Fennec Pharmaceuticals (FRX) AI Stock Analysis

• Market Cap: C$331.15M
• Dividend Yield: N/A
• Average Volume (3M): 737.00
• Price to Earnings (P/E): ―
• Beta (1Y): 1.34
• Revenue Growth: 125.38%
• EPS Growth: 99.20%
• Country: CA
• Employees: 32
• Sector: Healthcare
• Sector Strength: 37
• Industry: Biotechnology
• EPS (TTM): -0.06
• Shares Outstanding: 27,618,744
• 10 Day Avg. Volume: 532
• 30 Day Avg. Volume: 737
• PEG Ratio: N/A
• Price to Book (P/B): 95.38
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -14.83
• Enterprise Value/Market Cap: 0.66
• Enterprise Value/Revenue: 1.14
• Enterprise Value/Gross Profit: 4.91
• Enterprise Value/Ebitda: 9.54
• 1Y Price Target: C$18.72
• Price Target Upside: 56.13% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 58 Neutral
• Price Target: ―

Fennec Pharmaceuticals shows strong revenue growth and improved cash flow, key for its industry. However, profitability issues and a weak balance sheet weigh down the score. Technical indicators and valuation reflect mixed signals, while positive earnings call sentiments provide some optimism. Addressing financial challenges will be crucial for future performance.

Positive Factors

Market Expansion

Fennec remains poised to reap benefits from market expansion to the adolescent and young adult (AYA) community with payor reimbursement, along with accelerating product adoption at key academic centers.

Product Launch

European commercial rollout advancing with the acceptance of PEDMARQSI for use in Scotland and launches in Germany, England, and Wales.

Revenue Opportunities

Significant revenue opportunities remain in ex-U.S., ex-European markets where Fennec still holds the commercial rights, such as China and Japan.

Negative Factors

Net Loss Projection

The outlook appears to be improving gradually, with a forecasted net loss for 2025 being less than previously projected, and the potential to achieve sustainable profitability in late 2025.

Revenue Forecast

The full-year 2025 total revenue estimate has been modestly reduced to $46.7M from the prior estimate of $48.4M.

Fennec Pharmaceuticals Business Overview & Revenue Model

Company Description

Fennec Pharmaceuticals Inc. (FRX) is a biopharmaceutical company focused on the development and commercialization of innovative cancer treatments. The company operates primarily in the biotechnology sector and is dedicated to addressing the critical needs of cancer patients, particularly in the area of pediatric oncology. Its flagship product, PEDMARK, is designed to prevent ototoxicity, which is hearing loss caused by platinum-based chemotherapy treatments in children.

How the Company Makes Money

Fennec Pharmaceuticals generates revenue primarily through the sale and distribution of its flagship product, PEDMARK. The company earns income by marketing this treatment to healthcare institutions, hospitals, and clinics specializing in pediatric oncology. Additionally, Fennec may enter into licensing agreements or partnerships with other pharmaceutical companies to expand the reach and accessibility of its products, thereby enhancing its revenue streams. The company may also receive milestone payments and royalties from such partnerships. Fennec's financial performance is heavily reliant on the successful commercialization of PEDMARK and its acceptance within the medical community.

Fennec Pharmaceuticals Financial Statement Overview

Summary

Fennec Pharmaceuticals demonstrates strong revenue growth and improved cash flow, crucial for biotechnology operations. However, significant challenges remain with profitability and a weak balance sheet, marked by negative equity and high leverage. Addressing these issues is essential for sustainable growth and financial health.

Income Statement

Fennec Pharmaceuticals has shown significant revenue growth, with a TTM revenue of $47.5M compared to $21.3M in the previous year, indicating a strong upward trajectory. However, the company continues to face profitability challenges, with a negative net profit margin of -0.9% despite improvements in gross profit and EBITDA margins. The EBIT margin remains low at 5.4%, reflecting operational inefficiencies that need addressing.

Balance Sheet

The balance sheet is concerning, with negative stockholders' equity of -$5.9M, indicating potential financial instability. The debt-to-equity ratio is not meaningful due to the negative equity, but the high total debt of $19.3M suggests a leveraged position. The equity ratio is also negative, reflecting an imbalance in the company's capital structure.

Cash Flow

The company has improved its operating cash flow significantly, with a TTM operating cash flow of $26.98M compared to negative figures in previous years. The free cash flow is positive at $26.98M, indicating good cash generation ability despite net losses. However, the reliance on financing activities in prior years highlights a potential risk if external funding becomes constrained.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	47.54M	21.25M	1.53M	0.00	170.00K
Gross Profit	44.35M	19.99M	1.45M	0.00	170.00K
EBITDA	4.80M	-12.65M	-22.74M	-17.18M	-17.98M
Net Income	-436.00K	-16.05M	-23.86M	-17.46M	-18.11M
Balance Sheet
Total Assets	44.95M	26.86M	26.94M	22.41M	31.42M
Cash, Cash Equivalents and Short-Term Investments	26.63M	13.27M	23.77M	21.10M	30.34M
Total Debt	19.34M	30.95M	24.90M	4.99M	0.00
Total Liabilities	50.82M	38.49M	29.51M	6.64M	2.35M
Stockholders Equity	-5.87M	-11.62M	-2.57M	15.77M	29.07M
Cash Flow
Free Cash Flow	26.98M	-17.14M	-18.06M	-14.22M	-15.60M
Operating Cash Flow	26.98M	-17.14M	-18.06M	-14.22M	-15.60M
Investing Cash Flow	0.00	0.00	0.00	0.00	0.00
Financing Cash Flow	-13.62M	6.64M	20.73M	4.98M	32.29M

Fennec Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.99
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FRX, the sentiment is Positive. The current price of 11.99 is above the 20-day moving average (MA) of 11.81, above the 50-day MA of 11.30, and above the 200-day MA of 8.94, indicating a bullish trend. The MACD of 0.21 indicates Positive momentum. The RSI at 55.08 is Neutral, neither overbought nor oversold. The STOCH value of 31.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FRX.

Fennec Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FRX	58 Neutral	C$331.15M	―	21.91%	―	125.38%	99.20%
MDNA	53 Neutral	C$57.02M	―	-97.22%	―	―	-67.03%
Sector *	46 Neutral	C$201.68M	-3.23	-23.14%	1.87%	20.75%	-0.36%

Fennec Pharmaceuticals Corporate Events

Fennec Pharmaceuticals Achieves Strong Growth and Expands Market Reach in 2024

Fennec Pharmaceuticals reported a 40% increase in full-year net product sales for PEDMARK® in 2024, reaching $29.6 million, with significant growth in the adolescent and young adult segment. The company has made strategic moves to strengthen its financial position, including early repayment of $13 million of its convertible debt, and expanded its market reach with the commercial launch of PEDMARQSI® in the UK and Germany, positioning itself for further growth in 2025.

Fennec Pharmaceuticals Reports Strong 2024 Financials and Expands Global Reach

Fennec Pharmaceuticals reported a 40% increase in full-year net product sales for 2024, driven by the adoption of PEDMARK in the adolescent and young adult segment and its commercial launch in the UK and Germany. The company also completed an early repayment of $13 million of its convertible debt, optimizing its balance sheet and saving on future interest payments. With ongoing clinical trials in Japan and strategic partnerships in Turkey and the Gulf Cooperation Council countries, Fennec is poised for further international expansion. These developments are expected to enhance shareholder value and solidify the company’s position in the pharmaceutical industry.