Sierra Oncology Inc. (NASDAQ: SRRA) shares are up 50% after the company announced a term loan deal with Oxford Finance LLC and the release of positive topline results from the vital Phase III MOMENTUM study.
The MOMENTUM study, a global double-blind, randomized trial, evaluated momelotinib in treating patients with myelofibrosis that are anemic and symptomatic that had previously received JAK inhibitor treatment. Interestingly, the study achieved both its primary and secondary objectives.
MOMENTUM Study achieves primary and secondary objectives
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Sierra CEO and President Stephen Dilly stated:
To achieve statistically significant and clinically important efficacy across all prespecified primary and key secondary endpoints while maintaining platelet counts in such a difficult to treat patient population is remarkable, and a confirmation of the anemia response we identified in the comprehensive review of our previous Phase 3 studies.
The primary objective of the Total Symptom Score was met at more than 50%, while secondary endpoints of Transfusion independence and Splenic Response Rate were more than 31% and 23%, respectively. Co-principal study investigator Ruben Mesa commented:
As a clinician, I am thrilled to see data that confirm the potential of momelotinib as a treatment option for myelofibrosis patients who are anemic or at risk of becoming anemic. Anemia of myelofibrosis is strongly correlated with reduced quality of life and a decrease in overall survival. Half of all myelofibrosis patients present with anemia at diagnosis and virtually all become anemic over time.
Sierra to use a term loan to support momelotinib commercialization and launch
In the deal with Oxford Finance, a term loan will support commercial preparation and the possible launch of momelotinib. As of December 31, 2021, the company had cash and equivalents of $104.7 million. Dilly stated:
Our strong cash position together with the term loan facility with Oxford create great financial optionality for us as we move towards an NDA filing and potential approval of momelotinib.
Sierra withdrew a first $5M term loan upon closing under the loan agreement terms with Oxford Finance, LLC. The company can access a further $120M in a number of tranches, with $70 million contingent on some pre-determined benchmarks, such as regulatory approval in the US and funding, with $50M available at the insurer’s discretion. Furthermore, the Sierra’s Series B Warrants mature in 75 days and, when completely exercised, would give the company approximately $33.3 million in cash.
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