Salarius Pharmaceuticals, Inc.: Salarius Pharmaceuticals Reports Fourth Quarter and Full Year 2022 Financial Results and Provides Business Update

Data to be presented at AACR demonstrate significant SP-3164 anticancer activity in both non-Hodgkin Lymphoma and Multiple Myeloma cell lines and animal models

Targeted protein degrader SP-3164 on track for IND submission in first half of 2023 with clinical trial to begin in second half of 2023

HOUSTON, March 27, 2023 (GLOBE NEWSWIRE) -- Salarius Pharmaceuticals, Inc. (Nasdaq: SLRX), a clinical-stage biopharmaceutical company using protein inhibition and protein degradation to develop cancer therapies for patients in need of new treatment options, today reported financial results for the three and 12 months ended December 31, 2022 and provided a business update.

Financial Highlights

• Cash and cash equivalents were $12.1 million as of December 31, 2022, compared with $29.2 million as of December 31, 2021. Subsequent to the close of 2022, the company received $1.5 million from the Cancer Prevention and Research Institute of Texas (CPRIT)
• Net loss for 2022 was $31.6 million, or $14.88 per share, compared with a net loss for 2021 of $12.8 million, or $7.72 per share. The 2022 net loss included a one-time non-cash expense of $8.9 million, or $4.17 per share due to a loss on impairment of goodwill
• Net loss for the fourth quarter of 2022 was $6.4 million, or $2.83 per share, compared with a net loss for the fourth quarter of 2021 of $4.1 million, or $2.27 per share, reflecting higher operating expenses including an increase in research and development expenses associated with the development of our targeted protein degrader, SP-3164
  

"We believe Salarius had an extremely productive fourth quarter and is well-positioned to take advantage of the recently announced and encouraging SP-3164 preclinical cell line and animal model data. We plan to file an IND with the FDA and initiate an SP-3164 clinical trial this year," said David Arthur, president and chief executive officer.

"In addition, we believe the seclidemstat clinical trial data presented by MD Anderson Cancer Center researchers at the 2022 American Society of Hematology Annual Meeting and the Ewing sarcoma clinical trial data released by Salarius confirm that seclidemstat represent a potential lifeline to patients who are in desperate need of new treatment options. While the partial clinical trial holds have been a setback, we are optimistic about seclidemstat's potential in treating Ewing sarcoma as well as blood cancers, and we look forward to restarting enrollment as quickly as possible," Mr. Arthur added.

Targeted Protein Degrader (Molecular Glue) Highlights

• Continued to advance plans for filing an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) for SP-3164 in the first half of 2023 and begin a Phase 1/2 clinical trial in the second half of 2023
• SP-3164 data highlights from the American Society of Hematology (ASH) Annual Meeting include:
  • Significant single-agent activity in diffuse large B-cell lymphoma (DLBCL) cell lines and mouse models showed superiority to lenalidomide (Revlimid^®)
  • SP-3164 in combination with the approved anti-CD20 drug, rituximab, resulted in complete tumor regressions in 50% of mice, and performed significantly better than the approved regimen of lenalidomide (Revlimid^®) and rituximab
  • Rapid and efficient Ikaros¹ degradation compared with other studied molecular glues
  • Antiproliferative effects across several non-Hodgkin's lymphoma (NHL) cell lines
• Two abstracts were accepted for presentation at the American Association for Cancer Research (AACR) Annual Meeting in April 2023:
  • One presentation is titled "SP-3164, a novel Ikaros and Aiolos¹ molecular glue degrader with preclinical activity in non-Hodgkin lymphomas" and demonstrates that SP-3164 is a novel, orally available, cereblon-binding molecular glue with significant anticancer activity in NHL cell lines and mouse models
  • The second presentation is titled "SP-3164, a novel molecular glue degrader with activity in preclinical models of multiple myeloma" and demonstrates that SP-3164 is a potent cereblon-binding molecular glue with the ability to rapidly degrade cancer-promoting transcription factors proteins and induce cell death in multiple myeloma cell lines; in multiple myeloma mouse models; and, that SP-3164 has superior single agent and combination treatment activity compared to approved molecular glues
• Announced the issuance of a new composition of matter U.S. patent for a second, next-generation targeted protein degrader, SP-3204
  • The company's targeted protein degrader intellectual property portfolio now includes 16 issued patents across six patent families
    

Seclidemstat (Targeted Protein Inhibitor) Highlights

• MD Anderson researchers presented data at ASH showing that in patients with myelodysplastic syndrome or chronic myelomonocytic leukemia, the combination of seclidemstat with azacitidine appeared safe at current dose levels and showed initial signs of potential activity
  • There was a 50% overall response rate among eight evaluable patients who relapsed or progressed after standard of care hypomethylating agent therapy
• Salarius reported interim data from its Phase 1/2 study in Ewing sarcoma and FET-rearranged sarcomas showing:
  • A 60% confirmed disease control rate and 7.4 months median time to tumor progression for Ewing sarcoma first-relapse patients
  • No disease progression observed in either first- or second-relapse Ewing sarcoma patients who achieved confirmed disease control
• During the fourth quarter, enrollment of new patients in the Salarius-sponsored Phase 1/2 sarcoma clinical trial and the University of Texas MD Anderson investigator-initiated hematologic clinical trial was voluntarily paused, and then subsequently placed on partial clinical hold by the FDA. Salarius has worked to gather and analyze requested data and plans to submit its findings to the FDA with the goal of restarting its clinical trials, while MD Anderson works in parallel to provide its information to the FDA

"In summary, we believe our near-term future is promising and that our protein degradation assets hold great potential in treating blood cancers, and we are looking forward to beginning the SP-3164 clinical trial later this year. We are also excited about the encouraging seclidemstat clinical data generated to date. I'm looking forward to a great 2023 and beyond," concluded Mr. Arthur.

¹ Ikaros and Aiolos are transcription factors, or proteins, that play a critical role in regulating B and T cell development and have been associated with the development and progression of hematologic or blood cancers

Fourth Quarter Financial Results

Net loss for the fourth quarter of 2022 was $6.4 million, or $2.83 per share, compared with a net loss for the fourth quarter of 2021 of $4.9 million, or $2.27 per share. The increase was due to higher operating expenses including development spending on SP-3164, which was acquired in January 2022.

Research and development expenses were $4.7 million in the fourth quarter of 2022, compared with $2.7 million in the fourth quarter of 2021. The increase was principally due to costs associated with SP-3164, partially offset by lower costs related to SP-2577.

Net cash used for operating activities during the fourth quarter of 2022 was $4.7 million, compared with $2.7 million during the same quarter in 2021, reflecting the above-mentioned SP-3164 spending during the current period.

Full Year Financial Results

Net loss for 2022 was $31.6 million, or $14.88 per share, compared with a net loss for 2021 of $12.8 million, or $7.72 per share. The increase was primarily due to a $8.9 million one-time non-cash expense for impairment of goodwill, higher research and development expenses primarily resulting from the acquisition and development of SP-3164, higher seclidemstat development costs and higher general and administrative expenses. The 2021 period included grant revenue of $1.8 million, with no such revenue in 2022.

Research and development expenses were $15.8 million in 2022, compared with $8.5 million in 2021. The increase was principally due to costs associated with SP-3164, partially offset by lower costs related to SP-2577.

General and administrative expenses were $7.1 million in 2022, compared with $6.1 million in 2021, with the increase mainly driven by higher legal cost, public company cost and personnel cost.

Net cash used in operating activities for 2022 was $17.6 million, compared with $10.2 million for 2021. The increase was primarily due to higher research and development expenses.

As of December 31, 2022, Salarius had cash, cash equivalents and restricted cash of $12.1 million, compared with $29.2 million as of December 31, 2021. Current cash and cash equivalents are expected to fund the company's planned operations into the fourth quarter of 2023.

About Salarius Pharmaceuticals
Salarius Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company developing therapies for patients with cancer in need of new treatment options. Salarius' product portfolio includes seclidemstat, Salarius' lead candidate, which is being studied as a potential treatment for pediatric cancers, sarcomas and other cancers with limited treatment options, and SP-3164, an oral small molecule protein degrader. Seclidemstat is currently in a Phase 1/2 clinical trial for relapsed/refractory Ewing sarcoma and certain additional sarcomas that share a similar biology. This trial is currently on a partial clinical hold and is not enrolling new patients. Seclidemstat has received fast track, orphan drug and rare pediatric disease designations for Ewing sarcoma from the U.S. Food and Drug Administration. Salarius is also exploring seclidemstat's potential in several cancers with high unmet medical need, with an investigator-initiated Phase 1/2 clinical study in hematologic cancers at MD Anderson Cancer Center. This trial is also currently on a partial clinical hold and is not enrolling new patients. Salarius has received financial support from the National Pediatric Cancer Foundation to advance the Ewing program and was a recipient of a Product Development Award from the Cancer Prevention and Research Institute of Texas (CPRIT). SP-3164 is currently in IND-enabling studies and anticipated to enter the clinic in 2023. For more information, please visit salariuspharma.com or follow Salarius on Twitter and LinkedIn.

Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release are forward-looking statements. These forward-looking statements may be identified by terms such as "will," "believe," "developing," "expect," "may," "progress," "potential," "could," "look forward," "encouraging," "might," "should," and similar terms or expressions or the negative thereof. Examples of such statements include, but are not limited to, statements relating to the following: the future of the company's Phase 1/2 trial of seclidemstat as a treatment for Ewing sarcoma and FET-rearranged sarcomas following the recently announced suspected unexpected severe adverse reaction (SUSAR) event and resulting partial clinical hold by the U.S. Food and Drug Administration (FDA); the advantages of protein degraders including the value of SP-3164 as a cancer treatment; the timing of clinical trials for SP-3164 and expected therapeutic options for SP-3164 and related effects and projected efficacy; the impact that the addition of new clinical sites will have on the development of Salarius' product candidates; the timing of Salarius' IND submissions to the FDA and subsequent timing for initiating clinical trials; interim data related to Salarius' clinical trials, including the timing of when such data is available and made public; Salarius' growth strategy; the value of seclidemstat as a treatment for Ewing sarcoma, Ewing-related sarcomas, and other cancers and its ability to improve the life of patients; expanding the scope of Salarius' research and focus to high unmet need patient populations; milestones of Salarius' current and future clinical trials, including the timing of data readouts. Salarius may not actually achieve the plans, carry out the intentions or meet the expectations or objectives disclosed in the forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements are subject to risks and uncertainties which could cause actual results and performance to differ materially from those discussed in the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: Salarius' ability to continue as a going concern; it may take considerable time and expense to resolve the partial clinical hold that has been placed on Salarius' Phase 1/2 trial of seclidemstat as a treatment for Ewing sarcoma and FET-rearranged sarcomas by the FDA, and no assurance can be given that the FDA will remove the partial clinical hold; Salarius' ability to resume enrollment in the clinical trial following its review of the available data surrounding the SUSAR; the sufficiency of Salarius' capital resources; the ability of, and need for, Salarius to raise additional capital to meet Salarius' business operational needs and to achieve its business objectives and strategy; future clinical trial results and the impact of such results on Salarius; that the results of studies and clinical trials may not be predictive of future clinical trial results; risks related to the drug development and the regulatory approval process; the competitive landscape and other industry-related risks; and other risks described in Salarius' filings with the?Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as revised or supplemented by its Quarterly Reports on Form 10-Q and other documents filed with the SEC. The forward-looking statements contained in this press release speak only as of the date of this press release and are based on management's assumptions and estimates as of such date. Salarius disclaims any intent or obligation to update these forward-looking statements to reflect events or circumstances that exist after the date on which they were made.

Contact:

LHA Investor Relations
Kim Sutton Golodetz
[e-mail]
212-838-3777

SALARIUS PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS

	December 31, 2022				December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	12,106,435			$	29,214,380
Grants receivable from CPRIT		1,610,490				-
Prepaid expenses and other current assets		803,373				949,215
Total current assets		14,520,298				30,163,595
Grants receivable from CPRIT		-				1,610,490
Goodwill		-				8,865,909
Other assets		130,501				193,874
Total assets	$	14,650,799			$	40,833,868
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable	$	2,858,330			$	1,543,096
Accrued expenses and other current liabilities		1,407,861				567,787
Total liabilities	$	4,266,191			$	2,110,883
Commitments and contingencies (NOTE 5)
Stockholders' equity (deficit):
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued or outstanding		-				-
Common stock, $0.0001 par value; 100,000,000 shares authorized; 2,255,899 and 1,809,593 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively		225				181
Additional paid-in capital		74,189,531				70,919,996
Accumulated deficit		(63,805,148	)			(32,197,192	)
Total stockholders' equity		10,384,608				38,722,985
Total liabilities and stockholders' equity	$	14,650,799			$	40,833,868

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended						Twelve Months Ended
		31-Dec						31-Dec
		2022			2021			2022			2021
Revenue:
Grant revenue	$	-		$	-		$	-		$	1,840,216
Operating expenses:
Research and development		4,685,658			2,695,633			15,836,828			8,548,520
General and administrative		1,792,222			1,449,227			7,138,403			6,104,631
Loss on impairment of goodwill		-			-			8,865,909			-
Total operating expenses		6,477,880			4,144,860			31,841,140			14,653,151
Loss before other income (expense)		(6,477,880	)		(4,144,860	)		(31,841,140	)		(12,812,935	)
Change in fair value of warrant liability		1,884			39,488			14,454			44,693
Interest income (expense), net		105,060			499			218,730			4
Net loss	$	(6,370,936	)	$	(4,104,873	)	$	(31,607,956	)	$	(12,768,238	)
Loss attributed to common stockholders	$	(6,370,936	)	$	(4,104,873	)	$	(31,607,956	)	$	(12,768,238	)
Loss per common share - basic and diluted	$	(2.83	)	$	(2.27	)	$	(14.88	)	$	(7.72	)
Weighted-average number of common shares outstanding - basic and diluted		2,253,512			1,809,136			2,124,511			1,654,638