Sol-Gel Technologies Gets Makeover, Stock More Than Doubled In A Month

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Shares of Sol-Gel Technologies Ltd. (SLGL) have more than doubled over the last one month, thanks to positive data from its acne trials.

Sol-Gel Technologies is a clinical-stage dermatology company.

On December 30, 2019, the Company reported positive top-line results from two phase III trials of Twyneo for the treatment of acne vulgaris.

The primary endpoints for both trials included the proportion of patients who succeeded in achieving at least a two-grade reduction from baseline and Clear (grade 0) or Almost Clear (grade 1) at Week 12. Both the trials achieved the primary endpoints. Twyneo was also found to be well tolerated.

Twyneo is an investigational, combination of microencapsulated tretinoin 0.1% and microencapsulated benzoyl peroxide 3% cream. The Company is planning to submit the NDA for Twyneo in the second half of 2020. If approved, Twyneo has the potential to be the first acne vulgaris treatment to bring together benzoyl peroxide and a potent retinoid, tretinoin, in a once-daily cream.

Sol-Gel's lead drug candidate is Epsolay for papulopustular rosacea for which a New Drug Application is expected to be filed in the first half of 2020.

Papulopustular rosacea is a subtype of rosacea, a chronic inflammatory skin condition. It is characterized by persistent redness with transient papules and pastules (bumps and pimples). (Source: NCBI).

The Company's branded pipeline is supplemented by a portfolio of generic product candidates.

A bioequivalence study comparing Sol-Gel Technologies' 5-FU Cream with the marketed Efudex Cream in the treatment of actinic keratosis is underway. The results from this study, due by the end of 2019, are yet to be reported. This study is part of a collaboration with Douglas Pharmaceuticals.

Besides Douglas Pharmaceuticals, Sol-Gel also has a collaboration with Perrigo Company plc (PRGO) for generic product candidates.

Sol-Gel has seven collaborations with Perrigo and one with Douglas Pharmaceuticals for its generics portfolio with 50/50 gross profit sharing.

In January 2018, Perrigo received tentative approval from the FDA for Ivermectin cream, 1%, developed in collaboration with Sol-Gel, for the treatment of rosacea. In February 2019, Perrigo received approval from the FDA and launched the sale of acyclovir cream, 5%, developed in collaboration with Sol-Gel, for herpes.

Balance Sheet…

Sol-Gel reported a loss of $7.4 million or $0.35 per share for the third quarter of 2019 compared to a loss of $7.7 million or $0.40 per share for the same period in 2018.

Revenue from sales of a generic product from the collaboration arrangement with Perrigo in the third quarter of 2019 was $4.7 million compared to $38 thousand in the year-ago quarter and $7.8 million in the second quarter of 2019. The decrease in revenue from the previous quarter follows the entry of an authorized generic product to the market.

As of September 30, 2019, Sol-Gel had $7.6 million in cash, cash equivalents and deposits and $50.1 million in marketable securities for a total balance of $57.7 million. Based on current assumptions, the existing cash resources are expected to be sufficient to fund operational and capital expenditure requirements into the first quarter of 2021.

SLGL has traded in a range of $5.71 to $21.00 in the last 1 year. The stock closed Tuesday's (Dec.31, 2019) trading at $17.15, up 17.47%.

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