Executive Summary

Salarius reported a narrower quarterly loss with net loss of $3.88M and EPS of $(1.43), driven by lower R&D and G&A versus last year; cash was $11.54M at quarter-end, funding operations through Q4 2023 .
The FDA removed the partial clinical hold on seclidemstat (Ewing sarcoma) and cleared the SP-3164 IND for NHL; management simultaneously announced exploration of strategic alternatives and a workforce reduction of >50% to extend runway .
Operating expenses fell YoY (Total OpEx $3.97M vs $4.76M a year ago) as seclidemstat spending declined; R&D is expected to decrease further through 2023 and into 2024 amid strategic review .
Potential stock catalysts: updated seclidemstat survival data “in the coming months,” initiation of SP-3164 Phase 1 dosing in 2H23, and outcomes of strategic alternatives process (including M&A/licensing), balanced against financing and listing risks flagged in filings .

What Went Well and What Went Wrong

What Went Well

FDA removed the partial clinical hold on the Phase 1/2 Ewing sarcoma study, enabling progress on determining registration requirements; management highlighted “significant advancements in both of our development programs” .
SP-3164 received FDA IND clearance for NHL; multiple preclinical posters demonstrated potent IKZF1/IKZF3 degradation and superior antitumor activity vs. standards in lymphoma/multiple myeloma models .
Cost actions and financings ($6.0M private placement; $1.7M ATM) extended cash runway to Q4 2023, improving near-term operating visibility versus Q1 guidance (Q3 2023) .

“While the second quarter and recent weeks were highlighted by significant advancements...the Board...has made the difficult decision to limit further drug development while we explore strategic alternatives” — David Arthur, CEO .

What Went Wrong

Continued operating losses with no product revenue; Net loss $3.88M and Total OpEx $3.97M despite cost initiatives, underscoring ongoing funding needs and going-concern risk .
Strategic alternatives and >50% workforce reduction signal constrained access to capital; severance and related costs estimated at ~$1.2M and potential Nasdaq listing risk disclosed (closing price below minimum) .
Program prioritization required: seclidemstat spending down, SP-3164 spending up, with management explicitly expecting R&D cuts in H2 2023 and into 2024—potentially slowing clinical timelines .

Financial Results

Metric	Q2 2022	Q1 2023	Q2 2023
Revenue ($USD Millions)	$0.00	$0.00	$0.00
Research & Development ($USD Millions)	$2.92	$3.73	$2.35
General & Administrative ($USD Millions)	$1.84	$1.70	$1.62
Total Operating Expenses ($USD Millions)	$4.76	$5.42	$3.97
Net Loss ($USD Millions)	$(4.72)	$(5.34)	$(3.88)
Diluted EPS ($USD)	$(2.20)	$(2.23)	$(1.43)
Weighted Avg Shares (Millions)	2.141	2.392	2.709
Cash & Equivalents ($USD Millions, quarter-end)	$22.65	$9.27	$11.54

Segment/program breakdown (R&D totals):

Program R&D ($USD Millions)	Q2 2022	Q1 2023	Q2 2023
Seclidemstat (SP-2577)	$2.10	$1.34	$1.07
SP-3164 (degrader)	$0.82	$2.38	$1.28

KPIs:

KPI	Q2 2022	Q1 2023	Q2 2023
Net cash used in operating activities (YTD, $USD Millions)	$(7.14)	$(3.17)	$(7.59)
Financing raised in period ($USD Millions)	$2.07 (H1 2022)	$0.34	$7.02 (H1 2023)
Warrants outstanding (Millions)	0.598	0.598	11.431
Cash runway guidance	Into 2H 2023	Through Q3 2023	Through Q4 2023

Notes: Margins not meaningful due to lack of revenue; revenue lines are zero in reported periods .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Cash runway	FY 2023	Sufficient through Q3 2023	Sufficient through Q4 2023	Raised runway
R&D trajectory	H2 2023–FY 2024	Not specified	Expect R&D expenses to decrease remainder of 2023 and into 2024	Lowered spend
Workforce	H2 2023	Not specified	>50% workforce reduction to extend resources; ~$1.2M severance/employee-related costs estimate	Cost actions implemented
Strategic alternatives	H2 2023	Not announced	Canaccord engaged; considering acquisition/merger/reverse-merger/licensing/asset sale; no timetable	New strategic process
SP-3164 clinical start	2H 2023	IND filing plans (Q3’22)	IND cleared; plan to begin dose-escalation in 2H 2023	Progressing to clinic

Earnings Call Themes & Trends

(Transcript not available; themes derived from press release and Q2/Q1 filings)

Topic	Previous Mentions (Q3 2022, Q1 2023)	Current Period (Q2 2023)	Trend
Regulatory/legal (seclidemstat)	Partial clinical hold after SUSAR; pause; aiming to resume enrollment	FDA removed partial hold; initiating FDA process for registration requirements	Improved regulatory status
SP-3164 program	IND-enabling, preclinical data; target 1H 2023 IND	IND cleared; Phase 1 NHL to begin; robust preclinical posters across EHA/AACR	Advancing to clinic
Financing/cash runway	Cash $16.8M (Q3’22); runway into 2H 2023	Cash $11.5M; runway through Q4 2023 post financings and cost plan	Runway extended
Strategic alternatives	Not present	Formal review with Canaccord; potential M&A/licensing; workforce cuts	New narrative
Nasdaq/listing risk	Not present	Closing price below minimum; delisting risk disclosed	Emerging risk
R&D execution	Seclidemstat hematologic signals at MDACC; Ewing interim data planned	Ewing trial updates forthcoming; R&D spend shift from seclidemstat to SP-3164, then reductions	Reprioritization and cost control

Management Commentary

“While the second quarter and recent weeks were highlighted by significant advancements in both of our development programs...the Board...has made the difficult decision to limit further drug development while we explore strategic alternatives...” — David Arthur, CEO .
“It was an exceptionally difficult decision to initiate our cost-savings plans...in light of the promising early seclidemstat Ewing sarcoma clinical data...and the recent FDA clearance to begin the SP-3164 Phase 1 trial.” — David Arthur, CEO .
Company expects to release updated survival data for Ewing sarcoma “in the coming months,” and notes FDA designations (Fast Track, Orphan, Rare Pediatric Disease) for seclidemstat .

Q&A Highlights

The Q2 2023 earnings call transcript was not available. Based on filings and the press release, investor focus likely centered on strategic alternatives, cash runway extension, clinical status of seclidemstat post-hold removal, and SP-3164 Phase 1 initiation timeline; no additional guidance clarifications beyond filings were observed .

Estimates Context

Wall Street consensus estimates via S&P Global were unavailable for SLRX for Q2 2023 at the time of this analysis; therefore, estimate comparisons could not be provided. Values would have been retrieved from S&P Global if available.

Key Takeaways for Investors

Regulatory momentum improved: FDA lifted partial hold for seclidemstat and cleared SP-3164 IND; expect Ewing survival update and SP-3164 dosing initiation in 2H23—key clinical catalysts .
Operating discipline is tightening: Total OpEx down YoY, R&D mix shifting (SP-3164 up, seclidemstat down), and further reductions guided into 2024, supporting runway through Q4 2023 .
Strategic alternatives process introduces binary outcomes: potential value-creating transaction vs. wind-down risk if capital/partners aren’t secured; monitor Canaccord-led process milestones .
Capital structure/watch points: large warrant overhang (~11.43M outstanding) and Nasdaq listing risk could influence deal optionality and equity market access; pricing and terms matter for shareholders .
Trading setup: near-term news flow (Ewing survival data, SP-3164 first-in-human progress, any 8-Ks on strategic actions) is likely to drive volatility; absence of revenue and ongoing losses emphasize financing dependency .
MDACC hematologic data remain supportive of seclidemstat’s potential; external investigator efforts (MDS/CMML) may broaden optionality if strategic pathway continues .
Risk skew: going-concern, financing, and execution risks are elevated; diligence should weigh clinical updates versus balance sheet/runway and corporate actions disclosed in risk factors .

Salarius Pharmaceuticals, Inc. (SLRX)·Q2 2023 Earnings Summary