Following recent transactions and cost-cutting efforts, Sol-Gel’s cash runway is expected to extend into the first quarter of 2026
Ongoing Phase 3 clinical trial of SGT-610 for Gorlin Syndrome with over 30 clinical sites activated; Top-line results are expected by the second quarter of 2026
SGT-210 proof-of-concept study in patients suffering from Darier disease, a significant unmet medical need in dermatology, is ongoing
Sol-Gel sells its rights in the Abbreviated New Drug Application (ANDA)drug product generic to Zoryve® Cream(roflumilast cream 0.3%)
Following management realignment, Mr. Mori Arkin, the Company’s executive chairman and controlling shareholder to be appointed as Company’s interim CEO as of January 1, 2025, subject to shareholders approval
Sol-Gel recently signed license agreements with respect to TWYNEO and EPSOLAY in Europe and South Africa and is negotiating additional license deals in Latin America and other territories
Aug. 16, 2024 -- 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® and EPSOLAY®, today announced financial results for the second quarter ended June 30, 2024, and provided a corporate update.
On August 15, 2024, Sol-Gel signed a new agreement with Padagis, which replaces the parties’ prior collaborative agreement for the development and commercialization of a drug product generic to Zoryve® Cream (roflumilast cream 0.3%). Under this new agreement, Sol-Gel is to unconditionally receive 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 collaborative agreement. The amount to be received by Padagis together with the elimination of future expected expenses related to this asset is expected to enhance our cash position by approximately $6million. Recognizing that TWYNEO and EPSOLAY have a significant commercial potential also outside the U.S., during July 2024, Sol-Gel has successfully signed six initial license agreements with key partners covering most European countries and South Africa. Sol-Gel expects to sign additional agreements covering the majority of Latin American countries, Australia, New Zealand, South Korea, Spain, Italy and Portugal. These already signed agreements together with agreements we anticipate to sign in the future, are expected to provide upfront and regulatory milestone payments of up to $3.7 million, which we expect 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 Phase3 study in Sol-Gel’s key asset SGT-610 in approximately 140 subjects (with 100 subjects required to complete the Study), at about 42 experienced clinical centers is ongoing. To date, Sol-Gel has signed agreements with 39 centers in multiple countries, including the U.S., Germany, Italy, France, and the UK, and approximately 29 of these enters have been activated. Top line results are anticipated in Q2 2026. SGT-610 is atopically 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 we successfully complete this proof-of-concept study and the required pre-clinical studies, we anticipate 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.
Subject to shareholders approval, Mr. Arkin, the Company’s executive chairman and controlling shareholder, who has several decades of experience in leading positions in the pharmaceutical industry and in the dermatological space in particular, will assume the role of interim CEO as of January 1, 2025. During his tenure as interim CEO, Mr. Arkin plans to transition away from the majority of his other business activities in order to dedicate himself to his new full time position as interim CEO of the Company. Mr. Arkin will not be entitled to any compensation for assuming this position. On July 15, 2024, Sol-Gel announced management realignment whereby pending shareholder approval our CEO Dr. Alon Seri-Levy will step down as CEO and Board member, effective December 31, 2024, and will then continue to serve the Company as a consultant to our new CEO and management team for at least one year.
Effective July 12, 2024, Mr. Eyal Ben-Or, the Company's previous Director of Finance, assumed the role of Chief Financial Officer (CFO). Prior to his employment in Sol-Gel Mr. Ben-Or worked at Mobileye and KPMG Israel. Mr. Ben-Or, is a certified public accountant, holds an MBA and a BA in accounting from the College of Management in Israel. Mr. Ben-Or replaces the Company’s previous CFO, Mr. Gilad Mamlok, who will facilitate the transition through December 31, 2024.
Mr. Mori Arkin, Executive Chairman of Sol-Gel, stated: "We are encouraged by Sol-Gel’s financial results for the second quarter of 2024 and our ability to extend our cash runway into the first quarter of 2026. We will continue to explore opportunities for non-dilutive funding to potentially further extend our runway through topline results. In our pipeline, we continue to conduct the pivotal Phase 3 clinical trial of SGT-610 for preventing new basal cell carcinomas in Gorlin Syndrome patients, targeting a market exceeding $300 million, with top line results anticipated in the second quarter of 2026 along with our proof-of-concept study for SGT-210 (topical erlotinib) in Darier disease patients targeting a market of between $200 to $300 million. These two rare disease projects reflect the huge growth potential of a company of our size. The Sol-Gel management team and I are committed to spare no effort to realize this potential."
Total revenue in the second quarter was $5.4 million, which primarily consisted of a one-time licensing revenue from Beimei, Galderma and Searchlight, compared to $0.6 million revenues for the same period in 2023.
Research and development expenses were $2.4 million compared to $5.3 million for the same period in 2023. The decrease of $2.9 million was primarily attributed to a decrease of $0.7 million in manufacturing expenses related to TWYNEO, a decrease of $0.7 million in clinical development expenses related to a generic product candidate, a decrease of $0.5 million in payroll expenses due to the adoption of cost saving measures initiated during the third quarter of 2023, a decrease of $0.5 related to R&D expenses, a decrease of $0.3 million in clinical trial expenses related to SGT-610 and a decrease of $0.2 in clinical expenses related to SGT-210.
General and administrative expenses were $1.4 million compared to $1.8 million for the same period in 2023. The decrease of $0.4 million was mainly attributed to a decrease in professional expenses.
Sol-Gel reported a net income of $1.9 million for the second quarter of 2024 and earnings of $0.07 per basic and diluted share, compared to a net loss of $6.0 million and a loss of $0.22 per basic and diluted share for the same period in 2023.
As of June 30, 2024, Sol-Gel had $15.6 million in cash, cash equivalents, and deposits and $14.9 million in marketable securities for a total balance of $30.5 million. The Company expects its cash resources to fund cash requirements into the first quarter of 2026.
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.
EPSOLAY is a topical cream containing benzoyl peroxide (BPO), 5%, for the treatment of bumps and blemishes (inflammatory lesions) of rosacea in adults. EPSOLAY utilizes a proprietary, patented technology to encapsulate BPO within silica-based microcapsules to create a barrier between the medication and the skin. The silica-based shell is designed to slowly release BPO over time to provide a tolerable and effective treatment.
SGT-610, a hedgehog signaling pathway blocker, has the potential to be the first ever treatment for prevention of BCCs in Gorlin syndrome patients, if approved. Gorlin syndrome, an autosomal dominant genetic disorder affecting approximately 1 in 27,000-31,000 people in the U.S., is mostly caused by inheritance of one defective copy of the tumor suppressor patched homolog 1 (PTCH1) gene. Normally, the PTCH1 gene blocks the smoothened, frizzle class receptor (SMO) gene, turning off the hedgehog signaling pathway when it is not needed. Mutations in the PTCH1 gene may cause a loss of PTCH1 function, release of SMO, and may allow BCC tumor cells to divide uncontrollably. Patidegib, the active substance in SGT-610, is designed to block the SMO signal, thus, allowing cells to function normally and reducing the production of new tumors.
SGT-210 is a topical erlotinib drug candidate that is formulated for the treatment of Darier Disease and other hyperkeratosis-related indications. Erlotinib is a tyrosine kinase receptor inhibitor that acts on the epidermal growth factor receptor, a protein present on cell surfaces that plays a key role in promoting cell growth and division. Darier Disease is a rare, genetic keratinization disorder which is classically characterized scaly crusted papules in a seborrheic distribution and in skin folds.
Sol-Gel Technologies, Ltd. is a dermatology company focused on identifying, developing and commercializing or partnering drug products to treat skin diseases. Sol-Gel developed TWYNEO which is approved by the FDA for the treatment of acne vulgaris in adults and pediatric patients nine years of age and older; and EPSOLAY, which is approved by the FDA for the treatment of inflammatory lesions of rosacea in adults.
The Company’s pipeline also includes Phase 3 clinical trial of Orphan and breakthrough drug candidate SGT-610, which is a new topical hedgehog inhibitor being developed to prevent the new basal cell carcinoma lesions in patients with Gorlin syndrome that is expected to have an improved safety profile compared to oral hedgehog inhibitors as well as topical drug candidate SGT-210 under investigation for the treatment of rare hyper keratinization disorders.
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