On March 21, 2018 Sophiris Bio Inc. (NASDAQ: SPHS) (the "Company" or "Sophiris"), a biopharmaceutical company studying topsalysin (PRX302), a first-in-class, pore-forming protein, in late-stage clinical trials for the treatment of patients with urological diseases, reported fourth quarter and full year 2017 financial results and key corporate highlights (Press release, Sophiris Bio, MAR 21, 2018, View Source [SID1234524931]).
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Recent Highlights and Upcoming Milestones:
Advancement of Phase 2b Localized Prostate Cancer Study. The Company announced in December 2017 that it had completed enrollment in its Phase 2b localized prostate cancer study, the purpose of which is to evaluate the safety and tolerability of topsalysin in treating men with clinically significant localized prostate cancer. A total of 38 patients have been treated with topsalysin in the study. The Company expects biopsy data from all patients receiving the first dose of topsalysin to be available by the end of the second quarter of 2018.
During the first quarter of 2018, the independent data monitoring committee (IDMC) for the Phase 2b trial met to review the reported adverse events from all patients after the first administration of topsalysin. The IDMC unanimously recommended the clinical trial continue without changes to the protocol.
The Phase 2b study was designed to include an option to re-treat patients who did not have any clinically significant adverse events and who had a partial response to the first administration of topsalysin but still had a clinically significant lesion. These patients will have the option to receive a second administration of topsalysin followed by an additional targeted biopsy six months following their second administration. The Company expects to have final biopsy data in the fourth quarter of 2018 from all patients who receive a second administration. This will be the first data potentially supporting repeat administration of topsalysin.
Presented Proof-of-Concept and Phase 2a Data at Global Urological Meetings. In 2017, the Company presented positive data from its Phase 2a clinical trial of topsalysin for the treatment of localized prostate cancer at the 112th American Urological Association Annual Meeting and at the 32nd European Association of Urology Congress. Copies of the posters are available on the Company’s website at www.sophirisbio.com.
Loan and Security Agreement with Silicon Valley Bank. On September 8, 2017, the Company and Silicon Valley Bank ("SVB") entered into a Loan and Security Agreement pursuant to which SVB has agreed to lend the Company up to $10.0 million (subject to certain conditions) in two term loans. On September 12, 2017, the Company borrowed $7.0 million from SVB under the Loan and Security Agreement.
"Over the past 12 months Sophiris has made important progress advancing topsalysin in clinically significant localized prostate cancer and preparing for a potential Phase 3 registration study," said Randall E. Woods, president and CEO of Sophiris. "With our Phase 2b study enrolled, we are looking ahead to two key data events this year. The first event is Phase 2b results from the first administration of topsalysin, which are expected to be available by end of the second quarter of 2018. Complete data from patients who were eligible to receive a second administration of topsalysin are expected to be available by the end of the year. The management team has also been diligently preparing for the design and execution of a Phase 3 registration study for the treatment of clinically significant localized prostate cancer in an effort to pave a clear path to commercialization."
Financial Results:
At December 31, 2017, the Company had cash, cash equivalents and securities available-for-sale of $25.8 million and working capital of $24.2 million. The Company expects that its cash and cash equivalents will be sufficient to fund its operations to the middle of 2019, assuming no new clinical trials.
For the three months ended December 31, 2017
The Company reported a net loss of $4.0 million or $(0.13) per share for the three months ended December 31, 2017, compared to a net loss of $0.5 million or $(0.02) per share for the three months ended December 31, 2016.
Research and development expenses
Research and development expenses were $1.9 million for the three months ended December 31, 2017, compared to $1.0 million for the three months ended December 31, 2016. The increase in research and development costs is primarily attributable to increases in the costs associated with the Company’s Phase 2b clinical trial for the treatment of localized prostate cancer, costs associated with manufacturing activities for topsalysin, and to a lesser extent, an increase in non-cash stock-based compensation expense. These increases are partially offset by a decrease in personnel related costs.
General and administrative expenses
General and administrative expenses were $1.3 million for the three months ended December 31, 2017, compared to $1.2 million for the three months ended December 31, 2016. The increase in general and administrative expense is primarily due to increases in market research activities and non-cash stock-based compensation expense. These increases are partially offset by a decrease in personnel related costs.
Gain (loss) on revaluation of the warrant liability
Loss on revaluation of the warrant liability was $0.6 million for the three months ended December 31, 2017, compared to a gain of $1.6 million for the three months ended December 31, 2016. Because these warrants may require the Company to pay the warrant holder cash under certain provisions of the warrant, the Company accounts for these warrants as a liability, and the Company is required to calculate the fair value of these warrants each reporting date. The non-cash loss reported for the three months ended December 31, 2017, is associated with an increase in the fair value of the Company’s warrant liability from September 30, 2017, to December 31, 2017, which is calculated using a Black-Scholes pricing model. Certain inputs utilized in the Company’s Black-Scholes fair value calculation may fluctuate in future periods based upon factors which are outside of the Company’s control. A significant change in one or more of these inputs used in the calculation of the fair value may cause a significant change to the fair value of the Company’s warrant liability, which could also result in a material non-cash gain or loss being reported in the Company’s consolidated statement of operations and comprehensive loss.
For the 12 months ended December 31, 2017
The Company reported a net loss of $8.6 million or $(0.29) per share for the year ended December 31, 2017, compared to a net loss of $11.2 million or $(0.49) per share for the year ended December 31, 2016.
Research and development expenses
Research and development expenses were $6.2 million for the year ended December 31, 2017, compared to $3.5 million for the year ended December 31, 2016. The increase in research and development costs is primarily attributable to increases in the costs associated with the Company’s Phase 2b for the treatment of localized prostate cancer, costs associated with the manufacturing activities for topsalysin, and to a lesser extent, an increase in the non-cash stock-based compensation expense. These increases are partially offset by decreases in costs associated with the Company’s completed Phase 2a proof of concept clinical trial for localized prostate cancer and personnel related costs primarily related to our completed reduction in work force in 2016.
General and administrative expenses
General and administrative expenses were $5.7 million for the year ended December 31, 2017, compared to $6.8 million for the year ended December 31, 2016. The decrease in general and administrative expense is primarily due to the inclusion of $1.6 million in offering costs that were allocated to warrants issued in the Company’s public offering completed in 2016. Also contributing to the decrease in general and administrative expense were decreases in costs associated with professional services and personnel related costs. These decreases are partially offset by increases in non-cash stock-based compensation, market research activities and consulting expenses.
Gain (loss) on revaluation of the warrant liability
Gain on revaluation of the warrant liability was $3.3 million for the year ended December 31, 2017, compared to a loss of $0.3 million for the year ended December 31, 2016. The non-cash gain reported for the year ended December 31, 2017, is associated with a reduction in the fair value of the Company’s warrant liability from December 31, 2016 to December 31, 2017, as calculated using a Black-Scholes pricing model.