Soleno Therapeutics, Inc. (“Soleno”) (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 third
quarter and nine months ended September 30, 2018.
“Our ongoing Phase III trial, DESTINY PWS, evaluating Diazoxide
Choline Controlled-Release (DCCR) tablets for the treatment of
Prader-Willi syndrome (PWS), continues to enroll patients at
multiple sites,” said Anish Bhatnagar, M.D., Chief Executive
Officer of Soleno Therapeutics. “We now have 10 sites activated in
the U.S. screening patients and intend to activate additional sites
in the coming months. Most recently, we amended the trial protocol
to allow children as young as four years of age into the study,
permitting inclusion of those children with an earlier age of
hyperphagia onset. We also presented clinical data supporting the
safety and efficacy of DCCR in PWS at both the European Society of
Paediatric Endocrinology and Foundation for Prader-Willi Research
Annual Conference.”
Recent Corporate Highlights
- Continued enrollment for Phase III DESTINY PWS clinical trial
of DCCR
- 10 activated U.S. trial sites. Additional sites are being
activated and resources being deployed to support timely completion
of the trial
- Safety consistent with known profile of DCCR and no serious
unexpected adverse reactions to date
- C602, the 9-month open-label safety extension study, has
commenced for patients completing three months of treatment in the
DESTINY PWS study
- Protocol amendment to DESTINY PWS trial submitted to and
accepted by the U.S. Food and Drug Administration (FDA)
- Amended protocol reduces the age of inclusion to four years of
age, from eight years of age previously
- Allows inclusion of PWS patients who develop symptoms of
hyperphagia, the central characteristic of PWS by age 4, with
nearly all patients exhibiting hyperphagia by age 8
- Granted Fast Track designation by the FDA for DCCR for the
treatment of PWS
- Presented clinical data on DCCR at Late Breaking Session of
European Society of Paediatric Endocrinology
- Pharmacokinetic data presented clearly demonstrated that DCCR
is suitable for once-daily dosing, which is important for patient
compliance, particularly in children
- Placebo-controlled data indicated that DCCR’s intraday
circulating drug levels have the potential to reduce the likelihood
of adverse events that can be associated with drug level
fluctuations
- Presented clinical data on DCCR at 2018 Foundation for
Prader-Willi Research Annual Conference (FPWR)
- Data presented indicate that DCCR targets the underlying neural
mechanisms of hyperphagia in PWS
- Safety data presented showed that DCCR’s once-daily dosing
demonstrates potential for improved safety and provides
justification for current dosing regimen
- Issued U.S. patent (No. 10/058,557) related to the use of
pharmaceutical formulations of diazoxide and diazoxide choline to
increase lean body mass and the lean body mass/fat mass ratio in
patients with PWS
Third Quarter Ended September 30, 2018 Financial Results
for Continuing Operations As a result of the decision to
sell NeoForce, partner the CoSense business and divest the Serenz
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 and liabilities
held for sale on the balance sheet. All prior period information
has been recast to conform to this presentation.
Research and development expense was $2.1 million for the three
months ended September 30, 2018, compared to $1.0 million in the
same period of 2017. The increase was primarily due to
spending related to the Phase III trial of DCCR in PWS.
General and administrative expense was $1.6 million for the
three months ended September 30, 2018, compared to $1.7 million in
the same period of 2017. The decrease was primarily a result of a
decrease in personnel-related expenses of $92,000 as well as a
$30,000 decrease in rent expense as the lease on one of the
Company’s facilities expired on June 30, 2018.
The change in the fair value of contingent consideration results
from Soleno’s obligation to make cash payments to Essentialis
stockholders upon the achievement of certain future commercial
milestones associated with the sale of Essentialis’ product in
accordance with the terms of the Essentialis merger agreement. The
fair value of the liability for the contingent consideration
payable by Soleno was initially established as approximately $2.6
million at the time of the merger in March 2017 and was estimated
as approximately $5.1 million at December 31, 2017, at $5.5 million
at March 31, 2018, and $5.4 million at June 30, 2018. In the
third quarter ended September 30, 2018, the fair value was
estimated as approximately $5.7 million, resulting in an increase
in expense of approximately $0.2 million in the period.
The loss from continuing operations for the third quarter of
2018 was $2.3 million, or ($0.11) per share.
The loss from discontinued operations for the third quarter of
2018 was $0.4 million, or ($0.02) per share.
The net loss for the third quarter of 2018 was $2.7 million, or
($0.13) per share, compared to a net loss of $3.8 million, or
($0.39) per share, for the third quarter of 2017.
Nine months Ended September 30, 2018 Financial Results
for Continuing OperationsAs a result of the decision to
sell NeoForce, partner the CoSense business and divest the Serenz
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 and liabilities
held for sale on the balance sheet. All prior period information
has been recast to conform to this presentation.
Research and development expense was $5.0 million for the nine
months ended September 30, 2018, compared to $2.0 million in the
same period of 2017. The increase was primarily due to
spending related to the Phase III trial of DCCR in PWS.
General and administrative expense was $5.2 million for the nine
months ended September 30, 2018, compared to $4.9 million in the
same period of 2017. The increase was primarily due to amortization
of the intangible asset acquired in the Essentialis merger.
The loss from continuing operations for the nine months ended
September 30, 2018, was $12.2 million, or ($0.60) per share.
The loss from discontinued operations for the nine months ended
September 30, 2018, was $1.4 million, or ($0.07) per share.
The net loss for the nine months ended September 30, 2018, was
$13.6 million, or ($0.67) per share, compared to a net loss of
$10.6 million, or ($1.31) per share, for the same nine month period
of 2017.
As of September 30, 2018, Soleno had cash and cash equivalents
of approximately $10.2 million, compared to $17.1 million at
December 31, 2017.
About PWSThe Prader-Willi Syndrome Association
USA estimates that one in 12,000 to 15,000 people in the US have
PWS. The hallmark symptom of this disorder is hyperphagia, a
chronic feeling of insatiable hunger that severely diminishes the
quality of life for PWS patients and their families. Additional
characteristics of PWS include 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 can lead to
significant morbidities (e.g., stomach rupture, obesity, diabetes,
cardiovascular disease) and mortality (e.g., choking, accidental
death due to food seeking behavior). In a global survey conducted
by the Foundation for Prader-Willi Research, 96.5% of respondents
(parent and caregivers) rated hyperphagia 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. Diazoxide choline has received Orphan Drug
Designation for the treatment of PWS in the U.S. and E.U.
About Diazoxide Choline Controlled-Release
TabletDiazoxide choline controlled-release tablet is a
novel, proprietary extended-release, crystalline salt formulation
of diazoxide, which is administered once-daily. The parent
molecule, diazoxide, has been used for decades in thousands of
patients in a few rare diseases in neonates, infants, children and
adults, but has not been approved for use in PWS. Soleno 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 five
completed Phase I clinical studies in various metabolic indications
or in healthy volunteers and three completed Phase II clinical
studies, one of which was in PWS patients. In the PWS Phase II
study, DCCR showed promise in addressing hyperphagia, the hallmark
symptom of PWS, as well as several other symptoms such as
aggressive/destructive behaviors, fat mass and abnormal lipid
profiles.
About Soleno Therapeutics, Inc.Soleno is
focused on the development and commercialization of novel
therapeutics for the treatment of rare diseases. The company’s lead
candidate, DCCR, a once-daily oral tablet for the treatment of PWS,
is currently being evaluated in a Phase III clinical development
program. For more information, please visit www.soleno.life.
Forward-Looking StatementsThis 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 complete the Phase III clinical development program of DCCR in
PWS in 2019. 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 press release will prove to be
accurate. Additional factors that could materially affect actual
results can be found in Soleno’s annual and quarterly reports filed
with the Securities and Exchange Commission, 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.
Corporate Contact:Brian RitchieLifeSci
Advisors, LLC212-915-2578
Media Contact:Allison Blum, Ph.D.LifeSci Public
Relations646-627-8383
Soleno Therapeutics, Inc.
Condensed Consolidated Balance Sheets (In
thousands except share and per share data)
|
|
|
|
September 30, 2018 |
|
December 31, 2017 |
Assets |
(Unaudited) |
|
Current assets |
|
|
Cash and
cash equivalents |
$ |
10,239 |
|
|
$ |
17,100 |
|
Restricted cash |
|
— |
|
|
|
35 |
|
Prepaid
expenses and other current assets |
|
327 |
|
|
|
343 |
|
Current
assets held for sale |
|
847 |
|
|
|
516 |
|
Total current assets |
|
11,413 |
|
|
|
17,994 |
|
Long-term assets |
|
|
Property
and equipment, net |
|
14 |
|
|
|
23 |
|
Other
assets |
|
— |
|
|
|
126 |
|
Intangible assets, net |
|
18,955 |
|
|
|
20,413 |
|
Long-term
assets held for sale |
|
453 |
|
|
|
466 |
|
Total assets |
$ |
30,835 |
|
|
$ |
39,022 |
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
Current
liabilities |
|
|
Accounts
payable |
$ |
1,245 |
|
|
$ |
633 |
|
Accrued
compensation and other current liabilities |
|
1,153 |
|
|
|
973 |
|
Current
liabilities held for sale |
|
110 |
|
|
|
127 |
|
Total current liabilities |
|
2,508 |
|
|
|
1,733 |
|
Long-term
liabilities |
|
|
Series A
warrant liability |
|
58 |
|
|
|
70 |
|
Series C
warrant liability |
|
2 |
|
|
|
6 |
|
2017 PIPE
warrant liability |
|
6,641 |
|
|
|
5,076 |
|
Contingent liability for Essentialis purchase price |
|
5,671 |
|
|
|
5,082 |
|
Other
liabilities |
|
— |
|
|
|
13 |
|
Long-term
liabilities held for sale |
|
1,750 |
|
|
|
225 |
|
Total liabilities |
|
16,630 |
|
|
|
12,205 |
|
|
|
|
Commitments and
contingencies (Note 7) |
|
|
Stockholders’
equity |
|
|
Preferred Stock, $0.001
par value, 10,000,000 shares authorized: |
|
|
Series B
convertible preferred stock, 13,780 are designated at
September 30, 2018 and December 31, 2017; nil
and 4,571 shares issued and outstanding at
September 30, 2018 and December 31, 2017,
respectively. Liquidation value of zero |
|
— |
|
|
|
— |
|
Common stock, $0.001
par value, 100,000,000 shares authorized, 21,435,241 and
19,238,972 shares issued and outstanding at
September 30, 2018 and December 31, 2017,
respectively |
|
21 |
|
|
|
19 |
|
Additional
paid-in-capital |
|
141,479 |
|
|
|
140,495 |
|
Accumulated
deficit |
|
(127,295 |
) |
|
|
(113,697 |
) |
Total
stockholders’ equity |
|
14,205 |
|
|
|
26,817 |
|
Total
liabilities and stockholders’ equity |
$ |
30,835 |
|
|
$ |
39,022 |
|
|
|
|
Soleno Therapeutics, Inc.
Condensed Consolidated Statements of Operations
(unaudited) (In thousands except share and per
share data)
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
Operating expenses |
|
|
|
|
Research
and development |
$ |
2,092 |
|
|
$ |
946 |
|
|
$ |
4,986 |
|
|
$ |
2,046 |
|
Sales and
marketing |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26 |
|
General
and administrative |
|
1,558 |
|
|
|
1,685 |
|
|
|
5,191 |
|
|
|
4,900 |
|
Change in
fair value of contingent consideration |
|
228 |
|
|
|
— |
|
|
|
589 |
|
|
|
— |
|
Total
operating expenses |
|
3,878 |
|
|
|
2,631 |
|
|
|
10,766 |
|
|
|
6,972 |
|
Operating loss |
|
(3,878 |
) |
|
|
(2,631 |
) |
|
|
(10,766 |
) |
|
|
(6,972 |
) |
|
|
|
|
|
Other income
(expense) |
|
|
|
|
Cease-use
income |
|
— |
|
|
|
5 |
|
|
|
6 |
|
|
|
3 |
|
Change in
fair value of warrants liabilities |
|
1,543 |
|
|
|
131 |
|
|
|
(1,549 |
) |
|
|
(29 |
) |
Interest
and other income (expense) |
|
26 |
|
|
|
3 |
|
|
|
75 |
|
|
|
(595 |
) |
Total
other income (expense) |
|
1,569 |
|
|
|
139 |
|
|
|
(1,468 |
) |
|
|
(621 |
) |
|
|
|
|
|
Loss from continuing
operations |
|
(2,309 |
) |
|
|
(2,492 |
) |
|
|
(12,234 |
) |
|
|
(7,593 |
) |
Loss from discontinued
operations |
|
|
|
|
Operating
loss |
|
(427 |
) |
|
|
(1,086 |
) |
|
|
(1,364 |
) |
|
|
(2,841 |
) |
Loss on
sale of assets |
|
— |
|
|
|
(208 |
) |
|
|
— |
|
|
|
(208 |
) |
Total |
|
(427 |
) |
|
|
(1,294 |
) |
|
|
(1,364 |
) |
|
|
(3,049 |
) |
|
|
|
|
|
Net loss |
$ |
(2,736 |
) |
|
$ |
(3,786 |
) |
|
$ |
(13,598 |
) |
|
$ |
(10,642 |
) |
|
|
|
|
|
Loss per common share
from continuing operations, basic and diluted |
$ |
(0.11 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.60 |
) |
|
$ |
(0.94 |
) |
Loss per common share
from discontinued operations, basic and diluted |
|
(0.02 |
) |
|
|
(0.13 |
) |
|
|
(0.07 |
) |
|
|
(0.37 |
) |
|
|
|
|
|
Net loss per common
share, basic and diluted |
$ |
(0.13 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.67 |
) |
|
$ |
(1.31 |
) |
|
|
|
|
|
Weighted-average common
shares outstanding used to calculate basic and diluted
net loss per common share |
|
21,432,482 |
|
|
|
9,670,543 |
|
|
|
20,443,044 |
|
|
|
8,109,187 |
|
|
|
|
|
|
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