimate validation. ASCO wasn't simply memorable. It created an effective platform to educate healthcare professionals, amplify our mission, and reinforce CENIC's leadership in changing the standard of care for the prevention of CIO. With that, I will now turn the call over to Pierre for a medical update.

Thank you, Christine. Good morning, everyone. The second quarter for medical affairs was one defined by expansion. We have a fully trained, fully deployed MSL team. This team engaged with a record number of new HCPs as well as affiliated sites and HCOs in Q2, adding significantly to an already growing target base. In fact, our total unique HCP reach increased 63% and unique affiliated sites increased 72%. This team is successfully converting the scientific field engagements from HCP educational gaps to further clinical conviction as we collaborate across functions to change the standard of care with Petmark. During the quarter, we also advanced our evidence generation efforts with impactful presentations at ASCO and through an expanding portfolio of Investigator Sponsored Studies, or ISTs. In April, we announced a third ISP with the University of Arizona Cancer Center to evaluate the use of PEDMARC in AYA and adult patients with head and neck and testicular cancers receiving cisplatin. This news follows the initiation of two other institution-led clinical studies with Tampa General Hospital Cancer Institute and the City of Hope. These studies are actively accruing patients. We are also engaged in discussions to grow this pipeline of ISPs, which will further expand our understanding of PEDMARC's potential. Importantly, these conversations are across multiple tumor types and across various patient populations. One of the most encouraging takeaways from our presence at ASCO in June was the evolution of the conversation. Discussions are now moving beyond general awareness of cisplatin-induced hearing loss to implementation with healthcare providers asking practical questions about incorporating PEDMARC into standard treatment workflows. We believe this reflects increasing clinical confidence and growing momentum towards broader adoption. In Q2, we nearly tripled our medical congress footprint at both national and regional conferences. At these meetings, gynecologic cancers were of particular interest and generated significant discussions and insights surrounding the market opportunity in this area. We heard from multiple leading academic gynaecologists that there is limited PEDMARC awareness despite recognizing CIO, reinforcing our medical affairs strategy to expand structured education into gynecology alongside head and neck and testicular cancers. specific tumor areas account for nearly half of our medical target base. Our field medical team plays a critical role in the education of physicians. The depth of our team's scientific knowledge and respected standing within the academic community are a true competitive advantage. Our evidence generation strategy continues to gain momentum beyond ASCO. We are pleased to share that the investigator-initiated Phase 2-3 STS-J01 clinical trial evaluating PEDMARC for the reduction of CIO in pediatric and AYA patients with non-metastatic solid tumors in Japan. has been selected for an oral presentation at the SIOP 2026 Annual Meeting in September. These data will mark the first public presentation of human pharmacokinetic data, representing an important milestone in deepening our understanding of the clinical profile and potential of PEDMARC to change standard of care. Oral presentations are reserved for research considered to be of particular scientific interest, and we believe this recognition reflects the growing clinical focus on preventing hearing loss in children receiving cisplatin-based chemotherapy. We look forward to sharing more details on the full results in September. Together with the data shared at ASCO earlier this year, these presentations continue to expand the scientific dialogue around hearing loss prevention and reinforce our commitment to supporting the generation of high-quality evidence. With that, I will now turn the call over to Terry for a commercial update. Thank you, Pierre, and good morning, everyone.

Our newly expanded sales force is driving a positive impact in the first quarter. Commercial demand continued to grow in Q2, which is attributed to our disciplined execution and greater reach and frequency. With prescribers underscoring, we have a repeatable and scalable platform for growth. For example, in the second quarter, we saw a 280% increase in the number of sales calls made by our field sales team. Demand in Q2 grew double digits over Q1. driven primarily through our patient services hub called Finnecure's. In fact, Finnecure saw a significant increase in patient enrollments that led to an all time high number of infusions for the quarter. Q2 also delivered record AYA enrollment supported by the NCCN 2A recommendation. Additionally, more than half of our business came from the home infusion center. This flexible at-home scheduling option works for both patients and providers by making it easier to start therapy and to stay on therapy. Importantly, this record patient enrollment in Q2 has helped create real momentum with unprecedented demand carried into the third quarter. In fact, in the month of July, we recorded an all time high of completed PEDMAR confusions new patient enrollments, active patients on therapy, and new customers in a single month. As we have discussed previously, continued commercial growth depends on strong alignment and execution across our organization. We are encouraged by how our expanded sales force has partnered with our market access and medical affairs teams to deliver a coordinated customer experience as we work to change the standard of care with Bedmark. To give you an example of this teamwork in action, these groups recently collaborated to secure a major formulary addition with a nationally recognized community oncology network. by combining strong sales and account management with compelling clinical education. we successfully added Pedmark to their formulary, which expands access and creates new opportunities for patients. This achievement demonstrates the strength of our integrated commercial model and our team's ability to drive meaningful results. In summary, there are several positive trends that we're carrying into Q3, including overall vial demand, number of vials per patient, new patients entering the funnel, and infusions ordered and completed. We are optimistic that this commercial success will continue to reach record levels in the second half of 2026. With that, I will turn the call over to Robert for a financial update.

Thank you, Terry. Our press release contains details of our financial results for the second quarter of 2026, which can be viewed on the Investors in Media section of our website. As customary, rather than read through all of those details, my comments today will focus on some key financial results. Of note, a table reconciling non-GAAP measures was included in today's press release for reference and will be in our accompanying 10-Q filed with the SEC. For the second quarter of 2026, the company recorded net product sales of 17.1 million compared to 9.7 million in the second quarter of 2025. representing an increase of approximately 78% year over year. We witnessed the highest amount of new patient enrollment in the second quarter and carry record demand for PEDMARC into the third quarter. On the OpEx side, which we define as R&D and SG&A excluding stock-based compensation, it was approximately $13.6 million for the quarter, with a year-over-year increase of approximately $3.6 million. The majority of the increase... was on the SG&A with expanded marketing investment focused on awareness initiatives and increased commercial headcount supporting PEDMAR growth. Consistent with prior commentary for 2026, we expect approximately $50 million in total cash OPEX 2026. with approximately $20 to $22 million, or 40% of those expenses, left to be recorded in the second half of 2026. We are focused on EBITDA generation and cash flow as we grow the business and as such are presenting record non-GAAP adjusted EBITDA in the second quarter of approximately $2.8 million compared to a loss of $1.2 million in the comparable quarter a year ago. We have significant leverage in the business with a predominantly fixed cost base. And as our revenue growth continues, we anticipate operating income and non-GAAP-adjusted EBITDA to grow meaningfully in the quarters to come. EPS in the second quarter of 26 was $0.05 per share. compared to cash and cash equivalents were $41.2 million as of June 30, 2026. For the quarter, there was a $1 million increase in cash and cash equivalents, which was higher than we anticipated for the quarter. As we have stated previously, as we grow the business, we anticipate select quarterly swings in cash position based on collection cycles with customers. as such expect the third quarter ending cash to be lower than the second quarter. However, we expect the fourth quarter cash generation and our year-ending cash to be positive. Lastly, as we stated in our press release, we anticipate that our cash equivalents and investment securities as of June 30, 2026, coupled with the projected revenues from PEDMARC, will be sufficient to fund our business based on our current operating plan. Operator, with that, we are now ready to open the call for questions.

Thank you. At this time, we'll conduct the question and answer session. As a reminder to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. And our first question comes from the line of David and Selin of Piper Stanley. Your line is now open.

Thanks. So just a few for me. First, regarding the testicular cancer population, can you talk to how how much of your overall patient mix right now is coming from young men with testicular cancer. or maybe asking another way, what portion of your new starts on Tedmark are in to stick cancer patients. And then secondly, can you give us a sense of the mix between using usage in academic centers versus community oncology practices. and how is that trending? And then lastly, wanted to pick your brain on life cycle management and what you think you can do or have you given thought to ways to better improve the profile of Pedmark. Thanks.

Perfect. Thank you. This is Jeff. I'll take these and then we'll kind of pass them through some of the folks here. So, thanks for the question. I appreciate it. You know, testicular cancer continues to be a driver for our business. It's the largest AYA tumor type that fits, you know, our PEDMARC profile. So those numbers for AYA, the size of the market is larger than the rest of the... the tumor types, again, we're agnostic on tumor types, as you know, because we target cisplatin usage. And it doesn't matter what tumor type it is, it's still going to have the impact to the hearing. So, maybe I'll have Terry, talk a little bit about the testicular market. He can kind of give you a little bit more detail, and then I'll jump back to the academic and community setting. Go ahead, Terry. Yes, sure.

And what we're seeing is roughly typical of what we had in Q1, however, slightly better in testicular cancer in Q2 with regard to, you know, that particular tumor type and PEDMARC utilization. We've got over 80% of our patients. right now between testicular, cervical, and head and neck. And predominantly, it is testicular that's the larger driver of all of those. And it really does speak to our commercial execution, sticking on our targeted plan, our sales force calling on the right folks at the right time, and then collaborating with our colleagues in market access as well as medical. That's really driving the business forward. The next question was about academic versus community. You can take that. Yes, go ahead, Jerry. So we see a really nice balanced approach between both academic and community. I've mentioned a formulary win in the community, but we also see really fantastic things happening in our community. our academic setting as well. I wouldn't characterize it by one leading more than the other. Both are growing really nicely with the additional sales force that we have. Yes, perfect. Thank you, Terry. And the last is the lifecycle management. Your comment on that's a good one. And I might have Pierre touch on that a little bit because I think what you're hearing.

from a lifecycle side is really coming from some of the ISTs that we put out there. There are a few areas where we think we can significantly grow the business, potentially even based on publications from these ISTs as the data comes in over the next few years. So, Pierre, maybe talk a little bit about some of those areas that you see from your ISTs. Pierre Coggani Sure, sure. So, thank you for the question. You know, the data generation is really leading to kind of a multi-pronged approach. So, as patients are quickly accruing across the three existing ISTs, so City at Hope, University of Arizona, and Tampa General Hospital, we have an abundance of increased interest in additional ISTs. And importantly, these are across tumor types. across patient ages, and localized as well as metastatic disease. So as the data matures, we are certainly having discussions with the regulatory agencies to see is there opportunities for label expansion. Additionally, we are very keenly looking at NCCN guidelines. and seeing opportunities for having increased guideline recommendations there as well. Great.

Thank you. We'll move on to our next question. Our next question comes from the line of Chase Knickerbocker of Greg Havlum. Your line is now open.

Good morning. Congrats on the results here and thanks for taking the questions. Maybe just as far as how kind of that productivity of the new reps is trending, were they meaningful contributors to Q2 growth? Just trying to get a sense for what inning, how early are we in kind of their productivity ramp? Thanks.

Sure. Thanks for the question, Chase. I'll take a little bit of it and then I'll give it to Terry. But you heard from some of my comments, we now are approaching close to 5,000 targets that we're calling on. It is having an impact. We're seeing patients in places in the country where we've never seen patients before. And as we even hinted a little bit on our Q3 numbers, our July continued that momentum that we're seeing. So one of the things we said early on was give these guys a little time, now they've had a quarter under their belt. but we're still not, they're going to continue to grow and get better at what they do. They need to understand like where they're going, multiple times we have to be in these offices obviously before we can we can move physicians and so give them a little time but but what I would say is.