On October 28, 2019 Salarius Pharmaceuticals, Inc. (Nasdaq: SLRX), a clinical-stage oncology company targeting the epigenetic causes of cancers, reported that it has entered into a $10.9 million common stock purchase agreement, including a $1.0 million initial common stock purchase, with Aspire Capital Fund, LLC, a Chicago-based institutional investor (Press release, Salarius Pharmaceuticals, OCT 28, 2019, View Source [SID1234549922]).
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With the investment by Aspire plus non-dilutive funding from the Cancer Prevention Research Institute of Texas (CPRIT) and ongoing financial support from the National Pediatric Cancer Foundation, Salarius believes it is well-capitalized to advance its current clinical programs through a number of near-term, value creating milestones, including early safety and efficacy data readouts from the ongoing Phase 1/2 clinical trial of Seclidemstat, Salarius’ lead drug candidate, in Ewing sarcoma and the Phase 1 clinical trial of Seclidemstat in advanced solid tumors.
Under the agreement, Aspire Capital is committed to purchase up to $10.9 million of Salarius’ common stock over a 30-month span extending into 2022, subject to certain terms and conditions. Immediately upon execution of the agreement, Aspire Capital made an initial purchase of 210,526 shares for $1.0 million, a per share purchase price of $4.75, which is equal to the closing sale price of Salarius’ shares on October 24, 2019, the date of the agreement. Any additional sales to Aspire Capital under the agreement will occur at the sole discretion of Salarius and at prices based on the market price of Salarius’ common stock at the time of each sale.
"This common stock purchase agreement with Aspire Capital provides Salarius with additional access to capital and financing flexibility allowing Salarius to further advance its lead drug candidate, Seclidemstat," commented David Arthur, Chief Executive Officer of Salarius. "We believe our non-dilutive financial support from both CPRIT and the National Pediatric Cancer Foundation, now combined with funding from Aspire Capital, puts Salarius in a good financial position as we continue our work targeting the epigenetic causes of cancer."
Steven G. Martin, the Managing Member of Aspire Capital, commented, "We are very pleased to announce this investment in Salarius as we recognize LSD1 as a novel and exciting target with ever increasing clinical validation in a broad range of cancers, including Ewing sarcoma and other advanced solid tumors, as well as hematologic cancers such as AML. Seclidemstat has demonstrated promising and potentially best-in-class characteristics driven by its differentiated reversible binding profile and inhibition of both the enzymatic and scaffolding functions of LSD1. Furthermore, we’re intrigued by recent evidence showing that the inhibition of LSD1 stimulates interferon production highlighting Seclidemstat’s potential as an important new immuno-oncology agent. Aspire Capital is confident that Salarius offers a good opportunity for near and long-term value creation."
Under the terms of the agreement with Aspire Capital, Salarius retains full control over the timing of any stock sales made under the agreement and the amount of stock sold to Aspire Capital. There are no warrants, options, financing swaps, derivatives or other securities associated with the agreement. The agreement contains no restrictions on the use of proceeds, financial covenants or restrictions on future financings and no rights of first refusal, participation rights, penalties or liquidated damages. Lastly, Salarius maintains the right to terminate the agreement at any time, at its discretion, without any additional cost or penalty. The proceeds from this agreement will be used for working capital and general corporate purposes.
In addition to the Common Stock Purchase Agreement, Salarius also entered into a Registration Rights Agreement with Aspire Capital. Additional details regarding the transaction, including the issuance of commitment fee shares, the Common Stock Purchase Agreement and related Registration Rights Agreement is available in Salarius’ Current Report on Form 8-K, filed today with the SEC. Salarius has filed a prospectus supplement to its Form S-3 shelf registration statement (File No. 333-231010), which was declared effective on May 17, 2019 by the U.S. Securities and Exchange Commission, qualifying the offer and sale of common shares to Aspire Capital. A copy of the Prospectus Supplement is available on EDGAR at www.sec.gov or may be obtained upon request to Salarius. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.