Mr. Rosty Raykov reports

FENNEC PHARMACEUTICALS ANNOUNCES SECOND QUARTER 2023 FINANCIAL RESULTS AND PROVIDES BUSINESS UPDATE

Fennec Pharmaceuticals Inc. has released its financial results for the second quarter ended June 30, 2023, and provided a business update.

"During the second quarter, we continued to make strong progress with the U.S. commercial launch of Pedmark, delivering net revenue of $3.3-million, which is a 98-per-cent increase in net revenue over the first quarter of 2023. These results reflect strong growth in patient starts and new account orders," said Rosty Raykov, chief executive officer of Fennec Pharmaceuticals. "Further, we are delighted to announce the appointment of Adrian Haigh, a Fennec board member since 2014, to the position of chief operating officer. Adrian brings significant experience in evaluating business development opportunities and preparing global commercial operations, and we are pleased to have him on our leadership team."

Appointment of Adrian Haigh as chief operating officer

Fennec has expanded its leadership team with the appointment of Mr. Haigh as chief operating officer. Mr. Haigh has been a board member of Fennec since 2014 and, with his appointment to the management team of Fennec, will step down as board member. Mr. Haigh recently retired from PTC Therapeutics, where his last role was senior vice-president and head of international. Previously, Mr. Haigh served as chief operating officer at Gentium GmbH, where he built and managed the company's commercial and medical affairs organization and was also responsible for business development, playing a pivotal role in the sale of Gentium to Jazz Pharmaceuticals for $1-billion.

"I am delighted to join Fennec at this critical point in the commercial evolution of the company and to be part of the leadership team that is evaluating all options for Pedmark worldwide," said Mr. Haigh. "Further, having been part of Fennec's board for nearly a decade, I will continue Fennec's unrelenting commitment to enabling rapid access to Pedmark to all eligible patients as hearing loss from cisplatin chemotherapy is a permanently disabling and devastating side effect of cancer treatment."

Upcoming investor conference

Fennec management will be participating at the 2023 Wedbush PacGrow Healthcare Conference on Aug. 8 to Aug. 9, 2023, at the Lotte Palace Hotel in New York, N.Y.

Financial results for the second quarter 2023

Cash position

Cash and cash equivalents were $15-million on June 30, 2023. The decrease in cash and cash equivalents between June 30, 2023, and Dec. 31, 2022, is the result of cash outlays for operating expenses related to the promotion and marketing of Pedmark and small amounts of research and development and general and administrative expenses, which were offset by cash inflows primarily from product sales. The company anticipates that its cash, cash equivalents and investment securities as of June 30, 2023, will be sufficient to finance its planned operations for at least the next 12 months.

Net sales

The company recorded net product sales of $3.3-million in the second quarter of 2023, compared with net product sales of $1.7-million in the first quarter of 2023. The company had gross profit of $3.2-million for the second quarter of 2023. The increase in sales reflects strong growth in new patient starts and account adoption.

Research and development (R&D) expenses

R&D expenses decreased by $1.1-million for the three months ended June 30, 2023, compared with the same period in 2022. The company's research and development activities for the quarter ended June 30, 2023, consisted of costs associated with investigator-initiated clinical trials. During the same period in 2022 and prior to approval of Pedmark, manufacturing costs pertaining to Pedmark were expensed to R&D expense in the period incurred and, following approval, are reflected in inventory.

Selling and marketing expenses

Selling and marketing expenses include remuneration of the company's sales and marketing employees, dollars spent on marketing campaigns (sponsorships, trade shows and presentations) and any activities to support marketing and sales activities. Selling and marketing expenses for the second quarter of 2023 were $2.3-million, compared with $2.5-million in the first quarter of 2023.

General and administrative (G&A) expenses

For the three-month period ended June 30, 2023, G&A expenses increased by $1.6-million over the same period in 2022. Further, G&A expenses increased by $1.1-million compared with the first quarter of 2023. The increase in G&A was primarily because of increases in non-cash employee remuneration, which accounted for $1.5-million of the increase over same period in 2022.

Net loss

Net loss for the quarter ended June 30, 2023, was $5.4-million (21 cents per share), compared with $5.1-million (19 cents per share) for the same period in 2022.

Q2 2023 conference call information

The company will host a conference call on Aug. 3, 2023, at 8:30 a.m. ET, to discuss the company's financial results from the second quarter ended June 30, 2023, and provide a business outlook for the remainder of 2023.

To access the conference call, please register on-line. Upon registration, a dial-in number and unique PIN (personal identification number) will be provided to join the call. To access the live webcast link, log on to Fennec's website and proceed to the news and events/event calendar page under the investors and media heading. Please connect to the company's website at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to listen to the webcast. A webcast replay of the conference call will also be archived on Fennec's website for 30 days.

Financial update

The selected financial data presented in the attached table is derived from Fennec's unaudited condensed consolidated financial statements, which were prepared in accordance with U.S. generally accepted accounting principles. The complete unaudited condensed consolidated financial statements for the period ended June 30, 2023, and management discussion and analysis of financial condition and results of operations will be available on the U.S. Securities and Exchange Commission's website and on SEDAR. All values are presented in thousands unless otherwise noted.

About Fennec Pharmaceuticals Inc.

Fennec Pharmaceuticals is a specialty pharmaceutical company focused on the development and commercialization of Pedmark and Pedmarqsi to reduce the risk of platinum-induced ototoxicity in pediatric patients. Further, Pedmark received FDA (U.S. Food and Drug Administration) approval in September, 2022, and European Commission marketing authorization in June, 2023, for Pedmarqsi. Pedmark has received orphan drug exclusivity in the United States for seven years of market protection and Pedmarqsi has received pediatric use marketing authorization in Europe, which includes eight years plus two years of data and market protection. Fennec has a licence agreement with Oregon Health and Science University (OHSU) for exclusive worldwide licence rights to intellectual property directed to sodium thiosulphate and its use for chemoprotection, including the reduction of risk of ototoxicity induced by platinum chemotherapy, in humans.

We seek Safe Harbor.