On November 7, 2019 Sophiris Bio Inc. (NASDAQ: SPHS), 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 third quarter 2019 and provided an overview of recent corporate highlights (Press release, Sophiris Bio, NOV 7, 2019, View Source [SID1234550633]).

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"We took a significant step forward with the agreement of a Phase 3 trial design with the FDA for our localized prostate cancer program, a step that advances discussions around potential strategic agreements necessary to help fund the development of topsalysin", said Randall E. Woods, president and CEO of Sophiris. "The design agreed to with the FDA aligns with the design previously approved by the EMA which will allow us to complete a global Phase 3 program for the potential approval of topsalyin for treating patients with intermediate risk localized prostate cancer in both the US and Europe."

Recent Corporate Highlights:

On August 30, 2019, the Company announced the closing of a registered offering in which the Company raised net proceeds of $3.6 million. This support from a new investor provides the company additional financial resources to execute on a funding strategy for the Phase 3 localized prostate cancer study. The company estimates that the cash and cash equivalents currently on hand will fund the Company through at least March 31, 2020.

On October 21, 2019, the Company announced that following an End of Phase 2/ Pre-Phase 3 meeting with the United States Food and Drug Administration there is agreement regarding the design of a single Phase 3 clinical trial to evaluate the potential of topsalysin as a targeted focal therapy to treat patients with intermediate risk localized prostate cancer. The Phase 3 study design agreed upon with the FDA is consistent with the design previously agreed upon with the EMA. In addition, the FDA has indicated that in order to receive approval, we will need to evaluate all patients that progress to alternative treatments for an additional 12 months, for a total of 24 months of data, post the administration of the study drug. The Company believes that a single Phase 3 trial, if successful, will provide the clinical data necessary for approval in both the United States and Europe.

From November 10-13, 2019, Sophiris CEO Randall E. Woods will attend the 25th Annual International Partnering Conference Bio-Europe 2019.

Financial Results:

At September 30, 2019, the Company had cash, cash equivalents and securities available-for-sale of $6.3 million and working capital of $3.1 million. The Company expects that its cash and cash equivalents and securities available-for-sale will be sufficient to fund its operations and debt service through March 2020, assuming no new clinical trials are initiated and the Company continues operating as a going concern. The Company will require significant funding to advance topsalysin in clinical development and to continue its operations. As of September 30, 2019, the outstanding principal balance of the Company’s term loan was $5.6 million. The Company began making principal payments on its term loan in April 2019.

For the three months ended September 30, 2019

The Company reported a net loss of $1.0 million or ($0.03) per share for the three months ended September 30, 2019, compared to net loss of $2.9 million or ($0.10) per share for the three months ended September 30, 2018.

Research and development expenses

Research and development expenses were $0.7 million for the three months ended September 30, 2019, compared to $1.8 million for the three months ended September 30, 2018. The decrease in research and development costs is primarily attributable to decreases in the costs associated with manufacturing activities for topsalysin and, to a lesser extent, a decrease in clinical costs associated with the Company’s completed Phase 2b clinical trial of topsalysin for localized prostate cancer.

General and administrative expenses

General and administrative expenses were $1.4 million for the three months ended September 30, 2019, compared to $1.2 million for the three months ended September 30, 2018. Included as a component of general and administrative expense for the three months ended September 30, 2019 was $0.4 million of offering costs which were allocated to the common share purchase warrants issued in its August 2019 financing. These offering costs were allocated to general and administrative expense as the common share purchase warrants were classified as liabilities. General and administrative expenses included non-cash stock-based compensation expense of $0.1 million for the three months ended September 30, 2019 as compared to $0.2 million for the three months ended September 30, 2018.

Gain on revaluation of the warrant liability

Gain on revaluation of the warrant liability was $1.3 million for the three months ended September 30, 2019, compared to $0.2 million for the three months ended September 30, 2018. As the Company’s warrants may require the Company to pay the warrant holders cash under certain provisions of the warrants, the Company accounts for the warrants as a liability, and the Company is required to calculate the fair value of these warrants each reporting date. 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, 2019

The Company reported a net loss of $5.5 million or ($0.18) per share for the nine months ended September 30, 2019 compared to a net loss of $12.3 million or ($0.41) per share for the nine months ended September 30, 2018.

Research and development expenses

Research and development expenses were $3.4 million for the nine months ended September 30, 2019 compared to $8.7 million for the nine months ended September 30, 2018. The decrease in research and development costs was primarily attributable to decreases in the costs associated with manufacturing activities for topsalysin, and to a lesser extent, a decrease in clinical costs associated with the Company’s completed Phase 2b clinical trial of topsalysin for localized prostate cancer.

General and administrative expenses

General and administrative expenses were $3.9 million for the nine months ended September 30, 2019 compared to $3.5 million for the nine months ended September 30, 2018. Included as a component of general and administrative expense for the nine months ended September 30, 2019 was $0.4 million of offering costs which were allocated to the common share purchase warrants issued in its August 2019 financing. These offering costs were allocated to general and administrative expense as the common share purchase warrants were classified as liabilities. General and administrative expenses included non-cash stock-based compensation expense of $0.4 million for the nine months ended September 30, 2019 as compared to $0.5 million for the nine months ended September 30, 2018.

Gain on revaluation of the warrant liability

Gain on revaluation of the warrant liability was $2.1 million for the nine months ended September 30, 2019 as compared to $0.1 million for the nine months ended September 30, 2018.