On August 6, 2020 Sierra Oncology, Inc. (SRRA), a late-stage drug development company focused on the registration and commercialization of momelotinib, a JAK1, JAK2 & ACVR1 inhibitor with a potentially differentiated therapeutic profile for the treatment of myelofibrosis, reported its financial and operational results for the second quarter ended June 30, 2020 (Press release, Sierra Oncology, AUG 6, 2020, View Source [SID1234563123]).
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"We believe momelotinib, if approved, may provide an important treatment option for underserved myelofibrosis patients, in particular those with anemia and thrombocytopenia, and as such is well-positioned to generate significant value," said Dr. Stephen Dilly, President and CEO of Sierra Oncology. "During the second quarter, we continued to advance the MOMENTUM Phase 3 trial and are on track to deliver top-line results in the first half of 2022. In anticipation of these pivotal data, we are preparing for the regulatory submission process and the potential commercialization of momelotinib, and subsequent to the end of the quarter, we substantially strengthened our senior management team to support these activities."
"We made significant progress during the first half of 2020 operationalizing the global MOMENTUM Phase 3 trial and, while the potential impact of the COVID-19 pandemic continues to be uncertain, we are pleased with the current pace of enrollment" said Dr. Barbara Klencke, Chief Development Officer, Sierra Oncology. "During the EHA (Free EHA Whitepaper) virtual conference, two world-leading physicians in the treatment of myelofibrosis reported long-term data that continue to reinforce momelotinib’s differentiated durability, safety and efficacy profile. We plan to report updated analyses in late 2020 comparing the symptomatic benefits of momelotinib to ruxolitinib from the SIMPLIFY-1 Phase 3 trial that will further emphasize momelotinib’s differentiated and competitive profile."
"As the MOMENTUM trial ramps up, we’ve managed our resources prudently and continue to anticipate our current cash runway will extend beyond top-line data and into the second half of 2022, subject to the potential impact of COVID-19," said Mr. Sukhi Jagpal, Chief Financial Officer of Sierra Oncology. "In addition, our Series B warrants will expire on the 75th day following the announcement of top-line data and may only be exercised by paying the exercise price in cash, which would amount to approximately $34.0 million in proceeds to the Company if fully exercised. We are also starting to explore non-dilutive options that could provide additional capital to support our North American commercialization strategy."
Second Quarter Highlights:
Hosted an Analyst & Investor Call featuring a presentation by renowned myelofibrosis expert Dr. Ruben Mesa, Director of the Mays Cancer Center, home to UT Health San Antonio MD Anderson Cancer Center, who discussed momelotinib’s ability to address anemia and transfusion dependency, two critical unmet medical needs in treating patients with myelofibrosis.
Reported favorable Long-Term Safety and Dose Intensity data for momelotinib from more than 550 patients across the two previously conducted SIMPLIFY Phase 3 studies and their subsequent ongoing extended treatment periods, at the 25th EHA (Free EHA Whitepaper) Virtual Congress.
Professor Claire Harrison, Guy’s and St. Thomas’ NHS Foundation Trust, London, United Kingdom presented a poster on the long-term safety profile of momelotinib, which demonstrated a lack of emergent or cumulative toxicity with extended daily administration. More than 90 SIMPLIFY-1 and SIMPLIFY-2 patients continued to receive momelotinib for 3.5 years or longer. Patients treated with momelotinib experienced rapid and sustained increases in hemoglobin, in contrast to the significant decrease in hemoglobin for patients receiving ruxolitinib. Patients treated with momelotinib also experienced significantly higher mean platelet counts compared to those receiving ruxolitinib. Importantly, patients who switched from ruxolitinib to momelotinib also achieved a sustained improvement in hemoglobin in both studies, and platelets in SIMPLIFY-1.
Dr. Vikas Gupta, Princess Margaret Cancer Centre, Toronto, Canada, presented a poster highlighting the sustained dose intensity and prolonged clinical activity of momelotinib across the continuum of JAK inhibitor naïve and previously JAK inhibitor treated myelofibrosis patients. While the starting doses for ruxolitinib were often attenuated due to low platelets, further reductions in dose intensity were also commonly required for ruxolitinib. In contrast, momelotinib was initiated at full dose for all patients enrolled to the SIMPLIFY studies and high dose intensity was maintained in the majority over extended dosing durations. Patients who switched from ruxolitinib to momelotinib saw an immediate and sustained improvement in dose intensity.
The data from the two interrelated presentations suggest that the favorable effect on hemoglobin and platelets allows momelotinib to be initiated at high dose intensity and maintained at high dose intensity over extended durations while retaining a favorable long-term safety profile. Notably, some patients continue to receive momelotinib 10 years after enrolling in the initial momelotinib Phase 2 trials, while 90 Phase 3 SIMPLIFY patients who enrolled into those trials 4 to 6 years ago continue to receive momelotinib, suggesting that the dosing and safety profile contributes to momelotinib’s potential ability to provide sustained benefits over extended durations.
Second Quarter 2020 Financial Results (all amounts reported in U.S. currency)
Research and development expenses were $10.2 million for the three months ended June 30, 2020 compared to $11.7 million for the three months ended June 30, 2019. The decrease was primarily due to a $2.1 million decrease in clinical trial, third-party manufacturing, research and preclinical costs for SRA737, a $1.1 million decrease in personnel-related and allocated overhead costs, and a $0.9 million decrease in third-party manufacturing costs for momelotinib. These decreases were partially offset by a $2.6 million increase in clinical trial and development costs for momelotinib. Research and development expenses included non-cash stock-based compensation of $0.9 million and $1.2 million for the three months ended June 30, 2020 and 2019, respectively.
Research and development expenses were $21.8 million for the six months ended June 30, 2020, compared with $21.9 million for the six months ended June 30, 2019. The decrease was primarily due to a $5.2 million decrease in clinical trial, third-party manufacturing, research and preclinical costs for SRA737, a $2.1 million decrease in personnel-related and allocated overhead costs, and a $0.6 million decrease in third-party manufacturing costs for momelotinib. These decreases were offset by a $6.3 million increase in clinical trial and development costs for momelotinib, and a non-cash charge of $1.5 million pertaining to the change in fair value of an obligation to issue common stock and a warrant to Gilead Sciences, Inc. (Gilead), which were issued during the first quarter of 2020. Research and development expenses included non-cash stock-based compensation of $1.5 million and $2.4 million for the six months ended June 30, 2020 and 2019, respectively.
General and administrative expenses were $6.3 million for the three months ended June 30, 2020, compared to $3.5 million for the three months ended June 30, 2019. The increase was primarily due to a non-cash $2.2 million stock-based compensation charge and a $0.6 million severance charge pertaining to an executive resignation. General and administrative expenses included non-cash stock-based compensation of $2.7 million and $0.5 million for the three months ended June 30, 2020 and 2019, respectively.
General and administrative expenses were $10.8 million for the six months ended June 30, 2020, compared to $6.8 million for the six months ended June 30, 2019. The increase was primarily due to a $3.0 million increase in personnel-related and allocated overhead costs, including a non-cash $2.2 million stock-based compensation charge noted above and $1.0 million of severance charges, offset by a decrease of $0.2 million in other personnel-related and allocated overhead costs. There was also an increase of $1.0 million in professional fees, including pre-commercial planning costs for momelotinib. General and administrative expenses included non-cash stock-based compensation of $3.1 million and $1.0 million for the six months ended June 30, 2020 and 2019, respectively.
Other income (expense), net was $24,000 of other expense, net for the three months ended June 30, 2020, compared to $0.3 million of other income, net for the three months ended June 30, 2019. The difference was primarily attributable to a decrease in interest income due to lower interest rates. Other income (expense), net was $15.7 million of other expense, net for the six months ended June 30, 2020, compared to $0.7 million of other income, net for the six months ended June 30, 2019. The difference was primarily attributable to a non-cash charge of $16.2 million related to the change in fair value of warrant liabilities which were reclassified to equity in January 2020.
For the three months ended June 30, 2020, Sierra incurred a GAAP net loss of $16.5 million compared to a GAAP net loss of $14.9 million for the months ended June 30, 2019. For the six months ended June 30, 2020, Sierra incurred a GAAP net loss of $48.4 million compared to a GAAP net loss of $27.9 million for the six months ended June 30, 2019. The GAAP net loss for the six months ended June 30, 2020 includes a non-cash charge of $16.2 million related to the change in fair value of warrant liabilities included in other income (expense), 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 $12.8 million for the three months ended June 30, 2020, compared with a non-GAAP adjusted net loss of $13.1 million for the three months ended June 30, 2019. Non-GAAP adjusted net loss for the three months ended June 30, 2020 and 2019 excludes expenses related to stock-based compensation. For the six months ended June 30, 2020, Sierra incurred a non-GAAP adjusted net loss of $26.1 million compared to a non-GAAP adjusted net loss of $24.5 million for the six months ended June 30, 2019. Non-GAAP adjusted net loss for the six months ended June 30, 2020 excludes expenses related to the change in fair value of warrant liabilities, the change in fair value of the securities issuance obligation, and stock-based compensation. Non-GAAP adjusted net loss for the six months ended June 30, 2019 excludes expenses related to stock-based compensation. See "Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Financial Measures" below for a reconciliation of this GAAP and non-GAAP financial measure.
Cash and cash equivalents totaled $123.2 million as of June 30, 2020, compared to $147.5 million as of December 31, 2019.
As of June 30, 2020, there were 10,395,732 total shares of common stock outstanding and warrants to purchase 11,102,251 shares of common stock, with an exercise price equal to $13.20 per share. There were 2,351,055 shares issuable upon exercise of stock options and an additional warrant to purchase 1,839 shares.