November 04, 2020 16:01 ET | Source: Flexion Therapeutics, Inc.

BURLINGTON, Mass., Nov. 04, 2020 (GLOBE NEWSWIRE) -- Flexion Therapeutics, Inc. (Nasdaq:FLXN) today reported financial results and recent business highlights for the quarter ended September30, 2020.

Throughout the third quarter, we saw strong execution across all areas of our business, and we were particularly pleased to achieve $23.7million in ZILRETTA net sales, said Michael Clayman, M.D., President and Chief Executive Officer of Flexion Therapeutics. We firmly believe that ZILRETTA can play an increasingly prominent role in helping the millions of patients who confront osteoarthritis knee pain, and our confidence in its long-term potential has only grown. Furthermore, during the quarter we made outstanding progress with our pipeline of innovative product candidates. We advanced FX201, our investigational intra-articular gene therapy product candidate for osteoarthritis, into the second cohort of the Phase 1 safety and tolerability study, and we remain on track to file an IND and potentially initiate clinical trials for FX301, our locally administered peripheral nerve block candidate for control of postoperative pain in 2021.

Third-Quarter Results & Financial Highlights

The Company reported a net loss of $24.6million for the third quarter of 2020, compared to a net loss of $38.2million for the same period of 2019. Net sales of ZILRETTA were $23.7million and $21.8million for the three months ended September 30, 2020 and 2019, respectively.

Cost of sales was $5.1million and $2.9million for the three months ended September 30, 2020 and 2019, respectively. For the three months ended September 30, 2020, cost of sales included $2.0million for the actual cost of units sold and $3.1million of unabsorbed overhead associated with the voluntary, temporary suspension of manufacturing activities at Patheon due to COVID19 impacts on sales of ZILRETTA. For the three months ended September30, 2019, cost of sales was comprised of $1.8million related to the actual cost of units sold, $0.9million related to unabsorbed manufacturing costs and $0.2million of period costs and other adjustments.

Research and development expenses were $10.1million and $20.9million for the three months ended September30, 2020 and 2019, respectively. The decrease in research and development expenses of $10.8million was primarily due to a decrease of $5.9million in development expenses for ZILRETTA due to a reduction in ZILRETTA life cycle management activities, a decrease in $2.9million in portfolio expansion-related expenses as the upfront payment for the purchase of XEN402 from Xenon Pharmaceuticals occurred in the third quarter of 2019, as well as a decrease of $1.4million in salary and other employee-related costs and stock-based compensation expense related to lower headcount.

Selling, general and administrative expenses were $27.3million and $32.1million for the three months ended September30, 2020 and 2019, respectively. Selling expenses were $19.3million and $23.9million for the three months ended September30, 2020 and 2019, respectively. The year-over-year decrease of $4.6million was primarily due to the expense reduction measures taken in response to COVID19; in particular, the elimination of live presence at industry conferences, reductions in in-person physician speaker programs and reductions in select marketing programs and materials, as well as a reduction in travel expenses due to physician office limitations and travel guidelines and restrictions at the state and local level. General and administrative expenses were $8.0million and $8.2million for the three months ended September30, 2020 and 2019, respectively, which represents a decrease of $0.2million.

Flexion expects full-year 2020 total operating expenses (including cost of sales, research and development, and selling, general and administrative) will be in the range of $172million to $182million.

Interest income was $0.1million and $0.7million for the three months ended September30, 2020 and 2019, respectively. Interest expense was $5.1million and $4.7million for the three months ended September30, 2020 and 2019, respectively.

As of September30, 2020, the Company had approximately $185.3million in cash, cash equivalents and marketable securities compared with $136.7million as of December31, 2019. Based on the Companys current operating plan and assuming purchasing activity at physician practices, clinics and certain medical centers or hospitals that administer ZILRETTA continue to return to pre-COVID19 levels, Flexion believes that its current cash, cash equivalents and marketable securities will be sufficient to fund operations into 2022.

Recent News & Business Updates

Indication and Select Important Safety Information for ZILRETTA

Indication:ZILRETTA is indicated as an intra-articular injection for the management of OA pain of the knee.

Limitation of Use: The efficacy and safety of repeat administration of ZILRETTA have not been demonstrated.

Contraindication:ZILRETTA is contraindicated in patients who are hypersensitive to triamcinolone acetonide, corticosteroids or any components of the product.

Warnings and Precautions:

Adverse Reactions:The most commonly reported adverse reactions (incidence 1%) in clinical studies included sinusitis, cough, and contusions.

Please seeZilrettaLabel.comfor full Prescribing Information.

About ZILRETTA (triamcinolone acetonide extended-release injectable suspension) On October6, 2017, ZILRETTA was approved by the U.S. FDA as the first and only extended-release intra-articular therapy for patients confronting OA-related knee pain. ZILRETTA employs proprietary microsphere technology combining triamcinolone acetonidea commonly administered, short-acting corticosteroidwith a poly lactic-co-glycolic acid (PLGA) matrix to provide extended pain relief. The pivotal Phase 3 trial on which the approval of ZILRETTA was based showed that ZILRETTA significantly reduced OA knee pain for 12 weeks, with some people experiencing pain relief through Week 16. Learn more at http://www.zilretta.com.

About FX201 (humantakinogene hadenovec) FX201 is a novel, intra-articular gene therapy product candidate that utilizes a helper-dependent adenovirus [HDAd] vector based on human serotype 5 (Ad5) that is designed to transfer a gene to cells in the joint to produce an anti-inflammatory protein, interleukin-1 receptor antagonist (IL-1Ra), under the control of an inflammation-sensitive promoter. Inflammation is a known cause of pain, and chronic inflammation is thought to play a major role in the progression of OA. By persistently suppressing inflammation, Flexion believes FX201 holds the potential to provide long-term pain relief and functional improvement, and to modify the disease.

About FX301 (funapide formulated in a proprietary thermosensitive hydrogel) FX301 is a locally administered NaV1.7 inhibitor product candidate, known as funapide, formulated for extended release in a thermosensitive hydrogel. The initial development of FX301 is intended to support administration as a peripheral nerve block for control of post-operative pain. Flexion believes FX301 has the potential to provide effective and durable pain relief while preserving motor function and anticipates initiating clinical trials in 2021.

About Osteoarthritis (OA) of the Knee OA, also known as degenerative joint disease, affects more than 30million Americans and accounts for more than $185billion in annual expenditures. In 2017, approximately 15million Americans were diagnosed with OA of the knee and the average age of physician-diagnosed knee OA has fallen by 16 years, from 72 in the 1990s to 56 in the 2010s. The prevalence of OA is expected to continue to increase as a result of aging, obesity and sports injuries. Each year, approximately five million OA patients receive either a corticosteroid (immediate-release or extended-release) or hyaluronic acid intra-articular injection to manage their knee pain.

About Flexion Therapeutics Flexion Therapeutics (Nasdaq:FLXN) is a biopharmaceutical company focused on the development and commercialization of novel, local therapies for the treatment of patients with musculoskeletal conditions, beginning with osteoarthritis, the most common form of arthritis. The Company's core values are focus, ingenuity, tenacity, transparency and fun. Please visitflexiontherapeutics.com.

Forward-Looking StatementsThis release contains forward-looking statements that are based on the current expectations and beliefs of Flexion. Statements in this press release regarding matters that are not historical facts are forward looking statements, including, but not limited to, statements relating to the future of Flexion; expectations related to Flexions expenses for the year ended December31, 2020, and cash runway; timing and plans with respect to clinical trials; expected impacts from COVID-19 and the timing and duration of such impacts; the long-term potential of ZILRETTA; expected increases in the rate of individuals with OA of the knee; and the potential therapeutic and other benefits of ZILRETTA and our product candidates. These forward-looking statements are based on managements 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, the fact that the impacts and expected duration of the COVID19 pandemic are uncertain and rapidly changing; risk that we may not achieve expense expectations for 2020; the potential for unexpected expenditures or cash requirements; the risk that we may not be able to successfully maintain an effective sales force to commercialize ZILRETTA; competition from alternative therapies; the risk that we may not be able to maintain and enforce our intellectual property, including intellectual property related to ZILRETTA; the risk that ZILRETTA may not be successfully commercialized or adopted; risks regarding our ability to obtain adequate reimbursement from payers for ZILRETTA; risks related to the manufacture and distribution of ZILRETTA, including our reliance on sole sources of supply and distribution; risks related to clinical trials, including potential delays, safety issues, or negative results; risks related to key employees, markets, economic conditions, health care reform, prices, and reimbursement rates; and other risks and uncertainties described in our filings with the Securities and Exchange Commission (SEC), including under the heading Risk Factors in our Quarterly Report on Form10-Q for the quarter ended June30, 2020, filed with the SEC on August5, 2020, and subsequent filings with the SEC. The forward-looking statements in this press release speak only as of the date of this press release, and we undertake no obligation to update or revise any of the statements. We caution investors not to place considerable reliance on the forward-looking statements contained in this press release.

Contact:

Scott Young Vice President, Corporate Communications & Investor Relations T: 781-305-7194 syoung@flexiontherapeutics.com

Julie Downs Associate Director, Corporate Communications & Investor Relations T: 781-305-7137 jdowns@flexiontherapeutics.com

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Flexion Therapeutics Reports Third-Quarter 2020 Financial Results and Recent Business Highlights - GlobeNewswire