Sophiris Bio Inc. (NASDAQ: SPHS) (the “Company” or “Sophiris”), a biopharmaceutical company developing PRX302 for the treatment of the symptoms of benign prostatic hyperplasia (BPH, enlarged prostate) and for the treatment of localized low to intermediate risk prostate cancer, today announced financial results for the three and nine months ended September 30, 2014.

“We have demonstrated good progress in advancing our clinical program in BPH. We completed the enrollment of the PLUS-1 Phase 3 study on schedule, which puts us on track to complete an administrative interim analysis around the end of the year,” stated Randall Woods, president and CEO of Sophiris Bio. “In the third quarter, we also provided an update on the PRX302 development program in localized low to intermediate risk prostate cancer, with a proof of concept study expected to commence enrollment in the first quarter of 2015 and with data expected by the end of 2015.”

Financial Results

At September 30, 2014, Sophiris had cash, cash equivalents and securities available-for-sale of $29.1 million and net working capital of $25.3 million. Sophiris expects that its current cash, cash equivalents and securities available-for-sale as of September 30, 2014 will be sufficient to fund its operations for at least the next 12 months.

For the third quarter ended September 30, 2014

The Company reported a net loss of $8.2 million ($0.49 per share) for the three months ended September 30, 2014 compared to a net loss of $3.0 million ($0.31 per share) for the three months ended September 30, 2013.

Research and development expenses

Research and development expenses were $6.7 million for the three months ended September 30, 2014 compared to $2.1 million for the three months ended September 30, 2013. The increase in research and development costs was attributable to an increase in the costs associated with the Company’s Phase 3 clinical trial which commenced enrollment in October 2013.

General and administrative expenses

General and administrative expenses were $1.4 million for the three months ended September 30, 2014 compared to $0.9 million for the three months ended September 30, 2013. The increase is due to an increase in personnel related costs, an increase of stock-based compensation expense as a result of the stock options granted in October 2013, and increases in auditing fees and corporate insurance.

For the nine months ended September 30, 2014

The Company reported a net loss of $25.4 million ($1.54 per share) for the nine months ended September 30, 2014 compared to a net loss of $5.7 million ($1.08 per share) for the nine months ended September 30, 2013.

Research and development expenses

Research and development expenses were $20.6 million for the nine months ended September 30, 2014 compared to $6.1 million for the nine months ended September 30, 2013. The increase in research and development costs was primarily attributable to an increase in the costs associated with the Company’s first Phase 3 clinical trial and an increase in manufacturing activities for PRX302.

General and administrative expenses

General and administrative expenses were $4.3 million for the nine months ended September 30, 2014 compared to $3.0 million for the nine months ended September 30, 2013. The increase is due to an increase in personnel related costs, an increase in directors and officers insurance expense as a result of our initial public offering on the NASDAQ in August 2013 and an increase of stock-based compensation expense as a result of stock options granted in October 2013.

For complete financial results, please see the Company’s website at www.sophiris.com.

Third Quarter Accomplishment

On September 2, 2014, the Company announced that it has fully enrolled its ongoing Phase 3 trial (referred to as PLUS-1) of PRX302 as a treatment for lower urinary tract symptoms of BPH. The primary endpoint is the International Prostate Symptom Score (IPSS) total score change from baseline over 52 weeks which the Company expects to complete in the second half of 2015. Secondary endpoints include Qmax (maximum urine flow) change from baseline over 52 weeks. The Company expects to complete an administrative interim analysis of the results after all of the enrolled patients complete three months in the trial around the end of 2014.

About Sophiris

Sophiris Bio Inc. is a biopharmaceutical company developing PRX302, a clinical-stage, targeted therapy for the treatment of the symptoms of BPH and treatment of localized low to intermediate risk prostate cancer. PRX302 is in Phase 3 clinical development for the treatment of the symptoms of BPH and is designed to be as efficacious as pharmaceuticals, less invasive than the surgical interventions, and without the sexual side effects seen with existing treatments. Sophiris plans to initiate a Phase 2 proof of concept study of PRX302 for the treatment of localized low to intermediate risk prostate cancer prior to the end of the first quarter of 2015. For more information, please visit www.sophiris.com.

Certain statements included in this press release may be considered forward-looking, including the quote of our President and CEO and any expectations relating to the results of our Phase 3 trial of PRX302, the proof of concept study for the treatment of localized low to intermediate risk prostate cancer or our capital requirements. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. Some of the risks and uncertainties that could cause actual results, performance or achievements to differ include without limitation, risk associated with the process of developing, obtaining regulatory approval of and commercializing treatments that are safe and effective, and in the endeavor of building a business around such treatments. All forward-looking statements are based on Sophiris’ current beliefs as well as assumptions made by and information currently available to Sophiris and relate to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, clinical trial results, market acceptance, ability to raise capital and future commitments. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by Sophiris in its public securities filings; actual events may differ materially from current expectations. Sophiris disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 
Sophiris Bio Inc.
Condensed Consolidated Balance Sheets

(In thousands, except share amounts)

(Unaudited)

   
September 30, December 31,
2014   2013  
 
Assets:
 
Current assets:
 
Cash and cash equivalents $ 16,174 $ 14,839
Securities available-for-sale 12,970 33,310
Other receivables 18 48
Prepaid expenses 3,101   3,598  
 
Total current assets 32,263 51,795
 
Property and equipment, net 40 78
Other long-term assets 19   19  
 
Total assets $ 32,322   $ 51,892  
 
Liabilities and shareholders’ equity:
 
Current liabilities:
 
Accounts payable $ 3,871 $ 1,470
Accrued expenses 2,912 2,181
Current portion of promissory notes 154   6,877  
 
Total current liabilities 6,937 10,528
 
Long-term promissory notes 5,754 —
Warrant liability — 883
Stock-based compensation liability 129   202  
 
Total liabilities 12,820   11,613  
 
 
 
Shareholders’ equity:
 
Common shares, unlimited authorized shares, no par value; 16,844,736 and 16,149,871 shares issued and outstanding at September 30, 2014 and December 31, 2013

113,089

111,204

Contributed surplus 16,592 13,824
Accumulated other comprehensive gain 101 98
Accumulated deficit (110,280 ) (84,847 )
 
Total shareholders’ equity 19,502   40,279  
 
Total liabilities and shareholders’ equity $ 32,322   $ 51,892  
 
 

Sophiris Bio Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except per share amounts)

(Unaudited)
   

 

Three Months Ended September 30,

Nine Months Ended September 30,
2014   2013 2014   2013
Revenues:
 
License revenue $ — $ — $ — $ 5,000
 
Operating expenses:
Research and development 6,710 2,117 20,629 6,143
General and administrative 1,370   883   4,316   3,009  
Total operating expenses 8,080 3,000 24,945 9,152
 
Other income (expense):
Interest expense (175 ) (313 ) (551 ) (1,064 )
Interest income 10 — 40 —
Gain on revaluation of warrant liability — 195 49 195
Other income (expense), net 21   166   (27 ) (190 )
Total other income (expense) (144 ) 48   (489 ) (1,059 )
 
Net loss before income taxes (8,224 ) (2,952 ) (25,434 ) (5,211 )
 
Income tax expense —   —   —   (500 )
 
Net loss $ (8,224 ) $ (2,952 ) $ (25,434 ) (5,711 )
 
Basic and diluted loss per share

$

(0.49

)

$

(0.31

)

$ (1.54 ) $ (1.08 )
Weighted average number of outstanding shares – basic and diluted 16,845   9,509   16,499   5,293  
Other comprehensive income (loss):

Foreign currency translation adjustment

— (154 ) — 146
Unrealized (loss) gain on securities available-for sale (1 ) —   3   —  
Total other comprehensive loss $ (8,225 ) $ (3,106 ) $ (25,431 ) $ (5,565 )