Salarius Pharmaceuticals Reports Fourth Quarter and Full Year 2023 Financial Results and Provides Business Update

Rhea-AI Summary

Salarius Pharmaceuticals, Inc. resumes patient enrollment in a clinical trial for Seclidemstat in combination with Azacitidine for hematologic cancers. The company implemented expense-reduction measures to extend cash runway. Financial results show a decrease in net loss for Q4 2023 compared to Q4 2022. Seclidemstat shows promising results in treating Ewing sarcoma.

Positive

• Resumption of patient enrollment in a clinical trial for Seclidemstat in combination with Azacitidine for hematologic cancers.
• Implementation of expense-reduction measures to extend cash runway.
• Significant decrease in net loss for Q4 2023 compared to Q4 2022.
• Positive results from Seclidemstat in treating Ewing sarcoma.

Negative

• None.

Insights

Financial Analyst

The financial performance of Salarius Pharmaceuticals, as reported, shows a significant reduction in net loss from $31.6 million in 2022 to $12.5 million in 2023. This reduction can be attributed to both a one-time non-cash expense in the previous year and aggressive cost-saving measures. The company's decision to resume patient enrollment in a clinical trial and the continuation of its Ewing sarcoma study are strategic steps that could potentially yield positive data, enhancing the company's value proposition to investors.

However, the decrease in cash and cash equivalents from $12.1 million to $5.9 million raises concerns about the company's liquidity and long-term financial stability. While the current cash is expected to fund operations into the first half of 2025, investors should consider the burn rate and the potential need for additional funding, which could lead to dilution of shares or increased debt.

Medical Research Analyst

The resumption of patient enrollment in the hematologic cancer trial and the ongoing Ewing sarcoma study are critical for Salarius Pharmaceuticals' pipeline development. The preliminary results showing a 50% objective response rate in a subset of patients and an extended overall survival rate are promising. However, these are interim results and should be interpreted cautiously until more comprehensive data is available.

Seclidemstat's fast track, orphan drug and rare pediatric disease designations by the FDA for Ewing sarcoma suggest regulatory confidence in the drug's potential, which could expedite the development process. Nevertheless, the true impact on the company's valuation will depend on the outcomes of the ongoing trials and the ability to navigate the regulatory landscape effectively.

Market Research Analyst

Salarius Pharmaceuticals' strategic focus on protein inhibition and degradation to develop cancer therapies places it within a highly competitive and innovative segment of the biopharmaceutical market. The company's targeted approach in treating hematologic cancers and Ewing sarcoma, which have unmet medical needs, could position it favorably if the clinical outcomes are positive.

Investors should monitor the competitive landscape and the progress of similar drugs in development by other companies. Market dynamics, such as the potential market size for seclidemstat and SP-3164, payer willingness to cover these treatments and the global demand for novel cancer therapies, will ultimately influence the company's market potential and stock performance.

Patient Enrollment Resumed in the Investigator-initiated Phase 1/2 Clinical Trial of Seclidemstat in Combination with Azacitidine to Treat Hematologic Cancers

Company Implemented Significant Expense-reduction Measures to Extend Cash Runway

HOUSTON, March 22, 2024 (GLOBE NEWSWIRE) -- Salarius Pharmaceuticals, Inc. (Nasdaq: SLRX), a clinical-stage biopharmaceutical company using protein inhibition and protein degradation to develop cancer therapies for patients in need of new treatment options, today reported financial results for the three and 12 months ended December 31, 2023 and provided a business update.

Financial Highlights

• Net loss for the fourth quarter of 2023 was $0.9 million, or $0.22 per share, compared with a net loss for the fourth quarter of 2022 of $6.4 million, or $2.83 per share, reflecting lower operating expenses resulting from the cost-savings plan implemented in the third quarter of 2023.
• Net loss for 2023 was $12.5 million, or $3.84 per share, compared with a net loss for 2022 of $31.6 million, or $14.88 per share. The 2022 net loss included a one-time non-cash expense of $8.9 million, or $4.17 per share, due to a loss on impairment of goodwill.
• Cash and cash equivalents were $5.9 million as of December 31, 2023, compared with $12.1 million as of December 31, 2022. The company collected all its remaining CPRIT payments during 2023.
  

In August 2023 Salarius announced a comprehensive review of strategic alternatives focused on maximizing shareholder value. While these efforts are ongoing, the Company continues to support its clinical programs, as appropriate, and the cost-savings measures approved by the Board of Directors are designed to enable the Company to continue supporting such activities. These measures included a reduction in certain executive, clinical and research and development staff, and the opportunistic engagement of consultants, among other activities.

“During the second half of 2023 and the first months of 2024, Salarius reduced operating expenses, allowing us to extend our cash runway to generate additional clinical data in the seclidemstat hematologic and Ewing sarcoma clinical trials. We believe these data, if positive, will further enhance our opportunities to maximize shareholder value,” said William McVicar, Ph.D., Chairman of the Salarius Pharmaceuticals Board of Directors. “As previously announced, the MD Anderson Cancer Center (MDACC) investigator-initiated hematologic cancer trial is active and enrolling patients, and we look forward to clinical trial updates later this year. The Company’s Ewing sarcoma Phase 1/2 study is not currently enrolling patients, but previously enrolled patients continue to be followed.”

Fourth Quarter Financial Results
Net loss for the fourth quarter of 2023 was $0.9 million, or $0.22 per share, compared with a net loss for the fourth quarter of 2022 of $6.4 million, or $2.83 per share. The decrease was due to the cost-savings plan implemented in the third quarter of 2023.

Research and development expenses were $0.06 million for the fourth quarter of 2023, compared with $4.7 million for the fourth quarter of 2022, reflecting the above-mentioned cost-savings plan.

Net cash used for operating activities during the fourth quarter of 2023 was $1.5 million, compared with $4.7 million during the same quarter in 2022, reflecting the above-mentioned cost-savings plan.

Full Year Financial Results
Net loss for 2023 was $12.5 million, or $3.84 per share, compared with a net loss for 2022 of $31.6 million, or $14.88 per share. This reduction of approximately $19.1 million resulted from an $8.9 million one-time non-cash expense for impairment of goodwill in 2022, significantly lower research and development expenses and lower general and administrative expenses in 2023 resulting from the Company’s idled clinical trial in late 2022, and cost-cutting measures that began in the third quarter of 2023. Costs resulting from the acquisition and development of SP-3164 in 2022 did not repeat in 2023.

Research and development expenses were $7.2 million for 2023, compared with $15.8 million for 2022. The decrease was principally due to the company’s lower spending on SP-2577, which went on clinical hold during the fourth quarter of 2022 and remained idle through 2023, cost cutting measures undertaken beginning in the third quarter of 2023 and SP-3164 acquisition costs in 2022 that did not repeat in 2023.

Net cash used in operating activities for 2023 was $12.8 million, compared with $17.6 million for 2022. The decrease was primarily due to lower overall operating loss in the current year.

As of December 31, 2023, Salarius had cash, cash equivalents and restricted cash of $5.9 million, compared with $12.1 million as of December 31, 2022. Current cash and cash equivalents are expected to fund the company’s planned operations into the first half of 2025.

Targeted Protein Inhibitor (Seclidemstat) Highlights
Seclidemstat (SP-2577) is a novel oral reversible inhibitor of the LSD1 enzyme that is being studied as a treatment for hematologic cancers in an investigator-initiated clinical trial at MDACC and in a Company-sponsored trial as a treatment for Ewing sarcoma.

In December 2022, researchers at MDACC reported interim clinical trial results evaluating seclidemstat in combination with azacitidine for the treatment of myelodysplastic syndrome and chronic myelomonocytic leukemia patients who relapsed or progressed after hypomethylating agent therapy. Of eight evaluable patients, four (50%) had an objective response. These researchers reported a 90% probability of survival for 11 months in patients receiving seclidemstat plus azacitidine. Typically, overall survival is four to six months after failing therapy with hypomethylating agents. The hematologic cancer Phase 1/2 clinical trial being conducted at MDACC is now listed as active and recruiting on clinical trials.gov – trial NCT04734990.

Seclidemstat has received fast track, orphan drug and rare pediatric disease designations from the U.S. Food and Drug Administration (FDA) for Ewing sarcoma and has been studied in a Company-sponsored Phase 1/2 trial evaluating its use in combination with topotecan and cyclophosphamide (TC) for the treatment of relapsed/refractory Ewing sarcoma. To date, 13 relapsed Ewing sarcoma patients, including five patients with first relapse and eight patients with second relapse, have been enrolled at 600 mg or 900 mg of seclidemstat dosed twice daily in combination with TC.

• The five first-relapse patients demonstrated a 60% objective response rate (ORR) and a 60% disease control rate (DCR), including one complete response and two partial responses. Among the three patients achieving objective responses, the median progression-free survival (mPFS) has not been reached with these patients still alive with disease control and objective responses at 17.4, 25.7 and 27.2 months, and increasing, after starting seclidemstat + TC combination therapy.
• The eight second-relapse patients demonstrated a 13% ORR, a 25% DCR and a mPFS of 1.6 months (range: 0.0 months to 10.7 months).
• Together, the 13 first- and second-relapse patients demonstrated a mPFS of 8.1 months (range: 2.0 months to 27.2 months). Five patients, or 38%, achieved confirmed disease control and progression has not been observed in any of these patients while on study.
  

Salarius has completed the FDA Type B End of Phase 2 (EOP2) meeting process for the seclidemstat Ewing sarcoma development program and has amended the current clinical trial protocol to reflect guidance agreed to with FDA. There is currently one patient enrolled in the Ewing sarcoma clinical trial who recently achieved a partial response, defined as a 30% or greater reduction in their target lesions, and this patient is continuing treatment with seclidemstat plus TC therapy. The Ewing sarcoma trial is currently active but is not enrolling additional patients.

Targeted Protein Degrader (Molecular Glue) Highlights
SP-3164 is an oral, next-generation molecular glue that uses Salarius’ deuterium-enabled chiral switching platform to stabilize the preferred (S)-enantiomer of avadomide, an extensively studied clinical compound that has demonstrated encouraging single-agent and combination-therapy clinical efficacy in non-Hodgkin lymphoma (NHL) and other hematologic malignancies. The addition of deuterium at the chiral center of the molecule prevents conversion to the unwanted (R)-enantiomer, allowing for isolation and development of the preferred (S)-enantiomer into a potential new cancer treatment. In July 2023 the FDA cleared the Company’s investigational new drug (IND) application to commence a Phase 1 clinical trial with SP-3164 in patients with relapsed/refractory NHL. That trial has not commenced.

About Salarius Pharmaceuticals
Salarius Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company developing therapies for patients with cancer in need of new treatment options. Salarius’ product portfolio includes seclidemstat, its lead candidate, which is being studied as a potential treatment for pediatric cancers, sarcomas and other cancers with limited treatment options, and SP-3164, an oral small molecule protein degrader being developed for the treatment of non-Hodgkin’s lymphoma. Salarius has received financial support from the National Pediatric Cancer Foundation to advance the Ewing sarcoma program and was a recipient of a Product Development Award from the Cancer Prevention and Research Institute of Texas (CPRIT). For more information, please visit salariuspharma.com or follow Salarius on Twitter and LinkedIn.

Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release are forward-looking statements. These forward-looking statements may be identified by terms such as “will,” “believe,” “developing,” “expect,” “may,” “progress,” “potential,” “could,” “look forward,” “encouraging,” “might,” “should,” and similar terms or expressions or the negative thereof. Examples of such statements include, but are not limited to, statements relating to the following: Salarius’ ability to continue as a going concern, Salarius’ expectations regarding the exploration of strategic alternatives, opportunities to extend Salarius’ resources, the Company’s expected cash runway, the Company’s expectations that the cost-savings measures will support the generation of additional data from the ongoing Phase 1/2 clinical trials in hematologic cancers and Ewing sarcoma; the future of the Company’s operations and product candidates; the future of the Company’s preclinical studies and clinical trials and development activities; the advantages of protein degraders including the value of SP-3164 as a cancer treatment; the value of seclidemstat as a treatment for Ewing sarcoma, Ewing-related sarcomas, and other cancers and its ability to improve the life of patients, and Salarius’ ability to remain listed on Nasdaq. Salarius may not actually achieve the plans, carry out the intentions or meet the expectations or objectives disclosed in these forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements are subject to risks and uncertainties which could cause actual results and performance to differ materially from those discussed in the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: the risk that exploration of strategic alternatives may not result in any definitive transaction or enhance stockholder value and may create a distraction or uncertainty that may adversely affect our operating results, business, or investor perceptions; the likelihood that the Company will need to seek a dissolution and orderly wind-down of operations if the Company is unable to raise capital or complete a strategic transaction in the next several months; expectations regarding future costs and expenses; our product candidates being in early stages of development; the uncertainty about the paths of our programs and our ability to evaluate and identify a path forward for those programs, particularly given the constraints we have as a small company with limited financial, personnel and other operating resources (including with respect to the allocation of our limited capital and the sufficiency of our capital in the near term for any path we do select); Salarius’ ability to continue as a going concern; the sufficiency of Salarius’ capital resources; availability of suitable third parties with which to conduct contemplated strategic transactions; whether the Company will be able to pursue a strategic transaction, or whether any transaction, if pursued, will be completed successfully and on attractive terms or at all; whether our cash resources will be sufficient to fund the Company’s foreseeable and unforeseeable operating expenses and capital requirements; changes in the Company’s operating plans that may impact its cash expenditures; the uncertainties inherent in research and development, future clinical data and analysis; the risks associated with reductions in workforce; the risk of not having a full-time chief executive officer; future clinical trial results and the impact of such results on Salarius; that the results of studies and clinical trials may not be predictive of future clinical trial results; the competitive landscape and other industry-related risks; and other risks described in Salarius’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as revised or supplemented by its Quarterly Reports on Form 10-Q and other documents filed with the SEC. The forward-looking statements contained in this press release speak only as of the date of this press release and are based on management’s assumptions and estimates as of such date. Salarius disclaims any intent or obligation to update these forward-looking statements to reflect events or circumstances that exist after the date on which they were made.

Contact:

LHA Investor Relations
Kim Sutton Golodetz
kgolodetz@lhai.com
212-838-3777

SALARIUS PHARMACEUTICALS, INC. CONSOLIDATED BALANCE SHEETS
	December 31,
		2023				2022
Assets
Current assets:
Cash and cash equivalents	$	5,899,910			$	12,106,435
Grants receivable from CPRIT		—				1,610,490
Prepaid expenses and other current assets		619,763				803,373
Total current assets		6,519,673				14,520,298
Other assets		66,850				130,501
Total assets	$	6,586,523			$	14,650,799
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable	$	602,853			$	2,858,330
Accrued expenses and other current liabilities		406,745				1,407,861
Notes payable		289,643			$	—
Total liabilities	$	1,299,241			$	4,266,191
Commitments and contingencies (NOTE 5)
Stockholders' equity (deficit):
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued or outstanding		—				—
Common stock, $0.0001 par value; 100,000,000 shares authorized; 3,938,433 and 2,255,899 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively		393				225
Additional paid-in capital		81,634,730				74,189,531
Accumulated deficit		(76,347,841	)			(63,805,148	)
Total stockholders' equity		5,287,282				10,384,608
Total liabilities and stockholders' equity	$	6,586,523			$	14,650,799

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	Twelve Months Ended December 31
		2023				2022
Operating expenses:
Research and development		7,173,747				15,836,828
General and administrative		5,721,197				7,138,403
Loss on impairment of goodwill		—				8,865,909
Total operating expenses		12,894,944				31,841,140
Loss before other income (expense)		(12,894,944	)			(31,841,140	)
Change in fair value of warrant liability		—				14,454
Interest income		352,251				218,730
Net loss	$	(12,542,693	)		$	(31,607,956	)
Loss attributable to common stockholders	$	(12,542,693	)		$	(31,607,956	)
Loss per common share — basic and diluted	$	(3.84	)		$	(14.88	)
Total net loss per share	$	(3.84	)		$	(14.88	)
Weighted-average number of common shares outstanding — basic and diluted		3,264,620				2,124,511

FAQ

What is the focus of the clinical trial involving Seclidemstat and Azacitidine?

The clinical trial focuses on treating hematologic cancers.

What expense-reduction measures did Salarius Pharmaceuticals implement?

Salarius implemented measures such as reducing certain staff and engaging consultants.

What were the financial results for Salarius in Q4 2023 compared to Q4 2022?

The net loss decreased significantly in Q4 2023 compared to Q4 2022.

What positive results were reported for Seclidemstat in treating Ewing sarcoma?

Patients showed a 60% objective response rate and a 60% disease control rate.

What is the status of the Ewing sarcoma clinical trial currently?

The trial is active but not enrolling additional patients.