What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-03-30 compared with 2020-02-14 · 657 added, 702 removed, 81 unchanged (94% of the section changed)

Fennec Pharmaceuticals

(“Fennec,”

the “Company,”

“we,”

“us,”

or “our”) is a biopharmaceutical

company focused on the development of PEDMARK TM (sodium thiosulfate (STS) anhydrous injection)”) for the prevention

of platinum-induced ototoxicity in pediatric cancer patients.

We incorporated under the Canada Business Corporations Act (“CBCA”)

in September 1996.

Effective on August 25, 2011, the Company continued from the CBCA to the Business Corporations Act (British

Columbia) (the “Continuance”).

We have four wholly-owned subsidiaries:

Oxiquant, Inc.

and Fennec Pharmaceuticals, Inc.,

both Delaware corporations, Cadherin Biomedical Inc., a Canadian company, and Fennec Pharmaceuticals (EU) Limited (“Fennec

Limited”), an Ireland company.

With the exception of Fennec Pharmaceuticals, Inc., all subsidiaries are inactive.

Our corporate website is www.fennecpharma.com.

We make our periodic and current reports, together with amendments to these reports, filed or furnished pursuant to Section 13(a)

or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, available on our website, free of charge, as

soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission,

Members of the public may also read and copy any materials we file with, or furnish to, the SEC at the SEC’s

Public Reference Room at 100 F Street, NE, Washington, DC 20549.

To obtain information on the operation of the Public Reference

Room, please call the SEC at 1-800-SEC-0330.

The SEC maintains a website at www.sec.gov that contains the reports, proxy statements

and other information that we file or furnish electronically with the SEC.

The Canadian securities regulatory authorities maintain

a website at www.sedar.com that contains our filings with the Canadian securities regulatory authorities.

Our website and the information

contained therein or connected thereto is not intended to be incorporated into this Annual Report or any other report or information

we file with the SEC or Canadian securities regulatory authorities.

Product Candidate

The following is

our only product candidate in the clinical stage of development:

PEDMARK TM (sodium thiosulfate

(STS) anhydrous injection) –has announced results of two Phase 3 clinical trials for the prevention of cisplatin induced

hearing loss, or ototoxicity in children including the pivotal Phase 3 study SIOPEL 6 , “A Multicentre Open Label Randomised

Phase 3 Trial of the Efficacy of Sodium Thiosulfate in Reducing Ototoxicity in Patients Receiving Cisplatin Chemotherapy for

Standard Risk Hepatoblastoma,”

and the proof of concept Phase 3 study “A Randomized Phase 3 Study of Sodium

Thiosulfate for the Prevention of Cisplatin-Induced Ototoxicity in Children”.

We continue to focus our resources on the

development of PEDMARK TM .

We have licensed from Oregon Health &

Science University (“OHSU”) intellectual property rights for the use of PEDMARK TM as a chemoprotectant and

are developing PEDMARK TM as a protectant against the hearing loss often caused by platinum-based anti-cancer agents

Preclinical and clinical studies conducted by OHSU and others have indicated that PEDMARK TM can effectively

reduce the incidence of hearing loss caused by platinum-based anti-cancer agents.

Hearing loss among children receiving platinum-based

chemotherapy is frequent, permanent and often severely disabling.

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.

In addition, adults undergoing chemotherapy for several common malignancies, including

ovarian cancer, testicular cancer, and particularly head and neck cancer and brain cancer, often receive intensive platinum-based

therapy and may experience severe, irreversible hearing loss, particularly in the high frequencies.

and Europe, it is

estimated annually that over 10,000 children may receive platinum-based chemotherapy.

The incidence of ototoxicity 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 that suffer ototoxicity at critical stages of development lack

speech language development and literacy, and older children and adolescents lack social-emotional development and educational

PEDMARK 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.

Candidate - PEDMARK TM

Our only product candidate in the clinical

stage of development is:

PEDMARK TM (sodium thiosulfate (STS) anhydrous

We have announced results of two Phase 3 clinical trials for the prevention of cisplatin induced hearing loss, or ototoxicity

in children, including the pivotal Phase 3 study SIOPEL 6, “A Multicentre Open Label Randomised Phase 3 Trial of the

Efficacy of Sodium Thiosulfate in Reducing Ototoxicity in Patients Receiving Cisplatin Chemotherapy for Standard Risk Hepatoblastoma,”

and the proof of concept Phase 3 study in collaboration with the Children’s Oncology Group (“COG ACCL0431”) “A Randomized

Phase 3 Study of Sodium Thiosulfate for the Prevention of Cisplatin-Induced Ototoxicity in Children”.

COG ACCL0431 final

results were published in the Lancet Oncology in 2016.

SIOPEL 6 final results were published in the New England Journal of

Medicine in June 2018.

We continue to focus our resources on the development of PEDMARK TM .

We have licensed from Oregon Health & Science University

(“OHSU”) intellectual property rights for the use of PEDMARK TM as a chemoprotectant and are developing PEDMARK TM

as a protectant against the hearing loss often caused by platinum-based anti-cancer agents in children.

Preclinical and clinical

studies conducted by OHSU and others have indicated that PEDMARK TM can effectively reduce the incidence of hearing loss

caused by platinum-based anti-cancer agents.

Hearing loss among children receiving platinum-based chemotherapy

is frequent, permanent and often severely disabling.

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.

In addition, adults undergoing chemotherapy

for several common malignancies, including ovarian cancer, testicular cancer, and particularly head and neck cancer and brain cancer,

often receive intensive platinum-based therapy and may experience severe, irreversible hearing loss, particularly in the high frequencies.

We estimate in the U.S.

and Europe that

annually over 10,000 children with solid tumors are treated with platinum agents.

The vast majority of these newly diagnosed

tumors are localized and classified as low to intermediate risk in nature.

These localized cancers may have overall survival rates

of greater than 80%, further emphasizing the importance of 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.

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 speech language development and literacy, and

older children and adolescents lack social-emotional development and educational achievement.

In March 2018, PEDMARK TM

received Breakthrough Therapy and Fast Track designations from the U.S.

Food and Drug Administration (“FDA”).

PEDMARK TM has received Orphan Drug Designation in the U.S.

in this setting.

We initiated our rolling New Drug Application

(“NDA”) for PEDMARK TM for the prevention of ototoxicity induced by cisplatin chemotherapy patients 1 month

to < 18 years of age with localized, non-metastatic, solid tumors with the FDA in December 2018.

We announced that we had

submitted full completion of the NDA in February 2020.

On April 13, 2020, we announced that the FDA had accepted for

filing and granted Priority Review for our NDA.

The FDA set a Prescription Drug Fee Act (“PDUFA”) target action date

of August 10, 2020 for the completion of the FDA’s review.

On August 10, 2020, we announced that we received a

Complete Response Letter (“CRL”) from the FDA regarding our NDA for PEDMARK TM , which identified deficiencies

in the third-party manufacturing facility that manufactures PEDMARK TM on our behalf.

Importantly, no clinical safety

or efficacy issues were identified during the review and there is no requirement for further clinical data.

In the fourth quarter

of 2020, we engaged in a Type A meeting with the FDA concerning the CRL that we believe was constructive and collaborative.

are working closely with our third-party drug manufacturer and the FDA to fully address the CRL, and we plan to resubmit our NDA

for PEDMARK TM in the second quarter of 2021.

In August 2018, the Pediatric Committee

(“PDCO”) of the European Medicines Agency (“EMA”) accepted our pediatric investigation plan (PIP) for sodium

thiosulfate with the trade name Pedmarqsi for the condition of the prevention of platinum-induced hearing loss.

An accepted PIP

is a prerequisite for filing a Marketing Authorization Application (“MAA”) for any new medicinal product in Europe.

indication targeted by our PIP is for the prevention of platinum-induced ototoxic hearing loss for standard risk hepatoblastoma

Additional tumor types of the proposed indication will be subject to the Committee for Medicinal Products for Human Use

(“CHMP”) assessment at the time of the MAA.

No deferred clinical studies were required in the positive opinion given

We were also advised that sodium thiosulfate (tradename to be determined) is eligible for submission of an application

for a Pediatric Use Marketing Authorization (“PUMA”).

A PUMA is a dedicated marketing authorization covering the indication

and appropriate formulation for medicines developed exclusively for use in the pediatric population and provides data and market

protection up to 10 years.

Therefore, this decision allows us to proceed with the submission of a PUMA in the European Union (EU)

with incentives of automatic access to the centralized procedure and up to 10 years of data and market protection.

In February 2020,

we announced that we had submitted a MAA for the prevention of ototoxicity induced by cisplatin chemotherapy patients 1 month to

< 18 years of age with localized, non-metastatic, solid tumors.

Clinical Studies

has been studied by cooperative groups in two Phase 3 clinical studies of survival and reduction of ototoxicity, COG ACCL0431 and

Both studies have been completed.

3 unchanged sentences

SIOPEL 6 enrolled only hepatoblastoma patients with localized tumors.

In July 2018, the Pediatric Committee (PDCO)

of the European Medicines Agency (EMA) accepted our pediatric investigation plan (PIP) for Sodium Thiosulfate for Infusion for

the condition of the prevention of platinum-induced ototoxic hearing loss.

An accepted PIP is a prerequisite for filing a full

Marketing Authorization Application (MAA) for a new medicinal product in Europe.

The indication targeted by the Company’s

PIP is for the prevention of platinum-induced ototoxic hearing loss for standard risk hepatoblastoma (SR-HB).

Additional tumor

types within the proposed Marketing Authorization (MA) indication will be subject to the Committee for Medicinal Products for Human

Use (CHMP) assessment at the time of the MAA.

No deferred clinical studies were required in the positive opinion given by PDCO.

The Company was also advised that Sodium Thiosulfate for Infusion is eligible for submission of an application for a Pediatric

Use Marketing Authorization (PUMA).

Therefore, this PIP decision allows Fennec to proceed with the submission of a PUMA in the European

Union (EU) with incentives of automatic access to the centralized procedure and up to 10 years of data and market protection.

PUMA is a dedicated MA for new products of medicines previously authorized and no longer under data or marketing protection, covering

the indication and appropriate formulation for medicines developed exclusively for use in the pediatric population.

2020, Fennec announced that it has submitted a MAA for the prevention of ototoxicity induced by cisplatin chemotherapy in patients

1 month to < 18 years of age with localized, non-metastatic, solid tumors.

The Company is targeting potential commercial launch

of Sodium Thiosulfate for Infusion, if approved, in the first half of 2021.

We initiated our rolling FDA New Drug Application

(“NDA”) for PEDMARK TM (tradename for Sodium Thiosulfate for Infusion in the US) for the prevention of ototoxicity

induced by cisplatin chemotherapy in patients 1 month to < 18 years of age with localized, non-metastatic, solid tumors in December

Fennec announced that it has completed its rolling submission of the NDA in February 2020.

The Company is targeting a potential

commercial launch of PEDMARK TM , if approved, in the second half of 2020.

In March 2018, PEDMARK TM received

Breakthrough Therapy and Fast Track designations from the FDA.

Further, PEDMARK TM has received Orphan Drug Designation

in the US in this setting.

In September 2019, the Company announced the

appointment of Shubh Goel as chief commercial officer.

In this newly created position, Ms.

Goel will build and oversee Fennec’s

commercial strategy and organization, including both the launch and commercialization of PEDMARK TM , if approved by the

FDA and equivalent foreign regulators.

In October 2007, we announced that our collaborative

partner, the International Childhood Liver Tumour Strategy Group, known as SIOPEL, a multi-disciplinary group of specialists under

the umbrella of the International Society of Pediatric Oncology, had launched a randomized Phase 3 clinical trial SIOPEL 6 to investigate

whether STS reduces hearing loss in standard risk hepatoblastoma (liver) cancer patients receiving cisplatin as a monotherapy.

The study was initiated in October 2007 initially

in the United Kingdom and completed enrollment at the end of 2014.

In October 2007, we announced that our collaborative partner,

the International Childhood Liver Tumour Strategy Group, known as SIOPEL, a multi-disciplinary group of specialists under the umbrella

of the International Society of Pediatric Oncology, had launched a randomized Phase 3 clinical trial SIOPEL 6 to investigate whether

STS reduces hearing loss in standard risk hepatoblastoma (liver) cancer patients receiving cisplatin as a monotherapy.

The study was initiated in October 2007 initially in the

United Kingdom and completed enrollment at the end of 2014.

52 sites from 11 countries enrolled 109 evaluable patients.

Under the terms of our agreement, SIOPEL conducted and funded all clinical activities and we provided drug, drug distribution and

pharmacovigilance, or safety monitoring, for the study.

SIOPEL 6 was completed in December 2014 and the final results of SIOPEL

6 were published in The New England Journal of Medicine in June 2018.

terms of our agreement, SIOPEL conducted and funded all clinical activities and we provided drug, drug distribution and pharmacovigilance,

or safety monitoring, for the study.

SIOPEL 6 was completed in December 2014 and the final results of SIOPEL 6 were published

in The New England Journal of Medicine in June 2018.

The primary objectives of SIOPEL 6 were:

To assess the efficacy of STS to reduce the

hearing impairment caused by cisplatin.

To carefully monitor any potential impact

of STS on response to cisplatin and survival.

To assess the efficacy of STS to reduce the hearing impairment caused by cisplatin.

To carefully monitor any potential impact of STS on response to cisplatin and survival.

SIOPEL 6 - Results

Background / Objectives:

high-frequency hearing loss is a serious permanent side-effect of cisplatin therapy, particularly debilitating when occurring in

young children.

STS has been shown to reduce cisplatin induced hearing loss.

SIOPEL 6 was a Phase 3 randomized trial to assess

the efficacy of STS in reducing ototoxicity in young children treated with cisplatin (Cis) for Standard Risk Hepatoblastoma (SR-HB).

Bilateral high-frequency hearing loss

is a serious permanent side-effect of cisplatin therapy, particularly debilitating when occurring in young children.

shown to reduce cisplatin induced hearing loss.

SIOPEL 6 was a Phase 3 randomized trial to assess the efficacy of STS in reducing

ototoxicity in young children treated with cisplatin (Cis) for Standard Risk Hepatoblastoma (SR-HB).

Design / Methods:

Newly diagnosed

patients with SR-HB, defined as tumor limited to PRETEXT I, II or III, no portal or hepatic vein involvement, no intra-abdominal

extrahepatic disease, AFP >100ng/ml and no metastases, were randomized to Cis or Cis+STS for 4 preoperative and 2 postoperative

Cisplatin 80mg/m2 was administered over 6 hours, STS 20g/m2 was administered intravenously over 15 minutes exactly 6 hours

after stopping cisplatin.

Newly diagnosed patients with SR-HB,

defined as tumor limited to PRETEXT I, II or III, no portal or hepatic vein involvement, no intra-abdominal extrahepatic disease,

AFP >100ng/ml and no metastases, were randomized to Cis or Cis+STS for 4 preoperative and 2 postoperative courses.

80mg/m2 was administered over 6 hours, STS 20g/m2 was administered intravenously over 15 minutes exactly 6 hours after stopping

Tumor response was assessed after 2 and 4 preoperative cycles with serum AFP and liver imaging.

In case of progressive disease (PD), STS was to be stopped and doxorubicin 60mg/m2 combined with cisplatin.

The primary endpoint

is centrally reviewed absolute hearing threshold, at the age of ≥3.5 years by pure tone audiometry.

One hundred and

nine randomized patients (52 Cisplatin only ("Cis") and 57 Cis+STS) were evaluable.

The combination of Cis+STS was generally

well tolerated.

With a follow up time of 52 months for the patients the three-year Event Free Survival ("EFS") for Cis

is 78.8% Cisplatin and 82.1% for the Cis + STS.

The three-year Overall Survival ("OS") is 92.3% for Cis and 98.2% for

Treatment failure defined as Progressive Disease ("PD") at 4 cycles was equivalent in both arms.

first 101 evaluable patients, hearing loss occurred in 29/46=63.0% under Cis and in 18/55=32.7% under Cis +STS, corresponding to

a relative risk of 0.52(P=0.002).

In case of progressive

disease (PD), STS was to be stopped and doxorubicin 60mg/m2 combined with cisplatin.

The primary endpoint was centrally reviewed

absolute hearing threshold, at the age of ≥3.5 years by pure tone audiometry.

109 randomized

patients (52 Cisplatin only ("Cis") and 57 Cis+STS) were evaluable.

The combination of Cis+STS was generally well tolerated.

With a patient follow-up time of 52 months, the three-year Event Free Survival ("EFS") for Cis was 78.8% Cisplatin and

82.1% for the Cis + STS.

The three-year Overall Survival ("OS") is 92.3% for Cis and 98.2% for Cis + STS.

Treatment failure

defined as Progressive Disease ("PD") at 4 cycles was equivalent in both arms.

Among the first 101 evaluable patients,

hearing loss occurred in 29/46=63.0% under Cis and in 18/55=32.7% under Cis +STS, corresponding to a relative risk of 0.52(P=0.002).

This randomized

1 unchanged sentence

of cisplatin-induced hearing loss without any evidence of tumor protection.

In March 2008, we announced the

activation of a Phase 3 trial with STS to prevent hearing loss in children receiving cisplatin-based chemotherapy in

collaboration with the Children’s Oncology Group (“COG ACCL0431”).

The goal of this Phase 3 study was to

evaluate in a multi-centered, randomized trial whether STS is an effective and safe means of preventing hearing loss in

children receiving cisplatin-based chemotherapy for newly diagnosed germ cell, liver (hepatoblastoma), brain

(medulloblastoma), nerve tissue (neuroblastoma) or bone (osteosarcoma) cancers.

Eligible children, one to eighteen years of

age, who were to receive cisplatin according to their disease-specific regimen and, upon enrollment in this study, were

randomized to receive STS or not.

Efficacy of STS was determined through comparison of hearing sensitivity at follow-up

relative to baseline measurements using standard audiometric techniques.

The Children’s Oncology Group was responsible

for funding the clinical activities for the study and we were responsible for providing the drug, drug distribution and

pharmacovigilance, or safety monitoring, for the study.

The trial completed enrollment of 131 pediatric patients in the first

quarter of 2012.

The final results of COG ACCL0431

were published in Lancet Oncology in December 2016.

March 2008, we announced the activation of a Phase 3 trial with STS to prevent hearing loss in children receiving cisplatin-based

chemotherapy in collaboration with the Children’s Oncology Group.

The goal of this Phase 3 study was to evaluate in a multi-centered,

randomized trial whether STS is an effective and safe means of preventing hearing loss in children receiving cisplatin-based chemotherapy

for newly diagnosed germ cell, liver (hepatoblastoma), brain (medulloblastoma), nerve tissue (neuroblastoma) or bone (osteosarcoma)

Eligible children, one to eighteen years of age, were to receive cisplatin according to their disease-specific regimen

and, upon enrollment in this study, were randomized to receive STS or not.

Efficacy of STS was determined through comparison of

hearing sensitivity at follow-up relative to baseline measurements using standard audiometric techniques.

The Children’s

Oncology Group was responsible for funding the clinical activities for the study and we were responsible for providing the drug,

drug distribution and pharmacovigilance, or safety monitoring, for the study.

The trial completed enrollment of 131 pediatric patients

in the first quarter of 2012.

The final results of COG ACCL0431 were published in Lancet Oncology in December 2016.

COG ACCL0431 - Results

10 unchanged sentences

Compare change in mean hearing thresholds.

Compare incidence of other Grade 3/4 toxicities

(renal and hematological).

Monitor Event Free Survival (EFS) and Overall

Survival (OS) in two groups.

Compare incidence of other Grade 3/4 toxicities (renal and hematological).

Monitor Event Free Survival (EFS) and Overall Survival (OS) in two groups.

125 eligible subjects were enrolled with

4 unchanged sentences

Hearing was measured using standard

audiometry for age and data were reviewed centrally using American Speech-Language-Hearing Association criteria.

audiometry for age and data was reviewed centrally using American Speech-Language-Hearing Association criteria.

The proportion of subjects with hearing

3 unchanged sentences

56.4% (31/55), respectively (p=0.004).

In a predefined subgroup of patients less

than 5 years old with 29 eligible subjects:

In a predefined subgroup of patients less than 5 years old with 29 eligible subjects:

Control was 21.4% (3/14) vs.

73.3% (11/15), respectively (p=0.005).

STS protects against cisplatin-induced hearing

loss in children across a heterogeneous range of tumor types with even stronger efficacy in the protocol predefined subgroup of

patients under five years old and is not associated with serious adverse events attributed to its use.

Further potential clinical use will be informed

by the final results of SIOPEL 6 study.

STS protects against cisplatin-induced hearing loss in children across a heterogeneous range of tumor types, with even stronger

efficacy in the protocol predefined subgroup of patients under five years old, and is not associated with serious adverse events

attributed to its use.

Further potential clinical use will be informed by the final results of SIOPEL 6 study.

Intellectual Property

Patents are important to developing and protecting

our competitive position.

Our general policy is to seek patent protection in the United States, major European countries, Japan,

Canada and other jurisdictions as appropriate for our compounds and methods.

patents, as well as most foreign patents, are

generally effective for 20 years from the date the earliest (priority) application was filed;

Patents are important to developing and protecting our competitive

Our general policy is to seek patent protection in the United States, major European countries, Japan, Canada and other

jurisdictions as appropriate for our compounds and methods.

patents, as well as most foreign patents, are generally effective

for 20 years from the date the earliest (priority) application was filed;

however, U.S.

patents that issue

on applications filed before June 8, 1995 may be effective until 17 years from the issue date, if that is later than the twenty-year

In some cases, the patent term may be extended to recapture a portion of the term lost during the U.S.

FDA regulatory review

or because of U.S.

patents that issue on applications filed

before June 8, 1995 may be effective until 17 years from the issue date, if that is later than the twenty-year date.

cases, the patent term may be extended to recapture a portion of the term lost during the U.S.

FDA regulatory review or because

Patent and Trademark Office, or USPTO, delays in prosecuting the application.

The duration of foreign patents

varies similarly, in accordance with local law.

Currently, we have licensed from OHSU one

The duration of foreign patents varies similarly,

in accordance with local law.

Currently, we have licensed from OHSU two U.S.

and nine foreign patents.

All the patents licensed from OHSU expire in 2021.

Additionally, there are two patents pending

that we license from OHSU and two additional patents pending owned by Fennec.

To the extent the patents owned by Fennec are issued,

the Company plans to operate under the owned patents as those licensed from OHSU will expire.

In addition, periods of marketing exclusivity

for STS may also be possible in the United States under orphan drug status and in Europe under European Market Exclusivity for

Pediatric Use.

The patents licensed from

OHSU expire in Europe in April of 2021 and expire in the United States in December of 2038.

Further, in September 2020,

patent was issued to us that captures the unique anhydrous form of

the active ingredient in our PEDMARK TM product, as well as related methods of synthesis.

This patent is

eligible for listing in the FDA Orange Book, and reflects our strategy to expand and diversify our intellectual property portfolio

to obtain protection for our PEDMARKTM product.

Additionally, there is one patent pending that we license from OHSU and one additional

patent pending owned by us.

In addition, periods of marketing exclusivity for PEDMARK TM

may also be possible in the United States under orphan drug status and in Europe under European Market Exclusivity for Pediatric

We obtained U.S.

Orphan Drug Designation for the use of STS in the prevention of platinum-induced ototoxicity in

pediatric patients in 2004 which provides 7.5 years of market exclusivity upon FDA approval of our NDA.

Orphan Drug Designation for the use of PEDMARK TM in the prevention of platinum-induced ototoxicity

in pediatric patients in 2004 which provides 7.5 years of market exclusivity upon FDA approval of our NDA.

We plan to pursue European

Market Exclusivity for Pediatric Use upon approval of the MAA which would allow for 10 years of market exclusivity.

Our success is significantly dependent

on our ability to obtain and maintain patent protection for STS, both in the United States and abroad.

The patent position of

biotechnology and pharmaceutical companies, in general, is highly uncertain and involves complex legal and factual questions,

which often results in apparent inconsistencies regarding the breadth of claims allowed and general uncertainty as to their

legal interpretation and enforceability.

Further, our principal candidate STS, is based on previously known compounds, and

the candidates or products that we develop in the future may include or be based on the same or other compounds owned or

produced by other parties, some or all of which may not be subject to effective patent protection.

In addition, regimens that

we may develop for the administration of pharmaceuticals, such as specifications for the frequency, timing and amount of

dosages, may not be patentable.

Accordingly, our patent applications may not result in patents being issued and issued

patents may not afford effective protection.

In addition, products or processes that we develop may turn out to be covered by

third party patents, in which case we may require a license under such patents if we intend to continue the development of

those products or processes.

Our patent position and proprietary rights

are subject to certain risks and uncertainties.

Our success is significantly dependent on our ability to obtain

and maintain patent protection for PEDMARK TM , both in the United States and abroad.

Our patent position and proprietary

rights are subject to various risks and uncertainties.

Please read the “Risk Factors”

in Item 1A of this Annual Report for

information about certain risks and uncertainties that may affect our patent position and proprietary rights.

We also rely upon unpatented confidential

information to remain competitive.

We protect such information principally through confidentiality agreements with our employees,

consultants, outside scientific collaborators, and other advisers.

In the case of our employees, these agreements also provide,

in compliance with relevant law, that inventions and other intellectual property conceived by such employees during their employment

shall be our exclusive property.

in Item 1A of this Annual Report

for information about certain risks and uncertainties that may affect our patent position and proprietary rights.

We also rely upon unpatented confidential information to remain

We protect such information principally through confidentiality agreements with our employees, consultants, outside

scientific collaborators, and other advisers.

In the case of our employees, these agreements also provide, in compliance with relevant

law, that inventions and other intellectual property conceived by such employees during their employment shall be our exclusive

Corporate Relationships

License Agreement with Oregon Health &

Science University

On February 20, 2013, Fennec entered into

a new exclusive license agreement with OHSU for exclusive worldwide license rights to intellectual property directed to thiol-based

compounds, including STS and their use in oncology (the "OHSU Agreement").

License Agreement with Oregon Health & Science University

On February 20, 2013, we entered into a new exclusive license

agreement with OHSU for exclusive worldwide license rights to intellectual property directed to thiol-based compounds, including

PEDMARK TM , and their use in oncology (the "OHSU Agreement").

OHSU will receive certain milestone payments,

royalty on net sales for licensed products and a royalty on any consideration received from sublicensing of the licensed technology.

On May 18, 2015, Fennec negotiated an amendment

("Amendment 1") to the OHSU Agreement, which expands Fennec’s exclusive license to include the use of N-acetylcysteine

as a standalone therapy and/or in combination with STS for the prevention of ototoxicity induced by chemotherapeutic agents to

treat cancers.

Further, Amendment 1 adjusts select milestone payments entered in the OHSU Agreement including but not limited to

the royalty rate on net sales for licensed products, royalty rate from sublicensing of the licensed technology and the fee payable

upon the regulatory approval of a licensed product.

On May 18, 2015, we negotiated an amendment ("Amendment

1") to the OHSU Agreement, which expands our exclusive license to include the use of N-acetylcysteine as a standalone therapy

and/or in combination with STS for the prevention of ototoxicity induced by chemotherapeutic agents to treat cancers.

Amendment 1 adjusts select milestone payments entered in the OHSU Agreement including but not limited to the royalty rate on net

sales for licensed products, royalty rate from sublicensing of the licensed technology and the fee payable upon the regulatory

approval of a licensed product.

The term of the OHSU Agreement as amended

by Amendment 1 expires on the date of the last to expire claim(s) covered in the patents licensed to Fennec or 8 years, whichever

by Amendment 1 expires on the date of the last to expire claim(s) covered in the patents licensed to us or 8 years, whichever

In the event a licensed product obtains regulatory approval and is covered by the Orphan Drug Designation, the parties

will in good faith amend the term of the agreement.

STS is currently protected by methods of use patents that the Company exclusively

licensed from OHSU that expire in Europe in 2021 and are currently pending in the United States.

The OHSU Agreement is terminable

by either Fennec or OHSU in the event of a material breach of the agreement by either party after 45 days prior written notice.

Fennec also has the right to terminate the OHSU Agreement at any time upon 60 days prior written notice and payment of all fees

due to OHSU under the OHSU Agreement.

Competition in the biotechnology and pharmaceutical

industries is intense.

We expect that if PEDMARK TM achieves regulatory approval for sale, it will compete on the basis

of drug efficacy, safety, patient convenience, reliability, ease of manufacture, price, marketing, distribution, and patent protection,

among other variables.

Our competitors may develop technologies or drugs that are more effective, safer or more affordable than

any we may develop.

We are aware of a number of companies engaged

in the research, development and testing of new cancer therapies or means of increasing the effectiveness of existing therapies,

including, among many others, Amgen, AstraZeneca, Bayer, Bristol-Myers Squibb, Eli Lilly, Eisai, Merck KGaA, Novartis, Johnson

& Johnson, Pfizer, Roche, Taiho and Sanofi-Aventis.

Some of these companies have products that have already received, or are

in the process of receiving, regulatory approval or are in later stages of clinical development than our product.

have much greater financial resources than we do.

Many of these companies have marketed drugs or are developing targeted cancer

therapeutics which, depending upon the mechanism of action of such agents, could be viewed as competitors.

We are not aware of any commercially

available agents that reduce the incidence of hearing loss associated with the use of platinum-based anti-cancer agents, for

which purpose we are developing STS.

There are several potential competitive agents with activity in preclinical or limited

clinical settings.

PEDMARK is currently protected by methods of use patents that we

exclusively license from OHSU that expire in Europe in 2021 and that expire in the United States in 2038.

The OHSU Agreement is

terminable by either us or OHSU in the event of a material breach of the agreement by either party after 45 days prior written

We also have the right to terminate the OHSU Agreement at any time upon 60 days prior written notice and payment of all

fees due to OHSU under the OHSU Agreement.

Our operations may be affected by the ongoing

COVID-19 pandemic.

The ultimate disruption which may be caused by the outbreak is uncertain;

however, it may result in a material

adverse impact on our financial position, operations and cash flows.

Possible effects may include, but are not limited to, disruption

to our product launch which includes the ability of sales reps to communicate with oncologists, absenteeism in our labor workforce,

unavailability of products and supplies used in operations, and a decline in value of our assets, including inventories, property

and equipment, and marketable securities.

COVID-19 has not had a material effect

on our operations to date as we have historically had a workforce which works remotely, preparations for product launch have been

under the assumption of a virtual launch, and product supplies have not been impacted.

biotechnology and pharmaceutical industries are extremely competitive.

Our potential competitors are many in number and include

major and mid-sized pharmaceutical and biotechnology companies.

Many of our potential competitors have significantly more financial,

technical and other resources than we do, which may give them a competitive advantage.

In addition, they may have substantially

more experience in effecting strategic combinations, in-licensing technology, developing drugs, obtaining regulatory approvals

and manufacturing and marketing products.

We cannot give any assurances that we can compete effectively with these other biotechnology

and pharmaceutical companies.

We expect that if PEDMARK TM achieves regulatory approval for sale, it will compete

on the basis of drug efficacy, safety, patient convenience, reliability, ease of manufacture, price, marketing, distribution, and

patent protection, among other variables.

Our competitors may develop technologies or drugs that are more effective, safer or more

affordable than any we may develop.

We are not aware of any commercially available agents that reduce

the incidence of hearing loss associated with the use of platinum-based anti-cancer agents, for which purpose we are developing

There are several potential competitive agents with activity in preclinical or limited clinical settings.

These include:

D-methionine, an amino acid that has been shown to protect against hearing loss in

experimental settings but was demonstrated to be inferior to STS in comparative studies;

SPI-3005, an oral agent primarily

being developed by Sound Pharmaceuticals for noise and age-related hearing loss but in early Phase II trials for chemotherapy

related hearing loss, which mimics glutathione peroxidase and induces the intracellular induction of glutathione;

N-acetylcysteine and amifostine, which have shown effectiveness (but less than STS) in experimental systems;

and Vitamin E,

salicylate and tiopronin, which have all demonstrated moderate activity in rat models to protect against cisplatin-induced

ototoxicity, but no clinical trials have been completed and DB-020 a clinical stage candidate in an ongoing Phase1b trial

being developed by Decibel Therapeutics.

Cochlear implants, which are small electronic devices that are surgically placed in

the inner ear to assist with certain types of deafness, are utilized to offer some relief for hearing loss associated with

the use of platinum-based anti-cancer agents, but are often suboptimal.

Many of our existing or potential competitors

have substantially greater financial, technical and human resources than we do and may be better equipped to develop, manufacture

and market products.

In addition, many of these competitors have extensive experience with preclinical testing and human clinical

trials and in obtaining regulatory approvals.

In addition, many of the smaller companies that compete with us have formed collaborative

relationships with large, established companies to support the research, development, clinical trials and commercialization of

any products that they may develop .

We may rely on third parties to commercialize the products we develop, and our success

will depend in large part on the efforts and competitive merit of these collaborative partners.

Academic institutions, government

agencies and other public and private research organizations may also conduct research, seek patent protection and establish collaborative

arrangements for research, clinical development and marketing of products similar to PEDMARK TM .

These companies and

institutions compete with us in recruiting and retaining qualified scientific and management personnel as well as in acquiring

technologies complementary to our projects.

The existence of competitive products, including products or treatments of which we

are not aware, or products or treatments that may be developed in the future, may adversely affect the marketability of PEDMARK TM .

D-methionine, an amino acid that has been shown to protect against hearing loss in experimental settings but was

demonstrated to be inferior to PEDMARK TM in comparative studies;

SPI-3005, an oral agent primarily being developed by

Sound Pharmaceuticals for noise and age-related hearing loss but in early Phase II trials for chemotherapy related hearing loss,

which mimics glutathione peroxidase and induces the intracellular induction of glutathione;

N-acetylcysteine and amifostine, which

have shown effectiveness (but less than PEDMARK TM ) in experimental systems;

and Vitamin E, salicylate and tiopronin,

which have all demonstrated moderate activity in rat models to protect against cisplatin-induced ototoxicity, but no clinical trials

have been completed and DB-020 a clinical stage candidate in an ongoing Phase1b trial being developed by Decibel Therapeutics.

Cochlear implants, which are small electronic devices that are surgically placed in the inner ear to assist with certain types

of deafness, are utilized to offer some relief for hearing loss associated with the use of platinum-based anti-cancer agents, but

are often suboptimal.

Manufacturing

and Clinical Supplies

do not own or operate manufacturing facilities for the production of commercial or clinical quantities of any product, including

We currently rely on a small number of third-party manufacturers to produce compounds used in our

product development and commercial activities and expect to continue to do so to meet the preclinical and clinical requirements

of our potential products and for all of our commercial needs.

We currently have long-term commercial supply agreements with

certain third-party manufacturers.

Our manufacturing and processing agreements require that all third-party contract manufacturers

and processors produce active pharmaceutical ingredients and finished products in accordance with the FDA’s current Good

Manufacturing Practices (“cGMP”) and all other applicable laws and regulations.

We maintain confidentiality agreements

with potential and existing manufacturers in order to protect our proprietary rights related to PEDMARK TM .

of the critical materials and components used in manufacturing PEDMARK TM are sourced from single suppliers.

interruption in the supply of a key material could significantly delay our research and development process or increase our expenses

for commercialization or development of PEDMARK TM .

Specialized materials must often be manufactured for the first time

for use in drug delivery technologies, or materials may be used in the technologies in a manner that is different from their customary

commercial uses.

The quality of materials can be critical to the performance of a drug delivery technology, so a reliable source

that provides a consistent supply of materials is important.

Materials or components needed for our drug delivery technologies

may be difficult to obtain on commercially reasonable terms, particularly when relatively small quantities are required or if the

materials traditionally have not been used in pharmaceutical products.

Government Regulation

The production and manufacture of our product

candidate and our research and development activities are subject to significant regulation for safety, efficacy and quality by

various governmental authorities around the world.

The production and manufacture of our product candidate and

our research and development activities are subject to significant regulation for safety, efficacy and quality by various governmental

authorities around the world.

Before new pharmaceutical products may be sold in the U.S.

and other countries,

clinical trials of the product must be conducted, and the results submitted to appropriate regulatory agencies for approval.

trial programs must establish efficacy, determine an appropriate dose and regimen, and define the conditions for safe use.

is a high-risk process that requires stepwise clinical studies in which the candidate product must successfully meet predetermined

In the U.S., the results of the preclinical and clinical testing of a product are then submitted to the FDA in the form

of a Biologics License Application or a New Drug Application.

In response to these submissions, the FDA may grant marketing approval,

request additional information or deny the application if it determines the application does not provide an adequate basis for

Similar submissions are required by authorities in other jurisdictions who independently assess the product and may reach

the same or different conclusions.

The receipt of regulatory approval often takes

a number of years, involves the expenditure of substantial resources and depends on a number of factors, including the severity

of the disease in question, the availability of alternative treatments and the risks and benefits demonstrated in clinical trials.

On occasion, regulatory authorities may require larger or additional studies, leading to unanticipated delay or expense.

initial approval from the FDA or other regulatory agencies has been obtained, further clinical trials may be required to provide

additional data on safety and effectiveness.

Additional trials are required to gain clearance for the use of a product as a treatment

for indications other than those initially approved.

Furthermore, the FDA and other regulatory agencies require companies to disclose

clinical trial results.

Failure to disclose such results within applicable time periods could result in penalties, including civil

monetary penalties.

In Canada, these activities are subject to

regulation by Health Canada’s Therapeutic Products Directorate, or TPD, and the rules and regulations promulgated under the

Food and Drug Act.

and other countries, clinical trials of

the product must be conducted, and the results submitted to appropriate regulatory agencies for approval.

Clinical trial programs

must establish efficacy, determine an appropriate dose and regimen, and define the conditions for safe use.

This is a high-risk

process that requires stepwise clinical studies in which the candidate product must successfully meet predetermined endpoints.

In the U.S., the results of the preclinical and clinical testing of a product are then submitted to the FDA in the form of a Biologics

License Application or a NDA.

In response to these submissions, the FDA may grant marketing approval, request additional information

or deny the application if it determines the application does not provide an adequate basis for approval.

Similar submissions are

required by authorities in other jurisdictions who independently assess the product and may reach the same or different conclusions.

The receipt of regulatory approval often takes a number of years,

involves the expenditure of substantial resources and depends on a number of factors, including the severity of the disease in

question, the availability of alternative treatments and the risks and benefits demonstrated in clinical trials.

On occasion, regulatory

authorities may require larger or additional studies, leading to unanticipated delay or expense.

Even after initial approval from

the FDA or other regulatory agencies has been obtained, further clinical trials may be required to provide additional data on safety

and effectiveness.

Additional trials are required to gain clearance for the use of a product as a treatment for indications other

than those initially approved.

Furthermore, the FDA and other regulatory agencies require companies to disclose clinical trial

Failure to disclose such results within applicable time periods could result in penalties, including civil monetary penalties.

In Canada, these activities are subject to regulation by Health

Canada’s Therapeutic Products Directorate, or TPD, and the rules and regulations promulgated under the Food and Drug

In the United States, drugs and biological products are subject to regulation by the FDA.

The FDA requires licensing

of manufacturing and contract research facilities, carefully controlled research and testing of products and governmental review

and approval of results prior to marketing therapeutic products.

Additionally, the FDA requires adherence to “Good Laboratory

Practices”

The FDA requires licensing of manufacturing

and contract research facilities, carefully controlled research and testing of products and governmental review and approval of

results prior to marketing therapeutic products.

Additionally, the FDA requires adherence to “Good Laboratory Practices”

as well as “Good Clinical Practices”

during clinical testing and “Good Manufacturing Practices”

and adherence to labeling and supply controls.

The systems of new drug approvals in Canada and the United States are substantially

similar and are generally considered to be among the most rigorous in the world.

Generally, the steps required for drug approval

in Canada and the United States, specifically in cancer related therapies, include:

and adherence

to labeling and supply controls.

The systems of new drug approvals in Canada and the United States are substantially similar and

are generally considered to be among the most rigorous in the world.

Generally, the steps required for drug approval in Canada and

the United States, specifically in cancer related therapies, include:

Preclinical Studies :

Preclinical studies, also known as non-clinical studies, primarily involve evaluations of pharmacology, toxic effects, pharmacokinetics

and metabolism of a drug in animals to provide evidence of the relative safety and bioavailability of the drug prior to its administration

to humans in clinical studies.

A typical program of preclinical studies takes 18 to 24 months to complete.

The results of the preclinical

studies as well as information related to the chemistry and comprehensive descriptions of proposed human clinical studies are then

submitted as part of the Investigational New Drug Application to the FDA, a Clinical Trial Application to the TPD, or similar submission

to other foreign regulatory bodies.

This is necessary in Canada, the United States and most other countries prior to undertaking

clinical studies.

Additional preclinical studies are conducted during clinical development to further characterize the toxic effects

of a drug prior to submitting a marketing application.

Phase 1 Clinical

Most Phase 1 clinical trials take approximately one year to complete and are usually conducted on a small number of

healthy human subjects to evaluate the drug’s safety, tolerability and pharmacokinetics.

In some cases, such as cancer indications,

Phase 1 clinical trials are conducted in patients rather than healthy volunteers.

Phase 2 Clinical

Phase 2 clinical trials typically take one to two years to complete and are generally carried out on a relatively small

number of patients, generally between 15 and 50, in a specific setting of targeted disease or medical

condition, in order to provide

an estimate of the drug’s effectiveness in that specific setting.

This phase also provides additional safety data and serves

to identify possible common short-term side effects and risks in a somewhat larger group of patients.

Phase 2 testing frequently

relates to a specific disease, such as breast or lung cancer.

Some contemporary methods of developing drugs, particularly molecularly

targeted therapies, do not require broad testing in specific diseases, and instead permit testing in subsets of patients expressing

the particular marker.

In some cases, such as cancer indications, the company sponsoring the new drug may submit a marketing application

to seek accelerated approval of the drug based on evidence of the drug’s effect on a “surrogate endpoint”

Phase II clinical trials.

A surrogate endpoint is a laboratory finding or physical sign that may not be a direct measurement of

how a patient feels, functions or survives, but is still considered likely to predict therapeutic benefit for the patient.

If accelerated

approval is received, the company sponsoring the new drug must continue testing to demonstrate that the drug indeed provides therapeutic

benefit to the patient.

Phase 3 Clinical

Phase 3 clinical trials typically take two to four years to complete and involve tests on a much larger population

of patients suffering from the targeted condition or disease.

These studies involve conducting controlled testing and/or uncontrolled

testing in an expanded patient population, numbering several hundred to several thousand patients, at separate test sites, known

as multi-center trials, to establish clinical safety and effectiveness.

These trials also generate information from which the overall

benefit-risk relationship relating to the drug can be determined and provide a basis for drug labeling.

Phase 3 trials are generally

the most time consuming and expensive part of a clinical trial program.

In some instances, governmental authorities, such as the

FDA, will allow a single Phase 3 clinical trial to serve as a pivotal efficacy trial to support a Marketing Application.

Preclinical studies, also known as non-clinical studies, primarily involve evaluations of pharmacology,

toxic effects, pharmacokinetics and metabolism of a drug in animals to provide evidence of the relative safety and bioavailability

of the drug prior to its administration to humans in clinical studies.

A typical program of preclinical studies takes 18 to 24

months to complete.

The results of the preclinical studies as well as information related to the chemistry and comprehensive descriptions

of proposed human clinical studies are then submitted as part of the Investigational New Drug Application to the FDA, a Clinical

Trial Application to the TPD, or similar submission to other foreign regulatory bodies.

This is necessary in Canada, the United

States and most other countries prior to undertaking clinical studies.

Additional preclinical studies are conducted during clinical

development to further characterize the toxic effects of a drug prior to submitting a marketing application.

Phase 1 Clinical Trials :

Most Phase 1 clinical trials take approximately one year to complete and are usually conducted

on a small number of healthy human subjects to evaluate the drug’s safety, tolerability and pharmacokinetics.

In some cases,

such as cancer indications, Phase 1 clinical trials are conducted in patients rather than healthy volunteers.

Phase 2 Clinical Trials :

Phase 2 clinical trials typically take one to two years to complete and are generally carried

out on a relatively small number of patients, generally between 15 and 50, in a specific setting of targeted disease or medical

condition, in order to provide an estimate of the drug’s effectiveness in that specific setting.

This phase also provides

additional safety data and serves to identify possible common short-term side effects and risks in a somewhat larger group of patients.

Phase 2 testing frequently relates to a specific disease, such as breast or lung cancer.

Some contemporary methods of developing

drugs, particularly molecularly targeted therapies, do not require broad testing in specific diseases, and instead permit testing

in subsets of patients expressing the particular marker.

In some cases, such as cancer indications, the company sponsoring the

new drug may submit a marketing application to seek accelerated approval of the drug based on evidence of the drug’s effect

on a “surrogate endpoint”

from Phase II clinical trials.

A surrogate endpoint is a laboratory finding or physical sign

that may not be a direct measurement of how a patient feels, functions or survives, but is still considered likely to predict therapeutic

benefit for the patient.

If accelerated approval is received, the company sponsoring the new drug must continue testing to demonstrate

that the drug indeed provides therapeutic benefit to the patient.

Phase 3 Clinical Trials :

Phase 3 clinical trials typically take two to four years to complete and involve tests on a

much larger population of patients suffering from the targeted condition or disease.

These studies involve conducting controlled

testing and/or uncontrolled testing in an expanded patient population, numbering several hundred to several thousand patients,

at separate test sites, known as multi-center trials, to establish clinical safety and effectiveness.

These trials also generate

information from which the overall benefit-risk relationship relating to the drug can be determined and provide a basis for drug

Phase 3 trials are generally the most time consuming and expensive part of a clinical trial program.

In some instances,

governmental authorities, such as the FDA, will allow a single Phase 3 clinical trial to serve as a pivotal efficacy trial to support

a Marketing Application.

Marketing Application :

Upon completion of Phase 3 clinical trials, the pharmaceutical company sponsoring the new drug assembles all the chemistry, preclinical

and clinical data and submits it to the TPD or the FDA as part of a New Drug Submission in Canada or a New Drug Application in

the United States.

The marketing application is then reviewed by the applicable regulatory body for approval to market the product.

Upon completion of Phase 3 clinical trials, the pharmaceutical company sponsoring the new drug

assembles all the chemistry, preclinical and clinical data and submits it to the TPD or the FDA as part of a New Drug Submission

in Canada or a NDA in the United States.

The marketing application is then reviewed by the applicable regulatory body for approval

to market the product.

The review process generally takes twelve to eighteen months.

Any clinical trials that we conduct may not

be successfully completed, either in a satisfactory time period or at all.

The typical time periods described above may vary substantially

and may be materially longer.

Any clinical trials that we conduct may not be successfully

completed, either in a satisfactory time period or at all.

The typical time periods described above may vary substantially and

may be materially longer.

In addition, the FDA and its counterparts in other countries have considerable discretion to discontinue

1 unchanged sentence

being tested.

It is possible the FDA and its counterparts in other countries may not (i) allow clinical trials to proceed at any

time after receiving an Investigational New Drug, (ii) allow further clinical development phases after authorizing a previous phase,

or (iii) approve marketing of a drug after the completion of clinical trials.

It is possible the FDA and its counterparts in other countries may not (i) allow clinical trials to proceed

at any time after receiving an Investigational New Drug, (ii) allow further clinical development phases after authorizing

a previous phase, or (iii) approve marketing of a drug after the completion of clinical trials.

While European, U.S.

and Canadian regulatory

systems require that medical products be safe, effective, and manufactured according to high quality standards, the drug approval

process in Europe differs from that in the United States and Canada and may require us to perform additional preclinical or clinical

testing regardless of whether FDA or TPD approval has been obtained.

The amount of time required to obtain necessary approvals

may be longer or shorter than that required for FDA or TPD approval.

European Union Regulations and Directives generally classify

health care products either as medicinal products, medical devices or in vitro diagnostics.

For medicinal products, marketing approval

may be sought using either the centralized procedure of the European Agency for the Evaluation of Medicinal Products, or EMEA,

or the decentralized, mutual recognition process.

The centralized procedure, which is mandatory for some biotechnology derived

products, results in an approval recommendation from the EMEA to all member states, while the European Union mutual recognition

process involves country by country approval.

and Canadian regulatory systems require

that medical products be safe, effective, and manufactured according to high quality standards, the drug approval process in Europe

differs from that in the United States and Canada and may require us to perform additional preclinical or clinical testing regardless

of whether FDA or TPD approval has been obtained.

The amount of time required to obtain necessary approvals may be longer or shorter

than that required for FDA or TPD approval.

European Union Regulations and Directives generally classify health care products either

as medicinal products, medical devices or in vitro diagnostics.

For medicinal products, marketing approval may be sought using

either the centralized procedure of the European Agency for the Evaluation of Medicinal Products, or EMEA, or the decentralized,

mutual recognition process.

The centralized procedure, which is mandatory for some biotechnology derived products, results in an

approval recommendation from the EMEA to all member states, while the European Union mutual recognition process involves country

by country approval.

The NDA Approval Process

Assuming successful completion of the required

clinical testing, the results of the preclinical studies and clinical trials, including negative or ambiguous results as well as

positive findings, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed

labeling, among other things, are submitted to the FDA as part of an NDA to support approval to market the product for one or more

In most cases, the submission of an NDA is subject to a substantial application user fee.

Fennec anticipates a waiver

of the application user fee related to its NDA for PEDMARK TM .

The FDA is required to conduct a preliminary

review of an NDA within the first 60 days after submission, before accepting it for filing, to determine whether it is sufficiently

complete to permit a substantive review.

The FDA may accept the NDA for filing, potentially refuse to file the NDA due to deficiencies

but work with the applicant to rectify the deficiencies (in which case the NDA is filed upon resolution of the deficiencies) or

refuse to file the NDA.

The FDA must notify the applicant of a refusal to file a decision within 60 days after the original receipt

date of the application.

successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, including negative

or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry,

manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA to support approval

to market the product for one or more indications.

In most cases, the submission of an NDA is subject to a substantial application

Fennec anticipates a waiver of the application user fee related to its NDA for PEDMARK TM .

The FDA is required to conduct a preliminary review of an NDA

within the first 60 days after submission, before accepting it for filing, to determine whether it is sufficiently complete to

permit a substantive review.

The FDA may accept the NDA for filing, potentially refuse to file the NDA due to deficiencies but

work with the applicant to rectify the deficiencies (in which case the NDA is filed upon resolution of the deficiencies) or refuse

to file the NDA.

The FDA must notify the applicant of a refusal to file a decision within 60 days after the original receipt date

of the application.

If the FDA refuses to file the NDA the applicant may resubmit the NDA with the deficiencies addressed.

The resubmitted NDA is considered a new application subject to a new review goal, as described below.

If the NDA is refused for

filing, the FDA will refund 75 percent of the application fee.

Upon resubmission, a new application fee will be required, unless

the applicant is eligible for a waiver or reduction.

The resubmitted application is also subject to review before the FDA accepts

it for filing.

resubmitted NDA is considered a new application subject to a new review goal, as described below.

If the NDA is refused for filing,

the FDA will refund 75 percent of the application fee.

Upon resubmission, a new application fee will be required, unless the applicant

is eligible for a waiver or reduction.

The resubmitted application is also subject to review before the FDA accepts it for filing.

Once an NDA is accepted for filing, the FDA begins an in-depth substantive review.

Under the Prescription Drug User

Fee Act, or PDUFA, and the FDA’s commitments under the current PDUFA reauthorization, the FDA has a goal of reviewing and

acting on 90% of standard non-priority NDA applications for drugs that are not new molecular entities within ten months from the

FDA’s receipt of the NDA.

The FDA reviews an NDA to determine, among

other things, whether the drug is safe and effective for its intended use and whether the facility in which it is manufactured,

processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

is required to refer an application for a novel drug to an advisory committee or explain why such referral was not made.

committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides

a recommendation in response to specific questions raised by the FDA, which may include whether the application should be approved

and under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations

carefully when making decisions.

Before approving an NDA, the FDA may inspect

the facility or facilities where the product is manufactured.

The FDA will not approve an application unless it determines that

the manufacturing processes and facilities are in compliance with current Good Manufacturing Practices (cGMP) requirements and

adequate to assure consistent production of the product within required specifications.

Additionally, before approving an NDA,

the FDA will typically inspect one or more clinical investigational sites to evaluate the integrity of the data and confirm compliance

with current Good Clinical Practices (cGCP).

After the FDA evaluates the NDA and conducts

its inspections, it may issue an approval letter or a Complete Response Letter.

An approval letter authorizes the commercial marketing

of the drug subject to specific prescribing information for specific indications and, if applicable, specific post-approval requirements.

A Complete Response Letter indicates that the review cycle of the application is complete and the application is not ready for

approval in its present form.

After receiving a Complete Response Letter, the applicant must decide within twelve months (subject

to extension), if it wants to resubmit the NDA addressing the deficiencies identified by the FDA in the Complete Response Letter,

withdraw the NDA, or request an opportunity for a hearing to challenge the FDA’s determination.

A Complete Response Letter

may require additional clinical data and/or an additional pivotal Phase 3 clinical trial(s), and/or other significant, expensive

and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing.

Even if such data are submitted,

the FDA may ultimately decide that the NDA does not satisfy the criteria for approval.

Data from clinical trials are not always

conclusive and the FDA may interpret data differently than we interpret data.

The FDA also may require implementation of

a Risk Evaluation and Mitigation Strategy, or REMS, to mitigate any identified or suspected serious risks.

The REMS could include

a medication guide, physician communication plan, assessment plan and elements to assure safe use, such as restricted distribution

methods, patient registries or other risk minimization tools.

The drug testing and approval process requires

substantial time, effort and financial resources, and may take several years to complete.

Data obtained from clinical activities

are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent marketing approval.

The FDA may not grant marketing approval on a timely basis, or at all.

Even if the FDA approves a product, it may

limit the approved indications for use for the product.

The FDA requires that the approved product labeling include information

regarding contraindications, warnings or precautions.

It may also require that post-approval studies, including a long-term registry,

be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product

after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, which

can materially affect the potential market and profitability of the product.

The FDA may prevent or limit further marketing of

a product based on the results of post-marketing studies or surveillance programs.

After approval, some types of changes to the

approved product, such as adding new indications or labeling claims or manufacturing changes may be subject to further testing

requirements and FDA review and approval.

Also after approval, the FDA may require labeling changes as new information becomes

known, particularly if new risks are identified, such as unexpected adverse events.

The FDA has the authority to prevent or limit

further marketing of a drug based on the results of these post-marketing studies and programs or other information that may become

known after approval.

Hatch-Waxman Exclusivity

The Drug Price Competition and Patent Term

Restoration Act of 1984, referred to as the Hatch-Waxman Amendments, amended the U.S.

Federal Food, Drug, and Cosmetic Act (“FFDCA”)

and established abbreviated pathways to market, as well as incentives for the development of new drug products.

The Hatch-Waxman

Amendments established section 505(b)(2) of the FFDCA that provides an alternative pathway for submission of an NDA, referred to

as the 505(b)(2) application, when some or all of the safety and efficacy investigations relied on for approval were not conducted

by or for the applicant and for which the applicant has not obtained a right of reference.

The Hatch-Waxman Amendments also established

the Abbreviated New Drug Application, or ANDA, approval pathway, which provides an expedient route for generic drugs that have

the same active ingredient as a previously approved drug.

At the same time, to incentivize continued pharmaceutical innovation,

the Hatch-Waxman Amendments authorized periods of statutory exclusivity to protect certain approved new drugs from competition

for five or three year periods.

Under the Hatch-Waxman Amendments, a new

drug containing an active ingredient that had never before been approved in any other NDA, ANDA, or 505(b)(2) NDA is provided

five years of statutory exclusivity upon approval.

The FDA refers to this exclusivity as new chemical entity (NCE)

During the NCE exclusivity period, the FDA cannot approve an ANDA or a 505(b)(2) application for a drug

containing the same active ingredient generally may not be submitted to the FDA.

For NCE exclusivity, the FDA regulations

interpret “active ingredient”

to mean “active moiety,”

which is defined as “the molecule or

ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt, or other noncovalent

derivative of the molecule, responsible for the physiological or pharmacological action of the drug substance.”

Although the FDA may not approve an ANDA or 505(b)(2) NDA with the same active ingredient during the five-year NCE

exclusivity period, an ANDA or 505(b)(2) NDA may be submitted to the FDA after four years if it contains a certification

of patent invalidity, non-infringement, or unenforceability.

The Hatch-Waxman Amendments also provide three

years of statutory exclusivity for an NDA, a 505(b)(2) NDA, or a supplement to either of these applications for a drug product

containing an active moiety that has been previously approved, if new clinical investigations, other than bioavailability studies,

that were conducted or sponsored by the applicant, are deemed by the FDA to be essential to the approval of the application.

this three-year exclusivity period, the FDA will not make effective the approval of any ANDA or 505(b)(2) NDA for the same active

moiety for the same conditions of use.

Five-year and three-year exclusivity will not delay the submission or approval of a new

drug containing the same active moiety if it is the subject of a full NDA for which the applicant conducted, sponsored, or obtained

a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate

safety and effectiveness.

Other Regulatory Requirements .

Drugs manufactured or distributed pursuant

to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, annual establishment

registration, product listing, user fees, compliance with requirements regarding cGMP, recordkeeping, periodic reporting, product

sampling and distribution, advertising and promotion, and adverse drug experience monitoring and reporting with the product.

approval, most changes to the approved product labeling, such as adding new indications, are subject to prior FDA review and approval.

Also, any post-approval changes in the drug substance, drug product, production process, quality controls, equipment, or facilities

that have a substantial potential to have an adverse effect on the identity, strength, quality, purity, or potency of the drug

product are subject to FDA review and approval.

Any such changes that have a moderate potential to have an adverse effect on the

identity, strength, quality, purity, or potency of the drug product may not be implemented until 30 days after the FDA receives

a supplement for the change.

All manufacturing facilities, as well as records required to be maintained under FDA regulations,

are subject to inspection or audit by the FDA.

In addition, manufacturers generally are required to pay annual user fees for approved

products and a user fee for the submission of each new or supplemental application.

The FDA may impose a number of post-approval

requirements as a condition of approval of an NDA.

For example, the FDA may require post-approval testing, including Phase 4 clinical

trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

Food and Drug Administration Amendments Act of 2007 gave the FDA the authority to require a REMS from drug manufacturers to manage

a known or potential serious risk associated with the drug and to ensure that the benefits of a drug outweigh its risks.

of a REMS include, but are not limited to, a Medication Guide, a patient package insert to help mitigate a serious risk of the

drug, and a communication plan to healthcare providers to support the implementation of an element of the REMS.

In addition, drug manufacturers and other

entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the

FDA and register or obtain permits or licenses in states where they do business, and are subject to periodic unannounced inspections

by the FDA and state regulatory authorities with jurisdiction over their activities to determine compliance with regulatory requirements.

A drug manufacturer is responsible for ensuring that its third-party contractors operate in compliance with applicable laws and

regulations including the cGMP regulation.

The failure of a drug manufacturer or any of its third-party contractors to comply with

federal or state laws or regulations may subject the drug manufacturer to possible legal or regulatory action, such as an untitled

letter, warning letter, recall, suspension of manufacturing or distribution or both, suspension of state permit or license, seizure

of product, import detention, injunctive action, and civil and criminal penalties.

Changes to the manufacturing process are strictly

regulated and often require prior FDA approval before being implemented.

FDA regulations also require a drug manufacturer to conduct

investigations and implement appropriate corrective actions to address any deviations from cGMP requirements and impose

reporting and documentation requirements upon the manufacturer and any third-party contractors (including contract manufacturers

and laboratories) involved in the manufacture of a drug product.

Accordingly, manufacturers must continue to expend significant

time, money and effort to maintain and ensure ongoing cGMP compliance and to confirm and ensure ongoing cGMP compliance of their third-party contractors.

Once an approval is granted, the FDA may withdraw

the approval if, among other things, there is information that the drug is unsafe for use under the approved conditions of use;

new information or evidence that, evaluated together with evidence available to the FDA at the time of approval, shows that the

drug is not shown to be safe for use under the approved conditions of use;

new information that, evaluated together with the evidence

available to the FDA at the time of approval, shows there is a lack of substantial evidence of effectiveness;

the approved application

contains an untrue statement of material fact;

or that the required patient information was not submitted within 30 days after

receiving notice from the FDA of the failure to submit such information.

Later discovery of previously unknown problems with a

product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply

with regulatory requirements, may result in revisions to the approved labeling to add new safety and risk information;

of a post-market study requirement to assess new safety risks;

or implementation of a REMS that may include distribution or other

restrictions.

The FDA closely regulates drug advertising

and promotional activities, including promotion of an unapproved drug, direct-to-consumer advertising, dissemination of scientific

information about a drug not on the approved labeling, off-label promotion, communications with payors and formulary committees,

industry-sponsored scientific and educational activities, and promotional activities involving the internet and social media.

company’s product claims must be true and not misleading, provide fair balance, provide adequate risk information, and be

consistent with the product labeling approved by the FDA.

Failure to comply with these requirements can lead to legal or regulatory

actions including, among other things, warning letters, corrective advertising, injunction, violation and related penalties under

the False Claims Act and can result in reputational and economic harm.

Physicians may prescribe FDA-approved drugs

for uses that are not described in the product’s labeling and that differ from those uses tested by the manufacturer.

off-label uses occur across medical specialties.

Physicians may believe that such off-label uses are the best treatment for many

patients in varied circumstances.

The FDA does not regulate the behavior of physicians in their choice of treatments for their

individual patients.

Under the Prescription Drug User Fee Act, or

PDUFA, and the FDA’s commitments under the current PDUFA reauthorization, the FDA has a goal of reviewing and acting on 90%

of standard non-priority NDA applications for drugs that are not new molecular entities within ten months from the FDA’s

receipt of the NDA.

The FDA reviews an NDA to determine, among other things, whether

the drug is safe and effective for its intended use and whether the facility in which it is manufactured, processed, packaged or

held meets standards designed to assure the product’s continued safety, quality and purity.

The FDA is required to refer

an application for a novel drug to an advisory committee or explain why such referral was not made.

An advisory committee is a

panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation

in response to specific questions raised by the FDA, which may include whether the application should be approved and under what

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully

when making decisions.

Before approving an NDA, the FDA may inspect the facility or

facilities where the product is manufactured.

The FDA will not approve an application unless it determines that the manufacturing

processes and facilities are in compliance with current Good Manufacturing Practices (cGMP) requirements and adequate to assure

consistent production of the product within required specifications.

Additionally, before approving an NDA, the FDA will typically

inspect one or more clinical investigational sites to evaluate the integrity of the data and confirm compliance with current Good

Clinical Practices (cGCP).

After the FDA evaluates the NDA and conducts its inspections, it may

issue an approval letter or a CRL.

An approval letter authorizes the commercial marketing of the drug subject to specific prescribing

information for specific indications and, if applicable, specific post-approval requirements.

A CRL indicates that the review cycle of

the application is complete and the application is not ready for approval in its present form.

After receiving a CRL, the applicant must

decide within twelve months (subject to extension), if it wants to resubmit the NDA addressing the deficiencies identified by the FDA

in the CRL, withdraw the NDA, or request an opportunity for a hearing to challenge the FDA’s determination.

A CRL may require additional

clinical data and/or an additional pivotal Phase 3 clinical trial(s), and/or other significant, expensive and time-consuming requirements

related to clinical trials, nonclinical studies or manufacturing.

Even if such data are submitted, the FDA may ultimately decide that

the NDA does not satisfy the criteria for approval.

Data from clinical trials are not always conclusive and the FDA may interpret data

differently than we interpret data.

The FDA also may require implementation of a Risk Evaluation

and Mitigation Strategy, or REMS, to mitigate any identified or suspected serious risks.

The REMS could include a medication guide,

physician communication plan, assessment plan and elements to assure safe use, such as restricted distribution methods, patient

registries or other risk minimization tools.

The drug testing and approval process requires substantial time,

effort and financial resources, and may take several years to complete.

Data obtained from clinical activities are not always conclusive

and may be susceptible to varying interpretations, which could delay, limit or prevent marketing approval.

The FDA may not grant

marketing approval on a timely basis, or at all.

Even if the FDA approves a product, it may limit the approved

indications for use for the product.

The FDA requires that the approved product labeling include information regarding contraindications,

warnings or precautions.

It may also require that post-approval studies, including a long-term registry, be conducted to further

assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization,

or impose other conditions, including distribution restrictions or other risk management mechanisms, which can materially affect

the potential market and profitability of the product.

The FDA may prevent or limit further marketing of a product based on the

results of post-marketing studies or surveillance programs.

After approval, some types of changes to the approved product, such

as adding new indications or labeling claims or manufacturing changes may be subject to further testing requirements and FDA review

and approval.

Also after approval, the FDA may require labeling changes as new information becomes known, particularly if new risks

are identified, such as unexpected adverse events.

The FDA has the authority to prevent or limit further marketing of a drug based

on the results of these post-marketing studies and programs or other information that may become known after approval.

Regulatory Requirements .

Drugs manufactured or distributed pursuant to FDA approvals

are subject to pervasive and continuing regulation by the FDA, including, among other things, annual establishment registration,

product listing, user fees, compliance with requirements regarding cGMP, recordkeeping, periodic reporting, product sampling and

distribution, advertising and promotion, and adverse drug experience monitoring and reporting with the product.

After approval,

most changes to the approved product labeling, such as adding new indications, are subject to prior FDA review and approval.

any post-approval changes in the drug substance, drug product, production process, quality controls, equipment, or facilities that

have a substantial potential to have an adverse effect on the identity, strength, quality, purity, or potency of the drug product

are subject to FDA review and approval.

Any such changes that have a moderate potential to have an adverse effect on the identity,

strength, quality, purity, or potency of the drug product may not be implemented until 30 days after the FDA receives a supplement

for the change.

All manufacturing facilities, as well as records required to be maintained under FDA regulations, are subject to

inspection or audit by the FDA.

In addition, manufacturers generally are required to pay annual user fees for approved products

and a user fee for the submission of each new or supplemental application.

The FDA may impose a number of post-approval requirements as

a condition of approval of an NDA.

For example, the FDA may require post-approval testing, including Phase 4 clinical trials, and

surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

The Food and Drug

Administration Amendments Act of 2007 gave the FDA the authority to require a REMS from drug manufacturers to manage a known or

potential serious risk associated with the drug and to ensure that the benefits of a drug outweigh its risks.

Examples of a REMS

include, but are not limited to, a Medication Guide, a patient package insert to help mitigate a serious risk of the drug, and

a communication plan to healthcare providers to support the implementation of an element of the REMS.

In addition, drug manufacturers and other entities involved

in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and register or

obtain permits or licenses in states where they do business, and are subject to periodic unannounced inspections by the FDA and

state regulatory authorities with jurisdiction over their activities to determine compliance with regulatory requirements.

manufacturer is responsible for ensuring that its third-party contractors operate in compliance with applicable laws and regulations

including the cGMP regulation.

The failure of a drug manufacturer or any of its third-party contractors to comply with federal

or state laws or regulations may subject the drug manufacturer to possible legal or regulatory action, such as an untitled letter,

warning letter, recall, suspension of manufacturing or distribution or both, suspension of state permit or license, seizure of

product, import detention, injunctive action, and civil and criminal penalties.

Changes to the manufacturing process are strictly regulated

and often require prior FDA approval before being implemented.

FDA regulations also require a drug manufacturer to conduct investigations

and implement appropriate corrective actions to address any deviations from cGMP requirements and impose reporting and

documentation requirements upon the manufacturer and any third-party contractors (including contract manufacturers and laboratories)

involved in the manufacture of a drug product.

Accordingly, manufacturers must continue to expend significant time, money and effort

to maintain and ensure ongoing cGMP compliance and to confirm and ensure ongoing cGMP compliance of their third-party contractors.

Once an approval is granted, the FDA may withdraw the approval

if, among other things, there is information that the drug is unsafe for use under the approved conditions of use;

new information

or evidence that, evaluated together with evidence available to the FDA at the time of approval, shows that the drug is not shown

to be safe for use under the approved conditions of use;

new information that, evaluated together with the evidence available to

the FDA at the time of approval, shows there is a lack of substantial evidence of effectiveness;

the approved application contains

an untrue statement of material fact;

or that the required patient information was not submitted within 30 days after receiving

notice from the FDA of the failure to submit such information.

Later discovery of previously unknown problems with a product, including

adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements,

may result in revisions to the approved labeling to add new safety and risk information;

imposition of a post-market study requirement

to assess new safety risks;

or implementation of a REMS that may include distribution or other restrictions.

The FDA closely regulates drug advertising and promotional activities,

including promotion of an unapproved drug, direct-to-consumer advertising, dissemination of scientific information about a drug

not on the approved labeling, off-label promotion, communications with payors and formulary committees, industry-sponsored scientific

and educational activities, and promotional activities involving the internet and social media.

A company’s product claims

must be true and not misleading, provide fair balance, provide adequate risk information, and be consistent with the product labeling

approved by the FDA.

Failure to comply with these requirements can lead to legal or regulatory actions including, among other things,

warning letters, corrective advertising, injunction, violation and related penalties under the False Claims Act and can result

in reputational and economic harm.

Physicians may prescribe FDA-approved drugs for uses that are

not described in the product’s labeling and that differ from those uses tested by the manufacturer.

Such off-label uses occur

across medical specialties.

Physicians may believe that such off-label uses are the best treatment for many patients in varied

circumstances.

The FDA does not regulate the behavior of physicians in their choice of treatments for their individual patients.

The FDA does, however, regulate manufacturers’

communications about their drug products and interprets

the FFDCA to prohibit pharmaceutical companies from promoting their FDA-approved drug products for uses that are not specified

in the FDA-approved labeling.

Companies that market drugs for off-label uses have been subject to warning letters, related costly

litigation, criminal prosecution, and civil liability under the FFDCA and the False Claims Act.

In addition, the distribution of prescription

pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, as amended by the Drug Supply Chain Security

Act, which regulates the distribution of drug and drug samples at the federal level, and sets minimum standards for the registration

and regulation of wholesale drug distributors by the states.

communications about their drug products and interprets the FFDCA to prohibit

pharmaceutical companies from promoting their FDA-approved drug products for uses that are not specified in the FDA-approved labeling.

Companies that market drugs for off-label uses have been subject to warning letters, related costly litigation, criminal prosecution,

and civil liability under the FFDCA and the False Claims Act.

In addition, the distribution of prescription pharmaceutical

products is subject to the Prescription Drug Marketing Act, or PDMA, as amended by the Drug Supply Chain Security Act, which regulates

the distribution of drug and drug samples at the federal level, and sets minimum standards for the registration and regulation

of wholesale drug distributors by the states.

Good Clinical Practices

The FDA and other regulatory agencies promulgate

regulations and standards, commonly referred to as current Good Clinical Practices, for designing, conducting, monitoring, auditing

and reporting the results of clinical trials to ensure that the data and results are accurate and that the trial participants are

adequately protected.

The FDA and other regulatory agencies enforce Good Clinical Practices through periodic inspections of trial

sponsors, principal investigators and trial sites.

If our study sites fail to comply with applicable Good Clinical Practices, the

clinical data generated in our clinical trials may be deemed unreliable and relevant regulatory agencies may require us to perform

additional clinical trials before approving our marketing applications.

The FDA and other regulatory agencies promulgate regulations

and standards, commonly referred to as current Good Clinical Practices, for designing, conducting, monitoring, auditing and reporting

the results of clinical trials to ensure that the data and results are accurate and that the trial participants are adequately

The FDA and other regulatory agencies enforce Good Clinical Practices through periodic inspections of trial sponsors,

principal investigators and trial sites.

If our study sites fail to comply with applicable Good Clinical Practices, the clinical

data generated in our clinical trials may be deemed unreliable and relevant regulatory agencies may require us to perform additional

clinical trials before approving our marketing applications.

Good Manufacturing Practices

The FDA and other regulatory agencies regulate

and inspect equipment, facilities and processes used in the manufacture of pharmaceutical and biological products prior to approving

If, after receiving approval from regulatory agencies, a company makes a material change in manufacturing equipment,

location or process, additional regulatory review and approval may be required.

All facilities and manufacturing techniques that

may be used for the manufacture of our products must comply with applicable regulations governing the production of pharmaceutical

products known as "Good Manufacturing Practices."

The FDA and other regulatory agencies regulate and inspect equipment,

facilities and processes used in the manufacture of pharmaceutical and biological products prior to approving a product.

receiving approval from regulatory agencies, a company makes a material change in manufacturing equipment, location or process,

additional regulatory review and approval may be required.

All facilities and manufacturing techniques that may be used for the

manufacture of our products must comply with applicable regulations governing the production of pharmaceutical products known as

"Good Manufacturing Practices."

Orphan Drug Act

Under the Orphan Drug Act, the FDA may grant

orphan drug designation to drugs intended to treat a “rare disease or condition,”

which generally is a disease or condition

that affects fewer than 200,000 individuals in the U.S.

If a product which has an orphan drug designation subsequently receives

the first FDA approval for that drug for the indication for which it has such designation, the product is entitled to orphan exclusivity,

i.e., the FDA may not approve any other application submitted by a different applicant to market the same drug for the same indication

for a period of seven years following marketing approval, except in certain very limited circumstances, such as if the later product

Under the Orphan Drug Act, the FDA may grant orphan drug designation

to drugs intended to treat a “rare disease or condition,”

which generally is a disease or condition that affects fewer

than 200,000 individuals in the U.S.

If a product which has an orphan drug designation subsequently receives the first FDA approval

for that drug for the indication for which it has such designation, the product is entitled to orphan exclusivity, i.e., the FDA

may not approve any other application submitted by a different applicant to market the same drug for the same indication for a

period of seven years following marketing approval, except in certain very limited circumstances, such as if the later product

is shown to be clinically superior to the approved product with orphan drug exclusivity.

2 unchanged sentences

Pediatric Marketing Use Authorization

The PUMA approval is typically granted by

the European Commission, based on a review by the European Medecines Agency, and is intended exclusively for pediatric (patients

under 18 years of age) use.

Such PUMA approval is ultimately valid in all countries within the European Economic Area (which excludes

the United Kingdom as of February 1, 2020).

The PUMA was introduced by the EU Paediatric

Regulation for medicines that are:

Normally contain an already authorized active

Are no longer covered by a supplementary

protection certificate (SPC) or a patent that qualifies for a SPC;

Are to be exclusively developed for use in

The PUMA process was established to make it

more efficient for pharmaceutical companies to invest in the development of drugs for children.

PUMA drugs receive 8 plus 2 years

of regulatory data and marketing protection.

The PUMA approval is typically granted by the European Commission,

based on a review by the European Medecines Agency, and is intended exclusively for pediatric (patients under 18 years of age)

Such PUMA approval is ultimately valid in all countries within the European Economic Area (which excludes the United Kingdom

as of February 1, 2020).

The PUMA was introduced by the EU Paediatric Regulation for

medicines that are:

Normally contain an already authorized active ingredient;

Are no longer covered by a supplementary protection certificate (SPC) or a patent that qualifies for a SPC;

Are to be exclusively developed for use in children.

The PUMA process was established to make it more efficient for

pharmaceutical companies to invest in the development of drugs for children.

PUMA drugs receive 8 plus 2 years of regulatory data

and marketing protection.

and the applications are, in part, exempt from fees.

The regulatory protection does

not prevent off-label use of other drugs with the same active substance and indication for adults, nor pharmacy compounding.

Our present and future business has been

and will continue to be subject to various other laws and regulations.

Various laws, regulations and recommendations relating

to safe working conditions, laboratory practices, the experimental use of animals, and the purchase, storage, movement,

import and export and use and disposal of hazardous or potentially hazardous substances, including radioactive compounds and

infectious disease agents, used in connection with our research work are or may be applicable to our activities.

agreements entered into by us involving exclusive license rights may be subject to national or supranational antitrust

regulatory control, the effect of which cannot be predicted.

The extent of government regulation, which might result from

future legislation or administrative action, cannot accurately be predicted.

The regulatory protection does not prevent off-label

use of other drugs with the same active substance and indication for adults, nor pharmacy compounding.

Our present and future business has been and will continue to

be subject to various other laws and regulations.

Various laws, regulations and recommendations relating to safe working conditions,

laboratory practices, the experimental use of animals, and the purchase, storage, movement, import and export and use and disposal

of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used in connection

with our research work are or may be applicable to our activities.

Certain agreements entered into by us involving exclusive license

rights may be subject to national or supranational antitrust regulatory control, the effect of which cannot be predicted.

of government regulation, which might result from future legislation or administrative action, cannot accurately be predicted.

Research and Development

Our research and development efforts have

been focused on the development of PEDMARK TM since 2013.

We have established relationships with contract

research organizations, universities and other institutions, which we utilize to perform many of the day-to-day activities associated

with our drug development.

Where possible, we have sought to include leading scientific investigators and advisors to enhance our

internal capabilities.

Research and development issues are reviewed internally by our executive management and supporting scientific

Our research and development efforts have been focused on the

development of PEDMARK TM since 2013.

We have established relationships with

contract research organizations, universities and other institutions, which we utilize to perform many of the day-to-day activities

associated with our drug development.

Where possible, we have sought to include leading scientific investigators and advisors to

enhance our internal capabilities.

Research and development issues are reviewed internally by our executive management and supporting

scientific team.

Research and development

expenses totaled $5.1 million and $5.6 million for the fiscal years ended December 31, 2020 and 2019, respectively.

We have increased

our research and development expenses related to PEDMARK TM as a result of our drug manufacturing activities related

to the preparation for registration batches and NDA and MAA submission.

Our product candidate still requires significant,

time-consuming and costly research and development, testing and regulatory clearances.

In developing our product candidate, we

are subject to risks of failure that are inherent in the development of products based on innovative technologies.

it is possible that our product candidate will be ineffective or toxic, or will otherwise fail to receive the necessary regulatory

There is a risk that our product candidate will be uneconomical to manufacture or market or will not achieve market

There is also a risk that third parties may hold proprietary rights that preclude us from marketing our product candidate

or that others will market a superior or equivalent product.

As a result of these factors, we are unable to accurately estimate

the nature, timing and future costs necessary to complete the development of this product candidate.

In addition, we are unable

to reasonably estimate the period when material net cash inflows could commence from the sale, licensing or commercialization of

such product candidate, if ever.

At December 31, 2019, we had four employees

(our Chief Executive Officer, Chief Financial Officer, Chief Commercial Officer, and Controller).

These employees are employed

on a full-time basis and there are no part-time employees.

We use independent contractors to perform certain daily operations of

decreased slightly our research and development expenses related to PEDMARK TM as the Company’s efforts have shifted

to pre-commercialization activities with some continued regulatory and manufacturing expenses associated with the resubmission

of the NDA for PEDMARK TM in response to the CRL discussed above under the heading “Business –

Overview –

Product Candidate”

and elsewhere in this Annual Report.

Our product candidate

still requires significant, time-consuming and costly research and development, testing and regulatory clearances.

In developing

our product candidate, we are subject to risks of failure that are inherent in the development of products based on innovative

technologies.

For example, it is possible that our product candidate will be ineffective or toxic, or will otherwise fail to receive

the necessary regulatory clearances.

There is a risk that our product candidate will be uneconomical to manufacture or market or

will not achieve market acceptance.

There is also a risk that third parties may hold proprietary rights that preclude us from marketing

our product candidate or that others will market a superior or equivalent product.

As a result of these factors, we are unable

to accurately estimate the nature, timing and future costs necessary to complete the development of this product candidate.

addition, we are unable to reasonably estimate the period when material net cash inflows could commence from the sale, licensing

or commercialization of such product candidate, if ever.

At December 31, 2020, we had nine employees all of which

are full time.

In addition, we use independent contractors to perform certain of our daily operations.

What changed 10-K

Item 1. Business