-- Exploratory Phase 2 MS & ALS Studies
with FLX-787 Underway --
-- HOTSHOTTM Net Product Revenue of $586,000
--
Conference Call Scheduled Today at 8:45 a.m.
ET
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Flex Pharma, Inc. (NASDAQ: FLKS), a biotechnology company
developing innovative and proprietary treatments for nocturnal leg
cramps (NLC), spasms associated with severe neuromuscular
conditions such as multiple sclerosis (MS) and amyotrophic lateral
sclerosis (ALS), and exercise-associated muscle cramps (EAMC),
today reported financial results for the quarter ended September
30, 2016 and provided an update on its clinical development,
consumer product launch and corporate activities.
"Over the past year we have gained important insights from our
exploratory studies that will inform our human efficacy studies
moving forward," said Flex Pharma Chief Medical Officer Thomas
Wessel, M.D., Ph.D. "Our single agent candidate, chemically
synthesized, TRP ion channel activator, FLX-787, has been studied
in over 100 human subjects treated for several weeks at therapeutic
doses, which provides an unusually extensive human safety and
efficacy experience for an agent at this stage of development and
bodes well for our Phase 2 studies."
"Our drug development efforts with FLX-787 in NLC, MS and ALS
continue to advance," stated Christoph Westphal, M.D., Ph.D., Chair
and CEO of Flex Pharma. "Flex is well funded through late 2018, and
we remain committed to executing upon our mission of helping
patients and consumers who suffer from debilitating cramps."
"On the consumer side, in just a few short months, we have over
15,000 unique customers and well over 50 professional and
collegiate teams that have ordered HOTSHOT, representing a
wonderful early platform for the brand," noted Kathie Lindemann,
Chief Operating Officer of Flex Pharma. "The performance of HOTSHOT
in its first full quarter post-launch demonstrates a healthy start
to the consumer business, following our cult brand strategy
targeted at endurance athletes."
Recent Business Highlights
- Clinical Efforts
- The Company initiated an exploratory
Phase 2 study in ALS patients in Australia in September. The
randomized, controlled, blinded, cross-over study is designed to
evaluate the safety and efficacy of FLX-787 in up to 50 patients
who suffer from cramps, spasms and/or spasticity as a consequence
of ALS. In June, the Company initiated a similar exploratory Phase
2 study in MS patients with FLX-787.
- In October, the Company provided a NLC
regulatory and clinical update for FLX-787, a topically-acting,
selective transient receptor potential (TRP) ion channel agonist:
(1) In written responses to the Company’s pre-IND meeting request,
FDA indicated that cramp frequency “could be an acceptable primary
efficacy endpoint.” FDA also recommended that the Company utilize a
parallel design in a planned IND-opening study. (2) While
statistically significant results were seen in some, but not all,
of the crossover endpoints, FLX-787 has shown positive signals on
muscle cramping in the parallel design portion of two exploratory
human proof-of-concept NLC studies. Data from these exploratory
studies, and a statistically significant sigmoidal dose-response
curve in a human electrically-induced cramp study, supports further
evaluation and development of FLX-787 in subjects with NLC and
other indications. (3) The Company is planning a parallel design
Phase 2 study in NLC to be initiated in the first half of 2017,
after its IND application has been accepted.
- Consumer Product (HOTSHOT)
- In its first full quarter post-launch,
HOTSHOT recorded approximately $586,000 of net product
revenue.
- As an official sponsor of the 2016
IRONMAN® World Championship in October, HOTSHOT was sampled at the
IRONMAN Village throughout the week and available on the race
course. More than 25 athletes represented TeamHOTSHOT on race day.
HOTSHOT will be sampled at the upcoming New York City
Marathon.
- In July, The Wall Street Journal
published the article, “A New Way to Prevent Muscle Cramps”,
discussing the breakthrough science behind HOTSHOT. The article was
a top ranked story on wsj.com for a week. HOTSHOT has also been
featured in several subsequent publications: Wired.com, Men’s
Fitness online, LAVA Magazine (official magazine of IRONMAN),
Esquire online and The Daily Burn.
- Corporate Highlights
- In August, W. Larry Kenney, Ph.D.,
Professor of Physiology and Kinesiology at Penn State University,
joined the Company’s Scientific Advisory Board. As the Marie
Underhill Noll Chair in Human Performance and Professor of
Physiology and Kinesiology at Penn State University, Dr. Kenney’s
research is focused on human physiological responses and
adaptations to exercise and extreme environments. Dr. Kenney served
as President of the American College of Sports Medicine from
2003-2004. He serves on the American Council of Exercise Scientific
Advisory Panel, Nike’s Science Advisory Board, and chaired the
Gatorade® Sports Science Institute for several years. Dr. Kenney
received his Ph.D. in Physiology from Penn State.
Third Quarter 2016 Financial Results
- Cash Position: As of September
30, 2016, Flex Pharma had cash, cash equivalents and marketable
securities of $67.3 million. During the quarter ended September 30,
2016, cash, cash equivalents and marketable securities decreased by
$7.5 million.
- Net Product Revenue: Net product
revenue for the three months ended September 30, 2016 was
approximately $586,000.
- Cost of Product Revenue: Cost of
product revenue for the three months ended September 30, 2016 was
approximately $221,000 and included an inventory reserve of
approximately $33,000.
- R&D Expense: Research and
development expense for the three months ended September 30, 2016
was $5.7 million. Research and development expense for the third
quarter primarily included costs associated with the Company’s
clinical studies of FLX-787, IND-supporting activities, personnel
costs (including salaries and stock-based compensation costs), and
external consultant costs.
- SG&A Expense: Selling,
general and administrative expense for the three months ended
September 30, 2016 was $5.4 million. Selling, general and
administrative expense for this quarter primarily included
personnel costs (including salaries and stock-based compensation
costs), sales, marketing and fulfillment costs related to launching
the Company’s consumer brand and product, legal costs, and external
consultant costs.
- Net Loss: Net loss for the three
months ended September 30, 2016 was ($10.6) million, or ($0.65) per
share. Net loss for the three months ended September 30, 2016
included $1.9 million of stock-based compensation expense. As of
September 30, 2016, Flex Pharma had 16,518,347 shares of common
stock outstanding, which excludes approximately 1.4 million shares
of stock that remain subject to vesting. The net loss for the third
quarter of 2016 was primarily driven by the Company’s operating
expenses related to its research and development efforts, costs
associated with the development and launch of the Company’s
consumer brand and product, and general and administrative
costs.
Financial Guidance
On the basis of Flex Pharma's current operating plans, the
Company expects that its current cash, cash equivalents and
marketable securities position will be sufficient to fund its
operations through late 2018, assuming no receipt of proceeds from
potential business development partnerships, equity financings or
debt drawdowns.
Upcoming Events and Presentations
- Jefferies London Healthcare Conference,
November 16-17, 2016 in London, UK
- Piper Jaffray Healthcare Conference,
November 29-30, 2016 in New York, NY
Conference Call and Webcast
The Company will host a conference call and webcast today at
8:45 a.m. ET to provide an update on the Company and discuss third
quarter 2016 financial results. To access the conference call,
please dial (855) 780-7202 (U.S. and Canada) or (631) 485-4874
(International) five minutes prior to the start time.
A live webcast may be accessed in the Investors section of the
Company’s website at www.flex-pharma.com. Please log on to the Flex
Pharma website approximately 15 minutes prior to the scheduled
webcast to ensure adequate time for any software downloads that may
be required. A replay of the webcast will be available on Flex
Pharma’s website for three months.
About Flex Pharma
Flex Pharma, Inc. is a biotechnology company that is developing
innovative and proprietary treatments for nocturnal leg cramps,
cramps and spasms associated with severe neuromuscular conditions
such as MS and ALS, and exercise-associated muscle cramps. Flex
Pharma was founded by National Academy of Science members Rod
MacKinnon, M.D. (2003 Nobel Laureate), and Bruce Bean, Ph.D.,
recognized leaders in the fields of ion channels and neurobiology,
along with Chair and CEO Christoph Westphal, M.D., Ph.D.
Visit www.TeamHOTSHOT.com for updates and to learn more about
HOTSHOTTM, the Company’s consumer product which is scientifically
proven to prevent and treat muscle cramps.
HOTSHOT is a consumer product that is marketed to endurance
athletes for exercise-associated muscle cramps. HOTSHOT complements
the Company’s drug development business and is not intended to
diagnose, treat, cure or prevent any disease.
Follow Flex Pharma (@flexpharma) and HOTSHOT (@Team_HOTSHOT) on
Twitter
Forward-Looking Statements
This press release contains forward-looking statements for
purposes of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include
statements regarding our intentions, beliefs, projections, outlook,
analyses or current expectations concerning, among other things:
the design and timing of ongoing and anticipated clinical studies,
our expectations regarding the availability of our capital
resources, and our plans regarding the commercialization of our
consumer product. These forward-looking statements are based on
management's expectations and assumptions as of the date of this
press release and are subject to numerous risks and uncertainties,
which could cause actual results to differ materially from those
expressed or implied by such statements. These risks and
uncertainties include, without limitation: the status, timing,
costs, results and interpretation of our clinical studies; the
uncertainties inherent in conducting clinical studies; results from
our ongoing and planned preclinical development; expectations of
our ability to make regulatory filings and obtain and maintain
regulatory approvals, the commercialization of our consumer
product; anticipated positioning and product attributes of our
consumer product; results of early clinical studies as indicative
of the results of future trials; availability of funding sufficient
for our foreseeable and unforeseeable operating expenses and
capital expenditure requirements; other matters that could affect
the availability or commercial potential of our consumer product or
drug product candidates; the inherent uncertainties associated with
intellectual property; and other factors discussed in greater
detail under the heading "Risk Factors" in our Annual Report on
Form 10-K for the year ended December 31, 2015 and subsequent
filings with the Securities and Exchange Commission (SEC). You are
encouraged to read our filings with the SEC, available at
www.sec.gov, for a discussion of these and other risks and
uncertainties. Any forward-looking statements that we make in this
press release speak only as of the date of this press release. We
assume no obligation to update our forward-looking statements
whether as a result of new information, future events or otherwise,
after the date of this press release.
Flex Pharma, Inc. Unaudited Selected
Consolidated Balance Sheet Information (in thousands)
September 30,2016
December 31,2015
Assets Cash and cash equivalents $ 27,830 $ 66,687
Marketable securities 39,504 26,965 Accounts receivable 22 —
Inventory 231 — Prepaid expenses and other current assets 1,554 909
Property and equipment, net 619 382 Other assets 191 127
Total assets $ 69,951 $ 95,070
Liabilities and
stockholders' equity Accounts payable and accrued expenses $
3,806 $ 2,823 Deferred revenue 81 — Other liabilities 36 55
Stockholders’ equity 66,028 92,192 Total liabilities and
stockholders’ equity $ 69,951 $ 95,070
Unaudited
Condensed Consolidated Statements of Operations (in
thousands, except loss per share amounts)
Three MonthsEnded
September 30,2016
Three MonthsEnded
September 30,2015
Nine MonthsEnded
September 30,2016
Nine MonthsEnded
September 30,2015
Net product revenue $ 586 $ — $ 699 $ — Other revenue 13 —
13 — Total revenue 599 — 712 — Costs
and expenses: Cost of product revenue 221 — 529 — Research and
development 5,665 3,445 16,148 9,440 Selling, general and
administrative 5,448 4,722 15,937 11,843
Total costs and expenses 11,334 8,167 32,614 21,283
Loss from operations (10,735 ) (8,167 ) (31,902 ) (21,283 )
Interest income, net 98 14 309 34 Net
loss $ (10,637 ) $ (8,153 ) $ (31,593 ) $ (21,249 ) Net loss
per share-basic and diluted $ (0.65 ) $ (0.53 ) $ (1.96 ) $ (1.57 )
Weighted-average number of common shares outstanding (1)
16,362 15,290 16,105 13,520
(1) As of September 30, 2016, the Company had issued
approximately 5.4 million shares of restricted stock that are
subject to vesting. Of these shares, approximately 4.0 million
shares had vested at September 30, 2016 and are outstanding for
purposes of computing weighted average shares outstanding. The
remaining shares will be included in the weighted average share
calculation as such shares vest over approximately the next 1.4
years.
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version on businesswire.com: http://www.businesswire.com/news/home/20161102005519/en/
Flex Pharma, Inc.Elizabeth Woo, 617-874-1829SVP, Investor
Relations & Corporate Communicationsirdept@flex-pharma.com
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