[August 02, 2017] |
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Flex Pharma Reports Second Quarter 2017 Financial Results
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Flex
Pharma, Inc. (NASDAQ: FLKS), a clinical-stage biotechnology company
that is developing innovative and proprietary treatments for cramps and
spasticity associated with severe neurological diseases such as multiple
sclerosis (MS), Charcot-Marie-Tooth (CMT) and amyotrophic lateral
sclerosis (ALS) under FDA Fast Track designation, today reported
financial results for the quarter ended June 30, 2017 and provided an
update on its clinical development and corporate activities.
"We have accomplished a number of important development objectives over
these past few months. First and foremost, the recent Fast Track
designation represents a validation by FDA that cramps are a severe,
unmet medical need in ALS. We see greater collaboration with FDA under
Fast Track as an important catalyst in our efforts to accelerate
the development of FLX-787 to address the suffering of patients with
painful, debilitating cramps as a consequence of their severe
neurological disease," stated Dr. William McVicar, President and CEO of
Flex Pharma. "In addition, our IND became effective, allowing us
to expand our clinical program to the US, and we have now initiated our
Phase 2 ALS trial, with our Phase 2 CMT trial soon to follow. The team
is focused on the execution of these new Phase 2 IND studies, as well as
completion of the ongoing exploratory Phase 2 spasticity study in MS in
Australia. These studies are expected to yield several important data
readouts in 2018."
Recent Business Highlights
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Clinical Efforts
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In early August, the Company initiated its Phase 2 randomized,
controlled, double-blinded, parallel design trial in the US,
referred to as the COMMEND trial, to evaluate FLX-787, the
Company's co-activator of TRPA1 and TRPV1, in patients with motor
neuron disease (MND), focused on ALS, who suffer from cramps. The
Company expects to report topline results from this study in the
middle of 2018.
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In July, the Company announced that the Food and Drug
Administration (FDA) granted Fast Track Designation for the
development of FLX-787 to treat severe muscle cramps in patients
with ALS. There are currently no drugs approved in the US for this
condition. Fast Track Designation is intended to accelerate the
clinical development and review of drugs to treat serious
conditions that address an unmet medical need. In addition, the
Company announced that it has prioritized the larger US Phase 2
ALS trial over the small, exploratory Australian ALS study due to
several advantages of the US Phase 2 ALS trial. As a result, the
exploratory Australian ALS study will end early, with roughly a
dozen patients.
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In June, the Inherited Neuropathies Consortium (INC) voted to
endorse the Company's US Phase 2 Trial of FLX-787 in CMT patients
who suffer from cramps. The INC is an integrated group of academic
medical centers, patient support organizations, and clinical
research resources dedicated to conducting clinical research in
CMT and to improving the care of patients (www.rarediseasesnetwork.org/cms/inc).
There are currently no drug products approved in the US for this
condition. The Company expects to begin enrolling US patients
during the third quarter in this randomized, controlled,
double-blinded, parallel design study, referred to as the COMMIT
trial.
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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 US 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 in April. 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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Consumer Business
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For the quarter ended June 30, 2017, the Company recorded
approximately $336,000 in total revenue for its consumer product,
HOTSHOT®, launched in June 2016. The Company expects
full year revenues for 2017 to exceed 2016.
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IRONMAN® and HOTSHOT, the only scientifically proven
solution for preventing and treating muscle cramps, have partnered
to designate HOTSHOT as the Official Muscle Cramp Product of the
IRONMAN US Series. To aid athletes, HOTSHOT will be on-course at
all the remaining 2017 IRONMAN events in the US, as well as at the
2017 IRONMAN and IRONMAN 70.3 World Championship events.
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Strengthened Leadership Team
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In July, Flex Pharma's Board of Directors appointed William
McVicar, Ph.D., as President and CEO. Dr. McVicar brings
approximately 30 years of clinical development experience to the
Company, formerly serving as the Company's President of Research
and Development. In June, Christoph Westphal, M.D., Ph.D.,
transitioned from his role as CEO and continues to serve as Flex
Pharma's Chairman of the Board. 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.
Second Quarter 2017 Financial Results
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Cash Position: As of June 30, 2017, Flex Pharma had cash, cash
equivalents and marketable securities of $47.1 million. During the
three months ended June 30, 2017, cash, cash equivalents and
marketable securities decreased by $5.7 million.
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Total Revenue: Total revenue for the three months ended June
30, 2017 was approximately $336,000, including approximately $5,000 of
other revenue.
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Cost of Product Revenue: Cost of product revenue for the three
months ended June 30, 2017 was approximately $145,000.
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R&D Expense: Research and development expense for the three
months ended June 30, 2017 was $4.1 million. Research and development
expense for this quarter primarily included costs associated with the
Company's clinical studies of FLX-787, 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 June 30, 2017 was $5.0 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
June 30, 2017 was ($8.8) million, or ($0.51) per share and included
$1.1 million of stock-based compensation expense. As of June 30, 2017,
Flex Pharma had 17,285,926 shares of common stock outstanding, which
excludes approximately 0.7 million shares of stock that remain subject
to vesting. The net loss for the second 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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H.C. Wainwright Rodman & Renshaw Annual Healthcare Conference,
September 11-12, 2017 in New York, NY
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Cantor Fitzgerald Global Healthcare Conference, September 25-26, 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 second quarter of 2017. To access the conference call, please dial
(855) 780-7202 (US 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 clinical-stage
biotechnology company that is developing innovative and proprietary
treatments for cramps and spasticity associated with the severe
neurological diseases of ALS, MS and peripheral neuropathies such as
Charcot-Marie-Tooth (CMT). The Company's lead candidate, FLX-787, is
being developed under Fast Track designation for the treatment of severe
muscle cramps associated with ALS. 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 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
trials, including the timing for results of our clinical trials, the
level of future interaction we may have with FDA, our expectations
relating to HOTSHOT revenue and our expectations regarding the
availability of our capital resources. 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 and drive customers to
purchase HOTSHOT; 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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June 30,
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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39,127
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$
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22,416
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Marketable securities
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7,996
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38,659
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Accounts receivable
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35
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12
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Inventory
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688
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454
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Prepaid expenses and other current assets
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1,209
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926
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Property and equipment, net
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448
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556
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Other assets
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127
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192
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Total assets
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$
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49,630
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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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4,936
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$
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3,780
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Deferred revenue
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97
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88
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Other liabilities
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92
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30
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Stockholders' equity
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44,505
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59,317
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Total liabilities and stockholders' equity
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$
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49,630
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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 June 30,
2017
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Three Months Ended June 30,
2016
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Six Months Ended June 30, 2017
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Six Months Ended June 30, 2016
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Net product revenue
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$
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331
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$
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113
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$
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571
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$
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113
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Other revenue
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5
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-
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7
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-
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Total revenue
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336
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113
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578
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113
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Costs and expenses:
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Cost of product revenue
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145
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111
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224
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308
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Research and development
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4,076
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6,095
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7,991
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10,482
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Selling, general and administrative
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4,991
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5,378
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9,586
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10,490
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Total costs and expenses
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9,212
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11,584
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17,801
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21,280
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Loss from operations
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(8,877
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)
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(11,471
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)
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(17,223
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)
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(21,167
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)
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Interest income, net
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72
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108
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150
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|
|
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211
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Net loss
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$
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(8,805
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)
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$
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(11,363
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)
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$
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(17,073
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)
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$
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(20,956
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)
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Net loss per share-basic and diluted
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$
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(0.51
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)
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$
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(0.71
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)
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$
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(1.00
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)
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$
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(1.31
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)
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Weighted-average number of common shares outstanding (1)
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17,130
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16,106
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17,003
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15,975
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(1) As of June 30, 2017, the Company had issued approximately 5.4
million shares of restricted stock that are subject to vesting. Of these
shares, approximately 4.8 million shares had vested at June 30, 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 0.7 years.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170802005149/en/
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