NESS ZIONA, Israel - Sol-Gel Technologies Ltd. (NASDAQ:SLGL), an Israel-based dermatological company, has announced the signing of six exclusive licensing agreements for the commercialization of its dermatology products TWYNEO and EPSOLAY in the majority of European countries and South Africa.
The agreements with entities including MagnaPharm Trading Slovakia S.R.L and Galenica A.B cover regions such as Germany, the United Kingdom, France, and South Africa, among others.
Under the terms of these agreements, Sol-Gel will receive an upfront and regulatory milestone payments that could total in the low seven-figure USD range, in addition to either a future fixed transfer price or low double-digit royalties from net sales. These financial terms are supported by commitments to minimum annual sales from the partnering companies.
Sol-Gel's partners will be responsible for the regulatory submissions in their respective territories, with Sol-Gel providing assistance in preparing these submissions. These new partnerships are in addition to existing agreements for the commercialization of the products in the United States, Canada, and China.
The company's CEO, Alon Seri-Levy, Ph.D., expressed confidence in the expansion of TWYNEO and EPSOLAY's availability through these agreements. He highlighted the company's ongoing Phase 3 clinical trial of SGT-610 for Gorlin syndrome and a clinical study for SGT-210 for the treatment of Darier disease, anticipating further strengthening of Sol-Gel's business and competitive position.
EPSOLAY is an FDA-approved topical cream for the treatment of inflammatory lesions of rosacea in adults, employing a proprietary technology to encapsulate benzoyl peroxide within silica-based microcapsules. TWYNEO, also FDA-approved, is a topical cream for treating acne vulgaris, uniquely combining tretinoin and benzoyl peroxide in a micro-encapsulated formula to prevent degradation and maintain effectiveness.
The announcement is based on a press release statement and contains forward-looking statements regarding the potential of Sol-Gel's assets and the expected benefits of the licensing agreements. These forward-looking statements are subject to risks and uncertainties that could affect the actual results and the performance of the company.
Sol-Gel Technologies is focused on developing and commercializing products for the treatment of skin diseases, with a pipeline that includes candidates in advanced clinical trials.
In other recent news, Sol-Gel Technologies Ltd. has received a notification from the Nasdaq Stock Market LLC of non-compliance with the minimum bid price rule. The dermatology-focused pharmaceutical company must raise its share price within 180 days to avoid potential delisting.
Sol-Gel is known for its two FDA-approved products, TWYNEO® for acne vulgaris and EPSOLAY® for inflammatory lesions of rosacea, both of which are licensed for commercialization in the U.S. and Canada.
In addition, Sol-Gel has recently signed an asset purchase agreement with Shenzhen Beimei Pharmaceutical Co. Ltd. This deal grants Beimei the exclusive rights to commercialize Sol Gel's acne treatment, Twyneo, in mainland China, Hong Kong, Macau, Taiwan, and Israel. Sol Gel is set to receive upfront and milestone payments totaling $10 million, as well as royalties on net sales that could reach up to $5 million, all subject to governmental approvals.
In response to these developments, H.C. Wainwright adjusted its price target for Sol Gel Technologies shares, lowering it to $6.00 from the previous target of $9.00, citing a slower revenue ramp and lower peak sales.
Despite the reduction, the firm maintained a Buy rating on the company's stock. This assessment takes into account the performance of Sol Gel's drugs in the U.S. market, which are currently being commercialized by its partner, Galderma.
InvestingPro Insights
As Sol-Gel Technologies Ltd. (NASDAQ:SLGL) forges ahead with international partnerships to expand the reach of its dermatology products, TWYNEO and EPSOLAY, the financial landscape of the company offers a mix of caution and potential. According to InvestingPro data, Sol-Gel holds a market capitalization of 18.66 million USD, which reflects its size within the biotechnology and pharmaceuticals market.
Despite the company's recent expansion efforts, analysts have pointed out that Sol-Gel is quickly burning through cash, which is a critical factor to consider given its current financial health. With a negative operating income margin of -1450.81% for the last twelve months as of Q1 2024, the company's profitability challenges are evident.
Moreover, Sol-Gel's gross profit margin during the same period was deeply negative at -1033.72%, underscoring the cost-related pressures it faces. Notably, the stock has experienced significant volatility, with a price total return of -81.34% over the past year, indicating a substantial decline in investor confidence.
However, there are silver linings in the company's financial picture. Sol-Gel's liquid assets exceed its short-term obligations, suggesting a level of financial flexibility in the near term. Additionally, two InvestingPro Tips highlight that the company holds more cash than debt on its balance sheet and that analysts anticipate sales growth in the current year. These factors could provide some resilience as the company navigates its path forward.
For investors interested in a deeper analysis of Sol-Gel Technologies, InvestingPro offers a comprehensive suite of additional tips and real-time metrics. To explore these insights and consider how they might inform your investment strategy, visit InvestingPro's Sol-Gel Technologies page. Don't forget to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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