Sol Gel Technologies Ltd (SLGL)

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Sol-Gel Technologies Reports First Quarter 2020 Financial Results and Corporate Update

GlobeNewswire GlobeNewswire•May 14, 2020

New Drug Applications for Epsolay® and Twyneo® remain on track for the second quarter and second half 2020, respectively
Completed a $23 million underwritten public offering in February with an additional $5 million investment from Sol-Gel’s controlling shareholder in April, providing cash runway into mid-2021 and funds pre-commercialization efforts for Epsolay and Twyneo
Top-line generic product revenue of $3.4 million in first quarter 2020

NESS ZIONA, Israel, May 14, 2020 (GLOBE NEWSWIRE) -- Sol-Gel Technologies, Ltd. (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.

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