Skye Bioscience Reports Second Quarter 2024 Financial Results and Recent Highlights

Rhea-AI Summary

Skye Bioscience (NASDAQ: SKYE) reported Q2 2024 financial results and recent highlights. The company is advancing its nimacimab peripheral CB1 inhibitor for obesity, with a Phase 2 clinical trial expected to begin in Q3 2024. Key points include:

- CBeyond™ Phase 2 trial design announced, targeting 120 patients
- Collaboration with Beacon Biosignals for sleep quality assessment
- Discontinuation of glaucoma study and ophthalmology pipeline
- Appointment of new board member and Clinical and Scientific Advisory Board
- Uplisting to NASDAQ Global Market® and inclusion in Russell indexes
- Q2 2024 financials: $74.1M cash position, $4.1M R&D expenses, $4.3M G&A expenses, $7.9M net loss

Skye expects current cash to fund operations through at least H1 2027.

Positive

• Phase 2 obesity clinical trial for nimacimab expected to begin in Q3 2024
• Strong cash position of $74.1 million, expected to fund operations through at least H1 2027
• Uplisting to NASDAQ Global Market® and inclusion in Russell 2000® and Russell 3000® Indexes
• Formation of Clinical and Scientific Advisory Board with key opinion leaders
• Conversion of $5.0 million convertible debt into common stock

Negative

• Net loss increased to $7.9 million in Q2 2024 compared to $3.1 million in Q2 2023
• R&D expenses increased to $4.1 million in Q2 2024 from $1.8 million in Q2 2023
• G&A expenses increased to $4.3 million in Q2 2024 from $1.2 million in Q2 2023
• Discontinuation of glaucoma study and entire ophthalmology pipeline due to unsuccessful Phase 2a trial results

Financial Analyst

Skye Bioscience's Q2 2024 results reveal a significant financial position with $74.1 million in cash, excluding $9.1 million in restricted cash. This runway is expected to fund operations through H1 2027, providing ample resources for their Phase 2 obesity trial. However, the company's net loss widened to $7.9 million from $3.1 million year-over-year, primarily due to increased R&D and G&A expenses.

The R&D expenses jumped to $4.1 million from $1.8 million, reflecting investments in clinical trials. G&A expenses also rose significantly to $4.3 million from $1.2 million, driven by stock-based compensation and costs associated with NASDAQ uplisting. While these increases indicate aggressive investment in growth, investors should monitor the burn rate carefully.

Medical Research Analyst

Skye's pivot to metabolic health, focusing on nimacimab for obesity treatment, represents a strategic shift in their clinical pipeline. The upcoming Phase 2 CBeyond™ trial, set to begin in Q3 2024, is a critical milestone. With 120 patients and multiple endpoints including weight loss, metabolic biomarkers and an exploratory GLP-1 agonist combination arm, this trial could potentially position Skye as a significant player in the competitive obesity market.

The collaboration with Beacon Biosignals to assess sleep quality is an innovative approach, addressing a often-overlooked aspect of obesity. However, the discontinuation of the SBI-100 OE glaucoma program due to unsuccessful Phase 2a results highlights the risks inherent in drug development. This setback underscores the importance of the nimacimab program's success for Skye's future prospects.

Market Research Analyst

Skye's uplisting to NASDAQ and inclusion in the Russell 2000® and 3000® indexes are significant milestones that could enhance visibility and liquidity for investors. The formation of a new Clinical and Scientific Advisory Board with renowned experts signals a strong commitment to their metabolic health focus and could bolster credibility in the field.

The obesity treatment market is highly competitive and rapidly evolving, particularly with the success of GLP-1 agonists. Skye's strategy to explore a combination therapy with Wegovy® is intriguing and could potentially differentiate nimacimab. However, the company faces significant challenges, including established competitors and the need to demonstrate superior efficacy or safety profiles. Investors should closely monitor the progress and results of the CBeyond™ trial, as it will be important in determining Skye's position in this lucrative but crowded market.

Advancement of clinical and regulatory steps enable the expected initiation of Phase 2 obesity clinical trial for nimacimab peripheral CB1 inhibitor in Q3 2024

SAN DIEGO, Aug. 09, 2024 (GLOBE NEWSWIRE) -- Skye Bioscience, Inc. (NASDAQ: SKYE) (“Skye” or the “Company”), a clinical-stage biopharmaceutical company focused on unlocking new therapeutic pathways for metabolic health, today reported financial results for the second quarter ended June 30, 2024, and highlighted recent corporate achievements.

“Our strategic acquisition of nimacimab in August 2023 has propelled Skye into the metabolic landscape, where there is a need to provide patients with obesity more tolerable and sustainable therapeutic alternatives to manage weight loss and address comorbid conditions,” said Punit Dhillon, CEO of Skye. “In Q2, at our event, ‘Metabolic Rewiring with CB1 Inhibition,’ we outlined our CBeyond™ Phase 2 clinical trial design and highlighted nimacimab’s differentiators, which we believe competitively position Skye. During the second quarter of 2024, we made changes to further support our metabolic focus by adding expertise to our Board of Directors and forming a clinical and scientific advisory board with key opinion leaders. We believe that our uplisting to NASDAQ and strong cash position provide us with the foundation to efficiently execute our Phase 2 obesity clinical trial and build on our strategic vision.”

Key Corporate and Clinical Program Highlights

Phase 2 Trial in Obesity Expected to Begin in Q3 2024

Nimacimab, is a first-in-class humanized monoclonal antibody that acts as a negative allosteric modulator to inhibit CB1 signaling in the periphery.

• Skye recently announced its CBeyond™ Phase 2 clinical trial design for nimacimab, for the treatment of obesity. This 120-patient trial is on track to begin screening in Q3 2024 and is expected to provide interim and topline data in Q2 and Q4 of 2025, respectively. The trial’s primary endpoint is to evaluate weight loss using nimacimab compared to placebo.
• Secondary endpoints include evaluations of safety and tolerability, neuropsychiatric and cognitive evaluation, change in body composition by Dual-Energy X-ray Absorptiometry (DEXA), and changes in key metabolic biomarkers such as triglycerides, insulin and leptin sensitivity.
• This trial will also be the first to evaluate the combination of a CB1 inhibitor (nimacimab) and a GLP-1 agonist (Wegovy^®) in humans in an exploratory arm which will assess the difference in weight loss, the difference in body composition and changes in sleep quality.
• In connection with the Company’s CBeyond™ trial for nimacimab, Skye announced a collaboration with Beacon Biosignals. Because obesity is recognized as detrimentally affecting sleep quality in some people¹, Skye’s CBeyond™ trial will use Beacon Biosignal’s FDA 510(k)-cleared Dreem Headband to collect sleep data and assess validated sleep endpoints in a subset of 40 patients, encompassing all arms of the trial, as an exploratory endpoint.

Completion of Glaucoma Study

• Skye completed a Phase 2a double-masked randomized, placebo-controlled trial of SBI-100 Ophthalmic Emulsion (“SBI-100 OE”) in 56 patients with elevated intraocular pressure (IOP) diagnosed with primary open-angle glaucoma or ocular hypertension. The primary endpoint evaluated the change in diurnal IOP in the treated arm vs. placebo over 2 weeks. The study did not achieve a statistically significant improvement in IOP over placebo.
• Skye has discontinued all clinical development, and research and development related to SBI-100 OE, including its ophthalmology pipeline, and redirected capital resources from its ocular program to its metabolic program.

Corporate Highlights

• Skye recently announced the appointment of Karen Smith, MD, Ph.D., MBA, LLM, to its Board of Directors. Dr. Smith brings significant global biotech and biopharma leadership expertise to Skye, including over 10 years of board and advisory experience.
• Skye recently announced the appointment of a new Clinical and Scientific Advisory Board to support the development of nimacimab, with advisors including Lee Kaplan, MD, Ph.D., Louis Aronne, MD, Rekha Kumar, MD, M.S., Marcus DaSilva Goncalves, MD, Ph.D., Beverly Tchang, MD, Eduardo Muñoz, MD, Ph.D. and Giovanni Appendino, Ph.D.
• Skye uplisted to the NASDAQ Global Market^® stock exchange from the OTCQB.
• Skye was included in the Russell 2000^® Index and the broad-market Russell 3000^® Index, effective at the U.S. market open on July 1, 2024, as part of the annual reconstitution of the Russell stock indexes.
• Subsequent to the end of second quarter, in August, Skye’s convertible debt with a principal balance of $5.0 million was converted into 968,973 shares of the Company’s common stock.
  

Second Quarter 2024 Financial Highlights:

Cash Position: Cash and cash equivalents totaled $74.1 million, excluding restricted cash of $9.1 million on June 30, 2024. The Company expects its current cash and cash equivalents to fund projected operations through at least the first half of 2027.

R&D Expenses: Research and development (R&D) expenses for the second quarter of 2024 were $4.1 million, as compared to $1.8 million for the same period in 2023. The increase was primarily due to costs associated with the completion of our Phase 2a clinical trial for glaucoma, which has since been discontinued, and the costs from the preparation of the launch of our Phase 2 clinical trial for the treatment of obesity.

G&A Expenses: General and administrative (G&A) expenses for the second quarter of 2024 were $4.3 million, as compared to $1.2 million for the same period in 2023. The increase was primarily due to increases in non-cash incentive stock-based compensation, professional services and fees associated with the Company’s January and March 2024 PIPE financings, uplisting to NASDAQ and expansion to support and advance its operations as a publicly-traded company.

Net Loss: Net loss for the second quarter of 2024 totaled $7.9 million, with non-cash share-based compensation expense of $1.8 million and non-cash interest expense of $0.3 million, compared to $3.1 million for the second quarter of 2023 with non-cash share-based compensation expense of $0.1 million.

^{1 Shazia Jehan et al, “Obstructive Sleep Apnea and Obesity: Implications for Public Health,” Sleep Med Disord. 2017; 1(4): 00019. Published online 2017 Dec 12.}

About Skye Bioscience

Skye is focused on unlocking new therapeutic pathways for metabolic health through the development of next-generation molecules that modulate G-protein coupled receptors. Skye's strategy leverages biologic targets with substantial human proof of mechanism for the development of first-in-class therapeutics with clinical and commercial differentiation. Skye plans to start a Phase 2 clinical trial in obesity in Q3 2024 for nimacimab, a negative allosteric modulating antibody that peripherally inhibits CB1, comparing monotherapy and combination arms of nimacimab and a GLP-1R agonist (Wegovy^®). For more information, please visit: https://www.skyebioscience.com. Connect with us on Twitter and LinkedIn.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our product development for nimacimab, business strategy, the timing of clinical trials for nimacimab, the therapeutic potential of nimacimab and the expected timing through which our current cash and cash equivalents will fund our operating plans. Such statements and other statements in this press release that are not descriptions of historical facts are forward-looking statements that are based on management’s current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, our business, operating results, financial condition, and stock price could be materially negatively affected. In some cases, forward-looking statements can be identified by terminology including “anticipated,” “plans,” “goal,” “focus,” “aims,” “intends,” “believes,” “expects,” “can,” “could,” “challenge,” “predictable,” “will,” “would,” “may” or the negative of these terms or other comparable terminology. We operate in a rapidly changing environment, and new risks emerge from time to time. As a result, it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements the Company may make. Risks and uncertainties that may cause actual results to differ materially include, among others, our capital resources, uncertainty regarding the results of future testing and development efforts and other risks that are described in the Company’s periodic filings with the Securities and Exchange Commission, including in the “Risk Factors” section of Skye’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Except as expressly required by law, Skye disclaims any intent or obligation to update these forward-looking statements.

SKYE BIOSCIENCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
	For the Three Months Ended  June 30,								For the Six Months Ended  June 30,
	2024				2023				2024				2023
Operating expenses
Research and development	$	4,078,751			$	1,788,434			$	6,025,201			$	2,973,314
General and administrative		4,326,820				1,206,405				8,532,620				3,121,683
Estimated legal contingency		—				(151,842	)			—				(151,842	)
Total operating expenses		8,405,571				2,842,997				14,557,821				5,943,155
Operating loss		(8,405,571	)			(2,842,997	)			(14,557,821	)			(5,943,155	)
Other (income) expense
Interest expense		450,052				186,429				886,988				204,828
Interest income		(961,237	)			(8,598	)			(1,388,791	)			(33,112	)
(Gain) loss from asset sales		—				—				(1,145,141	)			307,086
Debt conversion inducement expense		—				—				—				1,383,285
Wind-down costs		—				87,072				—				470,181
Other expense (income)		359				—				1,399				(3	)
Total other (income) expense, net		(510,826	)			264,903				(1,645,545	)			2,332,265
Loss before income taxes		(7,894,745	)			(3,107,900	)			(12,912,276	)			(8,275,420	)
Provision for income taxes		8,071				3,600				10,071				3,600
Net loss	$	(7,902,816	)		$	(3,111,500	)		$	(12,922,347	)		$	(8,279,020	)
Loss per common share:
Basic	$	(0.20	)		$	(0.80	)		$	(0.39	)		$	(2.16	)
Diluted	$	(0.20	)		$	(0.80	)		$	(0.39	)		$	(2.16	)
Weighted average shares of common stock outstanding used to compute earnings per share:
Basic		38,669,330				3,886,198				33,334,616				3,827,216
Diluted		38,669,330				3,886,198				33,334,616				3,827,216

SKYE BIOSCIENCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
	June 30, 2024				December 31, 2023
ASSETS
Current assets
Cash and cash equivalents	$	74,120,854			$	1,256,453
Restricted cash		9,080,202				9,080,202
Prepaid expenses		1,096,039				194,259
Other current assets		2,707,368				1,119,929
Total current assets		87,004,463				11,650,843
Property and equipment, net		45,772				43,276
Operating lease right-of-use asset		202,987				237,983
Other assets		8,309				8,309
Total assets	$	87,261,531			$	11,940,411
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	1,079,493			$	1,155,785
Accrued interest - related party		124,658				126,027
Accrued payroll liabilities		556,573				888,381
Accrued interest - legal contingency		384,896				234,750
Other current liabilities		1,184,795				998,552
Estimate for legal contingency		6,053,468				6,053,468
Convertible note - related party, net of discount		4,859,525				4,371,998
Operating lease liability, current portion		79,165				72,038
Total current liabilities		14,322,573				13,900,999
Non-current liabilities
Operating lease liability, net of current portion		129,907				171,230
Total liabilities		14,452,480				14,072,229
Commitments and contingencies (Note 9)
Stockholders’ equity (deficit)
Preferred stock, $0.001 par value; 200,000 shares authorized at June 30, 2024 and December 31, 2023; no shares issued and outstanding at June 30, 2024 and December 31, 2023		—				—
Common stock, $0.001 par value; 100,000,000 shares authorized at June 30, 2024 and December 31, 2023; 28,067,907 and 12,349,243 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		28,068				12,349
Additional paid-in-capital		190,085,879				102,238,382
Accumulated deficit		(117,304,896	)			(104,382,549	)
Total stockholders’ equity (deficit)		72,809,051				(2,131,818	)
Total liabilities and stockholders’ equity (deficit)	$	87,261,531			$	11,940,411

Contacts

Investor Relations
ir@skyebioscience.com
(858) 410-0266

LifeSci Advisors, Mike Moyer
mmoyer@lifesciadvisors.com
(617) 308-4306

Media Inquiries
LifeSci Communications, Michael Fitzhugh
mfitzhugh@lifescicomms.com
(628) 234-3889

FAQ

When is Skye Bioscience (SKYE) expected to start its Phase 2 obesity clinical trial?

Skye Bioscience (SKYE) is expected to begin its Phase 2 obesity clinical trial for nimacimab in Q3 2024.

What were Skye Bioscience's (SKYE) key financial figures for Q2 2024?

In Q2 2024, Skye Bioscience (SKYE) reported a cash position of $74.1 million, R&D expenses of $4.1 million, G&A expenses of $4.3 million, and a net loss of $7.9 million.

How long does Skye Bioscience (SKYE) expect its current cash to fund operations?

Skye Bioscience (SKYE) expects its current cash position to fund projected operations through at least the first half of 2027.

What major corporate changes did Skye Bioscience (SKYE) announce in Q2 2024?

Skye Bioscience (SKYE) announced uplisting to the NASDAQ Global Market®, inclusion in Russell indexes, appointment of a new board member, and formation of a Clinical and Scientific Advisory Board.

Why did Skye Bioscience (SKYE) discontinue its ophthalmology pipeline?

Skye Bioscience (SKYE) discontinued its ophthalmology pipeline, including SBI-100 OE for glaucoma, due to unsuccessful Phase 2a trial results that did not achieve statistically significant improvement in intraocular pressure over placebo.