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Item 2. Management’s Discussion and Analysis

2021-08-10 compared with 2021-05-13 · 211 added, 371 removed, 80 unchanged (88% 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

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.

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 PEDMARK TM

Our only product candidate in the clinical stage of development is:

● PEDMARK TM (a unique formulation of sodium thiosulfate (STS)) for the prevention of ototoxicity induced by cisplatin chemotherapy in patients one month to <18 years of age with localized, non-metastatic, solid tumors.

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.

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.

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

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

We have licensed from Oregon Health and 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 i n 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.

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.

Food and Drug Administration (“FDA”).

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

in this setting.

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 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 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 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.

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.

In May 2021, we announced the resubmission of our NDA for PEDMARK and in June 2021 we further announced that the FDA accepted for filing the resubmission of our NDA and set a PDUFA target action date of November 27, 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.

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.

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.

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.

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.

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.

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.

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.

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.

The primary objectives of SIOPEL 6 were:

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

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

SIOPEL 6 - Results

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).

Bilateral 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).

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 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.

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.

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

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 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 +

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).

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 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.

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 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 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 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

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.

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 125 were eligible patients.

The patients had been previously diagnosed with childhood cancers.

The primary endpoint was to evaluate the efficacy

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

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:

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).

● 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.

125 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.

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):

Subjects 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 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 STS vs.

2 unchanged sentences

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

was 21.4% (3/14) vs.

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.

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

We generated a net loss of approximately $4.7

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 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.

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 generated a net loss of approximately $8.7 million for the six months ended June 30, 2021, and a net loss of $8.7 million for the six months ended June 30, 2020.

As of June 30, 2021, our accumulated deficit was approximately $170.9 million ($162.1 million at December 31, 2020).

We believe that our cash and cash equivalents as of June 30, 2021, which totaled $27.3 million, plus the Bridge Bank Loan and Security Agreement, will be sufficient to meet our cash requirements through 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 March 31, 2021 versus three months ended March 31,

Three months ended June 30, 2021 versus three months ended June 30, 2020:

Three Months Ended

In thousands of U.S.

June 30, 2021

June 30, 2020

Operating expenses:

1 unchanged sentence

General and administration

Total operating expense

Loss from operations

Unrealized loss on securities

Amortization expense

Other gains/losses

Interest income and other, net

Research and development expenses decreased by $321 for the three months ended June 30, 2021 compared to the same period in 2020 as the Company’s development activities shifted back to product launch readiness and pre-commercial development of PEDMARK TM .

General and administrative expenses decreased by $604 compared to same period in 2020.

On June 30, 2020, the Company was relatively much closer to the anticipated launch date than it is in 2021.

We would anticipate the same increase in pre commercialization activities as we near the 2021 launch date.

The reduction in general and administrative expenses was slightly offset by higher expenses associated with additional employees and the increase in non-cash equity remuneration expense for employees and board members related to the vesting of new and existing grants.

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 loss on those shares for the three months ended on June 30, 2021 was $84.

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 a decrease of $22 in other gain/(loss) for the three months ended June 30, 2021, compared to 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 $30 for the three months ended June 30, 2021 compared to the same period in 2020.

There was virtually no amortization expense for the three months ended June 30, 2021.

Interest income was $5 lower for the three months ended June 30, 2021, compared to the same period in 2020.

This was driven mainly by lower average cash balance despite the slightly higher interest rates for the three months ended June 30, 2021 compared to the same period in 2020.

Six months ended June 30, 2021 versus six months ended June 30, 2020:

Six Months Ended

In thousands of U.S.

June 30, 2021

June 30, 2020

Operating expenses:

Research and development

General and administration

Total operating expenses

1 unchanged sentence

Unrealized gain on securities

Other gains/losses

Amortization expense

Interest income and other

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.

Research and development expenses increased by $702 for the six months ended June 30, 2021, compared to the same period in 2020.

The Company’s research and development activities for the first six months of 2021 increased as the Company prepared for the NDA resubmission.

General and administrative expenses decreased by $539 over same period in 2020 as expenses associated with pre-commercialization activities decreased on a year over year basis.

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 for the six months ended on June 30, 2021 was $98.

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.

There was a decrease of $21 in other gain/(loss) for the six months ended June 30, 2021 compared to 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 $47 for the six months ended June 30, 2021 compared to 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 $24 lower for the six months ended June 30, 2021, compared to the same period in 2020.

was driven mainly by a sharp decrease in interest rates and lower average cash balance for the six months ended June 30, 2021 compared to the same period in 2020.

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):

The following table presents selected condensed financial data for each of the last eight quarters through June 30, 2021, as prepared under US GAAP (U.S.

dollars in thousands, except per share information):

Net (Loss)/Income for the

1 unchanged sentence

Diluted Net (Loss)/Income per

June 30, 2019

September 30, 2019

5 unchanged sentences

March 31, 2021

June 30, 2021

Liquidity and Capital Resources

Dollars in thousands

Selected Asset and Liability Data:

March 31, 2021

Selected Asset and Liability Data (thousands):

June 30, 2021

December 31, 2020

Cash and cash equivalents

Cash and equivalents

Other current assets

1 unchanged sentence

Working capital (1)

(1) [Current assets –

current liabilities]

(1) [Current assets – current liabilities]

Selected Equity:

Common stock and additional paid in capital

Accumulated deficit

Stockholders’

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

Shareholders’ equity

Cash and cash equivalents were $27,293 at June 30,2021 and $30,344 at December 31, 2020.

The decrease in cash and cash equivalents between June 30, 2021 and December 31, 2020 is the result of expenses related to the development and preparation of the NDA resubmission of PEDMARK TM and general and administrative expenses, which was offset by a draw of $5,000 from the Bridge Bank Loan and Security Agreement.

There was a decrease of $292 in other current assets between June 30, 2021 and December 31, 2020.

This relates largely to a $388 reduction in the value of prepaid expenses almost entirely offset by an increase in the valuation of the Company’s holdings of Processa shares.

Current liabilities decreased sharply, primarily due to the completion of manufacturing and pre-commercialization activities and regulatory expenses associated with the PEDMARK TM NDA resubmission.

Working capital decreased between December 31, 2020, and June 30, 2021 by $1,800.

The decrease relates to cash expenditures for operating activities for the six months ended June 30, 2021, offset by the $5,000 draw from the Bridge Bank Loan and Security Agreement.

The Company expects increases in cash outflows related to pre commercialization and product launch activities in the coming months.

The following table illustrates a summary of cash flow data for the three and six-month periods of June 30, 2021 and 2020:

Selected Cash Flow Data

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(dollars and shares in thousands)

Net cash used in operating activities

Net cash provided by investing activities

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,

Net cash provided by financing activities

Net cash flow

Net cash used in operating activities for the three and six months ended June 30, 2021, primarily reflected a net loss of $4,001 and $8,734, respectively.

These three and six month losses were adjusted for the add back of non-cash items consisting of $1,326 and $1,913, respectively in stock-based compensation expense, with a loss of $84 added back for the three months ended June 30, 2021, less $98 for the six month period ended June 30, 2021, in unrealized loss/gain on securities.

For the three and six months ended June 30, 2021, there was a net change in prepaid and other assets of $209 and $390, respectively;

coupled with a net decrease in current liabilities of $2,044 and $1,499, respectively.

Three and six month cash flows from operating activities were negative $4,426 and $8,019, respectively;

for the period ended June 30, 2021.

Net cash provided by financing activities for the three and six months ended June 30, 2021 was $4,968, respectively.

Financing activities consisting of $5,000 gross proceeds from the Loan Security Agreement, $24 from the exercise of options, netted against $56 in capitalized deferred loan cost.

Net cash flows from the three and six month period ended June 30, 2021 were $542 and ($3,051), respectively.

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:

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;

progress or lack of progress in our preclinical

studies or clinical trials;

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;

1 unchanged sentence

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;

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

our business development activities;

new regulatory requirements implemented

by regulatory authorities;

new regulatory requirements implemented by regulatory authorities;

the timing and outcome of any regulatory review process;

1 unchanged sentence

Outstanding Share Information

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

Our outstanding share data as of June 30, 2021 and December 31, 2020 was as follows (in thousands):

Outstanding Share Type

Common shares

1 unchanged sentence

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

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.

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.

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 June 30, 2021, we had approximately $400 million in our cash accounts and $26,900 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.

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.

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

twelve months.

The 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.

The policy risks are primarily the opportunity

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.

Off-Balance Sheet Arrangements

Since our inception, we have not had any material

The policy risks are primarily the opportunity 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.

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.

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

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.

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.

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.

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.

Research and development expenses for the three months ended June 30, 2021 and 2020 were $800 and $1,121, respectively, and for the six-months ended June 30, 2021 and 2020 were $3,216, and $2,514 , respectively.

We have decreased our research and development expenses related to PEDMARK TM as our efforts have shifted to pre-commercialization activities after the NDA resubmission in May 2021.

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.

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

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.

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

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, 2020.

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