Sol-Gel Reports Third Quarter 2024 Financial Results and Provides Corporate Updates
-- Mori Arkin's appointment as interim CEO as of January 1, 2025 approved by
shareholders
-- Phase 3 clinical trial of SGT-610 for Gorlin Syndrome is ongoing with
over 40 clinical sites activated
-- SGT-210 proof-of-concept study in patients suffering from Darier disease
is ongoing
NESS ZIONA, Israel, Nov. 15, 2024 (GLOBE NEWSWIRE) -- Sol-Gel Technologies, Ltd. (NASDAQ: SLGL), a dermatology company, pioneering treatments for patients with severe skin conditions, conducting a Phase-3 clinical trial of SGT-610 (patidegib gel, 2%) for Gorlin syndrome, and with two approved large-category dermatology products, TWYNEO$(R)$ and EPSOLAY(R) , today announced financial results for the third quarter ended September 30, 2024, and provided a corporate update.
Q3 2024 and Recent Corporate Developments
-- On November 4, 2024, Sol-Gel's shareholders approved the appointment of
our Chairman, Mr. Mori Arkin, as Interim CEO as of January 1, 2025. Mr.
Arkin will replace Sol-Gel's founder and current CEO, Dr. Alon Seri-Levy,
who will remain as a consultant to the Company for a period of at least
one year.
-- On November 13, 2024, Sol-Gel received approval from Nasdaq to transfer
the listing of its Ordinary Shares from The Nasdaq Global Market to The
Nasdaq Capital Market. The transfer became effective as of November 15,
2024. This transfer has been requested in order to be provided with a
second 180-day compliance period to regain compliance with The Nasdaq
Stock Market LLC's ("Nasdaq") minimum bid price rule. Sol-Gel's Ordinary
Shares will continue to trade under the symbol "SLGL" and trading of its
Ordinary Shares will not be affected by this transfer. The Nasdaq Capital
Market is a continuous trading market that operates in substantially the
same manner as The Nasdaq Global Market. The approval of the second
compliance period and the transfer to the Nasdaq Capital Market are
expected based upon the Company meeting all other applicable requirements
for initial listing on the Capital Market, except for the bid price
requirement, the Company's written notice of its intention to cure the
deficiency by effecting a reverse stock split, if necessary, and
additional supporting information provided in its application.
-- On August 15, 2024, Sol-Gel signed a new agreement with Padagis, which
replaced the parties' prior collaboration agreement for the development
and commercialization of a generic drug product to Zoryve(R) Cream
(roflumilast cream 0.3%). Under this new agreement, Sol-Gel is to
unconditionally receive eight quarterly payments which will be paid over
24 months and low single digit royalties from gross profits from sales of
roflumilast cream for a period of five years, in lieu of its 50% share in
future gross profits from such sales. In addition, Sol-Gel will cease
paying any outstanding and future costs related to this prior
collaboration agreement. The amount to be received from Padagis, together
with the elimination of future expected expenses related to this asset,
is expected to enhance Sol-Gel's cash position by approximately $6
million.
-- On September 27, 2024, Sol-Gel signed an additional license agreement for
the commercialization of Twyneo and Epsolay in South Korea. This
Agreement is in addition to the six agreements Sol-Gel signed during July
2024 in various territories covering most of European countries and South
Africa. These already signed agreements, together with agreements we
anticipate to sign in the future covering Latin American countries,
Australia, New Zealand, Spain, Italy and Portugal, are expected to
provide upfront and regulatory milestone payments of up to $3.7 million,
which Sol-Gel expects to utilize on adapting TWYNEO and EPSOLAY to the
regulatory requirements of these new territories. Based on the forecasts
received from Sol-Gel's current and potential partners, Sol-Gel expects
that TWYNEO and EPSOLAY will launch in the majority of these new
territories in 2027 and 2026 respectively, and following launch, these
transactions are anticipated to provide Sol-Gel with an annual royalty
revenue stream starting with approximately $1 million to $2 million in
2026 and growing gradually to approximately up to $10 million for the
year 2030 and further.
-- The Phase 3 study in Sol-Gel's key asset SGT-610 in approximately 140
subjects (with 100 subjects required to complete the Study) at about 40
experienced clinical centers is ongoing. To date, Sol-Gel has signed
agreements with 43 centers in multiple countries, including
the U.S., Spain, The Netherlands, Germany, Italy, France and the UK, and
approximately 40 of these centers have been activated. Top line results
are anticipated in H2 2026. SGT-610 is a topically applied patidegib, a
hedgehog signaling pathway blocker 2% gel If approved, SGT-610 is
expected to be the first approved product for the prevention of new BCC
lesions in Gorlin syndrome patients and is targeting a market exceeding
$300 million annually.
-- Sol-Gel's proof-of-concept study for SGT-210 (topical erlotinib) in
patients with Darier disease is ongoing. Darier disease is a significant
unmet medical need, with a market potential estimated between $200 to
$300 million. If Sol-Gel successfully completes this proof-of-concept
study and the required pre-clinical studies, it anticipates filing for a
Phase 2 IND in Q2 2025. SGT-210 is currently being used in a
compassionate use treatment of a pediatric patient suffering from a rare
disease, and given the preliminary highly encouraging response, we are
cautiously optimistic about the potential for success in other viable
keratoderma indications, recognizing that further research and clinical
studies are necessary to validate any broader applications of our
therapy.
Mr. Mori Arkin, Executive Chairman of Sol-Gel, stated: "The quarterly results reflects our continuous effort to maximize the value of our assets, while exploring business opportunities for non-dilutive funding. We continue to conduct the pivotal Phase 3 clinical trial of SGT-610 as planned and are encouraged by the rate of recruitment of patients. We believe that our approach for preventing new basal cell carcinomas in Gorlin Syndrome patients can ease the suffering of patients and bring cure to an unmet medical need, in a target market that exceeds $300 million. In addition, our proof-of-concept study for SGT-210 (topical erlotinib) in Darier disease patients, targeting a market of between $200 million to $300 million, continues. The Company's strategy, with our two leading assets, pave the way for further strengthening Sol-Gel's business and competitive position."
Financial Results for the Third Quarter 2024
Total revenue in the third quarter was $5.4 million which primarily consisted of licensing revenue from Padagis, Galderma, Searchlight and seven new license agreements, compared to $0.2 million revenues for the same period in 2023.
Research and development expenses were $4.8 million compared to $4.7 million for the same period in 2023. The increase of $0.1 million was primarily attributed to an increase of $0.7 million in clinical trial expenses related to SGT-610, an increase of $0.5 million in expenses related to the commercialization of Epsolay and Twyneo in other territories and an increase of $0.3 million in clinical expenses related to SGT-210, offset by a decrease of $0.4 million in clinical development expenses related to a generic product, a decrease of $0.5 million in payroll expenses due to the adoption of cost saving measures initiated during the third quarter of 2023 and a decrease of $0.5 million related to R&D and Operations expenses due to cost measures savings.
General and administrative expenses were $1.4 million compared to $1.9 million for the same period in 2023. The decrease of $0.5 million was mainly attributed to a decrease of $0.4 million in professional expenses and a decrease of $0.1 million in payroll expenses due to the adoption of cost saving measures initiated during the third quarter of 2023.
Sol-Gel reported a net loss of $0.4 million for the third quarter of 2024 and loss of $0.01 per basic and diluted share, compared to a net loss of $5.7 million and a loss of $0.21 per basic and diluted share for the same period in 2023.
As of September 30, 2024, Sol-Gel had $14.6 million in cash, cash equivalents, and deposits and $14.6 million in marketable securities for a total balance of $29.2 million. The Company expects its cash resources to fund cash requirements into the first quarter of 2026.
About TWYNEO and EPSOLAY
TWYNEO is a topical cream containing a fixed-dose combination of tretinoin, 0.1%, and benzoyl peroxide, 3%, cream for the treatment of acne vulgaris in adults and pediatric patients 9 years of age and older. TWYNEO is the first acne treatment that contains a fixed-dose combination of benzoyl peroxide and tretinoin. Tretinoin and benzoyl peroxide are widely prescribed separately for acne vulgaris; however, benzoyl peroxide causes degradation of the tretinoin molecule, thereby potentially reducing its effectiveness if used at the same time or combined in the same formulation. TWYNEO uses silica (silicon dioxide) core shell structures to separately micro-encapsulate tretinoin crystals and benzoyl peroxide crystals enabling inclusion of the two active ingredients in the cream.
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