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Fennec Pharmaceuticals (FENC) Announces Up to $45M Investment From Petrichor

August 1, 2022 7:31 AM EDT

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Fennec Pharmaceuticals Inc. (NASDAQ: FENC), a specialty pharmaceutical company, today announced up to a US$45 million investment from Petrichor Healthcare Capital Management ("Petrichor"). Under the terms of the investment agreement:

  • Subject to customary closing conditions, Petrichor will purchase $5 million of senior secured promissory notes which are convertible into Fennec common shares at a price per share of $8.11 based upon a 20% premium to the 5-day VWAP immediately prior to announcement of the investment. The Company intends to repay in full its existing secured indebtedness with Bridge Bank before the first closing;
  • An additional $20 million to be funded upon the potential U.S. Food and Drug Administration (FDA) approval of PEDMARKTM by September 30, 2022 and satisfaction of other closing conditions. Fennec upon mutual agreement with Petrichor may draw up to $20 million of additional financing under the investment agreement; and
  • The notes have a five-year term and bear interest at a rate equal to the US Prime Rate plus 4.5%, with 3.5% of the interest paid in kind for the first twenty-four months.

Rosty Raykov, chief executive officer of Fennec, said, “Petrichor is a premier healthcare-dedicated investment firm who has worked with us to structure this transaction, which provides substantial capital and flexibility to support the launch and commercialization of PEDMARKTM, if approved. We appreciate the confidence that Petrichor is demonstrating in Fennec and the potential market opportunity for PEDMARKTM as we await a decision from the FDA by the September 23, 2022 PDUFA target action date.”

Tadd Wessel, Founder and Managing Partner of Petrichor, said, “We are pleased to partner with Fennec as they seek to commercialize PEDMARKTM. The Fennec team has a clear strategic vision and the potential to bring a transformative medication to the pediatric cancer community, as PEDMARKTM stands to be the first FDA-approved therapy to reduce the risk of ototoxicity associated with cisplatin in pediatric patients. Our investment strengthens Fennec’s balance sheet and provides management with the financial flexibility to potentially capitalize on near-term growth opportunities for PEDMARKTM.”

Further information surrounding the investment agreement is set forth in the Current Report on Form 8-K filed by the Company with the SEC on or about August 1, 2022. The offer and sale of the notes and the shares of common stock issuable upon conversion of the notes, if any, have not been registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction, and the notes and such shares may not be offered or sold absent registration with the U.S. Securities and Exchange Commission (the “SEC”) or an applicable exemption from registration requirements, or in a transaction not subject to, such registration requirements. We intend to rely upon the exemption set forth in Section 602.1 of the TSX Company Manual, which provides that the TSX will not apply its standards to certain transactions involving eligible interlisted issuers on a recognized exchange, such as Nasdaq.

No regulatory authority has either approved or disapproved the contents of this press release. This press release is neither an offer to sell nor a solicitation of an offer to buy the notes or the shares of common stock issuable upon conversion of the notes, if any, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.



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