Sio Gene Therapies Inc. (NASDAQ: SIOX) today provided financial
results for its fiscal third quarter ended December 31, 2022.
“Our financial results continue to show the beneficial effects
on operating expenses and cash burn resulting from the termination
of the licenses to our three clinical-stage programs, the
significant workforce reduction initiated last year April and
successful negotiations with vendors and landlords. We are now
focused on taking the steps necessary to put the Company and its
three subsidiaries into the liquidation and dissolution process,
including a stockholder vote expected to be held in April,” said
David Nassif, J.D., Chief Executive Officer of Sio Gene
Therapies.
Fiscal Third Quarter Financial Summary
Research and development expenses were $1.9 million for the
three months ended December 31, 2022 and $21.3 million for the
three months ended December 31, 2021. The $19.4 million decrease
was primarily related to decreases in:
(i) program-specific costs relating
to our prior AXO-Lenti-PD and AXO-AAV-GM1 and AXO-AAV-GM2 programs,
which decreased $15.5 million as we wound down our clinical-stage
programs subsequent to our termination of the Oxford Biomedica and
UMass agreements; and
(ii) unallocated internal costs,
which decreased $3.9 million primarily due to reductions in
personnel-related costs after announcing the discontinuation of our
clinical-stage programs and initiating a significant reduction in
workforce in April 2022.
General and administrative expenses were $2.6 million for the
three months ended December 31, 2022 and $4.1 million for the three
months ended December 31, 2021. The decrease of $1.5 million was
primarily due to decreases of $1.0 million in stock-based
compensation expense, $0.4 million of which results from prior year
expense associated with Roivant Sciences Ltd. ("RSL") equity
instruments held by our former Chief Executive Officer, and $0.6
million in personnel-related expenses related to the workforce
reduction that commenced in April 2022.
The net loss for the fiscal third quarter ended December 31,
2022 was $4.0 million, or $0.05 per share, compared to a net loss
of $25.5 million, or $0.35 per share, in the fiscal third quarter
ended December 31, 2021.
As of December 31, 2022, we had $46.13 million of cash and cash
equivalents. We hold no short-term or long-term debt on the balance
sheet.
Fiscal Nine Months Financial Summary
Research and development expenses were $7.8 million for the nine
months ended December 31, 2022 and $40.8 million for the nine
months ended December 31, 2021. The $33.0 million decrease was
primarily related to decreases in:
(i) program-specific costs relating to our prior AXO-Lenti-PD
and AXO-AAV-GM1 and AXO-AAV-GM2 programs, which decreased $24.6
million as we wound down our clinical-stage programs subsequent to
our termination of the Oxford Agreement and the UMMS Agreement;
and
(ii) unallocated internal costs, which decreased
$8.4 million primarily due to reductions in personnel-related
costs after announcing the discontinuation of our clinical-stage
programs and initiating a significant reduction in workforce in
April 2022. Personnel-related costs incurred during the nine months
ended December 31, 2022 included $0.7 million of severance
expense. Other costs incurred during the nine months ended December
31, 2022 included $0.7 million related to the early
termination of the laboratory space lease in Durham, North Carolina
and $0.6 million of losses on sales of equipment and furniture
related to the termination of that lease. Further, stock-based
compensation expense incurred during the nine months ended December
31, 2022 benefited from the reversal of $0.4 million from prior
periods resulting from the workforce reduction.
General and administrative expenses were $8.5 million for the
nine months ended December 31, 2022 and $17.7 million for the nine
months ended December 31, 2021. The decrease of $9.2 million was
primarily due to a decrease of $8.3 million in stock-based
compensation expense, $6.3 million of which results from prior
year expense associated with RSL equity instruments held by our
former Chief Executive Officer, and a decrease of $1.7 million in
personnel-related expenses.
The net loss for the nine months ended December 31, 2022 was
$15.5 million, or $0.21 per share, compared to a net loss of $58.6
million, or $0.80 per share, for the nine months ended December 31,
2021.
Forward-Looking Statements
This press release contains forward-looking statements for the
purposes of the safe harbor provisions under The Private Securities
Litigation Reform Act of 1995 and other federal securities laws.
The use of words such as "expect," "estimate," "may" and other
similar expressions are intended to identify forward-looking
statements. For example, all statements Sio makes regarding the
proposed dissolution and its timing, including for holding a
special stockholder meeting to approve the dissolution, cash
position to support the dissolution, costs associated with its
operating activities, potential cost savings and other benefits
from cost reduction activities, and funding requirements and/or
cash burn runway are forward-looking. All forward-looking
statements are based on estimates and assumptions by Sio’s
management that, although Sio believes to be reasonable, are
inherently uncertain. All forward-looking statements are subject to
risks and uncertainties that may cause actual results to differ
materially from those that Sio expected. Such risks and
uncertainties include, among others, the availability, timing and
amount of liquidating distributions; the amounts that will need to
be set aside by Sio; the adequacy of such reserves to satisfy Sio’s
obligations; potential unknown contingencies or liabilities,
including tax claims, and Sio’s ability to favorably resolve them
or at all; the amount of proceeds that might be realized from the
sale or other disposition of any remaining assets; the application
of, and any changes in, applicable tax laws, regulations,
administrative practices, principles and interpretations; the
incurrence by Sio of expenses relating to the dissolution; the
ability of the board of directors to abandon, modify or delay
implementation of the dissolution, even after stockholder approval;
the uncertain macroeconomic environment; continuing impact of the
COVID-19 pandemic on Sio’s operations; the actual funds required
for planned operating activities; costs, risks and timing related
to headcount reductions and capital conservation plans; and the
outcome of interactions with regulatory agencies. These statements
are also subject to a number of material risks and uncertainties
that are described in Sio’s most recent Quarterly Report on Form
10-Q filed with the Securities and Exchange Commission on February
14, 2023, as updated by its subsequent filings with the Securities
and Exchange Commission. Any forward-looking statement speaks only
as of the date on which it was made. Sio undertakes no obligation
to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise, except
as required by law.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND
IT
In connection with the proposed dissolution, the Company has
filed with the SEC a preliminary proxy statement and other relevant
materials and will file a definitive proxy statement. BEFORE MAKING
ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ THE DEFINITIVE PROXY STATEMENT, ANY AMENDMENTS OR SUPPLEMENTS
THERETO, ANY OTHER SOLICITING MATERIALS AND ANY OTHER DOCUMENTS TO
BE FILED WITH THE SEC IN CONNECTION WITH THE PLAN OF DISSOLUTION
AND RELATED MATTERS OR INCORPORATED BY REFERENCE IN THE PROXY
STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION ABOUT SIO GENE THERAPIES, INC., THE PROPOSED
DISSOLUTION AND RELATED MATTERS. Stockholders may obtain a free
copy of the proxy statement and the other relevant materials (when
they become available), and any other documents filed by the
Company with the SEC, at the SEC's website at http://www.sec.gov or
on the "Investors" section of Sio’s website at www.siogtx.com.
Participants in the Solicitation
Sio and its executive officer and directors may be deemed to be
participants in the solicitation of proxies from its stockholders
with respect to the proposed dissolution and related matters and
any other matters to be voted on at the special meeting of
stockholders. Information regarding the names, affiliations and
interests of such directors and executive officer will be included
in the proxy statement (when available). Additional information
regarding such directors and executive officer is included in Sio’s
Annual Report on Form 10-K for the fiscal year ended March 31,
2022, which was filed with the SEC on June 14, 2022.
Information regarding the persons who may, under SEC rules, be
deemed participants in the solicitation of proxies of Sio’s
shareholders in connection with the dissolution and related matters
and any other matters to be voted upon at the special meeting will
be set forth in the proxy statement (when available). These
documents are available free of charge as described in the
preceding section.
Contacts:
Media, Investors and Analysts
David W. NassifSio Gene Therapies Inc.Chief Executive Officer,
Chief Financial Officer and General
Counseldavid.nassif@siogtx.com
SIO GENE THERAPIES
INC.Condensed Consolidated Statements of
Operations(Unaudited, in thousands, except share and per
share amounts)
|
|
Three Months Ended December 31, |
|
Nine Months Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development
expenses |
|
|
|
|
|
|
|
|
(includes stock-based compensation expense (benefit) of $0 and $130
for the three months ended December 31, 2022 and 2021 and $(409)
and $1,051 for the nine months ended December 31, 2022 and 2021,
respectively) |
|
$ |
1,883 |
|
|
$ |
21,287 |
|
|
$ |
7,761 |
|
|
$ |
40,793 |
|
General and administrative
expenses |
|
|
|
|
|
|
|
|
(includes stock-based compensation expense of $227 and $1,268 for
the three months ended December 31, 2022 and 2021 and $692 and
$8,966 for the nine months ended December 31, 2022 and 2021,
respectively) |
|
|
2,600 |
|
|
|
4,086 |
|
|
|
8,533 |
|
|
|
17,693 |
|
Total operating expenses |
|
|
4,483 |
|
|
|
25,373 |
|
|
|
16,294 |
|
|
|
58,486 |
|
Other (income) expenses: |
|
|
|
|
|
|
|
|
Other (income) expense, net |
|
|
(464 |
) |
|
|
83 |
|
|
|
(785 |
) |
|
|
105 |
|
Loss before income tax
benefit |
|
|
(4,019 |
) |
|
|
(25,456 |
) |
|
|
(15,509 |
) |
|
|
(58,591 |
) |
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
(4 |
) |
|
|
(28 |
) |
Net loss |
|
$ |
(4,019 |
) |
|
$ |
(25,456 |
) |
|
$ |
(15,505 |
) |
|
$ |
(58,563 |
) |
Net loss per share of common
stock — basic and diluted |
|
$ |
(0.05 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.80 |
) |
Weighted-average shares of
common stock outstanding — basic and diluted |
|
|
73,975,196 |
|
|
|
73,335,279 |
|
|
|
73,905,737 |
|
|
|
73,046,889 |
|
SIO GENE THERAPIES
INC.Condensed Consolidated Balance
Sheets(Unaudited, in thousands, except share and per share
amounts)
|
|
December 31, 2022 |
|
March 31, 2022 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
46,127 |
|
|
$ |
63,729 |
|
Restricted cash |
|
|
— |
|
|
|
1,184 |
|
Prepaid expenses and other current assets |
|
|
789 |
|
|
|
5,214 |
|
Income tax receivable |
|
|
356 |
|
|
|
1,609 |
|
Total current assets |
|
|
47,272 |
|
|
|
71,736 |
|
Operating lease right-of-use
assets |
|
|
— |
|
|
|
2,444 |
|
Property and equipment,
net |
|
|
— |
|
|
|
900 |
|
Total assets |
|
$ |
47,272 |
|
|
$ |
75,080 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
201 |
|
|
$ |
3,984 |
|
Accrued expenses |
|
|
1,951 |
|
|
|
8,232 |
|
Current portion of operating lease liabilities |
|
|
— |
|
|
|
786 |
|
Total current liabilities |
|
|
2,152 |
|
|
|
13,002 |
|
Operating lease liabilities,
net of current portion |
|
|
— |
|
|
|
1,730 |
|
Total liabilities |
|
|
2,152 |
|
|
|
14,732 |
|
Stockholders’ equity: |
|
|
|
|
Common stock, par value $0.00001 per share, 1,000,000,000 shares
authorized, 73,975,196 and 73,739,378 issued and outstanding at
December 31, 2022 and March 31, 2022, respectively |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
923,249 |
|
|
|
922,966 |
|
Accumulated deficit |
|
|
(878,461 |
) |
|
|
(862,956 |
) |
Accumulated other comprehensive income |
|
|
331 |
|
|
|
337 |
|
Total stockholders’ equity |
|
|
45,120 |
|
|
|
60,348 |
|
Total liabilities and
stockholders’ equity |
|
$ |
47,272 |
|
|
$ |
75,080 |
|
SIO GENE THERAPIES
INC.Condensed Consolidated Statements of Cash
Flows(Unaudited, in thousands)
|
|
Nine Months Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Cash flows from
operating activities: |
|
|
|
|
Net loss |
|
$ |
(15,505 |
) |
|
$ |
(58,563 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
Non-cash lease expenses |
|
|
2,444 |
|
|
|
229 |
|
Stock-based compensation expense |
|
|
283 |
|
|
|
10,017 |
|
Depreciation and non-cash amortization |
|
|
137 |
|
|
|
187 |
|
Change in operating lease liabilities |
|
|
(2,516 |
) |
|
|
(265 |
) |
Other |
|
|
857 |
|
|
|
7 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
Prepaid expenses and other current assets |
|
|
4,425 |
|
|
|
2,104 |
|
Income tax receivable |
|
|
1,253 |
|
|
|
(76 |
) |
Accounts payable |
|
|
(3,783 |
) |
|
|
5,270 |
|
Accrued expenses |
|
|
(6,281 |
) |
|
|
(1,434 |
) |
Net cash used in operating activities |
|
|
(18,686 |
) |
|
|
(42,524 |
) |
Cash flows from
investing activities: |
|
|
|
|
Cash proceeds from sale of long-term investment |
|
|
— |
|
|
|
4,343 |
|
Cash proceeds from sale of property and equipment |
|
|
190 |
|
|
|
— |
|
Purchases of property and equipment |
|
|
(290 |
) |
|
|
(336 |
) |
Net cash (used in) provided by investing activities |
|
|
(100 |
) |
|
|
4,007 |
|
Cash flows from
financing activities: |
|
|
|
|
Cash proceeds from issuance of shares of common stock, net of
issuance costs |
|
|
— |
|
|
|
1,441 |
|
Net cash provided by financing activities |
|
|
— |
|
|
|
1,441 |
|
Net change in cash and
cash equivalents, restricted cash and long-term restricted
cash |
|
|
(18,786 |
) |
|
|
(37,076 |
) |
Total cash and cash
equivalents, restricted cash and long-term restricted
cash—beginning of period |
|
|
64,913 |
|
|
|
120,170 |
|
Total cash and cash
equivalents, restricted cash and long-term restricted cash—end of
period |
|
$ |
46,127 |
|
|
$ |
83,094 |
|
Cash and cash equivalents
—beginning of period |
|
|
63,729 |
|
|
|
118,986 |
|
Restricted cash included in
current assets—beginning of period |
|
|
1,184 |
|
|
|
— |
|
Restricted cash included in
long-term assets—beginning of period |
|
|
— |
|
|
|
1,184 |
|
Total cash and cash
equivalents, restricted cash and long-term restricted
cash—beginning of period |
|
$ |
64,913 |
|
|
$ |
120,170 |
|
Cash and cash equivalents—end
of period |
|
|
46,127 |
|
|
|
81,910 |
|
Restricted cash included in
current assets—end of period |
|
|
— |
|
|
|
1,184 |
|
Total cash and cash
equivalents and restricted cash—end of period |
|
$ |
46,127 |
|
|
$ |
83,094 |
|
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