Fennec Pharmaceuticals ((TSE:FRX)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Fennec Pharmaceuticals’ recent earnings call was marked by a generally positive sentiment, highlighting strong revenue growth and market adoption for their flagship product, PEDMARK. The company showcased strategic expansions and the addition of new accounts, although challenges such as increased operating expenses and dependency on market expansion were noted. The momentum in PEDMARK’s adoption and international expansion efforts suggest promising future prospects for Fennec Pharmaceuticals.
PEDMARK Revenue Growth
Fennec Pharmaceuticals reported a robust 33% year-over-year increase in revenue, with net revenues reaching $9.7 million. This marks the third consecutive quarter of growth, with a 10% sequential increase, underscoring the strong market performance of PEDMARK.
Expanded Market Adoption
The inclusion of PEDMARK in the formulary of a large national oncology group for patients under 40 signifies broader market adoption. This move is expected to enhance the product’s reach and acceptance within the oncology community.
Positive Quality Intervention Issued
A positive quality intervention (PQI) was issued by NCODA for PEDMARK, providing valuable guidance to oncology care teams on its use. This endorsement is likely to bolster confidence in PEDMARK’s efficacy and safety.
International Expansion
Fennec Pharmaceuticals has successfully launched PEDMARQSI in the UK and Germany, with plans for further expansion across the EU. Initial reports indicate positive traction, suggesting a strong foothold in these new markets.
New Accounts and Growth Strategy
The addition of 14 new accounts in the second quarter, including large community oncology groups, highlights Fennec’s aggressive growth strategy. Continued activation of these accounts is anticipated in the upcoming quarter.
Increased Operating Expenses
Operating expenses rose to approximately $11 million, driven by marketing, headcount, and intellectual property efforts. This increase reflects Fennec’s commitment to supporting PEDMARK’s growth and market penetration.
Ongoing Litigation Costs
General and administrative expenses saw an uptick due to ongoing litigation and intellectual property expenses, posing a financial challenge for the company.
Dependency on Market Expansion
Fennec’s future milestones and revenue growth are heavily reliant on successful EU expansion and pricing finalization in Germany, highlighting a critical dependency on market expansion.
Forward-Looking Guidance
Fennec Pharmaceuticals provided optimistic guidance for future growth, with revenue for the quarter reaching $9.7 million. The company added 14 new accounts, indicating expanding adoption of PEDMARK. CEO Jeff Hackman emphasized progress in awareness campaigns and payer-provider access, which are expected to drive future growth. The partnership with Norgine in the EU, particularly in the UK and Germany, showed promising traction, with expectations of further milestones and royalty revenues. Operating expenses are projected to align with the previous year’s $33 million, with a focus on marketing and intellectual property.
In conclusion, Fennec Pharmaceuticals’ earnings call conveyed a positive outlook, driven by strong revenue growth and strategic market expansions. Despite challenges such as increased operating expenses and dependency on market expansion, the company’s efforts in expanding PEDMARK’s adoption and international presence suggest a promising trajectory for future success.