[May 03, 2017] |
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Flex Pharma Reports First Quarter 2017 Financial Results
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Flex Pharma, Inc. (NASDAQ: FLKS), a biotechnology company that is
developing innovative and proprietary treatments for cramps and spasms
associated with severe neurological diseases such as amyotrophic lateral
sclerosis (ALS) and multiple sclerosis (MS) and peripheral neuropathies
such as Charcot-Marie-Tooth (CMT), today reported financial results for
the quarter ended March 31, 2017 and provided an update on its clinical
development and corporate activities.
"Now that our IND is active for our ALS study, we are poised to expand
our clinical program and will submit a protocol to the FDA to start a
clinical trial of FLX-787 to treat patients with CMT neuropathy. With
two Phase 2 clinical trials in ALS and CMT expected to initiate this
summer in the US, together with our exploratory Phase 2 studies already
underway in Australia, FLX-787 will be amongst the most advanced, novel
compounds in the clinic for ALS and CMT," stated Christoph Westphal,
M.D., Ph.D., Chair and CEO of Flex Pharma. "Our efforts are
focused on creating value by accelerating the development of FLX-787 to
address the significant unmet medical need of patients suffering from
debilitating cramps and spasms as a consequence of severe neurological
diseases."
During the quarter, the Company also continued to build the market for
its new consumer product, HOTSHOT®, which was launched in June of 2016.
"HOTSHOT has built a base of loyal, repeat customers in the first 9
months on the market, and usage has been growing amongst endurance
athletes and hundreds of professional and collegiate teams who rely on
HOTSHOT to treat and prevent exercise-associated muscle cramps in
addition to other Neuro Muscular Performance benefits related to
recovery and muscle soreness," said Kathie Lindemann, Chief Operating
Officer. "As we move into the warmer months and the busy racing season,
we are seeing an expected increase in HOTSHOT usage."
Recent Business Highlights
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Clinical Efforts
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In April, the Company's investigational new drug (IND) application
for FLX-787 for patients with ALS became effective, allowing the
Company to commence its U.S. Phase 2 clinical trial of FLX-787 in
ALS patients who suffer from cramps as a consequence of the
disease.
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In its abstract titled, "Chemical Neuro Stimulation by FLX-787, a
co-activator of TRPA1/TRPV1, for the Potential Treatment of
Cramps, Spasms and Spasticity," the Company presented human
efficacy data from its study in nocturnal leg cramps (NLC) at the
American Academy of Neurology (AAN) 69th Annual Meeting
in Boston, MA. When a neurologist evaluated, in a blinded manner,
subjects likely to have NLC based upon a questionnaire
administered after the study was completed, the data from first
treatment exposure of these 26 subjects showed a statistically
significant effect in the reduction in cramp frequency when
compared to placebo (p=0.03).
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New data presented at AAN from a separate study conducted by
independent researchers provides genetic validation that the
transient receptor potential (TRP) A1 ion channel, the
pharmacological target of FLX-787, is linked to human muscle cramp
fasciculation syndrome. In the Biller et al. abstract titled
"Identification of a novel TRPA1 mutation associated with
carbamazepine-responsive cramp-fasciculation syndrome" the authors
at NYU and Mount Sinai conclude that their findings "further
clarify the functional role of human TRPA1, and underscores the
importance of this ion channel as a potential therapeutic target."
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Consumer Launch
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For the quarter ended March 31, 2017, the Company recorded
approximately $243,000 in total revenue for its consumer product,
HOTSHOT, reflecting the expected impact of seasonality. Launched
in June 2016, HOTSHOT is a new 1.7 fluid ounce sports shot that is
scientifically proven to prevent and treat muscle cramps by
stopping them where they start: at the nerve.
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In March, the journal of Muscle & Nerve published the
randomized, placebo-controlled, double-blind study of athletes,
conducted by researchers at the esteemed Noll Laboratory at Penn
State University. The study shows that targeting TRP channels
through activators contained in HOTSHOT was significantly
effective at mitigating muscle cramps in a novel volitional cramp
model. The published findings from Penn State indicate that taking
HOTSHOT decreased the duration and intensity of cramps in this
carefully controlled experiment. In addition, when cramps did
occur, study participants reported decreased muscle soreness
immediately after the cramp ended.
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In February, Tim Reed, the reigning IRONMAN 70.3® champion, became
an official brand ambassador for HOTSHOT. Reed started racing with
HOTSHOT a year ago and, in 2016, had the most successful year of
his career with wins at the IRONMAN 70.3 Asia Pacific
Championship, IRONMAN® Australia and the IRONMAN 70.3 World
Championship.
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Strengthened Leadership Team
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In April, William K. McVicar, Ph.D. joined Flex Pharma as
President of Research and Development, bringing approximately 30
years of clinical development experience to the Company. Prior to
joining Flex Pharma, Dr. McVicar served as Executive Vice
President of Pharmaceutical Development, Chief Scientific Officer,
and President during his tenure at Inotek. As Vice President of
Development Operations at Sepracor, he oversaw the development,
FDA review, and approval of multiple NDAs and SNDAs, including
BROVANA®, XOPENEX MDI (News - Alert)®, and XOPENEX's pediatric approval, which
were each approved in a single 10-month review cycle. Prior to
Sepracor, Dr. McVicar held various positions of increasing
responsibility at Sandoz, Novartis and Rhone Poulenc Rorer.
First Quarter 2017 Financial Results
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Cash Position: As of March 31, 2017, Flex Pharma had cash, cash
equivalents and marketable securities of $52.8 million. During the
three months ended March 31, 2017, cash, cash equivalents and
marketable securities decreased by $8.3 million.
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Total Revenue: Total revenue for the three months ended March
31, 2017, was approximately $243,000, including approximately $2,000
of other revenue.
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Cost of Product Revenue: Cost of product revenue for the three
months ended March 31, 2017 was approximately $79,000.
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R&D Expense: Research and development expense for the three
months ended March 31, 2017 was $3.9 million. Research and development
expense for this quarter primarily included costs associated with the
Company's clinical studies of FLX-787, IND-supporting activities,
personnel costs (including salaries and stock-based compensation
costs), FLX-787 production costs and external consultant costs.
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SG&A Expense: Selling, general and administrative expense
for the three months ended March 31, 2017 was $4.6 million. Selling,
general and administrative expense for this quarter primarily included
personnel costs (including salaries and stock-based compensation
costs), sales, marketing and fulfillment costs related to HOTSHOT,
legal costs and external consultant costs.
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Net Loss and Cash Flow: Net loss for the three months ended
March 31, 2017 was ($8.3) million, or ($0.49) per share and included
$1.2 million of stock compensation expense. As of March 31, 2017, Flex
Pharma had 17,029,249 shares of common stock outstanding, which
excludes approximately 0.9 million shares of stock that remain subject
to vesting. The net loss for the first quarter of 2017 was primarily
driven by the Company's operating expenses related to its research and
development efforts, costs associated with HOTSHOT, and general and
administrative costs.
Financial Guidance
Based on its current operating plans and cash, cash equivalents and
marketable securities position, Flex Pharma expects to have sufficient
capital to fund its operations into early 2019.
Upcoming Events and Presentations
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Jefferies Healthcare Conference, June 6-9, 2017 in New York, NY
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JMP Securities (News - Alert) Life Sciences Conference, June 20-21, 2017 in New York,
NY
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 financial results for
the first quarter of 2017. 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 cramps and spasms associated
with the severe neurological diseases of ALS, MS and peripheral
neuropathies such as Charcot-Marie-Tooth (CMT). Flex Pharma was founded
by National Academy of Science members Rod MacKinnon, M.D. (2003 Nobel (News - Alert)
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.
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 commercialization plans for 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 successfully commercialize 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, 2016 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,
2017
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December 31, 2016
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Assets:
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Cash and cash equivalents
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$
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21,072
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$
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22,416
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Marketable securities
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31,743
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38,659
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Accounts receivable
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19
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12
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Inventory
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414
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454
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Prepaid expenses and other current assets
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1,586
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926
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Property and equipment, net
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479
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556
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Other assets
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192
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192
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Total assets
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$
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55,505
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$
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63,215
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Liabilities and stockholders' equity:
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Accounts payable and accrued expenses
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$
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3,130
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$
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3,780
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Deferred revenue
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81
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88
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Other liabilities
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67
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30
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Stockholders' equity
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52,227
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59,317
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Total liabilities and stockholders' equity
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$
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55,505
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$
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63,215
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Unaudited Condensed Consolidated Statements of Operations
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(in thousands, except loss per share amounts)
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Three Months Ended March 31, 2017
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Three Months Ended March 31, 2016
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Net product revenue
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$
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241
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$
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-
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Other revenue
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2
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-
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Total revenue
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243
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-
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Costs and expenses:
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Cost of product revenue
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79
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197
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Research and development
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3,915
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4,387
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Selling, general and administrative
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4,595
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5,111
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Total costs and expenses
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8,589
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9,695
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Loss from operations
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(8,346
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)
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(9,695
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Interest income, net
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78
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103
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Net loss
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$
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(8,268
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$
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(9,592
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Net loss per share-basic and diluted
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$
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(0.49
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)
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$
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(0.61
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Weighted-average number of common shares outstanding (1)
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16,874
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15,844
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(1) As of March 31, 2017, the Company had issued approximately 5.4
million shares of restricted stock that are subject to vesting. Of these
shares, approximately 4.5 million shares had vested at March 31, 2017
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 0.9 years.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170503005191/en/
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