On May 16, 2016 Sophiris Bio Inc. (NASDAQ: SPHS) (the "Company" or "Sophiris"), a biopharmaceutical company developing topsalysin (PRX302) for the treatment of urological diseases, reported financial results for the three months ended March 31, 2016 (Filing, Q1, Sophiris Bio, 2016, MAY 16, 2016, View Source [SID:1234512460]).

Business Highlights:

● On May 12, 2016, the Company announced the engagement Oppenheimer & Co. Inc. as its financial advisor to assist with the evaluation of various strategic alternatives.

● On May 11, 2016, the Company announced the closing of a public offering of common shares and warrants in which the Company raised net proceeds of $4.6 million.

● On May 7, 2016, the Company presented positive data from its Phase 3 clinical trial of topsalysin as a treatment for the symptoms of benign prostatic hyperplasia ("BPH") as a late breaking poster at the 111th American Urological Association Annual Meeting. A copy of the poster is available on the Company’s website at www.sophirisbio.com.

● On January 28, 2016, the Company announced that a review of the 6-month biopsy data from the first seven patients in the localized prostate cancer trial was completed.

"We are encouraged by the interim data from our Phase 2a topsalysin proof of concept trial for the treatment of localized prostate cancer announced earlier this year, and remain on track to complete this clinical trial by the end of this quarter," stated Randall Woods, president and CEO of Sophiris Bio. "We believe that the positive data from our Phase 3 BPH clinical trial and the encouraging initial data from our localized prostate cancer clinical trial further de-risk the development programs."

Mr. Woods added: "The funds raised in the financing strengthen our balance sheet as we review various strategic alternatives to advance the clinical development of topsalysin and create value for shareholders."

Phase 2a Proof of Concept Clinical Trial for Localized Prostate Cancer:

In May 2015 we initiated a single-center, open-label Phase 2a proof of concept clinical trial ("POC trial") of topsalysin for the treatment of localized low to intermediate risk prostate cancer. We believe that the highly targeted mechanism by which topsalysin selectively destroys prostate tissue in BPH makes topsalysin a potential targeted focal treatment for localized prostate cancer. A total of 18 patients with clinically significant, localized low to intermediate risk prostate cancer have been enrolled in this ongoing POC trial.

On January 28, 2016 we announced the biopsy data at six months on the first seven patients to complete the POC trial. A review of the biopsy data from the first seven patients showed that four patients experienced a response to treatment, including: one patient who experienced complete ablation of the tumor where there was no evidence of the treated tumor on a targeted biopsy at six months following treatment; and three patients who experienced either a reduction in the maximum cancer core length or a reduction in the Gleason pattern. Three patients had no response to treatment. No serious adverse events have been observed to date in this clinical trial and no new safety signals have been reported. We expect to have final data on all 18 patients by the end of the second quarter of 2016.

Financial Results:

At March 31, 2016, we had cash, cash equivalents and securities available-for-sale of $5.4 million and net working capital of $3.0 million. Taking into consideration the net proceeds of $4.6 million from our financing completed on May 11, 2016, we now expect that our cash, cash equivalents and securities available-for-sale will be sufficient to fund our operations for at least the next twelve months assuming that we do not initiate any additional clinical development of topsalysin beyond our on-going Phase 2a POC trial. We will need to obtain additional capital to fund a second Phase 3 clinical trial of topsalysin for the treatment of the symptoms of BPH and for any future clinical development of topsalysin for the treatment of localized prostate cancer and to fund our ongoing operations. We are actively evaluating strategic alternatives, including potential partnering arrangements, financings or a strategic transaction. We expect our research and development expense and general and administrative expenses to decrease as a result of the completion of our Phase 2a POC trial at the end of the second quarter of 2016 and as a result of the layoff of five of our ten employees during May 2016, resulting in an annualized reduction in compensation and benefit expenses of $0.9 million, net of severance. As of March 31, 2016, the outstanding principal balance of our term loan was $4.8 million on which we make principal and interest payments monthly.

The Company reported a net loss of $2.2 million ($0.13 per share) for the three months ended March 31, 2016 compared to a net loss of $4.3 million ($0.26 per share) for the three months ended March 31, 2015.

Research and development expenses

Research and development expenses were $0.9 million for the three months ended March 31, 2016 compared to $3.1 million for the three months ended March 31, 2015. The decrease in research and development costs is attributable to decreases in the costs associated with the Company’s completed Phase 3 PLUS-1 clinical trial of topsalysin, costs associated with the manufacturing activities for topsalysin and personnel related costs. These decreases are partially offset by an increase in costs associated with the Phase 2a POC trial for localized low to intermediate risk prostate cancer which enrolled its first patient in the second quarter of 2015.

General and administrative expenses

General and administrative expenses were $1.2 million for the three months ended March 31, 2016 compared to $1.0 million for the three months ended March 31, 2015. The increase is primarily due to increases in legal, accounting and professional services costs.

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