FENNEC PHARMACEUTICALS INC. Annual Report Summary

I’ve put together this guide to help you understand Fennec Pharmaceuticals’ performance over the past year. My goal is to cut through the corporate jargon and give you the facts you need to decide if this company fits your investment goals.

1. What does this company do?

Fennec is a "single-product" company. Their entire business relies on PEDMARK, an injection that lowers the risk of hearing loss in children treated with cisplatin for solid tumors. Because they only have one product, their success depends entirely on hospitals choosing to use PEDMARK and adding it to their approved drug lists.

2. Financial performance: The "Growth Phase"

Fennec has moved from a development company to a commercial one. For 2023, they reported $20.4 million in revenue, up from just $0.2 million in 2022. This reflects their first full year of sales. Despite this growth, they lost $23.5 million in 2023. They are currently in a "growth phase," where the costs of marketing and running the business are higher than the money coming in. They rely on cash reserves and potential future fundraising to keep operating.

3. Major wins and challenges

• Wins: PEDMARK received FDA approval in September 2022 and European approval in June 2023. They have signed deals with partners like Norgine B.V. and Inpharmus to sell the drug internationally. These partnerships bring in upfront and milestone payments that help support their operations.
• Challenges: As a "single-product" company, Fennec lacks other products to fall back on if sales struggle. Their revenue depends on a small number of distributors and hospitals. Any supply chain issues or changes in how doctors treat cancer could directly impact their sales.

4. Financial health

At the end of 2023, Fennec had about $44.8 million in cash. With a $23.5 million loss, they must manage their spending carefully. As of March 2026, they had 34.5 million shares outstanding. Because they aren't profitable yet, management may need to raise more money. If they issue more shares to raise cash, it will reduce your ownership percentage in the company.

5. Key risks for your wallet

• The "One-Trick Pony" Risk: Because PEDMARK is their only revenue source, any manufacturing problems, regulatory issues, or new competing drugs could threaten the company’s survival.
• Insurance & Reimbursement: Success depends on hospitals getting paid back by insurance companies. If insurers or Medicaid restrict coverage or lower payment rates, hospitals may stop stocking the drug, which would hurt sales.
• Dependency on Partners: Fennec relies on partners like Norgine to sell the drug abroad. If these partners fail to hit their sales goals, Fennec’s international growth will stall.

6. Future outlook

Fennec wants to make PEDMARK the standard treatment for children receiving cisplatin. Their future depends on two things: helping U.S. hospitals get paid by insurers and ensuring international partners sell the drug effectively. Success means narrowing their losses and eventually reaching a point where they no longer spend more cash than they earn.

Final Thought for Investors: When considering an investment in Fennec, ask yourself if you are comfortable with the risks of a single-product company. Their success is tied directly to the adoption of one drug and the financial stability of their international partners. If you believe PEDMARK will become the standard of care, the current growth phase may be an entry point, but keep a close eye on their cash burn and potential for future share dilution.