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What changed in FENNEC PHARMACEUTICALS INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FENNEC PHARMACEUTICALS INC.'s 2024 and 2025 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 2025 report.

+386 added−307 removedSource: 10-K (2026-03-27) vs 10-K (2025-03-26)

Top changes in FENNEC PHARMACEUTICALS INC.'s 2025 10-K

386 paragraphs added · 307 removed · 242 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

81 edited+58 added−27 removed219 unchanged
Biggest changeWhile European, U.S. and Canadian regulatory systems require that medical products be safe, effective, and manufactured according to high quality standards, the drug approval process in Europe differs from that in the U.S. and Canada and may require us to perform additional preclinical or clinical testing regardless of whether FDA or TPD approval has been obtained.
Biggest changeIt is possible the FDA and its counterparts in other countries may not (i) allow clinical trials to proceed at any time after receiving an IND, (ii) allow further clinical development phases after authorizing a previous phase, or (iii) approve marketing of a drug after the completion of clinical trials. 15 Table of Contents While European, U.S. and Canadian regulatory systems require that medical products be safe, effective, and manufactured according to high quality standards, the drug approval process in Europe differs from that in the U.S. and Canada and may require us to perform additional preclinical or clinical testing regardless of whether FDA or TPD approval has been obtained.
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.
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.
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.
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.
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.
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.
There is also a risk that third parties may hold proprietary rights that preclude us from marketing our product candidate or that others will market a superior or equivalent product. As a result of these factors, we are unable to accurately estimate the nature, timing and future costs necessary to complete future development of PEDMARK ® .
There is also a risk that third parties may hold proprietary rights that preclude us from marketing our product or that others will market a superior or equivalent product. As a result of these factors, we are unable to accurately estimate the nature, timing and future costs necessary to complete future development of PEDMARK ® .
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.
For example, it is possible that our product 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.
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.
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 12 Table of Contents have been completed, and DB-020, a clinical stage candidate completed a Phase1b trial by Decibel Therapeutics with future development unclear.
On May 28, 2024, we were granted US 11,992,530 Patent (the “ ’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.
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.
On April 23, 2024, we were granted US 11,964,018 Patent (the “ ’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.
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.
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.
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; ● 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.
Once an approval is granted, the FDA may withdraw the approval if, among other things, there is information that the drug is unsafe for use under the approved conditions of use; new information or evidence that, evaluated together with evidence available to the FDA at the time of approval, shows that the drug is not shown to be safe for use under the approved conditions of use; new information that, evaluated together with the evidence available to the FDA at the time of approval, shows there is a lack of substantial evidence of effectiveness; the approved application contains an untrue statement of material fact; or that the required patient information was not submitted within 30 days after receiving notice from the FDA of the failure to submit such information.
Once an approval is granted, the FDA may withdraw the approval if, among other things, there is information that the drug is unsafe for use under the approved conditions of use; new information or evidence that, evaluated together with evidence available to the FDA at the time of approval, shows that the drug is not shown to be safe for use under the approved conditions of use; new information that, evaluated together with the evidence available to the FDA at the time of approval, 16 Table of Contents shows there is a lack of substantial evidence of effectiveness; the approved application contains an untrue statement of material fact; or that the required patient information was not submitted within 30 days after receiving notice from the FDA of the failure to submit such information.
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.
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.
If a product which has an orphan drug designation subsequently receives the first FDA approval for that drug for the indication for which it has such designation, the product is entitled to orphan exclusivity, i.e., the FDA may not approve any other application submitted by a different applicant to market the same drug for the same indication for a period of seven years following marketing approval, except in certain very limited circumstances, such as if the later product is shown to be clinically superior to the approved product with orphan drug exclusivity.
If a product which has an orphan drug designation subsequently receives the first FDA approval for that drug for the indication for which it has such designation, the product is entitled to orphan exclusivity, i.e., the FDA may not approve any other 17 Table of Contents application submitted by a different applicant to market the same drug for the same indication for a period of seven years following marketing approval, except in certain very limited circumstances, such as if the later product is shown to be clinically superior to the approved product with orphan drug exclusivity.
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.
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 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. 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.
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. 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.
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.
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.
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.
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. 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 17 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 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 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.
All manufacturing facilities, as well as records required to be maintained under FDA 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.
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.
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 have sought to include leading scientific investigators and advisors to enhance our internal capabilities.
Members of the public may also read and copy any materials we file with, or furnish to, the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. To obtain information on the operation of the Public Reference Room, please call the SEC at 1-800-SEC-0330.
Members of the public may 26 Table of Contents also read and copy any materials we file with, or furnish to, the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. To obtain information on the operation of the Public Reference Room, please call the SEC at 1-800-SEC-0330.
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.
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 cancer.
Third party payors are increasingly challenging the prices charged for medicines and examining their cost effectiveness, in addition to their safety and efficacy. We may need to conduct expensive pharmacoeconomic or other studies in order to further demonstrate the value of our product.
Third party payors are increasingly 20 Table of Contents challenging the prices charged for medicines and examining their cost effectiveness, in addition to their safety and efficacy. We may need to conduct expensive pharmacoeconomic or other studies in order to further demonstrate the value of our product.
Each manufacturer of a drug approved under an NDA is required to enter into a Medicare Part D coverage gap discount agreement and provide a 70% discount on those drugs dispensed to Medicare beneficiaries in the coverage gap, in order for its drugs to be reimbursed by Medicare Part D.
Each manufacturer of a drug approved under an NDA is required to enter into a Medicare Part D coverage gap discount agreement and provide a 70% 24 Table of Contents discount on those drugs dispensed to Medicare beneficiaries in the coverage gap, in order for its drugs to be reimbursed by Medicare Part D.
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.
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 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.
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 applications are, in part, exempt from fees.
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.
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 8 Table of Contents 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.
Given the complexities and uncertainties of patent laws, there can be no assurance as to the impact that future patent claims against us may have on our business, financial condition, results of operations, or prospects.
Given the complexities and 5 Table of Contents uncertainties of patent laws, there can be no assurance as to the impact that future patent claims against us may have on our business, financial condition, results of operations, or prospects.
In the United States, Orphan Drug Designation must be requested before submitting an application for marketing approval. An Orphan Drug Designation does not shorten the duration of the regulatory review and approval process. The grant of an Orphan Drug Designation request does not alter the standard regulatory requirements and process for obtaining marketing approval.
In the United States, Orphan Drug Designation must be requested before submitting an application for marketing approval. 21 Table of Contents An Orphan Drug Designation does not shorten the duration of the regulatory review and approval process. The grant of an Orphan Drug Designation request does not alter the standard regulatory requirements and process for obtaining marketing approval.
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 5 Table of Contents a priority, along with activating patients and caregivers through disease education to drive demand for PEDMARK ® .
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 ® .
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.
In addition to retroactive rebates, if a manufacturer 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.
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.
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.
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.
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 this method of manufacturing claims was affirmed by the PTAB in a Written Decision in favor of Fennec in September 2023. U.S.
If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired. A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification.
If the applicant 18 Table of Contents does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired. A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification.
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.
To facilitate talent attraction and retention, we strive to make Fennec an inclusive, 25 Table of Contents safe, and healthy workplace, with opportunities for employees to grow and develop in their careers, supported by strong compensation, benefits, health and welfare programs.
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.
Patent No. 10,596,190 (the “US ‘190 Patent”), in-licensed from Oregon Health and Sciences University, was previously listed in the Orange Book. 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 ANDA development process typically does not require new pre-clinical or clinical studies, but it does typically require one or more bioequivalence studies to show that the ANDA drug is bioequivalent to the previously approved brand name reference listed drug.
The ANDA development process typically does not require new pre-clinical or clinical studies, but it does typically require one or more bioequivalence studies to show that 19 Table of Contents the ANDA drug is bioequivalent to the previously approved brand name reference listed drug.
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.
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 CIO in pediatric patients with localized solid tumors.
Since we contract with third parties to manufacture our product, our contract manufacturers are required to comply with all applicable environmental laws and regulations that affect the manufacturing process. As a result, we do not believe that we will have any significant direct exposure to environmental issues.
Since we contract with third parties to manufacture our product, our contract manufacturers are required to comply with all applicable environmental laws and regulations that affect the manufacturing process. As a result, we do not believe that we will have any significant direct exposure to environmental issues. Competition The biotechnology and pharmaceutical industries are extremely competitive.
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. We own five additional pending US patent applications directed to additional sodium thiosulfate pharmaceutical formulations and methods of treatment using such formulations.
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. 9 Table of Contents We own one granted (US ‘026 Patent) and four additional pending US patent applications directed to additional sodium thiosulfate pharmaceutical formulations and methods of treatment using such formulations.
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.
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; 13 Table of Contents ● 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.
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.
Research and development issues are reviewed internally by our executive management and supporting scientific team. Research and development expenses totaled $250 and $310 for the fiscal years ended December 31, 2025 and 2024, 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 20, 2023, we filed an Amended Complaint to assert infringement of the ’728 Patent and the ’984 Patent.
On 10 Table of Contents April 20, 2023, we filed an Amended Complaint to assert infringement of the US ‘728 Patent and the US ‘984 Patent.
The non-asserted patents remain listed in the Orange Book. 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.
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.
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 FDA does not regulate the behavior of physicians in their choice of treatments for their individual patients. 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 specified in the FDA-approved labeling.
None of our employees are covered by a collective bargaining agreement. We believe our relationship with our employees and consultants is good. Compensation and Benefits Our compensation philosophy is to provide pay and benefits that are competitive in the biotechnology and pharmaceutical industry where we compete for talent.
We believe our relationship with our employees and consultants is good. Compensation and Benefits Our compensation philosophy is to provide pay and benefits that are competitive in the biotechnology and pharmaceutical industry where we compete for talent.
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 ® .
In the United States, we sell our product through an experienced field force including Regional Pediatric Oncology Specialists and we utilize medical science liaisons within our medical team who help educate the medical communities and patients about CIO and our programs supporting patient access to PEDMARK ® .
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).
To date, Fennec has not received any milestone payments. Norgine will be responsible for all commercialization activities in the licensed territories and will hold all marketing authorizations in the licensed territories. In December 2024, PEDMARQSI ® received positive final draft guidance from the National Institute for Health and Care Excellence (NICE).
Generally, the steps required for drug approval in Canada and the United States, specifically in cancer related therapies, include: ● Preclinical Studies : Preclinical studies, also known as non-clinical studies, primarily involve evaluations of pharmacology, toxic effects, pharmacokinetics and metabolism of a drug in animals to provide evidence of the relative safety and bioavailability of the drug prior to its administration to humans in clinical studies.
The systems of new drug approvals in Canada and the United States are substantially similar and are generally considered to be among the most rigorous in the world. 14 Table of Contents Generally, the steps required for drug approval in Canada and the United States, specifically in cancer related therapies, include: ● Preclinical Studies : Preclinical studies, also known as non-clinical studies, primarily involve evaluations of pharmacology, toxic effects, pharmacokinetics and metabolism of a drug in animals to provide evidence of the relative safety and bioavailability of the drug prior to its administration to humans in clinical studies.
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.
We protect such information principally through confidentiality agreements with our employees, consultants, outside scientific collaborators, and other advisers. 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.
On June 4, 2024, we were granted US 11,998,604 Patent (the “ ’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. 9 Table of Contents 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.
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.
Government Programs for Marketed Drugs Medicaid, the 340B Drug Pricing Program, and Medicare Federal law requires that a pharmaceutical manufacturer, as a condition of having its products receive federal reimbursement under Medicaid and Medicare Part B, must pay rebates to state Medicaid programs for all units of its covered outpatient drugs dispensed to Medicaid beneficiaries and paid for by a state Medicaid program under either a fee-for-service arrangement or through a managed care organization.
We serialize our product at both the package and homogeneous case level, pass serialization and required transaction information to our customers, and believe that we comply with all such requirements. ​ ​ 23 Table of Contents Government Programs for Marketed Drugs Medicaid, the 340B Drug Pricing Program, and Medicare Federal law requires that a pharmaceutical manufacturer, as a condition of having its products receive federal reimbursement under Medicaid and Medicare Part B, must pay rebates to state Medicaid programs for all units of its covered outpatient drugs dispensed to Medicaid beneficiaries and paid for by a state Medicaid program under either a fee-for-service arrangement or through a managed care organization.
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.
Additional patents covering PEDMARK ® formulation have been granted in Australia, Canada, the European Patent Office (EPO) (described further below), Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, and Russia, and patent applications covering PEDMARK ® are pending in Brazil, China, the European Patent Office (EPO), Hong Kong, Israel, Korea, Mexico, New Zealand, Singapore, and Thailand.
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.
Employee Profile As of December 31, 2025, we had approximately 35 employees, 19 of whom are in our commercial 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. None of our employees are covered by a collective bargaining agreement.
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.
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. We plan to vigorously defend our intellectual property rights to PEDMARK ® if challenged.
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.
This patent will expire in July 2039, unless held invalid or unenforceable by a court of final jurisdiction. 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.
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.
Our patent position and proprietary rights are subject to various risks and uncertainties. Please 11 Table of Contents 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.
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.
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. On October 17, 2022, we announced commercial availability of PEDMARK ® in the United States.
Disclosure of results of these trials can be delayed in certain circumstances for up to two years after the date of completion of the clinical trial. Competitors may use this publicly-available information to gain knowledge regarding the progress of development programs.
Disclosure of results of these trials can be delayed in certain circumstances for up to two years after the date of completion of the clinical trial.
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.
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.
Anti-Kickback, False Claims Laws & the Prescription Drug Marketing Act In addition to FDA restrictions on marketing of drug products, other state and federal laws have been applied to restrict certain marketing practices in the pharmaceutical industry in recent years. These laws include anti-kickback statutes and false claims statutes.
Competitors may use this publicly-available information to gain knowledge regarding the progress of development programs. ​ 22 Table of Contents Anti-Kickback, False Claims Laws & the Prescription Drug Marketing Act In addition to FDA restrictions on marketing of drug products, other state and federal laws have been applied to restrict certain marketing practices in the pharmaceutical industry in recent years.
In coordination with the Third Amended Complaint, we entered into a covenant not to sue CIPLA on the US ‘363 Patent, ‘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.
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. ​ On May 27, 2025, we were granted US 12,311,026 (the “US ‘026 Patent”) covering a method of using pharmaceutical compositions comprising sodium thiosulfate and specific stabilizers to reduce ototoxicity in a patient receiving a platinum based chemotherapeutic for the treatment of a cancer.
We cannot give any assurances that we can compete effectively with these other biotechnology and pharmaceutical companies. Now that PEDMARK ® has regulatory approval for sale, it will compete on the basis of drug efficacy, safety, patient convenience, reliability, ease of manufacture, price, marketing, distribution, and patent protection, among other variables.
Now that PEDMARK ® has regulatory approval for sale, it will compete on the basis of drug efficacy, safety, patient convenience, reliability, ease of manufacture, price, marketing, distribution, and patent protection, among other variables. Our competitors may develop technologies or drugs that are more effective, safer or more affordable than PEDMARK ® .
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.
To date, Fennec has not received any milestone payments. Norgine will be responsible for all commercialization activities in the licensed territories and will hold all marketing authorizations in the licensed territories.
Our competitors may develop technologies or drugs that are more effective, safer or more affordable than PEDMARK ® . We are not aware of any commercially available agents that reduce the incidence of hearing loss associated with the use of platinum-based anti-cancer agents, which is the purpose of PEDMARK ® .
We are not aware of any commercially available agents that reduce the incidence of hearing loss associated with the use of platinum-based anti-cancer agents, which is the purpose of PEDMARK ® . However, there are several potential competitive agents with activity in preclinical or limited clinical settings.
This is an exclusive licensing agreement under which Norgine will commercialize PEDMARQSI ® in Europe, Australia and New Zealand.
As previously noted, in March 2024, we entered into an agreement with Norgine, a leading European specialist pharmaceutical company. This is an exclusive licensing agreement under which Norgine will commercialize PEDMARQSI ® in Europe, Australia and New Zealand.
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”).
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 ® .
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.
PEDMARK ® is the first and only therapy approved in the U.S. to reduce the risk of ototoxicity associated with cisplatin in pediatric patients one month of age and older with localized, non-metastatic solid tumors.
(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”).
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”). With the exception of Fennec Pharmaceuticals, Inc. and Fennec Limited, all subsidiaries are inactive.
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 .
The certifications allege these patents are invalid or will not be infringed by the manufacture, use, or sale of CIPLA’s sodium thiosulfate solution .
PEDMARQSI ® is the first and only approved therapy in the EU 6 Table of Contents 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.
During 2025, Norgine made PEDMARQSI ® commercially available and expects additional launches to occur in 2026 and beyond. ​ 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.
We are also pursuing additional patent applications in both the U.S. and internationally for PEDMARK ® . ​ There can be no assurance that we do not or will not infringe on patents held by third parties or that third parties in the future will not claim that we have infringed on their patents.
Applications from these patent families, where granted, valid, and enforceable, will expire in July 2039, exclusive of any patent term adjustment or extension ​ There can be no assurance that we do not or will not infringe on patents held by third parties or that third parties in the future will not claim that we have infringed on their patents.
The US ‘728, US ‘984, US ‘793, US ‘018, US ‘530 and US ‘604 Patents will expire in 2039. We are also pursuing additional patent applications in both the U.S. and internationally for PEDMARK ® .
The US ‘728, US ‘984, US ‘793, US ‘018, US ‘530, and US ‘604 Patents will expire in 2039.
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.
For fiscal year 2025, the application fee is $321,920 per ANDA application, and the facility fees are $231,952 per domestic finished dosage form facility, $246,952 per foreign finished dosage form facility, $41,580 per domestic active pharmaceutical ingredient facility, and $56,580 per foreign active pharmaceutical ingredient facility.
Many of our potential competitors have significantly more financial, technical and other resources than we do, which may give them a competitive advantage. In addition, they may have substantially more experience in effecting strategic combinations, in-licensing technology, developing drugs, obtaining regulatory approvals and manufacturing and marketing products.
Our potential competitors are many in number and include major and mid-sized pharmaceutical and biotechnology companies. Many of our potential competitors have significantly more financial, technical and other resources than we do, which may give them a competitive advantage.
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.
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, Fennec estimates that there are approximately 11,400 pediatric patients with localized, non-metastatic solid tumors each year, of which include approximately 2,157 cisplatin-treated pediatric patients in the U.S. and 1,250 in Europe who fall within the current PEDMARK ® market.
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.
Fennec is a commercial stage specialty pharmaceutical company dedicated to preventing cisplatin-induced ototoxicity (“CIO”) , a serious and often irreversible side effect of cancer treatment, with one FDA approved and European Commission approved product, PEDMARK ® in the U.S. and PEDMARQSI ® , which is the branded name for PEDMARK ® in Europe, the U.K., Australia and New Zealand (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.
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.
In the U.S., Fennec estimates that there are approximately 51,282 new AYA solid tumor cases annually, of which approximately 20,858 involve cisplatin-treated patients with localized, non-metastatic solid tumors. The most common relevant tumor types include germ cell tumors, testicular cancer, thyroid cancer and breast cancer. The U.S.
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 incidence and severity of CIO depends on the cumulative dose and duration of chemotherapy. Many affected children ultimately require hearing aids or, in more severe cases, cochlear implants, which are costly, technically complex and do not fully restore normal hearing.
On November 5, 2024, the European Patent Office notified Fennec of its intent to grant European Patent Application No 19830950.2, which covers the pharmaceutical formulation of PEDMARQSI ® (EU Brand name for PEDMARK ® ) . This patent, when granted, will expire in July 2039, unless held invalid or unenforceable by a court of final jurisdiction.
Applications from these patent families, where granted, valid, and enforceable, will expire in July 2039, exclusive of any patent term adjustment or extension. ​ On June 18, 2025, the European Patent Office issued European Patent No 3817751B, which covers the pharmaceutical formulation of PEDMARQSI ® (EU Brand name for PEDMARK ® ) .

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn 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.
Biggest changeIn particular, Essetifin SpA, owns approximately 4.0 million shares, or approximately 11.6% of our issued and outstanding common shares, Rosalind Advisors Inc. reported beneficial ownership of 2.7 million shares, or approximately 8.0% of our outstanding common shares, Southpoint Capital Advisors LP (“Southpoint Capital”) owns or exercises control over approximately 2.7 million 65 Table of Contents shares, representing approximately 8.0% of our issued and outstanding common shares; Sonic Fund II, LP, owns approximately 2.6 million shares, or approximately 7.6% of our issued and outstanding common shares; 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.
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.
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.
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 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.
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.
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. 51 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.
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, 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; ● 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. 29 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.
It is also possible that the overall scope of Section 404 may be revised in the future, thereby causing ourselves to review, revise or reevaluate our internal control processes, which may result in the expenditure of additional human and financial resources. ​ 64 Table of Contents Risks Related to Information Technology ​ If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences. ​ In the ordinary course of our business, we and the third parties upon which we rely, process proprietary, confidential, and sensitive data, including personal data (such as health-related data), intellectual property, trade secrets and any other sensitive data. ​ Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties upon which we rely.
It is also possible that the overall scope of Section 404 may be revised in the future, thereby causing ourselves to review, revise or reevaluate our internal control processes, which may result in the expenditure of additional human and financial resources. ​ 67 Table of Contents Risks Related to Information Technology ​ If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences. ​ In the ordinary course of our business, we and the third parties upon which we rely, process proprietary, confidential, and sensitive data, including personal data (such as health-related data), intellectual property, trade secrets and any other sensitive data. ​ Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties upon which we rely.
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.
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; 60 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.
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.
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; 43 Table of Contents ● 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.
If our operations or those of third parties with whom we conduct business are impaired or curtailed as a result of these events, the development and commercialization of our product and product candidate could be impaired or halted, which could have a material adverse impact on our business.
If our operations or those of third parties with whom we conduct business are impaired or curtailed as a result of these events, the development and commercialization of our product could be impaired or halted, which could have a material adverse impact on our business.
We have entered into, and may in the future enter into, strategic transactions for the research, development and commercialization of PEDMARK. If any of these transactions are not successful, then we may not be able to capitalize on the market potential of such product candidates.
We have entered into, and may in the future enter into, strategic transactions for the research, development and commercialization of PEDMARK. If any of these transactions are not successful, then we may not be able to capitalize on the market potential of such product.
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.
Restrictions under applicable federal and state anti-bribery and healthcare laws and regulations include the following: 50 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.
In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties, or enter into development collaborations that would help us develop our product’s market fully. 56 Table of Contents Changes in United States patent law could diminish the value of patents in general, thereby impairing our ability to protect our product.
In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties, or enter into development collaborations that would help us develop our product’s market fully. 59 Table of Contents Changes in United States patent law could diminish the value of patents in general, thereby impairing our ability to protect our product.
We cannot predict whether other legislative changes will be adopted or how such changes would affect the pharmaceutical industry generally and specifically the commercialization of PEDMARK ® . 46 Table of Contents If we fail to obtain or subsequently maintain orphan drug exclusivity or regulatory exclusivity for PEDMARK ® , our competitors may sell products to treat the same conditions at greatly reduced prices, and our revenues would be significantly adversely affected.
We cannot predict whether other legislative changes will be adopted or how such changes would affect the pharmaceutical industry generally and specifically the commercialization of PEDMARK ® . 49 Table of Contents If we fail to obtain or subsequently maintain orphan drug exclusivity or regulatory exclusivity for PEDMARK ® , our competitors may sell products to treat the same conditions at greatly reduced prices, and our revenues would be significantly adversely affected.
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.
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 33 Table of Contents compliance inspections and approvals of any replacement manufacturer, all of which factors could result in production delays and additional commercialization costs.
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.
We currently carry liability insurance that we believe to be adequate. Our insurance may not reimburse us for certain claims or the coverage may not be sufficient to cover claims made against us.
We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise improperly used or disclosed confidential information of these third parties or our employees’ former employers. 58 Table of Contents Further, we may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved in developing our product.
We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise improperly used or disclosed confidential information of these third parties or our employees’ former employers. 61 Table of Contents Further, we may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved in developing our product.
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.
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.
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.
Furthermore, because of the limited market and generally low volume of trading in our common shares, our 64 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.
In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised. 65 Table of Contents While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised. 68 Table of Contents While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
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.
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. 52 Table of Contents We plan to rely on third parties to conduct clinical trials for our product.
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.
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 62 Table of Contents affected by any delays in, or termination of, our clinical trials.
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.
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, 2025. 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.
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.
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. 66 Table of Contents We have not paid any dividends since incorporation and do not anticipate declaring any dividends in the foreseeable future.
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.
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 concluded litigation against CIPLA, as described elsewhere in this Annual Report.
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.
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 54 Table of Contents we may institute litigation against others who we believe are infringing our intellectual property rights.
If our distributors fail to perform, it may have a material adverse effect on our revenue, profitability, and ability to achieve our business objectives. 50 Table of Contents Risks Related to Our Intellectual Property Our commercial success will rely upon the strength of our patents to exclude competition.
If our distributors fail to perform, it may have a material adverse effect on our revenue, profitability, and ability to achieve our business objectives. 53 Table of Contents Risks Related to Our Intellectual Property Our commercial success will rely upon the strength of our patents to exclude competition.
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.
For all of these reasons, we may not be able to compete successfully. 30 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.
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.
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. 56 Table of Contents We may not be able to protect our intellectual property rights throughout the world.
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.
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. 63 Table of Contents In many markets, the pricing or profitability of healthcare products is subject to government control.
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.
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 we are unable to obtain patent 54 Table of Contents term extension/restoration or some other exclusivity, we could be subject to increased competition and our opportunity to establish or maintain product revenue could be substantially reduced or eliminated.
If we are unable to obtain patent 57 Table of Contents term extension/restoration or some other exclusivity, we could be subject to increased competition and our opportunity to establish or maintain product revenue could be substantially reduced or eliminated.
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.
These and other new provisions are likely to continue the pressure on pharmaceutical pricing, may require us to modify our 48 Table of Contents 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.
We have entered into, and may enter into in the future, strategic transactions, such as out-licensing of product candidates or technologies. For example, in March 2024, we entered into a collaboration and license agreement with Norgine.
We have entered into, and may enter into in the future, strategic transactions, such as out-licensing of our product or technologies. For example, in March 2024, we entered into a collaboration and license agreement with Norgine.
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.
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. 36 Table of Contents Liability claims may be expensive to defend and may result in large judgments against us.
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.
As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product may be subject to 58 Table of Contents claims of infringement of the patent rights of third parties.
In addition, periods of marketing exclusivity for PEDMARK ® have been granted in the United States under orphan drug exclusivity and in Europe under PUMA. We may be required to obtain licenses under patents or other proprietary rights of third parties, but the extent to which we may wish or need to do so is unknown.
In addition, periods of marketing exclusivity for PEDMARK ® have been granted in the United States under orphan drug exclusivity and in Europe under PUMA. 32 Table of Contents We may be required to obtain licenses under patents or other proprietary rights of third parties, but the extent to which we may wish or need to do so is unknown.
Reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a product is, among other things: ● a covered benefit under its health plan; ● safe, effective and medically necessary; ● appropriate for the specific patient; ● cost-effective; and ● neither experimental nor investigational.
Reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a product is, among other things: ● a covered benefit under its health plan; ● safe, effective and medically necessary; ● appropriate for the specific patient; ● cost-effective; and 44 Table of Contents ● neither experimental nor investigational.
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 28 Table of Contents commercial potential of PEDMARK ® will be limited.
The FDA and the Competent Authorities of the Member States of the European Economic Area, or EEA, and comparable foreign regulatory authorities, may also inspect our clinical trial sites and audit clinical study data to ensure that our studies are properly conducted in accordance with the IND regulations, human subject protection regulations, cGCP.
The FDA and the Competent Authorities of the Member States of the European Economic Area, or EEA, and comparable foreign regulatory authorities, may also inspect our clinical trial sites and audit clinical study data to ensure that our studies are 38 Table of Contents properly conducted in accordance with the IND regulations, human subject protection regulations, cGCP.
Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. If reimbursement of our product is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be adversely affected.
Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of 46 Table of Contents publication and other countries. If reimbursement of our product is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be adversely affected.
Furthermore, negative posts or comments about us or our products in social media could seriously damage our reputation, brand image, and goodwill. ​ ​ Item 1B. Unresolved Staff Comments None. ​ 66 Table of Contents
Furthermore, negative posts or comments about us or our products in social media could seriously damage our reputation, brand image, and goodwill. ​ ​ Item 1B. Unresolved Staff Comments None. ​ 69 Table of Contents
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 ® .
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 regarding our NDA for PEDMARK ® .
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.
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. Our business and operations could be adversely affected by the effects of health epidemics, like the recent COVID-19 pandemic.
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.
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.
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.
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.
If we fail to arrange for sufficient capital on a timely basis, we may be required to curtail our business activities until we can obtain adequate financing. Debt financing must be repaid regardless of whether or not we generate profits or cash flows from our business activities.
If we fail to arrange for sufficient capital on a timely basis, we 27 Table of Contents may be required to curtail our business activities until we can obtain adequate financing. Debt financing must be repaid regardless of whether or not we generate profits or cash flows from our business activities.
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.
Whether or not we are ultimately successful in any adverse litigation, such litigation could 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.
In addition, the Affordable Care Act provided that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.
In addition, the Affordable Care Act provided that the government may assert 41 Table of Contents that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.
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.
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 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.
We may also issue further warrants as part of any future financings in addition to the additional 0.7 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.
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.
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.
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.
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.
However, we may fail to apply for patents on important technologies or product in a timely fashion, or at all. Our existing patents and any future patents we obtain may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products and technologies.
However, we may fail to apply for patents on important technologies or product in a timely fashion, or at all. Our existing patents and any future patents we obtain may not be sufficiently broad to prevent others from practicing our technologies or from developing competing 55 Table of Contents products and technologies.
Beginning in January 2017, former President Trump signed two Executive Orders and other directives designed to delay the implementation of certain provisions of the Health Care Reform Law or otherwise circumvent some of the requirements for health insurance mandated by the Health Care Reform Law.
Beginning in January 2017, President Trump, in his first term, signed two Executive Orders and other directives designed to delay the implementation of certain provisions of the Health Care Reform Law or otherwise circumvent some of the requirements for health insurance mandated by the Health Care Reform Law.
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.
From September 13, 2017 (the date our common shares were first listed on the Nasdaq Capital Market) to March 17, 2026, 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.
In addition, we may be subject to physician payment transparency laws and patient privacy and security regulation by the federal government and by the U.S. states and foreign jurisdictions in which we conduct our business.
In addition, we may be subject to physician payment transparency laws and patient privacy and security regulation by the federal government and by the U.S. states 40 Table of Contents and foreign jurisdictions in which we conduct our business.
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.
From January 1, 2018 to March 17, 2026, 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.
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.
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, 2026, our current shareholders separately representing more than 5% ownership of our common shares collectively represented beneficial ownership of approximately 41% of our common shares.
Established companies may also invest heavily to accelerate discovery and development of compounds that could make our product obsolete.
Established companies may also invest heavily to accelerate discovery 45 Table of Contents and development of compounds that could make our product obsolete.
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.
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 $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.
Based on available resources, we believe that our cash and cash equivalents of $36.8 million available as of December 31, 2025 are sufficient to fund our anticipated operating and capital requirements for at least the next 12 months.
In addition, as of March 17, 2025, there were approximately 5.7 million common shares issuable upon the exercise of outstanding stock options with a weighted average exercise price of $6.22 per common share.
In addition, as of March 17, 2026, there were approximately 5.9 million common shares issuable upon the exercise of outstanding stock options with a weighted average exercise price of $6.38 per common share.
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.
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; 39 Table of Contents ● 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.
Foreign exchange controls may have a material adverse effect on our business and financial condition, since such controls may limit our ability to flow funds into or out of a particular country to meet obligations under licenses, clinical trial agreements or other collaborations. Our cash invested in money market funds might be subject to loss.
Foreign exchange controls may have a material adverse effect on our business and financial condition, since such controls may limit our ability to flow funds into or out of a particular country to meet obligations under licenses, clinical trial agreements or other collaborations.
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 anticipate potentially incurring substantial additional losses due to the need to spend significant amounts on activities required for the continued commercialization of PEDMARK in the U.S. and for obtaining and maintaining regulatory approvals for PEDMARK outside of the U.S., as well as for anticipated research and development activities and general and administrative expenses, among other factors.
It is not possible for us to be certain that we are the original and first creator of inventions encompassed by our pending patent applications or that we were the first to file patent applications for any such inventions.
It is not possible for us to be certain that we are the original and first creator of inventions encompassed by our pending patent applications or that we were the first to file patent applications for any such inventions. Further, any of our patents, once issued, may be declared by a court to be invalid or unenforceable.
Enacted and future legislation or judicial action may increase the difficulty and cost for us to commercialize PEDMARK ® In the United States, there have been a number of court cases, legislative and regulatory changes, and other potential changes relating to the healthcare system that restrict or regulate post-approval activities, which may affect our ability to profitably sell PEDMARK ® or any other drug candidates for which we obtain marketing approval.
Monetary penalties in such cases have often been substantial, and civil penalties can include costly mandatory compliance programs and potential exclusion of a company’s products from federal healthcare programs. 47 Table of Contents Enacted and future legislation or judicial action may increase the difficulty and cost for us to commercialize PEDMARK ® In the United States, there have been a number of court cases, legislative and regulatory changes, and other potential changes relating to the healthcare system that restrict or regulate post-approval activities, which may affect our ability to profitably sell PEDMARK ® or any other drug candidates for which we obtain marketing approval.
Finally, even after approval can be obtained, we may be required to recall or withdraw a product as a result of newly discovered safety or efficacy concerns, either of which would have a materially adverse effect on our business and results of operations.
Finally, even after approval can be obtained, we may be required to recall or withdraw a product as a result of newly discovered safety or efficacy concerns, either of which would have a materially adverse effect on our business and results of operations. 34 Table of Contents We have been in the past and may in the future be the target of securities litigation, which may be costly and time-consuming to defend.
At March 17, 2025, we had 0.2 million warrants outstanding to purchase and 0.2 million shares of our common shares at an exercise price of $7.71 per common share.
At March 17, 2026, we had 0.1 million warrants outstanding to purchase 0.1 million shares of our common shares at an exercise price of $8.11 per common share.
To be profitable, we will need to continue to successfully transition from a company with a research and development focus to a company capable of supporting commercial activities. Ultimately, we may not be successful in such a transition. There are limitations on the liability of our directors, and we may have to indemnify our officers and directors in certain instances.
To be profitable, we will need to continue to successfully transition from a company with a research and development focus to a company capable of supporting commercial activities. Ultimately, we may not be successful in such a transition.
Risks Related to the Clinical Development and Marketing Approval of Our Product outside the United States The marketing approval processes of foreign authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for our product abroad, our business will be substantially harmed.
In addition, any new collaboration that we enter into may be on terms that are not optimal for us. 37 Table of Contents Risks Related to the Clinical Development and Marketing Approval of Our Product outside the United States The marketing approval processes of foreign authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for our product abroad, our business will be substantially harmed.
The certifications allege these patents are invalid or will not be infringed by the manufacture, use, or sale of CIPLA’s sodium thiosulfate solution. We plan to vigorously defend our intellectual property rights related to 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.
Given the difficult environment and potential for incurring liabilities currently facing directors of publicly-held corporations, we believe that director indemnification is in our and our stockholders’ best interests because it enhances our ability to attract and retain highly qualified directors and reduce a possible deterrent to entrepreneurial decision-making.
Given the difficult environment and potential for incurring liabilities currently facing directors of publicly-held corporations, we believe that director indemnification is in our and our stockholders’ best interests because it enhances our ability to attract and retain highly qualified directors and reduce a possible deterrent to entrepreneurial decision-making. 35 Table of Contents 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.
Our articles limit, to the maximum extent permitted under British Columbia law, the personal liability of our directors for monetary damages for breach of their fiduciary duties as directors. Our articles provide that we will indemnify our officers and directors and may indemnify our employees and other agents to the fullest extent permitted by law.
There are limitations on the liability of our directors, and we may have to indemnify our officers and directors in certain instances. Our articles limit, to the maximum extent permitted under British Columbia law, the personal liability of our directors for monetary damages for breach of their fiduciary duties as directors.
The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare may adversely affect: ● the demand for our product; ● our ability to set a price that we believe is fair for our product; ● our ability to obtain coverage and reimbursement approval for our product; ● our ability to generate revenues and achieve or maintain profitability; and ● the level of taxes that we are required to pay.
The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare may adversely affect: ● the demand for our product; ● our ability to set a price that we believe is fair for our product; ● our ability to obtain coverage and reimbursement approval for our product; ● our ability to generate revenues and achieve or maintain profitability; and ● the level of taxes that we are required to pay. 42 Table of Contents If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on our business, financial condition or results of operations.
If we fail to comply with any of the FDA’s continuing regulations, or any other regulations under which we may be required to comply outside of the United States, we could be subject to reputational harm and sanctions, including: ● delays, warning letters and fines; ● product recalls or seizures and injunctions on sales; ● refusal of the FDA, or other regulators, to review pending applications; ● total or partial suspension of production; ● withdrawals of previously approved marketing applications; and ● civil penalties and criminal prosecutions.
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 third-party manufacturing facility that manufactures PEDMARK ® on our behalf is a specific example of the risks associated with our third-party manufacturers. 31 Table of Contents If we fail to comply with any of the FDA’s continuing regulations, or any other regulations under which we may be required to comply outside of the United States, we could be subject to reputational harm and sanctions, including: ● delays, warning letters and fines; ● product recalls or seizures and injunctions on sales; ● refusal of the FDA, or other regulators, to review pending applications; ● total or partial suspension of production; ● withdrawals of previously approved marketing applications; and ● civil penalties and criminal prosecutions.
For all of these reasons, we may not obtain foreign regulatory approvals on a timely basis, if at all. The process to develop, obtain marketing approval for, and commercialize product candidates is long, complex and costly, both inside and outside of the United States, and approval is never guaranteed.
The process to develop, obtain marketing approval for, and commercialize product candidates is long, complex and costly, both inside and outside of the United States, and approval is never guaranteed.
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.
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.
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.
We reported a net loss of approximately $9,741 for the year ended December 31, 2025 and reported a net loss of approximately $436 for the year ended December 31, 2024. At December 31, 2025, we had an accumulated deficit of approximately $229,422.
Regulatory approval of our product is time-consuming, expensive and uncertain, and could result in unexpectedly high expenses and delay our ability to sell our product in the U.S. and abroad. Development, manufacture and marketing of our product is subject to extensive regulation by governmental authorities in the United States and other countries.
Development, manufacture and marketing of our product is subject to extensive regulation by governmental authorities in the United States and other countries. This regulation could require us to incur significant unexpected expenses or delay or limit our ability to sell our product abroad.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur 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. ​
Biggest changeOur Chief Financial Officer has experience supervising and managing company security and privacy departments. ​ 70 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. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn 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 .
Biggest changeIn 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. ​ On May 27, 2025, we were granted US 12,311,026 (the “US ‘026 Patent”) covering a method of using pharmaceutical compositions comprising sodium thiosulfate and specific stabilizers to reduce ototoxicity in a patient receiving a platinum based chemotherapeutic for the treatment of a cancer.
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.
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 “’728 Patent”), expiration date July 2039.
On April 20, 2023, we filed an Amended Complaint to assert infringement of the ’728 Patent and the ’984 Patent.
On April 20, 2023, we filed an Amended Complaint to assert infringement of the US ‘728 Patent and the US ‘984 Patent.
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.
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.
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.
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.
On July 27, 2023, we filed a Second Amended Complaint to assert the US ‘793 Patent.
On July 27, 2023, we filed a Second 71 Table of Contents Amended Complaint to assert the US ‘793 Patent. CIPLA filed an Answer to the Second Amended Complaint on August 31, 2023.
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 “US ’984 Patent”).
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 ® .
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 .
The certifications allege these patents are invalid or will not be infringed by the manufacture, use, or sale of CIPLA’s sodium thiosulfate solution .
The suit is ongoing. ​ Item 4. Mine Safety Disclosures Not applicable. ​ PART II
Mine Safety Disclosures Not applicable. ​ 72 Table of Contents PART II
Added
The US ‘026 Patent has an expiration date of July 2039. ​ On May 27, 2025, we filed suit against the CIPLA entities in the United States District Court for the District of New Jersey (Case No. 2:25-cv-05709), for infringement of the US ‘026 Patent based on the Cipla entities’ ANDA filing.
Added
Subsequently, we filed a Motion to Consolidate Case No. 2:25-cv-05709 and Case No. 2:23-cv-00123. ​ On July 14, 2025, the court granted the Motion to Consolidate Case No. 2:25-cv-05709 with Case No. 2:23-cv-00123.
Added
On July 14, 2025, the court issued its Order on Claim Construction on two claim terms in dispute in the ‘793 Patent and ‘018 Patent, adopting our proposed constructions for both. ​ On August 25, 2025, the CIPLA entities filed an Answer and Counterclaims to the complaint, alleging that the ‘026 Patent was invalid, not infringed, and/or unenforceable. ​ On September 18, 2025, we filed an Answer to CIPLA’s Counterclaims. ​ On March 16, 2026, Fennec announced that it has entered into an agreement with Cipla Limited and Cipla USA, Inc. to settle the litigation between them regarding Cipla’s application to FDA for approval to market a generic version of Fennec’s PEDMARK® (sodium thiosulfate injection) product.
Added
See Fennec Pharmaceuticals Inc. v. Cipla Limited and Cipla USA, Inc ., C.A. No. 2:23-cv-00123-JKS-MAH (D.N.J.). Under the terms of the agreement, the lawsuit will be dismissed with each party bearing their own costs, and Cipla will not enter the market with its generic sodium thiosulfate product until September 1, 2033, or earlier under certain circumstances. ​ Item 4.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

19 edited+2 added−2 removed72 unchanged
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.
Biggest changeMaterial 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. Holders (as defined below) of acquiring, owning, and disposing of our common shares, subject to the qualifications set forth herein.
Holders that: ● are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; ● are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; ● are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; ● have a “functional currency” other than the U.S. dollar; ● own common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; ● acquired common shares in connection with the exercise of employee stock options or otherwise as compensation for services; ● hold common shares other than as a capital asset within the meaning of section 1221 of the Code (generally, property held for investment purposes); ● are partnerships or other “pass-through” entities for U.S. federal income tax purposes (or investors in such partnerships or entities); ● own, have owned, or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power of the outstanding shares of your company; ● are U.S. expatriates who are former citizens or long-term residents of the United States; ● have been, are, or will be residents or deemed to be residents in Canada for purposes of the Income Tax Act (Canada) (the “Tax Act”); ● use or hold, will use or hold, or that are or will be deemed to use or hold common shares in connection with carrying on a business in Canada; ● are persons whose common shares constitute “taxable Canadian property” under the Tax Act; or ● have a permanent establishment in Canada for the purposes of the Canada-U.S.
Holders that: ● are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; ● are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; ● are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; ● have a “functional currency” other than the U.S. dollar; ● own common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; ● acquired common shares in connection with the exercise of employee stock options or otherwise as compensation for services; 74 Table of Contents ● hold common shares other than as a capital asset within the meaning of section 1221 of the Code (generally, property held for investment purposes); ● are partnerships or other “pass-through” entities for U.S. federal income tax purposes (or investors in such partnerships or entities); ● own, have owned, or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power of the outstanding shares of your company; ● are U.S. expatriates who are former citizens or long-term residents of the United States; ● have been, are, or will be residents or deemed to be residents in Canada for purposes of the Income Tax Act (Canada) (the “Tax Act”); ● use or hold, will use or hold, or that are or will be deemed to use or hold common shares in connection with carrying on a business in Canada; ● are persons whose common shares constitute “taxable Canadian property” under the Tax Act; or ● have a permanent establishment in Canada for the purposes of the Canada-U.S.
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).
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 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).
A “qualified foreign corporation” includes a foreign corporation that is not a PFIC in the year of the distribution or in the prior taxable year and that is eligible for the benefits of an income tax treaty with the United States that contains an exchange of information provision and has been determined by the United States Treasury Department to be satisfactory for purposes of the legislation (such as the Canada-U.S.
A “qualified foreign corporation” includes 75 Table of Contents a foreign corporation that is not a PFIC in the year of the distribution or in the prior taxable year and that is eligible for the benefits of an income tax treaty with the United States that contains an exchange of information provision and has been determined by the United States Treasury Department to be satisfactory for purposes of the legislation (such as the Canada-U.S.
Holders who are individuals, estates or trusts may pay substantially more tax on GILTI income, as they are subject to ordinary tax rates (ranging from 10% to 37% plus the net investment income tax of 3.8%). Such U.S. Holders are not entitled to a deduction on GILTI income or a reduced foreign tax credit.
Holders who are individuals, estates or trusts may pay substantially more tax on GILTI income, as they are subject to ordinary tax rates (ranging from 10% to 37% plus 78 Table of Contents the net investment income tax of 3.8%). Such U.S. Holders are not entitled to a deduction on GILTI income or a reduced foreign tax credit.
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”).
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 17, 2026, 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”).
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.
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 income, a U.S.
Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder’s income that is subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.
Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder’s 76 Table of Contents income that is subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.
Members of such entities are regarded as holding their proportionate share of our common shares held by the entity for the purposes of the Tax Treaty. ​ Item 6. Reserved Not applicable. ​
Members of such entities are regarded as holding their proportionate share of our common shares held by the entity for the purposes of the Tax Treaty. ​ Item 6. Reserved Not applicable. ​ 79 Table of Contents
Tax Convention. U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S.
Holders that are subject to special provisions under the Code, including, but not limited to, U.S.
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.
U.S. Holders may be subject to these reporting requirements unless their common shares are held in an account at certain financial institutions. Significant penalties may apply for failure to satisfy applicable reporting obligations.
This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation. U.S. Holders For purposes of this summary, the term “U.S.
This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation. 73 Table of Contents U.S. Holders For purposes of this summary, the term “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.
The gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. Additional Medicare Tax on Net Investment Income Certain U.S.
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, 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.
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.
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.
We have not made the analysis necessary to determine whether or not we are currently a PFIC or whether we have ever been a PFIC. There can be no assurance that we are not, have never been or will not in the future be a PFIC.
There can be no assurance that we are not, have never been or will not in the future be a PFIC.
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.
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.
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.
Tax Convention. U.S. Holders that are subject to special provisions under the Code, including, but not limited to, 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.
Passive income for this purpose generally includes dividends, interest, rents, royalties and gains from securities and commodities transactions. The look-through rules require a foreign corporation that owns at least 25% by value of the stock of another corporation to treat a proportionate amount of assets and income as held or received directly by the foreign corporation.
The look-through rules require a foreign corporation that owns at least 25% by value of the stock of another corporation to treat a proportionate amount of assets and income as held or received directly by the foreign corporation. 77 Table of Contents We have not made the analysis necessary to determine whether or not we are currently a PFIC or whether we have ever been a PFIC.
Removed
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.
Added
The following summary is not a substitute for careful tax planning and advice. U.S.
Removed
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.
Added
Passive income for this purpose generally includes dividends, interest, rents, royalties and gains from securities and commodities transactions.

Item 6. [Reserved]

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

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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 ​ ​ ​
Biggest changeItem 6. Reserved 79 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 80 ​ ​ ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk 90 ​ ​ ​ Item 8. Financial Statements and Supplementary Data 91 ​ ​ ​

Item 7. Management's Discussion & Analysis

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

36 edited+57 added−25 removed35 unchanged
Biggest changeThe 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.
Biggest changeThe increase was primarily driven by cash inflows from net product sales, proceeds from equity issuances and option exercises, and improved operating cash flow, $42,000 of net proceeds from our November 2025 public equity offering and concurrent Canadian private placement, partially offset by $21,729 paid toward the Petrichor Financing note, ongoing operating expenditures related to the commercialization of PEDMARK, and other working capital uses. ● Other current assets increased by $12,765 between December 31, 2025 and December 31, 2024, primarily due to an increase in accounts receivable associated with higher product sales volumes, an increase in prepaid expenses and other current assets, and changes in inventory balances as the Company scaled commercial operations. ● Current liabilities increased by $3,599 at December 31, 2025 compared to December 31, 2024, primarily reflecting higher accrued expenses and other current liabilities associated with increased commercial activity and operating scale, partially offset by reductions in debt-related current obligations following repayments during the year. ● Working capital increased by $19,320 between December 31, 2025 and December 31, 2024, primarily as a result of higher cash balances, increased accounts receivable from higher product sales, partially offset by increased current liabilities and cash used in operations related to the continued commercialization of PEDMARK and the repayment of the Petrichor Financing note. ​ ​ ​ ​ ​ ​ ​ Selected Cash Flow Data ​ Year Ended ​ ​ ​ Year Ended (dollars and shares in thousands) ​ December 31, 2025 ​ December 31, 2024 Net cash (used in)/provided by operating activities ​ $ (12,473) ​ $ 26,980 Net cash provided by investing activities ​ — ​ — Net cash provided by /(used in) financing activities ​ 22,627 ​ (13,615) Net cash flow ​ $ 10,154 ​ $ 13,365 ​ 85 Table of Contents Net cash used in operating activities for the year ended December 31, 2025 was approximately $12,473, compared to net cash provided by operating activities of $26,980 for the year ended December 31, 2024.
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.
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.
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.
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 82 Table of Contents ​ 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.
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.
The following description of critical accounting policies, judgments and estimates should be read in conjunction with our December 31, 2025 consolidated financial statements. Credit Losses ​ The Company estimates and records a provision for its expected credit losses related to its trade receivables.
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.
Further, the National Comprehensive Cancer Network (NCCN) recommended 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.
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.
Key activities supporting these objectives include an expanded sales team with a strong track record in both academic and community settings, 81 Table of Contents partnerships with group purchasing organizations, and specialty pharmacy offerings such as home infusions, white bag delivery, and direct billing.
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.
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 CIO in pediatric patients with localized solid tumors.
The US ‘728, US ‘984 US ‘793, US ‘018, US’530 and US ’604 patents will expire in 2039.
The US ‘728, US ‘984, US ‘793, US ‘018, US ‘530, and US ‘604 Patents will expire in 2039.
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.
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.
However, because of the short time to the expected receipt of accounts receivable, the Company believes that the carrying value, net of excepted losses, approximates fair value and therefore, relies more on historical and current analysis of its trade receivables. ​ To determine the provision for credit losses for accounts receivable, the Company has disaggregated its accounts receivable by class of customer, as the Company determined that risk profile of its customers is consistent based on the life sciences industry.
However, because of the short time to the expected receipt of accounts receivable, the Company believes that the carrying value, net of excepted losses, approximates fair value and therefore, relies more on historical and current analysis of its trade receivables. ​ To determine the provision for credit losses for accounts receivable, the Company has disaggregated its accounts receivable by class of customer, as the Company determined that risk profile of its customers may vary based on certain characteristics such as credit history, past payment history and geography.
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).
To date, Fennec has not received any milestone payments. Norgine will be responsible for all commercialization activities in the licensed territories and will hold all marketing authorizations in the licensed territories. In December 2024, PEDMARQSI ® received positive final draft guidance from the National Institute for Health and Care Excellence (NICE).
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.
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.
If they are not distinct, they are combined with other promised goods or services to create a bundle of promised goods or services that is distinct. Optional future services where any additional consideration paid to the Company reflects their standalone selling prices do not provide the customer with a material right and, therefore, are not considered performance obligations.
Optional future services where any additional consideration paid to the Company reflects their standalone selling prices do not provide the customer with a material right and, therefore, are not considered 88 Table of Contents performance obligations.
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.
At December 31, 2025, we had approximately $36,788 in our cash accounts and $33,716 in savings and money market accounts. 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 $250,000 amount insured by the FDIC and may lose value.
The new guidance is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027. We are currently evaluating the impact of this standard on our consolidated financial statements. ​ ​
The new guidance is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027. We are currently evaluating the impact of this standard on our consolidated financial statements. ​ In July 2025, the FASB issued ASU No. 2025-05, “Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”).
License Agreements The Company generates revenue from license or similar agreements with pharmaceutical companies for the commercialization of its product. Such agreements may include the transfer of intellectual property rights in the form of 82 Table of Contents licenses.
These costs are typically known at the time of sale, resulting in minimal adjustments subsequent to the period of sale. ​ License Agreements The Company generates revenue from license or similar agreements with pharmaceutical companies for the commercialization of its product. Such agreements may include the transfer of intellectual property rights in the form of licenses.
We had cash and cash equivalents of approximately $26.6 million as of December 31, 2024.
We had cash and cash equivalents of approximately $36,788 as of December 31, 2025.
This is an exclusive licensing agreement under which Norgine will commercialize PEDMARQSI ® in Europe, Australia and New Zealand.
As previously noted, in March 2024, we entered into an agreement with Norgine, a leading European specialist pharmaceutical company. This is an exclusive licensing agreement under which Norgine will commercialize PEDMARQSI ® in Europe, Australia and New Zealand.
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.
Results of Operations Fiscal 2025 versus Fiscal 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ ​ ​ Increase In thousands of U.S.
Dollars 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.
Dollars ​ ​ ​ December 31, 2025 ​ ​ ​ % ​ ​ ​ December 31, 2024 ​ ​ ​ % ​ ​ ​ (Decrease) Product sales, net ​ $ 44,642 ​ ​ $ 29,580 ​ ​ $ 15,062 Licensing revenue ​ ​ — ​ ​ ​ ​ 17,958 ​ ​ ​ ​ (17,958) Total revenue ​ ​ 44,642 ​ ​ ​ ​ 47,538 ​ ​ ​ ​ (2,896) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ Cost of product sales ​ ​ 3,764 ​ 7 % ​ 3,184 ​ 7 % ​ 580 Research and development ​ 250 0 % 307 1 % (57) Selling and marketing ​ ​ 18,616 ​ 37 % ​ 18,426 ​ 41 % ​ 190 General and administrative ​ 28,294 56 % 23,053 51 % 5,241 Total operating expense ​ 50,924 100 % 44,970 100 % 5,954 (Loss)/Income from operations ​ (6,282) ​ ​ 2,568 ​ ​ (8,850) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss on securities ​ ​ (2) ​ ​ ​ ​ (81) ​ ​ ​ ​ 79 Amortization expense ​ (64) ​ ​ (89) ​ ​ 25 Interest expense ​ ​ (2,080) ​ ​ ​ ​ (4,069) ​ ​ ​ ​ 1,989 Unrealized foreign exchange gain/(loss) ​ 28 ​ ​ (82) ​ ​ 110 Loss on debt extinguishment ​ ​ (2,022) ​ ​ ​ ​ — ​ ​ ​ ​ (2,022) Interest income ​ 787 ​ ​ 1,682 ​ ​ (895) Loss before income tax ​ ​ (9,635) ​ ​ ​ ​ (71) ​ ​ ​ ​ (9,564) Income tax ​ ​ (106) ​ ​ ​ ​ (365) ​ ​ ​ ​ 259 Net loss ​ $ (9,741) ​ ​ $ (436) ​ ​ $ (9,305) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ● The Company recorded net product sales of $44,642 in fiscal 2025 compared to $29,580 in fiscal 2024, reflecting increased market penetration and expanded access for PEDMARK ® , including continued expansion of the Company’s focus on the AYA population.
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.
PEDMARK ® is the first and only therapy approved in the U.S. to reduce the risk of ototoxicity associated with cisplatin in pediatric patients one month of age and older with localized, non-metastatic solid tumors.
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.
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.
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.
Fiscal 2025 interest expense also decreased due to the early repayment of debt. ● Interest income decreased by approximately $895 in fiscal 2025 compared to fiscal 2024, primarily due to lower average invested cash balances during the year and lower yields on money market investments. ● Income tax expense decreased to $106 in fiscal 2025 compared to $365 in fiscal 2024, as the prior-year amount primarily reflected income tax expense related to taxable income generated from the Norgine licensing transaction, with less comparable taxable income recorded in fiscal 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As at ​ As at Selected Asset and Liability Data (thousands): ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Cash and equivalents ​ $ 36,788 ​ $ 26,634 Other current assets ​ 30,255 ​ 17,490 Current liabilities ​ 10,518 ​ 6,919 Working capital (1) ​ 56,525 ​ 37,205 (1) [Current assets – current liabilities] ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selected Equity: ​ ​ ​ ​ Common stock and additional paid in capital ​ ​ 263,651 ​ ​ 212,566 Accumulated deficit ​ (229,422) ​ (219,681) Shareholders’ equity/(deficit) ​ 35,472 ​ (5,872) ​ ● There was a $10,154 net increase in cash and cash equivalents between December 31, 2025 and December 31, 2024, increasing to $36,788 at December 31, 2025 from $26,634 at December 31, 2024.
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.
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.
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.
PEDMARK ® is currently the only FDA-approved therapy indicated to reduce the risk of ototoxicity associated with cisplatin in pediatric patients one month of age and older with localized, non-metastatic solid tumors.
Warrants are recorded at relative fair value and are deducted from the proceeds of common shares and recorded on the consolidated statements of shareholders’ equity as additional paid-in capital. 83 Table of Contents Outstanding Share Information Our outstanding comparative share data at December 31, 2024 and December 31, 2023 is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ Outstanding Share Type ​ 2024 ​ 2023 Change Common shares ​ 27,527 ​ 27,027 500 Warrants 150 150 ​ — Stock options 5,855 4,798 ​ 1,057 Total 33,532 31,975 ​ 1,557 ​ ​ Newly Adopted and Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued amended guidance for improvements to reportable segment disclosures (ASU) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” that requires a public entity disclose significant segment expenses regularly reviewed by the chief operating decision maker (CODM), including public entities with a single reportable segment.
Warrants are recorded at relative fair value and are deducted from the proceeds of common shares and recorded on the consolidated statements of shareholders’ equity as additional paid-in capital. 89 Table of Contents Outstanding Share Information Our outstanding comparative share data at December 31, 2025 and December 31, 2024 are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ December 31, ​ Outstanding Share Type ​ 2025 ​ 2024 ​ ​ ​ Change Common shares ​ 34,163 ​ 27,527 6,636 Warrants 111 150 ​ (39) Stock options 5,853 5,855 ​ (2) Total 40,127 33,532 ​ 6,595 ​ Newly Adopted and Recent Accounting Pronouncements 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.
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.
Contractual Obligations and Commitments None, other than the severance amounts described in notes to our consolidated financial statements contained elsewhere in this Annual Report. Critical Accounting Policies and Estimates The preparation of financial statements in conformity with U.S.
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.
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, Fennec estimates that there are approximately 11,400 pediatric patients with localized, non-metastatic solid tumors each year, of which include approximately 2,157 cisplatin-treated pediatric patients in the U.S. and 1,250 in Europe who fall within the current PEDMARK ® market.
This approval makes PEDMARK ® the first and only treatment approved by the FDA in this area of unmet medical need. On October 17, 2022, we announced commercial availability of PEDMARK ® in the U.S.
With the exception of Fennec Pharmaceuticals, Inc., 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.
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.
This guidance will be effective for the annual periods beginning the year ended December 31, 2025. The Company adopted ASU 2023-09 on January 1, 2025, on a prospective basis, and the adoption affected only the Company’s income tax disclosures and did not have an impact on its consolidated results of operations, financial position or cash flows.
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 ® .
In the United States, we sell our product through an experienced field force including Regional Pediatric Oncology Specialists and we utilize medical science liaisons within our medical team who help educate the medical communities and patients about CIO and our programs supporting patient access to PEDMARK ® .
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.
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. 86 Table of Contents On November 17, 2025, we completed an underwritten public offering of 5,367 of our common shares (including 700 common shares issued upon the underwriters’ full exercise of their option to purchase additional shares) at a public offering price of $7.50 per share, for gross proceeds of approximately $40.25 million, before deducting underwriting discounts and offering expenses.
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.
In valuing options granted in the fiscal years ended December 31, 2025 and 2024, we used the following weighted average assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ Year Ended ​ ​ December 31, ​ December 31, ​ 2025 2024 ​ Expected dividend — % — % Risk-free interest rate 3.83 - 4.19 % 3.64 - 5.15 % Expected volatility 71.04 - 161.67 % 55.00 - 162.00 % Expected life 1.5 - 6.0 years 1.5 - 6.0 years ​ ​ ​ Performance-based units ​ For performance share units, the Company also makes significant estimates regarding the probability of achieving specified revenue-based performance milestones and recognizes compensation expense based on the grant-date fair value of the awards over the applicable performance period.
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.
In the U.S., Fennec estimates that there are approximately 51,282 new AYA solid tumor cases annually, of which approximately 25,536 involve cisplatin-treated patients with localized, non-metastatic solid tumors. The most common relevant tumor types include germ cell tumors, testicular cancer, thyroid cancer and breast cancer. The U.S.
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.
Entities that elect the practical expedient should apply the guidance prospectively. The Company is currently evaluating the impact that the adoption of ASU 2025-05 may have on its consolidated financial statements. ​
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 incidence and severity of CIO depends on the cumulative dose and duration of chemotherapy. Many affected children ultimately require hearing aids or, in more severe cases, cochlear implants, which are costly, technically complex and do not fully restore normal hearing.
Removed
In addition, in January 2023, PEDMARK ® was included in the National Comprehensive Cancer Network (“NCCN”) clinical practice guidelines for Adolescent and Young Adult (“AYA”) Oncology with a category 2A recommendation.
Added
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.
Removed
In June 2023, we received European Commission Marketing Authorization for PEDMARQSI ® (known as PEDMARK ® in the U.S.) Further, the decision included the receipt of a PUMA in the EU with up to 8 years of data exclusivity plus 2 years of market protection.
Added
Fennec is a commercial stage specialty pharmaceutical company dedicated to preventing cisplatin-induced ototoxicity (“CIO”) , a serious and often irreversible side effect of cancer treatment, 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.
Removed
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.
Added
(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”).
Removed
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.
Added
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.
Removed
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.
Added
In clinical studies in this population, treatment with PEDMARK ® resulted in an approximate 50% relative reduction in the incidence of cisplatin-induced hearing loss compared to cisplatin alone, without evidence of materially compromised antitumor efficacy.
Removed
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.
Added
PEDMARK ® is administered as a short intravenous infusion and has generally been associated with a mild-to-moderate and manageable safety profile consistent with its known pharmacology. In March 2024, we announced that we entered into an agreement with Norgine, a leading European specialist pharmaceutical company.
Removed
Academic institutions play a critical role in establishing the treatment framework, with 72 NCI-designated academic centers treating approximately 20% of AYA oncology patients.
Added
This is an exclusive licensing agreement under which Norgine will commercialize PEDMARQSI ® in Europe, Australia and New Zealand. 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 one month to eighteen years of age with localized, non-metastatic solid tumors.
Removed
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.
Added
During 2025, Norgine made PEDMARQSI ® commercially available and expects additional launches to occur in 2026 and beyond. ​ 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.
Removed
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.
Added
To date, Fennec has not received any milestone payments. Norgine will be responsible for all commercialization activities in the licensed territories and will hold all marketing authorizations in the licensed territories.
Removed
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.
Added
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 80 Table of Contents insurance type, that can address co-pays or lack of coverage when certain eligibility requirements are met.
Removed
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.
Added
We currently have six patents listed for PEDMARK ® in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (“FDA Orange Book”).
Removed
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.
Added
Additional patents covering PEDMARK ® formulation have been granted in Australia, Canada, the European Patent Office (EPO) (described further below), Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, and Russia, and patent applications covering PEDMARK ® are pending in Brazil, China, the European Patent Office (EPO), Hong Kong, Israel, Korea, Mexico, New Zealand, Singapore, and Thailand.
Removed
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.
Added
Patents covering alternative sodium thiosulfate formulations have been granted in the United States (US 12,311,026 (the “US ‘026 Patent”), Canada, Korea, Mexico, and Russia, and patent applications covering alternative sodium thiosulfate formulations are pending in the United States, Australia, the EPO, Hong Kong, Indonesia, Japan, Malaysia, Mexico, and New Zealand.
Removed
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.
Added
Applications from these patent families, where granted, valid, and enforceable, will expire in July 2039, exclusive of any patent term adjustment or extension ​ There can be no assurance that we do not or will not infringe on patents held by third parties or that third parties in the future will not claim that we have infringed on their patents.
Removed
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.
Added
In the event that our product or technologies infringe or violate the patent or other proprietary rights of third parties, there is a possibility we may be prevented from pursuing product development, manufacturing or commercialization of our product until the underlying patent dispute is resolved.
Removed
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.
Added
For example, there may be patents or patent applications held by others that contain claims that our product or operations might be determined to infringe or that may be broader than we believe them to be.
Removed
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.
Added
Given the complexities and uncertainties of patent laws, there can be no assurance as to the impact that future patent claims against us may have on our business, financial condition, results of operations, or prospects.
Removed
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.
Added
Infants and young children who experience ototoxicity during critical developmental windows are at risk for impaired speech and language development and literacy, while older children and adolescents may face long-term challenges in academic performance, social-emotional development, career potential and independent living.​ ​ In the U.S., approximately 90% of pediatric cancer patients receive care at approximately 200 key pediatric hospital centers, including institutions within the Children’s Oncology Group (COG), National Cancer Institute (NCI) and National Comprehensive Cancer Network (NCCN).​ ​ The Adolescent and Young Adult (“AYA”) oncology patient is defined as an individual between 15 and 39 years of age at the time of initial cancer diagnosis.
Removed
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.
Added
AYA oncology treatment landscape spans both academic and community settings, with 72 NCI-designated academic centers treating roughly 20% of AYA oncology patients, while approximately 80% are managed across approximately 3,750 community oncology centers nationwide. ​ CIO and Unmet Medical Need Cisplatin is a cornerstone of modern cancer therapy for many pediatric and AYA solid tumors, with reported overall survival rates in some cisplatin-treated cancers exceeding 80%.
Removed
At December 31, 2024, we had approximately $26.6 million in our cash accounts and $24.6 million in savings and money market accounts.
Added
However, cisplatin is associated with a high incidence of ototoxicity. Published data indicates that approximately 60% to 90% of cisplatin-treated patients may develop some degree of permanent, sensorineural hearing loss, with reported rates of 40% to 80% occurring in adults and 50% to 90% in children.
Removed
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.
Added
CIO typically begins as bilateral, high-frequency hearing loss that is progressive and irreversible, occasionally accompanied by tinnitus. In some cases, it may ultimately require the use of hearing aids or cochlear implants.
Removed
The amended guidance is effective for fiscal years beginning January 1, 2024, and interim periods beginning January 1, 2025 and should be applied on a retrospective basis. The Company adopted the annual and interim disclosure requirements of ASU 2023-07 effective December 31, 2024 (refer to Note 11. Segment Reporting ).
Added
Published literature has linked treatment-related hearing loss to impairments in speech and language development, reduced academic performance, challenges in social-emotional development, and enduring impacts on educational attainment, vocational opportunities, and independent living.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+1 added−0 removed2 unchanged
Biggest changeWe currently do not use interest rate derivative instruments to manage exposure to interest rate changes. As our main purpose is research and development, we have chosen to avoid investments of a trade or speculative nature. Foreign Currency Exposure We are subject to foreign currency risks as we purchase goods and services which are denominated in Canadian dollars and Euros.
Biggest changeAs our main purpose is research and development, we have chosen to avoid investments of a trade or speculative nature. 90 Table of Contents Foreign Currency Exposure We are subject to foreign currency risks as we purchase goods and services which are denominated in Canadian dollars and Euros.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Money Market Investments We maintain an investment portfolio consisting of U.S. or Canadian obligations and bank securities and money market investments in compliance with our investment policy. We do not hold any mortgaged-backed investments in our investment portfolio.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Money Market Investments We maintain an investment portfolio consisting of U.S. or Canadian obligations and bank securities and money market investments in compliance with our investment policy. We do not hold any mortgage-backed investments in our investment portfolio.
We 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.
We have not experienced any loss or write down of our money market investments for the years ended December 31, 2025 and 2024; however, the amounts we hold in money market accounts are substantially above the $250 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, 2024, we held approximately CAD$0.16 million and €0.24 million. ​
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, 2025, we held approximately CAD$210 and €279. ​
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.
At December 31, 2025, we had $33,716 in money market investments and savings accounts as compared to $24,614 at December 31, 2024; these investments typically have minimal risk.
Added
We currently do not use interest rate derivative instruments to manage exposure to interest rate changes.

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