Adherex Technologies Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
March 21, 2024

Key Takeaways

  • Revenues Surge: Fennec delivered Q4 2023 net revenues of ~$9 million and full year revenues of ~$21 million from PedMark, up from $1.5 million in Q4 2022.
  • FDA Safety Reminder Supports Adoption: The FDA issued a public communication warning against substituting FedMark with other sodium thiosulfate products due to safety risks, bolstering Fennec’s educational efforts and positioning PedMark as the only approved complement agent.
  • European Licensing Deal: Fennec entered an exclusive agreement with Norgene for PedMark C in Europe, Australia, and New Zealand, receiving ~$43 million upfront plus up to $230 million in milestones and mid-20s percent royalties.
  • CMS J-Code Clarification: A new J-code effective April 1 will distinguish PedMark from other STS products and state they are not interchangeable, expected to accelerate community hospital uptake.
  • Strong Cash Runway: Pro forma cash balance exceeds $56 million after the Norgene upfront payment, projected to fund operations for at least 12 months under current revenue assumptions.
AI Generated. May Contain Errors.
Earnings Conference Call
Adherex Technologies Q4 2023
00:00 / 00:00

There are 7 speakers on the call.

Operator

Good morning, ladies and gentlemen, and welcome to the Fennec Pharmaceuticals 4th Quarter and Full Year 2023 Earnings and Corporate Update Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions on how to participate will be given at that time. As a reminder, today's conference is being recorded. Now, I would like to turn the conference over to Phoenix Chief Financial Officer, Robert Antrodi.

Operator

You may begin.

Speaker 1

Thank you, operator, and good morning, everyone. We appreciate you joining us today for Fennec Pharmaceuticals' 4th quarter and full year 2023 earnings conference call, during which we will review our financial results as well as provide a general business update. Joining me from Fennec this morning are Rusty Rykoff, our Chief Executive Officer and Adrian Hague, our Chief Operating Officer. 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.

Speaker 1

S. 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.fennickpharma.com, where it will be available for the next 30 days.

Speaker 1

And now, I will turn the call over to Rusty Rykoff. Rusty?

Speaker 2

Thank you, Robert, and good morning, everyone. On today's call, we will detail our Q4 and full year 2023 financial results, all of which were outlined in our earnings press release issued this morning prior to this call. We'll also discuss ongoing commercial launch efforts and the progress that we're making with PedMark in the U. S. And provide details on the exclusive licensing agreement we announced on Monday with Norgene to commercialize PedMark C in Europe, Australia and New Zealand.

Speaker 2

As you may recall, we announced preliminary unaudited 4th quarter and full year 2023 net revenues at the end of February, and we're pleased to report that FedMark delivered 4th quarter revenues of approximately $9,000,000 This brings our full year 2023 net revenues of approximately $21,000,000 It was an exciting year for Fennec given the strong performance with PedMark in the full fiscal year following its U. S. Commercial launch. We're pleased with our execution against strategic plans and our momentum in 'twenty three, which sets us the stage for further success in 'twenty four and beyond. We continue to be very encouraged with the progress we've made and we're even prouder of the work that is underway to sustain this momentum throughout 2024 and beyond.

Speaker 2

Earlier this year, we announced that the FDA issued a public communication that is aware that some providers may be preparing other sodium thiosulfate products for patient use in place of Fedmark, including diluting SDS products approved for auto uses to match the strength of Fedmark. The FDA reminded health care providers that is stated in Fedmark's prescribing information, Fedmark is not substitutable with autosodium thiosulfate products. The FDA stated that such substitutions post potential health risks, including potassium chloride exposure, which at high doses can lead to increased risk of acute cardiac events and other serious adverse reactions. Potassium chloride is not present in Denmark. Overexposure to boric acid can cause health risks including headache, hypothermia, restlessness, weariness, renal injury, dermatitis, alopecia, anorexia and indigestion.

Speaker 2

Although BedMark also contains boric acid, it is at a lower concentration than other SDS products. Overexposure to sodium nitrate, which can lead to health risks, including methemoglobinemia. Sodium nitrate is co packaged with sodium thiosulfate as a separate vial in some products. It is not present in Denmark. The public communication was issued by the FDA's professional affairs and stakeholder engagement staff with the Center For Drug Evaluation and Research Office of Communications.

Speaker 2

We are pleased with the FDA reminder to providers of this issue, which supports our educational efforts in establishing FedMark as the necessary complement agent when prescribing a cystatin based therapy for appropriate patients with a localized non metastatic cell tumor. To that end, earlier this month, we sponsored an educational program with Med Safety Board, a subsidiary of the Institute For Safe Medication Practices or ISMP, in which expert faculty Rita Ju and Doctor. Nour Federman reviewed therapeutic considerations for reducing the risk of cisplatin induced autopsies in pediatric patients. Regarding our commercial efforts, our sales force continues to target approximately 200 pediatric hospital centers including COG, NTI and NCCN institutions across the U. S.

Speaker 2

That drive 80% of pediatric response use. We're also continuing to build upon our commercial momentum through expanding the prescriber base to the community, increasing the utilization of the recent endorsement from the NCCN for PedMark in the adolescent and young adult AYA patient population. To be clear, our FDA indication is pediatric and our commercial teams are only promoting our FDA indication. Fedmark also continues to have broad and favorable payer coverage as evidenced by payer approved U. S.

Speaker 2

Prescription claims with commercial insurance plans and Medicare Part D plans. As a reminder, we estimate among current BedMark patients approximately 50% are commercially insured with another 50% insured through government sponsored programs. With regards to our evaluation of the best commercial path in Europe, we were pleased to announce on Monday that Fennec has entered into an exclusive licensing agreement with Noregene, a leading European specialty pharmaceutical company under which Norgene will commercialize Pedmarx in Europe, Australia and New Zealand. BedMarkz is the 1st and only approved therapy in the EU and U. K.

Speaker 2

For the prevention of oleptoxicity in buss pacisibat in chemotherapy in patients 1 month to 18 years of age with localized nonmetastatic solid tumors. Under the terms of the licensing agreement, Fandex received approximately US43 $1,000,000 in upfront consideration and the potential for up to approximately US230 $1,000,000 dollars in additional commercial and regulatory milestone payments and tiered royalties on net sales of BedMark C in the license territories up to the mid-20s. Norgina will be responsible for all commercialization activities in the license territories and will hold all marketing authorizations. This partnership represents an important step in achieving our mission of expanding PedMark C to patients across the globe who are at risk of suffering from cyst blocking in uselotoxicity. From a deal perspective, the terms provide us with many important benefits including an upfront payment for the solidifying of our balance sheet, attractive economic terms providing meaningful participation in the ex U.

Speaker 2

S. Success of Fedmark C and an experienced partner to successfully launch FedMark C in the licensed territory. In closing, I want to reiterate that the focus of our commercial strategy remains on executing the following: establishing fed market necessary complement agent when prescribing a cisplatin based therapy for appropriate patients with localized non metastatic solid tumors, minimizing the barriers to access and ensuring rapid responses to product questions and inquiries and establishing partner of choice in the oncology inpatient and community setting. With that, I will now turn the call over to Adrian, who will provide an update on our commercial strategy and operations. Adrian?

Speaker 3

Thanks, Rusty. As a reminder, we estimate that in the U. S, there are approximately 3,500 on label pediatric oncology patients. The majority of these are treated in the specialist pediatric centers and receive an average of 12 vials per patient. Conversely, there are more than 25,015- to 39 year old cancer patients, many of which receive cisplatin.

Speaker 3

And as Rusty said, the NCCN has recommended PedMark for this defined patient population with a 2A rating. Taking testicular cancer as an example, there are approximately 3,800 patients, and the majority of these are likely to receive high doses of ZYNFRIC, putting them at very high risk of hearing loss. The average testicular cancer patient due to our weight based dosing requires many more vials of Penmark than the younger pediatric patients. Testicular cancer has very high cure rates, 97% beyond. But in such cases, hearing loss is lifelong and devastating.

Speaker 3

The unmet medical need for a preventative treatment is clear. There is a very strong health economic argument that justifies spending on preventive treatment. These patients are exclusively treated in the community hospitals and infusion centers. AYA patients with cervical ovarian and head and neck cancers are also likely to be treated with Hisplatin. And again, if prescribed, will require a significant number of vials of PEDMOC.

Speaker 3

Since November, our sales force has primarily focused their activities on the community treated population. We have been very encouraged by the community's response to PEDMARK. Most of them, whilst being acutely aware of the hearing loss loss caused by cisplatin, were not aware of the availability of a preventative treatment. Incorporating PEDMARK into the treatment schedule requires some adjustment to current practice. For example, infusion clinics may have to stay open for an extra hour or so in order to accommodate the need to administer TEDMARK 6 hours after the end of a cisplatin infusion.

Speaker 3

All of this takes some time to put in place. And consequently, we focused our efforts during the last few months on disease awareness and treatment awareness and then subsequently working with the centers on the logistics of administration. We're essentially just a couple of months into what is in effect a new launch for PEDMARK, but we're encouraged by the reception we've received. Patients have already been treated and reimbursed by payers. As we look forward to the conference season and in particular to ASCO, we intend to appropriately educate all oncologists and create awareness of Pedmark.

Speaker 3

We've had to deal with one barrier to uptake, and I'm pleased to say that from April 1, this has been resolved. Prior to April 1, 2024, our J code did not differentiate between PedMark and other formulations of SDS. As a consequence, there has been some confusion and impact to the adoption of PedMark. We informed CMS and in January 2024, CMS issued a new J code for the HOPE product and amended our J code to specify Pedmark. Importantly, CMS has also stated that the two formulations are not interchangeable.

Speaker 3

To repeat, this important change will become effective on April 1, 2024, and we do expect a significant acceleration in uptake as a result. As Rossy mentioned, on January 8, the FDA issued an email reminder that PedMark cannot be substituted with other formulations of STS due to significant safety concerns. As this e mail was not sent to individual doctors, individual pharmacists or hospitals, but rather to organizations, for example, ASCO and the American Hospital Pharmacists Association, our sales force has been working to create further awareness of this notice to pediatric hospitals. As a result, a significant number of hospitals have scheduled new formulary committee meetings to discuss the FDA notice, and some have already ceased compounding. Again, this doesn't happen overnight, with many meetings taking place on a monthly or bimonthly frequency.

Speaker 3

I'm also pleased to report that the American Hospital Pharmacists Association Drug Information Resource, AHFS, has recently been amended to clearly differentiate between the various formulations of SDS and clearly states they are not substitutable. So in closing, I'm very pleased with the progress we are making, and I'd like to thank the commercial and medical affairs teams for the tremendous effort they've made over the last few months, and I look forward to seeing the acceleration in revenue. With that, I'll turn the call over to Robert to go over the financials for the quarter and full year results. Robert?

Speaker 1

Thank you, Adrian. Our press release contains details of our financial results for the Q4 full year of 2023, 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. The company recorded net product sales of Pedmark for our 1st full fiscal year after launch of approximately $21,000,000 in fiscal 2023, with over $9,000,000 in the recent Q4 2023. This compares to $1,500,000 in fiscal year Q4 2022.

Speaker 1

The increase in net sales reflects strong growth in new patient starts and accounts. G and A for the 2023 fiscal year increased by $2,300,000 compared to the 2022 fiscal year. This increase is largely attributable to payroll and benefit related expenses, which rose approximately 1,000,000 and higher non cash stock based compensation. Selling and marketing expenses, including remuneration of our sales and marketing employees, dollars spent on marketing campaigns such as sponsorships, trade shows and presentations, and any activities to support marketing and sales activities. The company recorded $12,100,000 in selling and marketing expenses in fiscal 2023, compared to $2,800,000 in fiscal year 2022 as the launch of PedMark commenced in fiscal Q4 of 2022.

Speaker 1

R and D expenses are negligible as we've mentioned before, as the company reduced research and development costs when it received FDA and EMA approvals of PedMark. The majority of traditional research and development expenses associated with PedMark are now recorded as G and A expenses or capitalized into inventory and eventually recorded to cost of product sales. Our net cash used in operating activities was $16,000,000 in 2023, which is consistent with our approximately $25,000,000 in annual cash operating expenses prior to any contributions from net revenue. Further, Q4 2023 and the 1st 6 months of 2024 have additional expenses associated with the internal preparation for the EU launch, which with the announced partnership of Norgene, we anticipate these EU expenses to tail off significantly in the second half of twenty twenty four. And finally, our cash position.

Speaker 1

We ended the year with approximately $13,000,000 in cash, cash equivalents and investment securities, which included the December 2023 third closing of $5,000,000 senior secured convertible notes under the existing agreement with Petrocor. The original investment agreement provided access to up to $20,000,000 of additional financing through December 31, 2023. As part of this closing, Fennec and PetriCore have amended the agreement to provide access to up to $15,000,000 of additional financing through December 31, 2024. In addition and importantly, as announced earlier this week, we received approximately 43,000,000 dollars from the licensing of Europe, Australia and New Zealand to Norgene. Inclusive of the licensing transaction, pro form a December 31, 2023 cash balance is in excess of US56 $1,000,000 We anticipate that our cash, cash equivalents and investment securities as of December 31, 2023, when coupled with Pedmark revenue assumptions and the recently announced license agreement for Europe, will be sufficient to fund our planned operations for at least the next 12 months.

Speaker 1

And operator, with that, we are ready for questions.

Operator

And our first question will be coming from Naureen Corbria of Capital One Securities. Your line is open.

Speaker 4

Good morning and congrats on all the progress and thanks for taking my question. I was just wondering, if we think about the quarter last quarter, in terms of the growth, was it more from new accounts, repeat prescribers? And when do you think the contributions from the AYA group will filter in?

Speaker 2

Yes. Hello. Yes, I would say, overall, it was really the hospital, the existing accounts, a few newer ones. I would also say that we did have several patients that started treatment that were in the AYA population. And as Adrian attributed, the bile usage in those patients is significantly higher.

Speaker 2

But as you can imagine, those were also in the context of a CMS J code issue that has been resolved starting April 1.

Speaker 4

Okay. Terrific. And congrats on the licensing deal. I was just wondering maybe too related to that. So when will the transfer of the health technology, the ACA dossier and any relevant materials?

Speaker 4

Has that already occurred with Norgene? And do you expect to maintain the timelines for launch in Europe in the second quarter? And finally, related to that, who's going to pursue the regulatory approval, I think you may have mentioned it, but I'm not sure, in Switzerland and Australia and New Zealand?

Speaker 2

Yes. This is over to Adrian.

Speaker 3

Yes. So the second question is easy to answer. The Norgene will be responsible for everything regulatory in the licensed territories. So we've already begun the process of transferring the European and U. K.

Speaker 3

Licenses to Norgene. They will be responsible for applying in Switzerland, Australia and New Zealand. We already have begun the process of introducing Norgene to the health technology vendors. They Norgene will take over or has taken over responsibility for the management of those vendors. It's not for me to comment on when Norgene will choose to launch.

Speaker 3

I think they will probably let the dust settle and evaluate where they are. So I would be anticipating a European launch probably in the second half of the year, just for logistical reasons.

Speaker 4

Sure. All right. Thank you so much. Thanks for taking my question.

Speaker 2

Pleasure.

Operator

And one moment for our next question. And our next

Speaker 5

Good morning, guys. I wanted to share my congrats as well on the EU licensing deal. Really nice deal you negotiated there. I'm going to start there. Maybe that color is helpful around Norgene's plans kind of maybe second half of the year from a launch perspective.

Speaker 5

Maybe kind of building off that, they appear to be set to launch the florinothenine in the near future as well and seems to be like they see some sort of strategic kind of rationale in the synergies there. Can you kind of speak to the excitement level that Noregene has kind of launching those 2 assets together? And then, second on that, this had to be, in my opinion, a pretty competitive process to get the strong terms that you received. You give us any sort of insight on how potential partners were thinking about strategic value of Pedmark as you kind of went through this process, not only in the EU, but globally and in the U. S.

Speaker 2

As well? And maybe I can start with the second half of the question, and then I would turn it over to Adrian. In terms of the value proposition that PedMark see and PedMark offers, as you know, it's very difficult to get a product approved. It's been 14 years in the making. And it's very rare for anyone to develop a product in the pediatric oncology setting.

Speaker 2

We also did an outstanding job with not just getting this product approved, but also setting it up for success in Europe, and that's largely to Adrian's efforts that were underway since he joined us in August. So I think that sets the stage up for an asset that is ready to again, ultra rare for an asset that is ready to launch That largely all the risk is basically off the table. And this is something very, very attractive to, as you could imagine, many, many parties, especially when there is a specific need and market for a very, very unique product. So maybe Adrian, you could discuss the first part of the question in terms of the overall direction that Norgene will take this forward.

Speaker 3

Yes. So as I think I mentioned on the previous call, the work that we've been doing over the last 6 months or so with European Health Technology vendors has brought us to the conclusion that we can get a pretty significant price

Speaker 2

in Europe.

Speaker 3

And as you're correct in saying that it was a competitive process and a number of the potential suitors all came to that conclusion. It became clear to us that the suitors were very excited about the potential of the product. We're prepared to commit significantly more resources than we would have been able to do given our other priorities in the U. S. And it got to it became very competitive.

Speaker 3

We had a number of very high quality European specialty pharma companies that were prepared to invest significant resources in Penmark. I'm absolutely delighted with the partnership with Norgene. They're completely bought into the concept. We're completely aligned on our pricing assumptions. They see this, as you said, Chase, as highly synergistic to their growing portfolio in pediatric oncology.

Speaker 3

And they're prepared to put very significant resources, both in terms of people and cash to support the launch, if that answers the question.

Speaker 5

Yes. No, that's helpful. Maybe digging in a little bit more on the J code issue. This is a kind of nuanced question, but it sounds so there's going to be a separate J code for the other SDS product. Is that Aaron, is there any chance excuse me, sorry, is there any chance that there's any sort of confusion around the ASP reporting for your J code from a standpoint of is there going to be some sort of ASPs that were reported for the other product that get included in your J code or is that going to get taken out?

Speaker 3

That's there certainly has been that confusion that's going to be taken out. So it very clearly says, SDS headmark, and then it says, SDS hope. And there's also a footnote there saying that the products are not interchangeable.

Speaker 5

So And so you guys are confident that the ASP is going to be accurate for your J code to reflect the pricing of your product starting April 1?

Speaker 2

Yes.

Speaker 5

Got it. And if we kind of think about how that kind of parlays into maybe some of the confusion that was seen in AYA population and those physicians, I mean, how should we think about potentially some volume kind of coming in, in that April 1 timeframe that once that confusion is kind of corrected, do you have a good handle on what kind of volumes out there that wasn't using your product?

Speaker 2

Yes. Adrian, you would hear. Yes. So what I would say, Chase, is that, as you know, this is not a chronic treatment. So you don't sort of have patients just waiting for it.

Speaker 2

It's really when the patient starts and then when the patient finishes the C splotkin treatment. So overall, we visited many of these community oncology centers where the setting for the cisplatin infusion takes place. And as Adrian mentioned from his comments, this is where the volume of cisplatin is administered for these patients and also where FedMark would be administered in this AYA population. So I think we have to wait and see how this plays out. But again, based on the numbers, we're highly encouraged that this would be well received.

Speaker 5

Great. And then maybe one more around the business and then one on financials. Just around the FDA communication, first of all, have you seen kind of any influx in kind of volume from that or subsequent to that communication? And then second, can you just update us on some of the metrics that you gave last quarter as far as kind of being in 20% of those 200 institutions and the max kind of being 25% penetration into an institution? Sorry if I missed that, but just an update there.

Speaker 2

Yes. So maybe Robert you can address that and then maybe Adrian you can address the earlier part.

Speaker 1

Yes, Chase. I mean our penetration continues to grow. I think that's reflective certainly in our net revenues. We don't want to get set ourselves up on the guardrails and in particular also as we expand in the market with the AYA population and the community hospitals. So those bases, the 25% and the 20% have certainly grown, but we're going to shy away from getting into the specific growth numbers at this time.

Speaker 2

And Adrian, maybe you could shine a word or 2. I know you had in your prepared remarks in terms of how the P and T committees in hospitals take this FDA safety communication and how quickly they affect change?

Speaker 3

Yes. As I said, unfortunately, this wasn't sent to individual doctors or hospitals or pharmacists. It was sent to organizations. I think it's about 12 different organizations. And initially, when our sales force went out, have you heard about the recent communication from the FDA?

Speaker 3

No, I haven't seen it. So the sales force have had to basically go out with the laptops, open up the laptops and show the email. And then things don't happen overnight. This has to go through a formulary committee process, it has to be discussed, people have to get buy in. And so these formulary committee meetings, in most cases, are just been scheduled or just about to take place.

Speaker 3

There's a handful that have stopped compounding immediately, but this takes time. So we have seen some increased use, but it's not like switching a light on. It's slow.

Speaker 5

Got it. And then just lastly, Robert, apologies here for taking up so much time guys, but I just want to dig in a little bit more on the SG and A. Can you give us a little bit more sense of what was in the quarter, at least benchmark us a little bit that we should consider kind of one time expenses from any sort of And then as we look into 2024, how should we phase out those And then as we look into 2024, how should we phase out those expenses? Is it are we flat from an OpEx perspective into Q1 and then it starts to phase out? Or how should we think about that?

Speaker 2

Yes, I think you have

Speaker 1

a good benchmark there. Certainly in Q4, we did have a good amount of expenses related to our EU preparation and launch, which we believe is well worth it. That will continue. So those SG and A levels will continue into Q1 and start tailing off certainly into Q2. And our understanding is it will basically go to very little, if any, for the second half of the year, kind of similar to my remarks.

Speaker 1

Is that helpful, Chase?

Speaker 5

Great. Yes. Thanks for all the questions, guys. Sorry. I'll hop back in the queue.

Speaker 1

Thanks, Chase.

Operator

And one moment for our next question. Our next question will be a follow-up from Dipesh Patel of H. C. Wainwright. Your line is open,

Speaker 6

Dipesh. Good morning. This is Dipesh Patel on for Ram Selvaraju. Several questions. The first is, I'm wondering what are the stocking patterns like for Pedmark at U.

Speaker 6

S. Hospitals? And how does FENEC expect this to evolve over time?

Speaker 2

Yes. So I will take that. So there's roughly 200 hospitals that are largely affiliated with COG and CCN. And those hospitals obviously are the ones that we target. They treat the pediatric patients largely inpatient.

Speaker 2

Those hospitals, they as we discussed in earlier calls, they go through a very rigorous PMT process to approve a drug and formulary before start using it. We have overall, I would say, a limited success in some of those accounts. And now with the FDA communication on the safety risks, we are encouraged by that. And our sales force as well as our medical team is out there educating. And as Adrian mentioned, we're in front of many of these hospitals and we're hopeful that we've seen a little bit of change, but we'd like to obviously see additional in the coming months.

Speaker 2

So that's really the market in the hospital setting. As you could imagine, it's not easy to sell in the hospital in general. And so we it's actually very, very proud of what the team has been able to accomplish. And stay tuned. I think there's more good news coming there.

Speaker 2

But again, it's not a light switch that comes on. I think it's gradually. Hopefully, there's a light switch toward the next 3 to 6 months. But let's see it and then we can discuss it with you guys.

Speaker 6

Thanks. I appreciate the color. And my second question, what kind of infrastructure does Norgene plan to use to launch PedmarXy in Europe? And what is the estimated size of the opportunity there?

Speaker 2

Yes. Adrian, over to you.

Speaker 3

Yes. They have a presence in all of the major European markets in Australia and New Zealand. They I think back of the envelope, they're looking at allocating around 50 FT

Speaker 2

feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet

Speaker 3

feet feet feet feet Es to the product and what I consider to be the appropriate level of commercial spend to make a success of the products. And they're hiring a mixture of new specialist folks to fill gaps and also reallocating some people. But to be honest, that's very high level. It's a question for Norgene, really.

Speaker 2

What I would also add because we got to we've interacted with several teams in Europe overall. And I would say that what Norgene is really committed to pediatric oncology. Not only did they have our product, but they have another product as well that they're planning to launch roughly at the same time. It's really exciting. It's really exciting because their passion and commitment is right up there with ours.

Speaker 2

I cannot be more pleased to see a very strong and capable player take on PedMark C and really get access for it in these territories. So imagine that we're going through 200 hospitals in the NCCN COG setting. So imagine that with each country and each health care system, health economics argument, etcetera. So it's a major, major task. And they have done this many times, and they're up for it.

Speaker 2

And importantly, they're really committed to this space. So this could not be a more perfect partner for Pedmarxi. And in terms of the revenue expectations for the product, I would say that what we had modeled, as Adrian said earlier, it's not that dissimilar to what they had modeled for it. So I think in terms of milestones and royalties, stay tuned to that. But most of the time in these biotech deals, you have bio bucks, if you will, and people sort of discount those things heavily.

Speaker 2

Let's give it a little bit of time, but I think most of these things are very realistic.

Speaker 6

Thanks. That's very helpful. And then final question. Does Fenwick plan to use any of the upfront cash from the Norgene transaction to expand its pipeline? If so, what kinds of opportunities do you plan to pursue, whether it's like development stage assets or approved products?

Speaker 6

And I think you kind of alluded to this, but I'll ask you the question. Is it Fenics long term intent to remain focused on oncology? Thank you.

Speaker 2

That's a very good strategic question. I think we just closed this deal. So we the Board and management obviously has to evaluate everything from 360 degrees. We've always been a very, very good steward of capital historically. I hope that to continue going forward.

Speaker 2

As you could imagine, the market is full with assets that need funding, And it's something that we as management and Board will have to decide at some stage if that's what we want to pursue, and we will obviously update the market on that. But for now, we're keeping our heads down, and we are executing on the opportunity ahead of us. I mean, as Adrian mentioned from the number perspective, we have greater than 10x the market opportunity in the community setting, and we're really focused on that. And what's again, what's really, really exciting is that despite the J code issue, we've been able to put patients on drug and those patients have been reimbursable, right, which is really important. So then from here, let's see what we can do in the coming months in terms of overall usage for the product.

Speaker 2

In addition to what's coming up down the pipe with the pediatric hospitals, which, again, I discussed earlier from a P and T perspective.

Speaker 6

Great. Thank you so much for taking my questions.

Operator

And I'm showing no further questions at this time. I would now like to turn the conference back to Rasti for closing remarks.

Speaker 2

Thank you. Thank you for the discussion and good questions and joining us today. We look forward to updating you on our continued launch progress and corporate milestones on future quarterly calls. Thank you and have a great day.

Operator

And this concludes today's conference call. Thank you for participating. You may now disconnect.

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