– Lead Candidate in Clinical Trial for Treating
Ewing Sarcoma –
– Salarius Completes $6.4 Million Private
Placement –
– Conference Call and Live Audio Webcast
Scheduled for Today at 9:00 a.m. ET –
Flex Pharma, Inc. (NASDAQ: FLKS), and Salarius Pharmaceuticals,
LLC, a clinical-stage oncology company targeting the epigenetic
causes of cancers, today announced that the companies have entered
into a definitive merger agreement under which privately-held
Salarius will merge with a wholly-owned subsidiary of Flex Pharma.
Management believes that the proposed transaction will position the
combined company to recognize multiple value inflection points
based on Salarius’ clinical pipeline, which targets rare, orphan
cancers with no targeted treatments and cancers that have a high
unmet need.
Salarius recently completed a $6.4 million private placement,
which combined with cash from Flex Pharma is expected to fund the
combined company to mid-2020, allowing it to report early cohort
data from an ongoing Phase 1 Ewing sarcoma trial. Upon the closing
of the transaction, Flex Pharma stockholders will own approximately
19.9% of the combined company and current Salarius investors will
own approximately 80.1% of the combined company. Flex Pharma
stockholders will also receive a right to receive warrants, six
months and one day following the closing date of the transaction,
allowing them to purchase additional shares. The total value
of these warrants will be calculated such that upon exercise Flex
Pharma stockholders would own an additional 2.4%, or a total of
22.3%, of the value of the combined entity, subject to adjustment
based on Flex Pharma’s net cash at closing. A live conference call
and webcast is scheduled for today at 9:00 a.m. Eastern Time.
Upon closing of the transaction, Flex Pharma is expected to be
renamed Salarius Pharmaceuticals, Inc. and be under the leadership
of Salarius’ current management team, led by Chief Executive
Officer, David Arthur. The Salarius clinical pipeline will become
the lead assets of the company following the transaction. Flex
Pharma President and Chief Executive Officer, William McVicar,
Ph.D., is expected to join the Board of Directors of the combined
company following the closing of the transaction.
"After completing a comprehensive and highly competitive
selection process, we are confident that the proposed transaction
with Salarius offers the best opportunity for significant near- and
long-term value creation,” stated Dr. McVicar. “We were impressed
by the compelling science supporting Salarius’ novel drug, as well
as the company’s strong financial position and management team.
Based on our diligence, we believe Salarius could be poised to
advance multiple potential product opportunities that address
significant unmet needs in oncology. I look forward to supporting
the company and being a member of the Salarius Board of Directors
following the closing of the transaction. Finally, I would like to
thank our stockholders for their support and patience during this
strategic process and to reiterate that the entire team is fully
committed to enhancing stockholder value with this transaction and
beyond.”
Salarius’ lead compound, Seclidemstat, targets the epigenetic
dysregulation underlying Ewing sarcoma, a devastating pediatric,
adolescent and young adult bone cancer for which no targeted
therapies currently exist. Seclidemstat is a differentiated,
reversible inhibitor of the lysine-specific demethylase 1 enzyme,
or LSD1, which is a widely studied epigenetic enzyme and a
validated drug target for clinical development. The company is
currently enrolling patients in an open-label Phase 1 dose
escalation/dose expansion study, which is expected to conclude in
2020. Salarius is also preparing to initiate additional studies in
advanced solid tumors, including prostate, breast and ovarian
cancers.
Salarius’ Chief Executive Officer, David Arthur, commented,
“This strategic transaction and Nasdaq listing represent a growth
opportunity for both companies. As an emerging public company, we
believe that the enhanced visibility and exposure to institutional
investors will enable Salarius to showcase the potential of its
clinical pipeline, and the progression of its programs should drive
increased stockholder value. Our goal is to become a recognized
leader in epigenetic cancer therapy.”
Mr. Arthur is a seasoned life sciences executive with more than
25 years’ experience in biopharma leadership, building and leading
multi-disciplinary teams, as well as launching and managing
pharmaceutical and drug delivery device brands. For much of his
career, he held executive roles at Eli Lilly and
Boehringer-Ingelheim managing product development, business
development and global commercialization.
About the Proposed Transaction
The transaction has been approved unanimously by the Board of
Director of Flex Pharma and Board of Managers of Salarius. The
proposed transaction is expected to close in the first half of
2019, subject to the approval of Flex Pharma stockholders at a
special stockholder meeting and other customary conditions,
including approval by Salarius’ members.
Flex Pharma’s strategic advisor in the transaction is Wedbush
PacGrow. Healthios Capital Markets is serving as financial advisor
to Salarius Pharmaceuticals. Dentons Canada LLP and Duane Morris
LLP are serving as legal counsel to Flex Pharma and Pillsbury
Winthrop Shaw Pittman LLP is serving as legal counsel to Salarius
Pharmaceuticals.
Conference Call and Webcast
Flex Pharma and Salarius will host a joint conference call and
simultaneous live audio webcast today at 9:00 a.m. Eastern Time to
discuss the proposed transaction. The live call may be accessed by
dialing:
- (855) 780-7202 (U.S.)
- (631) 485-4874 (international)
- Conference ID: 4498626
A live audio webcast of the call will be available online from
the investor relations section of the Flex Pharma website
at www.flex-pharma.com and will be archived there for 30
days.
About Salarius
Salarius Pharmaceuticals, LLC is a clinical-stage oncology
company targeting the epigenetic causes of cancers and is
developing treatments for patients that need them the most. The
company’s lead candidate, Seclidemstat, is currently in clinical
development for treating Ewing sarcoma, for which it has Orphan
Drug designation and Pediatric Rare Disease Designation by the U.S.
Food and Drug Administration. Salarius believes that Seclidemstat
is the only reversible inhibitor of the epigenetic modulator LSD1
currently in human trials, and that it could have potential for
improved safety and efficacy compared to other LSD1-targeted
therapies. Salarius is also developing Seclidemstat for a number of
cancers with high unmet need and expects to commence additional
clinical studies in 2019 targeting advanced solid tumors, including
prostate, breast and ovarian cancers. For more information, please
visit salariuspharma.com.
About Flex Pharma
Flex Pharma, Inc. is a biotechnology company that was founded in
2014 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.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in
respect of the proposed transaction. In connection with the
proposed transaction, Flex Pharma will file with the Securities and
Exchange Commission (SEC) a registration statement on Form S-4
containing a proxy statement/prospectus/information statement. Flex
Pharma will mail the proxy statement/prospectus/information
statement to Flex Pharma stockholders and members of Salarius, and
the securities may not be sold or exchanged until the registration
statement becomes effective. FLEX PHARMA URGES INVESTORS
AND EQUITYHOLDERS OF FLEX PHARMA AND SALARIUS TO READ THE PROXY
STATEMENT/PROSPECTUS/INFORMATION STATEMENT REGARDING THE PROPOSED
TRANSACTION WHEN IT BECOMES AVAILABLE, AS WELL AS OTHER DOCUMENTS
FILED OR THAT WILL BE FILED WITH THE SEC, BECAUSE THEY CONTAIN OR
WILL CONTAIN IMPORTANT INFORMATION ABOUT FLEX PHARMA, SALARIUS AND
THE PROPOSED TRANSACTION. This communication is not a
substitute for the registration statement, definitive proxy
statement/prospectus/information statement or any other documents
that Flex Pharma may file with the SEC or send to Flex Pharma or
Salarius equityholders in connection with the proposed transaction.
Before making any voting decision, investors and equityholders are
urged to read the registration statement, proxy
statement/prospectus/information statement and all other relevant
documents filed or that will be filed with the SEC in connection
with the proposed transaction as they become available because they
will contain important information about the proposed transaction
and related matters.
You may obtain free copies of the registration statement, proxy
statement/prospectus/information statement and all other documents
filed or that will be filed with the SEC regarding the proposed
transaction at the website maintained by the SEC, www.sec.gov. Once they are filed, copies of the
registration statement and proxy statement/prospectus will be
available free of charge on Flex Pharma’s website
at www.flex-pharma.com or by
contacting John McCabe at JMcCabe@Flex-Pharma.com.
Participants in Solicitation
Flex Pharma, Salarius and their respective directors or managers
and executive officers may be deemed to be participants in the
solicitation of proxies from the holders of Flex Pharma common
stock in connection with the proposed transaction. Information
about Flex Pharma’s directors and executive officers is set forth
in Flex Pharma’s Annual Report on Form 10-K for the period ended
December 31, 2017, which was filed with the SEC on March 8, 2018,
and its proxy statement for its 2018 annual meeting of
stockholders, which was filed with the SEC on April 23, 2018. Other
information regarding the interests of such individuals, as well as
information regarding Salarius’ managers and executive officers and
other persons who may be deemed participants in the proposed
transaction, will be set forth in the proxy
statement/prospectus/information statement, which will be included
in Flex Pharma’s registration statement when it is filed with the
SEC. You may obtain free copies of these documents as described in
the preceding paragraph.
Non-Solicitation
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No public offer of
securities in connection with the merger shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Forward-Looking Statements
Certain statements in this communication regarding the proposed
transaction and other contemplated transactions (including
statements relating to satisfaction of the conditions to and
consummation of the proposed transaction, the expected ownership,
management and board of directors of the combined company, the
alternatives to the proposed transaction, the plans with respect to
capitalization of the combined company, and the anticipated timing
and effects of the transaction, including as to value creation and
growth opportunities) as well as statements regarding Salarius’
plans following the transaction (including as to its lead compound
and future studies) constitute "forward-looking statements" within
the meaning of Section 27A of the Securities Act and Section 21E of
the Securities Exchange Act and are usually identified by the use
of words such as "anticipates," "believes," "estimates," "expects,"
"intends," "may," "plans," "projects," "seeks," "should," "will,"
and variations of such words or similar expressions. We intend
these forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in Section 27A
of the Securities Act and Section 21E of the Securities Exchange
Act of 1934, as amended, and are making this statement for purposes
of complying with those safe harbor provisions. These
forward-looking statements reflect our current views about our
plans, intentions, expectations, strategies and prospects, which
are based on the information currently available to us and on
assumptions we have made. Although we believe that our plans,
intentions, expectations, strategies and prospects as reflected in
or suggested by those forward-looking statements are reasonable, we
can give no assurance that the plans, intentions, expectations or
strategies will be attained or achieved. Furthermore, actual
results may differ materially from those described in the
forward-looking statements and will be affected by a variety of
risks and factors that are beyond our control.
Risks and uncertainties for Flex Pharma, Salarius and of the
combined company include, but are not limited to: inability to
complete the proposed transaction and other contemplated
transactions; costs and potential litigation associated with the
proposed transaction; failure or delay in obtaining required
approvals by the SEC, Nasdaq or any other governmental or
quasi-governmental entity necessary to consummate the proposed
transaction, including our ability to file an effective
registration statement in connection with the proposed transaction
and other contemplated transactions, which may also result in
unexpected additional transaction expenses and operating cash
expenditures on the parties; failure to obtain the necessary
stockholder and member approvals or to satisfy other conditions to
the closing of the proposed transaction and the other contemplated
transactions; a superior proposal being submitted to either party;
the ability of the proposed transaction to increase stockholder
value; an inability or delay in obtaining required regulatory
approvals for product candidates, which may result in unexpected
cost expenditures; risks inherent in drug development in general;
uncertainties in obtaining successful clinical results for product
candidates and unexpected costs that may result therefrom; failure
to realize any value of certain product candidates developed and
being developed in light of inherent risks and difficulties
involved in successfully bringing product candidates to market;
inability to develop new product candidates and support existing
products; the approval by the FDA and any other similar foreign
regulatory authorities of other competing or superior products
brought to market; risks resulting from unforeseen side effects;
risk that the market for the combined company's products may not be
as large as expected; inability to obtain, maintain and enforce
patents and other intellectual property rights or the unexpected
costs associated with such enforcement or litigation; inability to
obtain and maintain commercial manufacturing arrangements with
third-party manufacturers or establish commercial scale
manufacturing capabilities; loss of or diminished demand from one
or more key customers or distributors; unexpected cost increases
and pricing pressures; continuing or deepening economic recession
and its negative impact on customers, vendors or suppliers;
uncertainties of cash flows, expenses and inability to meet working
capital needs; cost reductions that may not result in anticipated
level of cost savings or cost reductions prior to or after the
consummation of the proposed transaction; risks associated with the
possible failure to realize certain benefits of the proposed
transaction, including future financial, tax, accounting treatment
and operating results; failure to maintain the combined company’s
management team or board of directors; and other risks and
uncertainties detailed in the risk factors section of Flex Pharma’s
Form 10-K and Forms 10-Q filed with the SEC, as well as other
filings Flex Pharma makes with the SEC from time-to-time. Many of
these factors that will determine actual results are beyond Flex
Pharma’s, Salarius’ or the combined company's ability to control or
predict. Flex Pharma disclaims any obligation to update information
contained in these forward-looking statements, whether as a result
of new information, future events or otherwise, except as required
by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20190104005118/en/
Flex Pharma, Inc.William McVicarChief Executive Officer(617)
874-1821wmcvicar@flex-pharma.com
Salarius Pharmaceuticals, LLCTiberend Strategic Advisors,
Inc.Joshua Drumm, Ph.D. (Investors)(212)
375-2664jdrumm@tiberend.com
David Schemelia (Media)(212) 375 6298dschemelia@tiberend.com
FLEX PHARMA, INC. (NASDAQ:FLKS)
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