- Company continues to operationalize the
MOMENTUM Phase 3 clinical trial in myelofibrosis -
- Impact of COVID-19 uncertain but may potentially affect overall
MOMENTUM timelines -
- Publications highlighting durability, safety, and efficacy data
for momelotinib planned throughout 2020 -
VANCOUVER, May 7, 2020 /PRNewswire/ - Sierra Oncology,
Inc. (SRRA), a late-stage drug development company focused on the
registration and commercialization of momelotinib, a JAK1, JAK2
& ACVR1 inhibitor with a potentially differentiated therapeutic
profile for the treatment of myelofibrosis, today reported its
financial and operational results for the first quarter ended
March 31, 2020.
"We commenced Q1 2020 building off the launch in late 2019 of
the MOMENTUM Phase 3 trial of momelotinib, which is intended to
confirm the array of clinical benefits previously described for the
drug candidate. Despite the challenges of COVID-19, which have
impacted clinical study conduct for nearly all companies in our
sector, we have nonetheless continued to make some progress
operationalizing MOMENTUM at both the country and site level on a
global basis through this crisis to date," said Dr. Nick Glover, President and CEO of Sierra
Oncology. "Similar to other biotech and pharmaceutical companies,
COVID-19 has had and will likely continue to have an effect on our
clinical trial plans. We have experienced and may continue to
experience some delays in planned site initiations, activations and
overall enrollment, which effects will be difficult to predict
until we have more visibility on the duration and impact of the
crisis and the continuing institution of public health orders
around the world."
"MOMENTUM is designed for myelofibrosis patients with pressing
unmet medical needs and no approved therapeutic options. These
patients are arguably best treated in a clinical trial. As such,
MOMENTUM remains an important study for patients and their
clinicians to potentially consider, even in the context of the
COVID-19 pandemic, a view shared by many of our clinical
investigators," said Dr. Barbara
Klencke, Chief Development Officer, Sierra Oncology. "As an inhibitor of JAK1, JAK2
and ACVR1, momelotinib has been shown to substantially reduce
transfusion burden and increase transfusion independence in
patients with myelofibrosis, an important consideration at this
time when the need for transfusions could place added burden on
patients, caregivers, the healthcare system, and the blood supply,
which further reinforces the potential benefits of enrolling in the
MOMENTUM study. Publications further highlighting durability,
safety and efficacy data for momelotinib remain planned throughout
2020 to further strengthen awareness of these potential
benefits."
First Quarter 2020 Financial Results (all amounts reported in
U.S. currency)
Research and development expenses were $11.6 million for the first quarter of 2020,
compared to $10.1 million for the
first quarter of 2019. The increase was primarily due to
costs related to momelotinib, including a $3.7 million increase in clinical trial and
development costs, a non-cash charge of $1.5 million pertaining to the change in
fair value of an obligation to issue common stock and a warrant to
Gilead Sciences, Inc. (Gilead), which were issued on January 31, 2020, and a $0.3 million increase in third-party
manufacturing costs. These increases were partially offset by a
decrease in SRA737 costs, including $3.1
million in clinical trial, third-party manufacturing and
research and preclinical costs, and a $0.9 million decrease in personnel-related
and allocated overhead costs. Research and development expenses
included non-cash stock-based compensation of $0.5 million and $1.2
million for the three months ended March 31, 2020 and 2019, respectively.
General and administrative expenses were $4.5 million for the three months ended
March 31, 2020 compared to
$3.4 million for the three months
ended March 31, 2019. The increase
was due to a $0.8 million increase in
professional fees, primarily related to pre-commercial planning
costs for momelotinib, and a $0.4
million charge related to severance costs. General and
administrative expenses included non-cash stock-based compensation
of $0.4 million and $0.5 million for the three months ended
March 31, 2020 and 2019,
respectively.
Other income (expense), net was $15.7
million of other expense, net for the first quarter of 2020,
compared to $0.3 million of other
income, net for the first quarter of 2019. The difference was
primarily attributable to a non-cash charge of $16.2 million related to the change in fair value
of warrant liabilities which were reclassified to equity in
January 2020.
For the quarter ended March 31,
2020, Sierra incurred a GAAP net loss of $31.9 million compared to a GAAP net loss of
$13.0 million for the quarter ended
March 31, 2019. The GAAP net loss for
the quarter ended March 31, 2020
includes a non-cash charge of $16.2
million related to the change in fair value of warrant
liabilities included in other income (expense), net and a
$1.5 million non-cash charge
pertaining to the obligation to issue securities to Gilead included
in research and development expenses as mentioned above.
Non-GAAP adjusted net loss was $13.3
million for the quarter ended March
31, 2020, compared to a non-GAAP adjusted net loss of
$11.3 million for the quarter ended
March 31, 2019. Non-GAAP adjusted net
loss excludes expenses related to the change in fair value of
warrant liabilities, the change in fair value of the securities
issuance obligation, and stock-based compensation. See "Non-GAAP
Financial Measures" and "Reconciliation of GAAP to Non-GAAP
Financial Measures" below for a reconciliation of this GAAP and
non-GAAP financial measure.
Cash and cash equivalents totaled $133.5
million as of March 31, 2020,
compared to $147.5 million as of
December 31, 2019.
Sierra anticipates its current resources will be sufficient to
execute on its development strategy for momelotinib into the second
half of 2022, subject to the potential impact of COVID-19. In
addition, the Series B warrants issued in the underwritten public
offering in November 2019 may only be
exercised by paying the exercise price in cash and will expire on
the 75th day anniversary following the announcement of top-line
data from the MOMENTUM Phase 3 trial. If these Series B warrants
are fully exercised, the company will receive approximately
$34.0 million in proceeds.
In January 2020, all of the Series
A convertible voting preferred stock converted into shares of
common stock and Sierra fulfilled the securities issuance
obligation to Gilead, issuing 725,283 shares of common stock and a
warrant to purchase an equivalent amount of common stock. As of
March 31, 2020, there were 10,395,732
total shares of common stock outstanding and warrants to purchase
11,102,251 shares of common stock, with an exercise price equal
to $13.20 per share. There were 1,738,827 shares issuable
upon exercise of stock options and an additional warrant to
purchase 1,839 shares.
About Sierra Oncology
Sierra Oncology is a late stage drug development company focused
on achieving the successful registration and commercialization of
momelotinib, a potent, selective and orally-bioavailable JAK1, JAK2
& ACVR1 inhibitor with a targeted mechanism of action that
enables it to address all three key drivers of myelofibrosis.
Momelotinib's differentiated therapeutic profile encompasses robust
constitutional symptom improvements, a range of meaningful anemia
benefits, including eliminating or reducing the need for frequent
blood transfusions, and comparable spleen control to ruxolitinib.
More than 1,200 subjects have received momelotinib since clinical
studies began in 2009, including more than 820 patients treated for
myelofibrosis.
Sierra has launched MOMENTUM, a randomized double-blind Phase 3
clinical trial designed to enroll 180 myelofibrosis patients who
are symptomatic and anemic, and who have been treated previously
with a JAK inhibitor. The U.S. Food and Drug Administration has
granted Fast Track designation to momelotinib. Momelotinib is
protected by patents anticipated to provide potential exclusivity
to 2040 in the United States and
Europe (inclusive of potential
Patent Term Extension or Supplementary Protection Certificate).
For more information, please
visit www.sierraoncology.com.
Cautionary Note on Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, including, but not
limited to, statements regarding Sierra Oncology's expectations
from current data, anticipated clinical development activities,
impact of the COVID-19 pandemic on clinical trial plans, including
enrollment and site initiations, expected timing of publications
with respect to momelotinib, expected timing and success of
enrollment of MOMENTUM, and potential benefits of momelotinib, and
Sierra Oncology's capitalization and sufficiency of its capital
resources. All statements other than statements of historical fact
are statements that could be deemed forward-looking statements.
These statements are based on management's current expectations and
beliefs and are subject to a number of risks, uncertainties and
assumptions that could cause actual results to differ materially
from those described in the forward-looking statements. Such
forward-looking statements are subject to risks and uncertainties,
including, among others, the risk that Sierra Oncology's cash
resources may be insufficient to fund its current operating plans
and it may be unable to raise additional capital when needed, the
risk that disruptions and impacts of COVID-19 will be significant
and lengthy, Sierra Oncology may be unable to successfully develop
and commercialize momelotinib, momelotinib may not demonstrate
safety and efficacy or otherwise produce positive results, Sierra
Oncology may experience delays in the clinical development of
momelotinib, Sierra Oncology may be unable to acquire additional
assets to build a pipeline of additional product candidates, Sierra
Oncology's third-party manufacturers may cause its supply of
materials to become limited or interrupted or fail to be of
satisfactory quantity or quality, Sierra Oncology may be unable to
obtain and enforce intellectual property protection for its
technologies and momelotinib and the other factors described under
the heading "Risk Factors" set forth in Sierra Oncology's filings
with the Securities and Exchange Commission from time to time.
Sierra Oncology undertakes no obligation to update the
forward-looking statements contained herein or to reflect events or
circumstances occurring after the date hereof, other than as may be
required by applicable law.
SIERRA ONCOLOGY, INC.
Condensed
Consolidated Balance Sheets
(unaudited)
(in thousands)
|
March 31,
2020
|
|
December 31,
2019
|
|
|
|
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
|
133,534
|
|
$
|
147,528
|
Prepaid expenses and
other current assets
|
1,936
|
|
2,369
|
Total current
assets
|
135,470
|
|
149,897
|
Property and
equipment, net
|
112
|
|
113
|
Operating lease
right-of-use asset
|
547
|
|
589
|
Other
assets
|
662
|
|
729
|
TOTAL
ASSETS
|
$
|
136,791
|
|
$
|
151,328
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Accrued and other
liabilities
|
$
|
5,640
|
|
$
|
7,170
|
Accounts
payable
|
1,357
|
|
1,019
|
Warrant
liabilities
|
-
|
|
45,935
|
Securities issuance
obligation
|
-
|
|
10,485
|
Total current
liabilities
|
6,997
|
|
64,609
|
Operating lease
liability
|
298
|
|
374
|
TOTAL
LIABILITIES
|
7,295
|
|
64,983
|
STOCKHOLDERS'
EQUITY:
|
|
|
|
|
|
|
|
Preferred
stock
|
-
|
|
1
|
Common
stock
|
10
|
|
74
|
Additional paid-in
capital
|
927,085
|
|
851,957
|
Accumulated
deficit
|
(797,599)
|
|
(765,687 )
|
TOTAL STOCKHOLDERS'
EQUITY
|
129,496
|
|
86,345
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
|
136,791
|
|
$
|
151,328
|
SIERRA ONCOLOGY, INC.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share data)
|
Three Months
Ended
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
Operating
expenses:
|
|
|
|
Research and
development
|
$
|
11,591
|
|
$
|
10,137
|
General and
administrative
|
4,544
|
|
3,365
|
Total operating
expenses
|
16,135
|
|
13,502
|
Loss from
operations
|
(16,135)
|
|
(13,502)
|
Other income
(expense), net
|
|
|
|
Changes in fair value of warrant liabilities
|
(16,240)
|
|
-
|
Other income, net
|
541
|
|
325
|
Total other income (expense), net
|
(15,699)
|
|
325
|
Loss before provision
for (benefit from) income taxes, net
|
(31,834)
|
|
(13,177)
|
Provision for
(benefit from) income taxes, net
|
78
|
|
(145)
|
Net loss
|
$
|
(31,912)
|
|
$
|
(13,032)
|
Net loss per common
share, basic and diluted
|
$
|
(3.14)
|
|
$
|
(7.00)
|
Weighted-average
shares used in computing net loss per common
|
|
|
|
share, basic and
diluted
|
10,156,628
|
|
1,862,132
|
Non-GAAP Financial Measures
In addition to operating results as calculated in accordance
with GAAP, Sierra Oncology uses certain non-GAAP financial measures
when evaluating operational performance. The following table
presents the company's net loss and net loss per common share
calculated in accordance with GAAP and as adjusted to remove the
impact of certain non-cash charges. Sierra Oncology's management
believes that these non-GAAP financial measures are useful to
enhance understanding of the company's financial performance, and
are more indicative of its operational performance and facilitate a
better comparison among fiscal periods.
These non-GAAP financial measures are not, and should not be
viewed as, substitutes for GAAP reporting measures. These non-GAAP
financial measures are not based on any comprehensive set of
accounting rules or principles, differ from GAAP measures with the
same names, and may differ from non-GAAP financial measures with
the same or similar names that are used by other companies. Sierra
Oncology believes that non-GAAP financial measures should only be
used to evaluate its results of operations in conjunction with the
corresponding GAAP financial measures. Sierra Oncology encourages
investors to carefully consider its results under GAAP, as well as
the reconciliations between these presentations, to more fully
understand our business.
Non-GAAP adjusted net loss and non-GAAP adjusted net loss per
share exclude changes in fair value for warrant liabilities,
changes in fair value for a securities issuance obligation and
stock-based compensation. Sierra Oncology excludes changes in fair
value of warrant liabilities because it is a non-cash expense and
has no direct correlation to the operation of its business. Sierra
Oncology excludes a non-cash charge pertaining to the changes in
fair value of an obligation to issue common stock and a warrant to
Gilead because it is a non-cash expense. Sierra Oncology excludes
non-cash stock-based compensation expense from its non-GAAP
financial measures because it believes that excluding this item
provides meaningful supplemental information regarding operational
performance. In particular, companies calculate stock-based
compensation expense using a variety of valuation methodologies and
subjective assumptions.
SIERRA ONCOLOGY, INC.
Reconciliation of GAAP to Non-GAAP Financial
Measures
(unaudited)
(in thousands,
except share and per share data)
A reconciliation between GAAP net loss to non-GAAP adjusted net
loss and GAAP net loss per common share to non-GAAP adjusted net
loss per common share:
|
Three Months
Ended
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
GAAP net
loss
|
$
|
(31,912)
|
|
$
|
(13,032)
|
Adjustments:
|
|
|
|
Changes in fair value
of warrant liabilities (1)
|
16,240
|
|
-
|
Changes in fair value
to securities issuance obligation (2)
|
1,485
|
|
-
|
Stock-based
compensation (3)
|
918
|
|
1,699
|
Non-GAAP adjusted net
loss
|
$
|
(13,269)
|
|
$
|
(11,333)
|
GAAP net loss per
common share, basic and diluted
|
$
|
(3.14)
|
|
$
|
(7.00)
|
Adjustment to net
loss per common share
|
1.83
|
|
0.91
|
Non-GAAP adjusted net
loss per common share, basic and diluted
|
$
|
(1.31)
|
|
$
|
(6.09)
|
Weighted-average
shares used in computing net loss per common
|
|
|
|
share, basic and
diluted
|
10,156,628
|
1,862,132
|
|
|
|
|
(1)
|
To reflect a non-cash
charge to other income (expense), net for the changes in fair value
of warrant liabilities.
|
(2)
|
To reflect a non-cash
charge to research and development expense for the changes in fair
value pertaining to the obligation to issue common stock and a
warrant to Gilead.
|
(3)
|
To reflect a non-cash
stock-based compensation charge to research and development expense
and general and administrative expense.
|
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SOURCE Sierra Oncology