On November 5, 2021Sierra 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 third quarter ended September 30, 2021 (Press release, Sierra Oncology, NOV 5, 2021, View Source [SID1234594588])."The past several months have been quite productive for Sierra with the addition of SRA515 to our pipeline and preparing for momelotinib pivotal data," said Stephen Dilly, MBBS, PhD, President and Chief Executive Officer of Sierra Oncology. "We remain focused on the completion of the MOMENTUM study and look forward to sharing topline results by February next year."
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Key Business Highlights
The pivotal, Phase 3 MOMENTUM study remains on track to report topline data by February 2022. Assuming positive results, the company plans to submit a New Drug Application with the US Food & Drug Administration in the second quarter of 2022.
An exclusive global in-licensing agreement for SRA515 (formerly AZD5153), a potent and selective BRD4 BET inhibitor with a novel bivalent binding mode, was announced on August 5. The initiation of a Phase 2 study examining momelotinib in combination with SRA515 for the treatment of myelofibrosis is planned for the first half of 2022. We continue to evaluate additional studies and may initiate other new trials for SRA515 and SRA737 in 2022.
Sierra raised $37.0 million in gross proceeds through the use of its at-the-market (ATM) offering during the third quarter of 2021 and ended the quarter with $97.1 million in cash and cash equivalents. Subsequent to the close of the third quarter, the company has raised an additional $12.6 million in gross proceeds via the ATM. The company also has the potential to obtain up to $33.3 million in cash from Series B warrants that must be exercised within 75 days of the announcement of MOMENTUM topline data.
On November 4, the company announced the acceptance of a momelotinib abstract for poster presentation at the 2021 Annual Meeting of the American Society of Hematology (ASH) (Free ASH Whitepaper). The poster, "Baseline Serum Ferritin Differentially Predicts W24 Transfusion Independence Response for Momelotinib and Ruxolitinib in Patients with Myelofibrosis" will be presented on Monday, December 13, 2021, from 6:00 – 8:00 pm ET, Georgia World Congress Center, Hall B5. The abstract has been published online View Source and a pre-recorded presentation of the poster will be made available for participants attending virtually.
Third Quarter 2021 Financial Results (all amounts reported in U.S. currency)
Research and development expenses were $21.6 million for the three months ended September 30, 2021 compared with $10.4 million for the three months ended September 30, 2020. The increase primarily related to an upfront cash payment of $8.0 million that was made to AstraZeneca for the exclusive global license of SRA515. Also attributing to the increase was a $2.2 million increase in personnel-related and allocated overhead costs, of which $0.6 million pertained to an increase in non-cash stock-based compensation, a $1.0 million increase in third-party manufacturing costs for momelotinib, and a $0.3 million increase in other research and support costs. These increases were partially offset by a $0.3 million decrease in clinical trial and development costs for momelotinib. Research and development expenses included non-cash stock-based compensation of $1.8 million and $1.2 million for the three months ended September 30, 2021 and 2020, respectively.
Research and development expenses were $49.7 million for the nine months ended September 30, 2021, compared with $32.2 million for the nine months ended September 30, 2020. The increase was due to an upfront cash payment of $8.0 million that was made to AstraZeneca for the exclusive global license of SRA515, a $5.8 million increase in personnel-related and allocated overhead costs, of which $2.6 million pertained to an increase in non-cash stock-based compensation, and costs for momelotinib including a $2.8 million increase in clinical trial and development costs and a $2.4 million increase in third-party manufacturing costs. These increases were partially offset by a $1.5 million non-cash charge incurred in 2020 to recognize the change in fair value of an obligation to issue securities to Gilead until the issuance of the securities in January 2020. Research and development expenses included non-cash stock-based compensation of $5.3 million and $2.7 million for the nine months ended September 30, 2021 and 2020, respectively.
General and administrative expenses were $7.0 million for the three months ended September 30, 2021, compared to $4.1 million for the three months ended September 30, 2020. The increase was due to a $1.7 million increase in personnel-related and allocated overhead costs, of which $0.6 million pertained to an increase in non-cash stock-based compensation, 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 $1.5 million and $0.9 million for the three months ended September 30, 2021 and 2020, respectively.
General and administrative expenses were $19.3 million for the nine months ended September 30, 2021, compared to $14.9 million for the nine months ended September 30, 2020. The increase was due to a $2.7 million increase in personnel-related and allocated overhead costs, of which $0.2 million pertained to an increase in non-cash stock-based compensation, and an increase of $1.7 million in professional fees primarily relating to pre-commercial costs for momelotinib. General and administrative expenses included non-cash stock-based compensation of $4.2 million and $4.0 million nine months ended September 30, 2021 and 2020, respectively.
Total other expense (income), net was $0.1 million of total other expense, net for the nine months ended September 30, 2021, compared to $15.7 million of total other expense, net for the nine months ended September 30, 2020. The difference was primarily attributable to a non-cash charge of $16.2 million incurred during the nine months ended September 30, 2020 related to the change in fair value of warrant liabilities until the reclassification to equity in January 2020.
For the three months ended September 30, 2021, Sierra incurred a Generally Accepted Accounting Principles (GAAP) net loss of $28.6 million compared to a GAAP net loss of $14.5 million for the three months ended September 30, 2020. For the nine months ended September 30, 2021 Sierra incurred a GAAP net loss of $69.2 million compared to a GAAP net loss of $62.9 million for the nine months ended September 30, 2020. The GAAP net loss for the three and nine months ended September 30, 2021 includes an upfront cash payment of $8.0 million that was made to AstraZeneca for the exclusive global license of SRA515. The GAAP net loss for the nine months ended September 30, 2020 includes a non-cash charge of $16.2 million related to the change in fair value of warrant liabilities included in total other expense (income), net and a $1.5 million non-cash charge pertaining to the obligation to issue securities to Gilead included in research and development expenses as mentioned above.
Non-GAAP adjusted net loss was $25.4 million for the three months ended September 30, 2021, compared with a non-GAAP adjusted net loss of $12.4 million for the three months ended September 30, 2020. Non-GAAP adjusted net loss for the three months ended September 30, 2021 and 2020 excludes expenses related to stock-based compensation. For the nine months ended September 30, 2021, Sierra incurred a non-GAAP adjusted net loss of $59.8 million compared to a non-GAAP adjusted net loss of $38.5 million for the nine months ended September 30, 2020. Non-GAAP adjusted net loss for the nine months ended September 30, 2021 excludes expenses related to stock-based compensation. Non-GAAP adjusted net loss for the nine months ended September 30, 2020 excludes expenses related to the change in fair value of warrant liabilities, the change in fair value of the securities issuance obligation, and stock-based compensation. See "Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Financial Measures" below for a reconciliation of this GAAP measure to non-GAAP financial measure.
Cash and cash equivalents totaled $97.1 million as of September 30, 2021, compared to $104.1 million as of December 31, 2020.
As of September 30, 2021, there were 14,498,953 total shares of common stock outstanding and warrants to purchase 11,040,894 shares of common stock, with an exercise price equal to $13.20 per share. There were 4,880,267 shares issuable upon exercise of stock options and an additional warrant to purchase 1,839 shares.