FENC

Fennec Pharmaceuticals ($FENC) CEO Acquires 15,000 Shares While Former Executive Sells, Coinciding With Improved Q1 Performance

05/19/2025 21:57

In a notable demonstration of confidence, Jeffrey Hackman, CEO of Fennec Pharmaceuticals ($FENC), has made significant open-market stock purchases in mid-May, coinciding with substantial share sales by former CEO and current director Rosty Raykov. Based in Research Triangle Park, North Carolina, Fennec Pharmaceuticals is a small-cap biopharmaceutical company with a market capitalization of approximately $140 million, specializing in developing treatments for pediatric cancer patients. Its flagship product, PEDMARK, is designed to prevent platinum-induced ototoxicity (hearing loss) in children undergoing chemotherapy. According to SEC filings, Hackman acquired 1,035 shares at $6.75 per share on May 16, followed by an additional 13,965 shares at $6.99 per share on May 19. This combined purchase of 15,000 shares, worth approximately $104,600, represents Hackman's first open-market acquisition since assuming the CEO position. Intriguingly, these purchases coincided with former CEO and current board member Rosty Raykov selling 16,667 shares at $6.78 per share on May 16, a transaction valued at approximately $113,000. The filing indicates this sale was made to satisfy tax obligations related to the vesting and settlement of restricted stock units (RSUs). Raykov has consistently sold shares from December 2024 through May 2025 under a 10b5-1 plan, disposing of a total of 68,529 shares worth approximately $431,000 during this period. Such 10b5-1 plans allow insiders to establish predetermined trading schedules when they don't possess material non-public information, providing a safe harbor against market manipulation allegations. These insider transactions should be viewed in the context of Fennec's recent business performance. On May 13, the company reported first-quarter 2025 results that exceeded analyst expectations, with revenue of $8.8 million representing an 18% year-over-year increase and surpassing the consensus estimate of $8.2 million. The net loss per share of $0.04 was also significantly better than the expected loss of $0.09. This positive performance contrasts sharply with the disappointing fourth-quarter 2024 results announced in March, when the company reported a loss of $0.06 per share versus an expected profit of $0.17, causing the stock to plummet 11.7%. Examining Fennec's financial position reveals a cash balance of $22.68 million with a quarterly burn rate of approximately $4 million. The company needs to achieve quarterly sales between $8.5 million and $9 million to reach breakeven, a threshold nearly attained in the first quarter. Hackman's substantial stock purchases may signal management's confidence in Fennec's long-term growth prospects. The company projects an average annual growth rate of 30% over the next three years, significantly outpacing the U.S. biotech industry's average projected growth of 17%. Fennec's core growth strategy includes expanding PEDMARK's presence in European markets, particularly Germany, the UK, Spain, Italy, and France. The company also plans to enhance its 'Fennec HEARS' patient support program and implement targeted marketing strategies aimed at high-prescribing cisplatin users. However, several risk factors remain. The company has yet to achieve consistent profitability, and given its cash burn rate, additional financing may be required in the future. Limited awareness of PEDMARK among healthcare providers could also present obstacles to growth. Currently, analysts maintain an average rating of 'buy' for Fennec with a median 12-month price target of $13.00, approximately 90% above the current share price. The stock closed at $6.84 on May 16, having risen about 36% from its early April low of $5.01. While Hackman's recent stock purchases and the company's better-than-expected first-quarter results provide positive signals regarding Fennec's growth potential, investors should balance these against the company's ongoing financial challenges and the former CEO's consistent pattern of share disposals.

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