Soleno Therapeutics, Inc. (NASDAQ:SLNO), a clinical-stage
biopharmaceutical company developing novel therapeutics for the
treatment of rare diseases, today provided a corporate update and
announced financial results for the three and six months ended June
30, 2017.
“Following our recent successful meeting with the FDA, we expect
to initiate a Phase III clinical trial of DCCR in Prader-Willi
Syndrome by the end of the year,” said Anish Bhatnagar, M.D., Chief
Executive Officer of Soleno Therapeutics. “We are in the
process of finalizing the design of a Phase III, randomized,
double-blind placebo-controlled study that will treat approximately
100 patients. We remain excited about the potential of
DCCR to safely and effectively treat this catastrophic
disease. We also recently strengthened our balance sheet
through the sale of one of our non-strategic
subsidiaries, NeoForce.”
Recent Corporate Highlights
- Completion of FDA Meeting for Diazoxide Choline
Controlled-Release (DCCR) in Prader-Willi Syndrome (PWS)•
Received positive guidance on key elements of Phase III
program• Company expects to initiate pivotal Phase III
clinical trial by year-end 2017; will take approximately 9-12
months to complete
- Sold a non-strategic subsidiary, NeoForce, Inc., which
manufactures and promotes a range of innovative pulmonary
resuscitation solutions in the neonatal market, to Flexicare, Inc.,
a privately-held, leading UK-based manufacturer of airway
management, anesthesia, and critical care medical devices
Second Quarter Ended June 30, 2017 Financial Results for
Continuing Operations
As a result of the decision to sell NeoForce and either divest
or partner the CoSense business, all revenue and expenses for these
businesses have been excluded from continuing operations for all
periods herein and reported as discontinued operations. All assets
and liabilities of these businesses have been classified as assets
held for sale on the balance sheet. All prior period information
has been recast to conform to this presentation.
Research and development expenses in the second quarter of 2017
were $1.0 million, compared to $0.7 million for the same period in
2016. The increase was primarily due to an increase in DCCR
clinical activities.
General and Administrative expenses in the second quarter of
2017 were $2.2 million, compared to $1.4 million for the same
period in 2016. The increase was primarily due to the
amortization from the acquisition of intangibles from the completed
Essentialis merger in March 2017, and an increase in stock
compensation expense.
Net loss from continuing operations for the second quarter of
2017 was $3.2 million, or $0.06 per share, compared to a net loss
of $2.4 million, or $0.15 per share, for the second quarter in
2016.
Net loss from discontinued operations for the second quarter of
2017 was $0.7 million, or $0.01 per share, compared to a net loss
of $1.1 million, or $0.07 per share, for the second quarter in
2016.
Net loss for the second quarter of 2017 was $4.0 million, or
$0.07 per share, compared to a net loss of $3.5 million, or $0.22
per share, for the second quarter in 2016.
Six-Months Ended June 30, 2017 Financial Results for
Continuing Operations
As a result of the decision to sell NeoForce, Inc. and either
divest or partner the CoSense business, all revenue and expenses of
these businesses have been excluded from continuing operations for
all periods herein and reported as discontinued operations. All
assets and liabilities of these businesses have been classified as
assets held for sale on the balance sheet. All prior period
information has been recast to conform to this presentation.
Research and development expenses in the six months ended June
30, 2017, were $1.5 million, compared to $1.6 million for the same
period in 2016. The decrease was primarily due to a reduction
in headcount.
General and Administrative expenses in the six months ended June
30, 2017, were $3.2 million, compared to $3.3 million for the same
period in 2016. The decrease was primarily due to a decrease
in legal fees and decreased headcount.
The change in fair value of warrants income for the six months
ended June 30, 2017, was $0.1 million, which represents a decrease
in the fair value of the Series A and Series C Warrants compared to
the value of the warrants at December 31, 2016. The change in
fair value of warrants income for the six months ended June 30,
2016, was $1.1 million, which represented an increase in the
fair value of the Series A, Series B and Series C Warrants compared
to the value of the warrants at December 31, 2015.
Net loss from continuing operations for the six months ended
June 30, 2017, was $5.5 million, or $0.14 per share, compared to a
net loss of $4.3 million, or $0.29 per share, for the same period
in 2016.
Net loss from discontinued operations for the six months ended
June 30, 2017, was $1.4 million, or $0.03 per share, compared to a
net loss of $2.4 million, or $0.16 per share, for the same period
in 2016.
Net loss for the six months ended June 30, 2017, was $6.9
million, or $0.17 per share, compared to a net loss of $6.7
million, or $0.45 per share, for the same period in 2016.
Cash and cash equivalents at June 30, 2017, totaled $7.5
million, compared to $2.7 million at December 31, 2016.
About PWS
PWS is a rare and complex genetic neurobehavioral/metabolic
disorder affecting appetite, growth, metabolism, cognitive function
and behavior. The committee on genetics of the American
Academy of Pediatrics states PWS affects both genders equally and
occurs in people from all geographic regions: its estimated
incidence is one in 15,000 to 25,000 live births. This disorder is
typically characterized by hyperphagia, a chronic feeling of
insatiable hunger, behavioral problems, cognitive disabilities, low
muscle tone, short stature (when not treated with growth hormone),
the accumulation of excess body fat, developmental delays, and
incomplete sexual development. Hyperphagia, in the absence of
effective limitations to access to food, can lead to morbid
obesity. In a global survey conducted by the Foundation for
Prader-Willi Research, 96.5% of respondents (parent and caregivers)
rated hyperphagia, which is the unrelenting hunger that severely
diminishes the quality of life for patients and their families, as
the most important or a very important symptom to be relieved by a
new medicine. There are currently no approved therapies to
treat the hyperphagia/appetite, metabolic, cognitive function, or
behavioral aspects of the disorder. DCCR has received
Orphan Drug Designation from the US FDA for the treatment of
PWS.
About Diazoxide Choline Controlled-Release
Tablet
Diazoxide choline controlled-release tablet is a novel,
proprietary controlled-release, crystalline salt formulation of
diazoxide, which is administered once-daily. The parent
molecule, diazoxide, as an oral suspension, has been used for
decades in thousands of patients in a few rare diseases in
neonates, children and/or adults, but not in PWS. Essentialis
conceived of and established extensive patent protection on the
therapeutic use of diazoxide and DCCR in patients with PWS.
The DCCR development program is supported by positive data from two
completed Phase II clinical studies and six completed Phase I
clinical studies in various metabolic indications, as well as a
pilot study in PWS patients. In the PWS pilot study, DCCR
showed promise in addressing the hallmark symptoms of PWS, most
notably hyperphagia.
About Soleno Therapeutics, Inc.
Soleno Therapeutics, Inc. is focused on the development and
commercialization of novel therapeutics for the treatment of rare
diseases. The company is currently advancing its lead
candidate, DCCR, a once-daily oral tablet for the treatment of PWS,
into a Phase III clinical development program at the end of 2017.
Soleno, through its wholly-owned subsidiary, Capnia, Inc.,
continues to market Capnia’s innovative medical device, the
CoSense® End-Tidal Carbon Monoxide (ETCO) monitor, which measures
ETCO and is used by hospitals to detect hemolysis in
newborns. It is expected that this product will be monetized
and will not be a focus for the company in the long term.
For more information, please visit www.soleno.life.
Forward-Looking Statements
This press release contains forward-looking statements that are
subject to many risks and uncertainties. Forward-looking statements
include statements regarding our intentions, beliefs, projections,
outlook, analyses or current expectations concerning, among other
things, our ability to initiate the Phase III clinical development
program of DCCR in PWS by the end of 2017. We may use terms
such as "believes," "estimates," "anticipates," "expects," "plans,"
"intends," "may," "could," "might," "will," "should,"
"approximately" or other words that convey uncertainty of future
events or outcomes to identify these forward-looking statements.
Although we believe that we have a reasonable basis for each
forward-looking statement contained herein, we caution you that
forward-looking statements are not guarantees of future performance
and that our actual results of operations, financial condition and
liquidity, and the development of the industry in which we operate
may differ materially from the forward-looking statements contained
in this presentation. As a result of these factors, we cannot
assure you that the forward-looking statements in this presentation
will prove to be accurate. Additional factors that could materially
affect actual results can be found in Soleno’s Form 10-Q filed with
the Securities and Exchange Commission on May 11, 2017, including
under the caption titled "Risk Factors." Soleno expressly
disclaims any intent or obligation to update these forward-looking
statements, except as required by law.
|
Soleno Therapeutics, Inc. |
Condensed Consolidated Balance
Sheets |
(In thousands, except share
amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, |
|
As of December 31, |
|
|
|
2017 |
|
2016 |
Assets |
|
|
|
|
|
|
|
|
Current
Assets |
|
|
|
|
|
|
|
|
|
Cash & Cash
Equivalents |
$ |
7,547 |
|
|
$ |
2,726 |
|
|
|
Accounts
Receivable |
|
3 |
|
|
|
3 |
|
|
|
Restricted Cash |
|
35 |
|
|
|
35 |
|
|
|
Inventory |
|
164 |
|
|
|
- |
|
|
|
Prepaid expenses and
other current assets |
|
246 |
|
|
|
247 |
|
|
|
Current assets held for
sale |
|
2,323 |
|
|
|
790 |
|
|
|
Total
Current Assets |
|
10,318 |
|
|
|
3,801 |
|
|
Long-term
Assets |
|
|
|
|
|
Property &
Equipment, net |
|
53 |
|
|
|
54 |
|
|
|
Other intangible
assets, net |
|
19,884 |
|
|
|
- |
|
|
|
Other Assets |
|
126 |
|
|
|
126 |
|
|
|
Long-term assets held
for sale |
|
- |
|
|
|
1,584 |
|
|
|
Total
Assets |
$ |
30,381 |
|
|
$ |
5,565 |
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
Current
Liabilities |
|
|
|
|
|
Accounts Payable |
$ |
1,029 |
|
|
$ |
411 |
|
|
|
Accrued compensation
and other current liabilities |
|
879 |
|
|
|
1,050 |
|
|
|
Current liabilities
held for sale |
|
214 |
|
|
|
246 |
|
|
|
Total
Current Liabilities |
|
2,122 |
|
|
|
1,707 |
|
|
Long-Term
Liabilities |
|
|
|
|
|
Series A Warrant
Liability |
|
415 |
|
|
|
194 |
|
|
|
Series C Warrant
Liability |
|
24 |
|
|
|
86 |
|
|
|
Other liabilities |
|
1,132 |
|
|
|
62 |
|
|
|
Long-term liabilities
held for sale |
|
- |
|
|
|
81 |
|
|
|
Total
Long-Term Liabilities |
|
1,571 |
|
|
|
423 |
|
|
|
Total
Liabilities |
|
3,693 |
|
|
|
2,130 |
|
|
Stockholder's equity |
|
|
|
|
Preferred
Stock, $.001 par value, 10,000,000 shares authorized |
|
|
|
|
|
Series B convertible
preferred stock, 13,780 are designated at June |
|
|
|
|
|
30, 2017 and December
31, 2016; 12,179 and 12,780 shares |
|
- |
|
|
|
- |
|
|
|
issued and outstanding
at June 30, 2017 and at December 31, 2016, |
|
|
|
|
|
respectively.
Liquidation value of zero |
|
|
|
|
Common
stock, $0.001 par value, 100,000,000 shares |
|
|
|
|
|
authorized, 47,587,647
and 16,786,952 shares issued and |
|
|
|
|
|
outstanding at June 30,
2017 and December 31, 2016, respectively |
|
48 |
|
|
|
17 |
|
|
Additional
paid-in-capital |
|
131,807 |
|
|
|
101,730 |
|
|
Accumulated
deficit |
|
(105,167 |
) |
|
|
(98,312 |
) |
|
|
Total stockholders'
equity |
|
26,688 |
|
|
|
3,435 |
|
|
|
Total
liabilities and stockholders' equity |
$ |
30,381 |
|
|
$ |
5,565 |
|
|
|
|
|
|
|
|
|
Soleno Therapeutics, Inc. |
Condensed Consolidated Statements of
Operations |
(In thousands, except share and per share
amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
Product
revenue |
|
1 |
|
|
|
2 |
|
|
|
4 |
|
|
|
2 |
|
Cost of
product revenue |
|
42 |
|
|
|
51 |
|
|
|
42 |
|
|
|
69 |
|
|
Gross profit
(loss) |
|
(41 |
) |
|
|
(49 |
) |
|
|
(38 |
) |
|
|
(67 |
) |
Expenses |
|
|
|
|
|
|
|
|
Research and
Development |
|
974 |
|
|
|
658 |
|
|
|
1,506 |
|
|
|
1,623 |
|
|
Sales and
Marketing |
|
- |
|
|
|
165 |
|
|
|
27 |
|
|
|
360 |
|
|
General and
Administrative |
|
2,195 |
|
|
|
1,423 |
|
|
|
3,214 |
|
|
|
3,273 |
|
|
Total expenses |
|
3,169 |
|
|
|
2,246 |
|
|
|
4,747 |
|
|
|
5,256 |
|
|
Operating income
(loss) |
|
(3,210 |
) |
|
|
(2,295 |
) |
|
|
(4,785 |
) |
|
|
(5,323 |
) |
Interest
and other income (expense) |
|
|
|
|
|
|
|
|
Interest income |
|
3 |
|
|
|
- |
|
|
|
4 |
|
|
|
- |
|
|
Change in fair value of
warrant liabilities (expense) |
|
(32 |
) |
|
|
(56 |
) |
|
|
(101 |
) |
|
|
1,095 |
|
|
Cease-use expense |
|
- |
|
|
|
- |
|
|
|
(2 |
) |
|
|
(94 |
) |
|
Other expense |
|
- |
|
|
|
(16 |
) |
|
|
(602 |
) |
|
|
(18 |
) |
|
Interest and other
income (expense), net |
|
(29 |
) |
|
|
(72 |
) |
|
|
(701 |
) |
|
|
983 |
|
Net loss
from continuing operations |
|
(3,239 |
) |
|
|
(2,367 |
) |
|
|
(5,486 |
) |
|
|
(4,340 |
) |
Net loss
from discontinued operations |
|
(727 |
) |
|
|
(1,146 |
) |
|
|
(1,370 |
) |
|
|
(2,362 |
) |
Net
loss |
$ |
(3,966 |
) |
|
$ |
(3,513 |
) |
|
$ |
(6,856 |
) |
|
$ |
(6,702 |
) |
|
|
|
|
|
|
|
|
|
Net income
(loss) per common share from continuing |
|
|
|
|
|
|
|
|
operations, basic and
diluted |
$ |
(0.06 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.29 |
) |
Net income
(loss) per common share from discontinued |
|
|
|
|
|
|
|
|
operations, basic and
diluted |
|
(0.01 |
) |
|
|
(0.07 |
) |
|
|
(0.03 |
) |
|
|
(0.16 |
) |
Net loss
per common share, basic and diluted |
$ |
(0.07 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.45 |
) |
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding used |
|
|
|
|
|
|
|
|
to calculate basic and
diluted net loss |
|
|
|
|
|
|
|
|
per common share |
|
53,060,868 |
|
|
|
15,528,922 |
|
|
|
40,029,547 |
|
|
|
15,162,520 |
|
|
|
|
|
|
|
|
|
|
Contact:
Brian Ritchie
LifeSci Advisors, LLC
212-915-2578
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