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What changed in FENNEC PHARMACEUTICALS INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FENNEC PHARMACEUTICALS INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+383 added−336 removedSource: 10-K (2025-03-26) vs 10-K (2024-03-29)

Top changes in FENNEC PHARMACEUTICALS INC.'s 2024 10-K

383 paragraphs added · 336 removed · 253 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

70 edited+37 added−22 removed220 unchanged
Biggest changeWe own three additional pending US patent applications directed to methods of treatment using the PEDMARK ® formulation, which, if granted, will be eligible for listing in the Orange Book. These patents where granted will expire in July 2039, exclusive of patent term adjustment and/or extension, unless held invalid or unenforceable by a court of final jurisdiction.
Biggest changeThese patents where granted will expire in July 2039, exclusive of patent term adjustment and/or extension, unless held invalid or unenforceable by a court of final jurisdiction. We own five additional pending US patent applications directed to additional sodium thiosulfate pharmaceutical formulations and methods of treatment using such formulations.
Under the Food and Drug Cosmetic Act, as amended by the Drug Price Competition and Patent Term Restoration Act of 1984, as amended, after receipt of a valid Paragraph IV notice, the Company may bring a patent infringement suit in a federal district court against CIPLA within 45 days from the receipt of the Notice Letter and if such a suit is commenced within the 45-day period, the Company is entitled to a 30 month stay on the FDA’s ability to give final approval to any proposed products that reference PEDMARK ® .
Under the Food, Drug, and Cosmetic Act, as amended by the Drug Price Competition and Patent Term Restoration Act of 1984, as amended, after receipt of a valid Paragraph IV notice, the Company may bring a patent infringement suit in a federal district court against CIPLA within 45 days from the receipt of the Notice Letter and if such a suit is commenced within the 45-day period, the Company is entitled to a 30 month stay on the FDA’s ability to give final approval to any proposed products that reference PEDMARK.
Please read the “Risk Factors” in Item 1A of this Annual Report for information about certain risks and uncertainties that may affect our patent position and proprietary rights. We also rely upon unpatented confidential information to remain competitive. We protect such information principally through confidentiality agreements with our employees, consultants, outside scientific collaborators, and other advisers.
Please read the “Risk Factors” in Item 1A of this Annual Report for information about certain risks and uncertainties that may affect our patent position and proprietary rights. ​ We also rely upon unpatented confidential information to remain competitive. We protect such information principally through confidentiality agreements with our employees, consultants, outside scientific collaborators, and other advisers.
If there is no listed patent in the Orange Book, there cannot be a Paragraph IV certification, and, thus, no ANDA can be filed before the expiration of the exclusivity period. Section 505(b)(2) New Drug Applications Most drug products obtain FDA marketing approval pursuant to an NDA or an ANDA.
If there is no listed patent in the FDA Orange Book, there cannot be a Paragraph IV certification, and, thus, no ANDA can be filed before the expiration of the exclusivity period. Section 505(b)(2) New Drug Applications Most drug products obtain FDA marketing approval pursuant to an NDA or an ANDA.
To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would.
To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA Orange Book to the same extent that an ANDA applicant would.
On May 11, 2023, we received written notice of CIPLA’s Paragraph IV Certification as to the ’793 Patent, which was dated May 10, 2023, along with an enclosed statement of alleged factual and legal bases for stating that the ’793 Patent is invalid, unenforceable, and/or will not be infringed by CIPLA’s ANDA Product.
On May 11, 2023, we received written notice of CIPLA’s Paragraph IV Certification as to the US ‘793 Patent, which was dated May 10, 2023, along with an enclosed statement of alleged factual and legal bases for stating that the US ‘793 Patent is invalid, unenforceable, and/or will not be infringed by CIPLA’s ANDA Product.
Our general policy is to seek patent protection in the United States, Europe, China, Japan, Canada and other jurisdictions as appropriate for our compounds and methods. U.S. patents, as well as most foreign patents, are generally effective for 20 years from the date the earliest (priority) application was filed.
Our general policy is to seek patent protection in the United States, Europe, U.K., China, Japan, Canada and other jurisdictions as appropriate for our compounds and methods. U.S. patents, as well as most foreign patents, are generally effective for 20 years from the date the earliest (priority) application was filed.
Drugs approved in this way are commonly referred to as “generic equivalents” to the listed drug and can often be substituted by pharmacists under prescriptions written for the original listed drug. The ANDA applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA’s Orange Book.
Drugs approved in this way are commonly referred to as “generic equivalents” to the listed drug and can often be substituted by pharmacists under prescriptions written for the original listed drug. The ANDA applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA Orange Book.
The majority of states also have statutes or regulations similar to the federal anti-kickback law and false claims laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payer. 20 Table of Contents The Centers for Medicare & Medicaid Services (CMS) has issued a final rule that requires manufacturers of approved prescription drugs to collect and report information on payments or transfers of value to physicians, physician assistants, certain types of advanced practice nurses and teaching hospitals, as well as investment interests held by physicians and their immediate family members.
The majority of states also have statutes or regulations similar to the federal anti-kickback law and false claims laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payer. 21 Table of Contents The Centers for Medicare & Medicaid Services (CMS) has issued a final rule that requires manufacturers of approved prescription drugs to collect and report information on payments or transfers of value to physicians, physician assistants, certain types of advanced practice nurses and teaching hospitals, as well as investment interests held by physicians and their immediate family members.
These cost containment measures could include: ● controls on government-funded reimbursement for drugs; ● mandatory rebates or additional charges to manufacturers for their products to be covered on Medicare Part D formularies; ● controls on healthcare providers; 18 Table of Contents ● controls on pricing of drug products, including the possible reference of the pricing of United States drugs to non-United States drug pricing for the same product; ● challenges to the pricing of drugs or limits or prohibitions on reimbursement for specific products through other means; ● reform of drug importation laws; ● entering into contractual ● agreements with payors; and ● expansion of use of managed-care systems in which healthcare providers contract to provide comprehensive healthcare for a fixed cost per person.
These cost containment measures could include: ● controls on government-funded reimbursement for drugs; ● mandatory rebates or additional charges to manufacturers for their products to be covered on Medicare Part D formularies; ● controls on healthcare providers; 19 Table of Contents ● controls on pricing of drug products, including the possible reference of the pricing of United States drugs to non-United States drug pricing for the same product; ● challenges to the pricing of drugs or limits or prohibitions on reimbursement for specific products through other means; ● reform of drug importation laws; ● entering into contractual ● agreements with payors; and ● expansion of use of managed-care systems in which healthcare providers contract to provide comprehensive healthcare for a fixed cost per person.
OHSU will receive certain milestone payments, royalty on net sales for licensed products and a royalty on any consideration received from sublicensing of the licensed technology. 9 Table of Contents On May 18, 2015, we negotiated an amendment (“Amendment 1”) to the OHSU Agreement, which expands our exclusive license to include the use of N-acetylcysteine as a standalone therapy and/or in combination with sodium thiosulfate for the prevention of ototoxicity induced by chemotherapeutic agents to treat cancers.
OHSU will receive certain milestone payments, royalty on net sales for licensed products and a royalty on any consideration received from sublicensing of the licensed technology. 10 Table of Contents On May 18, 2015, we negotiated an amendment (“Amendment 1”) to the OHSU Agreement, which expands our exclusive license to include the use of N-acetylcysteine as a standalone therapy and/or in combination with sodium thiosulfate for the prevention of ototoxicity induced by chemotherapeutic agents to treat cancers.
PEDMARK ® still requires significant, time-consuming and costly research and development, testing and regulatory clearances. In developing PEDMARK ® , we are subject to risks of failure that are inherent in the development of products based on innovative technologies.
PEDMARK ® still requires significant, time-consuming and costly research and development, testing and regulatory clearances globally. In developing PEDMARK ® , we are subject to risks of failure that are inherent in the development of products based on innovative technologies.
If the FDA determines that information relating to the use of the new drug in the pediatric population may produce health benefits in the population, the clinical study is deemed to fairly respond to the FDA’s request and the reports of FDA-requested pediatric studies are submitted 19 Table of Contents to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity or patent protection covering the product are extended by six months.
If the FDA determines that information relating to the use of the new drug in the pediatric population may produce health benefits in the population, the clinical study is deemed to fairly respond to the FDA’s request and the reports of FDA-requested pediatric studies are submitted 20 Table of Contents to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity or patent protection covering the product are extended by six months.
Among the remedies available to the government for any failure to properly disclose commercial pricing and/or to extend FSS contract price reductions is recoupment of any FSS overcharges that may result from such omissions. 22 Table of Contents Tricare Retail Pharmacy Network Program The DoD provides pharmacy benefits to current and retired military service members and their families through the Tricare healthcare program.
Among the remedies available to the government for any failure to properly disclose commercial pricing and/or to extend FSS contract price reductions is recoupment of any FSS overcharges that may result from such omissions. 23 Table of Contents Tricare Retail Pharmacy Network Program The DoD provides pharmacy benefits to current and retired military service members and their families through the Tricare healthcare program.
The ANDA application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the referenced product has expired.
The ANDA application also will not be approved until any applicable non-patent exclusivity listed in the FDA Orange Book for the referenced product has expired.
Facilities, procedures, operations, and/or testing of products are subject to periodic inspection by the FDA and other authorities. In addition, the FDA conducts pre-approval and post-approval reviews and inspections to determine whether the systems and processes are in compliance with cGMP and other FDA regulations. 17 Table of Contents There are also user fees for ANDA applicants, sponsors, and manufacturers.
Facilities, procedures, operations, and/or testing of products are subject to periodic inspection by the FDA and other authorities. In addition, the FDA conducts pre-approval and post-approval reviews and inspections to determine whether the systems and processes are in compliance with cGMP and other FDA regulations. 18 Table of Contents There are also user fees for ANDA applicants, sponsors, and manufacturers.
A drug may obtain a three-year period of exclusivity for a particular condition of approval, or change to a marketed product, such as a new formulation for the previously approved product, if one or more new clinical studies (other than bioavailability or bioequivalence studies) was essential to 16 Table of Contents the approval of the application and was conducted/sponsored by the applicant.
A drug may obtain a three-year period of exclusivity for a particular condition of approval, or change to a marketed product, such as a new formulation for the previously approved product, if one or more new clinical studies (other than bioavailability or bioequivalence studies) was essential to 17 Table of Contents the approval of the application and was conducted/sponsored by the applicant.
All manufacturing facilities, as well as records required to be maintained under FDA 13 Table of Contents regulations, are subject to inspection or audit by the FDA. In addition, manufacturers generally are required to pay annual user fees for approved products and a user fee for the submission of each new or supplemental application.
All manufacturing facilities, as well as records required to be maintained under FDA 14 Table of Contents regulations, are subject to inspection or audit by the FDA. In addition, manufacturers generally are required to pay annual user fees for approved products and a user fee for the submission of each new or supplemental application.
This phase also provides additional safety data and serves to identify possible common short-term side effects and risks in a somewhat larger group of patients. Phase 2 testing frequently relates to a specific disease, such as breast or lung 12 Table of Contents cancer.
This phase also provides additional safety data and serves to identify possible common short-term side effects and risks in a somewhat larger group of patients. Phase 2 testing frequently relates to a specific disease, such as breast or lung 13 Table of Contents cancer.
The FDA does, however, regulate manufacturers’ communications about their drug products and interprets the Federal Food, Drug, and Cosmetic Act (“FFDCA”) to prohibit pharmaceutical companies from promoting their FDA-approved drug products for uses that are not 14 Table of Contents specified in the FDA-approved labeling.
The FDA does, however, regulate manufacturers’ communications about their drug products and interprets the Federal Food, Drug, and Cosmetic Act (“FFDCA”) to prohibit pharmaceutical companies from promoting their FDA-approved drug products for uses that are not 15 Table of Contents specified in the FDA-approved labeling.
The PUMA process was established to make it more efficient for pharmaceutical companies to invest in the development of drugs for children. PUMA drugs receive eight years of data protection plus two years of marketing protection and the 15 Table of Contents applications are, in part, exempt from fees.
The PUMA process was established to make it more efficient for pharmaceutical companies to invest in the development of drugs for children. PUMA drugs receive eight years of data protection plus two years of marketing protection and the 16 Table of Contents applications are, in part, exempt from fees.
Specifically, every bulk drug substance used in compounding: (1) must comply with an applicable and current USP or NF drug monograph, if one exists, as well as the current USP chapters on pharmacy compounding; (2) if such a monograph does not exist, the bulk drug substance must be a component of an FDA-approved drug; or (3) if a monograph does not exist and the bulk drug substance is not a component of an FDA-approved drug, it must appear on a list of bulk drug substances that may be used in 10 Table of Contents compounding (i.e., the “Section 503A bulk substances list 1”).
Specifically, every bulk drug substance used in compounding: (1) must comply with an applicable and current USP or NF drug monograph, if one exists, as well as the current USP chapters on pharmacy compounding; (2) if such a monograph does not exist, the bulk drug substance must be a component of an FDA-approved drug; or (3) if a monograph does not exist and the bulk drug substance is not a component of an FDA-approved drug, it must appear on a list of bulk drug substances that may be used in compounding (i.e., the “Section 503A bulk substances list 1”).
These include: D-methionine, an amino acid that has been shown to protect against hearing loss in experimental settings but was demonstrated to be inferior to PEDMARK ® in comparative studies; SPI-3005, an oral agent primarily being developed by Sound Pharmaceuticals for noise and age-related hearing loss but in early Phase II trials for chemotherapy related hearing loss, which mimics glutathione peroxidase and induces the intracellular induction of glutathione; N-acetylcysteine and amifostine, which have shown effectiveness (but less than PEDMARK ® ) in experimental systems; and Vitamin E, salicylate and tiopronin, which have all demonstrated moderate activity in rat models to protect against cisplatin-induced ototoxicity, but no clinical trials have been completed, and DB-020, a clinical stage candidate in an ongoing Phase1b trial being developed by Decibel Therapeutics.
These include: D-methionine, an amino acid that has been shown to protect against hearing loss in experimental settings but was demonstrated to be inferior to PEDMARK ® in comparative studies; SPI-3005, an oral agent primarily being developed by Sound Pharmaceuticals for noise and age-related hearing loss but in early Phase II trials for chemotherapy related hearing loss, which mimics glutathione peroxidase and induces the intracellular induction of glutathione; N-acetylcysteine and amifostine, which have shown effectiveness (but less than PEDMARK ® ) in experimental systems; and Vitamin E, salicylate and tiopronin, which have all demonstrated moderate activity in rat models to protect against cisplatin-induced ototoxicity, but no clinical trials have been completed, and DB-020, a clinical stage candidate completed a Phase1b trial by Decibel Therapeutics with future development unclear.
The incidence of ototoxicity depends upon the dose and duration of chemotherapy, and many of these children require lifelong hearing aids or cochlear implants, which can be helpful for some, but do not reverse the hearing loss and can be costly over time.
The incidence of ototoxicity depends upon the dose and duration of chemotherapy, and many of these patients require lifelong hearing aids or cochlear implants, which can be helpful for some, but do not reverse the hearing loss and can be costly over time.
In addition to retroactive rebates, if a manufacturer 21 Table of Contents were found to have knowingly submitted false information to the government, federal law provides for civil monetary penalties for failing to provide required information, late submission of required information, and false information.
In addition to retroactive rebates, if a manufacturer 22 Table of Contents were found to have knowingly submitted false information to the government, federal law provides for civil monetary penalties for failing to provide required information, late submission of required information, and false information.
To facilitate talent attraction and retention, we strive to make Fennec an inclusive, safe, and healthy workplace, with opportunities to grow and develop in their careers, supported by strong compensation, benefits, health and welfare programs.
To facilitate talent attraction and retention, we strive to make Fennec an inclusive, safe, and healthy workplace, with opportunities for employees to grow and develop in their careers, supported by strong compensation, benefits, health and welfare programs.
While the advertising provisions in Section 503A were ruled unconstitutional in part in the United States by the Supreme Court in 2002, the FDA, since 2013, has aggressively regulated and exercised oversight over the practice of pharmacy compounding following the compounding incident at the New England Compounding Center in Massachusetts that sickened hundreds and killed over 60 individuals.
While the advertising provisions in Section 503A were 11 Table of Contents ruled unconstitutional in part in the United States by the Supreme Court in 2002, the FDA, since 2013, has aggressively regulated and exercised oversight over the practice of pharmacy compounding following the compounding incident at the New England Compounding Center in Massachusetts that sickened hundreds and killed over 60 individuals.
Our success is significantly dependent on our ability to obtain and maintain patent protection for PEDMARK ® , both in the United States and abroad. Our patent position and proprietary rights are subject to various risks and uncertainties.
The suit is ongoing. ​ Our success is significantly dependent on our ability to obtain and maintain patent protection for PEDMARK ® , both in the United States and abroad. Our patent position and proprietary rights are subject to various risks and uncertainties.
Applications from these patent families, where granted, valid, and enforceable, will expire in July 2039, exclusive of any patent term adjustment or extension. We have exclusively in-licensed from Oregon Health & Science University (“OHSU”) one patent family directed to the use of sodium thiosulfate to reduce the occurrence of ototoxicity.
Applications from these patent families, where granted, valid, and enforceable, will expire in July 2039, exclusive of any patent term adjustment or extension. 7 Table of Contents We have exclusively in-licensed from Oregon Health & Science University (“OHSU”) one patent family directed to the use of sodium thiosulfate to reduce the occurrence of ototoxicity.
PEDMARQSI ® is the first and only approved therapy in the EU and U.K. for the prevention of ototoxicity (hearing loss) induced by cisplatin chemotherapy in patients 1 month to ​ Under the terms of the licensing agreement, Fennec will receive approximately $43 million in upfront consideration and up to approximately $230 million in additional commercial and regulatory milestone payments and double-digit tiered royalties on net sales of PEDMARQSI ® in the licensed territories up to the mid-twenties.
PEDMARQSI ® is the first and only approved therapy in the EU and U.K. for the prevention of ototoxicity (hearing loss) induced by cisplatin chemotherapy in patients 1 month to ​ Under the terms of the Norgine licensing agreement, Fennec received approximately $43 million in upfront consideration and may receive up to approximately $230 million in additional commercial and regulatory milestone payments and double-digit tiered royalties (up to the mid-twenties) on net sales of PEDMARQSI ® in the licensed territories.
To date, the rebate amount for a drug has been capped at 100% of the AMP; however, effective January 1, 2024, this cap will be eliminated, which means that a manufacturer could pay a rebate amount on a unit of the drug that is greater than the average price the manufacturer receives for the drug.
To date, the rebate amount for a drug has been capped at 100% of the AMP; however, effective January 1, 2024, this cap was eliminated, which means that a manufacturer could pay a rebate amount on a unit of the drug that is greater than the average price the manufacturer receives for the drug.
We sell our product through an experienced field force including Regional Pediatric Oncology Specialists and medical science liaisons who are helping to educate the medical communities and patients about cisplatin induced ototoxicity and our programs supporting patient access to PEDMARK ® .
In the United States, we sell our product through an experienced field force including Regional Pediatric Oncology Specialists and medical science liaisons who are helping to educate the medical communities and patients about cisplatin induced ototoxicity and our programs supporting patient access to PEDMARK ® .
CIPLA ANDA Litigation On December 1, 2022, we received a letter dated November 30, 2022, notifying us that CIPLA Ltd. and CIPLA USA (“CIPLA”) submitted to the FDA an ANDA (ANDA No. 218028) for a generic version of PEDMARK ® (sodium thiosulfate solution) that contains Paragraph IV Certifications on two of our patents covering PEDMARK ® : the OHSU licensed ‘190 Patent, expiration date January 2038; and our US 11,291,728 Patent (the “’728 Patent”), expiration date July 2039.
CIPLA ANDA Litigation On December 1, 2022, we received a letter dated November 30, 2022, notifying us that CIPLA Ltd. and CIPLA USA (“CIPLA”) submitted to the FDA an ANDA (ANDA No. 218028) for a generic version of PEDMARK ® (sodium thiosulfate solution) that contained Paragraph IV Certifications on two of our patents covering PEDMARK ® : the OHSU licensed ‘190 Patent, expiration date January 2038; and our US 11,291,728 Patent (the “ ’728 Patent”), expiration date July 2039.
Patent No. 10,792,363 (the “’363 Patent”), which relates to an anhydrous form of STS and its method of manufacture, which is the active pharmaceutical ingredient in the PEDMARK ® product. The ‘363 Patent was issued October 6, 2020.
Patent No. 10,792,363 (the “US ‘363 Patent”), which relates to an anhydrous form of STS and its method of manufacture, which is the active pharmaceutical ingredient in the PEDMARK ® product. The US ‘363 Patent was issued October 6, 2020.
For example, it is possible that our product candidate will be ineffective or toxic, or will otherwise fail to receive the necessary regulatory clearances. There is a risk that PEDMARK ® will be uneconomical to manufacture or market or will not achieve market acceptance.
For example, it is possible that our product candidate will be ineffective or toxic, or will otherwise fail to receive or, where received, maintain the necessary regulatory clearances. There is a risk that PEDMARK ® will be uneconomical to manufacture or market or will not achieve market acceptance.
Factors affecting competition generally In general, our ability to compete depends in large part upon: ● our ability to obtain regulatory approvals for our drug candidate outside the U.S.; ● the demonstrated efficacy, safety and reliability of our drug candidate; ● the timing and scope of regulatory approvals; ● product acceptance by physicians and other health care providers; ● the willingness of payors to reimburse for our product; ● protection of our proprietary rights and the level of generic competition; ● our ability to supply commercial quantities of our product to the market; ● our ability to obtain reimbursement from private and/or public insurance entities for product use in approved indications; ● our ability to recruit and retain skilled employees; and ● the availability of capital resources to fund our development and commercialization activities, including the availability of funding from the federal government. 11 Table of Contents Government Regulation The production and manufacture of our product and our research and development activities are subject to significant regulation for safety, efficacy and quality by various governmental authorities around the world.
In general, our ability to compete depends in large part upon: ● our ability to maintain regulatory approvals for PEDMARK ® in the U.S., EU and other global markets; ● our ability to obtain regulatory approvals for PEDMARK ® in target markets outside of the U.S., EU and other global markets; ● the demonstrated efficacy, safety and reliability of our drug candidate; ● the timing and scope of regulatory approvals; ● product acceptance by physicians and other health care providers; ● the willingness of payors to reimburse for our product; ● protection of our proprietary rights and the level of generic competition; ● our ability to supply commercial quantities of our product to the market; ● our ability to obtain reimbursement from private and/or public insurance entities for product use in approved indications; ● our ability to recruit and retain skilled employees; and ● the availability of capital resources to fund our development and commercialization activities, including the availability of funding from the federal government. 12 Table of Contents Government Regulation The production and manufacture of our product and our research and development activities are subject to significant regulation for safety, efficacy and quality by various governmental authorities around the world.
We have established relationships with contract research organizations (“CROs”), universities and other institutions, which we utilize to perform many of the day-to-day activities associated with our drug development. Where possible, we have 23 Table of Contents sought to include leading scientific investigators and advisors to enhance our internal capabilities.
We have historically had relationships with contract research organizations (“CROs”), universities and other institutions, which we utilize to perform many of the day-to-day activities associated with our drug development. Where possible, we 24 Table of Contents have sought to include leading scientific investigators and advisors to enhance our internal capabilities.
Research and development issues are reviewed internally by our executive management and supporting scientific team. Research and development expenses totaled $0.1 million and $3.5 million for the fiscal years ended December 31, 2023 and 2022, respectively. We have decreased our research and development expenses related to PEDMARK ® as our efforts have shifted to commercial readiness and launch activities.
Research and development issues are reviewed internally by our executive management and supporting scientific team. Research and development expenses totaled $0.31 and $0.06 million for the fiscal years ended December 31, 2024 and 2023, respectively. We have decreased our research and development expenses related to PEDMARK ® as our efforts have shifted to commercial readiness and launch activities.
On April 4, 2023, we 8 Table of Contents were granted US 11,617,793 Patent (the “’793 Patent”) covering the formulation of the PEDMARK ® product, which was listed in the Orange Book on or around April 17, 2023, and has an expiration date of July 2039.
On April 4, 2023, we were granted US 11,617,793 Patent (the “US ‘793 Patent”) covering the formulation of the PEDMARK product, which was listed in the Orange Book on or around April 17, 2023, and has an expiration date of July 2039.
On November 9, 2022, the USPTO issued U.S. Patent No. 11,510,984 (the “US ‘984 Patent”) that also covers the PEDMARK ® pharmaceutical formulation. On April 4, 2023, the USPTO issued U.S. Patent No. 11,617,793 (the “US ‘793”) that covers the PEDMARK ® pharmaceutical formulation.
Patent No. 11,291,728 (the “US ‘728 Patent”) that covers the PEDMARK ® pharmaceutical formulation. On November 9, 2022, the USPTO issued U.S. Patent No. 11,510,984 (the “US ‘984 Patent”) that also covers the PEDMARK ® pharmaceutical formulation. On April 4, 2023, the USPTO issued U.S. Patent No. 11,617,793 (the “US ‘793 Patent”) that covers the PEDMARK ® pharmaceutical formulation.
In addition to the 30-month stay, because we have received Orphan Drug Exclusivity, the FDA may not approve CIPLA’s ANDA for at least 7 years from PEDMARK ® ’s FDA approval date of September 20, 2022.
In addition to the 30-month stay, because we have received Orphan Drug Exclusivity, the FDA may not approve CIPLA’s ANDA for at least 7 years from PEDMARK’s FDA approval date of September 20, 2022, which is September 20, 2029.
The ‘190 Patent was previously listed in Orange Book. In light of PTAB’s final written decision on the invalidity of the ‘190 Patent, we requested that the FDA remove the ’190 Patent from the Orange Book.
In light of PTAB’s final written decision on the invalidity of the US ‘190 Patent, we requested that the FDA remove the US ‘190 Patent from the Orange Book.
Third-Party Reimbursement Sales of drug products depend in significant part on the availability of coverage and adequate reimbursement by third party payors, such as state and federal governments, including Medicare and Medicaid, managed care providers, private commercial insurance plans and pharmacy benefit management (PBM) plans.
Further, in February 2025, Norgine announced the launch of PEDMARQSI in Germany. ​ Third-Party Reimbursement ​ Sales of drug products depend in significant part on the availability of coverage and adequate reimbursement by third party payors, such as state and federal governments, including Medicare and Medicaid, managed care providers, private commercial insurance plans and pharmacy benefit management (PBM) plans.
We plan to pursue PUMA upon approval of the MAA, which would allow for 10 years of market exclusivity upon PUMA approval. 7 Table of Contents Following the approval of PEDMARQSI ® (EU Brand name for PEDMARK ® ) in Europe on May 26, 2023, we were granted PUMA in the European Union pursuant to Regulation (EC) No. 1901/2006 and Regulation (EC) No. 1902/2006, which provides for 10 years of exclusivity (8 years of data exclusivity + 2 years of market exclusivity).
Following the approval of PEDMARQSI ® (EU Brand name for PEDMARK ® ) in Europe on May 26, 2023, we were granted PUMA in the European Union pursuant to Regulation (EC) No. 1901/2006 and Regulation (EC) No. 1902/2006, which provides for 10 years of exclusivity (8 years of data exclusivity + 2 years of market exclusivity).
Our goal in selecting employees is to retain high quality personnel with substantial prior experience who understand and support our mission as a company to develop and commercialize innovative therapies for people with rare, debilitating, chronic neuromuscular and neurological diseases and who are willing to work hard and in a collaborative manner to further that mission.
Our goal in selecting employees is to retain high quality personnel with substantial prior experience who understand and support our mission as a company to develop and commercialize innovative therapies for patients with rare, oncology related and orphan diseases and who are willing to work hard and in a collaborative manner to further that mission.
Employee Profile As of December 31, 2023, we had approximately 29 employees, 21 of whom are in our commercial organization, two of whom are in our R&D organization, and the rest of whom are in our G&A organization. We also utilize the services of several full-time consultants who work with our commercial organization.
Employee Profile As of December 31, 2024, we had approximately 32 employees, 20 of whom are in our commercial organization, 1 of whom are in our R&D organization, and the rest of whom are in our G&A organization. We also utilize the services of several full-time consultants who work with our commercial organization.
Norgine will be responsible for all commercialization activities in the licensed territories and will hold all marketing authorizations in the licensed territories.
Norgine 4 Table of Contents will be responsible for all commercialization activities in the licensed territories and will hold all marketing authorizations in the licensed territories.
On January 10, 2023, we filed suit against the CIPLA entities in the United States District Court for the District of New Jersey (Case No. 2:23-cv-00123), for infringement of the ‘190 Patent, the ‘728 Patent, and the ‘984 Patent. On April 20, 2023, we filed an Amended Complaint to assert infringement of the ‘728 patent and the ‘984 Patent.
On January 10, 2023, we filed suit against the CIPLA entities in the United States District Court for the District of New Jersey (Case No. 2:23-cv-00123), for infringement of the US ‘190 Patent, the US ‘728 Patent, and the US ‘984 Patent.
Further, PEDMARQSI ® (PEDMARK ® brand name outside of U.S.) received European Commission Marketing Authorization in June 2023 and received U.K. approval in October 2023. In March 2024, we announced that we entered into an agreement with Norgine, a leading European specialist pharmaceutical company.
European Commission Marketing Authorization PEDMARQSI ® (PEDMARK ® brand name in Europe) received European Commission Marketing Authorization in June 2023 and received U.K. approval in October 2023. As previously noted, in March 2024, we entered into an agreement with Norgine, a leading European specialist pharmaceutical company.
In addition, there is a new annual program fee based on the size of the generic drug applicant. These user fees typically increase each fiscal year. Other regulatory requirements In addition to regulation by the FDA and certain state regulatory agencies, we are also subject to a variety of foreign regulations governing clinical trials and the marketing of other products.
These user fees typically increase each fiscal year. ​ Other regulatory requirements In addition to regulation by the FDA and certain state regulatory agencies, we are also subject to a variety of foreign regulations governing clinical trials and the marketing of other products.
In the case of our employees, these agreements also provide, in compliance with relevant law, that inventions and other intellectual property conceived by such employees during their employment shall be our exclusive property. FDA Orange Book Listings On April 5, 2022, the USPTO issued U.S. Patent No. 11,291,728 (the “US ‘728 Patent”) that covers the PEDMARK ® pharmaceutical formulation.
In the case of our employees, these agreements also provide, in compliance with relevant law, that inventions and other intellectual property conceived by such employees during their employment shall be our exclusive property. Fennec’s Sodium Thiosulfate Patents and FDA Orange Book Listings On April 5, 2022, the USPTO issued U.S.
Cisplatin Induced Ototoxicity Cisplatin and other platinum compounds are essential chemotherapeutic agents for the treatment of many pediatric malignancies. Unfortunately, platinum-based therapies can cause ototoxicity, or hearing loss, which is permanent, irreversible, and particularly harmful to the survivors of pediatric cancer.
In contrast, around 80% of patients are treated at 3,750 community centers throughout the country. ​ Cisplatin Induced Ototoxicity (“CIO”) Cisplatin and other platinum compounds are essential chemotherapeutic agents for the treatment of many pediatric and adult malignancies. Unfortunately, platinum-based therapies can cause ototoxicity, or hearing loss, which is permanent, irreversible, and particularly harmful to the survivors of pediatric cancer.
The duration of foreign patents may vary in accordance with local law. Our current patent portfolio reflects our strategy to expand and diversify our intellectual property to obtain protection for our PEDMARK ® product.
The duration of foreign patents may vary in accordance with local law. Our current patent portfolio reflects our strategy to expand and diversify our intellectual property to obtain protection for our PEDMARK ® product. ​ We currently have six patents listed for PEDMARK ® in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (“FDA Orange Book”).
As stated earlier, in March 2024, Fennec and Norgine announced an exclusive licensing agreement under which Norgine will commercialize PEDMARQSI ® in Europe, Australia and New Zealand.
This is an exclusive licensing agreement under which Norgine will commercialize PEDMARQSI ® in Europe, Australia and New Zealand.
Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in support of approval of an abbreviated new drug application, or ANDA.
Upon approval of a drug, each of the patents listed in the application for the drug are then published in the FDA Orange Book. Drugs listed in the FDA Orange Book can, in turn, be cited by potential generic competitors in support of approval of an ANDA.
The four other applications cover additional sodium thiosulfate formulations for potential future use. A patent in this family has been granted in Indonesia. Additional applications from these families are pending in Australia, Brazil, Canada, China, the European Patent Office (EPO), Hong Kong, Israel, Japan, South Korea, Mexico, Malaysia, New Zealand, Russia, Singapore, and Thailand.
Additional applications from these patents are pending in Australia, Brazil, Canada, China, the European Patent Office (EPO), Hong Kong, Israel, Japan, South Korea, Mexico, Malaysia, New Zealand, Russia, Singapore, and Thailand.
The OHSU Agreement is terminable by either us or OHSU in the event of a material breach of the agreement by the other party after 45 days prior written notice.
In the event a licensed product obtains regulatory approval and is covered by the Orphan Drug Designation, the parties will in good faith amend the term of the agreement. The OHSU Agreement is terminable by either us or OHSU in the event of a material breach of the agreement by the other party after 45 days prior written notice.
We have exclusively licensed from OHSU U.S. Patent No. 10,596,190 (“the US ‘190 Patent”) and two pending US patent application directed to a method of reducing ototoxicity using sodium thiosulfate. On April 18, 2023, the PTAB invalidated the only claim of the‘190 Patent. The final written decision became effective June 20, 2023.
We have exclusively licensed from Oregon Health and Sciences University U.S. Patent No. 10,596,190 (the “US ‘190 Patent”). On April 18, 2023, the PTAB invalidated the only claim of the US ‘190 Patent. The final written decision became effective June 20, 2023. The US ‘190 Patent was previously listed in Orange Book.
Infants and young children that suffer ototoxicity at critical stages of development lack speech language development and literacy, and older children and adolescents lack social-emotional development and educational achievement. PEDMARK ® has been studied by co-operative groups in two Phase 3 clinical studies of survival and reduction of ototoxicity, COG ACCL0431 and SIOPEL 6. Both studies have been completed.
PEDMARK ® Product Overview PEDMARK ® has been studied by co-operative groups in two Phase 3 clinical studies of survival and reduction of ototoxicity, COG ACCL0431 and SIOPEL 6. Both studies have been completed.
Two United States patent applications claiming priority through the ‘190 Patent remain pending at the United States Patent and Trademark Office (“USPTO”), and if granted, will be eligible for listing in the Orange Book.
Two United States patent applications claiming priority through the US ‘190 Patent remain pending at the USPTO, and if granted, will be eligible for listing in the Orange Book. 8 Table of Contents We plan to vigorously defend our intellectual property rights to PEDMARK ® if challenged.
On January 6, 2023, we received a letter dated January 5, 2023, notifying us that CIPLA submitted to the FDA a Paragraph IV Certification on our newly issued US 11,510,984 Patent (the “’984 Patent”). These patents are listed in FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the Orange Book, for PEDMARK ® .
On January 6, 2023, we received a letter dated January 5, 2023, notifying us that CIPLA submitted to the FDA a Paragraph IV Certification on our newly issued US 11,510,984 Patent (the “ ’984 Patent”).
The certifications allege these patents are invalid or will not be infringed by the manufacture, use, or sale of CIPLA’s sodium thiosulfate solution.
These patents are listed in FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the Orange Book, for PEDMARK ® . The certifications allege these patents are invalid or will not be infringed by the manufacture, use, or sale of CIPLA’s sodium thiosulfate solution .
For fiscal year 2023, the application fees are $240,582 per ANDA application and the facility fees are $213,134 per domestic finished dosage form facility, $228,134 per foreign finished dosage form facility, $37,544 per domestic active pharmaceutical ingredient facility, and $52,544 per foreign active pharmaceutical ingredient facility.
For fiscal year 2024, the application fees are $252,453 per ANDA application and the facility fees are $220,427 per domestic finished dosage form facility, $235,427 per foreign finished dosage form facility, $40,464 per domestic active pharmaceutical ingredient facility, and $55,464 per foreign active pharmaceutical ingredient facility.
Fennec 4 Table of Contents HEARS ® also provides access to care coordinators that can answer insurance questions about coverage for PEDMARK ® and provide tips and resources for managing treatment.
Fennec HEARS ® also provides access to care coordinators that can answer insurance questions about coverage for PEDMARK ® and provide tips and resources for managing treatment. We received Orphan Drug Exclusivity for PEDMARK ® in January 2023, which provides seven years of market exclusivity from its FDA approval on September 20, 2022, until September 20, 2029.
During the ‘363 IPR, we disclaimed the patent claims directed to the anhydrous morphic form of STS and continued with claims directed to its method of manufacture. Because the remaining claims in the ‘363 patent are directed to a method of manufacture, the ‘363 patent is not eligible for listing in the Orange Book.
During the US ‘363 Patent IPR, we disclaimed the patent claims directed to the anhydrous morphic form of STS and continued with claims directed to its method of manufacture. The validity of these method of manufacturing claims was affirmed by the PTAB in a Written Decision in favor of Fennec in September 2023.
PEDMARK ® Product Overview PEDMARK ® is the first and only FDA approved therapy indicated to reduce the risk of ototoxicity associated with cisplatin treatment in pediatric patients with localized, non-metastatic, solid tumors. It is a unique formulation of sodium thiosulfate in single-dose, ready-to-use vials for intravenous use in pediatric patients.
In the United States, PEDMARK® is the first and only therapy approved to mitigate the risk of ototoxicity associated with cisplatin in pediatric patients aged one month and older with localized, non-metastatic solid tumors.
This approval makes PEDMARK ® the first and only treatment approved by the FDA in this area of significant unmet medical need. On October 17, 2022, we announced commercial availability of PEDMARK ® in the United States.
With the exception of Fennec Pharmaceuticals, Inc. and Fennec Limited, all subsidiaries are inactive. On September 20, 2022, we received approval from the FDA for PEDMARK ® (sodium thiosulfate injection). This approval makes PEDMARK ® the first and only treatment approved by the FDA in this area of significant unmet medical need.
Infants and young children that are affected by ototoxicity at critical stages of development lack speech and language development and literacy, and older children and adolescents often lack social-emotional development and educational achievement. 5 Table of Contents European Commission Marketing Authorization In August 2018, the Pediatric Committee (“PDCO”) of the European Medicines Agency (“EMA”) accepted our pediatric investigation plan (“PIP”) for sodium thiosulfate with the trade name PEDMARQSI ® for the condition of the prevention of platinum-induced hearing loss.
Infants and young children that are affected by ototoxicity at critical stages of development lack speech and language development and literacy, and older children and adolescents often lack social-emotional development and educational achievement.
Two United States patent applications claiming priority through the ‘190 Patent remain pending at the United States Patent and Trademark Office (“USPTO”). ​ On October 29, 2021, Hope Medical Enterprises, Inc. (“Hope”) filed a Petition for inter partes review (IPR2022-00125) to invalidate our wholly owned U.S.
These patents, if granted, will expire in July 2039, exclusive of patent term adjustment and/or extension, unless held invalid or unenforceable by a court of final jurisdiction. On October 29, 2021, Hope Medical Enterprises, Inc. (“Hope”) filed a Petition for inter partes review (IPR2022-00125) to invalidate our wholly owned U.S.
Upon approval of a drug, each of the patents listed in the application for the drug are then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book.
We currently have six patents listed for PEDMARK ® in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (“FDA Orange Book”).
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Item 1. Business Overview We are a commercial-stage biopharmaceutical company focused on our only product candidate PEDMARK ® . On September 20, 2022, we received approval from the FDA for PEDMARK ® (sodium thiosulfate injection) to reduce the risk of ototoxicity associated with cisplatin in pediatric patients one month of age and older with localized, non-metastatic solid tumors.
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Item 1. Business Overview Fennec Pharmaceuticals Inc., a corporation existing under the laws of British Columbia, was originally formed under the name Adherex Technologies Inc. and subsequently changed its name on September 3, 2014.
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We received Orphan Drug Exclusivity for PEDMARK © in January 2023, which provides seven years of market exclusivity from its FDA approval on September 20, 2022, until September 20, 2029. We have been granted three additional U.S. patents that cover the PEDMARK ® formulation, each of which have been listed in the U.S. FDA’s “Orange Book” (U.S.
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Fennec is a commercial stage specialty pharmaceutical company with one FDA approved and European Commission approved product, PEDMARK ® in the U.S. and PEDMARQSI ® , which is the branded name for PEDMARK ® outside of the U.S.
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Patent No. 11,291,728 (issued April 5, 2022), U.S. Patent No. 11,510,984 (issued November 29, 2022), and U.S. Patent No. 11,617,793 (issued April 4, 2023)), and additional United States patent applications from this family remain pending at the USPTO.
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(collectively, “PEDMARK”), developed to reduce the risk of ototoxicity associated with cisplatin in pediatric patients one month of age and older with localized, non-metastatic solid tumors. The Company has four wholly owned subsidiaries: Oxiquant, Inc. and Fennec Pharmaceuticals, Inc., both Delaware corporations, Cadherin Biomedical Inc., a Canadian corporation, and Fennec Pharmaceuticals (EU) Limited, an Ireland company (“Fennec Limited”).
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Our ‘363 issued patent covers a process of manufacture, which is a patent category that does not qualify for FDA orange book listing. Seven additional US patent applications are pending, three of which cover methods of using our PEDMARK ® formulation and are eligible for listing on the FDA Orange Book if issued.
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On October 17, 2022, we announced commercial availability of PEDMARK ® in the United States. Further, PEDMARQSI ® received European Commission Marketing Authorization in June 2023 and received U.K. approval in October 2023. In March 2024, we announced that we entered into an agreement with Norgine Pharma UK Limited (“Norgine”), a leading European specialist pharmaceutical company.
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PEDMARK ® is also the only therapeutic agent with proven efficacy and safety data with an established dosing paradigm, across two open-label, randomized Phase 3 clinical studies, the Clinical Oncology Group (COG) Protocol ACCL0431 and SIOPEL 6. In the U.S. and Europe, it is estimated that more than 10,000 children may receive platinum-based chemotherapy on an annual basis.
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In September 2022, the United States Patent and Trademark Office (“USPTO”) issued Patent No. 11,291,728 (the “US ‘728 Patent”), in December 2022, the USPTO issued Patent No. 11,510,984 (“US ‘984 Patent”) and in April 2023, the USPTO issued Patent No. 11,671,793 (“US ‘793 Patent”) that covers PEDMARK ® pharmaceutical formulation.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe indemnification provisions may require us, among other things, to indemnify such officers and directors against certain liabilities that may arise by reason of their status or service as directors or officers (other than liabilities arising from willful misconduct of a culpable nature), to advance their expenses incurred as a result of certain proceedings against them as to which they could be indemnified and to obtain directors’ and officers’ insurance.
Biggest changeThe indemnification provisions may require us, among other things, to indemnify such officers and directors against certain liabilities that may arise by reason of their status or service as directors or officers (other than liabilities arising in circumstances where the officer or director did not act honestly and in good faith with a view to the best interests of the company or the associated corporation, as the case may be, or in the case of a proceeding other than a civil proceeding, if the officer or director did not have reasonable grounds for believing that the eligible party's conduct in respect of which the proceeding was brought was lawful), to advance their expenses incurred as a result of certain proceedings against them as to which they could be indemnified and to obtain directors’ and officers’ insurance.
If we are sued for any injury allegedly caused by our product, our liability could exceed our ability to pay the liability.
If we are sued for any injury allegedly caused by our product, our liability could exceed our ability to pay the liability.
We may also issue further warrants as part of any future financings in addition to the additional 2.1 million options to acquire our common shares currently remaining and available for future awards under our stock option plan. We may need to raise additional funds in the future to continue our operations.
We may also issue further warrants as part of any future financings in addition to the additional 1.2 million options to acquire our common shares currently remaining and available for future awards under our stock option plan. We may need to raise additional funds in the future to continue our operations.
The applicable federal, state and foreign healthcare laws that may affect our ability to operate include the following: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under federal and state healthcare programs such as Medicare and Medicaid; ● federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; ● the civil monetary penalties statute, which imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent; ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and its implementing regulations, which impose obligations on covered entities, including healthcare providers, health plans, and healthcare clearinghouses, as well as their respective business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● the federal Open Payments program, created under Section 6002 of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or the Affordable Care Act, and its 37 Table of Contents implementing regulations, which imposed annual reporting requirements for manufacturers of drugs, devices, biologicals and medical supplies for certain payments and “transfers of value” provided to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members, where failure to submit timely, accurately and completely the required information for all covered payments, transfers of value and ownership or investment interests may result in civil monetary penalties; and ● analogous state and foreign laws, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The applicable federal, state and foreign healthcare laws that may affect our ability to operate include the following: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under federal and state healthcare programs such as Medicare and Medicaid; ● federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal 38 Table of Contents government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; ● the civil monetary penalties statute, which imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent; ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and its implementing regulations, which impose obligations on covered entities, including healthcare providers, health plans, and healthcare clearinghouses, as well as their respective business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● the federal Open Payments program, created under Section 6002 of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or the Affordable Care Act, and its implementing regulations, which imposed annual reporting requirements for manufacturers of drugs, devices, biologicals and medical supplies for certain payments and “transfers of value” provided to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members, where failure to submit timely, accurately and completely the required information for all covered payments, transfers of value and ownership or investment interests may result in civil monetary penalties; and ● analogous state and foreign laws, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Moreover, our ability to effectively generate significant product revenue from PEDMARK ® will depend on our ability to, among other things: ● educate patients and physicians successfully about efficacy expectations, side effects expectations, and how to successfully dose and titrate the medication to optimal patient benefit in order to minimize discontinuation due to perceived lack of efficacy or side effects; 25 Table of Contents ● educate pediatric cancer patients who will have cisplatin administration, and the physicians who treat them, as to the benefits to such patients of treatment using PEDMARK ® (in addition to the treatments they are receiving for their cancer); ● achieve and maintain compliance with regulatory requirements, including those related to our required post-approval studies, promotion and advertising requirements; ● increase awareness for and achieve market acceptance of PEDMARK ® through our sales and marketing activities and other arrangements established for the promotion of PEDMARK ® ; ● train, deploy, support, and retain a qualified field sales and marketing force; ● secure continued formulary approvals for PEDMARK ® with a substantial number of targeted payors; ● ensure that our third-party manufacturers manufacture PEDMARK ® in sufficient quantities, in compliance with requirements of the FDA and at acceptable quality and pricing levels, in order to meet commercial demand; ● ensure that our third-party manufacturers develop, validate and maintain commercially viable manufacturing processes that are compliant with cGMP regulations; ● implement and maintain agreements with wholesalers, distributors and group purchasing organizations on commercially reasonable terms; ● ensure that our entire supply chain efficiently and consistently delivers PEDMARK ® to our customers; ● provide co-pay assistance to help qualified patients with out-of-pocket costs associated with their PEDMARK ® prescription, and/or other programs to ensure patient access to our product, educate physicians and patients about the benefits, administration and use of PEDMARK ® , and obtain acceptance of PEDMARK ® as safe and effective by patients and the medical community; ● receive adequate levels of coverage and reimbursement for PEDMARK ® from commercial health plans and governmental health programs; ● generate positive experience with our Fennec HEARS ® program in helping patients obtain access to PEDMARK ® at an acceptable patient out-of-pocket cost; ● maintain quality relationships with patient advocacy groups; ● influence the nature of publicity related to our product relative to the publicity related to our competitors’ products; and ● obtain regulatory approvals for additional indications for the use of PEDMARK ® in treating other patient populations. 26 Table of Contents Any disruption in our ability to generate product revenue from the sale of PEDMARK ® will have a material and adverse impact on our results of operations.
Moreover, our ability to effectively generate significant product revenue from PEDMARK ® will depend on our ability to, among other things: 26 Table of Contents ● educate patients and physicians successfully about efficacy expectations, side effects expectations, and how to successfully dose and titrate the medication to optimal patient benefit in order to minimize discontinuation due to perceived lack of efficacy or side effects; ● educate pediatric cancer patients who will have cisplatin administration, and the physicians who treat them, as to the benefits to such patients of treatment using PEDMARK ® (in addition to the treatments they are receiving for their cancer); ● achieve and maintain compliance with regulatory requirements, including those related to our required post-approval studies, promotion and advertising requirements; ● increase awareness for and achieve market acceptance of PEDMARK ® through our sales and marketing activities and other arrangements established for the promotion of PEDMARK ® ; ● train, deploy, support, and retain a qualified field sales and marketing force; ● secure continued formulary approvals for PEDMARK ® with a substantial number of targeted payors; ● ensure that our third-party manufacturers manufacture PEDMARK ® in sufficient quantities, in compliance with requirements of the FDA and at acceptable quality and pricing levels, in order to meet commercial demand; ● ensure that our third-party manufacturers develop, validate and maintain commercially viable manufacturing processes that are compliant with cGMP regulations; ● implement and maintain agreements with wholesalers, distributors and group purchasing organizations on commercially reasonable terms; ● ensure that our entire supply chain efficiently and consistently delivers PEDMARK ® to our customers; ● provide co-pay assistance to help qualified patients with out-of-pocket costs associated with their PEDMARK ® prescription, and/or other programs to ensure patient access to our product, educate physicians and patients about the benefits, administration and use of PEDMARK ® , and obtain acceptance of PEDMARK ® as safe and effective by patients and the medical community; ● receive adequate levels of coverage and reimbursement for PEDMARK ® from commercial health plans and governmental health programs; ● generate positive experience with our Fennec HEARS ® program in helping patients obtain access to PEDMARK ® at an acceptable patient out-of-pocket cost; ● maintain quality relationships with patient advocacy groups; ● influence the nature of publicity related to our product relative to the publicity related to our competitors’ products; and ● obtain regulatory approvals for additional indications for the use of PEDMARK ® in treating other patient populations. 27 Table of Contents Any disruption in our ability to generate product revenue from the sale of PEDMARK ® will have a material and adverse impact on our results of operations.
Moreover, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act; 46 Table of Contents • HIPAA, which imposes criminal and civil liability, prohibits, among other things, knowingly and willfully executing, or attempting to execute a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by HITECH, which impose obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services involving the storage, use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information; • the federal legislation commonly referred to as the Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of covered drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program, with certain exceptions, to report annually to CMS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, certain types of advanced care practice nurses and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members, with the information made publicly available on a searchable website; • the U.S.
Moreover, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act; • HIPAA, which imposes criminal and civil liability, prohibits, among other things, knowingly and willfully executing, or attempting to execute a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by HITECH, which impose obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services involving the storage, use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information; • the federal legislation commonly referred to as the Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of covered drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program, with certain exceptions, to report annually to CMS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, certain types of advanced care practice nurses and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members, with the information made publicly available on a searchable website; • the U.S.
Our business exposes us to potential liability risks that may arise from the clinical testing, manufacture, and/or sale of our drug products. Patients have received substantial damage awards in some jurisdictions against pharmaceutical companies based on claims for injuries allegedly caused by the use of drug products used in clinical trials or after FDA approval.
Our business exposes us to potential liability risks that may arise from the clinical testing, manufacture, and/or sale of our drug product. Patients have received substantial damage awards in some jurisdictions against pharmaceutical companies based on claims for injuries allegedly caused by the use of drug products used in clinical trials or after FDA approval.
These and other new provisions are likely to continue the pressure on pharmaceutical pricing, may require us to modify our business practices with healthcare practitioners, and may also increase our regulatory burdens and operating costs. In that regard, President Biden and members of Congress in both parties have expressed concerns about high drug prices.
These and other new provisions are likely to continue the pressure on pharmaceutical pricing, may require us to modify our business practices with healthcare practitioners, and may also increase our regulatory burdens and operating costs. In that regard, the President and members of Congress in both parties have expressed concerns about high drug prices.
Our product could fail to receive marketing approval for many reasons, including the following: ● FDA comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; ● FDA comparable foreign regulatory authorities may find the human subject protections for our clinical trials inadequate and place a clinical hold on an IND at the time of its submission precluding commencement of any trials or a clinical hold on one or more clinical trials at any time during the conduct of our clinical trials; ● we may be unable to demonstrate to the satisfaction of the FDA comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication; ● the results of clinical trials may not meet the level of statistical significance required by the FDA comparable foreign regulatory authorities for approval; ● we may be unable to demonstrate that a product’s clinical and other benefits outweigh its safety risks; ● FDA comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; ● the data collected from clinical trials of our product may not be sufficient to obtain marketing approval outside of the United States; ● FDA comparable foreign regulatory authorities may find inadequate the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies (for example, see the discussion elsewhere concerning the CRLs we received from the FDA in August 2020 and November 2021); and 34 Table of Contents ● the approval policies or regulations of the FDA comparable foreign regulatory authorities may significantly change in a manner that would delay marketing approval.
Our product could fail to receive marketing approval for many reasons, including the following: ● FDA comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; ● FDA comparable foreign regulatory authorities may find the human subject protections for our clinical trials inadequate and place a clinical hold on an IND at the time of its submission precluding commencement of any trials or a clinical hold on one or more clinical trials at any time during the conduct of our clinical trials; ● we may be unable to demonstrate to the satisfaction of the FDA comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication; ● the results of clinical trials may not meet the level of statistical significance required by the FDA comparable foreign regulatory authorities for approval; ● we may be unable to demonstrate that a product’s clinical and other benefits outweigh its safety risks; ● FDA comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; ● the data collected from clinical trials of our product may not be sufficient to obtain marketing approval outside of the United States; ● FDA comparable foreign regulatory authorities may find inadequate the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies (for example, see the discussion elsewhere concerning the CRLs we received from the FDA in August 2020 and November 2021); and ● the approval policies or regulations of the FDA comparable foreign regulatory authorities may significantly change in a manner that would delay marketing approval.
Continued commercialization of PEDMARK ® is subject to many risks. Until we launched PEDMARK ® , we had never launched or commercialized a product, and there is no guarantee that we will be able to achieve profitability and cash flow positive based on our sales of PEDMARK ® .
Continued commercialization of PEDMARK ® is subject to many risks. Until we launched PEDMARK ® , we had never launched or commercialized a product, and there is no guarantee that we will be able to achieve profitability and become cash flow positive based on our sales of PEDMARK ® .
Factors that could impede our ability to generate commercially viable products through the conduct of clinical trials include: ● insufficient funds to conduct clinical trials; ● the inability to find partners, if necessary, for support, including research, development, manufacturing or clinical needs; ● the failure of clinical trials to demonstrate the safety and efficacy of our product to the extent necessary to obtain regulatory approvals; ● the failure by us or third-party investigators, CROs, or other third parties involved in the research to adhere to regulatory requirements applicable to the conduct of clinical trials; ● the failure of preclinical testing and early clinical trials to predict results of later clinical trials; ● any delay in completion of clinical trials caused by a regional disturbance where we or our collaborative partners are enrolling patients in clinical studies, such as pandemic, terrorist activities, or war, or political unrest, a natural disaster or any other reason or event, resulting in increased costs; 58 Table of Contents ● any delay in obtaining advice from the FDA or similar regulatory authorities; and ● the inability to obtain regulatory approval of our product candidate following completion of clinical trials, or delays in obtaining such approvals.
Factors that could impede our ability to generate commercially viable products through the conduct of clinical trials include: ● insufficient funds to conduct clinical trials; ● the inability to find partners, if necessary, for support, including research, development, manufacturing or clinical needs; ● the failure of clinical trials to demonstrate the safety and efficacy of our product to the extent necessary to obtain regulatory approvals; ● the failure by us or third-party investigators, CROs, or other third parties involved in the research to adhere to regulatory requirements applicable to the conduct of clinical trials; ● the failure of preclinical testing and early clinical trials to predict results of later clinical trials; ● any delay in completion of clinical trials caused by a regional disturbance where we or our collaborative partners are enrolling patients in clinical studies, such as pandemic, terrorist activities, or war, or political unrest, a natural disaster or any other reason or event, resulting in increased costs; ● any delay in obtaining advice from the FDA or similar regulatory authorities; and ● the inability to obtain regulatory approval of our product candidate following completion of clinical trials, or delays in obtaining such approvals.
Market acceptance of PEDMARK ® depends on a number of factors, including: ● the timing of market introduction; ● its efficacy and safety, as demonstrated in clinical trials; ● the clinical indications for which it is approved, and the label approved by regulatory authorities for use with the product, including any precautions, warnings or contraindications that may be required on the label; ● acceptance by physicians, key opinion leaders and patients of PEDMARK ® as a safe and effective treatment; ● the cost, safety and efficacy of treatment in relation to alternative treatments; ● the availability of coverage and adequate reimbursement and pricing by third-party payors and government authorities; ● the number and clinical profile of competing products; ● the growth of drug markets in our various indications; ● relative convenience and ease of administration; ● marketing and distribution support; ● the prevalence and severity of adverse side effects; and ● the effectiveness of our sales and marketing efforts.
Market acceptance of PEDMARK ® depends on a number of factors, including: ● the timing of market introduction; ● its efficacy and safety, as demonstrated in clinical trials; ● the clinical indications for which it is approved, and the label approved by regulatory authorities for use with the product, including any precautions, warnings or contraindications that may be required on the label; ● acceptance by physicians, key opinion leaders and patients of PEDMARK ® as a safe and effective treatment; ● the cost, safety and efficacy of treatment in relation to alternative treatments; ● the availability of coverage and adequate reimbursement and pricing by third-party payors and government authorities; ● the number and clinical profile of competing products; ● the growth of drug markets in our various indications; ● relative convenience and ease of administration; ● marketing and distribution support; 41 Table of Contents ● the prevalence and severity of adverse side effects; and ● the effectiveness of our sales and marketing efforts.
If a third party claims that we infringe on their products or technology, we could face a number of issues, including: ● infringement and other intellectual property claims which, with or without merit, can be expensive and time-consuming to litigate and can divert management’s attention from our core business; ● substantial damages for past infringement, which we may have to pay if a court decides that our product infringes on a competitor’s patent; ● a court prohibiting us from selling or licensing our product unless the patent holder licenses the patent to us, which the collaborator would not be required to do; ● if a license is available from a patent holder, we may have to pay substantial royalties or grant cross licenses to our patents; and 54 Table of Contents ● redesigning our processes so they do not infringe, which may not be possible or could require substantial funds and time.
If a third party claims that we infringe on their products or technology, we could face a number of issues, including: ● infringement and other intellectual property claims which, with or without merit, can be expensive and time-consuming to litigate and can divert management’s attention from our core business; ● substantial damages for past infringement, which we may have to pay if a court decides that our product infringes on a competitor’s patent; ● a court prohibiting us from selling or licensing our product unless the patent holder licenses the patent to us, which the collaborator would not be required to do; ● if a license is available from a patent holder, we may have to pay substantial royalties or grant cross licenses to our patents; and ● redesigning our processes so they do not infringe, which may not be possible or could require substantial funds and time.
However, if a replacement to our future internal or contract manufacturers were required, the ability to establish second-sourcing or find a replacement manufacturer may be difficult due to the lead times generally required to manufacture drugs and the need for FDA compliance inspections and approvals of any replacement manufacturer, all of which factors could result in production 30 Table of Contents delays and additional commercialization costs.
However, if a replacement to our future internal or contract manufacturers were required, the ability to establish second-sourcing or find a replacement manufacturer may be difficult due to the lead times generally required to manufacture drugs and the need for FDA compliance inspections and approvals of any replacement manufacturer, all of which factors could result in production 31 Table of Contents delays and additional commercialization costs.
As a result of all of these factors, maintaining orphan drug designation for our product is essential to our viability since our competitors may, among other things: ● have greater name and brand recognition, financial, manufacturing, marketing, development, technical and human resources; ● develop and commercialize products that are safer, more effective, less expensive, or more convenient or easier to administer; ● obtain quicker marketing approval; ● establish superior proprietary positions; ● have access to more manufacturing capacity as well as to more cost-effective manufacturing capacity; ● implement more effective approaches to sales and marketing; or ● form more advantageous strategic alliances.
As a result of all of these factors, maintaining orphan drug designation for our product is essential to our viability since our competitors may, among other things: ● have greater name and brand recognition, financial, manufacturing, marketing, development, technical and human resources; ● develop and commercialize products that are safer, more effective, less expensive, or more convenient or easier to administer; ● obtain quicker marketing approval; ● establish superior proprietary positions; ● have access to more manufacturing capacity as well as to more cost-effective manufacturing capacity; 43 Table of Contents ● implement more effective approaches to sales and marketing; or ● form more advantageous strategic alliances.
We believe that our ability to successfully compete will depend on our ability to maintain orphan drug designation as well as: ● achieving and maintaining compliance with regulatory requirements applicable to our business; ● the timing and scope of regulatory approvals, including labeling; ● adequate levels of reimbursement under private and governmental health insurance plans, including Medicare and Medicaid; ● our ability to protect intellectual property rights related to our product; ● our ability to commercialize and market our product; 42 Table of Contents ● our ability to manufacture and sell commercial quantities of our product; ● acceptance of our product by physicians, other healthcare providers and patients; and ● the cost of treatment in relation to alternative therapies.
We believe that our ability to successfully compete will depend on our ability to maintain orphan drug designation as well as: ● achieving and maintaining compliance with regulatory requirements applicable to our business; ● the timing and scope of regulatory approvals, including labeling; ● adequate levels of reimbursement under private and governmental health insurance plans, including Medicare and Medicaid; ● our ability to protect intellectual property rights related to our product; ● our ability to commercialize and market our product; ● our ability to manufacture and sell commercial quantities of our product; ● acceptance of our product by physicians, other healthcare providers and patients; and ● the cost of treatment in relation to alternative therapies.
In addition, we do not know whether: ● we or our licensors were the first to make the inventions covered by each of our issued patents and pending patent applications; 51 Table of Contents ● we or our licensors were the first to file patent applications for these inventions; ● any of the patents that cover our product will be eligible to be listed in the FDA’s compendium of “Approved Drug Products with Therapeutic Equivalence Evaluation,” sometimes referred to as the FDA’s Orange Book; ● others will independently develop similar or alternative technologies or duplicate any of our technologies; ● any of our or our licensors’ pending patent applications will result in issued patents; ● any patents issued to us or our licensors and collaborators will provide us with any competitive advantages, or will be challenge by third parties; ● we will develop additional proprietary technologies that are patentable; ● the United States government will exercise any of its statutory rights to our intellectual property that was developed with government funding; or ● our business may infringe the patents or other proprietary rights of others.
In addition, we do not know whether: ● we or our licensors were the first to make the inventions covered by each of our issued patents and pending patent applications; ● we or our licensors were the first to file patent applications for these inventions; ● any of the patents that cover our product will be eligible to be listed in the FDA’s compendium of “Approved Drug Products with Therapeutic Equivalence Evaluation,” sometimes referred to as the FDA Orange Book; ● others will independently develop similar or alternative technologies or duplicate any of our technologies; ● any of our or our licensors’ pending patent applications will result in issued patents; ● any patents issued to us or our licensors and collaborators will provide us with any competitive advantages, or will be challenge by third parties; ● we will develop additional proprietary technologies that are patentable; ● the United States government will exercise any of its statutory rights to our intellectual property that was developed with government funding; or ● our business may infringe the patents or other proprietary rights of others.
The CRLs that we received from the FDA in August 2020 and November 2021 as a result of deficiencies in the third-party manufacturing facility that manufactures PEDMARK ® on our behalf is a specific example of the risks associated with our third-party manufacturers. We intend to maintain a second source for back-up commercial manufacturing, wherever feasible.
The CRLs that we received from the FDA in August 2020 and November 2021 as a result of deficiencies in the third-party manufacturing facility that manufactured PEDMARK ® on our behalf is a specific example of the risks associated with our third-party manufacturers. We intend to maintain a second source for back-up commercial manufacturing, wherever feasible.
Restrictions under applicable federal and state anti-bribery and healthcare laws and regulations include the following: • the Federal health care program Anti-Kickback Statute, which prohibits individuals and entities from, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal and state healthcare program such as Medicare and Medicaid.
Restrictions under applicable federal and state anti-bribery and healthcare laws and regulations include the following: 47 Table of Contents • the Federal health care program Anti-Kickback Statute, which prohibits individuals and entities from, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal and state healthcare program such as Medicare and Medicaid.
As part of the evaluation undertaken by management pursuant to Section 404, our management concluded that our internal control over financial reporting was effective as of December 31, 2023. However, if we fail to maintain an effective system of disclosure controls or internal controls over financial reporting, we may discover material weaknesses that we would then be required to disclose.
As part of the evaluation undertaken by management pursuant to Section 404, our management concluded that our internal control over financial reporting was effective as of December 31, 2024. However, if we fail to maintain an effective system of disclosure controls or internal controls over financial reporting, we may discover material weaknesses that we would then be required to disclose.
The outcome of intellectual property litigation is subject to substantial uncertainties and may, for example, turn on the interpretation of claim language by the court, which may not be to our advantage, or on the testimony of experts as to technical facts upon which experts may reasonably disagree. As discussed above under the section entitled “Item 3.
The outcome of intellectual property litigation is subject to substantial uncertainties and may, for example, turn on the interpretation of claim language by the court, which may not be to our advantage, or on the testimony of experts as to technical facts upon which experts may reasonably disagree. As discussed above under the section entitled “Item 1.
Whether or not we are ultimately successful in any adverse litigation, such litigation could 33 Table of Contents consume substantial amounts of our financial and managerial resources, all of which could have a material adverse effect on our business, financial condition, results of operations, prospects and stock price.
Whether or not we are ultimately successful in any adverse litigation, such litigation could consume substantial 34 Table of Contents amounts of our financial and managerial resources, all of which could have a material adverse effect on our business, financial condition, results of operations, prospects and stock price.
For all of these reasons, we may not be able to compete successfully. 27 Table of Contents If we do not maintain current or enter into new collaborations with other companies, we might not successfully develop our product or generate sufficient revenues to expand our business.
For all of these reasons, we may not be able to compete successfully. 28 Table of Contents If we do not maintain current or enter into new collaborations with other companies, we might not successfully develop our product or generate sufficient revenues to expand our business.
We filed a patent infringement lawsuit against CIPLA, and vigorously defend and enforce our intellectual property rights protecting PEDMARK ® , but we can offer no assurance that our efforts we will be successful in which case our business may be materially and adversely affected.
We filed a patent infringement lawsuit against CIPLA, and will continue to vigorously defend and enforce our intellectual property rights protecting PEDMARK ® , but we can offer no assurance that our efforts we will be successful in which case our business may be materially and adversely affected.
Furthermore, we may not be able to obtain sufficient funding or generate sufficient revenue and cash flows to continue or complete the development of any future product candidates. 35 Table of Contents Now that we have achieved marketing approval for our product in the United States, it will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.
Furthermore, we may not be able to obtain sufficient funding or generate sufficient revenue and cash flows to continue or complete the development of any future product candidates. Now that we have achieved marketing approval for our product in the United States, it will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.
If any of the physicians or other healthcare providers or entities with whom we expect to do business, including our current and future collaborators, if any, are found not to be in compliance with applicable laws, those persons or entities may be subject to criminal, civil or administrative sanctions, including exclusion from participation in government healthcare programs, which could also affect our business.
If any of the physicians or other healthcare providers or entities with whom we expect to do business, including our current and future collaborators, if any, are found not to be in compliance with applicable laws, those persons or entities 39 Table of Contents may be subject to criminal, civil or administrative sanctions, including exclusion from participation in government healthcare programs, which could also affect our business.
These enforcement actions include not only civil and criminal penalties, but also exclusion from participation in government-funded healthcare programs, and exclusion from eligibility for the award of government contracts for our product. 47 Table of Contents Efforts to ensure that our current and future business arrangements with third parties comply with applicable healthcare laws and regulations could involve substantial costs.
These enforcement actions include not only civil and criminal penalties, but also exclusion from participation in government-funded healthcare programs, and exclusion from eligibility for the award of government contracts for our product. Efforts to ensure that our current and future business arrangements with third parties comply with applicable healthcare laws and regulations could involve substantial costs.
We cannot predict all of the possible harms or side effects that may result from the use of our current drug candidates, or any potential future products we may acquire and use in clinical trials or after FDA approval and, therefore, the amount of insurance coverage we currently hold may not be adequate to cover all liabilities we might incur.
We cannot predict all of the possible harms or side effects that may result from the use of our drug product, or any potential future products we may acquire and use in clinical trials or after FDA approval and, therefore, the amount of insurance coverage we currently hold may not be adequate to cover all liabilities we might incur.
Moreover, the other foreign regulatory authorities require us to comply with IND and human subject protection regulations and cGCP standards, for conducting, monitoring, recording, and reporting the results of clinical trials to ensure that the data and 48 Table of Contents results are scientifically credible and accurate and that the trial subjects are adequately informed of the potential risks of participating in clinical trials.
Moreover, the other foreign regulatory authorities require us to comply with IND and human subject protection regulations and cGCP standards, for conducting, monitoring, recording, and reporting the results of clinical trials to ensure that the data and results are scientifically credible and accurate and that the trial subjects are adequately informed of the potential risks of participating in clinical trials.
Furthermore, because of the limited market and generally low volume of trading in our common shares, our common shares are more likely to be affected by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in the market’s perception of our business, and announcements made by us, our competitors or parties with whom we have business relationships.
Furthermore, because of the limited market and generally low volume of trading in our common shares, our 61 Table of Contents common shares are more likely to be affected by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in the market’s perception of our business, and announcements made by us, our competitors or parties with whom we have business relationships.
Despite the contractual provisions employed when working with third parties, the need to share 57 Table of Contents trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue or commercialize our drugs. 38 Table of Contents It is likely that federal and state legislatures within the United States and foreign governments will continue to consider changes to existing healthcare legislation.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue or commercialize our drugs. It is likely that federal and state legislatures within the United States and foreign governments will continue to consider changes to existing healthcare legislation.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other 52 Table of Contents aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
Satisfying regulatory requirements typically takes a significant number of years and can vary substantially based on the type, complexity and novelty of the product candidate. Our business, results of operations and financial condition may be materially adversely affected by any delays in, or termination of, our clinical trials.
Satisfying regulatory requirements typically takes a significant number of years and can vary substantially based on the type, complexity and novelty of the product candidate. Our business, results of operations and financial condition may be materially adversely 59 Table of Contents affected by any delays in, or termination of, our clinical trials.
Although we believe that the safety procedures utilized by us and our third-party manufacturers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials.
Although we believe that the safety procedures utilized by us and our third-party manufacturers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot 40 Table of Contents guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials.
Management’s failure to use these funds effectively would have an adverse effect on the value of our common stock and could make it more difficult and costlier to raise funds in the future. We have not paid any dividends since incorporation and do not anticipate declaring any dividends in the foreseeable future.
Management’s failure to use these funds effectively would have an adverse effect on the value of our common stock and could make it more difficult and costlier to raise funds in the future. 63 Table of Contents We have not paid any dividends since incorporation and do not anticipate declaring any dividends in the foreseeable future.
Moreover, we expect to continue to incur losses for the foreseeable future as we continue our development of and seek marketing approvals for PEDMARK ® outside of the United States. We may not be able to obtain additional financing in sufficient amounts or on acceptable terms when needed.
Moreover, we expect to continue to incur losses for the foreseeable future as we continue our development of and seek marketing approvals for PEDMARK ® outside of the United States, E.U. and U.K. We may not be able to obtain additional financing in sufficient amounts or on acceptable terms when needed.
In June 2023, we obtained approval for PEDMARQSI ® in the European Union. Regulatory authorities outside of the United States, such as in Europe and Japan and in emerging markets, also have requirements for approval of drugs for commercial sale with which we must comply prior to marketing in those areas.
In June 2023, we obtained approval for PEDMARQSI ® in the European Union and in October 2023 in the U.K. Regulatory authorities outside of the United States, such as in Europe and Japan and in emerging markets, also have requirements for approval of drugs for commercial sale with which we must comply prior to marketing in those areas.
This may result in managed care organizations influencing prescription decisions for a larger segment of the population and a corresponding constraint on prices and reimbursement for our product. 59 Table of Contents Since its enactment, there have been judicial and Congressional challenges to numerous aspects of the Affordable Care Act.
This may result in managed care organizations influencing prescription decisions for a larger segment of the population and a corresponding constraint on prices and reimbursement for our product. Since its enactment, there have been judicial and Congressional challenges to numerous aspects of the Affordable Care Act.
Business– Intellectual Property,” we received a letter dated November 30, 2022, notifying us that CIPLA submitted to the FDA an ANDA (ANDA No. 218028) for a generic version of PEDMARK ® (sodium thiosulfate solution) that contains Paragraph IV Certifications on two of our patents covering PEDMARK ® : the OHSU licensed 190 patent, expiration date January 2038; and the 728 patent, expiration date July 2039.
Business– Intellectual Property,” we received a letter dated November 30, 2022, notifying us that CIPLA submitted to the FDA an ANDA (ANDA No. 218028) for a generic version of PEDMARK ® (sodium thiosulfate solution) that contains Paragraph IV Certifications on two of our patents covering PEDMARK ® : the OHSU licensed the US ‘190 patent, expiration date January 2038; and the US ‘728 patent, expiration date July 2039.
Our business is substantially dependent on our ability to complete the development of, obtain marketing approval for, and successfully commercialize our product candidate in abroad a timely manner. We cannot commercialize our product candidate outside of the United States without obtaining regulatory approval from comparable foreign regulatory authorities.
Our business is substantially dependent on our ability to complete the development of, obtain marketing approval for, and successfully commercialize our product candidate in abroad a timely manner. We cannot commercialize our product 35 Table of Contents candidate outside of the United States without obtaining regulatory approval from comparable foreign regulatory authorities.
As a result of the foregoing factors, we cannot be certain how much protection from competition patent rights will provide us. 49 Table of Contents Our success will depend significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.
As a result of the foregoing factors, we cannot be certain how much protection from competition patent rights will provide us. Our success will depend significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.
There is substantial history of litigation and other proceedings regarding patent and intellectual property rights in the pharmaceutical industry. We may be forced to defend claims of infringement brought by our competitors and others, and we may institute litigation against others who we believe are infringing our intellectual property rights.
There is substantial history of litigation and other proceedings regarding patent and intellectual property rights in the pharmaceutical industry. We may be forced to defend claims of infringement brought by our competitors and others, and 51 Table of Contents we may institute litigation against others who we believe are infringing our intellectual property rights.
The constraints on pricing and availability of competitive products may further limit our pricing and reimbursement policies as well as adversely impact market acceptance and commercialization of our product. In many markets, the pricing or profitability of healthcare products is subject to government control.
The constraints on pricing and availability of competitive products may further limit our pricing and reimbursement policies as well as adversely impact market acceptance and commercialization of our product. 60 Table of Contents In many markets, the pricing or profitability of healthcare products is subject to government control.
If we fail to comply with applicable continuing regulatory requirements, we may be subject to fines, 43 Table of Contents suspension, or withdrawal of regulatory approval, product recalls and seizures, operating restrictions, and criminal prosecutions. Our product promotion and advertising are also subject to regulatory requirements and continuing regulatory review.
If we fail to comply with applicable continuing regulatory requirements, we may be subject to fines, suspension, or withdrawal of regulatory approval, product recalls and seizures, operating restrictions, and criminal prosecutions. Our product promotion and advertising are also subject to regulatory requirements and continuing regulatory review.
Specifically, we were named in putative securities class action complaints as a result of the decline in our stock price following the August 10, 2020 announcement that we had received a CRL from the FDA regarding our NDA for PEDMARK ® and as result of the decline in our stock price following the November 29, 2021 announcement that we expected to receive another CRL from the 31 Table of Contents FDA regarding our NDA for PEDMARK ® .
Specifically, we were named in putative securities class action complaints as a result of the decline in our stock price following the August 2020 announcement that we had received a CRL from the FDA regarding our NDA for PEDMARK ® and as result of the decline in our stock price following the November 2021 announcement that we expected to receive another CRL from the FDA 32 Table of Contents regarding our NDA for PEDMARK ® .
Generally, unless we perform clinical trials meeting that standard comparing our product 36 Table of Contents to competitive products and these claims are approved in our product labeling, we will not be able promote our product as superior to other products. If we are found to have made such claims, we may become subject to significant liability.
Generally, unless we perform clinical trials meeting that standard comparing our product to competitive products and these claims are approved in our product labeling, we will not be able promote our product as superior to other products. If we are found to have made such claims, we may become subject to significant liability.
Supply sources could be interrupted from time to time and, if interrupted, supplies may not be resumed (whether in part or in whole) within a reasonable timeframe and at an acceptable cost or at all. We plan to rely on third parties to conduct clinical trials for our product.
Supply sources could be interrupted from time to time and, if interrupted, supplies may not be resumed (whether in part or in whole) within a reasonable timeframe and at an acceptable cost or at all. 49 Table of Contents We plan to rely on third parties to conduct clinical trials for our product.
We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies and product are covered by valid and enforceable patents or are effectively maintained as trade secrets. We apply for patents covering both our technologies and product, as we deem appropriate.
We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies and product are covered by valid and enforceable patents or are effectively maintained as trade secrets. 52 Table of Contents We apply for patents covering both our technologies and product, as we deem appropriate.
If we are a PFIC for any taxable year, we intend to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC annual information 62 Table of Contents statement, in order to enable the U.S. Holder to make and maintain a “qualified electing fund” election.
If we are a PFIC for any taxable year, we intend to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC annual information statement, in order to enable the U.S. Holder to make and maintain a “qualified electing fund” election.
Further, any of our patents, once issued, may be declared by a court to be invalid or unenforceable. 29 Table of Contents PEDMARK ® is currently protected by three patents owned by us that expires in 2039. Further, patents are currently pending in the United States and other territories.
Further, any of our patents, once issued, may be declared by a court to be invalid or unenforceable. 30 Table of Contents PEDMARK ® is currently protected by six patents owned by us that expires in 2039. Further, patents are currently pending in the United States and other territories.
Since we conduct a significant portion of our research and development through collaborations, our success may depend significantly on the performance of such collaborators, as well as any future collaborators. Collaborators might not commit sufficient resources to the research and development or commercialization of our product candidate.
In addition, our collaborators might not perform as agreed in the future. Since we conduct a significant portion of our research and development through collaborations, our success may depend significantly on the performance of such collaborators, as well as any future collaborators. Collaborators might not commit sufficient resources to the research and development or commercialization of our product candidate.
Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. Additionally, coverage and reimbursement for drug products can differ significantly from payor to payor.
Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate 42 Table of Contents return on our investment in product development. Additionally, coverage and reimbursement for drug products can differ significantly from payor to payor.
While the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates, and any reduction in reimbursement that results from the MMA may result in a similar reduction in payments from private payors.
While the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow 45 Table of Contents Medicare coverage policy and payment limitations in setting their own reimbursement rates, and any reduction in reimbursement that results from the MMA may result in a similar reduction in payments from private payors.
As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product may be subject to claims of infringement of the patent rights of third parties.
As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product may be subject to 55 Table of Contents claims of infringement of the patent rights of third parties.
It is likely that the market price of our common shares will continue to fluctuate significantly in the future. 60 Table of Contents The market price of our common shares may be significantly affected by many factors, including without limitation: ● the commercialization of our sole product candidate, PEDMARK ® ; ● the need to raise additional capital and the terms of any transaction we are able to enter into; ● other external factors generally or stock market trends in the pharmaceutical or biotechnology industries specifically; ● announcements of licensing agreements, joint ventures, collaborations or other strategic alliances that involve our product or those of our competitors; ● innovations related to our or our competitors’ products; ● actual or potential clinical trial results related to our or our competitors’ products; ● the status, timing and outcome of regulatory approvals; ● our financial results or those of our competitors; ● reports of securities analysts regarding us or our competitors; ● developments or disputes concerning our licensed or owned patents or those of our competitors; ● developments with respect to the efficacy or safety of our product or those of our competitors; and ● health care reforms and reimbursement policy changes nationally and internationally.
The market price of our common shares may be significantly affected by many factors, including without limitation: ● the commercialization of our sole product, PEDMARK ® ; ● the need to raise additional capital and the terms of any transaction we are able to enter into; ● other external factors generally or stock market trends in the pharmaceutical or biotechnology industries specifically; ● announcements of licensing agreements, joint ventures, collaborations or other strategic alliances that involve our product or those of our competitors; ● innovations related to our or our competitors’ products; ● actual or potential clinical trial results related to our or our competitors’ products; ● the status, timing and outcome of regulatory approvals; ● our financial results or those of our competitors; ● reports of securities analysts regarding us or our competitors; ● developments or disputes concerning our licensed or owned patents or those of our competitors; ● developments with respect to the efficacy or safety of our product or those of our competitors; and ● health care reforms and reimbursement policy changes nationally and internationally.
If we fail to maintain the patents and patent applications 53 Table of Contents directed to our product, our competitors might be able to enter the market earlier than should otherwise have been the case, which would have a material adverse effect on our business.
If we fail to maintain the patents and patent applications directed to our product, our competitors might be able to enter the market earlier than should otherwise have been the case, which would have a material adverse effect on our business.
If our competitors independently develop equivalent knowledge, methods and know-how, we would not be able to assert our trade secrets against them and our business could be harmed. We may not be able to protect our intellectual property rights throughout the world.
If our competitors independently develop equivalent knowledge, methods and know-how, we would not be able to assert our trade secrets against them and our business could be harmed. 53 Table of Contents We may not be able to protect our intellectual property rights throughout the world.
From September 13, 2017 (the date our common shares were first listed on the Nasdaq Capital Market) to March 25, 2024, the closing trading price of our stock fluctuated from a high of $14.33 per share to a low of $3.30 on the Nasdaq Capital Market.
From September 13, 2017 (the date our common shares were first listed on the Nasdaq Capital Market) to March 24, 2025, the closing trading price of our stock fluctuated from a high of $14.33 per share to a low of $3.30 on the Nasdaq Capital Market.
The following examples are illustrative: ● Others may be able to make products that are similar to our product but that are not covered by the claims of the patents that we license from others or may license or own in the future; ● Others may independently develop similar or alternative technologies or otherwise circumvent any of our technologies without infringing our intellectual property rights; ● Any of our collaborators might not have been the first to conceive and reduce to practice the inventions covered by the patents or patent applications that we own or license or will, in the future, own or license; ● Issued patents that have been licensed to us may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; ● Our competitors might conduct research and development activities in countries where we do not have license rights, or in countries where research and development safe harbor laws exist, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● Ownership of patents or patent applications licensed to us may be challenged by third parties; ● The patents of third parties or pending or future applications of third parties, if issued, may have an adverse effect on our business. 56 Table of Contents Confidentiality agreements with employees, consultants and others may not adequately prevent disclosure of trade secrets and protect other proprietary information.
The following examples are illustrative: ● Others may be able to make products that are similar to our product but that are not covered by the claims of the patents that we license from others or may license or own in the future; 57 Table of Contents ● Others may independently develop similar or alternative technologies or otherwise circumvent any of our technologies without infringing our intellectual property rights; ● Any of our collaborators might not have been the first to conceive and reduce to practice the inventions covered by the patents or patent applications that we own or license or will, in the future, own or license; ● Issued patents that have been licensed to us may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; ● Our competitors might conduct research and development activities in countries where we do not have license rights, or in countries where research and development safe harbor laws exist, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● Ownership of patents or patent applications licensed to us may be challenged by third parties; ● The patents of third parties or pending or future applications of third parties, if issued, may have an adverse effect on our business.
From January 1, 2018 to March 25, 2024, the closing trading price of our stock fluctuated from a high of $18.45 Canadian dollars (“CAD”) per share to a low of CAD$4.38 per share on the TSX.
From January 1, 2018 to March 24, 2025, the closing trading price of our stock fluctuated from a high of $18.45 Canadian dollars (“CAD”) per share to a low of CAD$4.38 per share on the TSX.
We anticipate 24 Table of Contents incurring substantial additional losses due to the need to spend substantial amounts on activities required for commercialization of PEDMARK ® in the U.S. and regulatory approval of PEDMARK ® outside of the U.S., as well as commercial launch preparation of PEDMARK ® outside of the U.S., anticipated research and development activities, and general and administrative expenses, among other factors.
We anticipate potentially 25 Table of Contents incurring substantial additional losses due to the need to spend substantial amounts on activities required for commercialization of PEDMARK ® in the U.S. and regulatory approvals of PEDMARK ® outside of the U.S., as well as the preparation for potential commercial launch preparation of PEDMARK ® outside of the U.S., anticipated research and development activities, and general and administrative expenses, among other factors.
We consider proprietary trade secrets and/or confidential know-how and unpatented know-how to be important to our business. We may rely on trade secrets and/or confidential know-how to protect our technology, especially where patent protection is believed by us to be of limited value. However, trade secrets and/or confidential know-how can be difficult to maintain as confidential.
We may rely on trade secrets and/or confidential know-how to protect our technology, especially where patent protection is believed by us to be of limited value. However, trade secrets and/or confidential know-how can be difficult to maintain as confidential.
Nevertheless, limitations of director liability may be viewed as limiting the rights of stockholders, and the broad scope of the indemnification provisions contained in our certificate of incorporation and bylaws could result in increased expenses.
Nevertheless, limitations of director liability may be viewed as limiting the rights of stockholders, and the broad scope of the indemnification provisions contained in articles and bylaws could result in increased expenses.
We have the right to any proceeds received as a result of such litigation, but, even if we are successful in such litigation, there is no assurance we would be awarded any monetary damages. Our involvement in intellectual property litigation could result in significant expense to us.
However, we are responsible for all costs relating to such potential litigation. We have the right to any proceeds received as a result of such litigation, but, even if we are successful in such litigation, there is no assurance we would be awarded any monetary damages. Our involvement in intellectual property litigation could result in significant expense to us.
Based on available resources, we believe that our cash and cash equivalents of $13.3 million available as of December 31, 2023 are sufficient to fund our anticipated operating and capital requirements for at least the next 12 months.
Based on available resources, we believe that our cash and cash equivalents of $26.6 million available as of December 31, 2024 are sufficient to fund our anticipated operating and capital requirements for at least the next 12 months.
The CRL that we received 28 Table of Contents from the FDA in August 2020 and in November 2021 as a result of deficiencies in the third-party manufacturing facility that manufactures PEDMARK ® on our behalf is a specific example of the risks associated with our third-party manufacturers.
The complete response letters (“CRL”) that we received from the FDA in August 2020 and in November 2021 as a result of deficiencies in the 29 Table of Contents third-party manufacturing facility that manufactures PEDMARK ® on our behalf is a specific example of the risks associated with our third-party manufacturers.
In particular, Southpoint Capital Advisors LP (“Southpoint Capital”) owns or exercises control over approximately 4.0 million shares, representing approximately 15.09% of our issued and outstanding common shares; Essetifin SpA, owns approximately 3.2 million shares, or approximately 11.94% of our issued and outstanding common shares; Sonic Fund II, LP, owns approximately 2.4 million shares, or approximately 8.91% of our issued and outstanding common shares; and Solas Capital Management, owns approximately 1.4 million shares, or approximately 5.1% of our issued and outstanding common shares; and Southpoint Capital, Essetifin SpA, Sonic Fund II, LP, Solas Capital Management, and our other significant shareholders, and other insiders, acting alone or together, might be able to influence the outcomes of matters that require the approval of our shareholders, including but not limited to certain equity transactions (such as a financing), an acquisition or merger with another company, a sale of substantially all of our assets, the election and removal of directors, or amendments to our incorporating documents.
In particular, Southpoint Capital Advisors LP (“Southpoint Capital”) owns or exercises control over approximately 4.0 million shares, representing approximately 14.81% of our issued and outstanding common shares; Sonic Fund II, LP, owns approximately 2.4 million shares, or approximately 8.75% of our issued and outstanding common shares; Essetifin SpA, owns approximately 4.0 62 Table of Contents million shares, or approximately 14.51% of our issued and outstanding common shares; and Solas Capital Management, owns approximately 2.3 million shares, or approximately 8.18% of our issued and outstanding common shares; and Southpoint Capital, Rosalind Advisors, Sonic Fund II, LP, Solas Capital Management and our other significant shareholders, and other insiders, acting alone or together, might be able to influence the outcomes of matters that require the approval of our shareholders, including but not limited to certain equity transactions (such as a financing), an acquisition or merger with another company, a sale of substantially all of our assets, the election and removal of directors, or amendments to our incorporating documents.
Our board of directors has concluded that the benefit to stockholders of improved corporate governance outweighs any possible adverse effects on stockholders of reducing the exposure of directors to liability and broadened indemnification rights. Our business and operations could be adversely affected by the effects of health epidemics, like the recent COVID-19 pandemic.
We believe that the benefit to stockholders of improved corporate governance outweighs any possible adverse effects on stockholders of reducing the exposure of directors to liability and broadened indemnification rights. 33 Table of Contents Our business and operations could be adversely affected by the effects of health epidemics, like the recent COVID-19 pandemic.
Litigation may also be necessary to enforce or defend patents issued or licensed to us or our collaborators or to determine the scope and validity of a third party’s proprietary rights. By example we have outstanding litigation against CIPLA.
Litigation may also be necessary to enforce or defend patents issued or licensed to us or our collaborators or to determine the scope and validity of a third party’s proprietary rights. By example we have outstanding litigation against CIPLA, as described elsewhere in this Annual Report.
Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, U.S. companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office, and foreign political parties or officials thereof; • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; and • certain state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug and therapeutic biologics manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and pricing information, state and local laws that require the registration of pharmaceutical sales representatives, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, U.S. companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office, and foreign political parties or officials thereof; • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; and • certain state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug and therapeutic biologics manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and pricing information, state and local laws that require the registration of pharmaceutical sales representatives, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. 48 Table of Contents If we or our collaborators, manufacturers or service providers fail to comply with applicable federal, state or foreign laws or regulations, we could be subject to enforcement actions, which could affect our ability to develop, market and sell our product successfully and could harm our reputation and lead to reduced acceptance of our product by the market.
Our existing principal shareholders hold a substantial number of our common shares and may be able to exercise influence in matters requiring approval of our shareholders. At March 25, 2024, our current shareholders separately representing more than 5% ownership of our common shares collectively represented beneficial ownership of approximately 47.03% of our common shares.
Our existing principal shareholders hold a substantial number of our common shares and may be able to exercise influence in matters requiring approval of our shareholders. At March 17, 2025, our current shareholders separately representing more than 5% ownership of our common shares collectively represented beneficial ownership of approximately 46.24% of our common shares.
Later discovery of previously unknown problems with an approved product, including adverse events of unanticipated severity or frequency, or with manufacturing operations or processes, or failure to comply with regulatory requirements, or evidence of acts that raise questions about the integrity of data supporting the product approval, may result in, among other things: ● restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls; ● fines, warning letters, or holds on clinical trials; ● refusal by the FDA to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of product approvals; ● product seizure or detention, or refusal to permit the import or export of products; and ● injunctions or the imposition of civil or criminal penalties.
Later discovery of previously unknown problems with an approved product, including adverse events of unanticipated severity or frequency, or with manufacturing operations or processes, or failure to comply with regulatory requirements, or evidence of acts that raise questions about the integrity of data supporting the product approval, may result in, among other things: ● restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls; ● fines, warning letters, or holds on clinical trials; ● refusal by the FDA to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of product approvals; ● product seizure or detention, or refusal to permit the import or export of products; and ● injunctions or the imposition of civil or criminal penalties. 37 Table of Contents The FDA’s and foreign regulatory agencies policies may change, and additional government regulations may be enacted that could prevent, limit or delay marketing approval, manufacturing or commercialization of our product.
The long term commercial success of PEDMARK ® depends on the extent to which patients and physicians accept and adopt PEDMARK ® For example, if the expected patient population is smaller than we estimate or if physicians are unwilling to prescribe or patients are unwilling to take PEDMARK ® , or if patients discontinue from use of the medication at rates that are higher than we expect, or if payers decide not to reimburse for our product, the commercial potential of PEDMARK ® will be limited.
For example, if the expected patient population is smaller than we estimate or if physicians are unwilling to prescribe or patients are unwilling to take PEDMARK ® , or if patients discontinue from use of the medication at rates that are higher than we expect, or if payers decide not to reimburse for our product, the commercial potential of PEDMARK ® will be limited.
Patients have received substantial damage awards in some jurisdictions against pharmaceutical companies based on claims for injuries allegedly caused by the use of pharmaceutical products used in clinical trials or after FDA approval. Liability claims may be expensive to defend and may result in large judgments against us. We currently carry liability insurance that we believe to be adequate.
Patients have received substantial damage awards in some jurisdictions against pharmaceutical companies based on claims for injuries allegedly caused by the use of pharmaceutical products used in clinical trials or 44 Table of Contents after FDA approval. Liability claims may be expensive to defend and may result in large judgments against us.
The 190 patent was issued on March 24, 2020. On December 5, 2022, we filed a Motion to Amend the single claim of the 190 patent focusing on the treatment of medulloblastoma. On April 18, 2023, the PTAB invalidated the only claim of the 190 patent. The final written decision became effective June 20, 2023.
On December 5, 2022, we filed a Motion to Amend the single claim of the US ‘190 patent focusing on the treatment of medulloblastoma. On April 18, 2023, the PTAB invalidated the only claim of the US ‘190 patent. The final written decision became effective June 20, 2023.
Historically, our common shares have had a low trading volume, and may continue to have a low trading volume in the future. This low volume may contribute to the volatility of the market price of our common shares.
Historically, our common shares have had a low trading volume, and may continue to have a low trading volume in the future. This low volume may contribute to the volatility of the market price of our common shares. It is likely that the market price of our common shares will continue to fluctuate significantly in the future.
We reported a net loss of approximately $16.05 million for the year ended December 31, 2023 and reported a net loss of approximately $23.71 million for the year ended December 31, 2022. At December 31, 2023, we had an accumulated deficit of approximately $219.2 million.
We reported a net loss of approximately $0.44 million for the year ended December 31, 2024 and reported a net loss of approximately $16.05 million for the year ended December 31, 2023. At December 31, 2024, we had an accumulated deficit of approximately $219.7 million.
Moreover, the AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of patent rights, all of which could have a material adverse effect on our business and financial condition.
It is not clear what other, if any, impact the AIA will have on the operation of our business. Moreover, the AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of patent rights, all of which could have a material adverse effect on our business and financial condition.
However, our insurance may not reimburse us for certain claims or the coverage may not be sufficient to cover claims made against us.
We currently carry liability insurance that we believe to be adequate. However, our insurance may not reimburse us for certain claims or the coverage may not be sufficient to cover claims made against us.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe review System and Organization Controls 1 (SOC 1 Type II) certifications where relevant from key third party partners and other service providers with access to information assets at least annually. 63 Table of Contents We maintain Information Systems Incident Management Standards that are intended to ensure information security events and weaknesses associated with information systems are communicated and acted on in a timely manner.
Biggest changeWe review System and Organization Controls 1 (SOC 1 Type II) certifications where relevant from key third party partners and other service providers with access to information assets at least annually.
Our Chief Financial Officer has experience supervising and managing company security and privacy departments. ​ Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from external security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment. ​ ​ ​ ​ ​ ​ 64 Table of Contents
Our Chief Financial Officer has experience supervising and managing company security and privacy departments. ​ 67 Table of Contents Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from external security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment. ​
Our internal controls and procedures address cybersecurity and include processes intended to ensure that security breaches are reported to appropriate personnel and, if warranted, analyzed for potential disclosure. While we have experienced cybersecurity attacks, such attacks to date have not materially affected the Company or our business strategy, results of operations, or financial condition.
While we have experienced cybersecurity attacks, such attacks to date have not materially affected the Company or our business strategy, results of operations, or financial condition.
Added
We maintain Information Systems Incident Management Standards that are intended to ensure information security events and weaknesses associated with information systems are communicated and acted on in a timely manner. Our internal controls and procedures address cybersecurity and include processes intended to ensure that security breaches are reported to appropriate personnel and, if warranted, analyzed for potential disclosure.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed5 unchanged
Biggest changeThe Second Office Service Agreement commenced on August 1, 2023 and terminates on January 31, 2025, thereafter the lease may continue on a month-to-month basis with either party being able to terminate the agreement by providing one months’ advance written notice of termination. ​ ​
Biggest changeThe Second Office Service Agreement commenced on August 1, 2023 and terminates on January 31, 2025, thereafter the lease may continue on a month-to-month basis with either party being able to terminate the agreement by providing one months’ advance written notice of termination. This office agreement terminated on January 31, 2025. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOn January 6, 2023, we received a letter dated January 5, 2023, notifying us that CIPLA submitted to the FDA a Paragraph IV Certification on our newly issued US 11,510,984 Patent (the “’984 Patent”). These patents are listed in FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the Orange Book, for PEDMARK ® .
Biggest changeOn January 6, 2023, we received a letter dated January 5, 2023, notifying us that CIPLA submitted to the FDA a Paragraph IV Certification on our newly issued US 11,510,984 Patent (the “US ’984 Patent”).
Under the Food and Drug Cosmetic Act, as amended by the Drug Price Competition and Patent Term Restoration Act of 1984, as amended, after receipt of a valid Paragraph IV notice, the Company may bring a patent infringement suit in a federal district court against CIPLA within 45 days from the receipt of the Notice Letter and if such a suit is commenced within the 45-day period, the Company is entitled to a 30 month stay on the FDA’s ability to give final approval to any proposed products that reference PEDMARK ® .
Under the Food, Drug, and Cosmetic Act, as amended by the Drug Price Competition and Patent Term Restoration Act of 1984, as amended, after receipt of a valid Paragraph IV notice, the Company may bring a patent infringement suit in a federal district court against CIPLA within 45 days from the receipt of the Notice Letter and if such a suit is commenced within the 45-day period, the Company is entitled to a 30 month stay on the FDA’s ability to give final approval to any proposed products that reference PEDMARK.
On May 11, 2023, we received written notice of CIPLA’s Paragraph IV Certification as to the ’793 Patent, which was dated May 10, 2023, along with an enclosed statement of alleged factual and legal bases for stating that the ’793 Patent is invalid, unenforceable, and/or will not be infringed by CIPLA’s ANDA Product.
On May 11, 2023, we received written notice of CIPLA’s Paragraph IV Certification as to the US ‘793 Patent, which was dated May 10, 2023, along with an enclosed statement of alleged factual and legal bases for stating that the US ‘793 Patent is invalid, unenforceable, and/or will not be infringed by CIPLA’s ANDA Product.
On April 4, 2023, we were granted US 11,617,793 Patent (the “’793 Patent”) covering the formulation of the PEDMARK ® product, which was listed in the Orange Book on or around April 17, 2023, and has an expiration date of July 2039.
On April 4, 2023, we were granted US 11,617,793 Patent (the “US ‘793 Patent”) covering the formulation of the PEDMARK product, which was listed in the Orange Book on or around April 17, 2023, and has an expiration date of July 2039.
CIPLA Litigation On December 1, 2022, we received a letter dated November 30, 2022, notifying us that CIPLA Ltd. and CIPLA USA (“CIPLA”) submitted to the FDA an ANDA (ANDA No. 218028) for a generic version of PEDMARK ® (sodium thiosulfate solution) that contains Paragraph IV Certifications on two of our patents covering PEDMARK ® : the OHSU licensed ‘190 Patent, expiration date January 2038; and our US 11,291,728 Patent (the “’728 Patent”), expiration date July 65 Table of Contents 2039.
Legal Proceedings CIPLA ANDA Litigation On December 1, 2022, we received a letter dated November 30, 2022, notifying us that CIPLA Ltd. and CIPLA USA (“CIPLA”) submitted to the FDA an ANDA (ANDA No. 218028) for a generic version of PEDMARK ® (sodium thiosulfate solution) that contained Paragraph IV Certifications on two of our patents covering PEDMARK ® : the OHSU licensed ‘190 Patent, expiration date January 2038; and our US 11,291,728 Patent (the “US ’728 Patent”), expiration date July 2039.
In addition to the 30-month stay, because we have received Orphan Drug Exclusivity, the FDA may not approve CIPLA’s ANDA for at least 7 years from PEDMARK ® ’s FDA approval date of September 20, 2022.
In addition to the 30-month stay, because we have received Orphan Drug Exclusivity, the FDA may not approve CIPLA’s ANDA for at least 7 years from PEDMARK’s FDA approval date of September 20, 2022, which is September 20, 2029.
On January 10, 2023, we filed suit against the CIPLA entities in the United States District Court for the District of New Jersey (Case No. 2:23-cv-00123), for infringement of the ‘190 Patent, the ‘728 Patent, and the ‘984 Patent. On April 20, 2023, we filed an Amended Complaint to assert infringement of the ‘728 patent and the ‘984 Patent.
On January 10, 2023, we filed suit against the CIPLA entities in the United States District Court for the District of New Jersey (Case No. 2:23-cv-00123), for infringement of the US ‘190 Patent, the US ‘728 Patent, and the US ‘984 Patent.
Mine Safety Disclosures Not applicable. ​ PART II
The suit is ongoing. ​ Item 4. Mine Safety Disclosures Not applicable. ​ PART II
The certifications allege these patents are invalid or will not be infringed by the manufacture, use, or sale of CIPLA’s sodium thiosulfate solution.
These patents are listed in FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the Orange Book, for PEDMARK ® . The certifications allege these patents are invalid or will not be infringed by the manufacture, use, or sale of CIPLA’s sodium thiosulfate solution .
Removed
Item 3. Legal Proceedings Hope Medical Enterprises, Inc. Inter Partes Review (IPR) Challenges On October 29, 2021, Hope Medical Enterprises, Inc. (“Hope”) filed a Petition for inter partes review (IPR2022-00123) with the Patent Trial and Appeal Board (“PTAB”) of the USPTO to invalidate U.S.
Added
On April 20, 2023, we filed an Amended Complaint to assert infringement of the ’728 Patent and the ’984 Patent.
Removed
Patent No. 10,596,190 (the “‘190 Patent”), which is exclusively in-licensed from Oregon Health & Science University (“OHSU”) and relates to a method of using PEDMARK ® . The ‘190 Patent was issued on March 24, 2020. On April 18, 2023, the PTAB invalidated the only claim of the‘190 Patent. The final written decision became effective June 20, 2023.
Added
On July 27, 2023, we filed a Second Amended Complaint to assert the US ‘793 Patent.
Removed
The ‘190 Patent was previously listed in the United States Approved Drug Products with Therapeutic Equivalence Evaluations (also known as the “Orange Book”). In light of PTAB’s final written decision on the invalidity of the ‘190 Patent, we requested that the FDA remove the ’190 Patent from the Orange Book.
Added
CIPLA filed an Answer to the Second Amended Complaint on August 31, 2023. 68 Table of Contents On April 23, 2024, we were granted US 11,964,018 Patent (the “US ’018 Patent) covering a method of using our PEDMARK product to reduce ototoxicity in a patient receiving a platinum based chemotherapeutic for the treatment of a cancer, which was listed in the Orange Book on or around May 8, 2024, and has an expiration date of July 2039.
Removed
Two United States patent applications claiming priority through the ‘190 Patent remain pending at the United States Patent and Trademark Office (“USPTO”). ​ On October 29, 2021, Hope Medical Enterprises, Inc. (“Hope”) filed a Petition for inter partes review (IPR2022-00125) to invalidate our wholly owned U.S.
Added
On May 28, 2024, we were granted US 11,992,530 Patent (the “US ’530 Patent”) covering a method of using our PEDMARK product to reduce ototoxicity in a patient receiving a platinum based chemotherapeutic for the treatment of a cancer, which was listed in the Orange Book on or around June 20, 2024, and has an expiration date of July 2039.
Removed
Patent No. 10,792,363 (the “’363 Patent”), which relates to an anhydrous form of STS and its method of manufacture, which is the active pharmaceutical ingredient in the PEDMARK ® product. The ‘363 Patent was issued October 6, 2020.
Added
On June 4, 2024, we were granted US 11,998,604 Patent (the “US ’604 Patent”) covering a method of using our PEDMARK product to reduce ototoxicity in a patient receiving a platinum based chemotherapeutic for the treatment of a cancer, which was listed in the Orange Book on or around June 24, 2024, and has an expiration date of July 2039.
Removed
During the ‘363 IPR, we disclaimed the patent claims directed to the anhydrous morphic form of STS and continued with claims directed to its method of manufacture. Because the remaining claims in the ‘363 patent are directed to a method of manufacture, the ‘363 patent is not eligible for listing in the Orange Book.
Added
On June 13, 2024, we filed a Motion for Leave to File a Third Amended Complaint to focus the ANDA litigation against CIPLA on the US ’018 Patent and the US ‘793 Patent only. The non-asserted patents remain listed in the Orange Book.
Removed
In September 2023, the PTAB issued a Final Written Decision in favor of Fennec and upholding the amended claim. The USPTO has now granted three additional U.S. patents that cover the PEDMARK ® formulation, each of which have been listed in the U.S. FDA’s “Orange Book” (U.S. Patent No. 11,291,728 (issued April 5, 2022), U.S.
Added
On July 22, 2024, CIPLA filed a response indicating that they do not oppose our Motion for Leave to File a Third Amended Complaint. On July 30, 2024, the court granted us leave to file the Third Amended Complaint, which we filed on September 16, 2024.
Removed
Patent No. 11,510,984 (issued November 29, 2022), and U.S. Patent No. 11,617,793 (issued April 4, 2023)), and seven additional United States patent applications from this family are pending at the USPTO. We plan to vigorously defend our intellectual property rights to PEDMARK ® if challenged.
Added
In coordination with the Third Amended Complaint, we entered into a covenant not to sue CIPLA on the US ‘363 Patent, US ‘728 Patent, US ‘984 Patent, US ‘530 Patent, and US ‘604 Patent, subject to the limitation that such shall not apply to the extent CIPLA alters the product or formulation described in its FDA ANDA application .
Removed
An invalidation of our patents covering PEDMARK ® could have a material adverse effect on our ability to protect our rights in PEDMARK ® beyond periods of marketing exclusivity for PEDMARK ® in the United States under Orphan Drug Designation.
Removed
On July 27, 2023, we filed a Second Amended Complaint to assert the ‘793 Patent. The suit is ongoing. PEDMARQSI ® (EU Brand name for PEDMARK ® ) received European Commission approval in June 2023 and was granted eight year of market exclusivity plus two years of data exclusivity in Europe under PUMA. ​ Item 4.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFederal Income Tax Considerations The following summary describes the material U.S. federal income tax consequences to U.S. Holders (as defined below) of acquiring, owning, and disposing of our common shares, subject to the qualifications set forth herein.
Biggest changeHolders (as defined below) of acquiring, owning, and disposing of our common shares, subject to the qualifications set forth herein. 69 Table of Contents General Tax Consequences Not Addressed This summary does not address all potential U.S. federal income tax considerations that may be relevant to a particular U.S. Holder.
Holder or a person in (a) directly or indirectly hold membership interests, held shares and/or rights to acquire shares representing 25% or more of the issued shares of any class of our capital stock; and (b) more than 50% of the fair market value of our common stock was derived 72 Table of Contents directly or indirectly from one or any combination of (i) real or immovable property situated in Canada, (ii) Canadian resource properties, (iii) timber resource properties, and (iv) options in respect of, or interests in, or for civil law rights in, property described in any of (i) to (iii).
Holder or a person in (a) directly or indirectly hold membership interests, held shares and/or rights to acquire shares representing 25% or more of the issued shares of any class of our capital stock; and (b) more than 50% of the fair market value of our common stock was derived 75 Table of Contents directly or indirectly from one or any combination of (i) real or immovable property situated in Canada, (ii) Canadian resource properties, (iii) timber resource properties, and (iv) options in respect of, or interests in, or for civil law rights in, property described in any of (i) to (iii).
Holders described immediately above, should consult their own tax advisors regarding the U.S. federal income, U.S. federal alternative 68 Table of Contents minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences of acquiring, owning, and disposing of our common shares. The following summary is not a substitute for careful tax planning and advice. U.S.
Holders described immediately above, should consult their own tax advisors regarding the U.S. federal income, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences of acquiring, owning, and disposing of our common shares. 71 Table of Contents The following summary is not a substitute for careful tax planning and advice. U.S.
U.S. Holders may be subject to these reporting requirements unless their 70 Table of Contents common shares are held in an account at certain financial institutions. Significant penalties may apply for failure to satisfy applicable reporting obligations.
U.S. Holders may be subject to these reporting requirements unless their 73 Table of Contents common shares are held in an account at certain financial institutions. Significant penalties may apply for failure to satisfy applicable reporting obligations.
Additionally, to determine the amount of any capital gain from the sale or other taxable disposition of common shares that will be subject to the additional tax on net investment 71 Table of Contents income, a U.S.
Additionally, to determine the amount of any capital gain from the sale or other taxable disposition of common shares that will be subject to the additional tax on net investment 74 Table of Contents income, a U.S.
The gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. 69 Table of Contents Additional Medicare Tax on Net Investment Income Certain U.S.
The gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. 72 Table of Contents Additional Medicare Tax on Net Investment Income Certain U.S.
For purposes of this calculation, all of the days present in the current year, one-third of the days present in the immediately preceding year, and one-sixth of the days present in the second preceding year are counted. Residents are taxed for U.S. federal income tax purposes as if they were U.S. citizens. 67 Table of Contents Non-U.S.
For purposes of this calculation, all of the days present in the current year, one-third of the days present in the immediately preceding year, and one-sixth of the days present in the second preceding year are counted. Residents are taxed for U.S. federal income tax purposes as if they were U.S. citizens. Non-U.S.
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common shares currently trade in the U.S. on the Nasdaq Capital Market under the trading symbol “FENC” and in Canada on the TSX under the trading symbol “FRX”. ​ Record Holders As of March 25, 2024, there were approximately 26 shareholders of record of our common shares, one of which was Cede & Co., a nominee for Depository Trust Company, and one of which was The Canadian Depository for Securities Limited (“CDS”).
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common shares currently trade in the U.S. on the Nasdaq Capital Market under the trading symbol “FENC” and in Canada on the TSX under the trading symbol “FRX”. ​ Record Holders As of March 24, 2025, there were approximately 27 shareholders of record of our common shares, one of which was Cede & Co., a nominee for Depository Trust Company, and one of which was The Canadian Depository for Securities Limited (“CDS”).
Holder, including specific tax consequences under an applicable income tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder.
Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder.
Holder investor should consult a professional tax advisor with respect to the U.S. federal income, U.S. alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences of acquiring, owning, and disposing of our common shares. Certain U.S. Holders Not Addressed This summary does not address the U.S. federal income tax considerations applicable U.S.
Holder investor should consult a professional tax advisor with respect to the U.S. federal income, U.S. alternative minimum, U.S. federal 70 Table of Contents estate and gift, U.S. state and local, and non-U.S. tax consequences of acquiring, owning, and disposing of our common shares. Certain U.S.
General Tax Consequences Not Addressed This summary does not address all potential U.S. federal income tax considerations that may be relevant to a particular U.S. Holder. In addition, this summary does not take into account the individual facts and circumstances that may affect the U.S. federal income tax consequences to a particular U.S.
In addition, this summary does not take into account the individual facts and circumstances that may affect the U.S. federal income tax consequences to a particular U.S. Holder, including specific tax consequences under an applicable income tax treaty.
Holders that are subject to special provisions under the Code, including, but not limited to, U.S.
Holders Not Addressed This summary does not address the U.S. federal income tax considerations applicable U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S.
Cede & Co. and CDS are each considered to be one shareholder of record. Dividend Policy We have never declared or paid cash dividends on our common shares.
Cede & Co. and CDS are each considered to be one shareholder of record. Dividend Policy We have never declared or paid cash dividends on our common shares. We currently expect to retain future earnings, if any, for use in the operation and expansion of business and do not anticipate paying any cash dividends in the foreseeable future.
Removed
We currently expect to retain future earnings, if any, for use in the operation and expansion of business and do not anticipate paying any cash dividends in the foreseeable future. 66 Table of Contents Material United States Federal and Canadian Income Tax Consequences Material U.S.
Added
Material United States Federal and Canadian Income Tax Consequences Material U.S. Federal Income Tax Considerations The following summary describes the material U.S. federal income tax consequences to U.S.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. Reserved 73 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 73 ​ ​ ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk 81 ​ ​ ​ Item 8. Financial Statements and Supplementary Data 81 ​ ​ ​
Biggest changeItem 6. Reserved 76 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 84 ​ ​ ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk 84 ​ ​ ​ Item 8. Financial Statements and Supplementary Data 85 ​ ​ ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeDollars December 31, 2023 % December 31, 2022 % (Decrease) PEDMARK (R) product sales, net ​ $ 21,252 ​ $ 1,535 ​ $ 19,717 Cost of product sales ​ ​ (1,259) ​ ​ ​ ​ (86) ​ ​ ​ ​ (1,173) Gross profit ​ ​ 19,993 ​ ​ ​ ​ 1,449 ​ ​ ​ ​ 18,544 Operating expenses: ​ ​ ​ Research and development ​ 56 0 % 3,531 14 % (3,475) Selling and marketing ​ ​ 12,123 ​ 37 % ​ 2,785 ​ 12 % ​ 9,338 General and administrative ​ 20,585 63 % 17,722 74 % 2,863 Total operating expense ​ 32,764 100 % 24,038 100 % 8,726 Loss from operations ​ 12,771 ​ 22,589 ​ (9,818) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss on securities ​ ​ (39) ​ ​ ​ ​ (184) ​ ​ ​ ​ 145 Amortization expense ​ (287) ​ (149) ​ (138) Interest expense ​ ​ (3,394) ​ ​ ​ ​ (978) ​ ​ ​ ​ (2,416) Unrealized foreign exchange gain/(loss) ​ 5 ​ (9) ​ 14 Interest income ​ 441 ​ 195 ​ 246 Net loss ​ $ (16,045) ​ $ (23,714) ​ $ 7,669 ​ ● Commercial launch of PEDMARK ® commenced in October 2022.
Biggest changeDollars December 31, 2024 % December 31, 2023 % (Decrease) Product sales, net ​ $ 29,580 ​ ​ $ 21,252 ​ $ 8,328 Licensing revenue ​ ​ 17,958 ​ ​ ​ ​ — ​ ​ ​ ​ 17,958 Total revenue ​ ​ 47,538 ​ ​ ​ ​ 21,252 ​ ​ ​ ​ 26,286 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ Cost of product sales ​ ​ 3,184 ​ 7 % ​ 1,259 ​ 3 % ​ 1,925 Research and development ​ 307 1 % 56 - % 251 Selling and marketing ​ ​ 18,426 ​ 41 % ​ 12,123 ​ 36 % ​ 6,303 General and administrative ​ 23,053 51 % 20,585 61 % 2,468 Total operating expense ​ 44,970 100 % 34,023 100 % 10,947 Income / (loss) from operations ​ 2,568 ​ (12,771) ​ 15,339 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss on securities ​ ​ (81) ​ ​ ​ ​ (39) ​ ​ ​ ​ (42) Amortization expense ​ (89) ​ (287) ​ 198 Interest expense ​ ​ (4,069) ​ ​ ​ ​ (3,394) ​ ​ ​ ​ (675) Unrealized foreign exchange (loss)/gain ​ (82) ​ 5 ​ (87) Interest income ​ 1,682 ​ 441 ​ 1,241 Loss before income tax ​ ​ (71) ​ ​ ​ ​ (16,045) ​ ​ ​ ​ 15,974 Income tax ​ ​ (365) ​ ​ ​ ​ — ​ ​ ​ ​ (365) Net loss ​ $ (436) ​ $ (16,045) ​ $ (14,704) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ● The Company recorded net product sales of $29.6 million in fiscal 2024 compared to $21.3 million in 2023 as the Company increased market penetration and access for PEDMARK as the Company expanded its focus to the adolescent and young adult (AYA) population.
This guidance will be effective for the annual periods beginning the year ended December 31, 2025. The Company is currently evaluating the effect the adoption of this ASU will have on the consolidated financial statements. ​
This guidance will be effective for the annual periods beginning the year ended December 31, 2025. The Company is currently evaluating the effect the adoption of this ASU will have on its consolidated financial statements.
The incidence of ototoxicity depends upon the dose and duration of chemotherapy, and many of these children require lifelong hearing aids or cochlear implants, which can be helpful for some, but do not reverse the hearing loss and can be costly over time.
The incidence of ototoxicity depends upon the dose and duration of chemotherapy, and many of these patients require lifelong hearing aids or cochlear implants, which can be helpful for some, but do not reverse the hearing loss and can be costly over time.
The COG ACCL0431 protocol enrolled pediatric patients with cancers typically treated with intensive cisplatin therapy for localized and disseminated disease, including newly diagnosed hepatoblastoma, germ cell tumor, osteosarcoma, neuroblastoma, medulloblastoma, and other solid tumors. SIOPEL 6 enrolled only hepatoblastoma patients with localized tumors.
The COG ACCL0431 protocol enrolled childhood cancer patients typically treated with intensive cisplatin therapy for localized and disseminated disease, including newly diagnosed hepatoblastoma, germ cell tumor, osteosarcoma, neuroblastoma, medulloblastoma, and other solid tumors. SIOPEL 6 enrolled only hepatoblastoma patients with localized tumors.
The Company adopted this ASU in 2023. ​ In December 2023 , the Financial Accounting Standards Board issued Accounting Standards Update No. 2023-09 , “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction.
In December 2023, the FASB issued Accounting Standards Update (ASU) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction.
In valuing options granted in the fiscal years ended December 31, 2023 and 2022, we used the following weighted average assumptions: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended Year Ended ​ ​ December 31, ​ December 31, ​ 2023 2022 ​ Expected dividend — % — % Risk-free interest rate 3.58 - 5.31% % 1.18 - 3.96 % Expected volatility 59 - 167 % 150 - 181 % Expected life 1.50 - 6 years 5 - 6 years ​ ​ Common shares and warrants Common shares are recorded as the net proceeds received on issuance after deducting all share issuance costs and the relative fair value of investor warrants.
In valuing options granted in the fiscal years ended December 31, 2024 and 2023, we used the following weighted average assumptions: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended Year Ended ​ ​ December 31, ​ December 31, ​ 2024 2023 ​ Expected dividend — % — % Risk-free interest rate 3.64 - 5.15 % 3.58 - 5.31% % Expected volatility 55 - 162 % 59 - 167 % Expected life 1.5 - 6.0 years 1.5 - 6.0 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common shares and warrants Common shares are recorded as the net proceeds received on issuance after deducting all share issuance costs and the relative fair value of investor warrants.
While we have never 78 Table of Contents experienced any loss or write down of our money market investments since our inception, the amounts we hold in money market accounts are substantially above the $250,000 amount insured by the FDIC and may lose value.
While we have never experienced any loss or write down of our money market investments since our inception, the amounts we hold in money market accounts are substantially above the $0.25 million amount insured by the FDIC and may lose value.
We carry investments at their fair value with unrealized gains and losses included in other comprehensive income (loss); however, we have not held any instruments that were classified as short-term investments during the periods presented in this Annual Report. Off-Balance Sheet Arrangements Since our inception, we have not had any material off-balance sheet arrangements.
We carry investments at their fair value with unrealized gains and losses included in other comprehensive income (loss); however, we have not held any instruments that were classified as short-term investments during the periods presented in this Annual Report.
The risk-free interest rate assumption was based on the yield on zero-coupon U.S. Treasury strips at the award grant date. We also used historical data to estimate forfeiture experience.
The expected volatility was determined using historical volatility of our stock based on the contractual life of the award. The risk-free interest rate assumption was based on the yield on zero-coupon U.S. Treasury strips at the award grant date. We also used historical data to estimate forfeiture experience.
Under ASC 718, the fair value of each stock option is estimated on the grant date using the Black-Scholes option-pricing model. The valuation models require assumptions and estimates to determine expected volatility, expected life, expected dividends and expected risk-free interest rates. The expected volatility was determined using historical volatility of our stock based on the contractual life of the award.
Stock-based Compensation The calculation of the fair values of our stock-based compensation plans requires estimates that require management’s judgments. Under ASC 718, the fair value of each stock option is estimated on the grant date using the Black-Scholes option-pricing model. The valuation models require assumptions and estimates to determine expected volatility, expected life, expected dividends and expected risk-free interest rates.
There is currently no established preventive agent for this hearing loss and only expensive, technically difficult, and sub-optimal cochlear (inner ear) implants have been shown to provide some benefit. Infants and young children that suffer ototoxicity at critical stages of development lack speech language development and literacy, and older children and adolescents lack social-emotional development and educational achievement.
Beyond the use of PEDMARK, only expensive, technically difficult, and sub-optimal cochlear (inner ear) implants have been shown to provide some benefit. Infants and young children that suffer ototoxicity at critical stages of development lack speech language development and literacy, and older children and adolescents lack social-emotional development and educational achievement.
In the U.S., we sell our product through an experienced field force including Regional Pediatric Oncology Specialists and medical science liaisons who are helping to educate the medical communities and patients about cisplatin induced 73 Table of Contents ototoxicity and our programs supporting patient access to PEDMARK ® .
Norgine announced the launch of Germany and the U.K. in early 2025. 76 Table of Contents In the U.S., we sell PEDMARK ® through an experienced field force and medical science liaisons who are helping to educate the medical communities and patients about cisplatin induced ototoxicity and our programs supporting patient access to PEDMARK ® .
Cisplatin Induced Ototoxicity Cisplatin and other platinum compounds are essential chemotherapeutic agents for the treatment of many pediatric malignancies. Unfortunately, platinum-based therapies can cause ototoxicity, or hearing loss, which is permanent, irreversible, and particularly harmful to the survivors of pediatric cancer.
In contrast, around 80% of patients are treated at 3,750 community centers throughout the country. ​ Cisplatin Induced Ototoxicity (“CIO”) Cisplatin and other platinum compounds are essential chemotherapeutic agents for the treatment of many pediatric and adult malignancies. Unfortunately, platinum-based therapies can cause ototoxicity, or hearing loss, which is permanent, irreversible, and particularly harmful to the survivors of pediatric cancer.
As part of the accounting for these arrangements, the Company must make significant judgments, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation. 79 Table of Contents Stock-based Compensation The calculation of the fair values of our stock-based compensation plans requires estimates that require management’s judgments.
As part of the accounting for these arrangements, the Company must make significant judgments, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation.
There was a decrease in net loss of $7.7 million in fiscal 2023 compared to fiscal 2022. In 2023, non-cash items added back to net loss increased by $1.1 million over 2022 and net changes in balance sheet accounts subtracted $6.8 million in 2023. Net financing activities in 2023 provided approximately $14.1 million less than in 2022.
There was a decrease in net loss of $15.6 million in fiscal 2024 compared to fiscal 2023. In 2024, non-cash items added back to net loss increased by $4.7 million over fiscal 2023 and net changes in balance sheet accounts added $23.4 million in fiscal 2024.
PEDMARK ® has been studied by co-operative groups in two Phase 3 clinical studies of survival and reduction of ototoxicity, COG ACCL0431 and SIOPEL 6. Both studies have been completed.
We are also pursuing additional patent applications in both the U.S. and internationally for PEDMARK ® . ​ PEDMARK ® Product Overview PEDMARK ® has been studied by co-operative groups in two Phase 3 clinical studies of survival and reduction of ototoxicity, COG ACCL0431 and SIOPEL 6. Both studies have been completed.
We had cash and cash equivalents of approximately $13.3 million as of December 31, 2023.
We had cash and cash equivalents of approximately $26.6 million as of December 31, 2024.
In March 2024, the Company announced an exclusive licensing agreement with Norgine, which will commercialize PEDMARQSI ® in in Europe, Australia and New Zealand in 2024.
This is an exclusive licensing agreement under which Norgine will commercialize PEDMARQSI ® in Europe, Australia and New Zealand.
This was mainly from the funding of the Petrichor Note, net of fees, and approximately $0.8 million arising from various option exercises. We continue to pursue various strategic alternatives including collaborations with other pharmaceutical and biotechnology companies. Our projections of further capital requirements are subject to substantial uncertainty.
We continue to pursue various strategic alternatives including collaborations with other pharmaceutical and biotechnology companies. Our projections of further capital requirements are subject to substantial uncertainty.
The following description of critical accounting policies, judgments and estimates should be read in conjunction with our December 31, 2023 consolidated financial statements.
The following description of critical accounting policies, judgments and estimates should be read in conjunction with our December 31, 2024 consolidated financial statements. Credit Losses ​ The Company estimates and records a provision for its expected credit losses related to its trade receivables.
We currently anticipate that our available capital resources, including our existing cash and cash equivalents, accounts receivable balances and the remaining $15 million available under the SPA and subject to mutual agreement between the Company and Petrichor, will be sufficient to meet our expected working capital and capital expenditure requirements as our business is currently conducted for at least the next 12 months.
We currently anticipate that our available capital resources, including our existing cash and cash equivalents and the accounts receivable balances will be sufficient to meet our expected working capital and capital expenditure requirements as our business is currently conducted for at least the next 12 months. ​ Financial Instruments We invest excess cash and cash equivalents in high credit quality investments held by financial institutions in accordance with our investment policy designed to protect the principal investment.
GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expense during the reporting period. These estimates are based on assumptions and judgments that may be affected by commercial, economic and other factors.
Critical Accounting Policies and Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expense during the reporting period.
Contractual Obligations and Commitments None, other than the OHSU Agreement and lease agreements described in notes to our consolidated financial statements contained elsewhere in this Annual Report, and the severance amounts as disclosed in the Annual Report. Critical Accounting Policies and Estimates The preparation of financial statements in conformity with U.S.
Off-Balance Sheet Arrangements Since our inception, we have not had any material off-balance sheet arrangements. 81 Table of Contents Contractual Obligations and Commitments None, other than the OHSU Agreement, lease agreements, and the severance amounts described in notes to our consolidated financial statements contained elsewhere in this Annual Report.
The decrease was a result of cash used in operations offset by net inflow of cash from collections of accounts receivable of $7.8 million, $5.0 million received from the Petrichor Note, and $1.7 million received from stock option exercises and interest income. ​ ​ ​ ​ ​ ​ ​ Selected Cash Flow Data ​ Year Ended Year Ended (dollars and shares in thousands) ​ December 31, 2023 ​ December 31, 2022 Net cash used in operating activities ​ $ (17,143) ​ $ (18,058) Net cash provided by investing activities ​ — ​ — Net cash provided by financing activities ​ 6,638 ​ 20,732 Net cash flow ​ $ (10,505) ​ $ 2,674 ​ The net cash flow used in operating activities for the year ended December 31, 2023 was approximately $17.1 million as compared to $18.1 million in 2022.
The increase was primarily as a result of cash inflows from the Norgine licensing transaction and cash collections on product sales offset by cash used in operations for the commercialization of PEDMARK and the paydown of the Petrichor notes. ​ ​ ​ ​ ​ ​ ​ Selected Cash Flow Data ​ Year Ended Year Ended (dollars and shares in thousands) ​ December 31, 2024 ​ December 31, 2023 Net cash provided by / (used in) operating activities ​ $ 26,980 ​ $ (17,143) Net cash provided by investing activities ​ — ​ — Net cash (used in) / provided by financing activities ​ (13,615) ​ 6,638 Net cash flow ​ $ 13,365 ​ $ (10,505) 80 Table of Contents ​ The net cash flow from operating activities for the year ended December 31, 2024 was approximately $27.0 million as compared to $17.1 million net cash used from operating activities in 2023.
The increase was driven mainly by higher average debt balances and higher interest rates on long-term debt. ● Interest income increased in fiscal 2023 as compared to fiscal 2022 by $0.2 million, due to higher rates on money market accounts for the comparable periods.
For year ended December 31, 2023, there was a loss of $0.04 million. ● Amortization expense decreased $0.2 million in fiscal 2024. 79 Table of Contents ● Interest expense increased by $0.7 million in fiscal 2024 compared to fiscal 2023. The increase was driven mainly by higher average debt balances and higher interest rates on long-term debt.
The vast majority of this is interest and is driven by larger debt load and higher interest rates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As at ​ As at Selected Asset and Liability Data (thousands): December 31, 2023 December 31, 2022 Cash and equivalents ​ $ 13,269 ​ $ 23,774 Other current assets ​ 13,589 ​ 2,954 Current liabilities ​ (7,553) ​ (4,608) Working capital (1) ​ 19,305 ​ 22,120 (1) [Current assets – current liabilities] ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selected Equity: ​ ​ ​ ​ Common stock and additional paid in capital ​ ​ 206,380 ​ ​ 199,388 Accumulated deficit ​ (219,245) ​ (203,200) Shareholders’ (deficit) equity ​ (11,622) ​ (2,569) ​ Liquidity and Capital Resources ● There was a $10.5 million net decrease in cash and cash equivalents between December 31, 2023, and December 31, 2022.
Prospective interest expense is expected to decline as a result of the Company’s debt paydown of $13 million in December 2024. ● Interest income increased in fiscal 2024 as compared to fiscal 2023 by $1.2 million, due to higher cash balances and higher rates on money market accounts for the comparable periods. ● Income tax expense increased due to the Company’s income inclusion from Norgine licensing transaction in March 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As at ​ As at Selected Asset and Liability Data (thousands): December 31, 2024 December 31, 2023 Cash and equivalents ​ $ 26,634 ​ $ 13,269 Other current assets ​ 17,490 ​ 13,589 Current liabilities ​ 6,919 ​ 7,553 Working capital (1) ​ 37,205 ​ 19,305 (1) [Current assets – current liabilities] ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selected Equity: ​ ​ ​ ​ Common stock and additional paid in capital ​ ​ 212,566 ​ ​ 206,380 Accumulated deficit ​ (219,681) ​ (219,245) Shareholders’ deficit ​ (5,872) ​ (11,622) ​ Liquidity and Capital Resources ● There was a $13.4 million net increase in cash and cash equivalents between December 31, 2024, and December 31, 2023.
Fennec HEAR® also provides access to care coordinators that can answer insurance questions about coverage for PEDMARK® and provide tips and resources for managing treatment. We received Orphan Drug Exclusivity for PEDMARK ® in January 2023, which provides seven years of market exclusivity from the date of its FDA approval on September 20, 2022 until September 20, 2029.
We received Orphan Drug Exclusivity for PEDMARK ® in January 2023, which provides seven years of market exclusivity from its FDA approval on September 20, 2022, until September 20, 2029. We currently have six patents listed for PEDMARK ® in the FDA Orange Book.
Results of Operations Fiscal 2023 versus Fiscal 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ Fiscal Year Ended ​ ​ Increase In thousands of U.S.
Further, in early 2025, Norgine announced the launch of PEDMARQSI in Germany. 78 Table of Contents Results of Operations Fiscal 2024 versus Fiscal 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ Fiscal Year Ended ​ ​ Increase In thousands of U.S.
PEDMARK ® Product Overview PEDMARK ® is the first and only therapy approved by the FDA indicated to reduce the risk of ototoxicity associated with cisplatin treatment in pediatric patients with localized, non-metastatic, solid tumors. Further, PEDMARQSI ® , known as PEDMARK ® in the U.S. was granted marketing authorization by the European Commission in June 2023.
In the United States, PEDMARK® is the first and only therapy approved to mitigate the risk of ototoxicity associated with cisplatin in pediatric patients aged one month and older with localized, non-metastatic solid tumors.
We currently have three patents listed for PEDMARK ® in the FDA’s Orange Book. In September 2022, the USPTO issued the 728 patent, in December 2022, the USPTO issued the 984 patent and in April 2023, the USPTO issued the 793 patent, each that cover PEDMARK ® pharmaceutical formulation.
In September 2022, the USPTO issued Patent No. 11,291,728 (the “US ‘728 Patent”), in December 2022, the USPTO issued Patent No. 11,510,984 (“US ‘984 Patent”) and in April 2023, the USPTO issued Patent No. 11,671,793 (“US ‘793 Patent”) that covers PEDMARK ® pharmaceutical formulation.
The Company recorded net product sales of $21.3 million in fiscal 2023 compared to $1.5 million in 2022. The Company recorded discounts and allowances against sales in the amount of $2.5 million and cost of products sold of $1.3 million in 2023. The Company had gross profit of $20.0 million for fiscal year ended 2023.
Further, the Company recorded $18.0 million in licensing revenue related to the Norgine transaction. The Company recorded discounts and allowances against sales in the amount of $9.3 million and cost of products sold of approximately $3.2 million in 2024. ● Research and development expense increased by $0.3 million in fiscal 2024 as compared to fiscal 2023.
There was an increase in consulting and professional costs of $0.8 million in fiscal 2023 over fiscal 2022. ● The value of our Processa shares declined by $0.04 million for the year ended December 31, 2023. For fiscal year ended December 31, 2022, there was a loss of $0.2 million. We acquired the Processa shares on October 30, 2020.
There was an increase in consulting and professional costs compared to same period in 2023 which is largely attributable to increased European pre-commercialization related expenses and expenses associated with the Norgine transaction and intellectual property expenses related to ongoing litigation. ● The value of our Processa shares declined by $0.01 million for the year ended December 31, 2024.
Infants and young children that are affected by ototoxicity at critical stages of development lack speech and language development and literacy, and older children and adolescents often lack social-emotional development and educational achievement. 74 Table of Contents Now that we have obtained applicable regulatory approval to sell PEDMARK ® in the United States, we recognize there may still be a need to establish collaborations that provide us with up-front payments, licensing fees, milestone payments, royalties or other revenue.
Infants and young children that are affected by ototoxicity at critical stages of development lack speech and language development and literacy, and older children and adolescents often lack social-emotional development and educational achievement.
This ASU will be effective for the year ended December 31, 2024.
This guidance will be effective for the annual periods beginning the year ended December 31, 2025. The Company believes that ASU 2024-01 will not have a material impact on the Company’s consolidated financial statements.
In the U.S. and Europe, it is estimated that more than 10,000 children annually may receive platinum-based chemotherapy. The incidence of ototoxicity depends upon the dose and duration of chemotherapy, and many of these children require lifelong hearing aids.
The incidence of ototoxicity depends upon the dose and duration of chemotherapy, and many of these children require lifelong hearing aids. PEDMARK® is the first and only therapy approved to mitigate the risk of ototoxicity associated with cisplatin, a form of platinum based chemotherapy, in pediatric patients aged one month and older with localized, non-metastatic solid tumors.
During the period ended December 31, 2023, cash for 77 Table of Contents operations was used mainly on the pre-commercialization activities of PEDMARK ® prior to FDA approval and then commercialization activities post NDA approval. ● The increase in other current assets of $10.6 million between December 31, 2022, and December 31, 2023, primarily relates to an increase of $7.3 million in accounts receivable, an increase of $1.6 million in inventory and an increase of $1.8 million in pre-paid expenses and the value of Processa shares. ● Current liabilities at December 31, 2023 increased $2.9 million compared to December 31, 2022.
The net increase was primarily the result of cash inflows of $43.2 million from the Norgine licensing transaction, cash collections on product sales and proceeds from the exercise of options which were offset by $13.0 million paid off on the Petrichor Financing note and cash operating expenses. ● The increase in other current assets of $3.8 million between December 31, 2023, and December 31, 2024, primarily relates to an increase of $4.1 million in accounts receivable, an decrease of $1.1 million in inventory and an increase of $0.5 million in prepaid expenses. ● Current liabilities at December 31, 2024 decreased $0.6 million compared to December 31, 2023. ● Working capital increased by $17.8 million between December 31, 2024, and December 31, 2023.
General and administrative expenses increased by $2.3 million in the three months ended December 31, 2023, as compared to the same period in 2022. There was an increase of $1.8 million related to commercial spending and consulting, $0.3 million related to increased payroll and benefits and $0.1 million in legal fees.
The increase is largely related to increased payroll and additional marketing expenses in the comparable period as we focused on expanding our outreach to community oncology centers and AYA population. ● There was a $2.8 million increase in general and administrative expenses 2024 compared to 2023.
Removed
We have obtained applicable regulatory approval to sell PEDMARK ® in the U.S. and authorization from the European Commission Marketing Authorization for PEDMARQSI ® in the EU. Commercialization of PEDMARQSI ® in Europe, Australia and New Zealand will be undertaken by Norgine.
Added
In March 2024, the Company announced an exclusive licensing agreement with Norgine, which will commercialize PEDMARQSI ® in Europe, Australia and New Zealand. The licensing agreement provided us with approximately $43,200 up front and may provide us with up to approximately $230,000 in milestone and royalty payments in the future.
Removed
The Company recognizes there may still be a need to establish collaborations that provide us with up-front payments, licensing fees, milestone payments, royalties, or other revenue to further commercialize our product around the world.
Added
Further, additional issued patents included US 11,964,018 Patent (the “’US ‘018 Patent) and US 11,992,530 Patent (the “US ’530 Patent”) and US 11,998,604 Patent (the “US ’604 Patent”) covering methods of using our PEDMARK ® product to reduce ototoxicity in a patient receiving a platinum based chemotherapeutic for the treatment of a cancer.
Removed
Further, we have established Fennec HEARS ® , a comprehensive single source program designed to connect PEDMARK ® patients to both patient financial and product access support. The program offers assistance and resources, regardless of insurance type, that can address co-pays or lack of coverage when certain eligibility requirements are met.
Added
The US ‘728, US ‘984 US ‘793, US ‘018, US’530 and US ’604 patents will expire in 2039.
Removed
The 728 patent, the 984 patent and the 793 patent will expire in 2039. We are also pursuing additional patent applications in both the U.S. and abroad for PEDMARK ® .
Added
Further, the National Comprehensive Cancer Network (NCCN) recommend the use of PEDMARK ® to reduce the risk of cisplatin-induced ototoxicity in patients with localized, non-metastatic solid tumors (category 2A) for Adolescent and Young Adult (AYA) Oncology.
Removed
PEDMARK ® is a unique formulation of sodium thiosulfate in single-dose, ready-to-use vials for intravenous use in pediatric patients. PEDMARK ® is also the only therapeutic agent with proven efficacy and safety data with an established dosing paradigm, across two open-label, randomized Phase 3 clinical studies, the Clinical Oncology Group (“COG”) Protocol ACCL0431 and SIOPEL 6.
Added
As of January 2025, all medical compendia have incorporated Fennec’s clinical updates, and AHFS, the largest online platform for pharmacists, has updated its content to reflect and differentiate PEDMARK ® in accordance with its labeling. ​ PEDMARK ® is the first and only FDA- and EMA-approved agent designed to reduce the risk of cisplatin-induced hearing loss (CIO) in children with localized solid tumors.
Removed
We generated a net loss of approximately $16.05 million for the fiscal year ended December 31, 2023, and a net loss of $23.71 million for the fiscal year ended December 31, 2022. As of December 31, 2023, our accumulated deficit was approximately $219.2 million ($203.2 million at December 31, 2022).
Added
The strategic imperatives driving the execution of PEDMARK ® ’s strategy include increasing awareness of unmet patient needs and emphasizing the importance of preventing CIO among oncologists. A key goal is to establish PEDMARK ® as the standard of care (SOC) for all CIO prevention.
Removed
We believe that our cash and cash equivalents as of December 31, 2023, which totaled $13.3 million, cash from product sales, plus the remaining Petrichor Financing of $15 million in convertible notes, which are subject to mutual agreement between us and Petrichor (see Note 1 and Note 8 to consolidated financial statements contained elsewhere in this Annual Report), along with the approximately $43 million we received in the Norgine licensing deal will be sufficient to meet our cash requirements through at least the next twelve months.
Added
Additionally, efforts focus on expanding adoption beyond oncologists by ensuring healthcare providers (HCPs) gain confidence in and have positive experiences with PEDMARK ® . Ensuring seamless access for advocacy groups, payers, and providers is also a priority, along with activating patients and caregivers through disease education to drive demand for PEDMARK ® .
Removed
We anticipate the Norgine licensing deal will alleviate the need to find alternative sources of financing and help us to fund operations while we expand our markets to areas outside of U.S., Europe, Australia and New Zealand.
Added
Key activities supporting these objectives include an expanded sales team with a strong track record in both academic and community settings, partnerships with group purchasing organizations, and specialty pharmacy offerings such as home infusions, white bag delivery, and direct billing.
Removed
We continue to look to establish collaborations that will provide us with funding, for the out-license or sale of certain aspects of our intellectual property portfolio or from other sources. Our operating expenses will depend on many factors, including the progress of our commercialization efforts and efficiency of our operations and current resources.
Added
Furthermore, digital materials, a digital speaker bureau to engage pediatric oncologists, audiologists, nurses, and pharmacists, along with a patient access services hub and ongoing support from advocacy groups, are all integral components of the strategy. ​ In the U.S. and Europe, it is estimated that more than 10,000 pediatric may receive platinum-based chemotherapy on an annual basis.
Removed
Our research and development expenses, which include expenses associated with our clinical trials, drug manufacturing to support clinical programs, consulting fees, sponsored research costs, toxicology studies, license fees, milestone payments, and other fees and costs related to the commercialization of our product, will depend on the availability of financial resources, the results of our clinical trials, and any directives from regulatory agencies, which are difficult to predict.
Added
The U.S. pediatric oncology landscape includes approximately 200 targeted pediatric hospital centers, such as those within the Children's Oncology Group (COG), National Cancer Institute (NCI), and National Comprehensive Cancer Network (NCCN) institutions.
Removed
Our general and administration expenses include expenses associated with the compensation of employees, stock-based compensation, professional fees, consulting fees, insurance and other administrative matters associated in support primarily of our commercialization of PEDMARK ® .
Added
Around 80% of pediatric cancer patients receive treatment at these key centers. 77 Table of Contents The Adolescent and Young Adult (AYA) oncology patient is defined as an individual between the ages of 15 and 39 at the time of initial cancer diagnosis.
Removed
In fiscal 2022, the Company had gross profit of $1.4 million. 75 Table of Contents ● Research and development expense decreased by $3.5 million in fiscal 2023 as compared to fiscal 2022. The Company reduced research and development costs when it received FDA approval of PEDMARK ® .
Added
In the U.S., Fennec estimates that approximately 20,000 cisplatin chemotherapy patients are treated annually with the primary tumor types of thyroid cancer, breast cancer, germ cell cancer and testicular cancer. The U.S. Adolescent and Young Adult (AYA) oncology landscape is shaped by a combination of academic and community centers across the nation.
Removed
Once FDA approval was obtained for PEDMARK ® , almost all research and development activities ceased. ● The Company began incurring selling and marketing expenses when it expanded its payroll to include an internal sales force. Selling and marketing expenses include distribution costs, logistics, shipping and insurance, advertising, wages commissions and out-of-pocket expenses.
Added
Academic institutions play a critical role in establishing the treatment framework, with 72 NCI-designated academic centers treating approximately 20% of AYA oncology patients.
Removed
The Company recorded $12.1 million in selling and marketing expenses in fiscal 2023, compared to $2.8 million in fiscal year 2022.
Added
It is estimated that greater than 50% of pediatric patients may suffer permanent hearing loss as a result of CIO and approximately 40-80% of adult patients may suffer permanent hearing loss as a result of CIO.
Removed
The increase relates to increased headcount and marketing expenses associated with the launch of PEDMARK as well as distribution and other fees paid to certain distributors in connection with the sales of our products. ● There was a $2.9 million increase in general and administrative expenses in fiscal 2023 compared to fiscal 2022.
Added
European Commission Marketing Authorization PEDMARQSI ® (PEDMARK ® brand name in Europe.) received European Commission Marketing Authorization in June 2023 and received U.K. approval in October 2023. As previously noted, in March 2024, we entered into an agreement with Norgine, a leading European specialist pharmaceutical company.
Removed
Non-cash expenses associated with equity remuneration increased by $1.3 million in fiscal year 2023 over 2022. Payroll and benefits related expenses rose by $0.7 million in fiscal 2023 compared to fiscal 2022.
Added
PEDMARQSI ® is the first and only approved therapy in the EU and U.K. for the prevention of ototoxicity (hearing loss) induced by cisplatin chemotherapy in patients 1 month to ​ Under the terms of the licensing agreement, Fennec received approximately $43 million in upfront consideration and may receive up to approximately $230 million in additional commercial and regulatory milestone payments and double-digit tiered royalties on net sales of PEDMARQSI ® in the licensed territories up to the mid-twenties.
Removed
The Processa shares are marked to market at each balance sheet date with the resulting change in value being booked as an unrealized gain or loss. ● Amortization expense increased $0.1 million in fiscal 2023. ● Interest expenses were up by $2.4 million in fiscal 2023 compared to fiscal 2022.
Added
Norgine will be responsible for all commercialization activities in the licensed territories and will hold all marketing authorizations in the licensed territories. Most recently, in December 2024, PEDMARQSI received positive final draft guidance from the National Institute for Health and Care Excellence (NICE).
Removed
Quarterly Information The following table presents selected consolidated financial data for each of the last eight quarters through December 31, 2023, as prepared under generally accepted accounting principles within the United States, or U.S.
Added
Our research and development activities for this period consisted of costs associated with investigator initiated clinical trials. ● Selling and marketing expenses include distribution costs, logistics, shipping and insurance, advertising, wages commissions and out-of-pocket expenses. We recorded $18.4 million in selling and marketing expenses for 2024, compared to $12.1 million for 2023.
Removed
GAAP (dollars in thousands, except per share information). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (Loss)/Income for the ​ Basic Net (Loss)/Income per ​ Diluted Net (Loss)/Income per Period Period Common Share Common Share March 31, 2022 ​ (3,696) ​ (0.14) ​ (0.14) June 30, 2022 ​ (5,072) ​ (0.19) ​ (0.19) September 30, 2022 ​ (8,089) ​ (0.31) ​ (0.31) December 31, 2022 ​ ​ (6,857) ​ ​ (0.26) ​ ​ (0.26) March 31, 2023 ​ (6,052) ​ (0.23) ​ (0.23) June 30, 2023 ​ (5,444) ​ (0.21) ​ (0.21) September 30, 2023 ​ (1,867) ​ (0.07) ​ (0.07) December 31, 2023 ​ ​ (2,682) ​ ​ (0.10) ​ ​ (0.10) ​ ​ ​ ​ ​ ​ ​ 76 Table of Contents ​ Quarter ended December 31, 2023 versus 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter Ended ​ ​ ​ Quarter Ended ​ ​ Increase In thousands of U.S.
Added
Net financing activities in fiscal 2024 provided approximately $20.3 million less than in fiscal 2023. This was mainly from $5 million being borrowed in 2023 and $13 million being paid back in 2024 on the Petrichor notes, net of fees, and approximately $0.5 million less arising from various option exercises in 2024 versus 2023.
Removed
Dollars December 31, 2023 % December 31, 2022 % (Decrease) PEDMARK (R) product sales, net ​ $ 9,735 ​ $ 1,535 ​ $ 8,200 Cost of product sales ​ ​ (685) ​ ​ ​ ​ (86) ​ ​ ​ ​ (599) Gross profit ​ ​ 9,050 ​ ​ ​ ​ 1,449 ​ ​ ​ ​ 7,601 Operating expenses: ​ ​ ​ Research and development ​ 32 0.3 % 117 36 % (85) Selling and marketing ​ ​ 3,868 ​ 36 % ​ 2,785 ​ — % ​ 1,083 General and administration ​ 6,968 64 % 4,682 64 % 2,286 Total operating expense ​ 10,868 100 % 7,584 100 % 3,284 Loss from operations ​ 1,818 ​ 6,135 ​ (4,317) Unrealized (loss)/gain on securities ​ 4 ​ (58) ​ 62 Interest income ​ 115 ​ 153 ​ (38) Amortization expense ​ (70) ​ (70) ​ — Interest expense ​ ​ (915) ​ ​ ​ ​ (744) ​ ​ ​ ​ (171) Other (loss), net ​ 2 ​ (3) ​ 5 Net loss ​ $ (2,682) ​ $ (6,857) ​ $ 4,175 ​ Revenues reported for the three months ended December 31, 2023, were $9.7 million, which is an increase of $8.2 million over the same period in 2022.
Added
At December 31, 2024, we had approximately $26.6 million in our cash accounts and $24.6 million in savings and money market accounts.
Removed
Gross profit from sales of PEDMARK ® increased by $7.6 million for the three months ended December 31, 2023, over the same period in 2022. We reported a loss from operations of $1.8 million for the three months ended December 31, 2023, compared to a loss from operations of $6.1 million for the same period in 2022.
Added
These estimates are based on assumptions and judgments that may be affected by commercial, economic and other factors. Actual results could differ from these estimates.
Removed
Research and development expenses decreased by $0.09 for the three months ended December 31, 2023, over the same period in 2022. The Company recorded selling and marketing expenses of $3.9 million in the quarter ended December 31, 2023, as compared to $2.8 million in the same period in 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed4 unchanged
Biggest changeWe have not experienced any loss or write down of our money market investments for the years ended December 31, 2023 and 2022; however, the amounts we hold in money market accounts are substantially above the $250,000 amount insured by the FDIC and may lose value.
Biggest changeWe have not experienced any loss or write 84 Table of Contents down of our money market investments for the years ended December 31, 2024 and 2023; however, the amounts we hold in money market accounts are substantially above the $250,000 amount insured by the FDIC and may lose value.
To date, we have not employed the use of derivative instruments; however, we do hold Canadian dollars and Euros which we use to pay vendors in Canada and the EU in addition to other corporate obligations. At December 31, 2023, we held approximately CAD$0.47 and €0.1. ​
To date, we have not employed the use of derivative instruments; however, we do hold Canadian dollars and Euros which we use to pay vendors in Canada and the EU in addition to other corporate obligations. At December 31, 2024, we held approximately CAD$0.16 million and €0.24 million. ​
At December 31, 2023, we had $11.9 million in money market investments and savings accounts as compared to $23.5 million at December 31, 2022; these investments typically have minimal risk.
At December 31, 2024, we had $24.6 million in money market investments and savings accounts as compared to $11.9 million at December 31, 2023; these investments typically have minimal risk.

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