Flexion Therapeutics, Inc. (Nasdaq:FLXN) today reported financial
results and recent business highlights for the quarter ended
September 30, 2017.
“In the past month alone, Flexion has achieved U.S. Food and
Drug Administration (FDA) approval of Zilretta for the management
of osteoarthritis (OA) knee pain; secured capital that we believe
will be sufficient to bring us to profitability; hired our full
field sales force; introduced product into our distribution
channels and booked our first sales,” said Michael Clayman, M.D.,
President and Chief Executive Officer. “While these accomplishments
are extraordinary in their own right, they simply set the stage for
us to execute a world-class launch of Zilretta. We are in a truly
remarkable position for a company of our size. We have some of the
best people in the industry, a comprehensive commercial strategy
and the resources needed to deliver an important new medicine to
millions of Americans who suffer from OA knee pain.”
Third-Quarter Results & Recent Financial
Highlights The Company reported a net loss of $34.2
million for the third quarter of 2017, compared to a net loss of
$17.8 million for the same period of 2016.
Research and development costs increased to $12.8 million in the
third quarter of 2017, as compared to $9.0 million in the third
quarter of 2016, due primarily to an increase of $1.9 million in
personnel and other employee-related costs for additional headcount
and stock compensation expense and an increase of $1.1 million in
portfolio expansion costs. General and administrative expenses
increased to $18.4 million in the third quarter of 2017, as
compared to $8.4 million for the same period in 2016, due primarily
to costs associated with increased headcount and expenses related
to the launch and commercialization of Zilretta.
As of September 30, 2017, the Company had approximately $335.1
million in cash, cash equivalents and marketable securities
compared with $210.3 million as of December 31, 2016.
On October 10, 2017, the Company announced its intention to
offer 4,000,000 shares of stock to the public. Due to high demand,
the offering was upsized to 4,800,000 shares, which was
successfully completed on October 16, 2017. Additionally, Flexion
granted the underwriters a 30-day option to purchase an additional
720,000 shares of common stock, which was exercised in full and
closed on October 18, 2017. All of the shares were sold at a price
to the public of $25.50 per share, resulting in total gross
proceeds of $140.8 million.
Recent News and Business
Highlights:
- On October 6, 2017, Flexion announced that the FDA approved
Zilretta for the management of OA knee pain. The milestone marked
the first product approval in the Company’s 10-year history.
Zilretta became commercially available on October 23, 2017, and the
Company intends to commence the full commercial launch prior to
Thanksgiving.
- Following approval, the Company converted contingent offers of
employment to 103 sales representatives and has fully staffed its
sales force. The Company expects to complete the training of the
field force by mid-November.
- On September 7, 2017, Flexion presented data on Zilretta at
PAINWeek 2017 that demonstrated a significant reduction in the use
of rescue medications following treatment with Zilretta compared to
placebo.
- Flexion delivered two clinical data presentations at the
American College of Rheumatology Annual Meeting on November 3,
2017. A pooled analysis showed sustained clinical improvement in
knee OA pain with Zilretta versus placebo, and the effect of
Zilretta was generally enhanced more than two-fold in patients with
baseline inflammation versus those without inflammation. In an
expanded meta-analysis of two large Zilretta studies, analgesia
appeared to be more effective through three months with Zilretta
versus placebo.
- The compensation committee of Flexion’s board of directors
approved the grant of inducement stock options for an aggregate of
401,700 shares of common stock to 117 new employees, the vast
majority of whom comprise the field sales force. Each stock option
has an exercise price of $22.10 per share and vests over four
years, with 25% of the shares vesting on the one-year anniversary
of the applicable vesting commencement date and 1/48 of the shares
vesting monthly thereafter, subject to the new employee's continued
service relationship with the Company. Each grant is subject
to the terms and conditions of the Company's 2013 Equity Incentive
Plan and a stock option agreement. The options were granted as
inducements material to the new employees entering into employment
with the Company in accordance with NASDAQ Listing Rule
5635(c)(4).
Conference Call Flexion’s management will host
a conference call today at 4:30 p.m. ET. The dial-in number for the
conference call is 855-770-0022 for domestic participants and
908-982-4677 for international participants, with Conference ID #
7299359. A live webcast of the conference call can also be
accessed through the “Investors” tab on the Flexion Therapeutics
website, and a replay will be available online after the call.
Indication and Important Safety Information
Indication: ZILRETTA™ (triamcinolone
acetonide extended-release injectable suspension) is indicated as
an intra-articular injection for the management of osteoarthritis
pain of the knee.
Limitation of Use: ZILRETTA is not intended for
repeat administration.*
Contraindication: ZILRETTA is
contraindicated in patients who are hypersensitive to triamcinolone
acetonide, corticosteroids or any components of the product.
Warnings and Precautions
- Intra-articular Use Only: ZILRETTA has
not been evaluated and should not be administered by epidural,
intrathecal, intravenous, intraocular, intramuscular, intradermal
or subcutaneous routes. Serious events have been reported with
epidural and intrathecal administration of corticosteroids and none
are approved for this use. ZILRETTA should not be considered safe
for epidural or intrathecal administration.
- Hypersensitivity Reactions: Rare
instances of anaphylaxis, including serious cases, have occurred in
patients with hypersensitivity to corticosteroids.
- Joint Infection and Damage: A marked increase in pain
accompanied by local swelling, restriction of joint motion, fever
and malaise are suggestive of septic arthritis. Examine joint fluid
to exclude a septic process. If diagnosis is confirmed, institute
appropriate antimicrobial therapy. Avoid injecting corticosteroids
into a previously infected or unstable joint. Intra-articular
administration may result in damage to joint tissues.
- Increased Risk of Infections: Infection
with any pathogen in any location of the body may be associated
with corticosteroid use. Corticosteroids may increase the
susceptibility to new infection and decrease resistance and the
ability to localize infection.
- Alterations in Endocrine
Function: Corticosteroids can produce reversible
hypothalamic-pituitary-adrenal axis suppression, with potential for
adrenal insufficiency after withdrawal of treatment, which may
persist for months. In situations of stress during that period,
institute corticosteroid replacement therapy.
- Cardiovascular and Renal
Effects: Corticosteroids can cause blood pressure
elevation, salt and water retention and increased potassium
excretion. Monitor patients with congestive heart failure,
hypertension and renal insufficiency for edema, weight gain and
electrolyte imbalance. Dietary salt restriction and potassium
supplementation may be needed.
- Increased Intraocular
Pressure: Corticosteroid use may be associated with
increased intraocular pressure. Monitor patients with elevated
intraocular pressure for potential treatment adjustment.
- Gastrointestinal
Perforation: Corticosteroid administration may
increase risk of gastrointestinal perforation in patients with
certain GI disorders and fresh intestinal anastomoses. Avoid
corticosteroids in these patients.
- Alterations in Bone
Density: Corticosteroids decrease bone formation and
increase bone resorption. Special consideration should be given to
patients with or at increased risk of osteoporosis prior to
treatment.
- Behavior and Mood
Disturbances: Corticosteroids may cause adverse
psychiatric reactions. Prior to treatment, special consideration
should be given to patients with previous or current emotional
instability or psychiatric illness. Advise patients to immediately
report any behavior or mood disturbances.
Adverse Reactions: The most commonly
reported adverse reactions (incidence ≥1%) in clinical studies
included sinusitis, cough and contusions.
Please see the full Prescribing
Information at www.ZILRETTAlabel.com.
* The efficacy and safety of repeat
administration of ZILRETTA have not been evaluated.
About ZILRETTA ZILRETTA is the first and only
FDA-approved extended-release intra-articular therapy for patients
confronting osteoarthritis-related knee pain. ZILRETTA employs
proprietary microsphere technology combining triamcinolone
acetonide — a commonly administered, short-acting corticosteroid —
with a poly lactic-co-glycolic acid (PLGA) matrix to provide
extended pain relief over 12 weeks.
About Osteoarthritis (OA) of the Knee OA, also
known as degenerative joint disease, affects more than 30 million
Americans and accounts for more than $185 billion in annual
expenditures. In 2016, more than 15 million Americans were
diagnosed with OA of the knee and the average age of
physician-diagnosed knee OA has fallen by 16 years, from 72 in
the 1990s to 56 in the 2010s. The prevalence of OA is expected to
continue to increase as a result of aging, obesity and sports
injuries. Each year, more than 15 million Americans are treated for
OA-related knee pain, and approximately five million OA patients
receive either an immediate-release corticosteroid or hyaluronic
acid intra-articular injection to manage their knee pain.
About Flexion Therapeutics Flexion Therapeutics
(Nasdaq: FLXN) is a specialty pharmaceutical company focused on the
development and commercialization of novel, local therapies for the
treatment of patients with musculoskeletal conditions, beginning
with OA, a type of degenerative arthritis. The company's core
values are focus, ingenuity, tenacity, transparency and fun.
Flexion was named one of the Boston Business
Journal's 2017 Best Places to Work.
Forward-Looking Statements Statements in this
press release regarding matters that are not historical facts,
including, but not limited to, statements relating to the future of
Flexion; timing for the expected full commercial launch of
ZILRETTA; plans to commercialize ZILRETTA and its market potential;
the sufficiency of our capital resources to achieve profitability;
expected increases in the rate of individuals with OA of the knee;
and the potential therapeutic and other benefits of ZILRETTA, are
forward-looking statements. 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, risks
associated with the process of launching a new pharmaceutical
product in the United States; the risk that we may not be able to
maintain and enforce our intellectual property, including
intellectual property related to ZILRETTA; competition from
alternative therapies; the risk that we may not be able to
successfully train and maintain an effective sales force to
commercialize ZILRETTA; the risk that ZILRETTA may not be
successfully commercialized, including as a result of limitations
in ZILRETTA's label and package insert information; risks regarding
our ability to obtain adequate reimbursement from payors for
ZILRETTA; risks related to the manufacture and distribution of
ZILRETTA, including our reliance on sole sources of supply and
distribution; risks related to key employees, markets, economic
conditions, health care reform, prices and reimbursement rates; the
risk that we may use our capital resources in ways that we do not
currently expect; the risk that we may not achieve profitability on
the timeline we currently expect, or at all, and other risks and
uncertainties described in our filings with the Securities and
Exchange Commission (SEC), including under the heading "Risk
Factors" in our most recent Annual Report on Form 10-K and
subsequent filings with the SEC. The forward-looking statements in
this press release speak only as of the date of this press release,
and we undertake no obligation to update or revise any of the
statements. We caution investors not to place considerable reliance
on the forward-looking statements contained in this press
release.
|
|
|
FLEXION THERAPEUTICS |
CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS |
(in thousands, except for per share
information) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
September 30, |
|
|
|
|
|
2017 |
|
2016 |
Revenue |
|
|
|
$ |
- |
$ |
- |
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Research and development |
|
|
12,846 |
|
9,047 |
General and administrative |
|
|
18,375 |
|
8,388 |
Total expenses |
|
|
31,221 |
|
17,435 |
Loss from
operations |
|
|
(31,221) |
|
(17,345) |
Interest
income (expense), net |
|
(2,748) |
|
(140) |
Other
income (expense) |
|
|
|
(219) |
|
(207) |
Loss from
operations before income tax |
|
(34,188) |
|
(17,782) |
Net loss |
|
|
|
|
(34,188) |
|
(17,782) |
|
|
|
|
Basic and
diluted net loss per share |
$ |
(1.07) |
$ |
(0.65) |
Basic and
diluted weighted |
|
|
|
|
average
number of common shares outstanding |
31,931 |
|
27,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FLEXION THERAPEUTICS
SELECTED BALANCE SHEET DATA(in
thousands) |
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ 159,179 |
|
$ 30,915 |
Marketable
securities |
|
175,921 |
|
179,413 |
Total
current assets |
|
|
338,709 |
|
209,393 |
Working
capital |
|
|
312,506 |
|
191,853 |
Total
assets |
|
|
350,790 |
|
226,262 |
Total notes
payable |
|
|
25,227 |
|
30,533 |
Total
convertible notes |
135,275 |
|
- |
Total
stockholders' equity (deficit) |
173,653 |
|
187,032 |
|
|
|
|
|
|
|
|
Contact:
Scott YoungSr. Director, Corporate Communications & Investor
Relations Flexion Therapeutics, Inc.T:
781-305-7194syoung@flexiontherapeutics.com
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