Fennec Pharmaceuticals Inc. (NASDAQ:FENC) Financial Analysis

• Fennec Pharmaceuticals Inc. (NASDAQ:FENC) has a Return on Invested Capital (ROIC) of -13.04% and a Weighted Average Cost of Capital (WACC) of 6.74%, indicating challenges in generating returns that exceed its cost of capital.
• Eton Pharmaceuticals, Inc. (NASDAQ:ETON) shows a relatively better position in terms of capital efficiency among its peers, with the least negative ROIC to WACC ratio.
• scPharmaceuticals Inc. (NASDAQ:SCPH), Verrica Pharmaceuticals Inc. (NASDAQ:VRCA), and Eiger BioPharmaceuticals, Inc. (NASDAQ:EIGR) face significant challenges in generating returns that exceed their cost of capital, indicating a tough environment for biopharmaceutical companies in the development stage.

Fennec Pharmaceuticals Inc. (NASDAQ:FENC) is a biopharmaceutical company focused on developing treatments for cancer patients. The company is in the clinical stage, which often involves high research and development costs without immediate revenue. This is common in the biopharmaceutical industry, where companies invest heavily in drug development before achieving profitability.

Fennec's Return on Invested Capital (ROIC) is -13.04%, while its Weighted Average Cost of Capital (WACC) is 6.74%. This results in a ROIC to WACC ratio of -1.94, indicating that the company is not generating returns that exceed its cost of capital. This is a typical scenario for companies in the clinical stage, as they are still in the process of developing their products.

When comparing Fennec to its peers, Eton Pharmaceuticals, Inc. (NASDAQ:ETON) has a ROIC of -34.74% and a WACC of 10.09%, resulting in a ROIC to WACC ratio of -3.44. Although Eton's ratio is negative, it is the least negative among the group, suggesting that Eton is relatively more efficient in managing its capital compared to its peers.

scPharmaceuticals Inc. (NASDAQ:SCPH) and Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) have even more negative ROIC to WACC ratios of -8.34 and -73.68, respectively. This indicates that these companies are facing significant challenges in generating returns that exceed their cost of capital. Eiger BioPharmaceuticals, Inc. (NASDAQ:EIGR) also has a highly negative ratio of -13.95, further highlighting the difficulties faced by companies in this sector.

Overall, the analysis underscores the challenging environment for biopharmaceutical companies, particularly those in the development stage. Despite the negative ROICs across the board, Eton Pharmaceuticals stands out with the highest ROIC to WACC ratio among the peers, indicating a relatively better position in terms of capital efficiency.