Business Overview and History
Silexion Therapeutics Corp. is a clinical-stage biotech company at the forefront of developing innovative RNA interference (RNAi) therapies for the treatment of KRAS-driven cancers. With a sharp focus on addressing some of the most challenging oncology indications, Silexion has emerged as a disruptive player in the precision medicine landscape.
Silexion Therapeutics Corp, formerly known as Biomotion Sciences, was founded in 2008 in Israel with the ambitious goal of revolutionizing cancer treatment through the power of RNAi technology. The company's founding team recognized the significant unmet need in targeting the elusive KRAS oncogene, which drives the development of numerous aggressive tumor types, including pancreatic, colorectal, and lung cancers.
Since its inception on November 30, 2008, Silexion has been dedicated to researching and developing innovative treatments for pancreatic cancer based on small interfering RNAs (siRNAs), with the aim of halting the production of the specific pancreatic cancer-causing protein known as the KRAS mutation. In its early years, the company primarily financed its operations through private offerings of ordinary shares and convertible preferred shares, as well as grants from the Israeli Innovation Authority (IIA). As of September 30, 2024, Silexion had received a total of $5.8 million in royalty-bearing grants from the IIA to support its research and development efforts.
The company faced challenges in 2023 related to the ongoing conflicts in Israel, including a war declared by Israel against Hamas and other terrorist organizations. While these conflicts did not materially impact Silexion's operations, the company continued to monitor the situation closely and implemented necessary adjustments to ensure the safety and well-being of its employees.
A significant milestone in Silexion's history occurred on August 15, 2024, when the company completed a business combination with Moringa Acquisition Corp, a publicly-traded special purpose acquisition company (SPAC). This transformative event resulted in Silexion becoming a wholly-owned subsidiary of the combined entity, which was subsequently renamed Silexion Therapeutics Corp. Following this transaction, the company's ordinary shares and warrants began trading on the Nasdaq Global Market under the ticker symbols "SLXN" and "SLXNW", respectively.
Over the past 16 years, Silexion has steadily built a robust pipeline of RNAi-based product candidates, anchored by its lead asset SIL-204B. This innovative therapy utilizes an extended-release formulation of small interfering RNAs (siRNAs) designed to selectively silence the KRAS gene, a key driver of tumor growth and proliferation. The company has made significant strides in advancing SIL-204B through clinical development, with the therapy currently in Phase 2 trials for the treatment of locally advanced pancreatic cancer.
In addition to SIL-204B, Silexion's pipeline includes a second-generation KRAS-targeting candidate, SIL-204, which has demonstrated promising preclinical results in terms of enhanced stability, efficacy, and KRAS targeting range. The company is also exploring the potential of its Loder platform, a biodegradable implant that locally delivers RNAi therapeutics, in the treatment of non-resectable pancreatic tumors.
Silexion's commitment to innovation and its focus on unmet needs have been recognized by the industry. The business combination with Moringa Acquisition Corp has provided Silexion with the resources and visibility to accelerate the development of its pipeline and drive its mission of transforming the lives of cancer patients.
Financial Performance and Liquidity
Silexion's financial statements reflect the company's ongoing investment in research and development activities. For the year ended December 31, 2023, the company reported no revenue, a net loss of $4.94 million, and negative operating cash flow of $4.53 million. As of December 31, 2023, Silexion had $4.64 million in cash and cash equivalents, with $15.06 million in redeemable convertible preferred shares outstanding.
The company's balance sheet highlights its focus on funding critical R&D initiatives, with a majority of its assets dedicated to property, plant, and equipment, as well as prepaid expenses related to its clinical trials. Silexion's working capital position, with $2.78 million as of December 31, 2023, underscores the need for additional financing to support its ongoing operations and pipeline advancement.
It is worth noting that Silexion's net loss and negative cash flow are in line with the typical financial profile of a clinical-stage biotech company, as the majority of its resources are directed towards research, development, and regulatory activities. The company's successful business combination with Moringa Acquisition Corp has provided a significant capital infusion, including the issuance of $2 million in PIPE financing, to fuel its future growth and development plans.
For the nine-month period ended September 30, 2024, Silexion's research and development expenses were $4.94 million, up from $2.45 million in the same period in 2023. This increase was driven mainly by a $2.42 million rise in share-based compensation expenses and a $0.20 million increase in payroll and related expenses. Of the total R&D spending, $4.70 million was allocated to the development of SIL-204B, compared to $1.60 million in the prior year period. Aggregate R&D expenses since inception for the SIL-204B program were approximately $8.30 million as of September 30, 2024.
General and administrative expenses also increased substantially, from $0.50 million in the first nine months of 2023 to $5.73 million in the same period of 2024. This $5.20 million increase was primarily due to a $3.40 million rise in share-based compensation, a $1.00 million increase in professional services costs related to becoming a public company, and a $0.70 million rise in payroll and related expenses.
The company's net loss for the nine-month period ended September 30, 2024 was $14.77 million, compared to a net loss of $3.43 million in the prior year period. This significant increase in net loss was driven by the higher research and development and general and administrative expenses, as well as a $4.09 million net financial expense, which included a one-time $4.78 million loss upon entering the business combination transaction.
As of September 30, 2024, Silexion had cash and cash equivalents of $1.97 million. The company's management has expressed substantial doubt about its ability to continue as a going concern, as its current cash resources are not expected to be sufficient to fund operations for the next 12 months. Silexion is actively pursuing additional funding sources, including through the company's recently established $15 million equity line of credit facility.
In terms of liquidity ratios, as of September 30, 2024, Silexion had a debt-to-equity ratio that is not applicable due to negative equity, a current ratio of 0.85, and a quick ratio of 0.85. The company had total debt of $4.31 million and total equity of -$4.58 million. These figures highlight the company's current financial challenges and the urgent need for additional funding to support ongoing operations and research efforts.
Pipeline and Clinical Progress
Silexion's lead candidate, SIL-204B, is a locally administered siRNA-based therapy targeting the KRAS oncogene for the treatment of locally advanced pancreatic cancer. In September 2024, the company announced significant new findings from its Phase 2 trial of SIL-204B, including a 56% objective response rate (ORR) and a 67% resectability improvement in patients with non-resectable pancreatic tumors harboring the KRAS G12D or G12V mutations.
These promising results underscore the potential of Silexion's approach to selectively silence the KRAS gene, which is mutated in approximately 90% of pancreatic cancers and is a key driver of tumor progression. The company is working diligently to advance SIL-204B through late-stage clinical development, with plans to initiate a pivotal Phase 3 trial in the near future.
Alongside SIL-204B, Silexion is also making strides with its second-generation KRAS-targeting candidate, SIL-204. Recent preclinical studies have demonstrated significant improvements in the stability, efficacy, and KRAS targeting range of this next-generation siRNA formulation, paving the way for potential future clinical evaluation.
The company's Loder platform, which utilizes a biodegradable implant to locally deliver RNAi therapeutics, has also generated positive data in the treatment of non-resectable pancreatic tumors. Silexion reported a 56% objective response rate and a 67% resectability improvement in patients with non-resectable pancreatic cancer treated with the Loder system.
These advancements across Silexion's pipeline highlight the company's commitment to developing innovative solutions for some of the most challenging oncology indications. As Silexion continues to navigate the clinical and regulatory landscape, its focus on KRAS-driven cancers positions it as a compelling player in the precision medicine space.
Competitive Landscape and Industry Trends
The field of precision oncology, particularly the targeting of the KRAS oncogene, has garnered significant attention in recent years due to the high unmet need and the potential for transformative therapies. Silexion operates in a competitive landscape that includes both established pharmaceutical companies and emerging biotechnology firms, all vying to develop effective treatments for KRAS-driven cancers.
Notable players in this space include Amgen, which received FDA approval for its KRAS G12C inhibitor Lumakras in 2021, and Mirati Therapeutics, which is advancing its KRAS G12C inhibitor adagrasib through late-stage clinical trials. Additionally, companies like Gilead Sciences, AstraZeneca, and Merck are actively exploring various approaches, including small molecule inhibitors and RNAi-based therapies, to target the KRAS oncogene.
Despite the competitive environment, Silexion's unique focus on RNAi-based therapies and its progress in addressing the challenges associated with KRAS targeting have positioned the company as a disruptive force in the industry. The company's ability to leverage its proprietary platform to develop novel, targeted treatments for KRAS-driven cancers has garnered the attention of industry observers and potential partners.
Furthermore, the increasing prevalence of KRAS mutations across various tumor types and the growing emphasis on precision medicine have fueled the demand for innovative therapies like those being developed by Silexion. The company's pipeline and clinical achievements have the potential to capture a significant share of this expanding market opportunity.
Risks and Challenges
As a clinical-stage biotechnology company, Silexion faces several inherent risks and challenges that are common to the industry. The company's success is heavily dependent on the successful development, regulatory approval, and commercialization of its pipeline candidates, particularly SIL-204B and SIL-204.
The drug development process is inherently lengthy, complex, and subject to significant uncertainty. Silexion's ability to advance its product candidates through clinical trials and obtain regulatory approvals is critical to its long-term success, and any delays or setbacks in this process could have a material impact on the company's financial performance and future prospects.
Additionally, Silexion operates in a highly competitive landscape, where it must compete with both established pharmaceutical companies and other emerging biotechnology firms. The company's ability to differentiate its therapies, maintain a robust intellectual property portfolio, and secure strategic partnerships will be crucial in navigating this competitive environment.
Furthermore, as a relatively young and rapidly growing company, Silexion faces challenges related to managing its operations, talent acquisition, and maintaining a strong financial position. The company's ability to effectively deploy its resources, attract and retain top-caliber talent, and secure additional funding will be paramount to its long-term success.
It is worth noting that Silexion's financial statements for the year ended December 31, 2023 include a going concern emphasis from the company's independent registered public accounting firm. This highlights the need for Silexion to secure additional financing to support its ongoing operations and pipeline development activities.
Outlook and Conclusion
Silexion Therapeutics is at a pivotal juncture in its evolution, having recently completed a transformative business combination that has provided the resources and visibility to accelerate the development of its innovative RNAi-based pipeline. The company's sharp focus on KRAS-driven cancers, a critical unmet need in the oncology landscape, has positioned it as a disruptive player in the precision medicine space.
The promising results from Silexion's clinical trials, particularly the significant improvements in objective response rates and resectability observed with its lead candidate SIL-204B, underscore the potential of the company's approach. As Silexion continues to advance its pipeline and navigate the regulatory landscape, its ability to deliver meaningful clinical outcomes for patients with KRAS-driven cancers will be paramount to its long-term success.
While Silexion faces inherent risks and challenges common to the biotechnology industry, the company's commitment to innovation, its robust intellectual property portfolio, and the growing industry focus on precision oncology provide a solid foundation for its future growth. With the additional resources secured through its recent business combination, Silexion is well-positioned to expand its research and development efforts, accelerate the clinical progression of its product candidates, and ultimately, transform the lives of cancer patients worldwide.
However, the company's financial position remains a critical concern. With a net loss of $14.77 million for the nine-month period ended September 30, 2024, and cash and cash equivalents of only $1.97 million, Silexion urgently needs to secure additional funding to support its ongoing operations and research efforts. The company's management has acknowledged substantial doubt about its ability to continue as a going concern, highlighting the importance of successfully leveraging its $15 million equity line of credit facility and exploring other financing options.
Despite these financial challenges, Silexion's innovative approach to targeting KRAS-driven cancers and its promising clinical results continue to generate interest within the oncology community. The company's ability to navigate its near-term financial hurdles while advancing its pipeline will be crucial in realizing the full potential of its RNAi-based therapies and establishing Silexion as a leader in the field of precision oncology.