(Filing, Annual, AEterna Zentaris, 2015, MAR 29, 2016, View Source [SID:1234510132])

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On March 28, 2016 Fennec Pharmaceuticals Inc. (TSX: FRX, OTCQB: FENCF), a specialty pharmaceutical company focused on the development of Sodium Thiosulfate (STS) for the prevention of platinum-induced ototoxicity in pediatric patients, reported its corporate update and financial results for the year ended December 31, 2015 (Press release, Fennec Pharmaceuticals, MAR 29, 2016, View Source [SID:1234510448]).

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"Throughout 2015 we continued to make progress on the development of STS including the positive interim safety results from SIOPEL 6 released at ASCO (Free ASCO Whitepaper)," said Rosty Raykov, CEO of Fennec. "We remain focused on putting the Company in a position for potential regulatory submission upon receiving positive hearing results from SIOPEL 6."

Highlights of Year 2015

In December 2015, announced seasoned pharmaceutical executive Khalid Islam as new Chairman of the Board.
In May 2015, SIOPEL 6 announced positive interim safety data results at American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2015 Annual Meeting.
In April 2015, Fennec’s largest shareholder exercised warrants for net proceeds of $0.5 million.
In February 2015, the Independent Monitoring Committee (IDMC) recommended the continuation of the SIOPEL 6 Phase 3 Clinical Trial after conducting their final safety review of 100 patients.
In January 2015, SIOPEL 6 completed patient enrollment of 109 patients in the Phase 3 trial.
Key Milestones for 2016

Second and last protocol-specified interim analysis for SIOPEL 6 on hearing efficacy is expected to be completed in the first half of 2016.
Prepare for NDA/MAA submissions and commercialization.
Regulatory Agency scientific advice meetings planned in US and Europe.
Financial Update

The selected financial data presented below is derived from our audited condensed consolidated financial statements which were prepared in accordance with U.S. generally accepted accounting principles. The complete audited consolidated financial statements for the period ended December 31, 2015 and management’s discussion and analysis of financial condition and results of operations will be available via www.sec.gov and www.sedar.com. All values are presented in thousands unless otherwise noted.

Audited Condensed Consolidated
Statement of Operations:
(U.S. Dollars in thousands except per share amounts)
Three Months Ended Twelve Months Ended
December 31,
2015 December 31,
2014 December 31,
2015 December 31,
2014
Revenue $ – $ – $ – $ –
Operating expenses:
Research and development 71 165 256 357
General and administrative 480 625 1,634 2,520
Loss from operations (551) (790) (1,890) (2,877)
Other (expense)/income
Unrealized gain on derivatives 11 2,179 1,237 355
Net gain on derivative settlement – – – 349
Interest (expense)/income and other, net – (1) (6) (3)
Total other (expense)/income, net 11 2,178 1,231 701
Net income/(loss) $ (540) $ 1,388 $ (659) $ (2,176)
Basic net income/(loss) per common share $ (0.05) $ 0.14 $ (0.06) $ (0.22)
Diluted net income/(loss) per common share $ (0.05) $ 0.13 $ (0.06) $ (0.22)
The Company reported a net loss from operations of $0.6 million (which excludes a $0.01 million non-cash gain on derivatives) for the three months ended December 31, 2015, compared to a net loss from operations of $0.8 million (excluding the non-cash gain of $2.2 million) in 2014.

Research and development expenses totaled $0.07 million for the fourth quarter ended December 31, 2015, as compared to a $0.2 million in the same period in 2014 as the SIOPEL 6 Phase 3 trial completed enrollment in 2014 along with a wind down of expenses associated with the trial. General and administrative expenses were $0.5 million in the fourth quarter ended December 31, 2015, as compared to $0.6 million in the same period in 2014. The decrease in general and administrative expenses is primarily attributable to the non-cash impact of equity based compensation in 2014.

Total operating expenses were $1.9 million for the year ended December 31, 2015 and $2.9 million for the year ended December 31, 2014. The decrease in net loss from operations excluding the non-cash impact of derivatives was due to both a decrease in research and development expenses and general and administrative expenses. Research and development expenses were down for the year comparable for the same period as the Company’s SIOPEL 6 Phase 3 trial completed enrollment and expenses were winding down related to the trial. There was a significant decrease in general and administrative expense primarily due to a reduction in non-cash expenses associated with the issuance of stock options in 2014.

Fennec Pharmaceuticals Inc.
Balance Sheets
(U.S. Dollars in thousands)
December 31, 2015 December 31, 2014
Assets
Cash and cash equivalents $ 942 $ 2,307
Other current assets 77 65
Total Assets $ 1,019 $ 2,372
Liabilities and stockholders’ equity
Current liabilities $ 389 $ 440
Derivative liabilities 82 1,319
Total stockholders’ equity 548 613
Total liabilities and stockholders’ equity $ 1,019 $ 2,372
Cash and cash equivalents were $0.94 million at December 31, 2015 and $2.3 million at December 31, 2014. The decrease in cash and cash equivalents between December 31, 2015 and December 31, 2014 was due to clinical trial expenses related to our Phase III study of STS and our general and administrative expenses offset by the exercise of options and warrants during the fiscal year. The Company received approximately $0.5 million in cash from the exercise of options and warrants.

Working Capital Fiscal Year Ended
Selected Asset and Liability Data: December 31, 2015 December 31, 2014
(U.S. Dollars in thousands)
Cash and cash equivalents $ 942 $ 2,307
Other current assets 77 65
Current liabilities excluding derivative liability (389) (440)
Working capital $ 630 $ 1,932
Selected Equity:
Common stock $ 69,153 $ 68,656
Accumulated deficit (111,533) (110,874)
Stockholders’ equity 548 613

At December 31, 2015, the Company had working capital balance totaling approximately $0.6 million compared to $1.9 million as of December 31, 2014.

Forward looking statements

Except for historical information described in this press release, all other statements are forward-looking. Forward-looking statements are subject to certain risks and uncertainties inherent in the Company’s business that could cause actual results to vary, including such risks that regulatory and guideline developments may change, scientific data may not be sufficient to meet regulatory standards or receipt of required regulatory clearances or approvals, clinical results may not be replicated in actual patient settings, protection offered by the Company’s patents and patent applications may be challenged, invalidated or circumvented by its competitors, the available market for the Company’s products will not be as large as expected, the Company’s products will not be able to penetrate one or more targeted markets, revenues will not be sufficient to fund further development and clinical studies, the Company may not meet its future capital requirements in different countries and municipalities, and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission including its Annual Report on Form 10-K for the year ended December 31, 2015. Fennec Pharmaceuticals, Inc. disclaims any obligation to update these forward-looking statements except as required by law.

For a more detailed discussion of related risk factors, please refer to our public filings available at www.sec.gov and www.sedar.com.

About Sodium Thiosulfate (STS)
Cisplatin and other platinum compounds are essential chemotherapeutic components for many pediatric malignancies. Unfortunately platinum-based therapies cause ototoxicity in many patients, and are particularly harmful to the survivors of pediatric cancer.

In the U.S. and Europe there is estimated that over 10,000 children are diagnosed with local cancers that may receive platinum based chemotherapy. Localized cancers that receive platinum agents may have overall survival rates of greater than 80% further emphasizing the quality of life after treatment. The incidence of hearing loss in these children depends upon the dose and duration of chemotherapy, and many of these children require lifelong hearing aids. There is currently no established preventive agent for this hearing loss and only expensive, technically difficult and sub-optimal cochlear (inner ear) implants have been shown to provide some benefit. Infants and young children at critical stages of development lack speech language development and literacy, and older children and adolescents lack social-emotional development and educational achievement.

STS has been studied by cooperative groups in two Phase 3 clinical studies of survival and reduction of ototoxicity, The Clinical Oncology Group Protocol ACCL0431 and SIOPEL 6. Both studies are closed to recruitment. The COG ACCL0431 protocol enrolled one of five childhood cancers typically treated with intensive cisplatin therapy for localized and disseminated disease, including newly diagnosed hepatoblastoma, germ cell tumor, osteosarcoma, neuroblastoma, and medulloblastoma. SIOPEL 6 enrolled only hepatoblastoma patients with localized tumors.

On March 29, 2016: Sun Pharma (Reuters: SUN.BO, Bloomberg: SUNP IN, NSE: SUNPHARMA, BSE: 524715, Sun Pharmaceutical Industries Ltd and includes its subsidiaries or associate companies) reported the acquisition of 14 established prescription brands from Novartis AG and Novartis Pharma AG (together ‘Novartis’) in Japan (Press release, Sun Pharma, MAR 29, 2016, View Source [SID:1234510180]).

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According to the agreements entered into between the parties, a wholly-owned subsidiary of Sun Pharma will acquire the portfolio consisting of 14 established prescription brands from Novartis for a cash consideration of US$ 293 million. These brands have combined annualized revenues of approximately US$ 160 million and address medical conditions across several therapeutic areas. Under the terms of the agreements, Novartis will continue to distribute these brands, for a certain period, pending transfer of all marketing authorizations to Sun Pharma’s subsidiary. The acquired brands will be marketed by a reliable and established local marketing partner under the Sun Pharma label. The local marketing partner will also be responsible for distribution of the brands.

Commenting on the acquisition, Dilip Shanghvi, Managing Director, Sun Pharma said, "Japan is a market of strategic interest for us. This acquisition marks Sun Pharma’s foray into the Japanese prescription market and provides us an opportunity to build a larger product portfolio in the future."

As per the December-2015 IMS Data, the size of the Japanese pharmaceutical market was estimated at US$ 73 Billion, accounting for over 7% of the US$ 1 Trillion global pharmaceutical market.

On March 29, 2016 Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZ) (the "Company"), a specialty biopharmaceutical company engaged in developing and commercializing novel treatments in oncology, endocrinology and women’s health, reported financial and operating results for the fourth quarter and year ended December 31, 2015 (Filing, Q4/Annual, AEterna Zentaris, 2015, MAR 29, 2016, View Source [SID:1234510133]).

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Commenting on fourth quarter accomplishments, David A. Dodd, Chairman, President and Chief Executive Officer of the Company, stated, "Our progress during the fourth quarter was truly astounding. As we began the quarter, we faced the prospect of massive dilution from the exercise of warrants that had very unfavorable terms and a capital structure that challenged our ongoing operations and our ability to raise further funding. We ended the quarter with a cleaned-up capital structure and a successful, significant capital raise on favorable terms. A tremendous amount of difficult work during the quarter made this successful turn-around possible. We now have the resources to complete the Phase 3 studies of both Zoptrex and Macrilen and to move the Company to an entirely new level, if our confidence in our product candidates is demonstrated with positive outcomes of the clinical programs. I would like to thank our team for their very hard and dedicated work during the quarter that achieved these critical accomplishments. I also want to thank our Board for their commitment and supportive efforts that enabled these successful achievements. We recognize that substantial progress remains to be achieved and we are committed to successfully building a profitable growth-oriented company, providing attractive financial returns to our shareholders, commercializing meaningful products that improve the lives of patients and enabling our employees to develop purposeful careers."

Commenting on the Company’s product-development progress, Mr. Dodd stated, "During the fourth quarter, we received very encouraging news regarding Zoptrex when, following a comprehensive review of the final interim efficacy and safety data, the DSMB recommended that we continue the ZoptEC Phase 3 clinical study to its conclusion. We expect to complete the ZoptEC trial in Q3 of 2016 and, if the results of the trial warrant doing so, to file the NDA for Zoptrex in the first half of 2017. More recently, we reported on the successful progress of the Zoptrex development program in China. We also initiated patient enrollment in our confirmatory Phase 3 clinical study of Macrilen, which we expect to be the first FDA-approved test for the evaluation of adult growth hormone deficiency. We expect the confirmatory Phase 3 clinical study of Macrilen to be concluded in Q3 of 2016, which would permit us to submit a NDA by mid-year 2017. If the study is successful in meeting its primary endpoint, we anticipate FDA approval of Macrilen by as early as year-end 2017."

Continuing with his commentary, Mr. Dodd stated, "Restructuring our financial team and closing our office in Quebec City was another very important and difficult accomplishment during the fourth quarter, which permitted us to further simplify our operations. We continue our search for a permanent finance staff and we are committed to taking the time necessary to find the appropriate expertise and experience that will contribute to our continued progress. I would like to note that we ended the year with a global headcount of approximately 48 active employees, compared to the almost 100 active employees we had when I joined the company in April of 2013. This restructuring, as well as the Resource Optimization Program implemented in 2014, has positioned us to achieve net research and development ("R&D") and general and administrative ("G&A") savings of approximately $2.5 million annually."

Concluding, Mr. Dodd addressed the Company’s commercial operations, stating, "Our co-promotions of EstroGel and Saizen continued to ramp up during the fourth quarter, although not at the pace we are seeking. During 2015, our selling efforts resulted in a consistent increase of EstroGel prescriptions within our territories. Specifically, we increased EstroGel market share of total prescriptions for non-patch transdermal estrogen products in our territories from 23.8% in Q1 to 26.9% in Q4. This resulted in a 17.4% increase in EstroGel total prescriptions within our territories over this same period, compared to a 0.5% decline by our competitors. However, this increase did not result in our receipt of meaningful commission revenue from our promotion of EstroGel. During the fourth quarter, we expanded our Saizen target list from the 450 endocrinologists we had during most of last year to 900 validated targets that we are now addressing. As a result, recent performance is producing attractive results, which we expect will result in meaningful commission revenue this year. During 2016, we expect to achieve more significant commission revenue for both of these products as we continue our focused selling efforts. One way to increase the productivity and income contribution resulting from our selling efforts is to expand our selling portfolio. During the fourth quarter, we added what we think will be a significant product, when we concluded a co-marketing agreement with Armune BioScience for APIFINY, the only cancer-specific, non-PSA blood test for the evaluation of the risk of prostate cancer. This product was launched by our sales force in mid-February. Early reports from our representatives are positive regarding the interest in targeted physicians adopting this product."

Fourth Quarter and Full Year 2015 Financial Highlights

R&D costs were $4.2 million and $17.2 million for the three-month period and the year ended December 31, 2015, respectively, compared to $6.3 million and $23.7 million for the same periods in 2014. The decrease for the three-month period and for the year ended December 31, 2015, as compared to the same period in 2014, is mainly attributable to the realization of cost savings in connection with our 2014 Resource Optimization Program, as well as to the weakening, in 2015, of the euro against the US dollar. The decrease for the year ended December 31, 2015 was partly offset by higher third-party costs, which increased slightly during the year ended December 31, 2015, as compared to the same period in 2014, mainly due to a higher comparative number of patients enrolled in the ZoptEC clinical trial, which is now fully enrolled. However, the quarter-over-quarter decrease in third-party costs is explained by the fact that the number of patients in treatment was lower in 2015 as compared to the same period in 2014.

G&A expenses were $4.0 million and $11.3 million for the three-month period and the year ended December 31, 2015, respectively, as compared to $2.6 million and $9.8 million for the same periods in 2014. The increase is mainly attributable to the recording of a provision related to the closure of our Quebec City office and the restructuring of our finance and accounting team in the fourth quarter of 2015, as well as to the recording of certain transaction costs associated with the completion of our March 2015 and December 2015 offerings of Common Shares and warrants.

Selling expenses were $1.8 million and $6.9 million for the three-month period and the year ended December 31, 2015, respectively, as compared to $2.0 million and $3.9 million for the same periods in 2014. The decrease in selling expenses for the three-month period ended December 31, 2015 is explained by the start-up costs related to the deployment of our contracted sales force in connection with the co-promotion activities, which were launched in late 2014. The increase in selling expenses for the year ended December 31, 2015 as compared to the same period in 2014, is attributable to the fact that 2014 was not a full year of sales activity. During the third quarter of 2015, we also expanded the size of our contracted sales force from 19 to 21 sales representatives in order to support our promotional efforts associated with Saizen. This sales force expense will also cover the recently initiated selling in support of APIFINY.

Net (loss) income for the three-month period and the year ended December 31, 2015 was ($10.0) million and ($50.1) million, or ($1.46) and ($18.14) per basic and diluted share, respectively, compared to $4.2 million and ($16.6) million, or $6.35 and ($28.06) per basic and diluted share for the same periods in 2014. The increase in our net loss from operations for the three-

month period and for the year ended December 31, 2015, as compared to the same period in 2014, is due to the higher comparative G&A and selling expenses and net finance costs, partly offset by lower comparative R&D costs.
Cash and cash equivalents were $41.5 million as at December 31, 2015, compared to $34.9 million as at December 31, 2014.