Salarius Pharmaceuticals, Inc. (SLRX)·Q3 2022 Earnings Summary

Executive Summary

• Q3 2022 net loss expanded to $14.41M ($6.41 per share) driven by an $8.87M non-cash goodwill impairment and higher R&D tied to SP-3164; no revenue was recorded. Net cash used in operations was $5.70M, and cash/equivalents ended at $16.8M .
• Cash runway guidance was extended: management expects current cash to fund operations into the second half of 2023, up from “into 2023” in prior quarters .
• Clinical update: a SUSAR led to a voluntary enrollment pause and subsequent FDA partial clinical hold on the seclidemstat sarcoma trial; Salarius is working with the FDA to analyze data and restart enrollment. Interim sarcoma data is still planned before year-end .
• Pipeline catalysts: SP-3164 IND submission remains targeted for 1H 2023; management highlighted favorable preclinical data and upcoming ASH presentations for SP-3164 and seclidemstat that could drive sentiment .
• Wall Street consensus estimates (S&P Global) for Q3 were not available via our data tools; estimate comparisons are therefore not included.

What Went Well and What Went Wrong

What Went Well

• Favorable SP-3164 preclinical data: potent cereblon binding, efficient degradation, and superior tumor inhibition vs. lenalidomide/pomalidomide in myeloma models; abstract accepted for ASH and IND still tracked for 1H 2023 .
• Seclidemstat hematologic combo data: MD Anderson abstract accepted for ASH showed the seclidemstat + azacitidine combo appeared safe at current dose levels with initial signs of activity (two marrow responses, one bridging to transplant) .
• Corporate actions: regained Nasdaq minimum-bid compliance after reverse stock split; management continues to position company around protein inhibition and degradation platforms .

What Went Wrong

• Clinical disruption: SUSAR triggered a voluntary enrollment pause and an FDA partial clinical hold on the sarcoma trial, introducing uncertainty on timelines and enrollment pace .
• Financial optics: reported loss widened significantly due to the $8.87M non-cash goodwill impairment related to the 2019 Flex Pharma reverse merger, overshadowing operating trends .
• No grant revenue in 2022 to offset burn (vs. $1.84M in 9M 2021), while R&D increased from SP-3164 development; cash used in operations rose vs. prior year .

Financial Results

Quarterly P&L snapshot and trends (oldest → newest)

Year-over-year: Q3 2022 vs Q3 2021

Note: EPS comparability across quarters is affected by the reverse stock split referenced by management .

KPIs and balance sheet items

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “SP-3164… has been generating exciting preclinical data… We remain focused on SP-3164 IND-enabling studies and are on track to submit the IND in the first half of 2023 and to begin clinical trials shortly thereafter.” — David Arthur, CEO .
• On seclidemstat hematologic study: “The combination… seems safe at the current dose levels and shows signs of potential activity.” — David Arthur summarizing MD Anderson abstract .
• On clinical hold: “The FDA subsequently agreed… and placed the sarcoma trial on partial clinical hold; Salarius is working with the FDA… with the goal of… restart enrollment.” .
• Strategic positioning: “We are delighted to be part of the protein degradation sector… driven by… molecular glues… 2021 global sales of more than $16 billion.” — David Arthur .

Q&A Highlights

• Volition Rx collaboration: Biomarker strategy using Nu.Q to assess target engagement via methyl marks in plasma; data collection targeted late 2022 into early 2023 .
• Seclidemstat enrollment/data timing: Interim data planned for 2H22; dissemination could be press release or late-breaking conference depending on timing and ethics of informing patients .
• SP-3164 IND-enabling status: Studies underway; IND submission on track for 1H23; additional mechanism and in vivo data to be presented at conference .
• Financial/R&D mix: R&D increase primarily from SP-3164 program and added personnel to manage trials; absence of grant revenue magnified losses .
  Note: No Q3 2022 earnings call transcript was available; highlights above reference Q2/Q1 calls for context .

Estimates Context

• We attempted to retrieve S&P Global consensus estimates for Q3 2022 (EPS, revenue, target price), but consensus data was unavailable through our tools during compilation; therefore, no estimate comparison is included.
• Given the absence of revenue and the significant non-cash goodwill impairment, typical EPS comparisons vs. consensus would have been skewed; future models should adjust for non-recurring items for cleaner tracking .

Key Takeaways for Investors

• Non-cash goodwill impairment ($8.87M) drove a large reported loss; underlying OpEx reflects SP-3164 acceleration and steady G&A—investors should adjust for this one-time item in assessing trajectory .
• Cash runway extended into 2H 2023 despite higher quarterly burn, providing time to reach SP-3164 IND and key data readouts; monitor quarterly cash usage vs. guidance .
• Regulatory overhang from FDA partial hold on the sarcoma trial is the principal near-term risk; a clear plan to restart enrollment is a critical catalyst .
• SP-3164 preclinical strength and ASH presence raise the probability of positive sentiment; partnership interest could emerge as data matures .
• Seclidemstat hematologic combo signals early activity; additional clinical updates before year-end could serve as trading catalysts .
• With no revenue and limited estimate visibility, focus on clinical milestones, regulatory resolutions, and burn discipline for medium-term thesis construction .
• Stock reaction drivers near term: resolution of partial hold, ASH data disclosures, and confirmation of IND timing for SP-3164 .