Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PEDMARK delivered net revenues of $7.3 million in Q2 2024, representing a 120% increase compared to the same quarter in 2023.
- The company has successfully managed the reimbursement process with major health plans such as Blue Cross Blue Shield, United, and Caremark.
- Fennec Pharmaceuticals Inc (FENC, Financial) has expanded its sales force activities into community centers treating the AYA population, which is expected to drive future growth.
- The partnership with Norgine to commercialize PEDMARQSI in Europe, Australia, and New Zealand is progressing well, with a targeted launch in late Q4 2024.
- The NCCN recently updated their AYA guidelines for PEDMARK, allowing access to a broader patient population, which is expected to drive increased adoption.
Negative Points
- G&A expenses increased to $6.9 million in Q2 2024, up from $5.5 million in the same quarter of 2023, largely due to pre-commercialization efforts for the European launch.
- Selling and marketing expenses rose to $4.6 million in Q2 2024, compared to $2.4 million in the same quarter of 2023, driven by higher payroll and increased marketing expenses.
- The pediatric business showed a modest sequential decline, indicating potential challenges in maintaining growth in this segment.
- The company is still addressing the issue of compounding, which poses a challenge to the adoption of PEDMARK in the pediatric market.
- Cash and cash equivalents decreased to approximately $43 million as of June 30, 2024, due to sales and marketing expenses and EU-related costs, including those associated with the Norgine transaction.
Q & A Highlights
Q: Jeff, what excited you about joining Fennec Pharmaceuticals, and how do you plan to create shareholder value?
A: Jeff Hackman (CEO): I saw significant opportunities at Fennec, including a talented team and leadership experience. My background in commercializing oncology products, especially in the pediatric and AYA (adolescent and young adult) markets, positions me well to identify gaps and drive the company forward.
Q: Can you provide more details on the AYA progress and what we can expect in Q3?
A: Robert Andrade (CFO): We've laid a strong foundation, including updating the NCCN guidelines. Early in Q3, institutions are becoming more aware of PEDMARK, and we are seeing follow-through in terms of reimbursement and adoption. This is just the beginning, and we expect continued progress.
Q: How are you addressing logistical challenges in treating AYA patients, such as clinic hours and home infusions?
A: Robert Andrade (CFO): We are using a combination of approaches, including partnerships with Orsini Specialty Pharmacy for home infusions and working with clinics to extend their hours. Reimbursement from major payers has also been a significant step forward.
Q: How did the pediatric business perform in Q2, and what are your expectations moving forward?
A: Robert Andrade (CFO): The pediatric market is small but stable. We have a strong base of business with key centers and hospitals. Jeff Hackman (CEO): There is still opportunity for growth in the pediatric segment, and we will continue to evaluate and execute strategies to maximize this potential.
Q: What progress has been made with the pilot studies in the community setting for the AYA market?
A: Robert Andrade (CFO): We have made significant progress, including successful reimbursement from new institutions. This foundation will help us build momentum in Q3 and beyond.
Q: Can you comment on the compounding issue and its impact on the pediatric market?
A: Robert Andrade (CFO): Compounding is a challenge, but we believe in the value of PEDMARK and its clinical benefits. Jeff Hackman (CEO): We will focus on delivering the right message and executing effectively to overcome this challenge.
Q: Are there plans to fill the COO role or other key positions?
A: Jeff Hackman (CEO): I am evaluating the gaps and needs within the organization. I will assess and fill positions as necessary to ensure we have the right talent in place.
Q: What are the next milestones with Norgine, and how will they be recognized?
A: Robert Andrade (CFO): The next milestone is achieving a certain price for PEDMARQSI in Germany, expected in late Q4 or early Q1. Upon achieving this, we will recognize a EUR10 million milestone and start receiving royalties on net sales.
Q: Jeff, can you share any past experiences that are analogous to the current situation with PEDMARK?
A: Jeff Hackman (CEO): I have two relevant experiences: one at Baxalta, moving a product from pediatric to AYA markets, and another at Use of Pharma, launching a product with a better safety profile. Both required clear messaging and effective execution, which I plan to apply here.
Q: What are your thoughts on business development opportunities and expanding the portfolio?
A: Jeff Hackman (CEO): Our priority is to create a success story with PEDMARK in the US. Once we achieve that, we will consider additional opportunities. Robert Andrade (CFO): We are focused on growing PEDMARK globally and will evaluate other opportunities as they arise.
Q: When can we expect formal revenue guidance from Fennec?
A: Robert Andrade (CFO): We are committed to providing more guidance as we move forward. As we gain more traction in both the pediatric and AYA markets, we will offer more detailed expectations to analysts and investors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
