On March 27, 2020 Salarius Pharmaceuticals, Inc. (Nasdaq: SLRX), a clinical-stage biotechnology company targeting cancers caused by dysregulated gene expression, reported its corporate and financial results for the fourth quarter and full-year ended December 31, 2019 (Press release, Salarius Pharmaceuticals, MAR 27, 2020, View Source [SID1234555946]).
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Financial Highlights:
•In February 2020, closed $11 million underwritten public offering
•In October 2019, entered Stock Purchase Agreement
• $2.6 million stock sales completed in 2019
•12-month period ended December 31, 2019 net loss per common share – basic and diluted – for continuing operations of $2.12, compared to $1.16 for the same period ended December 31, 2018
•Total cash and cash equivalents of $3.7 million as of December 31, 2019
•Up to $9.1 million remains available to draw from the Cancer Prevention and Research Institute of Texas grant (CPRIT), upon meeting certain requirements
Recent Business Highlights:
•Advanced to the sixth level dosing cohort in Phase 1/2 study of Seclidemstat in Ewing sarcoma
•Seclidemstat granted Fast Track Designation by FDA for relapsed or refractory Ewing sarcoma
•Scientific paper published highlighting potential of combining Seclidemstat with checkpoint inhibitors
•Data from in vitro studies conducted by Sunil Sharma, M.D., Salarius’ scientific founder
•Added Memorial Sloan Kettering Cancer Center and Nationwide Children’s Hospital as clinical sites for Phase 1/2 trial of Seclidemstat in Ewing sarcoma
"Salarius achieved much during 2019 and has entered 2020 well positioned to maximize the potential of our lead drug candidate, Seclidemstat," stated David Arthur, President and Chief Executive of Salarius. "Key to this was the completion of our merger with Flex Pharma and the subsequent listing of our stock on the Nasdaq Capital Market. We believe these developments were important in elevating our visibility among investors and providing resources that have allowed us to advance Seclidemstat."
Mr. Arthur continued, "Our ultimate aim as a company is to maximize the potential of Seclidemstat and bring hope to the patients around the world afflicted with cancers resulting from dysregulated gene expression. In this regard, the Phase 1/2 dose-escalation trial of Seclidemstat in Ewing sarcoma, our lead clinical program, continues to advance at trial sites across the country, as has a Phase 1/2 dose-escalation trial in advanced solid tumors. Both clinical trials are expected to report important data
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milestones this year. In addition to these clinical programs, Salarius is also exploring Seclidemstat as a treatment for other cancers and in combination with cancer immunotherapies."
Mr. Arthur continued, "Validating our Seclidemstat development strategy, we were pleased that the FDA granted Seclidemstat Fast-Track status in Ewing sarcoma, a rare and deadly pediatric bone cancer for which there is no approved targeted treatment. Coupled with the previously granted Orphan Drug Designation and Rare Pediatric Disease Designation, we believe Salarius is well-positioned to leverage the FDA’s expedited programs for drug development and review."
Mr. Arthur continued, "Meanwhile, the recently completed $11 million public offering combined with $2.6 million from our stock purchase agreement with Aspire Capital represent only a portion of the funds at our disposal. With the non-dilutive financial support Salarius receives from the National Pediatric Cancer Foundation (NPCF) and the up to $9.1 million in non-dilutive funding that remains to be drawn down from the $18.7 million grant we received in 2016 from the Cancer Prevention and Research Institute of Texas (CPRIT), we believe Salarius has the resources to advance both our Ewing sarcoma and AST programs into the second half of 2021."
Mr. Arthur concluded, "In closing, we must acknowledge that the coronavirus or COVID-19 outbreak is impacting every corner of society and business. We are thankful to report that thus far Salarius’ operations continue with minimal interruption, however the ever-changing nature of the situation makes it challenging to forecast what may occur. This includes the Seclidemstat clinical trials where the health and safety of the patients and their families is paramount. Should developments occur, we will communicate such information."
12-Month Financial Results:
For the 12-month period ended December 31, 2019, Salarius’ reported net loss was $6.9 million, or $2.12 per basic and diluted share, compared to a net loss of $1.8 million, or $1.16 per basic and diluted share for the same period in 2018. The loss from operations before other income for the twelve-month span ended December 31, 2019 increased by $6.6 million compared to the loss from operations for the same time span last year, which was primarily due to an increase of $2.7 million in research and development expenses resulting from increased clinical expenses and an increase of $5.4 million in general and administrative expenses, respectively. Increased general and administrative spending resulted primarily from costs related to the merger between Salarius Pharmaceuticals, LLC and Flex Pharma, Inc. ("Flex Pharma"), which was completed in July 2019, and financing activities. These merger-related costs include a one-time success fee of $1.35 million and $0.8 million in professional fees.
As of December 31, 2019, total cash, cash equivalents and restricted cash was $3.7 million, compared to $3.2 million as of December 31, 2018.
Summary of Corporate and Operational Events:
$11 Million Underwritten Public Offering
On February 11, 2020, Salarius completed a public offering with total gross proceeds of approximately $11 million, which includes the full exercise of the underwriter’s over-allotment option to purchase an additional 1,252,173 shares and warrants prior to deducting underwriting discounts and commissions
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and offering expenses payable by Salarius. Salarius intends to use the net proceeds from the offering for general corporate purposes, including working capital.
The offering is comprised of 7,101,307 Class A units, priced at a public offering price of $1.15 per unit, with each unit consisting of one share of common stock and a five-year warrant to purchase one share of common stock at an exercise price of $1.15 per share, and 1,246,519 Class B units, priced at a public offering price of $1.15 per unit, with each unit consisting of one share of Series A convertible preferred stock and a five-year warrant to purchase one share of common stock with and exercise price of $1.15 per share.
The convertible preferred stock issued in this transaction includes a beneficial ownership limitation on conversion but has no dividend rights (except to the extent that dividends are also paid on the common stock). The conversion price of the Series A convertible preferred stock in the offering, as well as the exercise price of the warrants are fixed and do not contain any variable pricing features, or any price-based anti-dilutive features.
Stock Purchase Agreement
On October 24, 2019, Salarius entered into a $10.9 million common stock purchase agreement with a Chicago-based institutional investor. Since then, Salarius has completed stock sales totaling $2.6 million. Under the agreement, and more recently the terms of the capital raise, Salarius may sell shares of its common stock over a 30-month span extending into 2022, but in very limited circumstances including limitations based on the price of Salarius common stock.
Update on Seclidemstat Clinical and Pre-Clinical Programs:
Seclidemstat Clinical Trials in Ewing Sarcoma and Advanced Solid Tumors:
The Safety Review Committee overseeing the ongoing Phase 1/2 clinical study of Seclidemstat in patients with relapsed or refractory Ewing sarcoma has approved the advancement of the study to the sixth dosing cohort, which is now open for patient enrollment.
Salarius is conducting two Phase 1/2 clinical trials for Seclidemstat – one in Ewing sarcoma and the second in patients with advanced solid tumors (AST) resistant to standard-of-care therapies. The trials are designed as open-label dose-finding studies to characterize the pharmacokinetics (PK), maximum tolerated dose (MTD), and initial safety profile of Seclidemstat. Thus far, early PK data from the trials suggest that plasma drug levels measuring the concentration of Seclidemstat in a patient’s plasma remain dose proportional. Based on current projections, Salarius believes both studies are on track to reach maximum tolerated dose in 2020, and shortly after, begin the dose expansion phase of the study. Salarius expects to report early topline patient data before year-end 2020.
The Phase 1/2 clinical trial of Seclidemstat in Ewing sarcoma opened patient enrollment in Q3 2018 and is currently enrolling patients of 12 years of age or older at eight leading cancer centers in the U.S. Meanwhile, the Phase 1/2 AST clinical trial began enrolling patients in June 2019 with a focus on prostate, breast, ovarian, melanoma, colorectal, non-Ewing’s sarcomas and other cancers where Seclidemstat demonstrated single-agent preclinical activity.
Seclidemstat Granted Fast-Track Status by FDA
On December 16, 2019, Salarius announced that the U.S. Food and Drug Administration has granted Seclidemstat Fast Track Designation for the treatment of patients with Ewing sarcoma who have
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relapsed or are refractory to standard-of-care therapy. Fast Track is a process designed by the FDA to expedite the development and review of new drugs with the potential to treat serious or life-threatening conditions and fill unmet medical needs. The program aims to streamline regulatory submissions and enable more frequent communications with the agency to assure that questions and issues are resolved quickly, which often leads to earlier drug approval and access by patients.
New Clinical Trial Sites Added to Ewing Sarcoma Study:
On October 8, 2019, Salarius announced the addition of Memorial Sloan Kettering Cancer Center (MSKCC) in New York City and Nationwide Children’s Hospital (Nationwide Children’s) in Columbus, OH as trial sites in the Phase 1/2 clinical trial of Seclidemstat in Ewing sarcoma patients. This brings the number of active sites to eight and helps facilitate enrollment as the trial advances.