Fennec Pharmaceuticals Inc. Aktie

Good morning, ladies and gentlemen, and welcome to the Fennec Pharmaceuticals First Quarter 2026 Earnings and Corporate Update Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded.

I would now like to turn the conference over to Fennec's Chief Financial Officer, Robert Andrade. Please begin.

Thank you, operator, and good morning, everyone. Thank you for joining us. We are pleased to host Fennec Pharmaceuticals first quarter 2026 earnings conference call today, during which we will review our financial results as well as provide a general business update. Joining me from Fennec this morning is our Chief Executive Officer and Board member, Jeff Hackman. I am also pleased to welcome our Chief Commercial Officer, Terry Evans, who is joining our earnings call for the first time.

Terry is a seasoned commercial and operations leader with a proven track record for delivering significant revenue growth and leading high-performing teams. Terry's industry experience spans all facets of commercial operations, including sales, sales management, operations, market access, trade, specialty pharmacy and data analytics. He has more than 25 years of commercial leadership experience with companies, including Currax Pharmaceuticals, Horizon Therapeutics and Medisys.

Since joining Fennec in the fourth quarter of 2024, Terry has played a pivotal role in reshaping and strengthening our commercial organization. He has helped to sharpen our execution, enhance our field presence and position the team to capitalize on the opportunities ahead. Later in the call, Terry will speak to how recent efforts will support Fennec's next phase of growth. Additionally, our Chief Medical Officer, Dr. Pierre Sayad, will join us for the Q&A portion of today's call.

Before we begin, I would like to remind you that during this call, the company will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. References to these risks and uncertainties are made in today's press release and disclosed in the company's periodic and current event filings with the United States Securities and Exchange Commission. In addition, any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. This conference call is being recorded for audio rebroadcast on Fennec's website, www.fennecpharma.com, where it will be available for the next 30 days.

I will now turn the call over to Jeff Hackman.

Thank you, Robert, and good morning, everyone. Thanks for joining the call here today. We are encouraged by our strong start to the year and believe 2026 is a defining period for Fennec. Our conviction is rooted in the progress across many multiple fronts. We've made important strategic enhancements to our business for 2026 that are strengthening our execution across the organization and positions us to continue to build momentum as the year unfolds. On the commercial front, we're seeing encouraging early indicators, including positive experiences through our full-service patient support program, Fennec HEARS, as well as trends that support our confidence in the opportunity ahead, and Terry will provide more color on those dynamics shortly.

Beyond commercial execution, we continue to be encouraged by growing clinical interest in PEDMARK and its broader potential. We are pleased to have recently announced a third investigator-initiated study with the University of Arizona Cancer Center to evaluate PEDMARK in adolescent and young adults or AYA and adult patients in head and neck and testicular cancers receiving cisplatin. The news follows recent initiations of 2 other institution-led clinical studies with Tampa General Hospital Cancer Institute and City of Hope. We believe that the data insights generated through these studies and others to come will help support broader clinical adoption of PEDMARK to prevent ototoxicity in AYA and adult cancer patients receiving cisplatin-based treatments.

Additionally, 4 abstracts from key opinion leaders evaluating the utility of PEDMARK in preventing cisplatin-induced ototoxicity or permitted hearing loss were accepted for the presentation at this year's ASCO Annual Meeting. Collectively, these studies are continuing to the momentum and the growing body of evidence supporting potential use of PEDMARK in new patient populations and tumor types.

As a reminder, PEDMARK is currently approved for pediatric patients 1 month of age and older with localized non-metastatic solid tumors and is also recognized by the National Cancer -- or National Comprehensive Cancer Network with a 2A recommendation for use in AYA patients. With regards to Japan, we had a positive informal PMDA meeting earlier this quarter. We continue to be in conversations and to explore partnering opportunities in that region.

So in summary, we're making meaningful progress across the drivers that matters most to our long-term success; expanding clinical momentum, strengthening commercial execution and maintaining a solid financial foundation. Taken together with what we are observing early in Q2, we believe we are well positioned to deliver sustained growth throughout this year.

With that, I will turn it over to Terry for a detailed commercial update.

Thank you, Jeff. As Jeff just noted, we're encouraged by the momentum we're seeing in the business and believe our first quarter performance reflects the benefits of the key strategic enhancements we've made across the commercial organization. In late Q4 2025, we launched an initiative called Project Ignite. This was a strategic decision based on successful cross-functional initiatives put in place at the start of 2025. Building on the shared insights and strong commercial execution, we use data to evaluate opportunities to optimize both reach and frequency.

Our Q1 investment in 14 new territories and 4 frontline managers expanded our ability to engage health care professionals, support adoption and drive sustained momentum across priority markets. Much of the quarter involved the foundational work required to bring those investments fully online, recruiting and onboarding new talent, completing training and integrating these team members into our commercial model. The recruitment and onboarding process concluded at our national meeting in early March. This was an important milestone to align the expanded organization around our strategy, sharpen execution and ensure the team entered the field equipped and ready to execute.

There is a natural ramp period with any field force expansion and we view much of Q1 as laying that groundwork. The expansion of our customer-facing team has allowed us to reach with greater frequency, a larger prescriber target base, increasing from 1,300 to now over 5,000 targets. We know the AYA market is promotionally sensitive and effectively communicating the unmet need around CIO is our #1 priority. This creates a pathway for practices to help change the standard of care for all appropriate patients receiving cisplatin. We believe we're executing in Q2 with a strengthened commercial footprint that is now positioned to drive greater impact through increased reach, frequency and account penetration.

Importantly, we're already seeing encouraging signs from these investments through our HCP targeting efforts. To bring our cross-functional model to life, one recent example illustrates how coordinated engagement can translate into adoption over time. About a year ago, our medical team initiated engagement with a KOL from a leading academic center who was familiar with CIO, but not aware of PEDMARK as a preventative treatment option.

Through multiple scientific exchanges and participation in a sponsored program at ASCO GU alongside the Testicular Cancer Awareness Foundation, awareness evolved into meaningful engagement. And more recently, that relationship was transitioned from medical to field sales. A newly deployed territory manager with our Key Account Director introduced Fennec HEARS, which facilitated this KOL's identification and treatment of his first testicular cancer patient for home infusion. Since then, the engagement is actively expanding across the institution with multiple physicians across tumor types now positioned to prescribe and treat more than 20 patients with PEDMARK.

Now in parallel, we're working collaboratively on order sets and EMR integration. This example highlights a key principle. Durable growth stems from persistent cross-functional engagement across medical, sales, market access and patient support services. Another example of significant progress is through our market access initiatives, specifically in terms of engaging with GPOs. One of the fastest-growing oncology aggregators in the U.S. has partnered with us to integrate PEDMARK throughout their network with order sets and site activations.

We have ongoing efforts with other organizations to replicate this model that supports a top-down adoption approach, complementing the expansion of our sales force focused on bottom-up activities. At the macro level, we continue to see a healthy mix of both new and existing prescribers. Many established accounts are becoming more comfortable with PEDMARK, contributing to deeper utilization and increased vials per account. We view that continued adoption and growing depth of use as an important marker of durable demand. In fact, demand in the first quarter was driven by prescribing in 3 core tumor types: testicular, cervical and head and neck cancers, and these remain foundational to our commercial opportunity.

Another area we would highlight is cross-functional collaboration across all parts of our organization to convert prescription demand into completed therapy. This collaboration comes together through Fennec HEARS, our full-service hub designed to simplify access and support continuity of care by guiding patients and providers through coverage, reimbursement, nurse-led administration and at-home infusion services. This white glove support and education continue to be a meaningful differentiator as we change the standard of care. That coordinated approach is reflected in the operational metrics we're seeing.

We continue to see strength in infusion volume and vial utilization. This is reflected in a 48% quarter-over-quarter increase in completed infusions through Fennec HEARS and reinforces our ability to translate prescription demand into completed therapy. From a site of care perspective, we're maintaining a productive mix of approximately 50% from both in-office and at-home infusions, which supports access and flexibility for patients and providers.

Fennec HEARS continues to be an important contributor to momentum in the quarter. Through ongoing operational refinements, we're seeing more patients enter the funnel. Specifically, a higher share of patients are progressing to therapy as reflected in encouraging conversion rates, which are hitting our benchmark of 80% for the first time. Once on treatment, we continue to see strong adherence trends of approximately 80%, which is a huge improvement from where we were 1 year ago today. With our larger sales footprint, we're able to make substantially more sales calls each day versus previous quarters.

Now as I mentioned before, this is a promotionally sensitive market where reach and frequency make an impact on our business. Early indicators of this success include HEARS patient record monthly enrollments in April. Demand through Fennec HEARS in April alone is more than 50% of the total Fennec HEARS demand for all of Q1. As a result, demand in Q2 is tracking to surpass Q1. Additionally, conversion rates remain above our target of 80% and key community and academic relationships are opening up to our message of CIO prevention. We remain focused on disciplined execution as we build on this momentum throughout the year.

And with that, I will now turn the call over to Robert for our financial review.

Thank you, Terry. Our press release contains details of our financial results for the first quarter of 2026, which can be viewed on the Investors and Media section of our website. Rather than read through all of those details, my comments today will focus on some key financial results.

For the first quarter of 2026, the company recorded net product sales of $15.1 million compared to $8.8 million in the first quarter of 2025, representing an increase of approximately 73% year-over-year compared with the first quarter of 2025. The first quarter demonstrated continued momentum in delivering PEDMARK to patients with net product sales up for the sixth consecutive quarter since new commercial leadership took over. We saw record new patient enrollments in the March quarter and April was our highest demand month ever.

On the OpEx side, which we define as R&D and SG&A, excluding stock-based compensation, it was approximately $14 million for the quarter, with a year-over-year increase of approximately $6 million. The increase was on the SG&A with expanded marketing investment and increased commercial headcount supporting PEDMARK growth. Important to note, we expect approximately $50 million in cash OpEx in 2026, with over 60% of those expenses expected in the first half of 2026.

Cash and cash equivalents were $40.1 million as of March 31, 2026. For the quarter, there was an increase of $3.3 million in cash and cash equivalents. The net increase in cash consisted of $2.3 million in operating cash flow and approximately $1 million in proceeds from option exercises. With regard to anticipated milestone payments from our partner, Norgine, we do not anticipate receiving the German milestone payment. We look forward to Norgine's expansion efforts in 2026 as they launch in multiple markets and the potential for the next milestone achievement by the end of 2026.

Importantly, we generated positive cash flow in the first quarter of 2026. As we grow the business, we anticipate select quarterly swings in the cash position based on collection cycles with customers and as such, expect the second quarter ending cash to be lower than the first quarter. However, we expect the third quarter cash to be positive and to grow the cash the remainder of the year in the second half of 2026.

We have tremendous leverage in the business with a predominantly fixed cost base. And as our revenue growth continues, we anticipate operating income to grow meaningfully in the quarters to come. Lastly, as stated in our press release, we anticipate that our cash, cash equivalents and investment securities as of March 31, 2026, combined with projected revenues from PEDMARK will be sufficient to fund our business based on our current operating plan.

Operator, with that, we are now ready to open the call for questions.

[Operator Instructions] And our first question will be coming from the line of Madison El-Saadi of B. Riley Securities.

Congrats on the quarter. It seems you gave some additional color this quarter on KPIs and performance. Maybe just help us break down really what drove the upside here, if this was predominantly new account adds in 1Q, if it was deepening utilization of your base accounts or maybe just productivity from sales force expansion that weren't fully onboarded as of March? And then afterwards, a follow-up.

Sure. This is Jeff. Thanks for the question. I appreciate it. And I'll let Terry comment on it a little bit. We talked about execution early on when I even first got here 1.5 years or so ago and going on. And we're starting to see it now. And one of the things that we saw with Project Ignite was the ability for us to be able to not only expand our reach but expand our frequency. And that's what we're seeing and one of the reasons why you're seeing such significant uptake, especially in a month like April. So we can go into a little bit more detail. Fennec HEARS is something that drives a lot of the growth here. And we see demand all throughout Q1 growing through Fennec HEARS. So that's also exciting for us. But I'll let Terry comment a little bit more on some of the growth.

Yes, for sure. Thank you for the question. What we're seeing is new starts in Q2 is balanced really between both academic and community. In that balanced approach, utilizing the additional folks that we have, our increased reach and frequency that Jeff mentioned, we're seeing that really present itself in academic and large community small community practices. We're seeing a nice growth in both AYA and pediatrics. So yes, we're encouraged by the balance of the year.

Yes, please. So it seems like you've had multiple inbound interests regarding these ISTs. I'm just wondering why you guys decided to go with the ISTs and the tumor types you did. And if we focus just on, say, the AYA adult testicular, what can this practically mean for the company? Is it more of a means of entrenching PEDMARK, increasing awareness? Or is it more in the context of TAM expansion? And I'm just curious if you can comment if you've seen any revenue come out of these IST institutions. It seems that would be a really tremendous kind of leading indicator of kind of the awareness gap.

Yes. Great question, again, and I'll touch on it first, and then I'll kick it over to Pierre, who's sitting here with us today. ISTs are something that are important for a couple of reasons. Number one is it establishes our position in the space. So one of the pushback you'll get from AYA physicians that talk is, let me see the data. Let me see some of the data that was generated in this population.

As you know, the trials that got PEDMARK approved were trials that were done with the Children's Oncology Group or in the pediatric space. So that's one of the reasons why we're excited about the testicular data that we're generating through the -- as well as some of the adult data down the road that are going to come from these. The second part is as you -- and I'll let Pierre talk a little bit more on how this happens inside the institutions, but we -- not only the physicians who are participating in these studies are using the product, but also physicians that are surrounding those physicians. And so we're seeing that expansion throughout the institution. And Pierre, maybe you can comment a little bit on that.

Sure. Sure, Jeff. Thanks for the question. So yes, as the medical team has the conversations around our 2 Phase III clinical trials, as Jeff alluded, those were obviously in the pediatric setting, there's a very natural conversation that happens with our physicians where they say, okay, now that I'm really understanding how cisplatin is causing this damage in the cochlea and how PEDMARK can potentially prevent that, they're coming to us with these new and very creative ISTs to test this out in AYA and adult patients. So we're -- as you know, from previous press releases, at least on the 3 ISTs that have already been announced, these are across tumor types, AYA setting, adult setting, localized tumors, metastatic tumors and all these ideas are coming directly from the KOLs. So we're very excited about all this interest.

I think your second question maybe was what do we do with this data? As you can imagine, as the data matures and our data set expands, we're certainly thinking about potential regulatory conversations, NCCN guideline submissions, so on and so forth. And I think the third point, just to cover what Jeff said, we absolutely see this very interesting trend of once an IST is activated in a given academic institution, there's so much training, so much conversation that needs to happen that now you have the pharmacists, the nurses, other oncologists all really on board with PEDMARK. So we begin to see a little bit of an uptick in commercial use in those institutions.

And our next question will come from the line of Chase Knickerbocker of Craig-Hallum.

Congrats on the nice quarter here. Could you maybe just share what percentage of your volume or just some kind of underlying demand metric was driven by the new rep hires over the last couple of quarters? And then how is that productivity trending in Q2? Really just trying to get to the extent of kind of what -- to what magnitude those new hires are playing a role in this sequential growth and then when they can be fully productive.

Yes. I'll give this over to Terry, but Chase, thanks for the question. It's a good one. And we -- the things we're seeing early on April is new patients or I mean, coming from new territories, which is exciting. So we see a healthy mix, both coming from new and existing prescribers. And I'm commenting now on the April numbers that we're seeing. These are established accounts, but which are becoming more comfortable with PEDMARK, but also we're seeing execution in accounts in new accounts and which is really exciting in places where we've never seen patients before. And we knew that once we expanded our reach and we expanded the frequency of this -- of the PEDMARK message, we were going to see continued adoption through these. Terry, maybe you can comment a little bit.

Yes. A couple of things. Jeff is exactly right. There's a significant number of our new territories that had prescriptions or patients that have come through between the time that our national meeting occurred through the end of April. To part of the point that you made, Chase, we actually began the hiring -- we began the decision of Project Ignite in Q4, and that kind of happened all the way through Q1. We trained everybody the first week of March, ended at our national meeting.

The effectiveness of the salespeople, the new salespeople really began, call it, on March 9. So as you know, and through years of experience, there's a ramp period of productivity for our sales team. We've talked about kind of the second half as we get these folks up and running and more productive. But early signs are good. There's a good balance between new accounts and existing accounts and growing patients and prescriptions inside of both of those. So we're encouraged that the fact that with the strengthened commercial footprint, we're going to drive reach and frequency, and we're excited that we've been able to deliver 6 consecutive quarters of strong performance.

Helpful. And maybe just a couple of smaller kind of details. Can you just speak to the kind of stability of the pediatric revenue? Just trying to get a sense for kind of underlying sequential AYA growth? And then can you just remind us what percentage of your business at this point, either from a demand or revenue perspective is flowing through Fennec HEARS?

Yes. I'll take a couple of the beginning points of this, then I'll give it over to Terry. But Chase, we see -- we're excited about the business and how it's growing. And so the Fennec HEARS right now, what we're seeing is in April alone, about 50% of our business and demand is going through Fennec HEARS. That's increasing every day. It increases as we get better implementation. It increases as physicians want to add more patients to this. And so we're continuing to see that.

Our pediatric business is growing. It's growing not at the pace, of course, of AYA, and we've said that before in the past. But pediatric business grows because we're getting now into institutions and places where we didn't have the ability to get to in the past with our pediatric business as well. So when a pharmacist, for example, becomes comfortable in an academic institution with the product, for example, in the AYA space, we're seeing now uptake in the pediatric space as well because of the ability to be comfortable with the product. Whether we get in there through AYA or pediatric for me, it doesn't really matter. It's the opportunity to be able to access these patients.

Yes. Jeff, I agree. Chase, we're growing in both pediatrics and AYA. Fennec HEARS, as Jeff mentioned, is roughly about 50%. It's important to note that even though we grow pediatrics and we're growing the AYA, PEDMARK is weight-based. And just -- and AYA represents 20-plus 1,000 patients with a high survival rate that take high dose cisplatin. So the AYA would be expected to outpace pediatrics even though the pediatric space is growing. So in both of those things, I think we're taking a balanced approach, which, again, kind of leads us to 6 quarters of strong growth.

And our next question will come from the line of David Amsellem of Piper Sandler & Company.

This is Alex von Riesemann on for David. My first question is just how are you thinking about life cycle management for PEDMARK? And then secondly, what is your appetite for acquiring another asset?

Yes, it's a great question. And I'll touch on it on the life cycle, and I can turn to Pierre on this, but you're starting to see a little bit of that life cycle management come into play with the ISTs. We talk about 3 kind of groups of patients for our business. It's the pediatric and we talk about AYA, but there's also adult. When you think of where cisplatin is given, it's given across not only these 3 areas, but it's also given to both localized and metastatic.

And so now you're starting to see us start to grow the opportunity to develop data and expand it from a life cycle management standpoint into these other types of populations, the metastatic population, for example, can this product be given there and be effective in these patients in the adult patients, in the head and neck space. So you're starting to see all of this. And we have got more opportunities to be able to do that in other areas. Maybe, Pierre, you can touch on those.

Sure. That's exactly right, Jeff. So as these -- as I touched upon earlier, the ISTs are beginning to mature and we're seeing the data come through. So that obviously is going to open doors into metastatic indications. We've had a tremendous interest from multiple academic institutions putting forth very creative new ISTs in the head and neck space. So as I mentioned and alluded to before, we have our sights set on possible NCCN designation criteria for head and neck and cervical is also a very robust area in terms of interest. So as the data matures, that will define our strategy to expand, whether it's with regulatory meaningfulness or NCCN guidelines.

Yes. And as related to the second part of your question, looking at other products and bringing in other opportunities, we continue to be open to that. As you know now, we've expanded our commercial team significantly, we've expanded the organization and put resources in places now that you could start to expect a potential opportunity to be able to layer in some additional products, for example. So yes, we continue to be open to that, and that's something that we're looking at as well.

And our next question will be coming from the line of Ram Selvaraju of H.C. Wainwright.

This is Katie on for Ram. I guess I'm wondering what is the typical profile of a high-volume prescriber for PEDMARK at this point? Are those high-volume prescribers predominantly NCI cancer centers? Are they more community oncologists? And how many of those physicians are there in the U.S.

We talked about -- Terry mentioned -- that's a good question. I appreciate it. Terry mentioned that we're targeting about 5,400 folks with our new team expanded up from just a little bit over 1,000. So -- and those breakout, typically, we see the concentration of our uptake in both academic and community settings. So our strategy, as we get into this is designed to engage both academic centers and also community practices, and we're seeing a really good balance between both. Maybe, Terry, you can comment on that.

No, I think you're exactly right. With our greater reach and frequency, we're seeing new starts from academic and community settings. It's one of the important things that I may or may not have said, which is PEDMARK is a long -- it's a long play sometimes where -- it takes medical. It takes sales, it takes market access. It takes patient support services, lots of these cross-functional teams to kind of pull it through. So the need in academic is slightly different than the need in community. But -- and I've mentioned this before, we're taking a nice balanced approach and activating both sides of them. So thank you.

Excellent. If I could sneak in one more question. Do you guys have an idea of how many additional investigator-initiated trials you're going to have starting this year? And could any of those outcomes give you evidence to label expansion?

Sure. It's a good question. We get -- as soon as we put out your first press release, you start to see significant interest come in, right? Because we see that we have -- our doors are open for partnerships. So let me let Pierre comment on that a little bit. But again, the doors -- we -- there's a limit to how many we're going to do. I can tell you that. But there are some really interesting ones that we've been talking about. Pierre, maybe you can comment on that.

Sure, sure. I'm smiling a little bit at the question. I mean the -- we're really excited, very encouraged. When you have the amount of interest that we've had from the top academic institutions for new IPs, it's always a great sign. In terms of how many are we expecting to see, I can't comment on that, but there will hopefully be more press releases here soon. I think the point, though, that I want to make is these are not -- I'll use the word haphazard. We have a very strong strategy as to which ones we're approving and which ones we are not. And so ultimately, there will be efforts to combine data, et cetera, do some pooled analyses with very specific purposes, again, as I mentioned, for regulatory enabling conversations.

Next question will be coming from the line of Sudan Loganathan of Stephens.

We appreciate the updates and the great progress. My first question, I wanted to ask what your internal pipeline looks like to target new patient populations also treated with platinum-based chemotherapies such as ovarian cancer, bladder cancer, colorectal cancer and even non-small cell or small cell lung cancers. I believe those areas will start getting into more into the AYA population. I'm curious to see what you view out of those maybe or others to be the next low-hanging fruit.

Sure. Thanks. It's a good question. We go where cisplatin is given, right? And we know that there's certain tumor types that are obviously a target for us in that space of where these patients receive therapy with cisplatin. I'll let Pierre comment on the potential new ones. But we see as an opportunity, obviously, testicular because cisplatin has done so -- it's the gold standard. It's something that there's a lot of cisplatin that's given and we see a big impact of CIO in that space.

But there are others that physicians have come to us throughout our time frame as we expand because they're using a lot of cisplatin in cervical and head and neck and other places. And so we see that expansion in places like that. But maybe, Pierre, you can talk about why we see that.

Yes. So as we've covered before, there's a strong foothold, if you will, interest that has come through for head and neck testicular cervical. We are absolutely having a lot of conversations in those additional areas that you mentioned as well, bladder as well as lung. And I think it's basically what Jeff said, the mechanism by which cisplatin, a, combats the tumor, but then also defeats and kills these very sensitive cochlear hair cells is the same across all these tumors. So wherever cisplatin goes, PEDMARK absolutely has a strong potential of helping those patients. So yes, you're absolutely right, right? It's head and neck, cervical, testicular, lung, bladder, and there's probably a few more that we could rattle off here. Those are all absolutely big targets for PEDMARK.

Great. And secondly, if I can squeeze one more in. Could we give more details on how the PEDMARQSI launches are going? What are the primary sticking points? And when do you anticipate revenues from there maybe to start actually moving the needle for the business?

Yes. We're enthusiastic about what we're seeing with Norgine. It's -- this is the year we'll see significant growth in Norgine throughout their territories and we're starting to see, obviously, many countries. As Robert said, maybe you can comment a little bit on some of the growth that we're seeing through Fennec HEARS, I mean, through Norgine.

Yes. PEDMARQSI for 2026 will be launched in multiple markets, almost double-digit type markets. So this is the year where the foundation gets laid. I think an important point there is not only our royalties, which start in the mid-teens as they grow those sales, but also the milestones. And if you think of the over $200 million in milestones, at least half of those are tied purely to achieving certain sales. So we look forward to giving you updates, but this -- 2026 is the year where we see the ramp starting.

And congrats. Great quarter.

I would now like to turn the call back to Jeff for closing remarks.

Perfect. Well, thanks, and great questions, and I really appreciate everybody here attending today. So in closing, we believe our first quarter performance reflects meaningful momentum across the business and reinforces our confidence in 2026 as an important year for Fennec. With strong execution underway in Q2 and multiple catalysts ahead, we remain focused on delivering sustained value. So thank you all again for your continued interest and support. We appreciate it. Take care.

And this concludes today's conference. Thank you for your participation. You may now disconnect.

Good morning, ladies and gentlemen. Welcome to Fennec Pharmaceuticals' Fourth Quarter and Full Year 2025 Earnings and Corporate Update Conference Call. [Operator Instructions]. As a reminder, today's conference call is being recorded.

Now I'd like to turn the conference over to Fennec Chief Financial Officer, Robert Andrade.

Thank you, operator, and good morning, everyone. Thank you for joining us today. We are pleased to host Fennec Pharmaceuticals' Fourth Quarter and Full Year 2025 Earnings Conference Call during which we will review our financial results as well as provide a general business update. Towards the end of the call, we will conduct a Q&A session, hosted by myself starting with frequent questions that the company received from investors, followed by our traditional open Q&A session.

Joining me from Fennec this morning is our Chief Executive Officer and Board member, Jeff Hackman. I am also pleased to welcome our Chief Medical Officer, Dr. Pierre Saada. Pierre is an accomplished industry executive with proven success leading global medical teams and oncology launches at companies such as Onyx Pharmaceuticals, Karyopharm Therapeutics, Oncopeptides and CTI BioPharma.

Dr. Sayad is a graduate of the School of Medicine of Loma Linda University as well as a Harvard Business School alone. Since joining Fennec in the fourth quarter of 2024, and Pierre has been instrumental in advancing our medical strategy and clinical evidence strategy, expanding engagement with leading institutions and key opinion leaders and strengthening the independent data foundation supporting PEDMARK.

Later in the call, Pierre will speak to the substantial progress being made on the medical front and the importance of the medical team in the education process of CIO and PEDMARK. Before we begin, I would like to remind you that during this call, the company will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. References to these risks and uncertainties are made in today's press release and disclosed in detail in the company's periodic and current event filings with the U.S. SEC.

In addition, any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements.

This conference call is being recorded for audio rebroadcast on Fennec website, www.fennecpharma.com, where it will be available for the next 30 days. And with that, I'll turn the call over to our CEO, Jeff Hackman.

Thank you, Robert. Good morning, everyone. Thanks for joining us today on a very special earnings call. 2025 was a transformational year for Fennec. We delivered record net product sales of $44.6 million compared to $29.6 million in 2024. But most importantly, this growth was really driven by quarter-over-quarter expansion with our active patients as well as new and existing accounts. This reinforces the durability and demand and the effectiveness of our overall market development strategies.

In the fourth quarter, given the positive momentum we saw in 2025, we made the strategic decision to further enhance our execution by increasing our customer-facing team and to try to achieve a much greater reach and frequency with our customers, so we can ultimately help more cancer patients protect their hearing. We expanded our capabilities to include new territories and high-prescribing targets in the AYA or adolescent and young adult market.

We strengthened the company's financial health during the year with disciplined operating decisions and efficiency measures, including the closing of public offerings, raising over $42 million in net proceeds, which resulted in a full redemption of our debt. We were intentional on our capital allocation, focused on high-impact initiatives and continue to enhance our operating leverage as our business scales. This balanced approach in investing in growth while maintaining financial rigor has positioned us well for long-term value creation with the strongest balance sheet right now in the company's history.

Our full service patient support program, I've mentioned before in the past, Fennec HEARS, which is designed to simplify access and support continuity of care by guiding patients through coverage, reimbursement and providing free product for eligible individuals as well as coordinating a nurse-led administration and at-home infusion services achieved a record performance in the fourth quarter.

The program reached all-time highs in patient enrollments, prescribed and infused vials, active patients and conversion rates. In fact, conversion rates were up 70% in Q4 compared to 50% in the first quarter. These results reflect not only patient need, but the exceptional execution of our field organization and our operational infrastructure that we have built to ensure appropriate and efficient access for our patients.

Now as we continue to increase the awareness and use of PEDMARK through our sales activities, our marketing team has been busy as well, expanding focus to activate young adult testicular patients, for example, on a broader scale. In the coming quarter, we're excited to launch an initiative around the Ind500 race in May in close partnership with a testicular cancer advocacy group. Following that, we will also have a significant presence this year at the ASCO meeting in Chicago. We look forward to providing more updates on these initiatives and others in months ahead.

Beyond commercial performance and our activities, we also made significant progress advancing our clinical evidence strategy. Shortly, you're going to hear from Pierre. He'll provide you much more details on the progress and how we are moving these forward in our medical affairs initiatives.

Finally, top line results from our investigator-initiated Phase II/III, we call it STS-JO1 clinical trial for PEDMARK in Japan is progressing well. This, as you guys know, this is -- we believe it's still early, but this clinical milestone is very important for Fennec and reinforces the broader applicability of PEDMARK and the opportunity to expand our impact globally, partnering and registering this product in Japan and potentially broader in Asia.

As a reminder, PEDMARK is currently approved for pediatric patients 1 month of age and older with localized non-metastatic solid tumors and is also recognized by the National Comprehensive Cancer Network or the NCCN with a 2A recommendation for use in AYA patients.

Now I'd like to just take a moment to thank our dedicated employees for their focus this past year. Their resilience and their belief in our mission, it's been instrumental in driving our performance. We've built a very strong organization with strong revenue growth and notable milestone achievements during the quarter and the year further will validate our strategic plans and objectives and market development strategies and importantly, Fennec's ability to execute our plans.

Further, I'm proud of our executive team and each of their respective operating functions at Fennec. Overall, we have strong performance and strong foundation that we built in 2025, and that is going to propel us and propel Fennec into the next chapter of this organization. One is going to -- and this next chapter is going to be defined, as I mentioned, with execution, global expansion and sustained growth. So with that, let me turn it over to Pierre.

Thank you, Jeff, and good morning, everyone. I'm pleased to be joining today's call to share an update on the significant progress we've made across our evidence generation and medical initiatives. Over the past year, we have strengthened our medical affairs team significantly, building a high-performing organization capable of delivering on our strategic priorities. We expanded capabilities across clinical field and real-world evidence functions ensuring that we can engage effectively with key opinion leaders in both academic and community settings while supporting new evidence generation initiatives in the U.S. and globally.

This robust foundation positions us to execute efficiently and meaningfully in 2026 and beyond. Our 2025 efforts were focused on 3 priorities. First, key opinion leader development, engaging with influential clinicians to deepen understanding of our product's clinical value and real-world applicability. Second, institutional engagements partnering with leading academic institutions to advanced independent research, generate new clinical data and expand insights across additional tumor types and patient populations. And finally, improving patient and clinician experiences, driving key customer enhancements, such as the revamp of our Fennec HEARS program, designed to simplify access, support adoption and ensure a positive experience for both the patients as well as the clinicians.

These activities created meaningful traction in 2025 and into 2026 with multiple studies underway and strong collaborations forming with both academic and community oncology [indiscernible]. The insights we have gained from KOLs during the year are highly encouraging. Clinicians report increasing confidence in our products, particularly in better understanding the mechanism of action of cisplatin and then recognizing the feasibility and ease of incorporating PEDMARK into routine practice without compromising cisplatin's antitumor activity.

These discussions are not only reinforcing clinical confidence, but also supporting broader adoption and integration into guidelines and standards of care. For example, last month, Fennec announced that new data supporting the potential use of PEDMARK in adults with head and neck cancers were presented at the 2026 Multidisciplinary Head and Neck Cancer Symposium that's the NCS meeting. It is worth noting that these are the first new data supporting the potential use of PEDMARK since the pivotal clinical program.

The findings from the multi-institutional retrospective review of 15 adults with head and neck cancers, show that PEDMARK could be safely given at 6 hours after cisplatin dosing and what's easy to incorporate into the real-world care plan. This strict post cisplatin timing is a validated approach intended to preserve cisplatin antitumor activity and no disruption to curative intent cisplatin-based treatment delivery was observed [indiscernible].

These new findings are critical to demonstrating the feasibility, scalability and long-term value of PEDMARK beyond those studied in our pivotal clinical program. These findings also helped to strengthen the case for broader clinical adoption and a sizable patient population at risk for permanent hearing loss.

Additionally, as Jeff mentioned, at the start of 2025, we outlined a very focused strategy to expand and deepen the clinical evidence supporting our product via institution-led initiatives. Our objectives were clear. First, generate new data across additional tumor types and patient populations; second, validate and expand the product's real-world clinical value. Third, address unmet need in vulnerable groups such as AYA and adult patients. Next, strengthen guidelines and practice adoption through independent evidence. And then finally, deepen our collaboration with influential institutions shaping oncology standards of care.

I am proud to report that we have made meaningful progress across each of these priorities. Within the last 3 months, we have announced the initiation of 2 new studies with respected academic and community oncology centers. The first is with City of Hope, 1 of the largest and most advanced cancer research and treatment organizations in the United States. City of Hope is evaluating PEDMARK for the prevention of cisplatin-induced auto toxicities of CIO in adult men with Stage II/III metastatic particular germ cell tumors. And our intention is to not stop here. Cisplatin has truly transformed outcome for patients with germ cell tumors, turning what was once a highly fatal disease into one of oncology's true success stories. However, as many as 4 out of 5 survivors are left with permanent hearings loss, which impacts the quality of life long after the treatment ends. And we are pleased to see that centers like City of Hope recognize that oncological care needs to focus on both the survival as well as the quality of life.

The second study we announced earlier this month is with Tampa General Hospital Cancer Institute, that's TGH. TGH is initiating a study evaluating the real-world clinical utility at PEDMARK and reducing the risk of ototoxicity in AYA and adult cancer patients receiving cisplatin-based treatment. This evaluation will examine real-world clinical data and audiology monitoring that will help to reinforce the message that tumor efficacy is not compromised by the use of PEDMARK. Over time, this expanding data set will help to strengthen physician confidence and support the broader clinical adoption.

Additional investigator-initiated studies supporting the use of PEDMARK have been submitted to Fennec and are currently under review. We continue to be very encouraged by the robust conversations and engagement we've had with key opinion leaders at some of the nation's leading oncology centers and look forward to sharing additional updates on evidence generation in the very near future.

In summary, our medical efforts in 2025 laid a strong foundation for future growth through expanded evidence generation and meaningful KOL development in the academic setting. It's a combination of a robust organization focused priorities and positive KOL feedback ensures that we are well positioned to continue driving clinical confidence and impact in 2026.

With that, I will turn the call over to Robert to take us through the financial highlights.

Thank you, Pierre, and a very good thank you to our entire medical team for their energy and strong momentum going into 2026.

Now to the financials. Our press release contains details of our financial results for the fourth quarter and full year 2025, which can be viewed on the Investors and Media section of our website. My comments today will focus on some key financial results.

For the fourth quarter of 2025, the company recorded a net product sales of $13.8 million compared to $7.9 million in the comparable period in 2024, representing an increase of approximately 75%. Fourth quarter demonstrated continued momentum in delivering PEDMARK to patients with net product sales up for the fifth consecutive quarter, since Jeff joined as CEO; and our new leadership team of stewardship.

For the full fiscal year 2025, the company recorded $44.6 million in net product sales compared to $29.6 million in 2024, representing an increase of approximately 50%. The increase in net product sales is attributable to growth across both new and existing accounts with notable success and progress in conversion and adherence of PEDMARK patients.

The company recorded $6.1 million in selling and marketing expenses in the fourth quarter of '25 compared to $3.9 million in the comparable period in '24. The increase in selling and marketing expenses in the quarter is largely related to increased payroll and additional marketing expenses as we focus on expanding our commercial team and augmenting our outreach to community oncology expenses and the adolescent and young adult operations.

For the fiscal year '25, the company recorded $18.6 million in selling and marketing compared to $18.4 million in fiscal year '24. For the full fiscal year, selling and marketing expenses was in line largely as increased payroll and additional marketing expenses in the comparable period were offset by the elimination of European expenses after the announcement of the [indiscernible] transaction. in March of 2024.

On the G&A front, the company recorded $8.9 million in the fourth quarter of 2025 compared to $4.2 million in the comparable quarter of '24. For the fiscal year 2020, the company recorded $28.8 million in G&A compared to $23.1 million in '24. G&A expenses across both periods, quarters and comparable fiscal years increased with higher intellectual property and legal expenses, increased payroll expenses as head count increase and increased noncash expenses associated with equity-based remuneration.

Noncash stock-based compensation increased about $2 million year-over-year. Cash and cash equivalents were $36.8 million as of December 31, 2025. The net increase in cash was primarily due to the approximately $42 million in net proceeds from equity offering and cash selected for net product sales offset by operating expenses and $21.8 million debt paydown in November of '25. As Jeff mentioned, the company has 0 in debt outstanding and has the strongest balance sheet and the history of Fennec.

Importantly, we anticipate generating positive cash flow in the first quarter of 2026 as the timing of receivable collections impacted the Q4 cash flows, but on the [indiscernible], we collected the receivables early in the first quarter of 2026 that will benefit our cash position in Q1 of 2026.

Lastly, and the major milestone for Fennec, we are pleased to have announced -- last week, the settlement of patent litigation regarding PEDMARK in the U.S. Under the terms of the settlement, Cipla will not enter the market with its generic sodium thiosulphate product until September 1, 2033 or earlier under select [indiscernible]. We believe this settlement will save multiple millions of dollars in annual G&A that will largely be redeployed to help contribute to the expansion of the commercial team, and importantly, provide market exclusivity for many years as we continue to establish PEDMARK as standard of care for patients to be administered cisplatin.

With that, we will now commence with a Q&A format by addressing top questions that we most frequently received from investors within the categories of medical, financial and commercial.

Starting with medical here. Number one, what is the biggest challenge or pushback from physicians or institutions when it comes to PEDMARK, such as the notion that it interferes with cisplatin treatment.

Yes. Thank you for the question, Robert. It's an understandable concern, and it's an important question to address. The primary historical question from oncologists has been whether sodium biosulfate could reduce the cisplatin antitumor activity. And this concern is understandable given the importance of maintaining such high cure rates in cancers versus cisplatin is used. And I'll show 2 specific explanations.

First, what has been encouraging is that long-term follow-up from both the COG and SIOPEL 6 trials continues to show preservation of survival outcomes while significantly reducing the risk of cisplatin-induced hearing loss. That evidence base has been critical in shifting physician confidence.

In the COG ACCL0431 study, long-term follow-up approaching approximately 8 years has shown no difference in overall survival between the PEDMARK plus cisplatin arm, and the cisplatin alone. Similarly, the CIHL study in hepatoblastoma has demonstrated consistent overall survival outcomes with follow-up extending beyond approximately 5 years while still showing a substantial reduction in hearing loss.

So what this means is, importantly, if PEDMARK were meaningfully interfering with cisplatin antitumor activity, we would expect to see a divergence in those long-term survival curves, yet, instead, the curves remain essentially overlapping, which provides strong clinical reassurance that the anticancer efficacy of cisplatin is fully preserved.

Second, and aside from this long-term durability data, as physicians become more familiar with the pharmacology and the [indiscernible] delayed administration strategy, it's the mechanistic rationale, which becomes clear. Cisplatin has already entered tumor cells and has already formed the DNA at ex before PEDMARK is administered. We are seeing this discussion move away from skepticism and toward implementation logistics such as the institutional protocol and pharmacy workflow.

As awareness grows, many institutions are recognizing that hearing loss is a lifelong type of city and are becoming more proactive about production.

Thank you, Peter. Second question. what is Fennec's regulatory strategy for the AYA population? And are you speaking with the FDA regarding the revised or supplemental indications or working with NCCN regarding stronger guidelines placement?

Yes, Robert. As I mentioned earlier, we're building a robust evidence generation pipeline through recent data from our study in Japan, new real-world data supporting the potential use of PEDMARK in adults with head and neck cancers, 2 ISPs already underway and other ISPs in additional tumor types and patient populations, including AYA cancer have been submitted to Fennec and are currently under review.

We are focused on expanding the clinical evidence base that demonstrates consistent protection against cisplatin-induced ototoxicity across additional tumor types and patient population. So stay tuned for more updates over the coming months.

In parallel, from a regulatory standpoint, we maintain ongoing dialogue with regulatory authorities regarding the potential pathways for label expansion as the data package matures. From a clinical practice perspective, guideline recognition is a very important milestone. As the evidence grows across different disease settings that positions PEDMARK more strongly for future guideline inclusion for strengthened recommendations.

The AYA population represents a meaningful opportunity because these patients frequently receive cisplatin-based regimens and face decades of potential hearing impairment if toxicity occurs. Our strategy is evidence first. Once the clinical and mechanistic data are sufficiently robust, we have a plan and look forward to regulatory and guideline pathways naturally becoming more achievable.

Thank you, Pierre. Moving to financial. Question one, can you provide an estimate on cash operating expenses for 2026 versus 2025 in light of the commercial expansion and other awareness initiatives?

With the growth of our commercial team territories and the strategic marketing initiatives to drive further awareness, specifically in AYA, we anticipate cash operating expenses to grow from approximately $35 million in 2025 to approximately $50 million in 2026. The increase in spending is across both commercial and medical. On the commercial front, we have increased head count, expanded awareness initiatives, a few of which is here today and focus on execution.

On the medical front, we expect additional ISTs commencing and enrolling, expanded advocacy initiatives and a focus on positioning Fennec for additional guideline recognition and expansion. Further, from a cash EPS perspective, we anticipate a clean P&L in 2026, with a similar gross to net drop down of approximately 85% of gross sales to net sales, COGS in the mid-single digits and noncash stock compensation in line with 2025.

Important to note, the increase in spending is focused with rigor and accountability with specific [indiscernible] to grow PEDMARK utilization and net product sales. We increased spending and expanded the customer-facing teams with the expectation that they will be making a material contribution by the second half of 2026.

We remain intent on growing cash flow from operations in '26, and we can expect the same cadence of spending with over 60% of total cash operating expenses to be spent in the first half of the calendar year.

Question two. Can you provide an update on the Norgine partnership and ex U.S. progress?

After our Norgine deal in March 2024, PEDMARQSI, the brand name for PEDMARK in Europe, was launched in the U.K. and Germany, just last year in '25 and was just approved in Switzerland last week. Importantly, Norgine is planning 8 to 10 launches in 2026, including some major EU countries in addition to the U.K. and Germany.

Regarding pricing, the U.K. price was set in 2025 at approximately GBP 8,000. And the final pricing in Germany we expect to be able to share more by the middle of this year and give you an update related to the potential milestones attached to that pricing. The key takeaway here is that Norgine is just getting started. We expect PEDMARQSI momentum to build meaningfully throughout 2026 as additional countries get launched and commercial activities expand and royalty contributions and related potential milestones impact Fennec financials will really start to hit us in the second half of 2026.

Final financial question. When will you provide revenue or EBITDA guidance in 2026?

As a reminder, every additional 100 patients per year on PEDMARK has the potential to benefit Fennec Financials by approximately $13 million. That's 100 patients per year with an approximate addressable market in the AYA market segment alone of greater than 20,000 patients annually. The opportunity is significant as we ramp up our commercial teams presence in the field here in the first half of 2026.

As the year progresses, we intend to evaluate the potential for issuing both revenue and EBITDA guidance as we monitor the impact of our growth initiatives. In addition, directionally in terms of EBITDA and free cash flow, every additional 100 patients, as mentioned, can add $30 million in net revenue, but with our fixed cost base has the potential to add an estimated $0.70 per share of free cash flow or cash EPS.

Moving on to commercial. Yes. Jeff, question one. You've announced the recent field force expansion in Q1. Can you elaborate on these hires and how we should think about the impact of the sales?

Sure. Thanks, Robert. The expansion that we announced in the first quarter here was a very targeted step for our growth. These are really focused on building our territory managers and we've seen the productivity of our current territory managers to be significant, but limited in their reach and frequency. So our territory managers with our accounts that they have focused on high Tier 1 accounts and we're going to continue to see that with the increase of these folks that we brought in, so will not only increase our reach, but we'll increase our frequency.

These additional hires are going to be focused on expanding coverage in regions where demand and account density support incremental investment. We believe this approach will allow us to further penetrate these Tier 1 accounts while also supporting activation of high-potential new centers. Given the productivity that we've seen from our existing territory managers in 2025, we're confident that these hires will contribute new and continued growth and ramp up through 2026 throughout the year and in the future.

Thank you, Jeff. Question two, you highlighted [indiscernible] enrollments and conversion rates for the quarter. To what extent is that program driving commercial demand versus addressing access barriers and how should we think about an impact on revenues going forward?

Thanks, Robert. The primary purpose of our Fennec HEARS program is to address access barriers and to ensure that appropriate patients are able to start and complete their therapy rather than just to create demand. What we're seeing in the data is that this revamped program is functioning exactly as we intended it by helping physicians and patients navigate reimbursement and affordability challenges while also simplifying the overall access experience for PEDMARK.

The record enrollments as well as prescribed and infused vials in active AYA patients are growing and they reflect both strong operational execution as well as growing familiarity with our providers and how to utilize this program efficiently. Most importantly, though, the demand for the product continues to originate from clinical adoption and physician decision-making.

The patient assistance program supports that demand by removing friction from the access process as well as helping convert appropriate prescriptions into treated patients. From a revenue standpoint, we view that this program is an important enabler for our sustained growth going forward. By improving this patient and clinician experience and ensuring conversion and prescribe files to infused vials that helps us capture appropriate utilization, which might otherwise be delayed or even lost due to administrative and financial barriers.

Thank you, Jeff. And operator, with that, we'll open it up for questions.

[Operator Instructions] Our first question coming from the line of David Amsellem with Piper Sandler.

This is Alex on for David. We wanted to dive more into the germ cell tumor and to secular cancer group of patients. Can you maybe refresh us on what you're seeing in the field from advocacy groups and the new field force? And how is penetration in this segment? And then also, are you seeing strong uptake in academic centers or community oncology practices or both? And what's the mix between pediatric patients and older segments at present?

Yes. Let me take the first part just real quickly because I think it relates to some -- on the commercial side, and then I'll hand it over to Pierre. It's a good question. Germ cell tumors continue to be the largest opportunity that we see for PEDMARK. And while the efficacy of cisplatin is fantastic in a lot of these tumors, what we see is a significant amount of ototoxicity in these patients. And so we continue to focus ourselves there.

We are partnering with advocacy groups. We have some initiatives throughout this year, and I mentioned a few in our call. But I think driving kind of a two-pronged approach, we have to educate our physicians on the importance of PEDMARK, but we also have to educate patients that they -- and by partnering with advocacy groups, this gives us an opportunity to be able to get that education out to our patients.

The second part of that, I'll give it over to Pierre to answer.

Thank you, Jeff, and thank you for the question. Certainly, we have seen a very substantial, I think, interest, if you will, from both the community as well as the academic settings in terms of driving PEDMARK research and where this is coming from is maybe twofold. So on the one hand, frankly, it's our substantial medical team. So we had in the field, a group of trained MDs, PhDs, Pharm-Ds, true experts, if you will, engaging daily with top KOLs and academic institutions as well as very important HCPs in the community setting.

They are driving very deep and robust conversations. I think the second thing is how these conversations are actually unfolding. These conversations go extremely down deep into the mechanistic rationale, first of cisplatin. How does cisplatin actually cause the damage to the [ hair ] cells inside the cochlea. We are really able to demonstrate through data, through science, what's happening with [indiscernible] and then on the backside of that is explaining the molecular mechanisms, the biochemistry of how PEDMARK prevents the auto toxicity.

So you combine the talent of the team with these very mechanistic biochemistry, organic chemistry types of discussions, and yes, we are absolutely seeing an increase in KOL interest and I would say, enthusiasm for working with PEDMARK.

Our next question coming from the line of Madison El-Saadi with B. Riley Securities.

Maybe if we could double-click on the growth of the number of treated patients in making certain assumptions about pediatric revenue. It looks like the AYA patient treated count rose materially in 4Q, at least by, say, 20% versus 3Q. Is that a fair assessment? And do you expect these to increase in the coming quarters? And then relatedly, are you seeing an increase in high frequency prescribers?

Yes. We'll continue to see that trend grow. -- you see a shift in our focus in our organization towards the AYA market. Obviously, it's much larger. I think Robert has mentioned on numerous occasions. It's 10x the size of the pediatric market. So where we're seeing the significant growth is in our AYA patients. That's where we'll focus. And that's where our efforts have been. That doesn't mean that you walk away from these pediatric institutions and the ability to be able to grow it there. We have some great relationships, and we continue those.

In the institutions, you see it mixed, both in the academic and community settings for AYA. We see academic centers in certain areas of the country play a much more important role, but we also are seeing, and we've mentioned in the past that PEDMARK was put on formulary in a large community practice, oncology community practice, and we're going to continue to expand, and we have initiatives working with some very large community practices throughout the country. So stay tuned. We'd love to announce more in the future about how we grow our business in the community setting.

And just to dive a little deeper, Mad, and then question on your question in terms of some key prescribers what we saw in Q4, and we expect to continue is a nice mix of both existing accounts and new accounts. And in particular, what got us very enthusiastic is the existing accounts growth. So not only growth in the amount of patients but growth in the amount of vials of PEDMARK administered. And so that's something that we're watching closely to keep that balanced mix between both existing and new.

Our next question coming from the line from Raghuram Selvaraju with HC Wainwright.

Congratulations on all the 2025 progress. The first question is from an international commercial perspective, and there are 2 parts. First, when would you during 2026 to start to see initial revenue coming from the Norgine partnership? And with respect to Japan, can you comment on when you would anticipate having a potential partner, a local regional distributor in place and how that might relate to the time line for potential approval and market entry?

And then lastly, I was wondering if you could comment on the current overall situation vis-a-vis generic filers in the wake of the Cipla settlement. Do you anticipate pretty much everything else to more or less fall in line with that settlement? To what extent is their remaining litigation pending? How many other generic filers do you expect? And any other information on that topic that you could provide that might be germain.

Sure, Rob. I think I'll start with taking all 3. On the Norgine front, as I mentioned, there are a number of launches happening this year. And also really once we get the -- once Norgine gets the pricing in Germany, you're going to see Germany starts to take off. So we anticipate a material contribution to Fennec financials in the second half. of 2026 from Norgine.

On Japan, front and center, as Pierre mentioned, we're really excited about the results that we announced in Q4, all very consistent with what we know that it protects your hearing and doesn't impact the efficacy of cisplatin. Those conversations and dialogues are ongoing. It's in our best interest to get a deal done sooner rather than later. We want to be with a partner similar to what we have with Norgine in Europe -- in Japan, so we can get the regulatory process kicked off. And we have a lot of enthusiasm, not only from strategic but from the investigators themselves in Japan to get PEDMARK approved there.

Lastly, and thank you for the question on the settlement. It was many years in the work, lots of dollars spent. So we are very excited to have that behind us. We have no other outstanding litigations currently at this time. I think you're very familiar with the generic and the settlement process generally, it's one and the first one that you settle with, if it's two, it means that you have an enormous market or a sizable market. So to a certain extent, that's a good problem to have. But nevertheless, we are very excited to have resolved our only outstanding litigation with Cipla and look forward to establishing PEDMARK as the standard of care well into the 30s and go thereafter. So thank you, Ram.

Our next question coming from the line of [indiscernible].

I wanted to get your thoughts maybe -- I think it would be helpful kind of however you guys kind of break it out internally, but potentially a number of kind of unique way AYA accounts or prescribers. And then you kind of mentioned those accounts that are writing more vials in Q4 over Q3? Maybe just -- is that the exception is that the rule kind of maybe kind of elucidate that further as far as kind of how many repeat prescribers you're seeing in that AAA population?

Thanks for the question. We're seeing -- first off, let me take the last part of that question. One of the areas that is really sticky for us now and what we're seeing is prescribers prescribing again, right, and multiple times. And I think that's probably the biggest impact that you see on our growth if these prescribers now being comfortable with the regimen, being comfortable with using Fennec HEARS with using nurses coming into the home of the patient being comfortable with getting reimbursement. One of the things I know you're interested in also is can the product get reimbursed in the AYA space. And the 3 top plans in the country, we're seeing upwards of 95% to 100% reimbursement rates for the product. So that's not limiting us either.

All of those are factors that allow our physicians now to be much more comfortable with the product and use it multiple times. But one of the reasons why we wanted to increase the size of our commercial footprint was to get to more customers. There was just a limit to who we could call on with the size of our commercial team. We've now expanded that reach significantly. I believe that the size of our team now is good enough to get us to the future of where we need to go, especially with the expansion of the number of calls that we're seeing already with these folks in the field. And so that growth is going to be evident, and you'll see that really quickly start here in 2026.

So while we don't kind of get numbers of new accounts, as you know, but the area -- the breakdown of both new existing accounts are very balanced right now. It's probably like what we'd like to see in the field is kind of a balance of both. I don't want to see physicians walking away from using the product because they didn't have a good experience, but we also want to see us reaching out to new customers as well. So it's a very balanced approach.

Maybe just being most of the way through Q1 here. You kind of called out that kind of per patient revenue is pretty significant that does introduce a little bit of lumpiness, right? And so as we go into Q1, most of the way through the quarter, I think it would be helpful just to get some kind of goalpost or thoughts as far as kind of current trends? I mean you grew about 11% sequentially in Q4. Maybe just a goal post there would be -- do you expect that to accelerate in Q1? Or is there some seasonality in Q1 that we should be thinking about for the business?

Well, I'll let Robert comment on some of the numbers. But Chase, we've grown this business 5 straight quarters. My plan is not to slow down here. Robert, if you want to comment on.

Yes, I'll just -- similar to Jeff's comments, we have a strong momentum into 2026. Importantly, we did add significant amount of FTEs and commercial hires and as well as medical hires. They don't contribute day 1. But as mentioned in my prepared remarks, we anticipate that material, call it, step up in the back half of 2026. So we're not going to stop here by any means in Q1 and Q2, but the material contribution that we've done from this expansion we believe is going to really start to impact our financials starting in Q3.

Our next question is coming from the line up [indiscernible].

Congrats on the great year and quarter. My first question, I just wanted to ask how are you thinking about the business development going forward, particularly in terms of priority and maybe potential areas of focus? And then the second one I have kind of touched on this a little bit on the prepared questions. But can you elaborate on how institutional led research is expected to impact Fennec in both the near and long term over the long term?

Yes. The first question to Dan was on business development. And I'll let Jeff add to here. But as you know, our opportunity in PEDMARK is very, very large, 20,000 patients in the AYA alone with the opportunities that Pierre spoke to in potentially expanding both the initiatives into metastatic and into additional populations. So that being understood as we expand our sales team, there's always the opportunity to evaluate potentially late-stage assets or commercial assets. But with our team in place, we are very enthusiastic just about the opportunity to invest in ourselves and this opportunity [indiscernible]. Jeff, do you want to add anything?

I'll just add, yes, I mean, now we're -- the scale that we've added now and the expertise and the I've talked about this, Sudanefore, is now we've created and we're showing significant execution, 5 straight quarters in a row here. So this organization now has shown that it can deliver and execute on its strategies. And so yes, now it opens up some doors. So it's a good question.

The second part of your question, I'll answer a little bit of it, and then I'll let Pierre jump in. But the growth in our partnerships in these medical institutions are kind of twofold, right? So you can start to think about the relationships that we build and the importance of these studies and the data that we're going to get from these studies, but having a partnership, for example, with City of Hope, as Pierre discussed earlier, is essential for the entire organization and our relationship with City of Hope, not just those physicians doing the study. And do you want to expand on that because a little bit.

Sure, sure. Thank you for the question. As Jeff is commenting, absolutely, you got City of Hope critical academic centers that are going to help us drive our understanding into new patient populations. As previously mentioned, adults, metastatic disease, et cetera. And there's many more ISTs that we are currently reviewing. So stay tuned for some more press releases here hopefully very, very soon. All that to say, is that as new data is coming in, that defines our regulatory strategy.

Our immediate priority is expanding the clinical evidence that demonstrates this consistent protection against cisplatin is ototoxicity, yet additional tumor types and additional patient populations will allow us to drive these regulatory conversations. So in terms of expanded labels, perhaps new guidelines, new relationships with NCCN, the new data coming in will help define that entire guide.

So in closing I -- yes, thank you for the questions, everyone. I think we'll close it here. And I just want a few comments here at the end for me on this. And I -- 2025 was a record-setting year for the company. It's we've come an incredible and we've overcome incredible things this past year in 2025, but we're not stopping here. We're set up to strengthen our commercial execution going forward. We see our medical engagement. We've expanded our global reach.

We're now seeing the impact of this focus and this disciplined execution focus in this organization. We've built real momentum going into 2026 with a revitalized and expanded team with clarity and purpose. We know exactly where the business is and where our efforts need to be focused. Our field and medical teams are deeply engaged. We're educating physicians. We're supporting our patients and we're expanding awareness of cisplatin-induced ototoxicity. The organization is aligned, and we are energized, and we're excited and we are hitting on all cylinders as we go into 2026. So I'd like to thank you all for your continued support and partnership and we're looking forward to a fantastic progress in 2026 and beyond.

Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.

Good morning, ladies and gentlemen, and welcome to Fennec Pharmaceuticals' Second Quarter 2025 Earnings and Corporate Update Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. Now I would like to turn the conference over to Fennec's Chief Financial Officer, Robert Andrade.

Thank you, operator, and good morning, everyone. Thank you for joining us. We are pleased to host Fennec Pharmaceuticals' Second Quarter 2025 Earnings Conference Call today, during which we will review our financial results as well as provide a general business update. Joining me from Fennec this morning is our Chief Executive Officer and Board member, Jeff Hackman. Before we begin, I would like to remind you that during this call, the company will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements.

Reference to these risks and uncertainties are made in today's press release and disclosed in detail in the company's periodic and current event filings with the U.S. Securities and Exchange Commission. In addition, any forward-looking statements made on this call represent our views as of today only and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. This conference call is being recorded for audio rebroadcast on Fennec's website, www.fennecpharma.com, where it will be available for the next 30 days. And with that, I will now turn the call over to Jeff Hackman.

Thanks, Robert. Good morning, everyone. Thanks for joining the call today. Well, it's hard to believe it's been 1 year since I stepped in into the CEO role here at Fennec. When I joined, my focus was clear. I wanted to stabilize the business, sharpen our strategy and build a strong foundation for sustainable growth. I'm proud to say that over the last 12 months, we've been delivering on these priorities, while also driving the awareness and adoption of PEDMARK for the prevention of cisplatin-induced ototoxicity or CIO. And the results are beginning to materialize. We are now talking about 3 consecutive quarters of growth and more to come.

You may recall, after I joined Fennec last year, I outlined a focused set of strategic imperatives to drive our execution and accelerate the long-term growth of PEDMARK, which remember, still remains the first and only FDA-approved therapy in the U.S. and Europe to reduce the risk of CIO or permanent hearing loss associated with cisplatin treatment. PEDMARK is specifically approved for pediatric patients 1 month of age and older with localized non-metastatic solid tumors and also was recognized by the National Comprehensive Cancer Network, or NCCN, with a 2A recommendation for the U.S. for use in adolescent and young adult patients.

But before we dive into the performance for the quarter, let me update you on significant progress that we've made during the first half of this year. First, we made significant strides in increasing awareness of the unmet need among both oncology and broader cancer care communities. We've done this through continued presence at major conferences, targeted educational campaigns and peer-to-peer interactions. We're seeing growing recognition that hearing loss from cisplatin is not just a side effect, it's preventable, and it's an issue with long-term consequences.

We're seeing the strongest momentum in both large community practices and academic centers. and early validation of our targeted sales approach and enhanced patient support services. And to that end, I'm pleased to share that a large national oncology group of providers recently added PEDMARK to its formulary for its use in patients under 40 years of age. This is 1 of the largest and fastest-growing groups in the country, it's a group of community-based oncology practices in the U.S. This decision reflects the growing recognition and the need to protect younger patients from cisplatin-induced hearing loss, and we're excited and encouraged by what it signals in terms of broader momentum for PEDMARK and adoption in the community settings.

Second, we are actively working to cement PEDMARK as the standard of care for CIO prevention. During the second quarter, we held multiple advisory boards with leading academic centers across the country to better understand current approaches to diagnosing and managing CIO. The insights shared by key opinion leaders are now forming many of our cross-functional strategies. In parallel, positive feedback from existing accounts using PEDMARK continues to strengthen our confidence in our clinical value and support broader institutional adoption.

I'm pleased to also share today that NCODA recently issued a positive quality intervention or PQI for PEDMARK. This is an important development that provides peer-reviewed, practical guidance to oncology care teams on the use, administration and timing of PEDMARK to prevent CIO in pediatric and AYA or adolescent and young adult patients. NCODA PQIs are widely used tools that support multidisciplinary cancer teams, including pharmacists, nurses and oncologists in delivering a high-quality care for patients receiving oral and IV therapies in oncology. But most importantly, we see PQI as a strong signal of growing clinical alignment around importance of preventing cisplatin-induced ototoxicity and it supports our goal of establishing PEDMARK as the standard of care in this space.

Third, we are expanding our CIO and -- we are expanding and educating on CIO and an important role of PEDMARK in preventing it, not just with oncologists, but beyond. Many healthcare professionals are involved in the patient journey, including ENTs, audiologists, nurses and pharmacists. These groups are now engaging with Fennec and PEDMARK and we're seeing the benefit of this multidisciplinary support in day-to-day clinical practices. We are reminded that in the expansion that the care of these oncology patients, especially when it comes to survivorship and quality of life, it goes beyond the role of just the oncologists.

Fourth point I want to make is on the access front. We've made significant progress with payers and providers alike. Our field access and reimbursement teams have been instrumental in ensuring smoother coverage and pathways and fewer barriers for the sites that are ready to treat. The strengthening of our Fennec HEARS patient assistance program has been central to this work. We've seen quarter-over-quarter growth in enrollment in Fennec HEARS programs and the newly revamped offerings that we're delivering, which are giving improved experiences through strengthened healthcare provider practices, patient services, expanded payer reimbursement support and streamlined access to home nursing resources.

And finally, on the activation side, while our near-term commercial focus remains on educating healthcare providers to support a shift in the standard of care, we are also strengthening our efforts to educate and engage patients and caregivers. We are doing this through the support of several advocacy associations or organizations, such as the Testicular Cancer Awareness Foundation and activities surrounding initiatives like the Childhood Cancer Awareness month. These efforts help raise awareness of the risk of CIO and encourage families to inform and have informed conversations about hearing protection during their treatment planning.

Further, we are excited to announce that Fennec's senior leadership team and employees along with several PEDMARK patients and their families will ring the closing bell of the NASDAQ stock market on Friday, September 5, 2025. While this is an exciting business milestone for Fennec, it's important -- it's a really important symbolic reminder of our mission, which is to help more patients be able to hear their own remission bells. Now turning to our second quarter 2025 results. Revenue grew 33% year-over-year and 10% sequentially with net revenues of $9.7 million. This kind of quarter-over-quarter growth just doesn't happen by chance. It reflects a disciplined execution and a completely overhauled go-to-market strategy and having a top-down talent in the right positions to execute this excellence.

This quarter-over-quarter growth includes the addition of 14 new accounts, some of which are part of 2 large community oncology groups or purchase or GPOs. Within these networks, we've seen PEDMARK activation in Q2, which continues to grow into Q3. Looking into Q3, we expect additional accounts within both of these networks to activate and prescribe PEDMARK. I'm incredibly proud of the Fennec team and encouraged by the continued growth that we're seeing, which reinforces our belief in the scalability of this model and the growing demand for PEDMARK across these key markets. With that, I'll now turn it back over to Robert.

Thank you, Jeff. Really amazing to think that just 1 year ago, we did our first conference call together and the amount of progress to date under your leadership. I remember on that call, both thanking our shareholders for their support and patience as we underwent the transition. And stating that I believe the opportunity for Fennec was significant with proper execution ahead of us. Further, I'd like to give much appreciation and recognition to our new leadership team that Jeff brought into Fennec only 9 months ago and who have been on the front lines in this execution. Christi Cioffi, our Chief Strategy Officer and leader in many areas, including our awareness and marketing initiatives; Terry Evans, our Chief Commercial Officer, who has primed our commercial team for optimal excellence; and Pierre Sayad, our Chief Medical Officer, whose experience and knowledge has transformed our medical team with new energy and vigor and the proper tools to educate and support providers and patients.

I believe we are just getting started. Now on to the details. Our press release contains some of our financial results for the second quarter of 2025, which can be viewed on the Investors & Media section of our website. Rather than read through all those details, my comments today will focus on some key financial results. As Jeff outlined, for the second quarter of 2025, the company recorded net product sales of $9.7 million, representing a 33% increase compared to the same period last year and 10% growth over the first quarter of this year and matching the highest quarterly net product sales in the history of Fennec. Of significance, we are pleased to report our third consecutive quarter of sequential growth in net product sales.

We have a great trend forming. Our revenue performance continues to demonstrate strong growth and commercial momentum, and we believe this is just getting started. As mentioned in our previous earnings, we are focused on growing net product sales throughout 2025. Importantly, we anticipate the most significant quarterly growth in the second half of 2025, when all the foundational pillars and initiatives we have implemented and continued to optimize are expected to materially impact growth of PEDMARK. The strong performance reflects both successful retention of existing customers, and the exciting new uptake in demand for PEDMARK by new customers.

Further, the launch of PEDMARQSI by Norgine in the EU is well underway in the United Kingdom and Germany, and we are pleased with the traction to date. We expect to provide additional updates on milestones and royalties from this partnership with Norgine in the quarters to come. Turning to our expenses. Our total cash operating expenses for the quarter, exclude noncash stock-based compensation, was approximately $11 million. This represents an increase of roughly $2 million compared to the first quarter of this year.

The quarter-over-quarter increase was primarily driven by ongoing investments in marketing, additional head count as well as continued efforts related to our intellectual property. As is customary with our business, cash operating expenses are higher in the first half of the fiscal year, largely as a result of commercial and marketing spending patterns and we expect these cash expenses to decrease in the second half of 2025. The company recorded $4.4 million in selling and marketing expenses in the second quarter of '25 compared to $2.9 million in the first quarter of '25 and $4.7 million in the second quarter of 2024.

The primary drivers of the increase in the quarter include additional marketing expenses and a onetime accrual reversal that occurred only in Q1 2025. On the G&A front, the company recorded $7 million in the second quarter of 2025 compared to $6.1 million in the earlier quarter, first quarter of '25 million and $6.9 million in the second quarter of '24. For the second quarter of 2025, G&A expenses were consistent on a year-over-year basis and increased quarter-over-quarter, largely due to the following. One, increased noncash stock compensation; and two, ongoing litigation and intellectual property expenses.

For the quarter, the company spent roughly $4 million in cash. Cash and cash equivalents were approximately $18.7 million as of June 30, 2025. We remain confident that full year cash operating expenses will be similar in '25 to that of '24 or roughly $33 million. This includes an increase in commercial expenses, including higher head count and marketing expenses offset by the elimination of European pre-commercialization costs, which only occurred in 2024. Importantly, we have several levers to potentially increase the cash balance in the second half of 2025. Product revenues continued to gain momentum, and we aim towards cash profitability as cash expenses also decreased in the second half; two, potential milestones and royalties from the Norgine partnership; and three, the possible monetization or partnership after the release of the Japan study results, which are expected in the fourth quarter. And operator, with that, we will now open up the call for questions.

[Operator Instructions] Our first question comes from the line of Chase Knickerbocker with Craig-Hallum.

Jeff, maybe just to start, would you guys be willing to share active -- an prescribers number, particularly obviously within AYA as just it would be helpful to see kind of the number of active prescribers you have within that kind of cohort.

Yes. The -- we don't share the number -- the cumulative number, obviously, for a bunch of different reasons on that guidance. Tell me a little bit more about what your -- maybe a little bit more detail, though, and I can maybe share some other specifics what you're looking for.

Just an active number of current writers basically. I mean you shared kind of double-digit accounts increase sequentially. I mean, maybe on that front, kind of if you'd be willing to share kind of an active account number just as we can -- so we can think about kind of the ramp from here in AYA.

Yes, yes. Let me go back and look at that. It might be something that we might be able to share in the future quarters, Chase. I don't see that -- I want to be careful, especially when you start getting a little bit more detail, right, on actual accounts that are out there. And obviously, you have to protect that relationship. But obviously, doing something with some numbers might not be -- it could be something we could do in the future. So...

Maybe if we just focus on that double-digit accounts sequentially, Jeff. I mean, can you give us some kind of visibility into maybe how many patients within those accounts in AYA are treated with cisplatin and kind of what your kind of overall opportunity is maybe just in those accounts that have kind of added on sequentially?

Yes. I mean, we talked about in the AYA market, it's 10x the size of the pediatric. It's about 20,000 patients in that population between ages 15 to 39 that are treated with cisplatin. And so that population is significant. That's our market. That's where we've divided up the country into our commercial teams and supply them with that data.

Yes. And Chase, I'll add, which is important, but it starts generally with 1 patient at a center or at a hospital. We have successful administration. We can create the awareness. We have successful administration, and we have successful reimbursement, that expands and what we've been able -- what we've witnessed in particular in Q2 over Q1 is the retention of those existing customers and that also augmenting the amount of patients within those existing customers. So I think what we wanted to shed light was we had 14 new accounts, don't get focused on the amount of accounts because each account is unique, but we are growing. And the goal is obviously then to build that existing base and augment that as well.

And then maybe just a little bit additional color on that. When that account starts out, and let's say it's a single patient, what's kind of the cadence in which you start seeing increased writing from set account?

Yes, we see it -- we saw it more in the second quarter as we started to get experience, Chase. That's exactly where Robert was going was we needed to have that initial patient in that center or that practice go through PEDMARK therapy, see the positive outcome, see that it works, how they administer it, in some cases, actually using our Fennec HEARS program. And now we -- that's the area where, obviously, a lot of our folks will focus their efforts is to expand now in those same practices because remember, these physicians in these oncology practices have multiple cisplatin patients that they're going through. So that's where we saw a lot of our growth was through expansion of current accounts in Q2, and we'll see even more of that as we go through the year.

Got it. Maybe just last for me, guys. Sorry to get so many in here. But on the EU side, could you share the amount of royalty revenue that was in the quarter from Norgine? And then just kind of general thoughts on kind of how that ramp is going with your partner, particularly as we go into the back half of the year here. And then on kind of final German pricing, I mean, do you have a thought on when we should hear back on that?

Yes. Thanks, Chase. To step back a little, as you're aware, the Norgine partnership has 2 primary components. The first component is -- are the royalties, and that is a percent, starts in the mid-teens of Norgine sales. And the second component is north of $200 million potential milestones. We started to see some significant traction in the second quarter from that partnership. As a reminder, they launched late in the first quarter. The second quarter, we started to see some traction really out of the U.K. as they work to get the different P&T approvals within Germany and final pricing later in the year. That number is not material enough at this point to move our own financials on an aggregate basis. But the sequential certainly increase in traction is significant.

They plan to then roll that out to the broader EU5 later this year, early next year. You're talking Italy, Spain, France and also to the Nordic regions. So we're quite enthusiastic about that opportunity. Near term, there are 2 primary milestones ahead of us. One is based on aggregate calendar year sales and the other one is just on German pricing and we look forward to giving updates on that in the quarters to come.

Our next question comes from the line of Sudan Loganathan with Stephens.

Congrats on the progress in the second quarter. My first one, I wanted to just get some color on the mix of new and repeat customers. Maybe you can provide a percentage amount of either to kind of get a look at the potential net penetration and how that's progressing?

Yes. Initially, when we started, we jumped out to mostly new customers, right? So we saw -- I mean, if I could give you percentages when we first started in the AYA space, all of our customers were new, right? We really got out and tried to get experience with PEDMARK in these patients. We saw in the second quarter now that start to shift down to some higher percentages of these repeat customers. And so we will see -- we -- I don't want to give a percentage because it's a moving target as we go. But we are seeing new patients coming in. We talked about 14 new accounts. We talked about growing these new accounts, and it's really critical for us because there are so many accounts out there not touching PEDMARK.

So I think we'll continue to see this new account additions. But as we grow our business and get bigger, we'll start -- you'll add those additional accounts behind those that are repeat customers. So at this point, it's -- we're starting to see the mix start to even out a little bit more new customers versus repeat customers, and we'll probably continue to see that throughout the rest of this year.

Great. I appreciate that color. The second one I wanted to ask here, with the trial results in Japan expected this fall, could you elaborate on the Japanese market opportunity? For example, the prevalence of CIO in both pediatric and AYA population and then outline your plans for a potential commercial rollout, including whether you anticipate partnering locally or the size of the sales force you may implement there in that region?

Right. We -- so we're in the final discussions of trying to understand all the data. We'll have some meetings in September here with the investigators to really kind of go through all the data tables and get ourselves familiar with that. So that's the first part is it's really making sure we understand and get all the data. We are working with the -- our investigators as well as with some consultants to kind of start to look at, okay, what's our approach, what is our regulatory approach and how fast do we get this product submitted. As you know, in Japan, you'll need a partner to submit it to the PDMA (sic) [ PMDA ] and so we're doing -- we're looking at that approach and that partner strategy in parallel. We're in -- we've said this before, we're in discussions with folks. And that's an ongoing -- that's an ongoing process as we move forward.

Japan is about 1/3 of the size of the U.S. and Europe when you look at CIO usage. And so that kind of gives you a feel for the -- for the numbers. Remember, this will be probably a pediatric indication in Japan. We had 10 centers that were -- that participated in the trial. It's a -- these centers are all excited about getting an opportunity to continue to use this product outside of the clinical trial. So we've had some really good feedback from the folks in country. So there's more to come here. We'll probably have more updates in September as we see some of the final data and then -- and how we're going to approach this.

Timing-wise, we're trying to really focus it as fast as we can move this forward. We don't want these investigators and folks in Japan who have touched this product to go a long time without having to be able to have an approved product, right? So the faster we can get this into the Japanese regulatory authorities, the better.

Yes. And just to add, we've had a lot of enthusiasm from investigators, from patients and a lot of unsolicited interest within Japan and the broader Asia area for the product. It's a known product. It's known to work. The reimbursement system is quite sophisticated. Having been through the Norgine process a year ago, I think it's quite analogous to it. So we look forward to giving more updates.

Great to hear. Just lastly, if I can squeeze 1 more in. Do you anticipate the operating expenses to remain relatively stable in the second half of the year? And what areas do you expect will represent maybe your larger expenditures in upcoming quarters and may drive those expenditures. I know you mentioned, obviously, some of the IP expenses needed for the EU in the second quarter. And just kind of curious if there's any more kind of maybe one-time expenses in the second half of this year as you're growing the launch?

Yes. Thank you. So the first half of the year is heavier from a cash OpEx. A lot of our contracts are structured with 50% upfront and then the back -- and the balance over the back half of the year. So as mentioned in the stated remarks, I expect both our second half expenses to go down, so from a cash operating expenses, we were roughly $20 million for the first half. So I expect it to go down and the full year to be consistent with '24 from a cash OpEx, which was roughly $33 million to $34 million. In the second quarter specifically, on a noncash basis, there was also a jump up in stock-based compensation as we aligned what we believe is a really effective and exciting team here with incentives that are aligned with our shareholders.

Our next question comes from the line of Jason McCarthy with Maxim Group.

This is Chad on for Jason. We were wondering if you could provide some additional color on getting the PQI and how this differs from NCCN guidelines.

Sure, Chad. Nice to hear from you. Yes, the -- they differ -- let me -- the NCODA PQIs are a peer-reviewed guidance document, really, and it really is a guidance document to really help patient care and oncology practices. So -- it's a little bit different because it comes from the -- NCODA stands for the National Community Oncology Dispensing Association. So these are kind of -- these are standardized evidence-based kind of practice management type of recommendation. So they're a little bit more focused than the NCCN guidelines, right? And the purpose of these PQIs, we call them, are to kind of really focus on patient outcomes and really look at standardizing care and optimizing treatments and enhancing communications with the oncology teams. And so they're a little bit more focused.

They're a little bit below the level of these NCCN guidelines. They cover various aspects, not just cancer care, but also kind of how to select patients or monitoring or counseling or management strategies. And so we really think that this is an important milestone for us to now have a PQI for PEDMARK. They have now -- that's access people can have information about our product really without us having to be there, they can access that information through these PQIs. So we're very excited about it.

That's helpful. And then also, could you just talk about how you're splitting marketing resources between the larger AYA opportunity in earlier pediatric population? Are you laser-focused on driving this newly opened market? Or is there some balance you're targeting there?

Yes. The balance between the 2 markets. I mean, listen, we've said all along that we believe that the opportunity is much larger in AYA, but that we don't especially in the academic institutions, when we're in an academic institution, we're there on the pediatric side as well as the AYA side. Obviously, we know that the size and the market is much different but there's still that incredible need for PEDMARK in these pediatric settings. And so we still continue to get use there. We still continue to see growth. We don't see the growth that we see in AYA, of course, because during this launch phase and it's obviously much larger. But we instruct our commercial organization as well as our medical organization when we're in these institutions, we're doing both Ped and AYA commercial marketability.

Yes. And just to add, Chad, doors have opened for us in the AYA as a result of our pediatric relationships that we've obviously built over the last several years. And conversely, doors have also opened for pediatric as a result of the progress that we've made with AYA. And so that's really the beauty of the opportunity, different size market opportunities but really growth potential in each one.

Our next question comes from the line of Ram Selvaraju with H.C. Wainwright.

This is Eduardo on for Ram. I was wondering if you could provide any details that you -- how proactive the FDA has been recently in seeking to ensure that the market is complying with its guidance, not to substitute PEDMARK with other compounded versions of your AP and that formulation?

I missed the -- I missed the beginning of that, I'm sorry. Eduardo, can you repeat that again? Sorry.

Sure. No problem. Just how proactive the FDA has been in ensuring the market is complying with its guidance, not to substitute PEDMARK with compound versions of STS?

Well, we've had -- in the past, we've had the FDA put out a statement. I think that statement is clear. We -- that statement is part of what we continue to utilize when we see that compounding happening. They are -- the FDA has been supportive of the use of FDA-approved product or PEDMARK in this situation. So I mean it continues, Eduardo, to be probably 1 of the bigger areas in the pediatric discussion when we are looking at, especially opening up new institutions, we want to make sure and we talk about it all the time about that there is a -- we're the only FDA-approved product that's on the market.

I think it's important to realize in the AYA space, unlike the pediatric space is that the reimbursement and the usage of compounded products are much different in the community settings as well. So we don't have as much of an issue there as we do in some of the academic centers for -- in the pediatric space. But we continue to utilize that message from the FDA and continue to have support from them.

And Eduardo, when you -- when I mentioned briefly our medical team, they have really reinvigorated both the fact that PEDMARK is the first and only approved product for the prevention of hearing loss as it relates to cisplatinum. Also understanding very well why cisplatinum causes this hearing loss, what the uniqueness is of PEDMARK and we started to see that bear fruit just in recent quarters, and we expect more to come. And we've got a lot of enthusiasm, as Jeff mentioned, both in new pediatric patients and also in AYA. And in AYA specifically, we have seen no compounded use of the product to date.

Got it. That's really helpful. And then going back to the EU, I think you mentioned the time line for expanding. You mentioned you started with Norgine has started the work and found some good traction with in the U.K. markets. Could you repeat the time line for when you expect them to launch and you mentioned Italy, I think, and a few other countries. But yes, just a little bit more clarity on that time line again.

Sure. So as a reminder, Norgine has the rights to all of the EU, Australia and New Zealand. Principally, that first market is the U.K. They have also launched and they have their first patient in Germany. But there is not final pricing yet in Germany. There's only final pricing in the U.K. The additional, as I call, the EU5 markets on top of Germany, U.K., where you have Italy, Spain and France, we expect a launch early next year with preparation later this year. And the Nordic countries, Denmark, Norway and additionally, Switzerland starting to come on later this year and early next year. In summary, they're just getting going. They're just getting started, which we're very, very excited about.

Yes, we're encouraged about the positive indications that we've seen in the early engagement.

And do you have any visibility to the Germany pricing that would trigger a milestone payment? Or is that correct?

That is a material milestone. We look forward to providing additional updates. What we do have is we have final pricing in the U.K., which well exceeded what we were anticipating just a year ago. And so if we're consistent with that in Germany, we look forward to giving additional updates on that milestone.

I'm currently showing no further questions at this time. I'd like to turn the call back over to Jeff Hackman for closing remarks.

Well, thank you. Thanks for your questions, everybody. I appreciate it and the continued engagement. As you heard today, we are so pleased with the momentum that we've been able to build in the first half of 2025. This -- the revenue growth, the strong revenue growth that we've seen is the key to really all of the milestones that we've been able to achieve. We remain focused on the disciplined execution that we've talked about today, the strategic imperatives, and we're confident on the path ahead. So most importantly, I'll close the call. I never want to lose sight of the patients that we serve especially the young people facing cancer treatment and the difference that our product PEDMARK can make in preserving their hearing and their quality of life.

So we appreciate your support. We look forward to updating you more on our continued progress in the quarters to come, and thank you for participating today.

This concludes today's conference call. Thank you for your participation. You may now disconnect.