Flexion Therapeutics Reports Second-Quarter 2019 Financial Results and Recent Business Highlights
- Company reported ZILRETTA® (triamcinolone acetonide extended-release injectable suspension) net sales of $17.0 million in Q2 representing 60% growth over Q1
- Completed debt financing, which replaces previous term loan and provides up to
$60 millionin non-dilutive capital
- Results from nonclinical studies of gene therapy product candidate, FX201, support IND filing and initiation of clinical trials by the end of 2019
- Conference call scheduled for today at
4:30 p.m. ET
“The second quarter was marked by excellent progress across all areas of our business, most notably, ZILRETTA sales of
Second-Quarter Results & Financial Highlights
The Company reported net sales of ZILRETTA of
Research and development expenses were
Selling, general and administrative expenses were
Interest income was
ZILRETTA Commercial Metrics
Since the launch of ZILRETTA in
- 2,733 of Flexion’s approximately 4,400 target accounts had purchased ZILRETTA. This reflects growth of 22% over the period from launch through
March 31, 2019when 2,247 accounts had purchased product.
- 73% (2,004) of purchasing accounts had placed at least one reorder.
- More than 460 accounts had made ZILRETTA purchases of more than 50 units; nearly 850 accounts had purchased 11 to 50 units; and roughly 1,425 accounts had purchased between 1 and 10 units.
- Accounts purchasing more than 50 ZILRETTA units have been responsible for 70% of total ZILRETTA purchases (approximately 62,890 units).
August 2, 2019, the Company entered into the Amended and Restated Credit and Security Agreement with Silicon Valley Bank, MidCap Financial Trust, and Flexpoint MCLS Holdings, LLC, which provides for a term loan of $40.0 millionand a revolving credit facility up to $20.0 million, both of which mature on January 1, 2024. The Company immediately borrowed the $40.0 millionterm loan and used $7.7 millionof the proceeds to pay off the remaining amount owed on its $30.0 milliondebt facility with Silicon Valley Bankand MidCap Financial Funding XIII Trust. The revolving credit facility, which is secured by a portion of the Company’s accounts receivable balance, will be available beginning January 1, 2020, subject to certain conditions imposed by the lenders, including an initial borrowing limitation of up to $10.0 millionuntil the lenders complete an audit of certain collateral accounts.
- In July, new findings from a post-hoc subgroup analysis of the open-label Phase 3b repeat administration trial of ZILRETTA in patients with knee osteoarthritis (OA) were presented at the
American Orthopaedic Society for Sports Medicine(AOSSM). The analysis, which evaluated the efficacy of initial and repeat administration of ZILRETTA in patients with symptomatic knee OA ranging in radiographic severity from Kellgren-Lawrence (KL) Grades 2 to 4, indicated that ZILRETTA consistently reduced OA knee pain for at least 12 weeks after each injection, regardless of KL Grade. The incidence of treatment emergent adverse events (AEs) were similar across all KL Grades and the most commonly reported AEs were consistent with those reported in previous clinical studies of ZILRETTA.
- In the second quarter, Flexion advanced FX201, a locally administered gene therapy product candidate, towards first-in-human testing. Good Manufacturing Practice (GMP) manufacturing of clinical trial material and IND-enabling nonclinical studies were completed and the nonclinical program, including Good Laboratory Practice (GLP) toxicology, biodistribution, and pharmacology studies, established a potentially safe and efficacious starting dose for initial clinical testing. In addition, efficacy, in terms of both symptomatic and structural effects, has been demonstrated across multiple animal species. Flexion remains on track to file an Investigational New Drug (IND) application and initiate clinical studies by the end of the year.
In June, the U.S. Patent and Trademark Office (USPTO) issued patent number 10,301,647, which covers the composition of matter and method of use of FX201 in the treatment of OA with a term through January of 2033.
- In May, the Company announced that results from a pooled analysis of data from three Phase 2/3 randomized clinical trials on the use of rescue medications with ZILRETTA were published in the peer-reviewed journal, Pain and Therapy. The analysis showed that the overall number of rescue medication tablets used per day through Week 24 was significantly less for ZILRETTA compared to both saline-placebo (LSM difference, −0.43) and immediate-release triamcinolone acetonide crystalline suspension (–0.24). The safety profile of ZILRETTA in this pooled analysis was consistent with that of the pivotal Phase 3 trial.
- Also in May, Flexion paused enrollment in the Phase 3 trial of ZILRETTA in hip OA pain, due to a non-safety related issue, which resulted in the inability to deliver a full dose in a small number of trial participants. The Company has developed a strong working hypothesis about the root cause of the issue and is testing those assumptions in the clinic. Pending successful results, trial enrollment is expected to resume in the fourth quarter of this year.
Flexion’s management will host a conference call today at
Indication and Select Important Safety Information for ZILRETTA® (triamcinolone acetonide extended-release injectable suspension)
Indication: ZILRETTA (triamcinolone acetonide extended-release injectable suspension) is indicated as an intra-articular injection for the management of osteoarthritis pain of the knee. It is not intended for repeat administration.
Contraindication: ZILRETTA is contraindicated in patients who are hypersensitive to triamcinolone acetonide, corticosteroids or any components of the product.
Warnings and Precautions:
- Intra-articular Use Only: ZILRETTA has not been evaluated and should not be administered by epidural, intrathecal, intravenous, intraocular, intramuscular, intradermal, or subcutaneous routes. ZILRETTA should not be considered safe for epidural or intrathecal administration.
- Serious Neurologic Adverse Reactions with
Epidural and Intrathecal Administration: Serious neurologic events have been reported following epidural or intrathecal corticosteroid administration. Corticosteroids are not approved for this use.
- Hypersensitivity reactions: Serious reactions have been reported with triamcinolone acetonide injection. Institute appropriate care if an anaphylactic reaction occurs.
- Joint infection and damage: A marked increase in joint pain, joint swelling, restricted motion, fever and malaise may suggest septic arthritis. If this occurs, conduct appropriate evaluation and if confirmed, institute appropriate antimicrobial treatment.
Adverse Reactions: The most commonly reported adverse reactions (incidence ≥1%) in clinical studies included sinusitis, cough, and contusions.
Please see ZilrettaLabel.com for full Prescribing Information.
FX201 is a pre-clinical, locally administered gene therapy product candidate designed to stimulate the production of an anti-inflammatory protein, interleukin-1 receptor antagonist (IL-1Ra), whenever inflammation is present within the joint. Inflammation is a known cause of pain, and chronic inflammation is thought to play a major role in the progression of OA. By persistently suppressing inflammation, Flexion believes FX201 holds the potential to both reduce OA pain and modify the disease.
About Osteoarthritis (OA) of the Knee
OA, also known as degenerative joint disease, affects more than 30 million Americans and accounts for more than
This release contains forward-looking statements that are based on the current expectations and beliefs of Flexion. Statements in this press release regarding matters that are not historical facts, including, but not limited to, statements relating to the future of Flexion; Flexion’s plans and expected timing for clinical and regulatory milestones and activities; expected increases in the rate of individuals with OA of the knee; and the potential therapeutic and other benefits of ZILRETTA and FX201, are forward looking statements. 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; the risk that we may not be able to successfully maintain an effective sales force to commercialize ZILRETTA; competition from alternative therapies; risks inherent in clinical development and the regulatory approval process, including the risk that future clinical results will not be consistent with prior results, the risk that clinical trials may be delayed or terminated, and the risk that the
| FLEXION THERAPEUTICS
STATEMENTS OF OPERATIONS
|(in thousands, except for per share information)|
|Three Months Ended June 30,
|Revenue||$ 16,953||$ 3,797|
|Cost of sales||1,398||946|
|Research and development||16,125||13,094|
|Selling, general and administrative||33,103||31,036|
|Total operating expenses||50,626||45,076|
|Loss from operations||(33,673)||(41,279)|
|Interest income (expense), net||(3,118)||(2,672)|
|Loss from operations before income tax||(36,487)||(43,875)|
|Basic and diluted net loss per share||$ (0.96)||$ (1.16)|
|Basic and diluted weighted average number of common shares outstanding||38,010||37,697|
STATEMENTS OF OPERATIONS
|(in thousands, except for per share information)|
|Six Months Ended June 30,
|Revenue||$ 27,517||$ 5,991|
|Cost of sales||3,160||3,644|
|Research and development||31,550||24,645|
|Selling, general and administrative||65,325||57,935|
|Total operating expenses||100,035||86,224|
|Loss from operations||(72,518)||(80,233)|
|Interest income (expense), net||(6,043)||(5,430)|
|Loss from operations before income tax||(78,025)||(85,444)|
|Basic and diluted net loss per share||$ (2.05)||$ (2.27)|
|Basic and diluted weighted average number of common shares outstanding||38,001||37,659|
|FLEXION THERAPEUTICS SELECTED BALANCE SHEET DATA
|June 30,||December 31,|
|Cash and cash equivalents||$ 45,701||$ 87,299|
|Marketable securities (current and non-current)||130,861||171,555|
|Total current assets||211,184||285,042|
|Total notes payable||8,956||13,607|
|Total convertible notes||149,046||144,879|
|Total stockholders' equity||41,471||110,079|
Source: Flexion Therapeutics, Inc.