On November 13, 2019 Salarius Pharmaceuticals, Inc. (Nasdaq: SLRX), a clinical-stage biotechnology company targeting the epigenetic causes of cancer, reported its corporate and financial results for the quarter ended September 30, 2019 (Press release, Flex Pharma, NOV 13, 2019, View Source [SID1234551123]).
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Third Quarter 2019 Financial Highlights:
Entered $10.9 million Stock Purchase Agreement with Aspire Capital
Initial $1.0 million stock sale completed
Three- and nine-month periods ended September 30, 2019 net loss per common share – basic and diluted – for continuing operations of $0.73 and $1.68, respectively
Total cash and cash equivalents of $4.0 million as of September 30, 2019
$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:
Closed merger with Flex Pharma; initiated trading on Nasdaq Capital Market
Enrolled first patient in Phase 1 trial of Seclidemstat in advanced solid tumors (AST)
Achieved dose-escalation milestones in ongoing Phase 1/2 Ewing sarcoma and Phase 1 AST clinical trials
Added Memorial Sloan Kettering Cancer Center and Nationwide Children’s Hospital as clinical sites for Phase 1/2 trial of Seclidemstat in Ewing sarcoma
Entered a collaborative partnership with Ivy Brain Tumor Center to develop Seclidemstat for the treatment of glioblastoma
"The third quarter of 2019 was a transformative time for Salarius, highlighted by our merger with Flex Pharma and our subsequent listing on the Nasdaq Capital Market," stated David Arthur, President and Chief Executive of Salarius. "The importance of this accomplishment cannot be understated as it establishes a foundation for our future growth by providing increased exposure and access to institutional investors and a platform for Salarius to showcase the potential of our lead asset, Seclidemstat, as well as our broader clinical pipeline."
Mr. Arthur continued, "Key to Salarius’ value proposition is Seclidemstat, a potent reversible inhibitor of the LSD1 enzyme. Seclidemstat is currently being tested in a Phase 1/2 clinical trial in Ewing sarcoma, a rare and deadly pediatric bone cancer for which there is no approved targeted treatment, in addition to a Phase 1 trial in advanced solid tumors. During the quarter, we achieved important dose escalation and trial enrollment events for each program, putting us on target to report early patient data from both studies in 2020."
Mr. Arthur concluded, "As a publicly-traded company, Salarius has a foundation for future growth and a means to maximize the potential of Seclidemstat, which we believe to be one of the most advanced reversible LSD1 inhibitors now in the clinic. Subject to limitations in our stock purchase agreement with Aspire Capital, Salarius has access to a flexible source of capital over the next 30 months, as well as the support from Aspire Capital, an institutional investor that recognizes our tremendous upside potential. This capital, in addition to the non-dilutive financial support Salarius receives from the National Pediatric Cancer Foundation (NPCF) and the $9.1 million in non-dilutive funding still remaining from the $18.7 million grant Salarius received in 2016 from the Cancer Prevention and Research Institute of Texas puts Salarius in a good financial position as we continue our work developing targeted cancer therapies. Above all and underpinning our drive as a company is a dedication to the patients around the world who are unfortunately afflicted with the devastating cancers we aim to treat. Their bravery is our inspiration."
Third Quarter Financial Results:
For the quarter ended September 30, 2019, Salarius’ reported net loss was $2.6 million, or $0.73 per basic and diluted common share, compared to a net loss of $0.3 million, or $0.20 per basic and diluted share for the same period in 2018. The loss from operations before other income for the three-month span ended September 30, 2019 increased by $3.4 million compared to the loss from operations before other income for the same time span last year, which was primarily due to increases of $0.8 million in research and development expenses resulting from increased clinical expenses, and an increase of $3.1 million in general and administrative expenses, respectively. Increased general and administrative spending resulted primarily from costs related to the merger with Flex Pharma, Inc. ("Flex Pharma"), which was completed in July 2019. These merger-related costs include a one-time success fee of $1.35 million and $0.8 million in professional fees.
Nine Month Financial Results:
For the nine-month period ended September 30, 2019, Salarius’ reported net loss was $5.1 million, or $1.68 per basic and diluted share, compared to a net loss of $0.6 million, or $0.47 per basic and diluted share for the same period in 2018. The loss from operations before other income for the nine-month span ended September 30, 2019 increased by $5.6 million compared to the loss from operations for the same time span last year, which was primarily due to an increase of $1.9 million in research and development expenses resulting from increased clinical expenses and an increase of $4.9 million in general and administrative expenses, respectively. Increased general and administrative spending primarily resulted from professional fees of $1.4 million and one-time success fees totaling $1.35 million, both related to the merger with Flex Pharma.
As of September 30, 2019, total cash, cash equivalents and restricted cash was $4.0 million, compared to $6.1 million as of December 31, 2018.
Summary of Corporate and Operational Events:
Merger with Flex Pharma Completed:
On July 19, 2019, Salarius Pharmaceuticals, LLC completed its previously-announced merger with Flex Pharma. In accordance with the terms of the merger agreement, the newly combined company was renamed Salarius Pharmaceuticals, Inc., and would be led by Salarius’ then current management team under the leadership of David Arthur, President and Chief Executive Officer of Salarius Pharmaceuticals, LLC. Former Flex Pharma President and Chief Executive Officer William McVicar, Ph.D., joined Salarius’ Board of Directors upon completion of the merger.
On July 22, 2019, shares of Salarius’ common stock began trading on the Nasdaq Capital Market under the ticker symbol "SLRX". The shares reflected a 25:1 reverse stock split that was effective as of the close of business on July 19, 2019.
Stock Purchase Agreement with Aspire Capital:
On October 24, 2019, Salarius entered into a $10.9 million common stock purchase agreement with Aspire Capital Fund, LLC., a Chicago-based institutional investor. Under the agreement, Aspire Capital is committed to buy shares of Salarius common stock over a 30-month span extending into 2022 at our sole discretion, subject to certain terms and conditions. Immediately upon execution of the agreement, Aspire Capital made an initial purchase of 210,526 shares of Salarius stock for $1.0 million, at a per-share purchase price of $4.75, which was the closing price of Salarius shares on the date of the agreement.
Update on Seclidemstat Clinical and Pre-Clinical Programs:
Seclidemstat Clinical Trials in Ewing Sarcoma and Advanced Solid Tumors:
On September 24, 2019, Salarius announced that the Safety Review Committees overseeing the ongoing Phase 1/2 clinical study of Seclidemstat in patients with relapsed or refractory Ewing sarcoma and the Phase 1 study of Seclidemstat in patients with advanced solid tumors resistant to standard-of-care therapies have approved the advancement of both studies to the fourth level dosing cohort.
The two clinical trials are designed as open-label dose-finding studies to characterize the pharmacokinetics (PK), the maximum tolerated dose (MTD) and initial safety profile of Seclidemstat. Thus far, early PK data suggests Seclidemstat has a desirable half-life and plasma levels are dose proportional. Based on current projections, both studies are on track to reach maximum tolerated dose in early 2020 and report early patient data later in the same year.
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 leading cancer centers in the U.S. Meanwhile, the Phase 1 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.
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.
Partnership with Ivy Brain Tumor Center:
On August 26, 2019, Salarius and the Ivy Brain Tumor Center at the Barrow Neurological Institute in Phoenix, AZ announced a collaborative partnership to test Seclidemstat for the treatment of glioblastoma, a rare brain cancer. Under the agreement, the organizations plan to launch what both believe to be the most comprehensive pre-clinical study to date evaluating the effect of targeting the LSD1 enzyme, which has increased expression in tumors of brain cancer patients.
Leadership Changes:
On September 13, 2019, Salarius appointed Mark Rosenblum as Interim Chief Financial Officer, as well as Executive Vice President Finance. Scott Jordan, Salarius’ previous Chief Financial Officer, transitioned to the new role of Chief Business Officer.