Sol-Gel Q2 2024 Financial Results and Corporate Updates

Sol-Gel Technologies Ltd., a dermatology company specializing in treatments for severe skin conditions, recently announced substantial progress in its operations, including various corporate updates and financial results for the second quarter of 2024. Among the key highlights are advancements in their clinical trials, financial arrangements, and executive management changes.

The company is actively conducting a Phase 3 clinical trial of its key asset, SGT-610, a topical gel containing patidegib, for the treatment of Gorlin syndrome. This trial involves approximately 140 subjects across 42 clinical centers. With 39 centers already under agreement and 29 activated, Sol-Gel anticipates top-line results by the second quarter of 2026. If approved, SGT-610 could be the first product designed to prevent basal cell carcinoma (BCC) lesions in Gorlin syndrome patients, targeting a market valued at over $300 million annually.

Additionally, Sol-Gel is working on a proof-of-concept study for SGT-210, a topical erlotinib treatment for Darier disease, a significant unmet need in dermatology with a market potential estimated between $200-$300 million. If promising results continue, the company plans to file for a Phase 2 IND by the second quarter of 2025. SGT-210 is also being used in a compassionate use treatment for a pediatric patient, with encouraging preliminary results.

Financially, Sol-Gel has made moves to bolster its cash position. As of June 30, 2024, the company reported $30.5 million in cash, cash equivalents, and marketable securities, up from $28.0 million at the end of 2023. This improvement is attributed in part to a new agreement with Padagis, which replaces a previous collaborative arrangement for the development and commercialization of a generic version of Zoryve® Cream. Under the new terms, Sol-Gel will receive quarterly payments over 24 months and royalties from sales, increasing their cash position by approximately $6 million.

In pursuing international expansion, Sol-Gel signed six initial license agreements for its approved products, TWYNEO and EPSOLAY, covering most European countries and South Africa. The company is also negotiating additional deals in Latin America, Australia, New Zealand, South Korea, Spain, Italy, and Portugal, aiming to generate up to $3.7 million in upfront and milestone payments. These agreements are expected to pave the way for product launches in these territories by 2026 and 2027, providing an annual royalty revenue stream that could grow to $10 million by 2030.

Sol-Gel is also undergoing significant management changes. Mori Arkin, the company's executive chairman and controlling shareholder, is set to become the interim CEO as of January 1, 2025, subject to shareholder approval. Arkin will transition away from most of his other business activities to dedicate himself fully to this role. Additionally, Eyal Ben-Or has assumed the position of Chief Financial Officer, succeeding Gilad Mamlok, who will assist with the transition through the end of 2024.

For the second quarter of 2024, Sol-Gel reported total revenue of $5.4 million, a significant increase from $0.6 million during the same period in 2023. This growth was primarily due to licensing revenue from partners like Beimei, Galderma, and Searchlight. Research and development expenses decreased to $2.4 million from $5.3 million in the same period the previous year, mainly due to reduced costs associated with TWYNEO, clinical development, payroll, and other R&D expenses. General and administrative expenses also dropped to $1.4 million from $1.8 million, largely due to lower professional expenses. Consequently, Sol-Gel reported a net income of $1.9 million for the quarter, compared to a net loss of $6.0 million in the second quarter of 2023.

TWYNEO, a topical cream combining tretinoin and benzoyl peroxide, and EPSOLAY, a benzoyl peroxide cream for rosacea, are Sol-Gel's two FDA-approved products. Both utilize proprietary silica-based encapsulation technologies to enhance their efficacy and tolerability.

Sol-Gel Technologies continues to focus on expanding its product pipeline and geographical reach while strengthening its financial foundation and leadership team. These efforts are aimed at advancing the company's position in the dermatology market and addressing unmet medical needs in skin disease treatment.