B. Riley Securities launched coverage of Fennec Pharmaceuticals Inc. (NASDAQ: FENC) with a Buy recommendation and a $16.00 price objective on Thursday, highlighting what the research house sees as a material undervaluation of the company’s lead commercial product, PEDMARK. Fennec carries a market capitalization of roughly $25 million and is slated to report its next quarterly results on February 26, according to available data.
In its initiation note, B. Riley points to PEDMARK’s exclusive regulatory position and attractive unit economics as the basis for its bullish stance. The research firm calculated that Fennec is trading at about 2x EV/FY27E sales - a multiple it says sits 19% below the peer group median - even while projecting a compound annual revenue growth rate near 55% from fiscal 2025E through fiscal 2027E. B. Riley also flagged Fennec’s reported gross profit margin of 59.2% as evidence of the product’s commercial strength.
Fennec’s PEDMARK is identified in the report as the only therapy currently approved by the U.S. Food and Drug Administration to reduce the risk of cisplatin-induced hearing loss. B. Riley’s write-up emphasizes that the drug faces no approved competitors in its indication and that the firm sees limited pipeline threats in the near term.
The company has delivered three consecutive quarters of record sales and recorded its first operating cash flow-positive quarter in 3Q25. Despite those milestones, B. Riley characterizes the commercial expansion as still in its early stages, noting ongoing efforts to penetrate the adolescent and young adult patient segments.
B. Riley outlined several potential catalysts that could prompt a material re-rating of the shares in the first half of 2026. Those items include clarity on Cipla-related intellectual property litigation, public disclosure of pricing in Germany accompanied by an $11 million milestone payment from European partner Norgine, and the announcement of a possible Japanese partnership that could carry additional milestone payments.
Separately, Fennec reported it has repaid all of its outstanding debt, having repurchased and redeemed all convertible notes previously issued to Petrichor Opportunities Fund I LP and Petrichor Opportunities Fund I Intermediate LP. The company funded the debt repayment with proceeds from a recently closed underwritten public offering in the United States and a concurrent private placement in Canada.
Fennec’s move to eliminate its convertible note obligations represents a notable shift in the company’s capital structure. The firm did not provide further detail on how debt repayment will alter its financial outlook, but the action could influence future financing flexibility and operational decision-making. Investors may monitor how these developments interact with commercial execution for PEDMARK and the timing of the potential near-term catalysts highlighted by B. Riley.
Context and next steps
Market participants looking at Fennec will likely weigh the combination of a favorable regulatory position for PEDMARK, recent sales momentum and margin profile against legal and commercial execution risks. Key upcoming datapoints that could affect sentiment include litigation updates, partner milestone disclosures and any formalized international licensing agreements.