Sol-Gel Technologies, Ltd. (NASDAQ: SLGL), a clinical-stage
dermatology company focused on identifying, developing and
commercializing branded and generic topical drug products for the
treatment of skin diseases, today announced financial results for
the first quarter ended March 31, 2020 and provided an update on
its clinical development programs.
“In the first quarter of 2020, we strengthened
our balance sheet through a $23 million underwritten public
offering in February and a subsequent $5 million private placement
that closed just after the end of the first quarter. This capital
from new and existing shareholders, including our controlling
shareholder, M. Arkin Dermatology Ltd., extends our cash runway to
mid-2021, and funds our pre-commercialization efforts for Epsolay
and Twyneo,” commented Dr. Alon Seri-Levy, Chief Executive Officer
of Sol-Gel. “We remain on track to file our New Drug Application
(NDA) for Epsolay with the FDA in the second quarter of this year
and our NDA for Twyneo in the second half this year, both exciting
milestones for the company.”
“I also want to acknowledge the efforts of our
employees and the whole healthcare system in working to keep our
community safe during the ongoing COVID-19 pandemic,” continued Dr.
Seri-Levy. “At Sol-Gel, we have been fortunate to have seen only
minimal impact to our operations to date, largely due to the
advanced clinical status of our two lead programs, Epsolay and
Twyneo.”
Corporate Highlights and Recent
Developments
- Strengthened balance sheet with
$28.0 million in gross proceeds from the February underwritten
public offering of $23.0 million and from the $5.0 million that
Sol-Gel’s controlling shareholder, M. Arkin Dermatology Ltd.,
invested in April. Despite market conditions, the April purchase of
ordinary shares and warrants was at the same terms as the February
underwritten public offering, $11.00 per ordinary share and an
accompanying warrant to purchase 0.80 of an ordinary share. The
warrants have an initial exercise price of $14.00 per share,
subject to certain adjustments, and will expire on February 19,
2023.
- In the first quarter of 2020,
Sol-Gel generated revenue of $3.4 million from its collaboration
agreement with Perrigo.
- In response to COVID-19, Sol-Gel
immediately implemented policies and procedures to protect the
health, safety and welfare of employees and their families and to
help mitigate the spread of the coronavirus including mandatory
work-from-home and frequent on-site sterilization.
Clinical Program Updates
- Sol-Gel expects to file an NDA for
Epsolay (encapsulated benzoyl peroxide, 5%, cream) in the second
quarter of 2020. If approved, Epsolay has the potential to be the
first FDA-approved single-agent BPO prescription drug product and
to redefine the standard of care for the treatment of inflammatory
lesions associated with rosacea.
- Sol-Gel expects to file an NDA for
Twyneo (encapsulated benzoyl peroxide, 3%, and encapsulated
tretinoin, 0.1%, cream) in the second half of 2020. If approved,
Twyneo has the potential to become a preferred treatment for
acne.
- In January, Sol-Gel announced
positive topline results from an open-label long-term safety study
of Epsolay. Of the 209 patients (57.6%) that completed 52
weeks of treatment with Epsolay, 153 (73.2%) reached “clear” or
“almost clear”, 46 (22%) reached “mild” rosacea, only 10 (4.8%) had
“moderate” rosacea, and none had “severe” rosacea on a Global
Assessment (IGA) 5-point scale. Additionally, at the end of the
study, more than 90% of these patients had “none” or “mild”
cutaneous signs or symptoms (burning or stinging, itching, dryness
and scaling) and no “severe” scores were recorded.
- A proof of concept clinical study
of SGT-210, erlotinib gel, a topical epidermal growth factor
receptor inhibitor, for the potential treatment of punctuate
palmoplantar keratoderma type 1 initiated in January 2020. This
clinical study was recently expanded to include other types of
palmoplantar keratoderma. Patient enrollment is expected to be
renewed subject to Israel Ministry of Health guidelines for
COVID-19. Data is expected in 2021.
- In early 2020, Sol-Gel added to its
pre-clinical pipeline tapinarof, an aryl hydrocarbon receptor
agonist, and roflumilast, a PDE4 inhibitor, each to be developed
for potential treatment of psoriasis, as mono or combination
therapies and other dermatological indications. Sol-Gel continues
to work to advance these assets into the clinic.
Financial Results for the Three Months
ended March 31, 2020
Revenue in the first quarter 2020 was $3.5
million. The revenue was mainly due to sales of a generic product
from the collaboration arrangement with Perrigo. The decrease in
revenue from the previous quarter follows from continued generic
competition.
Research and development expenses were $7.9
million in the first quarter of 2020 compared to $10.8 million
during the same period in 2019. The decrease of $2.9 million was
mainly attributed to a decrease of $2.6 million in clinical trial
expenses, mainly related to clinical trials of Epsolay and a
decrease of $0.5 million in manufacturing expenses of Epsolay and
Twyneo, partially offset by an increase of $0.2 million in
regulatory expenses, mainly related to preparing for the NDA
submissions for Epsolay and Twyneo.
General and administrative expenses were $2.8
million in the first quarter of 2020 compared to $1.7 million
during the same period in 2019. The increase of $1.1 million was
mainly attributed to an increase of $1.0 million in
commercialization expenses and an increase of $0.1 million in other
expenses.
Sol-Gel reported a loss of $7.1 million for the
first quarter of 2020 compared to loss of $5.7 million for the same
period in 2019.
As of March 31, 2020, Sol-Gel had $20.4 million
in cash, cash equivalents and deposits and $45.8 million in
marketable securities for a total balance of $66.2 million,
excluding the additional $5.0 million investment by Sol-Gel’s
controlling shareholder which closed in April. Based on current
assumptions, Sol-Gel expects its existing cash resources will
enable funding of operational and capital expenditure requirements
into mid-2021. As previously disclosed, Sol-Gel does not plan to
raise additional dilutive capital to fund pre-commercialization
activities for Epsolay and Twyneo.
About Sol-Gel Technologies
Sol-Gel is a clinical-stage dermatology
company focused on identifying, developing and commercializing
branded and generic topical drug products for the treatment of skin
diseases. Sol-Gel leverages its proprietary
microencapsulation technology platform for Twyneo, for the
treatment of acne vulgaris, and Epsolay, for the treatment of
papulopustular rosacea. The Company’s pipeline also includes
SGT-210, an early-stage topical epidermal growth factor receptor
inhibitor, erlotinib, for the treatment of
punctate palmoplantar keratoderma, and preclinical assets
tapinarof and roflumilast. For additional information, please
visit www.sol-gel.com.
About Epsolay®
Epsolay® is an investigational topical cream
containing encapsulated benzoyl peroxide, 5%, for the treatment of
papulopustular rosacea. Epsolay utilizes a patented technology
process to encapsulate benzoyl peroxide within silica microcapsules
to create a barrier between the medication and the skin. The slow
migration of medication from the microcapsules delivers treatment
doses onto the skin, while the barrier reduces the ability of
benzoyl peroxide to induce the strong oxidation process that can
result in significant skin irritation, such as erythema, burning
and stinging. Silica is chemically inert, photochemically and
physically stable, and is safely used in topical products. If
approved, Epsolay has the potential to be the first FDA-approved
single-active benzoyl peroxide prescription drug product.
About Papulopustular
Rosacea
Papulopustular rosacea is a chronic and
recurrent inflammatory skin disorder that affects nearly 5 million
Americans. The condition is common, especially in fair-skinned
people of Celtic and northern European heritage. Onset is usually
after age 30 and typically begins as flushing and subtle redness on
the cheeks, nose, chin or forehead. If left untreated, rosacea can
slowly worsen over time. As the condition progresses the redness
becomes more persistent, blood vessels become visible and pimples
often appear. Other symptoms may include burning, stinging, dry
skin, plaques and skin thickening.
About Twyneo®
Twyneo is an investigational, antibiotic-free,
fixed-dose combination of encapsulated benzoyl peroxide, 3%, and
encapsulated tretinoin, 0.1%, cream for the treatment of acne
vulgaris. If approved, it will be the first acne treatment that
contains a fixed-dose combination of benzoyl peroxide and
tretinoin, which are separately encapsulated in silica using
Sol-Gel proprietary microencapsulation technology. Tretinoin and
benzoyl peroxide are widely believed to be highly effective as a
combination treatment for acne; however, benzoyl peroxide causes
degradation of the tretinoin molecule, thereby reducing its
effectiveness. The silica microcapsule protects tretinoin from
oxidative decomposition by benzoyl peroxide, thereby enhancing the
stability of the active drug ingredients. The silica shell also
allows for an extended drug delivery time and creates a barrier
between the drug substances and the skin, which may reduce the
irritation typically associated with topical application of benzoyl
peroxide and tretinoin on acne-affected skin.
About Acne Vulgaris
Acne vulgaris is a common multifactorial skin
disease that according to the American Academy of Dermatology
affects approximately 40 to 50 million people in the United States.
The disease occurs most frequently during childhood and adolescence
(affecting 80% to 85% of all adolescents) but it may also appear in
adults. Acne patients suffer from the appearance of lesions on
areas of the body with a large concentration of oil glands, such as
the face, chest, neck and back. These lesions can be inflamed
(papules, pustules, nodules) or non-inflamed (comedones). Acne can
have a profound effect on the quality of life of those suffering
from the disease. In addition to carrying a substantial risk of
permanent facial scarring, the appearance of lesions may cause
psychological strain, social withdrawal and lowered
self-esteem.
Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements contained in this press release
that do not relate to matters of historical fact should be
considered forward-looking statements, including, but not limited
to, statements regarding the progress of our product candidates,
the timing of the submission of an NDA for Epsolay and an NDA for
Twyneo, and the Company’s expectations regarding its liquidity and
ability to fund operational and capital expenditure requirements.
These forward-looking statements include information about possible
or assumed future results of our business, financial condition,
results of operations, liquidity, plans and objectives. In some
cases, you can identify forward-looking statements by terminology
such as “believe,” “may,” “estimate,” “continue,” “anticipate,”
“intend,” “should,” “plan,” “expect,” “predict,” “potential,” or
the negative of these terms or other similar expressions.
Forward-looking statements are based on information we have when
those statements are made or our management’s current expectation
and are subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in
or suggested by the forward-looking statements. Important factors
that could cause such differences include, but are not limited to,
risks relating to the effects of COVID-19 (coronavirus), the
timing of a launch of a branded tapinarof product and the launch of
a branded topical roflumilast in the U.S., risks related to the
timing of the submission of an NDA for Epsolay and an NDA for
Twyneo as well as the following factors: (i) the adequacy of our
financial and other resources, particularly in light of our history
of recurring losses and the uncertainty regarding the adequacy of
our liquidity to pursue our complete business objectives; (ii) our
ability to complete the development of our product candidates;
(iii) our ability to find suitable co-development partners; (iv)
our ability to obtain and maintain regulatory approvals for our
product candidates in our target markets and the possibility of
adverse regulatory or legal actions relating to our product
candidates even if regulatory approval is obtained; (v) our ability
to commercialize our pharmaceutical product candidates; (vi) our
ability to obtain and maintain adequate protection of our
intellectual property; (vii) our ability to manufacture our product
candidates in commercial quantities, at an adequate quality or at
an acceptable cost; (viii) our ability to establish adequate sales,
marketing and distribution channels; (ix) acceptance of our product
candidates by healthcare professionals and patients; (x) the
possibility that we may face third-party claims of intellectual
property infringement; (xi) the timing and results of clinical
trials that we may conduct or that our competitors and others may
conduct relating to our or their products; (xii) intense
competition in our industry, with competitors having substantially
greater financial, technological, research and development,
regulatory and clinical, manufacturing, marketing and sales,
distribution and personnel resources than we do; (xiii) potential
product liability claims; (xiv) potential adverse federal, state
and local government regulation in the United States, Europe or
Israel; and (xv) loss or retirement of key executives and research
scientists. These and other important factors discussed in the
Company's Annual Report on Form 20-F filed with the Securities and
Exchange Commission (“SEC”) on March 24 , 2020 and our other
reports filed with the SEC could cause actual results to differ
materially from those indicated by the forward-looking statements
made in this press release. Any such forward-looking statements
represent management’s estimates as of the date of this press
release. Except as required by law, we undertake no obligation to
update publicly any forward-looking statements after the date of
this press release to conform these statements.
SOL-GEL TECHNOLOGIES LTD.
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share and per
share data)
(Unaudited)
|
|
December 31, |
|
March 31, |
|
2019 |
|
2020 |
A s s e t s |
|
|
|
CURRENT
ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
9,412 |
|
|
$ |
2,199 |
|
Bank deposit |
|
- |
|
|
|
18,200 |
|
Marketable securities |
|
40,966 |
|
|
|
45,762 |
|
Receivables from collaborative arrangements |
|
4,120 |
|
|
|
3,594 |
|
Prepaid expenses and other current assets |
|
1,293 |
|
|
|
863 |
|
TOTAL CURRENT
ASSETS |
|
55,791 |
|
|
|
70,618 |
|
|
|
|
|
|
|
|
|
NON-CURRENT
ASSETS: |
|
|
|
|
|
|
|
Restricted long-term deposits |
|
472 |
|
|
|
1,268 |
|
Property and equipment, net |
|
2,314 |
|
|
|
2,363 |
|
Operating lease right-of-use assets |
|
2,040 |
|
|
|
1,904 |
|
Funds in respect of employee rights upon retirement |
|
684 |
|
|
|
663 |
|
TOTAL NON-CURRENT
ASSETS |
|
5,510 |
|
|
|
6,198 |
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
$ |
61,301 |
|
|
$ |
76,816 |
|
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
Accounts payable |
$ |
1,710 |
|
|
$ |
1,926 |
|
Other accounts payable |
|
4,123 |
|
|
|
4,972 |
|
Current maturities of operating leases |
|
672 |
|
|
|
525 |
|
TOTAL CURRENT
LIABILITIES |
|
6,505 |
|
|
|
7,423 |
|
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES - |
|
|
|
|
|
|
|
Operating leases liabilities |
|
1,373 |
|
|
|
1,315 |
|
Liability for employee rights upon retirement |
|
958 |
|
|
|
946 |
|
TOTAL LONG-TERM
LIABILITIES |
|
2,331 |
|
|
|
2,261 |
|
COMMITMENTS |
|
|
|
|
|
|
|
TOTAL
LIABILITIES |
|
8,836 |
|
|
|
9,684 |
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY: |
|
|
|
|
|
|
|
Ordinary Shares, NIS 0.1 par value – authorized: 50,000,000 as of
December 31, 2019 and March 31, 2020; issued and outstanding:
20,402,800 and 22,514,488 as of December 31, 2019 and March 31,
2020, respectively. |
|
561 |
|
|
|
622 |
|
Additional paid-in capital |
|
203,977 |
|
|
|
225,693 |
|
Accumulated deficit |
|
(152,073 |
) |
|
|
(159,183 |
) |
TOTAL SHAREHOLDERS'
EQUITY |
|
52,465 |
|
|
|
67,132 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY |
$ |
61,303 |
|
|
$ |
76,816 |
|
|
|
|
|
|
|
|
|
SOL-GEL TECHNOLOGIES LTD.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(U.S. dollars in thousands, except share and per
share data)
(Unaudited)
|
|
|
|
Three months endedMarch 31 |
|
|
2019 |
|
2020 |
COLLABORATION REVENUES |
$ |
6,358 |
|
|
$ |
3,465 |
|
OPERATING
EXPENSES |
|
|
Research and Development |
|
10,793 |
|
|
|
7,930 |
|
General and Administrative |
|
1,694 |
|
|
|
2,761 |
|
TOTAL OPERATING
LOSS |
$ |
6,129 |
|
|
$ |
7,226 |
|
FINANCIAL
INCOME, net |
|
(401 |
) |
|
|
(116 |
) |
LOSS BEFORE INCOME
TAXES |
$ |
5,728 |
|
|
$ |
7,110 |
|
INCOME
TAXES |
|
- |
|
|
|
- |
|
LOSS FOR THE
PERIOD |
$ |
5,728 |
|
|
$ |
7,110 |
|
BASIC AND DILUTED LOSS
PER ORDINARY SHARE |
$ |
0.30 |
|
|
$ |
0.33 |
|
WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND
DILUTED LOSS PER SHARE |
|
18,949,968 |
|
|
|
21,361,514 |
|
|
|
|
|
|
|
|
|
For further information, please
contact:
Sol-Gel Contact:Gilad MamlokChief Financial
Officer+972-8-9313433
Investor Contact:Chiara RussoSolebury
Trout+1-617-221-9197crusso@soleburytrout.com
Source: Sol-Gel Technologies Ltd.
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