SEC Form 424B3 filed by Sol-Gel Technologies Ltd.
Exhibit 99.1
|
Press release dated August 17, 2024 (reissued)
|
Exhibit 99.2
|
Unaudited condensed consolidated financial statements as of June 30, 2024 and for the three and six months then ended.
|
|
SOL-GEL TECHNOLOGIES LTD.
|
|
|
||
Date: August 19, 2024
|
By:
|
/s/ Eyal Ben-Or |
|
|
Eyal Ben-Or
|
|
|
Chief Financial Officer
|
3
• |
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
|
• |
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 $6 million. 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 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 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 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 million 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 shareholder 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.
|
December 31,
|
June 30,
|
|||||||
2023
|
2024
|
|||||||
A s s e t s
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
7,513
|
$
|
11,549
|
||||
Bank deposits
|
10,012
|
4,012
|
||||||
Marketable securities
|
20,471
|
14,912
|
||||||
Accounts receivables
|
377
|
6,059
|
||||||
Prepaid expenses and other current assets
|
2,794
|
1,750
|
||||||
TOTAL CURRENT ASSETS
|
41,167
|
38,282
|
||||||
NON-CURRENT ASSETS:
|
||||||||
Restricted long-term deposits and cash equivalents
|
1,284
|
1,273
|
||||||
Property and equipment, net
|
434
|
305
|
||||||
Operating lease right-of-use assets
|
1,721
|
1,507
|
||||||
Other long-term assets
|
55
|
34
|
||||||
Funds in respect of employee rights upon retirement
|
626
|
604
|
||||||
TOTAL NON-CURRENT ASSETS
|
4,120
|
3,723
|
||||||
TOTAL ASSETS
|
$
|
45,287
|
$
|
42,005
|
||||
Liabilities and shareholders' equity
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable
|
$
|
154
|
$
|
679
|
||||
Other accounts payable
|
3,921
|
4,147
|
||||||
Current maturities of operating leases
|
447
|
376
|
||||||
TOTAL CURRENT LIABILITIES
|
4,522
|
5,202
|
||||||
LONG-TERM LIABILITIES
|
||||||||
Operating leases liabilities
|
1,206
|
1,018
|
||||||
Liability for employee rights upon retirement
|
915
|
883
|
||||||
TOTAL LONG-TERM LIABILITIES
|
2,121
|
1,901
|
||||||
TOTAL LIABILITIES
|
6,643
|
7,103
|
||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Ordinary Shares, NIS 0.1 par value – authorized: 50,000,000 as of December 31, 2023 and June 30, 2024; issued and outstanding: 27,857,620 as of
December 31, 2023 and June 30, 2024.
|
774
|
774
|
||||||
Additional paid-in capital
|
258,173
|
258,799
|
||||||
Accumulated deficit
|
(220,303
|
)
|
(224,671
|
)
|
||||
TOTAL SHAREHOLDERS' EQUITY
|
38,644
|
34,902
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
45,287
|
$
|
42,005
|
Six months ended
June 30
|
Three months ended
June 30
|
|||||||||||||||
2023
|
2024
|
2023
|
2024
|
|||||||||||||
REVENUE
|
$
|
894
|
$
|
5,899
|
$
|
594
|
$
|
5,433
|
||||||||
RESEARCH AND DEVELOPMENT EXPENSES
|
14,698
|
7,783
|
5,312
|
2,438
|
||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES
|
3,786
|
3,203
|
1,809
|
1,371
|
||||||||||||
OPERATING INCOME (LOSS)
|
$
|
(17,590
|
)
|
$
|
(5,087
|
)
|
$
|
(6,527
|
)
|
$
|
1,624
|
|||||
FINANCIAL INCOME, net
|
899
|
719
|
557
|
352
|
||||||||||||
NET INCOME (LOSS) FOR THE PERIOD
|
$
|
(16,691
|
)
|
$
|
(4,368
|
)
|
$
|
(5,970
|
)
|
$
|
1,976
|
|||||
BASIC AND DILUTED EARNINGS (LOSS) PER ORDINARY SHARE
|
$
|
(0.63
|
)
|
$
|
(0.16
|
)
|
$
|
(0.22
|
)
|
$
|
0.07
|
|||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE
|
26,306,484
|
27,857,620
|
27,660,326
|
27,857,620
|
7
Page
|
|
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
|
|
F - 2
|
|
F - 3
|
|
F - 4 - F - 5
|
|
F - 6
|
|
F - 7 - F - 13
|
December 31,
|
June 30,
|
|||||||
2023
|
2024
|
|||||||
A s s e t s
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
7,513
|
$
|
11,549
|
||||
Bank deposits
|
10,012
|
4,012
|
||||||
Marketable securities
|
20,471
|
14,912
|
||||||
Accounts receivables
|
377
|
6,059
|
||||||
Prepaid expenses and other current assets
|
2,794
|
1,750
|
||||||
TOTAL CURRENT ASSETS
|
41,167
|
38,282
|
||||||
NON-CURRENT ASSETS:
|
||||||||
Restricted long-term deposits and cash equivalents
|
1,284
|
1,273
|
||||||
Property and equipment, net
|
434
|
305
|
||||||
Operating lease right-of-use assets
|
1,721
|
1,507
|
||||||
Other long-term assets
|
55
|
34
|
||||||
Funds in respect of employee rights upon retirement
|
626
|
604
|
||||||
TOTAL NON-CURRENT ASSETS
|
4,120
|
3,723
|
||||||
TOTAL ASSETS
|
$
|
45,287
|
$
|
42,005
|
||||
Liabilities and shareholders' equity
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable
|
$
|
154
|
$
|
679
|
||||
Other accounts payable
|
3,921
|
4,147
|
||||||
Current maturities of operating leases
|
447
|
376
|
||||||
TOTAL CURRENT LIABILITIES
|
4,522
|
5,202
|
||||||
LONG-TERM LIABILITIES
|
||||||||
Operating leases liabilities
|
1,206
|
1,018
|
||||||
Liability for employee rights upon retirement
|
915
|
883
|
||||||
TOTAL LONG-TERM LIABILITIES
|
2,121
|
1,901
|
||||||
TOTAL LIABILITIES
|
6,643
|
7,103
|
||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Ordinary Shares, NIS 0.1 par value – authorized: 50,000,000 as of December 31, 2023 and June 30, 2024; issued and outstanding: 27,857,620 as
of December 31, 2023 and June 30, 2024.
|
774
|
774
|
||||||
Additional paid-in capital
|
258,173
|
258,799
|
||||||
Accumulated deficit
|
(220,303
|
)
|
(224,671
|
)
|
||||
TOTAL SHAREHOLDERS' EQUITY
|
38,644
|
34,902
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
45,287
|
$
|
42,005
|
Six months ended
June 30
|
Three months ended
June 30
|
|||||||||||||||
2023
|
2024
|
2023
|
2024
|
|||||||||||||
REVENUE
|
$
|
894
|
$
|
5,899
|
$
|
594
|
$
|
5,433
|
||||||||
RESEARCH AND DEVELOPMENT EXPENSES
|
14,698
|
7,783
|
5,312
|
2,438
|
||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES
|
3,786
|
3,203
|
1,809
|
1,371
|
||||||||||||
OPERATING INCOME (LOSS)
|
$
|
(17,590
|
)
|
$
|
(5,087
|
)
|
$
|
(6,527
|
)
|
$
|
1,624
|
|||||
FINANCIAL INCOME, net
|
899
|
719
|
557
|
352
|
||||||||||||
NET INCOME (LOSS) FOR THE PERIOD
|
$
|
(16,691
|
)
|
$
|
(4,368
|
)
|
$
|
(5,970
|
)
|
$
|
1,976
|
|||||
BASIC AND DILUTED EARNINGS (LOSS) PER ORDINARY SHARE
|
$
|
(0.63
|
)
|
$
|
(0.16
|
)
|
$
|
(0.22
|
)
|
$
|
0.07
|
|||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE
|
26,306,484
|
27,857,620
|
27,660,326
|
27,857,620
|
Ordinary shares
|
Additional
paid-in capital
|
Accumulated
deficit
|
Total
|
|||||||||||||||||
Number of shares
|
Amounts
|
Amounts
|
||||||||||||||||||
BALANCE AS OF JANUARY 1, 2023
|
23,129,469
|
638
|
234,640
|
(193,065
|
)
|
42,213
|
||||||||||||||
CHANGES DURING THE SIX MONTHS ENDED JUNE 30, 2023:
|
||||||||||||||||||||
Loss for the period
|
(16,691
|
)
|
(16,691
|
)
|
||||||||||||||||
Issuance of shares and warrants through public offering, net of issuance costs
|
2,560,000
|
74
|
11,468
|
11,542
|
||||||||||||||||
Issuance of shares and warrants through private placement from the controlling shareholder
|
2,000,000
|
56
|
9,944
|
10,000
|
||||||||||||||||
Exercise of options
|
116,485
|
3
|
177
|
180
|
||||||||||||||||
Share-based compensation
|
1,052
|
1,052
|
||||||||||||||||||
BALANCE AT JUNE 30, 2023
|
27,805,954
|
771
|
257,281
|
(209,756
|
)
|
48,296
|
||||||||||||||
BALANCE AS OF JANUARY 1, 2024
|
27,857,620
|
774
|
258,173
|
(220,303
|
)
|
38,644
|
||||||||||||||
CHANGES DURING THE SIX MONTHS ENDED JUNE 30, 2024:
|
||||||||||||||||||||
Loss for the period
|
-
|
-
|
(4,368
|
)
|
(4,368
|
)
|
||||||||||||||
Share-based compensation
|
-
|
-
|
626
|
626
|
||||||||||||||||
BALANCE AT JUNE 30, 2024
|
27,857,620
|
774
|
258,799
|
(224,671
|
)
|
34,902
|
Ordinary shares
|
Additional
paid-in capital
|
Accumulated
deficit
|
Total
|
|||||||||||||||||
Number of shares
|
Amounts
|
Amounts
|
||||||||||||||||||
BALANCE AS OF APRIL 1, 2023
|
25,702,237
|
712
|
246,678
|
(203,786
|
)
|
43,604
|
||||||||||||||
CHANGES DURING THE THREE MONTHS ENDED JUNE 30, 2023:
|
||||||||||||||||||||
Loss for the period
|
(5,970
|
)
|
(5,970
|
)
|
||||||||||||||||
Issuance of shares and warrants through private placement from the controlling shareholder
|
2,000,000
|
56
|
9,944
|
10,000
|
||||||||||||||||
Exercise of options
|
103,717
|
3
|
161
|
164
|
||||||||||||||||
Share-based compensation
|
498
|
498
|
||||||||||||||||||
BALANCE AT JUNE 30, 2023
|
27,805,954
|
771
|
257,281
|
(209,756
|
)
|
48,296
|
||||||||||||||
BALANCE AS OF APRIL 1, 2024
|
27,857,620
|
774
|
258,524
|
(226,647
|
)
|
32,651
|
||||||||||||||
CHANGES DURING THE THREE MONTHS ENDED JUNE 30, 2024:
|
||||||||||||||||||||
Income for the period
|
-
|
-
|
1,976
|
1,976
|
||||||||||||||||
Share-based compensation
|
-
|
-
|
275
|
275
|
||||||||||||||||
BALANCE AT JUNE 30, 2024
|
27,857,620
|
774
|
258,799
|
(224,671
|
)
|
34,902
|
Six months ended
June 30
|
||||||||
2023
|
2024
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Loss for the period
|
$
|
(16,691
|
)
|
$
|
(4,368
|
)
|
||
Adjustments required to reconcile loss to net cash used in operating activities:
|
||||||||
Depreciation
|
185
|
125
|
||||||
Changes in accrued liability for employee rights upon retirement, net
|
9
|
(10
|
)
|
|||||
Share-based compensation expenses
|
1,052
|
626
|
||||||
Financial expenses (income), net
|
(1
|
)
|
(2
|
)
|
||||
Net changes in operating leases
|
(36
|
)
|
(45
|
)
|
||||
Changes in fair value of marketable securities
|
(66
|
)
|
(87
|
)
|
||||
Changes in operating asset and liabilities:
|
||||||||
Receivables from collaborative and licensing arrangements
|
5,653
|
-
|
||||||
Accounts receivables
|
-
|
(5,682
|
)
|
|||||
Prepaid expenses and other current assets
|
(1,063
|
)
|
1,065
|
|||||
Accounts payable, accrued expenses and other
|
2,623
|
751
|
||||||
Net cash used in operating activities
|
(8,335
|
)
|
(7,627
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of property and equipment
|
(94
|
)
|
-
|
|||||
Proceeds from sale of property and equipment
|
-
|
4
|
||||||
Investment in marketable securities
|
(17,114
|
)
|
-
|
|||||
Proceeds from sales and maturity of marketable securities
|
7,995
|
5,646
|
||||||
Short-term deposits
|
(1,000
|
)
|
6,000
|
|||||
Long-term deposits
|
12
|
821
|
||||||
Net cash provided by (used in) investing activities
|
(10,201
|
)
|
12,471
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from exercise of options
|
180
|
-
|
||||||
Proceeds from issuance of shares and warrants through placement from the controlling shareholder
|
10,000
|
-
|
||||||
Proceeds from issuance of shares and warrants through public offering,
net of issuance costs
|
11,542
|
-
|
||||||
Net cash provided by financing activities
|
21,722
|
-
|
||||||
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS
|
1
|
2
|
||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS
|
3,187
|
4,846
|
||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD
|
13,598
|
7,863
|
||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT END OF THE PERIOD
|
$
|
16,785
|
$
|
12,709
|
||||
Cash and Cash equivalents
|
15,618
|
11,549
|
||||||
Restricted cash
|
1,167
|
1,160
|
||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH SHOWN IN STATEMENT OF CASH FLOWS
|
16,785
|
12,709
|
||||||
SUPPLEMENTARY DISCLOSURE OF NON-CASH ACTIVITIES:
|
|
|||||||
Recognition of new operating lease ROU and liabilities | $ | 190 |
-
|
|||||
SUPPLEMENTARY INFORMATION:
|
||||||||
Interest received
|
$
|
590
|
$
|
1,121
|
(U.S. dollars in thousands, except share and per share data)
a. |
Basis of Presentation
The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial statements. Accordingly, they do not include all of the information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s consolidated financial position as of June 30, 2024, the consolidated results of operations and the statements of changes in shareholders' equity for the six month periods ended June 30, 2024 and 2023 and the statements of cash flows for the six month period ended June 30, 2024 and 2023. |
Basic earnings (loss) per share is computed on the basis of the net earnings (loss) for the period divided by the weighted average number of ordinary shares outstanding during the period. Diluted earnings (loss) per share is based upon the weighted average number of ordinary shares and of potential ordinary shares outstanding when dilutive. Potential ordinary shares include outstanding stock options and warrants, which are included under the treasury stock method when dilutive.
(U.S. dollars in thousands, except share and per share data)
b. |
Recently issued accounting pronouncements, not yet adopted
In November 2023, the FASB issued ASU 2023-07 “Segment Reporting: Improvements to Reportable Segment
Disclosures”. This guidance expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within
each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. Public entities with a single
reportable segment are required to provide the new disclosures and all the disclosures required under ASC 280. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal
years beginning after December 15, 2024, with early adoption permitted. The amendments are required to be applied retrospectively to all prior periods presented in an entity’s financial statements. The Company is currently
evaluating this guidance to determine the impact it may have on its consolidated financial statements and related disclosures.
|
December 31,
|
June 30,
|
|||||||
2023
|
2024
|
|||||||
Level 2 securities:
|
||||||||
U.S government and agency bonds
|
2,583
|
1,612
|
||||||
Other foreign government bonds
|
1,946
|
1,974
|
||||||
Corporate bonds*
|
15,942
|
11,326
|
||||||
Total
|
20,471
|
14,912
|
Marketable securities
|
||||||||
For the year ended
|
For the six months
|
|||||||
December 31, 2023
|
ended June 30, 2024
|
|||||||
Balance at beginning of the period
|
$
|
8,678
|
$
|
20,471
|
||||
Additions
|
23,164
|
-
|
||||||
Sale or maturity
|
(11,807
|
)
|
(5,646
|
)
|
||||
Changes in fair value during the period
|
436
|
87
|
||||||
Balance at end of the period
|
$
|
20,471
|
$
|
14,912
|
(U.S. dollars in thousands, except share and per share data)
Market value
|
||||
June 30,
|
||||
2024
|
||||
Due within one year
|
$
|
14,912
|
Six months ended
June 30
|
Three months ended
June 30
|
|||||||||||||||
2023
|
2024
|
2023
|
2024
|
|||||||||||||
Royalties revenue
|
$
|
514
|
$
|
1,056
|
$
|
214
|
$
|
612
|
||||||||
Sale of IP and license revenue
|
380
|
4,800
|
380
|
4,800
|
||||||||||||
Support services
|
-
|
43
|
-
|
21
|
||||||||||||
Total revenue
|
$
|
894
|
$
|
5,899
|
$
|
594
|
$
|
5,433
|
a. |
In 2007, the Company granted rights to a third party for use and commercialization of a product for skin protection. Under this agreement, the Company is entitled to royalties during the years 2016 to 2024. Based on current sales,
royalties are not material.
|
b. |
In 2016 through 2020, the Company entered into several collaboration agreements mainly with one third party (the "Partner") for the development, manufacturing and commercialization of several product candidates (including an
agreement assumed by the Company in August 2018, following the transfer of an in-process research and development product candidate from a related party).
|
c. |
Under the agreements, the Partner is obligated to conduct regulatory, scientific, clinical and technical activities necessary to develop the products and prepare and file an abbreviated new drug application ("ANDA"), with the FDA and
gain regulatory approval. The Company participates in the development of the product candidates, including participation in joint steering committees and is obligated for sourcing the active pharmaceutical ingredient (API) during the
development phase.
Upon FDA approval, the Partner has exclusive rights and is required to use diligent efforts to commercialize these products in territories defined under the agreements, including all required sales, marketing and distributing activities associated with the agreements. The Company is entitled to a share of the Partner's gross profits related to the sale of the products, as such term is defined in each of the agreements. |
(U.S. dollars in thousands, except share and per share data)
a. |
In June 2021, the Company entered into two exclusive license agreements with Galderma for the commercialization of two of the Company's most advanced investigational drug products (Twyneo® and Epsolay®) in the United States. The
Company was entitled to amounts of up to $7.5 million per product in upfront payments and regulatory approval milestone payments assuming 2021 approval of each respective product. The Company is also eligible to receive tiered
double-digit royalties ranging from mid-teen to high-teen percentage of net sales as well as up to $9 million in sales milestone payments.
|
b. |
On June 6, 2023, the Company and Searchlight Pharma Inc. (“Searchlight”), a private Canadian specialty pharmaceutical company, signed on an exclusive license agreements for Twyneo® and Epsolay® for the Canadian market, over a
fifteen-year term that is renewable for subsequent five-year periods. Searchlight will be responsible for obtaining and maintaining any regulatory approvals required to market and sell the drugs in Canada, with support from the Company.
|
(U.S. dollars in thousands, except share and per share data)
c. |
On May 15, 2024, the Company and Beimei, a private Chinese company, signed an agreement for the purchase and license by Beimei of certain rights in the intellectual property ("IP") related to Twyneo, for the treatment of acne
vulgaris, in the mainland of China, Hong Kong, Macau, Taiwan and Israel.
|
(U.S. dollars in thousands, except share and per share data)
The options vest over a period of 3 years; one third of the options vest on the first anniversary of the vesting commencement date (as described in each agreement) and the rest vest quarterly over the following two years. The options expire on the tenth anniversary of their grant date.
2024
|
||||
Value of one ordinary share
|
$
|
1.2
|
||
Dividend yield
|
0
|
%
|
||
Expected volatility
|
72
|
%
|
||
Risk-free interest rate
|
4.8
|
%
|
||
Expected term
|
4 years
|
a. |
Related parties include the controlling shareholder and companies under his control, the board of directors and the executive officers of the Company.
|
b. |
As to options granted to directors and executive officers, see note 7.
|