Conference Call Scheduled Today at 9:00 a.m.
ET
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Flex Pharma, Inc. (NASDAQ: FLKS), a biotechnology company that
is developing innovative and proprietary treatments for
exercise-associated muscle cramps, nocturnal leg cramps, and spasms
associated with severe neuromuscular conditions, today reported
financial results for the quarter ended March 31, 2015, and
provided an update on its clinical development and corporate
activities.
“We were pleased to present our human proof-of-concept data in
an oral platform presentation at the recent annual meeting of the
American Academy of Neurology (AAN) as we continue to make clinical
progress with the initiation of our studies in nocturnal leg cramps
and potentially other settings,” stated Christoph Westphal, M.D.,
Ph.D., Chairman and Chief Executive Officer of Flex Pharma.
“Additionally, the recent NSF certification of our proprietary
formulation is a step forward for our consumer product that we
expect to begin commercializing in 2016.”
The activation of ion channels forms the basis of Flex Pharma's
scientific approach and members of the scientific advisory board
are leaders in this field. Flex Pharma Co-founder, Rod MacKinnon,
M.D., was awarded the Nobel Prize in 2003 for his work determining
the structure of ion channels and showing the mechanism by which
they select for particular ions (Doyle, et al., The Structure of
the Potassium Channel: Molecular Basis of K+ Conduction and
Selectivity, April 1998, Science).
David Julius, Ph.D., a member of the Flex Pharma Scientific
Advisory Board, Professor and Chair, Department of Physiology,
University of California, San Francisco and member of the National
Academy of Sciences and the Institute of Medicine, first described
the transient receptor potential (TRP) vanilloid-1, or TRPV1,
receptor and illustrated the importance this ion channel played in
diverse physiological functions. (Caterina, et. al., The capsaicin
receptor: a heat-activated ion channel in the pain pathway, October
1997, Nature). Authored by Dr. Julius, Ph.D., the paper entitled
“Structure of the TRPA1 ion channel suggests regulatory mechanisms”
was recently published in Nature on April 8, 2015. Dr. Julius
has authored several papers in Nature related to the
structure and function of the TRPV1 ion channel. (Dec 5,
2013: TRPV1 structures in distinct conformations reveal activation
mechanisms)
Recent Business Highlights
- Advanced scientific and clinical
efforts
- Dr. Bruce Bean, Flex Pharma Scientific
Co-founder and Scientific Advisory Board Co-Chair, presented the
Company’s human proof-of-concept data in an oral platform
presentation at the AAN 67th Annual Meeting held in Washington,
D.C. The abstract, titled “Orally-administered TRPV1 and TRPA1
activators inhibit electrically-induced muscle cramps in normal
healthy volunteers,” was presented on Tuesday, April 21,
2015.
- The Company recently initiated a human
proof-of-concept study in nocturnal leg cramps (NLC) with its
proprietary formulation. Nocturnal leg cramps can cause severe
pain, interrupted sleep, reduced quality of life and interference
with activities of daily living. The randomized, blinded,
placebo-controlled, cross-over study is expected to enroll
approximately 40 subjects who experience NLC at least four nights
per week.
- Consumer Product
- Flex Pharma’s proprietary formulation
earned certification from NSF International's Certified for Sport®
program. NSF's Certified for Sport® program certifies ingredients
and tests products to ensure they do not contain contaminants or
banned or prohibited substances. The MLB, MLB Player's Association,
NFL, NFL Player's Association, PGA, LPGA and the CCES (Canadian
Centre for Ethics in Sport) have all chosen NSF's Certified for
Sport® program.
- Expanded Directors and Advisors
- Jeffrey D. Capello, Chief Financial
Officer of Ortho-Clinical Diagnostics, Inc., joined our Board of
Directors and serves as Chair of the Audit Committee. Prior to his
role at Ortho-Clinical Diagnostics, Mr. Capello served as Chief
Financial Officer and Executive Vice President of Boston Scientific
(NYSE: BSX) from 2010 to 2013.
- John Winkelman, M.D., Ph.D., Chief of
the Sleep Disorders Clinical Research Program at Massachusetts
General Hospital, joined our Scientific Advisory Board. John
Winkelman, M.D., Ph.D. is an Associate Professor of Psychiatry at
Harvard Medical School. Prior to MGH, he served for 17 years as
Medical Director of the Sleep Health Center of Brigham and Women's
Hospital in Boston, Massachusetts. Dr. Winkelman’s clinical work,
teaching, and research focuses on the epidemiology, neurobiology,
and clinical consequences of primary sleep disorders. His clinical
research has included clinical trials in sleep-related movement
disorders, particularly extensive involvement in the development of
approved agents for restless legs syndrome.
- Corporate
- In the first quarter of 2015, the
Company raised $87.9 million in gross proceeds and $79.9 million in
net proceeds from the sale of 5,491,191 shares of common stock in
an initial public offering.
- On April 1, 2015, Flex Pharma, Inc.
(FLKS) was added to the Russell 3000, Russell 2000, and Russell
Microcap Indices as part of Russell Investments' first quarter 2015
IPO additions.
First Quarter 2015 Financial Results
- Cash Position: As of March 31,
2015, Flex Pharma had cash of $110.5 million. Based on its current
cash position, Flex Pharma expects to have sufficient capital to
fund its operations until the middle of 2018.
- R&D Expense: Research and
development expense for the three months ended March 31, 2015 was
$2.8 million. Research and development expense for the first
quarter of 2015 primarily included costs associated with the
Company’s clinical studies and research of its proprietary
treatment, personnel costs (including salaries as well as
stock-based compensation costs), and external consultant costs.
Costs incurred in the three months ended March 31, 2014 were not
significant as the Company was establishing operations during this
time.
- G&A Expense: General and
administrative expense for the three months ended March 31, 2015
was $3.2 million. General and administrative expense for this
period primarily included personnel costs, including salaries and
stock-based compensation, costs related to developing the Company’s
consumer brand and cornerstone product, legal and accounting costs,
and external consultant costs.
- Net Loss: Net loss for the three
months ended March 31, 2015 was ($6.0) million, or ($0.59) per
share. Included in the loss for the quarter was $1.7 million of
stock-based compensation expense. The net loss for the first
quarter of 2015 was primarily driven by the Company’s operating
expenses related to its research and development efforts, costs
associated with the development of the Company’s consumer brand and
cornerstone product, and general and administrative costs.
Upcoming Events and Presentations
- Jefferies Healthcare Conference, June
1-4, 2015 in New York, NY
- Piper Jaffray Consumer Conference, June
9-10, 2015 in New York, NY
- Jefferies Consumer Conference, June
23-24, 2015 in Nantucket, MA
- JMP Securities Healthcare Conference,
June 23-24, 2015 in New York, NY
- Cantor Fitzgerald Healthcare
Conference, July 8, 2015 in New York, NY
Conference Call and Webcast
The company will host a conference call and webcast today at
9:00 a.m. ET to provide an update on the company and discuss first
quarter 2015 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 exercise-associated
muscle cramps, nocturnal leg cramps, and spasms associated with
severe neuromuscular conditions. In three randomized, blinded,
placebo-controlled, cross-over studies, Flex Pharma's proprietary
treatment has shown a statistically significant reduction in the
intensity of muscle cramps in healthy normal volunteers.
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 Chairman and Chief Executive Officer Christoph Westphal,
M.D., Ph.D.
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 to develop and commercialize our consumer
products. 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, our ability to develop and commercialize our
consumer products; anticipated positioning and product attributes
of our consumer products; 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 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, 2014 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.
- Financial Tables to Follow -
Flex Pharma,
Inc.Unaudited Selected Consolidated Balance Sheet
Information(in thousands)
March 31,
2015
December 31,2014
Cash $ 110,522 $ 33,854 Prepaid expenses and other current assets
1,055 370 Property and equipment, net 105 85 Other assets 262 1,302
Total assets $ 111,944 $ 35,611 Accounts payable and accrued
expenses $ 1,346 $ 995 Other liabilities 517 123 Convertible
preferred stock - 41,031 Stockholders’ equity (deficit) 110,081
(6,538) Total liabilities and stockholders’ equity (deficit) $
111,944 $ 35,611
Unaudited Condensed Consolidated
Statements of Operations(in thousands, except per share
amounts) Three Months Ended
March 31, 2015
Three Months Ended
March 31, 2014
Operating expenses: Research and development $ 2,805 $ 30 General
and administrative 3,216 63 Total operating expenses 6,021 93
Loss from operations (6,021) (93) Interest income 3 - Net
loss $ (6,018) $ (93) Net loss per share–basic and diluted $
(0.59) $ (0.07) Weighted-average number of common shares
outstanding (1) 10,180 1,370
(1) As of March 31, 2015, the Company had issued approximately
5.4 million shares of restricted stock that are subject to vesting.
Of these shares, approximately 2.5 million shares had vested as of
March 31, 2015 and are outstanding for purposes of computing
weighted average shares outstanding. The remaining shares will be
included in the weighted average shares outstanding calculation as
such shares vest. Approximately 5.5 million shares issued by the
Company in its IPO are considered outstanding for the weighted
average shares calculation at the date of issuance and
approximately 7.0 million shares of common stock issued upon
conversion of all outstanding shares of preferred stock are
included in weighted average shares outstanding from the date of
the closing of the IPO.
Flex Pharma, Inc.Elizabeth Woo, 617-874-1829SVP, Investor
Relations & Corporate Communicationsirdept@flex-pharma.com
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