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 third quarter ended September 30, 2020 and provided clinical
and regulatory updates on its programs.
“The third quarter was highlighted by a major achievement for
Sol-Gel, as our first New Drug Application (NDA) for Epsolay for
the treatment of inflammatory lesions of rosacea was accepted by
the Federal Drug Administration (FDA) with a Prescription Drug User
Fee Act (PDUFA) goal date set for April 26, 2021. We now look
forward to the NDA acceptance of our second proprietary product,
Twyneo, for the treatment of acne vulgaris,” commented Dr. Alon
Seri-Levy, Chief Executive Officer of Sol-Gel. “Also, after the
close of the third quarter, we expanded our collaboration with
Perrigo to develop an eleventh generic product candidate. While we
are successfully expanding our partnership with Perrigo, we
continue to focus on our own branded product candidates, Epsolay
and Twyneo. We are working towards commercializing both treatments,
if approved, in 2021, either on our own or with a partner that has
a significant U.S. dermatology presence.”
Corporate Highlights and Recent
Developments
- Sol-Gel announced FDA acceptance of
NDA for Epsolay (benzoyl peroxide, 5%, cream) with a PDUFA goal
date set for April 26, 2021. If approved, Epsolay has the potential
to be the first FDA-approved, single-agent benzoyl peroxide
prescription drug product for the treatment of inflammatory lesions
of rosacea.
- Sol-Gel submitted an NDA for Twyneo
(benzoyl peroxide, 3%, and tretinoin, 0.1%, cream) to the FDA in
the beginning of October. If approved, Twyneo has the potential to
be the first FDA-approved acne treatment that contains
fixed-dose combination of benzoyl peroxide and tretinoin.
- Sol-Gel was informed by its
collaboration partner that the launch of an FDA-approved generic
drug is expected in the second quarter of 2021. Annual sales of the
brand name product exceeded $180 million in the United States in
2019.
- Bausch Health Companies, Inc.
(NYSE:BHC) initiated patent infringement action in the U.S.
District Court for the District of New Jersey on August 31, 2020
regarding Perrigo Company plc’s (NYSE; TASE: PRGO) Abbreviated New
Drug Application (ANDA) for a generic version of Duobrii®
(halobetasol propionate and tazarotene) lotion, a product in which
Sol-Gel and Perrigo previously entered into a collaboration
agreement. In July 2020, Perrigo filed first-to-file Paragraph IV
Certification for Duobrii®.
- In preparation for commercial launch
of proprietary products, and as part of Sol-Gel’s go-to-market
strategy, the Company has opened a US headquarters in Whippany,
NJ.
- In October 2020, Sol-Gel signed an
additional collaboration agreement with Perrigo for the
development, manufacturing and commercialization of a new generic
product candidate, the eleventh product collaboration between the
companies.
- The enrollment of patients in the
Phase 1 proof-of-concept study with SGT-210, a novel, topical,
epidermal growth factor receptor inhibitor in patients with
punctate palmoplantar keratoderma has been affected by the COVID-19
pandemic. The Company expects to be able to provide an update
regarding the timing of top-line results by year-end.
- Pre-clinical testing of tapinarof,
an aryl hydrocarbon receptor (AhR) agonist, and roflumilast, a
phosphodiesterase 4 (PDE4) inhibitor, is progressing for various,
new dermatological indications. The Company is also conducting
pre-clinical studies in psoriasis to compare the
tapinarof/roflumilast combination to each individual active
ingredient. A total of 24 provisional patent applications for these
projects have been submitted to date.
Financial Results for the Three Months ended
September 30, 2020
Revenue in the third quarter of 2020 was $2.1 million. The
revenue was mainly due to sales of a generic product from a
collaboration arrangement with Perrigo. While revenue increased
compared to the previous quarter, it is still adversely affected by
the COVID-19 pandemic. In addition, due to the entry of
an additional generic version of Zovirax® (acyclovir) cream, 5%,
marketed by Amneal Pharmaceuticals Inc., we expect revenue from our
generic products to decrease until the expected launch of a second
generic drug in the second quarter of 2021 as detailed above.
Research and development expenses were $7.9 million in the third
quarter of 2020 compared to $9.9 million during the same period in
2019. The decrease of $2.0 million was mainly attributed to a
decrease of $5.9 million in clinical trial expenses for Epsolay and
Twyneo partially offset by an increase of $3.4 million in
regulatory expenses mainly related to the PDUFA fee for Twyneo.
General and administrative expenses were $3.0 million in the
third quarter of 2020 compared to $2.5 million during the same
period in 2019. The increase of $0.5 million was mainly attributed
to an increase of $0.4 million in commercialization expenses and of
$0.1 million in patent-related expenses.
Sol-Gel reported a loss of $8.6 million for the third quarter of
2020 compared to loss of $7.4 million for the same period in
2019.
As of September 30, 2020, Sol-Gel had $27.4 million in cash,
cash equivalents and deposits, and $29.9 million in marketable
securities for a total balance of $57.3 million. Sol-Gel expects
its existing cash resources will enable funding of operational and
capital expenditure requirements into the third quarter of
2021.
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 the development of
Twyneo, under investigation for the treatment of acne vulgaris, and
Epsolay, under investigation for the treatment of inflammatory
lesions of rosacea. The Company’s pipeline also includes SGT-210,
an early-stage topical epidermal growth factor receptor inhibitor,
erlotinib, under investigation for the treatment
of 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-based
microcapsules to create a barrier between the medication and the
skin. The slow migration of medication from the microcapsules is
designed to deliver an effective dose of benzoyl peroxide onto the
skin, while reducing the ability of benzoyl peroxide to induce skin
irritation, such as erythema, burning and stinging. If approved,
Epsolay has the potential to be the first FDA-approved
single-active benzoyl peroxide prescription drug product. Epsolay
is not approved by the FDA and the safety and efficacy has not been
established.
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, 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’s proprietary
microencapsulation technology. Tretinoin and benzoyl peroxide are
widely prescribed separately as a combination treatment for acne;
however, benzoyl peroxide causes degradation of the tretinoin
molecule, thereby potentially reducing its effectiveness if used at
the same time or combined in the same formulation. The silica-based
microcapsule is designed to protect tretinoin from oxidative
decomposition by benzoyl peroxide, thereby enhancing the stability
of the active drug ingredients. The silica-based shell is also
designed to release the ingredients slowly over time to provide a
favorable efficacy and safety profile. Twyneo is not approved by
the FDA and the safety and efficacy has not been established.
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 PDUFA goal date for Epsolay (benzoyl
peroxide, 5%, cream), the expectation that the FDA will accept the
NDA for Twyneo and the timing of commercialization of Epsolay and
Twyneo, expectation that revenue from our generic products will
continue to decrease until the expected launch of a second
FDA-approved generic drug in the second quarter of 2021. 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) 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, the potential delay in receiving
such regulatory approvals 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 FINANCIAL
STATEMENTS(U.S. dollars in thousands, except share and per
share data)(Unaudited)
|
December 31, |
|
September 30, |
|
2019 |
|
2020 |
A s s e t s |
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
Cash and cash equivalents |
$ |
9,412 |
|
$ |
6,007 |
Bank deposit |
|
- |
|
21,400 |
Marketable securities |
|
40,966 |
|
29,875 |
Receivables from collaborative arrangements |
|
4,120 |
|
2,180 |
Prepaid expenses and other current assets |
|
1,293 |
|
|
1,200 |
TOTAL CURRENT ASSETS |
|
55,791 |
|
|
60,662 |
|
|
|
|
|
|
NON-CURRENT ASSETS: |
|
|
|
|
|
Restricted long-term deposits |
|
472 |
|
1,285 |
Property and equipment, net |
|
2,314 |
|
2,048 |
Operating lease right-of-use assets |
|
2,040 |
|
1,658 |
Funds in respect of employee rights upon retirement |
|
684 |
|
|
687 |
TOTAL NON-CURRENT ASSETS |
|
5,510 |
|
|
5,678 |
|
|
|
|
|
|
TOTAL ASSETS |
$ |
61,301 |
|
$ |
$66,340 |
Liabilities and shareholders' equity |
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
Accounts payable |
$ |
1,710 |
|
$ |
1,121 |
Other accounts
payable |
|
4,123 |
|
|
5,469 |
Current maturities of operating leases |
|
672 |
|
|
508 |
TOTAL CURRENT LIABILITIES |
|
6,505 |
|
|
7,098 |
|
|
|
|
|
|
LONG-TERM LIABILITIES - |
|
|
|
|
|
Operating leases liabilities |
|
1,373 |
|
|
1,105 |
Liability for employee rights upon retirement |
|
958 |
|
|
980 |
TOTAL LONG-TERM
LIABILITIES |
|
2,331 |
|
|
2,085 |
COMMITMENTS |
|
|
|
|
|
TOTAL
LIABILITIES |
|
8,836 |
|
|
9,183 |
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY: |
|
|
|
|
|
Ordinary Shares, NIS 0.1 par value – authorized: 50,000,000 as of
December 31, 2019 and September 30, 2020; issued and outstanding:
20,402,800 and 23,000,782 as of December 31, 2019 and September 30,
2020, respectively. |
|
561 |
|
|
635 |
Additional paid-in capital |
|
203,977 |
|
|
231,397 |
Accumulated deficit |
|
(152,073) |
|
|
(174,875) |
TOTAL SHAREHOLDERS'
EQUITY |
|
52,465 |
|
|
57,157 |
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY |
$ |
61,301 |
|
$ |
66,340 |
(The amounts are stated in U.S. dollars in
thousands, except share and per share data)
SOL-GEL TECHNOLOGIES
LTD.CONSOLIDATED STATEMENTS OF
OPERATIONS(U.S. dollars in thousands, except share and per
share data)(Unaudited)
|
Nine months endedSeptember
30 |
|
Three months endedSeptember
30 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
COLLABORATION REVENUES |
$ |
18,884 |
|
$ |
6,714 |
|
$ |
4,733 |
|
$ |
2,116 |
|
RESEARCH AND DEVELOPMENT EXPENSES |
|
32,146 |
|
|
22,248 |
|
|
9,913 |
|
|
7,867 |
|
GENERAL AND ADMINISTRATIVE EXPENSES |
|
5,816 |
|
|
8,014 |
|
|
2,484 |
|
|
3,018 |
|
TOTAL OPERATING LOSS |
|
19,078 |
|
|
23,548 |
|
|
7,664 |
|
|
8,769 |
|
FINANCIAL INCOME, NET |
|
(1,071 |
) |
|
(746 |
) |
|
(311 |
) |
|
(149 |
) |
LOSS FOR THE PERIOD |
$ |
18,007 |
|
$ |
22,802 |
|
$ |
7,353 |
|
$ |
8,620 |
|
BASIC AND DILUTED LOSS PER ORDINARY SHARE |
$ |
0.94 |
|
|
1.02 |
|
$ |
0.37 |
|
|
0.37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN
COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE |
|
19,230,070 |
|
|
22,431,096 |
|
|
19,787,194 |
|
|
22,997,708 |
|
For further information, please contact:
Sol-Gel Contact:Gilad MamlokChief Financial
Officer+972-8-9313433
Investor Contact:Lee M. SternSolebury
Trout+1-646-378-2922lstern@soleburytrout.com
Source: Sol-Gel Technologies Ltd.
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