On March 3, 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 year ended December 31, 2019 (Press release, Sierra Oncology, MAR 3, 2020, View Source [SID1234555128]).
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"Our focus is on achieving regulatory and commercial success with our Phase 3 drug candidate, momelotinib, which may become the first approved therapeutic capable of treating all three hallmarks of myelofibrosis; anemia, constitutional symptoms and enlarged spleen. Given its potentially unique profile, momelotinib could command an important role in the poorly addressed anemic and thrombocytopenic first-line and second-line myelofibrosis patient populations," said Dr. Nick Glover, President and CEO of Sierra Oncology. "During the fourth quarter of 2019, we launched the MOMENTUM Phase 3 clinical trial, setting Sierra on course to deliver top-line data in late 2021 and positioning momelotinib for potential registration filing in 2022. Our focus now is on activating global clinical trial sites over the coming months and driving enrollment for MOMENTUM, and we look forward to providing ongoing updates on our progress throughout this year."
"Myelofibrosis is characterized by progressive anemia and thrombocytopenia, and current JAK inhibitor therapies can induce or further exacerbate this myelosuppression, limiting their use in first line treatment and resulting in a population of second line patients who are no longer able to benefit from such therapies. Conversely, we believe momelotinib’s ability to address anemia, while either sparing platelets or reversing thrombocytopenia, are important potential drivers of its commercial opportunity. We plan to further highlight momelotinib’s differentiated durability, safety and efficacy profile during 2020 with additional dissemination of emerging data from the two previously completed SIMPLIFY Phase 3 trials that compared momelotinib head-to-head with ruxolitinib," added Dr. Glover. "Given momelotinib’s distinct clinical profile, we believe our drug candidate is also well positioned amongst the JAK inhibitor class for emerging combination approaches targeting myelofibrosis."
2019 Highlights for Momelotinib:
During the second quarter, Sierra obtained regulatory clarity with the FDA and announced the design of the MOMENTUM Phase 3 clinical trial intended to support the potential registration of momelotinib. Sierra also announced that Dr. Srdan Verstovsek, MD, PhD, Chief, Section for Myeloproliferative Neoplasms, Department of Leukemia, Division of Cancer Medicine, The University of Texas MD Anderson Cancer Center, Houston, Texas, had been named Chief Investigator of the MOMENTUM trial.
Sierra also reported during the second quarter that the FDA has granted Fast Track designation to momelotinib for the treatment of patients with intermediate/high-risk myelofibrosis who have previously received a JAK inhibitor.
During the fourth quarter, Sierra launched the MOMENTUM clinical trial for patients with myelofibrosis. The randomized double-blind global Phase 3 trial is designed to confirm the efficacy of momelotinib on myelofibrosis symptoms, transfusion independence and splenomegaly, as compared to danazol. The trial is targeting enrollment of 180 myelofibrosis patients who are symptomatic, anemic and have been treated previously with a JAK inhibitor. The Primary Endpoint of the trial is the Total Symptom Score (TSS) response rate of momelotinib compared to danazol at Week 24 (99% power; p-value < 0.05). Data from MOMENTUM, along with data from more than 820 myelofibrosis patients previously treated with momelotinib in prior clinical studies, will form the basis of the global registration strategy for momelotinib.
During the fourth quarter, new analyses of RBC transfusion data from SIMPLIFY-1, a double-blind Phase 3 trial of momelotinib head-to-head versus ruxolitinib in JAK inhibitor naïve patients, were presented in a poster by Dr. Ruben Mesa, Director of the Mays Cancer Center, home to UT Health San Antonio MD Anderson Cancer Center, at the 61st American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting in Orlando, Florida. These analyses demonstrated that patients who received momelotinib had significantly decreased transfusion requirements compared to those treated with ruxolitinib, including an odds ratio of nearly 10 for receiving no transfusions during the 24-week study period. Transfusion dependency and moderate to severe anemia are critical negative prognostic factors for overall survival in myelofibrosis.
Year End 2019 Financial Results (all amounts reported in U.S. currency)
Research and development expenses were $53.2 million for the year ended December 31, 2019, compared to $41.1 million for the year ended December 31, 2018. In addition to a non-cash charge of $10.5 million pertaining to the obligation to issue common stock and a warrant in consideration for meaningfully reduced royalty rates and elimination of a near term milestone payment in an amendment to our Asset Purchase Agreement with Gilead Sciences, Inc. (Gilead), the increase was primarily due to costs related to momelotinib, including a $12.2 million increase in clinical trial and development costs, a $2.5 million increase in third-party manufacturing costs and a $1.4 million increase in personnel-related and allocated overhead costs. These increases were partially offset by a $3.0 million upfront fee paid to Gilead to acquire momelotinib in 2018 and decreases in SRA737 and SRA141 costs, including a $5.0 million decrease in clinical trial costs primarily related to SRA737, a $4.3 million decrease in third-party manufacturing costs, and a $2.1 million decrease in research and preclinical costs. Research and development expenses included non-cash stock-based compensation of $3.9 million and $4.5 million for the year ended December 31, 2019 and 2018, respectively.
General and administrative expenses were $13.7 million for the year ended December 31, 2019, compared to $14.3 million for the year ended December 31, 2018. This decrease was primarily due to decreases in personnel-related and allocated overhead costs. General and administrative expenses included non-cash stock-based compensation of $1.8 million and $2.3 million for the year ended December 31, 2019 and 2018, respectively.
Other income (expense), net was $21.4 million of other expense, net for the year ended December 31, 2019, compared to $1.8 million of other income, net for the year ended December 31, 2018. The increase was primarily attributable to a non-cash charge of $20.9 million related to the change in fair value of warrant liabilities and offering expenses of $1.3 million pertaining the issuance of the warrants in the 2019 public offering and a $0.7 million increase in interest expense incurred on the term loan that was repaid in December 2019.
For the year ended December 31, 2019, Sierra incurred a GAAP net loss of $88.3 million compared to a GAAP net loss of $53.3 million for the year ended December 31, 2018. The GAAP net loss for the year ended December 31, 2019 includes a non-cash charge of $20.9 million, related to the change in fair value of warrant liabilities included in other income (expense), net and a non-cash charge of $10.5 million pertaining to the obligation to issue securities to Gilead included in research and development expenses as mentioned above. In January 2020, Sierra fulfilled this obligation, issuing 725,283 shares of common stock to Gilead and a warrant to purchase an equivalent amount of common stock.
Non-GAAP adjusted net loss was $51.2 million for the year ended December 31, 2019, compared to a non-GAAP adjusted net loss of $46.5 million for the year ended December 31, 2018. Non-GAAP adjusted net loss excludes expenses related to the change in fair value of warrant liabilities, the securities issuance obligation, and 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 $147.5 million as of December 31, 2019, compared to $106.0 million as of December 31, 2018. This increase was due to an underwritten public offering in November 2019, pursuant to which the company raised gross proceeds of $103.0 million (net proceeds of $97.7 million). This increase was offset by cash used in operating activities of $51.2 million and the full repayment of a term loan in December 2019 in the amount of $5.4 million, including prepayment and final payment fees associated with terminating the debt facility.
In January 2020, all of the Series A convertible voting preferred stock converted into shares of common stock. As of January 31, 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. At December 31, 2019 were 327,862 shares issuable upon exercise of stock options and a warrant.
The company anticipates its current resources will be sufficient to execute on its development strategy for momelotinib into the second half of 2022. In addition, the Series B warrants issued in the underwritten public offering in November 2019, may only be exercised by paying the exercise price in cash, and will expire on the 75th day anniversary following the announcement of top-line data from the MOMENTUM Phase 3 trial. If these Series B warrants are fully exercised, the company will receive approximately $34.0 million in proceeds.
Conference Call Information
Today at 8:00 am Eastern Time, Sierra’s management will host a conference call to discuss the company’s and operational results for 2019 and provide a business update for 2020.
Date and Time: Tuesday, March 3 at 8:00 am ET
Domestic (Toll Free- US): 1-888-394-8218
International (Toll): 1-323-701-0225
Conference ID: 1052679
Webcast Link: www.sierraoncology.com
Direct Link: View Source
Call registration is available through the Sierra Oncology website at www.sierraoncology.com. An archive of the presentation will be accessible after the event through the Sierra Oncology website.