What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-05-13 compared with 2020-11-16 · 372 added, 415 removed, 79 unchanged (91% of the section changed)

Management's Discussion and

Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis

of Financial Condition and Results of Operations

CAUTIONARY STATEMENT

The discussion below contains forward-looking

statements regarding our financial condition and our results of operations that are based upon our annual consolidated financial

statements, which have been prepared in accordance with generally accepted accounting principles within the United States, or U.S.

GAAP, and applicable U.S.

Securities and Exchange Commission, or SEC, regulations for financial information.

The preparation

of these financial statements requires our management to make estimates and judgments that affect the reported amounts of assets,

liabilities, income and expenses, and related disclosure of contingent assets and liabilities.

We evaluate our estimates on

an ongoing basis.

Our estimates are based on historical experience and on various other assumptions that we believe to be

Candidate PEDMARK TM

The following

is our only lead product candidate in the clinical stage of development:

PEDMARK TM (a unique formulation of sodium thiosulfate ) –

PEDMARK 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”.

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 the Company’s

resources on the development of PEDMARK TM .

We have licensed from 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.

This section and other parts of this Quarterly

Report on Form 10-Q contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that

involve risks and uncertainties.

Forward-looking statements provide current expectations of future events based on certain assumptions

and include any statement that does not directly relate to any historical or current fact.

Forward-looking statements can be identified

by words such as “future,”

“anticipates,”

“believes,”

“estimates,”

“expects,”

“intends,”

“plans,”

“predicts,”

“will,”

“would,”

“could,”

“can,”

“may,”

and similar terms.

Forward-looking statements are not guarantees of future performance and our actual results may differ

significantly from the results discussed in the forward-looking statements.

Factors that might cause such differences include, but are

not limited to, those discussed in Part I, Item 1A of the our Annual Report on Form 10-K for the year ended December 31, 2020 under the

heading “Risk Factors.”

We assume no obligation to revise or update any forward-looking statements for any reason, except

as required by law.

The following discussion should be read in conjunction

with our Annual Report on Form 10-K for the year ended December 31, 2020 and the condensed consolidated financial statements and accompanying

notes included elsewhere in this report.

Product Candidate

only product candidate in the clinical stage of development is:

PEDMARK TM (sodium thiosulfate

(STS) anhydrous injection).

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 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

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.

The Company estimates in the U.S.

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

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

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.

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 in December 2018.

Fennec announced that it has

submitted full completion of the NDA in February 2020.

On April 13, 2020 Fennec announced that the U.S.

Food and Drug

Administration (“FDA”) had accepted for filing and granted Priority Review for Fennec’s New Drug

Application for PEDMARK.

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 the Company announced that it received a Complete Response Letter

(CRL) from the FDA regarding its NDA for PEDMARK.

Further, subsequent to the CRL the Company is pleased with the recent

constructive and collaborative Type A meeting with the FDA and plans to work closely with the third-party drug manufacturer

and the FDA to fully address the CRL and plans to resubmit the NDA for PEDMARK TM as quickly as possible.

Importantly, no clinical safety or efficacy issues were identified during the review and there is no requirement for further

clinical data.

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

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.

There is currently no established

preventive agent for this hearing loss and only expensive, technically difficult and sub-optimal cochlear (inner ear) implants have been

shown to provide some benefit.

Infants and young children at critical stages of development lack speech language development and literacy,

and older children and adolescents lack 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.

Further, PEDMARK TM has received Orphan Drug Designation

in this setting.

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

We initiated our rolling 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 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.

We 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

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.

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 of the proposed indication will be subject to the Committee for Medicinal Products for Human Use (CHMP) assessment at the

time of the MAA.

An accepted PIP is a prerequisite for filing a Marketing

Authorization Application (“MAA”) for any new medicinal product in Europe.

The indication targeted by our PIP is

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

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 by PDCO.

The Company was also advised

that sodium thiosulfate (tradename to be determined) is eligible for submission of an application for a Pediatric Use Marketing

Authorization (PUMA).

Therefore, this 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 The 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.

In February 2020, Fennec announced

that it has 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.

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 sodium thiosulfate reduces hearing loss in standard risk hepatoblastoma (liver) cancer patients

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”).

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.

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.

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 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 by PDCO.

The Company was also advised that sodium thiosulfate (tradename to be determined)

is eligible for submission of an application for a Pediatric Use Marketing Authorization (PUMA).

Therefore, this 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 The 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.

In February 2020, Fennec announced that it has submitted a MAA for the prevention of otoxicity induced by cisplatin chemotherapy patients

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

Clinical Studies

PEDMARK TM has

been studied by cooperative groups in two Phase 3 clinical studies of survival and reduction of ototoxicity, COG ACCL0431 and SIOPEL 6.

Both studies have been completed.

The COG ACCL0431 protocol enrolled one of five childhood cancers typically treated with intensive cisplatin

therapy for localized and disseminated disease, including newly diagnosed hepatoblastoma, germ cell tumor, osteosarcoma, neuroblastoma,

and medulloblastoma.

SIOPEL 6 enrolled only hepatoblastoma patients with localized tumors.

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

Under the terms of our agreement, SIOPEL conducts and funds all clinical activities and Fennec provides 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 are:

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.

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 sodium thiosulfate to reduce the hearing impairment caused by cisplatin.

To carefully monitor any potential impact of sodium thiosulfate on response to cisplatin and survival

carefully monitor any potential impact of sodium thiosulfate on response to cisplatin and survival.

SIOPEL 6 - Results

/ Objectives:

high-frequency hearing loss is a serious permanent side-effect of cisplatin therapy;

particularly debilitating when occurring in

young children.

Sodium thiosulfate has been shown to reduce cisplatin induced hearing loss.

SIOPEL 6 is a Phase 3 randomized trial

to assess the efficacy of sodium thiosulfate in reducing ototoxicity in young children treated with cisplatin (Cis) for SR-HB.

Background / Objectives:

Bilateral high-frequency

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

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).

Design / Methods:

diagnosed patients with SR-HB, defined as tumour 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+Sodium thiosulfate (STS)

for 4 preoperative and 2 postoperative courses.

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

over 15 minutes exactly 6 hours after stopping cisplatin.

Tumour response was assessed after 2 and 4 preoperative cycles with

serum AFP and liver imaging.

In case of progressive disease (PD), sodium thiosulfate 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) are 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=33.0% under Cis +STS, corresponding to

a relative risk of 0.52(P=0.002).

This randomized

Phase 3 trial in SR-HB of cisplatin versus cisplatin plus sodium thiosulfate shows that the addition of sodium thiosulfate significantly

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

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 cisplatin.

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 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 +

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).

randomized Phase 3 trial in SR-HB of cisplatin versus cisplatin plus STS shows that the addition of STS significantly reduces the incidence

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

In March 2008, we announced the activation

of a Phase 3 trial with sodium thiosulfate 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 sodium thiosulfate 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 sodium thiosulfate or not.

Efficacy of sodium thiosulfate

was determined through comparison of hearing sensitivity at follow-up relative to baseline measurements using standard audiometric

The Children’s Oncology Group is responsible for funding the clinical activities for the study and we are 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.

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) cancers.

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

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.

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

COG Study ACCL0431, “A Randomized

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

finished enrollment

of 131 patients of which 126 were eligible patients in Q1 2012.

Study ACCL0431, “A Randomized Phase 3 Study of Sodium Thiosulfate for the Prevention of Cisplatin-Induced Ototoxicity in Children,”

finished enrollment of 131 patients of which 125 were eligible patients.

The patients had been previously diagnosed with childhood cancers .

The primary endpoint was to evaluate the

efficacy of sodium thiosulfate for prevention of hearing loss in children receiving cisplatin chemotherapy (hypothesis:

reduction in hearing loss).

The primary endpoint was to evaluate the efficacy

of STS for prevention of hearing loss in children receiving cisplatin chemotherapy (hypothesis:

50% relative reduction in hearing loss).

Secondary endpoints included:

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

126 eligible subjects were enrolled with

germ cell tumor (32), osteosarcoma (3029), neuroblastoma (26), medulloblastoma/pnet (26), hepatoblastoma (7) or other (5).

change in mean hearing thresholds.

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

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

eligible subjects were enrolled with germ cell tumor (32), osteosarcoma (29), neuroblastoma (26), medulloblastoma/pnet (26), hepatoblastoma

(7), or other (5).

Of these, 104 subjects (64 male and 29 <5 years old) were evaluable for the primary endpoint .

Subjects were randomized either to no treatment

(control) or treatment with sodium thiosulfate 16 grams/m2 IV over 15 minutes, 6 hours after each cisplatin dose.

Hearing was measured

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

The proportion of subjects with hearing

loss assessed at 4 weeks post the final cisplatin dose (primary endpoint).

The proportion of hearing loss for sodium thiosulfate vs.

were randomized either to no treatment (control) or treatment with STS 16 grams/m2 IV over 15 minutes, 6 hours after each cisplatin dose.

Hearing was measured using standard audiometry for age and data was reviewed centrally using American Speech-Language-Hearing Association

The proportion of subjects with hearing loss assessed

at 4 weeks post the final cisplatin dose (primary endpoint):

The proportion of hearing loss for STS vs.

Control was 28.6% (14/49) vs.

56.4% (31/55),

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

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

sodium thiosulfate

Control was 21.4% (3/14) vs.

was 21.4% (3/14) vs.

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

Sodium thiosulfate 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 .

Capital Funding

We have not received and do not expect

to have significant revenues from our product candidate until we are either able to sell our product candidate after obtaining

applicable regulatory approvals or we establish collaborations that provide us with up-front payments, licensing fees, milestone

payments, royalties or other revenue.

We have not received and do not expect to have

significant revenues from our product candidate until we are either able to sell our product candidate after obtaining applicable regulatory

approvals or we establish collaborations that provide us with up-front payments, licensing fees, milestone payments, royalties or other

We generated a net loss of approximately $4.7

$14,874 for the nine-months ended September 30, 2020 and a net loss of $9,165 for the nine-months ended September 30,

As of September 30, 2020, our accumulated deficit was approximately $158,902 ($144,031 at December 31, 2019).

On May 5, 2020, the Company announced

the completion of an underwritten public offering of 4.8 million common shares at a public offering price of $6.25 per share.

addition, Fennec issued an additional 0.66 million common shares in connection with the partial exercise of the underwriters’

over-allotment option.

The approximate total gross proceeds from the offering was $34,100 ($31,967 net of commissions, fees and

issue costs).

On June 26, 2020, Fennec announced

an amendment to the Loan and Security Agreement with Bridge Bank.

This amendment provides Fennec with an $18,000 debt

facility comprised of two term loans.

Term Loan A consists of $12,500 to be funded upon NDA approval of PEDMARK TM in

by no later than December 31, 2020 and Term Loan B consists of $5,500 to be funded upon the occurrence of a revenue

event in 2021.

The interest-only period for the facility has the ability to be extended from 18 months to 24 months from

the funding of Term Loan A, provided that Term Loan B is funded, and certain conditions are met.

Under Accounting Standards Codification

(“ASC”) 470-50, Modifications and Extinguishments, the amendment was considered a modification.

As such, the Company

is amortizing the loan fee and the value of the warrant over the remainder of the loan term.

The Company intends to use the proceeds

from the loans to provide working capital for commercialization activities for PEDMARK TM upon NDA approval.

On August 10, 2020, the Company received a Complete Response

Letter (CRL) from the U.S.

Food and Drug Administration (FDA) regarding its New Drug Application (NDA) for PEDMARK TM .

According to the CRL, after recent completion of a pre-approval inspection of the manufacturing facility of our drug product manufacturer,

the FDA identified deficiencies that are required to be resolved prior to the approval of PEDMARK TM .

Importantly, no

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

Company plans to work closely with the third-party drug manufacturer and the FDA to fully address the CRL and plan to resubmit

the NDA for PEDMARK TM as quickly as possible.

As a result of the FDA’s CRL the anticipated product launch did

not occur as of September 30, 2020 and thus the Bridge Bank Term Loan A has not yet been funded.

The Company does not believe it

will receive FDA approval by December 31, 2020 and thus has fully impaired the deferred asset associated with Term Loan A.

the Company believes the delay in approval will mean it will not be able to meet the revenue target to fund Term Loan B.

the deferred asset associated with Term Loan B has been expensed.

The Company is currently in negotiations with Bridge Bank to

receive an extension on both Term Loan A and B.

million for the three months ended March 31, 2021 and a net loss of $3.8 million for the three months ended March 31, 2020.

31, 2021, our accumulated deficit was approximately $166.9 million ($162.1 million at December 31, 2020).

We believe that our cash and cash equivalents

as of September 30, 2020, which totaled $33,166 will be sufficient to meet our cash requirements through the at least the

next twelve months.

Our projections of our capital requirements are subject to substantial uncertainty.

than we anticipated may be required thereafter.

To finance our continuing operations, we may need to raise substantial additional

funds through either the sale of additional equity, the issuance of debt, the establishment of collaborations that provide us with

funding, the out-license or sale of certain aspects of our intellectual property portfolio or from other sources.

current economic conditions, we might not be able to raise the necessary capital, or such funding may not be available on financially

acceptable terms if at all.

If we cannot obtain adequate funding in the future, we might be required to further delay, scale

back or eliminate certain research and development studies, consider business combinations or even shut down some, or all, of our

Our operating expenses will depend on many

factors, including the progress of our drug development efforts and efficiency of our operations and current resources.

and development expenses, which include expenses associated with our clinical trials, drug manufacturing to support clinical programs,

salaries for research and development personnel, stock-based compensation, consulting fees, sponsored research costs, toxicology

studies, license fees, milestone payments, and other fees and costs related to the development of our product candidate, will depend

on the availability of financial resources, the results of our clinical trials and any directives from regulatory agencies, which

are difficult to predict.

Our general and administration expenses include expenses associated with the compensation of employees,

stock-based compensation, professional fees, consulting fees, insurance and other administrative matters associated in support

of our drug development programs.

as of March 31, 2021, which totaled $26.8 million, will be sufficient to meet our cash requirements through the at least the next twelve

months, including anticipated NDA approval and, if approved, the first commercial launch of PEDMARK TM in the United States.

Our projections of our capital requirements are subject to substantial uncertainty, and more capital than we currently anticipate

may be required thereafter.

To finance our continuing operations, we may need to raise substantial additional funds through either

the sale of additional equity, the issuance of debt, the establishment of collaborations that provide us with funding, the out-license

or sale of certain aspects of our intellectual property portfolio or from other sources.

We may not be able to raise the necessary

capital, or such funding may not be available on financially acceptable terms if at all.

If we cannot obtain adequate funding in the future,

we might be required to further delay, scale back or eliminate certain research and development studies, consider business combinations,

or even shut down some, or all, of our operations.

Our operating expenses will depend on many factors,

including the progress of our drug development efforts and efficiency of our operations and current resources.

Our research and development

expenses, which include expenses associated with our clinical trials, drug manufacturing to support clinical programs, stock-based compensation,

consulting fees, sponsored research costs, toxicology studies, license fees, milestone payments, and other fees and costs related to the

development of our product candidate, will depend on the availability of financial resources, the results of our clinical trials, and

any directives from regulatory agencies, which are difficult to predict.

Our general and administration expenses include expenses associated

with the compensation of employees, stock-based compensation, professional fees, consulting fees, insurance and other administrative matters

associated in support of our drug development programs.

Results of Operations

Three months ended September 30, 2020 versus three months

ended September 30, 2019:

In thousands of U.S.

September 30,

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other (loss)/gain

Amortization expense

Interest income and other

Research and development expenses increased by $573 for the

three months ended September 30, 2020 over the same period in 2019 as the Company’s activities increased after the CRL from

the FDA related to manufacturing and regulatory.

General and administrative expenses increased by $3,423 over same period in 2019

being driven mainly by the pre-commercialization efforts, non-cash equity remuneration and added headcount.

Other (loss)/gain was driven mainly by

fluctuations in its foreign currency transactions.

The Company has vendors that transact in Euros, Great British Pounds and Canadian

There was an increase of $338 in amortization expense for the three months ended September 30, 2020 over the same

period in 2019.

This increase is mainly as a result of recognizing the complete impairment of both sections of the Term Loan Agreement

on the balance sheet.

Amortization expense is a non-cash expense and relates to amortization of the deferred issuance cost of

the loan facilities with Bridge Bank.

Amortization expense was $355 and $17 for the three months ended September 30, 2020

and 2019, respectively.

Interest income was $48 lower for the three months ended September 30, 2020 over the same period

This was driven mainly by a sharp decrease in interest rates for the three months ended September 30, 2020 over

the same period in 2019.

Three months ended March 31, 2021 versus three months ended March 31,

In thousands of U.S.

September 30,

Operating expenses:

Research and development

General and administrative

General and administration

Total operating expenses

Loss from operations

Other (loss)/gain

Unrealized gain on securities

Amortization expense

Interest income and other

Total research and development expenses

were down by $553 for the nine-month period ended September 30, 2020 over the same period in 2019.

This decrease relates primarily

to the shift from research and development to pre-commercialization and product launch efforts for PEDMARK TM which took

place in the first nine months of 2020.

The increase in pre-commercialization and product launch efforts are reflected in the general

and administrative cost increase of $5,736 over the prior year in the same period in 2019.

A large portion of this increase were

from sales and marketing expenses which were up approximately $4,600 over the same period in 2019 as the Company prepared for product

Salary and benefit expenses were up by approximately $600 over same period in 2019.

Items such as legal fees, consulting

fees and investor relations accounted for an increase of $500.

Other (loss)/gain increased by $5 for

the nine-months ended September 30, 2020 over the same period in 2019.

For the nine-month period ended September 30,

2020 the Company recognized an increase of $356 in amortization expense on the deferred issuance cost associated with the loan

facilities arranged with Bridge Bank over the same period in 2019.

This increase was primarily due to the decision to fully amortize

the remaining balance of the loan facility asset after the Company decided it would not be able to meet the conditions of the

loan facility.

Presently, the Company is in negotiations with Bridge Bank to extend the dates associated with funding the facility.

Interest income was down sharply $172 over the same period in 2019, due to lower interest rates and lower average deposits.

The following table presents selected

condensed financial data for each of the last eight quarters through September 30, 2020, as prepared under US GAAP (U.S.

dollars in thousands, except per share information):

Total other income

Research and development expenses increased by

$1,023 for the three months ended March 31, 2021 over the same period in 2020 as the Company’s development activities shifted back

to research and development expenses from product launch readiness and pre-commercial development of PEDMARK TM .

administrative expenses increased by $65 over same period in 2020 with the slight increase mainly driven by additional employees.

The Company holds shares of Processa (PCSA) which

are marked to market each balance sheet date and unrealized gains or losses are recognized at that time.

The unrealized gain on those

shares on March 31, 2021 was $182.

Other loss was driven mainly by fluctuations in the Company’s foreign currency transactions and

is a non-cash expense.

The Company has vendors that transact in Euros, Great British Pounds and Canadian Dollars.

There was an decrease

of $1 in other gain/(loss) for the three months ended March 31, 2021 over the same period in 2020.

Amortization expense is also a non-cash

expense and relates to amortization of the deferred issuance cost of the loan facilities with Bridge Bank.

Amortization expense decreased

by $17 for the three months ended March 31, 2021 over the same period in 2020 due to the deferred issuance cost of the loan facility being

fully expensed in the fourth quarter of 2020.

Interest income was $19 lower for the three months ended March 31, 2020 over the same period

This was driven mainly by a sharp decrease in interest rates for the three months ended March 31, 2021 over the same period in

2020 despite the higher average cash balance in 2021.

Quarterly Information

The following table presents selected condensed

financial data for each of the last eight quarters through March 31, 2021, as prepared under US GAAP (U.S.

dollars in thousands, except

per share information):

Net (Loss)/Income for the

Basic Net (Loss)/Income

Diluted Net (Loss)/Income

December 31, 2018

March 31, 2019

Basic Net (Loss)/Income per

Diluted Net (Loss)/Income per

June 30, 2019

4 unchanged sentences

September 30, 2020

December 31, 2020

March 31, 2021

Liquidity and Capital Resources

1 unchanged sentence

Selected Asset and Liability Data:

September 30, 2020

March 31, 2021

December 31, 2020

8 unchanged sentences

Stockholders’

Cash and cash equivalents were $33,166

on September 30, 2020 and $13,650 at December 31, 2019.

The increase in cash and cash equivalents between September 30,

2020 and December 31, 2019, is the result of the $34,100 (gross proceeds) equity financing completed in May 2020.

cash inflows were offset by expenses related to our pre-commercialization expenses of PEDMARK TM and general and administrative

The decrease in other current assets between September 30, 2020 and December 31, 2019 relates to the amortization

of pre-paid Nasdaq annual listing fees and pre-paid Director’s and Officer’s Insurance.

Current liabilities increased primarily

due to manufacturing and pre-commercialization activities associated with production and marketing of PEDMARK TM and

related regulatory expenses.

Working capital increased between December 31,

2019 and September 30, 2020 by $19,572.

The increase was primarily as a result of the May 2020 financing.

inflows were offset by expenses related to our pre-commercialization activities of PEDMARK TM and general and administrative

The following table illustrates a summary

of cash flow data for the three and nine-month periods of September 30, 2020 and 2019:

Dollar and shares in thousands

Three Months Ended September 30,

Nine-month Ended September 30,

Cash and cash equivalents were $26,751 at March

31, 2021 and $30,344 at December 31, 2020.

The decrease in cash and cash equivalents between March 31, 2021 and December 31, 2020 is the

result of expenses related to the development and preparation of NDA resubmission of PEDMARK TM and general and administrative

The minimal increase in other current assets between March 31, 2021 and December 31, 2020 relates to the increase in the valuation

of the Company’s holdings of Processa shares, the pre-payment of annual Nasdaq listing fee, offset by the decrease in value of the

deferred asset related to the financing of the Company’s Director’s and Officer’s Insurance.

Current liabilities increased primarily due to

manufacturing and pre-commercialization activities associated with PEDMARK TM and related regulatory expenses.

The Company also

had payables balances for legal and other professional services related to our ongoing shareholder class action lawsuit.

Working capital decreased between December 31,

2020 and March 31, 2021 by $4.1 million.

The decrease was almost entirely due to the increase in current liabilities and cash expenditures

during the quarter ended March 31, 2021.

The Company expects modest increases in cash outflows as it prepares for resubmission of its

NDA and increased commercial readiness activities upon resubmission.

The following table illustrates a summary of cash

flow data for the three month periods of March 31, 2021 and 2020:

Dollar in thousands

Selected cash flow data:

Three Months Ended March 31,

Net cash used in operating activities

Net cash provided by investing activities

Net cash (used in)/provided by financing activities

(Decrease)/increase in cash and cash equivalents

Net cash used in operating activities

for the three and nine-months ended September 30, 2020 was $5,446 and $12,311, respectively.

This is compared to $2,235 and

$7,470 during the same periods in 2019.

These increases in cash outlays relate to the pre-commercialization activities of PEDMARK TM

and regulatory submission activities relating to the NDA.

The Company increased cash balances by $31,967 from a public financing

which it completed in May of 2020.

We continue to pursue various strategic

alternatives including collaborations with other pharmaceutical and biotechnology companies.

Our projections of further capital

requirements are subject to substantial uncertainty.

Our working capital requirements may fluctuate in future periods depending

upon numerous factors, including:

Net cash used in financing activities

Decrease in cash and cash equivalents

Net cash used in operating activities for the

three months ended March 31, 2021 primarily reflected a net loss of $4,733.

This loss was adjusted for the add back of non-cash items

consisting of $596 in stock-based compensation expense less $182 in unrealized gain on securities, and a net change in prepaid and other

assets of minus $181,coupled with a net increase in current liabilities of $545.

Cash flows from operating activities were $3,593.

cash used in operating activities for the three months ended March 31, 2020 primarily reflected a net loss of $3,826.

This loss was adjusted

for the add back of non-cash items consisting of $412 in stock-based compensation expense and $17 in amortization expense, and a net change

in prepaid and other assets of $12, coupled with a net decrease in current liabilities of $364.

Cash flows from operating activities were

We continue to pursue various strategic alternatives

including collaborations with other pharmaceutical and biotechnology companies.

Our projections of further capital requirements are

subject to substantial uncertainty.

Our working capital requirements may fluctuate in future periods depending upon numerous factors,

our ability to obtain additional financial resources;

our ability to enter into collaborations

that provide us with up-front payments, milestones or other payments;

our ability to enter into collaborations that provide us with up-front

payments, milestones or other payments;

results of our research and development activities;

or lack of progress in our preclinical studies or clinical trials;

unfavorable toxicology in our clinical programs, our drug substance

requirements to support clinical programs;

progress or lack of progress in our preclinical

studies or clinical trials;

unfavorable toxicology in our clinical programs, our drug substance requirements to support clinical programs;

change in the focus, direction, or costs of our research and development programs;

headcount expense;

the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing our patent claims;

the costs involved in preparing,

filing, prosecuting, maintaining, defending and enforcing our patent claims;

competitive and technological advances;

the potential need to develop, acquire or license new technologies and products;

development activities;

new regulatory requirements implemented by regulatory authorities;

the timing and outcome of any regulatory

review process;

the potential need

to develop, acquire or license new technologies and products;

our business development activities;

new regulatory requirements implemented

by regulatory authorities;

the timing and outcome of any regulatory review process;

and commercialization activities, if any.

Outstanding Share Information

The outstanding share data for our Company as of September 30,

2020 and December 31, 2019 was as follows (in thousands):

September 30, 2020

Our outstanding share data for our Company as of March 31, 2021 and

December 31, 2020 was as follows (in thousands):

March 31, 2021

December 31, 2020

2 unchanged sentences

Financial Instruments

We invest excess cash and cash equivalents

in high credit quality investments held by financial institutions in accordance with our investment policy designed to protect

the principal investment.

At September 30, 2020, we had approximately $33,166 in cash accounts ($33,147 in money market accounts,

and $19 in checking accounts).

We have not experienced any loss or write down of our money market investments since inception.

We invest excess cash and cash equivalents in

high credit quality investments held by financial institutions in accordance with our investment policy designed to protect the principal

At December 31, 2020, we had approximately $0.7 million in our cash accounts and $29.6 million in savings and money

market accounts.

While we have never experienced any loss or write down of our money market investments since our inception, the

amounts we hold in money market accounts are substantially above the $250,000 amount insured by the FDIC and may lose value.

Our investment policy is to manage investments

to achieve, in the order of importance, the financial objectives of preservation of principal, liquidity and return on investment.

Investments may be made in U.S.

may be made in U.S.

or Canadian obligations and bank securities, commercial paper of U.S.

or Canadian industrial companies,

utilities, financial institutions and consumer loan companies, and securities of foreign banks provided the obligations are guaranteed

or carry ratings appropriate to the policy.

Securities must have a minimum Dun & Bradstreet rating of A for bonds or

R1 low for commercial paper.

The policy also provides for investment limits on concentrations of securities by issuer and maximum-weighted

average time to maturity of twelve months.

or Canadian industrial companies, utilities,

financial institutions and consumer loan companies, and securities of foreign banks provided the obligations are guaranteed or carry ratings

appropriate to the policy.

Securities must have a minimum Dun & Bradstreet rating of A for bonds or R1 low for commercial paper.

policy also provides for investment limits on concentrations of securities by issuer and maximum-weighted average time to maturity of

twelve months.

This policy applies to all of our financial resources.

1 unchanged sentence

cost of the conservative nature of the allowable investments.

As our main purpose is research and development, we have chosen

to avoid investments of a trading or speculative nature.

As our main purpose is research and development, we have chosen to avoid

investments of a trading or speculative nature.

Off-Balance Sheet Arrangements

Since our inception, we have not had any

material off-balance sheet arrangements.

Since our inception, we have not had any material

off-balance sheet arrangements.

In addition, we do not engage in trading activities involving non-exchange traded contracts.

As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in

such activities.

we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such activities.

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 team.

development expenses for the three-months ended September 30, 2020 and 2019 were $1,368 and $795, respectively and for the

nine-months then ended, $3,882 and $4,435, respectively.

For the three-months ended September 30, 2020 the Company has decreased

its research and development expenses related to PEDMARK TM as the Company’s efforts have shifted to pre-commercialization

activities with some continued regulatory expenses associated with the rolling NDA submission of PEDMARK TM .

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 for the three months ended March 31, 2021 and 2020 were $2,416 and $1,393, respectively.

We have increased our research and development

expenses related to PEDMARK TM as our efforts have shifted to pre-commercialization with continued regulatory expenses associated

with the resubmission of our NDA for PEDMARK TM .

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.

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.

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.

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.

Critical Accounting Policies and Estimates

The preparation of financial statements

in conformity with US GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues

and expenses during the reporting period.

These estimates are based on assumptions and judgments that may be affected by commercial,

economic and other factors.

Actual results could differ from these estimates.

Our accounting policies are materially

consistent with those presented in our annual consolidated financial statements included in our Annual Report on Form 10-K

for the year ended December 31, 2019.

The preparation of financial statements in conformity

with US GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent

assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting

These estimates are based on assumptions and judgments that may be affected by commercial, economic and other factors.

results could differ from these estimates.

Our accounting policies are materially consistent

with those presented in our annual consolidated financial statements included in our Annual Report on Form 10-K for the year ended December

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis