Mr. Rosty Raykov reports

FENNEC PHARMACEUTICALS REPORTS FULL YEAR AND FOURTH QUARTER 2023 FINANCIAL RESULTS AND PROVIDES BUSINESS UPDATE

Fennec Pharmaceuticals Inc. has released its financial results for the fiscal year ended Dec. 31, 2023, and provided a business update.

"It was an exciting year for Fennec given the strong performance with Pedmark in the first full fiscal year following its U.S. commercial launch. We are pleased with our execution against strategic plans and our momentum in 2023, which sets the stage for further success in 2024 and beyond. We also received European Commission and U.K. [United Kingdom] approvals of Pedmarqsi, which led to the recent announcement of an exclusive licensing agreement with Norgine for Europe, Australia and New Zealand," said Rosty Raykov, chief executive officer of Fennec Pharmaceuticals. "We have significantly strengthened our balance sheet through the agreement with Norgine, and we remain dedicated to further growing our revenues as we expand the availability of Pedmark to patients and providers globally."

Recent developments and highlights:

• The company entered into an exclusive licensing agreement to commercialize Pedmarqsi in Europe, Australia and New Zealand. Fennec received approximately $43-million upfront and has the potential to receive up to approximately $230-million in additional commercial and regulatory milestones and double-digit tiered royalties up to the mid-twenties. Pedmarqsi was granted EU (European Union) marketing authorization by the European Commission in June, 2023, and received United Kingdom approval from the MHRA (Medicines and Healthcare products Regulatory Agency) in October, 2023.
• The company achieved Pedmark net product revenue of approximately $9-million and $21-million for the fourth quarter and full-year 2023, respectively. Additionally, the company anticipates continued increasing utilization of the earlier endorsement from the NCCN (National Comprehensive Cancer Network) for Pedmark in the adolescent and young adult (AYA) population.
• In January, 2024, the FDA (U.S. Food and Drug Administration) issued a public reminder to health care providers that Pedmark (sodium thiosulphate injection) is not substitutable with other sodium thiosulphate products as explicitly directed in its prescribing label.

Financial results for the fourth quarter and fiscal year ended Dec. 31, 2023:

• Net sales: Net product sales were $21.3-million in fiscal 2023, compared with $1.5-million in 2022. The company had gross profit of $20-million for fiscal 2023. The increase in sales reflects strong growth in new patient starts and accounts.
• Cash position: Cash and cash equivalents were $13.2-million as of Dec. 31, 2023. There was a $10.5-million decrease in cash and cash equivalents between Dec. 31, 2023, and Dec. 31, 2022, as a result of cash outlays for operating expenses related to the promotion and marketing of Pedmark, general and administrative expenses and the preparation for the commercial launch of Pedmarqsi in Europe. These cash outflows were offset by cash inflows primarily from product sales. In addition, as announced this week, the company received approximately $43-million from the licensing of Europe, Australia and New Zealand to Norgine. Inclusive of these events, the pro forma Dec. 31, 2023, cash balance is in excess of $55-million. The company anticipates that its cash, cash equivalents and investment securities as of Dec. 31, 2023, when coupled with Pedmark revenue assumptions and the recently announced licence agreement for Europe, will be sufficient to finance its planned operations for at least the next 12 months.
• Research and development expenses (R&D) expenses: R&D expenses decreased by $3.5-million in fiscal 2023 as compared with fiscal 2022. The company reduced research and development costs when it received FDA approval of Pedmark in September, 2022. The majority of traditional research and development expenses associated with Pedmark are now recorded as general and administrative expenses or capitalized into inventory and eventually recorded to costs of product sales.
• 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. The company recorded $12.1-million in selling and marketing expenses in fiscal 2023, compared with $2.8-million in fiscal 2022.
• General and administrative (G&A) expenses: For fiscal 2023, G&A expenses increased by $2.3-million compared with fiscal 2022. Non-cash expenses associated with equity remuneration increased by $1.4-million in fiscal year 2023 over 2022. Payroll and benefits related expenses rose by $1.1-million in fiscal 2023 compared with fiscal 2022. There was an increase in consulting and professional costs of $800,000 in fiscal 2023 over fiscal 2022.
• Net loss: Net losses for the fourth quarter and year ended Dec. 31, 2023, of $2.7-million (10 cents per share) and $16-million (60 cents per share), respectively, compared with $6.9-million (26 cents per share) and $23.7-million (90 cents per share), respectively, for the same periods in 2022.

Financial update

The selected financial data presented herein are derived from the company's unaudited, condensed consolidated financial statements, which were prepared in accordance with U.S. generally accepted accounting principles. The complete audited, condensed consolidated financial statements for the period ended Dec. 31, 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 to reduce the risk of platinum-induced ototoxicity in pediatric patients. Further, Pedmark received FDA approval in September, 2022, and European Commission approval in June, 2023, and United Kingdom approval in October, 2023. Pedmark has received orphan drug exclusivity in the United States.

We seek Safe Harbor.