[May 04, 2016] |
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Flex Pharma Reports First Quarter 2016 Financial Results
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Flex Pharma, Inc. (NASDAQ: FLKS), a biotechnology company developing
innovative and proprietary treatments for nocturnal leg cramps (NLC),
spasms associated with severe neuromuscular conditions such as MS and
ALS, and exercise-associated muscle cramps, today reported financial
results for the quarter ended March 31, 2016 and provided an update on
its clinical development and corporate activities.
"Our efforts in the clinical and consumer arms of the business continue
to advance. With statistically significant positive human efficacy
demonstrated in our nocturnal leg cramps study, we are poised to
initiate human efficacy studies in NLC, MS and ALS this year with single
agent selective, specific transient receptor potential (TRP) ion channel
agonists. Additionally, within the next few weeks, we expect to begin
commercializing the first consumer product proven to treat and prevent
muscle cramps with a limited launch in three markets," stated Christoph
Westphal, M.D., Ph.D., Chair and CEO of Flex Pharma. "With over $84
million in cash and investments at quarter end, Flex is well funded
through the middle of 2018 to execute upon our mission of helping
patients and consumers suffering from muscle cramps."
"Flex Pharma is advancing the clinical development of our product
candidate for nocturnal leg cramps. We believe the statistically
significant human efficacy data generated in our recent study are
clinically meaningful and hold promise for a new treatment in the future
for the millions of patients who currently have no safe and effective
therapeutic options," said Flex Pharma Chief Medical Officer Thomas
Wessel, M.D., Ph.D., who served as the medical lead for three products
approved in the United States: Razadyne®, Lunesta® and Ampyra®. "These
recent results encourage us to look beyond exercise-associated cramps
and nocturnal leg cramps to spasms and spasticity in MS and other
neurological diseases because we believe there are common underlying
mechanisms at play."
"Based upon the recent results from the nocturnal leg cramps study, we
believe in the potential positive impact of Chemical Neuro Stimulation -
the process whereby small molecules activate TRP ion channels topically,
which we hypothesize leads to sensory stimulation that in turn reduces
hyperexcitability in motor neurons at multiple levels in the spinal
cord," said Dr. Rod MacKinnon, Nobel (News - Alert) Laureate and Flex Pharma Scientific
Co-Founder, Board Member, and Scientific Advisory Board Co-Chair.
"Chemical Neuro Stimulation may prove to be helpful to the millions
afflicted by nocturnal leg cramps, to those suffering from
exercise-associated muscle cramps, and hopefully, to those with severe
neuromuscular disorders such as multiple sclerosis and amyotrophic
lateral sclerosis."
Business Highlights
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Clinical Efforts
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In April 2016, the Company presented its positive human NLC study,
which was selected as one of only 14 abstracts for late-breaking
presentations at the American Academy of Neurology (AAN) Annual
Meeting. In this randomized, controlled, blinded study of subjects
with frequent nocturnal leg cramps, the Company's extract
formulation demonstrated statistically significant positive human
efficacy on multiple key endpoints: muscle cramp frequency
(p<0.05); cramp-free days (p<0.01); the physician-rated Clinical
Global Impression of Change (CGI (News - Alert)-C) (p<0.01); specific sleep
disturbance measures (p<0.05); and specific pain measures
(p<0.01). The positive effects were seen across a broad range of
enrolled subjects; in addition, a subset of patients showed
pronounced benefit. Additionally, the product appeared to be safe
and well-tolerated and there were no serious adverse events
reported. The topline results from this study were first reported
in February 2016.
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In April 2016, leading academics at The Pennsylvania State
University (PSU) presented a positive effect of the Company's
proprietary formulation on athletic human muscle cramps at the
Experimental Biology conference. The Company's proprietary
consumer formulation showed a statistically significant benefit in
reducing muscle cramps in athletes as compared to vehicle control
(as measured by the intensity-duration profile of voluntarily
induced muscle cramps). Additionally, subject ratings of muscle
soreness resulting from cramps were also lower compared to vehicle
control. The research at the Noll Laboratory at PSU supports the
development of our consumer product and complements our
electrically-induced cramp model.
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Consumer Launch Preparations
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The Company's consumer beverage has earned certification from NSF
International's Certified for Sport® program. Products certified
to the stringent NSF Certified for Sport® program include
additional steps to screen supplements for more than 230 athletic
banned substances, which is why the program is used by the NFL,
NHL, MLB (News - Alert), PGA, LPGA, the Canadian Centre for Ethics in Sport
(CCES) and the New York City Police Department. Additionally, the
consumer beverage has been certified USDA Organic as the product
contains a minimum of 95 percent organic ingredients.
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Within the next few weeks, the Company expects to begin
commercializing its cornerstone consumer product, scientifically
proven to treat and prevent muscle cramps, in a limited launch
with select retailers in Boston, Boulder and Los Angeles. The
product will also become available for purchase on its branded
website in June.
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Expanded Board of Directors
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In March 2016, Michelle Stacy, former President of Keurig Inc.,
joined the Board of Directors of Flex Pharma. As the former
president of Keurig, Inc. and former vice president and general
manager with Gillette/P&G, Ms. Stacy brings a wealth of experience
leading consumer businesses and building global brands. During her
five-year tenure at Keurig Inc., a division of Keurig Green
Mountain, the company's revenue grew from $493 million in FY2008
to $4.3 billion in FY2013.
First Quarter 2016 Financial Results
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Cash Position: As of March 31, 2016, Flex Pharma had cash, cash
equivalents and marketable securities of $84.4 million. During quarter
ended March 31, 2016, cash, cash equivalents and marketable securities
decreased by $9.3 million.
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R&D Expense: Research and development expense for the three
months ended March 31, 2016 was $4.4 million. Research and development
expense for this period primarily includes costs associated with the
Company's clinical studies of its extract formulation and FLX-787,
personnel costs (including salaries and stock-based compensation
costs), and external consultant costs.
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SG&A Expense: Selling, general and administrative expense
for the three months ended March 31, 2016 was $5.3 million. Selling,
general and administrative expense for this period primarily includes
personnel costs (including salaries and stock-based compensation
costs), costs related to developing the Company's consumer brand and
cornerstone product, legal costs, and external consultant costs.
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Net Loss: Net loss for the three months ended March 31, 2016
was ($9.6) million, or ($0.61) per share. Net loss for the three
months ended March 31, 2016 included $1.5 million of stock-based
compensation expense. As of March 31, 2016, Flex Pharma had 16,004,746
shares of common stock outstanding, which excludes approximately 2.0
million shares of stock that remain subject to vesting. The net loss
for the first quarter of 2016 was primarily driven by the Company's
operating expenses related to its research and development efforts,
costs associated with the development of the Company's consumer brand
and cornerstone product, and general and administrative costs.
Financial Guidance
Based on its current cash, cash equivalents and marketable securities
position, Flex Pharma expects to have sufficient capital to fund its
operations through the middle of 2018.
Upcoming Events and Presentations
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Annual Shareholder Meeting, June 7, 2016 in Boston, MA
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Jefferies Healthcare Conference, June 7-10, 2016 in New York, NY
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Piper Jaffray Consumer Conference, June 14-15, 2016 in New York, NY
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JMP Securities (News - Alert) Healthcare Conference, June 21-22, 2016 in New York, NY
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ROTH Healthcare Day, June 22, 2016 in London
Conference Call and Webcast
The company will host a conference call and webcast today at 8:45 a.m.
ET to provide an update on the company and discuss first quarter 2016
financial results. To access the conference call, please dial (855)
780-7202 (U.S. and Canada) or (631) 485-4874 (International) five
minutes prior to the start time. A live webcast may be accessed in the
Investors section of the company's website at www.flex-pharma.com.
Please log on to the Flex Pharma website approximately 15 minutes prior
to the scheduled webcast to ensure adequate time for any software
downloads that may be required. A replay of the webcast will be
available on Flex Pharma's website for three months.
About Flex Pharma
Flex Pharma, Inc. is a biotechnology company that is developing
innovative and proprietary treatments for nocturnal leg cramps, spasms
associated with severe neuromuscular conditions such as MS and ALS, and
exercise-associated muscle cramps. Flex Pharma was founded by National
Academy of Science members Rod MacKinnon, M.D. (2003 Nobel Laureate),
and Bruce Bean, Ph.D., recognized leaders in the fields of ion channels
and neurobiology, along with Chair and CEO Christoph Westphal, M.D.,
Ph.D.
Follow Flex Pharma on Twitter (@flexpharma) and visit the Company's
web site (http://ir.flex-pharma.com/)
for updates of the Company's pre-launch activities for its consumer
product to prevent and treat exercise-associated muscle cramps.
Forward-Looking Statements This press release contains
forward-looking statements for purposes of the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include statements regarding our intentions, beliefs,
projections, outlook, analyses or current expectations concerning, among
other things: the design and timing of ongoing and anticipated clinical
studies, our expectations regarding the availability of our capital
resources, and our plans to launch and commercialize our consumer
product. These forward-looking statements are based on management's
expectations and assumptions as of the date of this press release and
are subject to numerous risks and uncertainties, which could cause
actual results to differ materially from those expressed or implied by
such statements. These risks and uncertainties include, without
limitation: the status, timing, costs, results and interpretation of our
clinical studies; the uncertainties inherent in conducting clinical
studies; results from our ongoing and planned preclinical development;
expectations of our ability to make regulatory filings and obtain and
maintain regulatory approvals, our ability to launch and commercialize
our consumer product; anticipated positioning and product attributes of
our consumer product; results of early clinical studies as indicative of
the results of future trials; availability of funding sufficient for our
foreseeable and unforeseeable operating expenses and capital expenditure
requirements; other matters that could affect the availability or
commercial potential of our consumer or drug product candidates; the
inherent uncertainties associated with intellectual property; and other
factors discussed in greater detail under the heading "Risk Factors" in
our Annual Report on Form 10-K for the year ended December 31, 2015 and
subsequent filings with the Securities and Exchange Commission (SEC (News - Alert)).
You are encouraged to read our filings with the SEC, available at www.sec.gov,
for a discussion of these and other risks and uncertainties. Any
forward-looking statements that we make in this press release speak only
as of the date of this press release. We assume no obligation to update
our forward-looking statements whether as a result of new information,
future events or otherwise, after the date of this press release.
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Flex Pharma, Inc.
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Unaudited Selected Consolidated Balance Sheet Information
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(in thousands)
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March 31, 2016
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December 31, 2015
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Cash and cash equivalents
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$
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54,000
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$
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66,687
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Marketable securities
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30,377
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26,965
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Inventory
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113
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-
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Prepaid expenses and other current assets
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1,992
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909
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Property and equipment, net
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578
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382
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Other assets
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192
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127
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Total assets
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$
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87,252
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$
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95,070
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Accounts payable and accrued expenses
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$
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3,020
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$
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2,823
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Other liabilities
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62
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55
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Stockholders' equity
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84,170
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92,192
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Total liabilities and stockholders' equity
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$
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87,252
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$
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95,070
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Unaudited Condensed Consolidated Statements of Operations
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(in thousands, except per share amounts)
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Three Months Ended March 31, 2016
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Three Months Ended March 31, 2015
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Costs and expenses:
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Research and development
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$
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4,387
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$
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2,805
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Selling, general and administrative, and cost of production
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5,309
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3,216
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Total costs and expenses
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9,696
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6,021
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Loss from operations
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(9,696
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(6,021
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)
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Interest income, net
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103
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3
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Net loss
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$
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(9,593
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$
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(6,018
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Net loss per share-basic and diluted
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$
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(0.61
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$
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(0.59
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)
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Weighted-average number of common shares outstanding (1)
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15,844
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10,180
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(1) In 2014, the Company issued approximately 5.4 million shares of
restricted stock to the Company's founders that are subject to vesting.
Of these shares, approximately 3.5 million shares had vested at March
31, 2016 and are outstanding for purposes of computing weighted average
shares outstanding. The remaining shares will be included in the
weighted average share calculation as such shares vest over
approximately the next two years.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160504005266/en/
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