On November 9, 2017 Sophiris Bio Inc. (NASDAQ: SPHS) (the "Company" or "Sophiris"), a biopharmaceutical company studying topsalysin (PRX302), a first-in-class pore-forming protein, in late-stage clinical trials for the treatment of patients with urological diseases, reported financial results for the three and nine months ended September 30, 2017 and key corporate highlights (Press release, Sophiris Bio, NOV 9, 2017, View Source [SID1234521903]).
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Key Corporate Highlights:
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Update on Enrollment in Phase 2b Localized Prostate Cancer Study. Eight active clinical trial sites continue to schedule and dose the remaining handful of patients required to complete enrollment. The Company expects biopsy data from all patients dosed with the first administration of topsalysin to be available in the first half of 2018.
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 in the fourth quarter of 2018, assuming enrollment is completed as expected.
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Loan and Security Agreement with Silicon Valley Bank. On September 8, 2017, the Company and Silicon Valley Bank ("SVB") entered into a Loan and Security Agreement pursuant to which SVB has agreed to lend the Company up to $10.0 million (subject to certain condition) in two term loans. On September 12, 2017, the Company borrowed $7.0 million from SVB under the Loan and Security Agreement.
"Execution of our Phase 2b clinical trial of topsalysin in localized prostate cancer is our priority," said Randall E. Woods, president and CEO of Sophiris. "Our clinical team together with our investigators are diligently identifying patients most likely to benefit from topsalysin."
Financial Results:
At September 30, 2017, the Company had cash, cash equivalents and securities available-for-sale of $28.5 million and working capital of $27.5 million. The Company expects that its cash and cash equivalents will be sufficient to fund its operations to the middle of 2019. The Company is currently not planning on pursuing a second Phase 3 trial in benign prostatic hyperplasia, (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 September 30, 2017
The Company reported a net loss of $2.7 million or $(0.09) per share for the three months ended September 30, 2017 compared to a net loss of $4.3 million or $(0.17) per share for the three months ended September 30, 2016.
Research and development expenses
Research and development expenses were $1.6 million for the three months ended September 30, 2017 compared to $0.6 million for the three months ended September 30, 2016. The increase in research and development costs is 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, to a lesser extent, an increase in non-cash stock-based compensation expense. These increases are partially offset by decreases in personnel related costs.
General and administrative expenses
General and administrative expenses were $1.7 million for the three months ended September 30, 2017 compared to $3.0 million for the three months ended September 30, 2016. The decrease in general and administrative expense is primarily due to the inclusion of $1.4 million in offering costs which were allocated to warrants issued in our public offering completed in 2016. Also contributing to the decrease in general and administrative expense were decreases in costs associated with professional services and personnel related costs. These decreases are partially offset by increases in non-cash stock-based compensation and market research activities.
Gain (loss) on revaluation of the warrant liability
Gain on revaluation of the warrant liability was $0.7 million for the three months ended September 30, 2017 compared to a loss of $0.4 million for the three months ended September 30, 2016. Because these warrants may require the Company to pay the warrant holder cash under certain provisions of the warrant, the Company accounts for these warrants as a liability and the Company is required to calculate the fair value of these warrants each reporting date. The non-cash gain reported for this three months ended September 30, 2017 is associated with a reduction in the fair value of the Company’s warrant liability from June 30, 2017 to September 30, 2017 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 a material non-cash gain or loss being reported in the Company’s consolidated statement of operations and comprehensive loss.
For the nine months ended September 30, 2017
The Company reported a net loss of $4.7 million or $(0.15) per share for the nine months ended September 30, 2017 compared to a net loss of $10.6 million or $(0.51) per share for the nine months ended September 30, 2016.
Research and development expenses
Research and development expenses were $4.2 million for the nine months ended September 30, 2017 compared to $2.5 million for the nine months ended September 30, 2016. The increase in research and development costs is 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, to a lesser extent, an increase in the non-cash stock-based compensation expense. These increases are partially offset by decreases in costs associated with the Company’s completed Phase 2a proof of concept clinical trial for low to intermediate risk prostate cancer and personnel related costs primarily related to our completed reduction in work force in 2016.
General and administrative expenses
General and administrative expenses were $4.4 million for the nine months ended September 30, 2017 compared to $5.6 million for the nine months ended September 30, 2016. The decrease in general and administrative expense is primarily due to the inclusion of $1.6 million in offering costs which were allocated to warrants issued in the Company’s public offering completed in 2016. Also contributing to the decrease in general and administrative expense were decreases in costs associated with professional services and personnel related costs. These decreases are partially offset by increases in non-cash stock-based compensation, market research activities and consulting expenses.
Gain (loss) on revaluation of the warrant liability
Gain on revaluation of the warrant liability was $3.9 million for the nine months ended September 30, 2017 as compared to a loss of $2.0 million for the nine months ended September 30, 2016. Because these warrants may require the Company to pay the warrant holder cash under certain provisions of the warrant, the Company accounts for these warrants as a liability and the Company is required to calculate the fair value of these warrants each reporting date. The non-cash gain reported for this nine months ended September 30, 2017 is associated with a reduction in the fair value of the Company’s warrant liability from December 31, 2016 to September 30, 2017 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 a material non-cash gain or loss being reported in the Company’s consolidated statement of operations and comprehensive loss.