"We continue to believe in the potential of FLX-787 to reduce painful
cramps and spasms in patients with neurologic diseases. However, given
the additional development work required to advance a FLX-787-based
product, it was in the best interest of our stockholders to stop the
ongoing MND and CMT studies, reduce our workforce and assess our
strategic alternatives. That assessment is underway and we are working
diligently to conserve working capital and enhance stockholder value.
While we conduct the assessment, we are continuing to assess the
potential of FLX-787 in dysphagia (difficulty swallowing) and to operate
the HOTSHOT consumer business,” stated
- The Company has stopped its clinical trials in MND and CMT and is the process of winding down those studies. That wind-down is expected to be completed in the third quarter of 2018.
The majority of the reduction in the Company's workforce announced on
June 13, 2018was completed by June 30, 2018. The remaining reductions will be completed in the third quarter of 2018.
Second Quarter 2018 Financial Results
- Cash Position: As of
June 30, 2018, Flex Pharmahad cash and cash equivalents of $15.8 million. The Company held no marketable securities at June 30, 2018. During the three months ended June 30, 2018, cash, cash equivalents and marketable securities decreased by $8.2 million.
- Total Revenue: Total revenue for the three months ended
June 30, 2018was approximately $245,500.
- Cost of Product Revenue: Cost of product revenue for the three
June 30, 2018was approximately $179,900. Write-offs during the three months ended June 30, 2018totaled approximately $85,000, and were related to raw materials not expected to be used for future production runs as well as finished goods used for product sampling that are not expected to be distributed.
- R&D Expense: Research and development expense for the three
June 30, 2018was $6.2 million. Research and development expense for this period primarily included costs associated with the Company’s clinical operations and subsequent wind-down of FLX-787 Phase 2 clinical studies, personnel costs (including salaries, termination-related costs and stock-based compensation costs), FLX-787 production costs, and external consultant costs.
- SG&A Expense: Selling, general and administrative expense
for the three months ended
June 30, 2018was $3.0 million. Selling, general and administrative expense for this period primarily included personnel costs (including salaries, termination-related costs and stock-based compensation costs), sales, marketing and fulfillment costs related to HOTSHOT, legal and professional costs, and external consultant costs.
- Net Loss and Cash Flow: Net loss for the three months ended
June 30, 2018was ($9.1) million, or ($0.50)per share and included $0.5 millionof stock-based compensation expense. As of June 30, 2018, Flex Pharmahad 18,066,142 shares of common stock outstanding. The net loss for the second quarter of 2018 was primarily driven by the Company’s operating expenses related to its research and development efforts, costs associated with HOTSHOT, and general and administrative costs.
This press release contains forward-looking statements for purposes of
the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements include statements
regarding our intentions, beliefs, projections, outlook, analyses or
current expectations concerning, among other things: the corporate
restructuring; the reduction in force and restructuring charges; the
potential cost savings resulting from these changes; the ability to
achieve cash flow savings; the discontinuation of the Company’s trials
of FLX-787 in motor neuron disease and Charcot-Marie-Tooth disease; the
ability to continue to develop FLX-787; and the potential for a sale or
merger of the Company. These forward-looking statements are based on
management's expectations and assumptions as of the date of this press
release and are subject to numerous risks and uncertainties, which could
cause actual results to differ materially from those expressed or
implied by such statements. These risks and uncertainties include,
without limitation: uncertainties regarding whether the Company will be
able to implement the restructuring in a timely fashion and at the level
of expense projected; whether the Company will be able to effectively
manage the organizational changes brought about by the restructuring and
have sufficient capital resources to fund its continuing operations in
future periods to realize its anticipated cost savings; availability of
funding sufficient for our foreseeable and unforeseeable operating
expenses and capital expenditure requirements; other matters that could
affect the availability or commercial potential of our consumer or drug
product candidates; and the inherent uncertainties associated with
intellectual property. Other factors that may cause actual results to
differ from those expressed or implied in the forward-looking statements
in this press release are discussed in our filings with the U.S.
Securities and Exchange Commission (
|Flex Pharma, Inc.|
|Unaudited Selected Consolidated Balance Sheet Information|
|Cash and cash equivalents||$||15,757||$||19,186|
|Prepaid expenses and other current assets||856||777|
|Property and equipment, net||180||331|
|Liabilities and stockholders' equity:|
|Accounts payable and accrued expenses||$||3,734||$||5,717|
|Total liabilities and stockholders’ equity||$||17,213||$||34,993|
|Unaudited Condensed Consolidated Statements of Operations|
|(in thousands, except loss per share amounts)|
|Net product revenue||$||242||$||331||$||418||$||571|
|Costs and expenses:|
|Cost of product revenue||180||145||264||224|
|Research and development||6,175||4,076||10,854||7,991|
|Selling, general and administrative||2,995||4,991||6,692||9,586|
|Total costs and expenses||9,350||9,212||17,810||17,801|
|Loss from operations||(9,104||)||(8,877||)||(17,386||)||(17,223||)|
|Interest income, net||52||72||111||150|
|Net loss per share-basic and diluted||$||(0.50||)||$||(0.51||)||$||(0.96||)||$||(1.00||)|
|Weighted-average number of common shares outstanding (1)||18,037||17,130||17,966||17,003|
|In 2014, the Company issued approximately 5.4 million shares of restricted stock that vested over four years, through February 2018. These shares were considered outstanding for purposes of computing weighted average shares as they vested. All of these shares have vested and are considered outstanding as of June 30, 2018.|
Flex Pharma, Inc.
John McCabe, 617-874-1824
Chief Financial Officer