UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
August 1, 2018
Date of Report (Date of earliest event reported)
Flex Pharma, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 001-36812 | 46-5087339 | ||
(State or other jurisdiction | (Commission File Number) | (IRS Employer Identification No.) | ||
of incorporation) | ||||
800 Boylston Street, 24th Floor Boston, MA | 02199 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (617) 874-1821
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
Item 2.02 Results of Operations and Financial Condition.
On August 1, 2018, Flex Pharma, Inc. (the "Company") issued a press release announcing its financial results for the quarter ended June 30, 2018. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information in this Item 2.02 and Exhibit 99.1 hereto is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description | ||
99.1 | |||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Flex Pharma, Inc. | ||
Dated: August 1, 2018 | ||
By: | /s/ John McCabe | |
John McCabe | ||
Chief Financial Officer | ||
Flex Pharma Reports Second Quarter 2018 Financial Results
August 1, 2018
Boston, MA - Flex Pharma, Inc. (NASDAQ: FLKS), today announced its financial results for the three months ended June 30, 2018.
On June 13, 2018, the Company announced that it was ending its ongoing Phase 2 clinical trial investigations of FLX-787 in Motor Neuron Disease (MND), which primarily included patients with amyotrophic lateral sclerosis (ALS), and in Charcot-Marie-Tooth disease (CMT), reducing its workforce and engaged Wedbush PacGrow to help the Company assess its strategic alternatives.
"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 Bill McVicar, Ph.D., President and CEO of Flex Pharma.
Corporate Activities:
• | 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, 2018 was 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 Pharma had 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, 2018 was approximately $245,500. |
• | Cost of Product Revenue: Cost of product revenue for the three months ended June 30, 2018 was approximately $179,900. Write-offs during the three months ended June 30, 2018 totaled 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 months ended June 30, 2018 was $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, 2018 was $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, 2018 was ($9.1) million, or ($0.50) per share and included $0.5 million of stock-based compensation expense. As of June 30, 2018, Flex Pharma had 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. |
About Flex Pharma
Flex Pharma, Inc. is a clinical-stage biotechnology company founded by National Academy of Science members Rod MacKinnon, M.D. (2003 Nobel Laureate), and Bruce Bean, Ph.D., recognized leaders in the fields of ion channels and neurobiology, along with Christoph Westphal, M.D., Ph.D.
Forward-Looking Statements
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 (SEC), including the "Risk Factors" contained therein. You are encouraged to read our filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. Any forward-looking statements that we make in this press release speak only as of the date of this press release. We assume no obligation to update our forward-looking statements whether as a result of new information, future events or otherwise, after the date of this press release.
###
Contact:
John McCabe
Chief Financial Officer
Flex Pharma, Inc.
jmccabe@flex-pharma.com
617-874-1824
- Financial Tables to Follow -
Flex Pharma, Inc. | ||||||
Unaudited Selected Consolidated Balance Sheet Information | ||||||
(in thousands) | ||||||
June 30, 2018 | December 31, 2017 | |||||
Assets: | ||||||
Cash and cash equivalents | $ | 15,757 | $ | 19,186 | ||
Marketable securities | — | 14,130 | ||||
Accounts receivable | 17 | 10 | ||||
Inventory | 276 | 432 | ||||
Prepaid expenses and other current assets | 856 | 777 | ||||
Property and equipment, net | 180 | 331 | ||||
Other assets | 127 | 127 | ||||
Total assets | $ | 17,213 | $ | 34,993 | ||
Liabilities and stockholders' equity: | ||||||
Accounts payable and accrued expenses | $ | 3,734 | $ | 5,717 | ||
Deferred revenue | — | 72 | ||||
Other liabilities | 69 | 98 | ||||
Stockholders’ equity | 13,410 | 29,106 | ||||
Total liabilities and stockholders’ equity | $ | 17,213 | $ | 34,993 | ||
Unaudited Condensed Consolidated Statements of Operations | |||||||||||||
(in thousands, except loss per share amounts) | |||||||||||||
Three Months Ended June 30, 2018 | Three Months Ended June 30, 2017 | Six Months Ended June 30, 2018 | Six Months Ended June 30, 2017 | ||||||||||
Net product revenue | $ | 242 | $ | 331 | $ | 418 | $ | 571 | |||||
Other revenue | 4 | 5 | 6 | 7 | |||||||||
Total revenue | 246 | 336 | 424 | 578 | |||||||||
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 | $ | (9,052 | ) | $ | (8,805 | ) | $ | (17,275 | ) | $ | (17,073 | ) | |
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 | |||||||||
(1) | 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. |