On May 6, 2022 Sierra Oncology, Inc. (SRRA), a late-stage biopharmaceutical company with a mission to deliver targeted therapies that treat rare forms of cancer, reported its financial and operating results for the first quarter ended March 31, 2022 (Press release, Sierra Oncology, MAY 6, 2022, View Source [SID1234613761]).
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"By entering into a merger agreement with GSK, we are one step closer to realizing our mission of delivering transformative therapies for patients with rare cancers, while also delivering compelling and certain value for our stockholders. We are working to continue to progress our timeline and our NDA submission remains on track for later this quarter," said Stephen Dilly, MBBS, PhD, President and Chief Executive Officer at Sierra Oncology.
Key Business Highlights
On April 13, 2022, Sierra announced it had entered into an agreement to be acquired by GSK for $55 per share of common stock, representing an approximate total equity value of $1.9 billion. The per share price represents a premium of approximately 39 percent to Sierra’s closing stock price on April 12, 2022, and approximately 63 percent to Sierra’s volume-weighted average price (VWAP) over the prior thirty trading days. The transaction is expected to close in the third quarter of 2022 or before.
On January 25, 2022, Sierra announced momelotinib achieved a statistically significant benefit on symptoms, anemia and splenic size in the pivotal MOMENTUM Phase 3 study. The trial met all of its primary and key secondary endpoints. Data from this study, as well as previous data from the SIMPLIFY-1 and SIMPLIFY-2 Phase 3 studies, will serve as the foundation for the submission of a New Drug Application to the US Food & Drug Administration in the second quarter of 2022. If approved, the company anticipates momelotinib being commercially available early in the first half of 2023.
The Journal of Hematology and Oncology published a review article on momelotinib, titled "Momelotinib: an emerging treatment for myelofibrosis patients with anemia." The article highlights the use of momelotinib for the potential treatment of myelofibrosis patients who are anemic based on published data from the SIMPLIFY studies as well as earlier Phase 2 studies. The full article is available for review here.
Sierra ended the quarter with a cash balance of $274.0 million. Included in this total is $145.3 million in net proceeds from a public equity offering early in the first quarter of 2022. The company also secured a debt facility with Oxford Finance, LLC for up to $125.0 million, announced in January of this year. Under the terms of the loan agreement, Sierra drew an initial $5.0 million term loan at closing. Additionally, during the first quarter of 2022, the company received proceeds of $9.6 million from the exercise of a warrant by Gilead, $4.6 million from the exercise of stock options, and $30.5 million from the exercise of Series B warrants. In April 2022, the company received an additional $2.8 million in proceeds from the exercise of the remaining Series B warrants prior to their expiration on April 10, 2022.
First Quarter 2022 Financial Results (all amounts reported in U.S. currency)
Research and development expenses were $17.6 million for the three months ended March 31, 2022 compared with $14.0 million for the three months ended March 31, 2021. The increase primarily related to a $2.6 million increase in personnel-related and allocated overhead costs, a $1.6 million increase in third-party manufacturing costs of which $0.9 million pertained to momelotinib, and a $0.2 million increase in other research and support costs. These increases were partially offset by a $0.8 million decrease in clinical trial and development costs primarily for momelotinib. Research and development expenses included non-cash stock-based compensation of $1.6 million and $1.7 million for the three months ended March 31, 2022 and 2021, respectively.
General and administrative expenses were $10.3 million for the three months ended March 31, 2022, compared to $5.9 million for the three months ended March 31, 2021. The increase was due to a $3.2 million increase in personnel-related and allocated overhead costs, of which $0.9 million related to severance and a stock-based compensation charge pursuant to a transition agreement with a former executive, and a $1.2 million increase in professional fees primarily relating to pre-commercial costs for momelotinib. General and administrative expenses included non-cash stock-based compensation of $1.7 million and $1.3 million for the three months ended March 31, 2022 and 2021, respectively.
For the three months ended March 31, 2022, Sierra incurred a net loss of $27.9 million compared to a net loss of $19.9 million for the three months ended March 31, 2021.
Cash and cash equivalents totaled $274.0 million as of March 31, 2022, compared to $104.7 million as of December 31, 2021.
As of March 31, 2022, there were 23,800,409 total shares of common stock outstanding and warrants to purchase 7,984,428 shares of common stock outstanding and pre-funded warrants to purchase 925,925 shares of common stock. There were Series B warrants with an exercise price of $13.20 to purchase 212,477 shares of common stock that were fully exercised after March 31, 2022, and prior to expiration on April 10, 2022 and provided $2.8 million of proceeds to the company. In addition, there were Series A warrants that contain a cash and/or cashless exercise provision to purchase 7,771,951 shares of common stock, with an exercise price equal to $13.20 per share. There were 5,466,822 shares issuable upon exercise of stock options and an additional warrant to purchase 1,839 shares.