Soleno Therapeutics, Inc. (“Soleno”) (NASDAQ: SLNO), a
clinical-stage biopharmaceutical company developing novel
therapeutics for the treatment of rare diseases, today provided a
corporate update, and reported financial results for the three
months ended March 31, 2019.
“Enrollment in our Phase III DESTINY PWS trial evaluating
Diazoxide Choline Controlled-Release (DCCR) tablets for the
treatment of Prader-Willi Syndrome (PWS) continues to progress,”
said Anish Bhatnagar, M.D., Chief Executive Officer of Soleno
Therapeutics. “We recently received approval from the
Medicines and Healthcare Products Regulatory Agency (MHRA) of our
clinical trial application (CTA) in the UK and are in the process
of activating several sites there. Moreover, we are strongly
encouraged that more than 90% of the patients who have completed
the randomized, double-blind, placebo-controlled, Phase
III DESTINY PWS study have enrolled in our 9-month,
open-label, safety extension study, C602. We continue to look
forward to top-line data from DESTINY PWS late this
year.” Recent
Corporate Highlights
- Continued enrollment for Phase III DESTINY PWS study of
DCCR ° Trial enrollment continuing at U.S. sites
° Received CTA approval from the MHRA
° Intend to initiate several additional sites both in
the UK and in the U.S. shortly ° Over 90% of
subjects who were randomized and completed the DESTINY PWS study
elected to continue in C602, the 9-month open-label safety
extension study ° Data Safety Monitoring Board
recommended the continuation of the DESTINY PWS study without
modification ° Top-line data from the DESTINY PWS
study expected in late 2019
- Appointed Gwen A. Melincoff, a biotechnology and pharmaceutical
industry veteran, to Board of Directors
- Presented at multiple investor conferences
Financial Results
Soleno’s current research and development efforts are primarily
focused on advancing its lead product candidate, DCCR tablets for
the treatment of PWS, into late-stage clinical development.
First Quarter Ended March 31, 2019 Financial Results for
Continuing Operations
Research and development expenses were $2.8 million for the
quarter ended March 31, 2019, compared to $1.2 million in the same
period of 2018. The increase was primarily due to increased
activities related to the DCCR development program.
General and administrative expense was $2.0 million for the
quarter ended March 31, 2019, compared to $1.9 million in the same
period of 2018. The increase was primarily a result of increased
legal fees, primarily related to intellectual property.
The change in the fair value of contingent consideration results
from Soleno’s obligation to make cash payments to Essentialis
stockholders upon the achievement of certain future commercial
milestones associated with the sale of Essentialis’ product in
accordance with the terms of the Essentialis merger agreement. The
fair value of the liability for the contingent consideration
payable by Soleno was initially established as
approximately $2.6 million at the time of the merger
in March 2017, and was estimated at approximately $5.1
million at December 31, 2017, at $5.5
million at March 31, 2018, $5.4
million at June 30, 2018, $5.7
million at September 30, 2018, and $5.6 million at
December 31, 2018. The fair value was estimated to be
approximately $5.9 million at March 31, 2019,
resulting in an increase in expense of approximately $0.2
million from the balance at December 31, 2018.
Total Other Expense of $2.1 million consisted
primarily of the change in the fair value of the liability for
warrants of approximately $1.9 million.
Net loss for the quarter ended March 31, 2019, was approximately
$7.0 million, or ($0.22) per share, compared to a net loss of
approximately $3.8 million, or ($0.19) per share, for the quarter
ended March 31, 2018.
As of March 31, 2019, Soleno had cash and cash equivalents of
approximately $19.4 million, as compared to $23.1 million at
December 31, 2018.
Results of Discontinued Operations during
Quarter Ended March 31, 2018
Discontinued operations during the quarter ended March 31, 2018,
consisted of the Company’s activities previously dedicated to the
development and commercialization of innovative diagnostics,
devices and therapeutics addressing unmet medical needs, which
consisted of: precision metering of gas flow technology marketed as
Serenz® Allergy Relief, or Serenz; CoSense® End-Tidal Carbon
Monoxide (ETCO) Monitor, or CoSense, which measures ETCO and aids
in the detection of excessive hemolysis; and, products that
included temperature probes, scales, surgical tables and patient
surfaces. These operations were discontinued as a result of the
decision to sell NeoForce, partner the CoSense® business and divest
the Serenz business.
About PWSThe Prader-Willi Syndrome Association
USA estimates that one in 12,000 to 15,000 people in the U.S. have
PWS. The hallmark symptom of this disorder is hyperphagia, a
chronic feeling of insatiable hunger that severely diminishes the
quality of life for PWS patients and their families. Additional
characteristics of PWS include behavioral problems, cognitive
disabilities, low muscle tone, short stature (when not treated with
growth hormone), the accumulation of excess body fat, developmental
delays, and incomplete sexual development. Hyperphagia can lead to
significant morbidities (e.g., stomach rupture, obesity, diabetes,
cardiovascular disease) and mortality (e.g., choking, accidental
death due to food seeking behavior). In a global survey conducted
by the Foundation for Prader-Willi Research, 96.5% of respondents
(parent and caregivers) rated hyperphagia as the most important or
a very important symptom to be relieved by a new medicine. There
are currently no approved therapies to treat the
hyperphagia/appetite, metabolic, cognitive function, or behavioral
aspects of the disorder. Diazoxide choline has received Orphan Drug
Designation for the treatment of PWS in the U.S. and E.U.
About Diazoxide Choline Controlled-Release
TabletDiazoxide choline controlled-release tablet is a
novel, proprietary extended-release, crystalline salt formulation
of diazoxide, which is administered once-daily. The parent
molecule, diazoxide, has been used for decades in thousands of
patients in a few rare diseases in neonates, infants, children and
adults, but has not been approved for use in PWS. Soleno conceived
of and established extensive patent protection on the therapeutic
use of diazoxide and DCCR in patients with PWS. The DCCR
development program is supported by positive data from five
completed Phase I clinical studies in various metabolic indications
or in healthy volunteers and three completed Phase II clinical
studies, one of which was in PWS patients. In the PWS Phase II
study, DCCR showed promise in addressing hyperphagia, the hallmark
symptom of PWS, as well as several other symptoms such as
aggressive/destructive behaviors, fat mass and abnormal lipid
profiles.
About Soleno Therapeutics, Inc.Soleno is
focused on the development and commercialization of novel
therapeutics for the treatment of rare diseases. The company’s lead
candidate, DCCR, a once-daily oral tablet for the treatment of PWS,
is currently being evaluated in a Phase III clinical development
program.
For more information, please visit www.soleno.life.
Forward-Looking StatementsThis press release
contains forward-looking statements that are subject to many risks
and uncertainties. Forward-looking statements include statements
regarding our intentions, beliefs, projections, outlook, analyses
or current expectations concerning, among other things, our ability
to complete the Phase III C601 study in PWS during 2019. We may use
terms such as "believes," "estimates," "anticipates," "expects,"
"plans," "intends," "may," "could," "might," "will," "should,"
"approximately" or other words that convey uncertainty of future
events or outcomes to identify these forward-looking statements.
Although we believe that we have a reasonable basis for each
forward-looking statement contained herein, we caution you that
forward-looking statements are not guarantees of future performance
and that our actual results of operations, financial condition and
liquidity, and the development of the industry in which we operate
may differ materially from the forward-looking statements contained
in this presentation. As a result of these factors, we cannot
assure you that the forward-looking statements in this press
release will prove to be accurate. Additional factors that could
materially affect actual results can be found in Soleno’s annual
and quarterly reports filed with the Securities and Exchange
Commission, including under the caption titled "Risk Factors."
Soleno expressly disclaims any intent or obligation to update these
forward-looking statements, except as required by law.
Corporate Contact:Brian RitchieLifeSci
Advisors, LLC212-915-2578
Soleno Therapeutics, Inc.
Condensed Consolidated Balance Sheets (In
thousands except share and per share data)
|
March 31,2019 |
|
|
December 31,2018 |
|
Assets |
(Unaudited) |
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
19,402 |
|
|
$ |
23,099 |
|
Prepaid expenses and other current assets |
|
603 |
|
|
|
529 |
|
Due from related party |
|
72 |
|
|
|
64 |
|
Minority interest investment in former subsidiary |
|
788 |
|
|
|
978 |
|
Total current assets |
|
20,865 |
|
|
|
24,670 |
|
Long-term assets |
|
|
|
|
|
|
|
Property and equipment, net |
|
19 |
|
|
|
12 |
|
Intangible assets, net |
|
17,983 |
|
|
|
18,469 |
|
Total assets |
$ |
38,867 |
|
|
$ |
43,151 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Accounts payable |
$ |
1,258 |
|
|
$ |
934 |
|
Accrued compensation and other current liabilities |
|
992 |
|
|
|
943 |
|
Total current liabilities |
|
2,250 |
|
|
|
1,877 |
|
Long-term liabilities |
|
|
|
|
|
|
|
Series A warrant liability |
|
73 |
|
|
|
49 |
|
2017 PIPE Warrant liability |
|
6,274 |
|
|
|
4,563 |
|
2018 PIPE Warrant liability |
|
784 |
|
|
|
600 |
|
Contingent liability for Essentialis purchase price |
|
5,855 |
|
|
|
5,649 |
|
Total liabilities |
|
15,236 |
|
|
|
12,738 |
|
Commitments and contingencies
(Note 6) |
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
Preferred Stock, $.001 par value,
10,000,000 shares authorized: |
|
|
|
|
|
|
|
Series B convertible preferred stock, 13,780 shares designated
at March 31, 2019 and December 31, 2018; zero and 4,571
shares issued and outstanding at March 31, 2019 and at
December 31, 2018, respectively. Liquidation value of
zero. |
|
— |
|
|
|
— |
|
Common stock, $0.001 par value,
100,000,000 shares authorized, 31,776,584 and 31,755,169
shares issued and outstanding at March 31, 2019 and December
31, 2018, respectively. |
|
32 |
|
|
|
32 |
|
Additional paid-in-capital |
|
157,661 |
|
|
|
157,413 |
|
Accumulated deficit |
|
(134,062 |
) |
|
|
(127,032 |
) |
Total stockholders’ equity |
|
23,631 |
|
|
|
30,413 |
|
Total liabilities and stockholders’ equity |
$ |
38,867 |
|
|
$ |
43,151 |
|
Soleno Therapeutics,
Inc.Condensed Consolidated Statements of
Operations (unaudited) (In thousands
except share and per share data)
|
Three Months EndedMarch 31, |
|
|
2019 |
|
|
2018 |
|
Operating expenses |
|
|
|
|
|
|
|
Research and development |
$ |
2,760 |
|
|
$ |
1,180 |
|
General and administrative |
|
2,012 |
|
|
|
1,867 |
|
Change in fair value of contingent consideration |
|
206 |
|
|
|
428 |
|
Total operating expenses |
|
4,978 |
|
|
|
3,475 |
|
Operating loss |
|
(4,978 |
) |
|
|
(3,475 |
) |
Other income (expense) |
|
|
|
|
|
|
|
Cease-use income |
|
— |
|
|
|
3 |
|
Change in fair value of warrants liabilities |
|
(1,919 |
) |
|
|
163 |
|
Loss from minority interest investment |
|
(190 |
) |
|
|
— |
|
Interest income |
|
57 |
|
|
|
19 |
|
Total other income (expense) |
|
(2,052 |
) |
|
|
185 |
|
Loss from continuing
operations |
|
(7,030 |
) |
|
|
(3,290 |
) |
Loss from discontinued
operations |
|
— |
|
|
|
(514 |
) |
Net loss |
$ |
(7,030 |
) |
|
$ |
(3,804 |
) |
Loss per common share from
continuing operations, basic and diluted |
$ |
(0.22 |
) |
|
$ |
(0.17 |
) |
Loss per common share from
discontinued operations, basic and diluted |
|
— |
|
|
|
(0.02 |
) |
Net loss per common share, basic
and diluted |
$ |
(0.22 |
) |
|
$ |
(0.19 |
) |
Weighted-average common shares
outstanding used to calculate basic and diluted net loss per
common share |
|
31,756,120 |
|
|
|
19,530,311 |
|
See accompanying notes to condensed consolidated
financial statements
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