On August 10, 2017 Sophiris Bio Inc. (NASDAQ: SPHS) (the "Company" or "Sophiris"), a late stage clinical biopharmaceutical company developing topsalysin (PRX302) for the treatment of patients with urological diseases, today reported financial results for the three and six months ended June 30, 2017 and key corporate highlights (Press release, Sophiris Bio, AUG 10, 2017, View Source [SID1234520160]).

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Key Corporate Highlights:

Phase 2b Localized Prostate Cancer Study Underway. On June 8, 2017, the Company announced that the first patient had been dosed in its Phase 2b study to evaluate the safety and tolerability of a single dose of topsalysin in focally treating men with clinically significant localized prostate cancer. Topsalysin (PRX302) is an innovative, first-in-class pore-forming protein engineered to be activated only in the presence of enzymatically-active PSA, which is only found within the prostate. This study is enrolling approximately 40 patients at clinical sites in the UK and US. The Company expects to receive the 24- week biopsy data for all patients from the first dose of topsalysin in the first quarter of 2018 assuming enrollment is completed as expected.

The Phase 2b study includes an option to re-treat patients with a second dose of topsalysin, with a targeted biopsy to occur 24 weeks following the second dose. The Company expects to have complete data on all patients who receive a second dose by the fourth quarter of 2018 assuming enrollment is completed as expected.

Added to Russell Microcap Index. In June 2017, the Company was added to the Russell Microcap Index. Russell indices are widely used by investment managers and institutional investors for index funds and as benchmarks for both passive and active investment strategies.
Filing of New Form S-3. In anticipation of the expiration of the company’s existing Form S-3 shelf registration statement filed in September 2014, Sophiris will file a new Form S-3 today with the Securities and Exchange Commission to register securities which could be issued in the future.
"Topsalysin is a highly potent ablative agent, which we administer by an ultrasound-guided injection directly into a tumor, previously confirmed by biopsy. We are using state of the art commercially available software in order to increase the precision by which the physician administers topsalysin into the pre-identified tumor," said Randall E. Woods, president and CEO of Sophiris. "We are working toward completion of enrollment, and we would like to thank the investigators, study coordinators and patients for their participation in this exciting study."

Financial Results:

At June 30, 2017, the Company had cash, cash equivalents and securities available-for-sale of $24.0 million and working capital of $23.4 million. The Company expects that its cash and cash equivalents will be sufficient to fund its operations through the end of 2018. The Company is currently not planning on pursuing a second Phase 3 trial in BPH, unless the Company can secure a development partner to fund a new clinical trial or the Company obtains other financing.

For the three months ended June 30, 2017

The Company reported net income of $0.6 million or $0.02 per share for the three months ended June 30, 2017 compared to a net loss of $4.1 million or ($0.21 per share) for the three months ended June 30, 2016. The net income for the three months ended June 30, 2017 was driven by a non-cash gain related to the revaluation of the Company’s warrant liability. See an additional discussion below related to this item.

Research and development expenses

Research and development expenses were $1.4 million for the three months ended June 30, 2017, compared to $1.0 million for the three months ended June 30, 2016. The increase in research and development costs are primarily attributable to increases in the costs associated with the Company’s Phase 2b clinical trial for the focal treatment of localized prostate cancer, costs associated with manufacturing activities for topsalysin and non-cash stock-based compensation expense. These increases are partially offset by decreases in costs associated with our completed Phase 2a proof of concept clinical trial for low to intermediate risk prostate cancer and personnel related costs.

General and administrative expenses

General and administrative expenses were $1.4 million for the three months ended June 30, 2017 and 2016. General and administrative expense included non-cash stock-based compensation expense of $0.3 million for the three months ended June 30, 2017 as compared to $0.1 million for the three months ended June 30, 2016. This increase was offset by decreases for personnel related costs.

Gain (loss) on revaluation of the warrant liability

Gain on revaluation of the warrant liability was $3.3 million for the three months ended June 30, 2017 compared to a loss of $1.6 million for the three months ended June 30, 2016. Because these warrants may require us to pay the warrant holder cash under certain provisions of the warrant, we account for these warrants as a liability and we are required to calculate the fair value of these warrants each reporting date. This non-cash gain is associated with a reduction in the fair value of the Company’s warrant liability which is calculated using a Black-Scholes pricing model. Certain inputs utilized in the Company’s Black-Scholes fair value calculation may fluctuate in future periods based upon factors which are outside of the Company’s control. A significant change in one or more of these inputs used in the calculation of the fair value may cause a significant change to the fair value of the Company’s warrant liability, which could also result in material non-cash gain or loss being reported in the Company’s consolidated statement of operations and comprehensive loss.

For the six months ended June 30, 2017

The Company reported a net loss of $2.0 million or ($0.07 per share) for the six months ended June 30, 2017 compared to a net loss of $6.3 million or ($0.35 per share) for the six months ended June 30, 2016.

Research and development expenses

Research and development expenses were $2.6 million for the six months ended June 30, 2017 compared to $1.9 million for the six months ended June 30, 2016. The increase in research and development costs are primarily attributable to increases in the costs associated with the Company’s Phase 2b for the focal treatment of localized prostate cancer, costs associated with the manufacturing activities for topsalysin and the non-cash stock-based compensation expense. These increases are partially offset by decreases in costs associated with our completed Phase 2a proof of concept clinical trial for low to intermediate risk prostate cancer and personnel related costs.

General and administrative expenses

General and administrative expenses were $2.7 million for the six months ended June 30, 2017 compared to $2.5 million for the six months ended June 30, 2016. The increase is primarily due to an increase in professional services and non-cash stock-based compensation expense. These increases are partially offset by the decreases in personnel related costs, legal and closing costs which were expensed as they were allocated to the warrants issued in our completed financing during the six months ended June 30, 2016.

Gain (loss) on revaluation of the warrant liability

Gain on revaluation of the warrant liability was $3.2 million for the six months ended June 30, 2017 as compared to a loss of $1.6 million for the six months ended June 30, 2016. This non-cash gain is associated with a reduction in the fair value of our warrant liability.