– Planned Q2 2022 NDA submission following
positive topline data from MOMENTUM clinical trial of momelotinib
in symptomatic and anemic myelofibrosis patients –
– Financial position significantly strengthened
–
Sierra Oncology, Inc. (NASDAQ: SRRA), a late-stage
biopharmaceutical company dedicated to delivering targeted
therapies for rare cancers, today reported its financial and
operating results for the fourth quarter and fiscal year ended
December 31, 2021.
“Last year was a great year for Sierra. We accelerated timelines
in the midst of a global pandemic to over enroll the pivotal
MOMENTUM clinical trial, achieving statistical significance in the
primary and all pre-specified secondary endpoints. This year, we’ll
be focused on our regulatory submission and the continued build out
of our commercial team to prepare for the anticipated approval of
momelotinib in early 2023,” said Stephen Dilly, MBBS, PhD,
President and Chief Executive Officer at Sierra Oncology.
“Financially, we are in a strong position to support ongoing
pre-commercialization activities for momelotinib, and continued
development of our myelofibrosis franchise with a combination study
of momelotinib and our novel BET inhibitor, SRA515.”
The pivotal Phase 3 MOMENTUM clinical trial enrolled 195
symptomatic and anemic myelofibrosis patients previously treated
with an approved JAK inhibitor. Data from this study, as well as
previous data from the SIMPLIFY-1 and SIMPLIFY-2 Phase 3 studies,
will serve as the foundation for the submission of a New Drug
Application to the US Food & Drug Administration in the second
quarter of 2022. If approved, the company anticipates momelotinib
being commercially available early in the first half of 2023.
Key 2021 and Recent Business Highlights
- Momelotinib achieved positive topline results in the pivotal
Phase 3 MOMENTUM clinical trial for myelofibrosis, reporting a
statistically significant benefit on symptoms, anemia and splenic
size. The company plans to submit a New Drug Application with the
US Food & Drug Administration in the second quarter of this
year.
- Sierra had cash and cash equivalents of $104.7 million as of
December 31,2021 and has significantly strengthened its financial
position during the first quarter of 2022 by raising a total of
$155.3 million in gross proceeds from a public equity offering, and
securing a debt facility with Oxford Finance, LLC for up to $125.0
million. Under the terms of the loan agreement, Sierra drew an
initial $5.0 million at closing and has the ability to access up to
an additional $120 million in a series of tranches (of which $50.0
million is at the discretion of the lender). Also, the company
received proceeds of $30.5 million from the cash exercise of Series
B warrants. The outstanding Series B warrants will expire on April
10, 2022, and if fully exercised would provide an additional $2.8
million in proceeds to the company. Additionally, in connection
with a previously issued securities purchase agreement to Gilead,
the related warrant was exercised, providing $9.6 million of
proceeds to the company.
- On January 19, 2022, the Journal of Hematology and Oncology
published a review article on momelotinib, titled “Momelotinib: an
emerging treatment for myelofibrosis patients with anemia.” The
article highlights the use of momelotinib for the potential
treatment of myelofibrosis patients who are anemic based on
published data from the SIMPLIFY studies as well as earlier Phase 2
studies. The full article is available for review here.
- An exclusive global in-licensing agreement for SRA515 (formerly
AZD5153), a potent and selective BRD4 BET inhibitor with a novel
bivalent binding mode, was announced on August 5, 2021. The
initiation of a Phase 2 study examining momelotinib in combination
with SRA515 for the treatment of myelofibrosis is planned for the
first half of 2022.
Year End 2021 Financial Results
Research and development expenses were $67.2 million for the
year ended December 31, 2021, compared to $45.1 million for the
year ended December 31, 2020. The increase was attributable to a
$9.1 million increase in personnel-related and allocated overhead
costs primarily due to headcount additions to support the continued
development and preparation for the regulatory submission of
momelotinib. Also attributing to the increase was an upfront cash
payment of $8.0 million that was made to AstraZeneca for the
exclusive global license of SRA515, and external costs for
momelotinib, including a $4.4 million increase in third-party
manufacturing costs primarily pertaining to the production of
pre-approval inventory and a $2.2 million increase in clinical
trial and development costs primarily pertaining to the MOMENTUM
clinical trial and the related preparation for regulatory
submission. These increases were partially offset by a $1.5 million
non-cash charge incurred in 2020 to recognize the change in fair
value of an obligation to issue securities to Gilead until the
issuance of the securities in January 2020 and a $0.2 million
decrease in costs for SRA737. Research and development expenses
included non-cash stock-based compensation of $7.2 million and $4.3
million for the year ended December 31, 2021 and 2020,
respectively.
General and administrative expenses were $27.4 million for the
year ended December 31, 2021, compared to $20.1 million for the
year ended December 31, 2020. The increase was due to a $4.9
million increase in personnel-related and allocated overhead costs
primarily due to headcount additions for the expansion and the
continued buildout of our infrastructure to support our potential
commercialization efforts, including the establishment of key
commercial functions such as marketing and market access. Also
attributing to the increase in expense was an increase of $2.4
million in professional fees primarily relating to pre-commercial
costs for momelotinib. General and administrative expenses included
non-cash stock-based compensation of $5.7 million and $5.2 million
for the year ended December 31, 2021 and 2020, respectively.
Total other expense (income), net was $0.1 million of total
other expense, net for the year ended December 31, 2021, compared
to $15.8 million of total other expense, net for the year ended
December 31, 2020. The difference was primarily attributable to a
non-cash charge of $16.2 million incurred during the year ended
December 31, 2020, related to the change in fair value of warrant
liabilities until the reclassification to equity in January
2020.
For the year ended December 31, 2021, Sierra incurred a
Generally Accepted Accounting Principles (GAAP) net loss of $94.7
million compared to a GAAP net loss of $80.9 million for the year
ended December 31, 2020. The GAAP net loss for the year ended
December 31, 2021 includes an upfront cash payment of $8.0 million
that was made to AstraZeneca for the exclusive global license of
SRA515. The GAAP net loss for the year ended December 31, 2020,
includes a non-cash charge of $16.2 million related to the change
in fair value of warrant liabilities included in total other
expense (income), 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 $81.8 million for the year ended
December 31, 2021, compared with a non-GAAP adjusted net loss of
$53.7 million for the year ended December 31, 2020. Non-GAAP
adjusted net loss for the year ended December 31, 2021 and 2020
excludes expenses related to stock-based compensation. For the year
ended December 31, 2020, non-GAAP net loss also excludes expenses
related to the change in fair value of warrant liabilities and the
change in fair value of the securities issuance obligation. See
“Non-GAAP Financial Measures” and “Reconciliation of GAAP to
Non-GAAP Financial Measures” below for a reconciliation of this
GAAP measure to non-GAAP financial measure.
Cash and cash equivalents totaled $104.7 million as of December
31, 2021, compared to $104.1 million as of December 31, 2020.
As of December 31, 2021, there were 15,571,656 total shares of
common stock outstanding and warrants to purchase 11,040,894 shares
of common stock, with an exercise price equal to $13.20 per share.
There were 4,937,189 shares issuable upon exercise of stock options
and an additional warrant to purchase 1,839 shares.
Recent Financial Highlights
On January 31, 2022, the company completed an underwritten
public offering of 4,074,075 shares of common stock and pre-funded
warrants to purchase up to 925,925 shares of common stock. As part
of the underwritten public offering, on February 3, 2022, the
company issued an additional 750,000 shares of common stock
representing the underwriters’ full exercise of their
over-allotment option. The shares of common stock and the
pre-funded warrants were offered by the company at a price to the
public of $27.00 and $26.999 per share, respectively. The aggregate
net proceeds received by the company from the offering were $145.6
million, net of underwriting discounts and commissions and
estimated offering expenses of $9.7 million.
In the first quarter of 2022, the company has issued 18,937,
2,312,257 and 725,283 shares of common stock pertaining to the cash
exercise of Series A warrants, Series B warrants, and the
previously issued warrant related to a securities purchase
agreement, respectively, providing proceeds to the company of $40.3
million. As of March 7, 2022, there were 23,665,100 shares of
common stock outstanding and 925,925 pre-funded warrants to
purchase shares of common stock. There were Series B warrants with
an exercise price of $13.20 to purchase 212,477 shares of common
stock which expire on April 10, 2022, and if exercised in full
would provide $2.8 million of additional proceeds to the company.
In addition, there were Series A warrants that contain a cash
and/or cashless exercise provision to purchase 7,791,951 shares of
common stock, with an exercise price equal to $13.20 per share.
Additionally, there were 4,871,157 shares of common stock issuable
upon exercise of stock options and a warrant.
About Sierra Oncology
Sierra Oncology is a late-stage biopharmaceutical company on a
mission to deliver targeted therapies that treat rare forms of
cancer. We harness our deep scientific expertise to identify
compounds that target the root cause of disease in order to advance
therapies on the leading edge of cancer biology. Our team takes an
evidence-based approach to understand the limitations of current
treatments and explore new ways to change the cancer treatment
paradigm. Together we are transforming promise into patient
impact.
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
regarding the commercialization and future success of momelotinib
and future expansion of its pipeline, the potential of SRA515,
including its impact on Sierra Oncology’s ability to treat
myelofibrosis patients and its potential safety and efficacy
advantages when combined with momelotinib, the timing of Sierra
Oncology’s initiation of a Phase 2 study examining momelotinib in
connection with SRA515, the expected timing of the NDA submission
for momelotinib. the timing of regulatory approval of momelotinib,
the timing of momelotinib becoming commercially available,
statements by Sierra Oncology’s President and Chief Executive
Officer, statements regarding the company’s operational and
commercialization plans, statements regarding the company’s
financial condition including the sufficiency of its cash and cash
equivalents to fund its operating plans, the company’s ability to
identify compounds, and the proceeds from the potential exercise of
Series B warrants.
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 may not be
able to successfully develop, obtain regulatory approval for and
commercialize momelotinib or other product candidates or experience
significant delays in doing so, Sierra Oncology may not be able to
demonstrate acceptable safety and efficacy of its product
candidates, the risk that disruptions and impacts of COVID-19 will
be significant and lengthy, 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's cash
resources may be insufficient to fund its current operating plans
and it may be unable to raise additional capital when needed,
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.
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 accompanying 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
uses these non-GAAP financial measures internally in analyzing its
financial results and 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 its 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. Non-GAAP financial measures do not have any
standardized meaning and are therefore unlikely to be comparable to
similarly titled measures presented by other companies In
particular, companies calculate stock-based compensation expense
using a variety of valuation methodologies and subjective
assumptions.
SIERRA ONCOLOGY, INC.
Condensed Consolidated Balance
Sheets
(unaudited)
(in thousands)
December 31,
2021
December 31,
2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
104,749
$
104,055
Prepaid expenses and other current
assets
2,644
2,415
Total current assets
107,393
106,470
Property and equipment, net
141
52
Operating lease right-of-use assets
788
318
Other assets
1,045
647
TOTAL ASSETS
$
109,367
$
107,487
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accrued and other liabilities
$
10,726
$
7,148
Accounts payable
2,158
2,205
Total current liabilities
12,884
9,353
Operating lease liabilities
485
175
TOTAL LIABILITIES
13,369
9,528
STOCKHOLDERS’ EQUITY:
Preferred stock
—
—
Common stock
16
11
Additional paid-in capital
1,037,230
944,537
Accumulated deficit
(941,248
)
(846,589
)
TOTAL STOCKHOLDERS’ EQUITY
95,998
97,959
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
109,367
$
107,487
SIERRA ONCOLOGY, INC.
Condensed Consolidated
Statements of Operations
(unaudited)
(in thousands, except share
and per share data)
Three Months Ended
December 31,
Year Ended
December 31,
2021
2020
2021
2020
Collaboration revenue
$
—
$
200
$
—
$
300
Operating expenses:
Research and development
17,430
12,906
67,150
45,118
General and administrative
8,161
5,207
27,435
20,123
Total operating expenses
25,591
18,113
94,585
65,241
Loss from operations
(25,591
)
(17,913
)
(94,585
)
(64,941
)
Other expense (income), net:
Changes in fair value of warrant
liabilities
—
—
—
16,240
Other expense (income), net
3
74
77
(421
)
Total other expense (income), net
3
74
77
15,819
Loss before provision for (benefit from)
income taxes, net
(25,594
)
(17,987
)
(94,662
)
(80,760
)
Provision for (benefit from) income taxes,
net
(127
)
36
(3
)
142
Net loss
$
(25,467
)
$
(18,023
)
$
(94,659
)
$
(80,902
)
Net loss per common share, basic and
diluted
$
(1.67
)
$
(1.63
)
$
(7.14
)
$
(7.70
)
Weighted-average shares used in computing
net loss per common
share, basic and diluted
15,274,908
11,028,200
13,252,605
10,506,739
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
December 31,
Year Ended
December 31,
2021
2020
2021
2020
GAAP net loss
$
(25,467
)
$
(18,023
)
$
(94,659
)
$
(80,902
)
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)
3,451
2,861
12,890
9,470
Non-GAAP adjusted net loss
$
(22,016
)
$
(15,162
)
$
(81,769
)
$
(53,707
)
GAAP net loss per common share, basic and
diluted
$
(1.67
)
$
(1.63
)
$
(7.14
)
$
(7.70
)
Adjustment to net loss per common
share
0.23
0.26
0.97
2.59
Non-GAAP adjusted net loss per common
share, basic and diluted
$
(1.44
)
$
(1.37
)
$
(6.17
)
$
(5.11
)
Weighted-average shares used in computing
net loss per common
share, basic and diluted
15,274,908
11,028,200
13,252,605
10,506,739
(1)
To reflect a non-cash charge to other
expense (income), 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220310005072/en/
Investor Contact DeDe Sheel
415.732.9828 dsheel@sierraoncology.com Media
Contact Lauren Musto 615.351.7777
lmusto@sierraoncology.com
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