 Company reported ZILRETTA triamcinolone acetonide extended-release injectable suspension net sales of 15.5 million in second quarter 2020 Flexion resumed enrollment in Phase 1 dose-escalation trial for FX201; FX301 on track to enter clinic in 2021BURLINGTON, Mass., Aug. 05, 2020 GLOBE NEWSWIRE -- Flexion Therapeutics, Inc. Nasdaq:FLXN today reported financial results and recent business highlights for the quarter ended June 30, 2020.In light of the significant challenges presented by COVID-19, we made excellent progress across all areas of the business in the second quarter, said Michael Clayman, M.D., President and Chief Executive Officer of Flexion Therapeutics. We saw demand for ZILRETTA build month-over-month throughout the quarter, and we continued to add new accounts, bolstering our confidence that ZILRETTA can become the leading intra-articular therapy for OA knee pain. Furthermore, in May, following the voluntary suspension of clinical trials, we resumed the Phase 1, dose-escalation trial evaluating the safety and tolerability of FX201, our novel, intra-articular, IL-1RA gene therapy product candidate in development for the treatment of OA. In addition, we continued to advance the preclinical program for FX301, a locally administered peripheral nerve block product candidate for control of post-operative pain, and we remain on track to enter the clinic in 2021. While the impacts of the pandemic on the second half of the year are impossible to predict, our confidence in ZILRETTA and our ability to advance our pipeline of compelling product candidates, remains as strong as ever.Second-Quarter Results Financial HighlightsThe Company reported a net loss of 32.6 million for the second quarter of 2020, compared to a net loss of 36.5 million for the same period of 2019. Net sales of ZILRETTA were 15.5 million and 17.0 million for the three months ended June 30, 2020 and 2019, respectively.Flexion recognizes revenue primarily on sales of ZILRETTA to specialty distributors and a specialty pharmacy versus the purchases of ZILRETTA by healthcare providers. Due to the impacts of COVID-19, the level of product inventory held at specialty distributors at the end of the first quarter was higher than prior quarters. As purchases of ZILRETTA by healthcare providers increased throughout the second quarter, the specialty distributors worked through their elevated inventory levels. As a result, the aggregate number of ZILRETTA units that specialty distributors purchased and that the Company recognized as revenue in the second quarter was less than the aggregate amount purchased by healthcare providers from specialty distributors during this period. Cost of sales was 5.5 million and 1.4 million for the three months ended June 30, 2020 and 2019, respectively. For the three months ended June 30, 2020, cost of sales included 1.6 million for the actual cost of units sold, 3.4 million of unabsorbed overhead associated with the voluntary, temporary suspension of manufacturing activities at Patheon due to COVID-19 impacts on sales of ZILRETTA, and 0.5 million of period costs and other adjustments.Research and development expenses were 12.5 million and 16.1 million for the three months ended June 30, 2020 and 2019, respectively. The decrease in research and development expenses of 3.6 million was primarily due to a decrease of 2.7 million in development expenses for ZILRETTA due to lower ZILRETTA clinical trial activity during the period, as well as a decrease of 1.0 million in salary and other employee-related costs and stock-based compensation expense related to lower headcount.Selling, general and administrative expenses were 24.7 million and 33.1 million for the three months ended June 30, 2020 and 2019, respectively. Selling expenses were 16.8 million and 24.8 million for the three months ended June 30, 2020 and 2019, respectively. The year-over-year decrease of 8.0 million was primarily due to the expense reduction measures taken in response to COVID-19. General and administrative expenses were 7.9 million and 8.3 million for the three months ended June 30, 2020 and 2019, respectively, which represents a decrease of 0.4 million.As a result of the Companys musculoskeletal business managers MBMs returning to the field and the resumption of the clinical trial for FX201, Flexion expects full-year 2020 total operating expenses including cost of sales, research and development, and selling, general and administrative will be in the range of 172 million to 182 million versus previous guidance of 167 million to 177 million.Interest income was 0.1 million and 0.8 million for the three months ended June 30, 2020 and 2019, respectively. Interest expense was 5.0 and 3.9 million for the three months ended June 30, 2020 and 2019, respectively.As of June 30, 2020, the Company had approximately 200.6 million in cash, cash equivalents and marketable securities compared with 136.7 million as of December 31, 2019. Based on the Companys current operating plan and assuming purchasing activity at physician practices, clinics and certain medical centers or hospitals that administer ZILRETTA begin to return to pre-COVID-19 levels by early 2021, Flexion believes that its current cash, cash equivalent and marketable securities, will be sufficient to fund operations into 2022.Recent News Business Updates On July 14, 2020, Flexion pre-announced preliminary ZILRETTA net sales for the second quarter and provided updated Commercial metrics. Despite negative impacts from COVID-19 early in the quarter, demand for ZILRETTA grew month-over-month in the second quarter with purchases by healthcare providers reaching 4,863 units, 13,547 units and 18,287 units in April, May and June, respectively. In total, approximately 36,700 units of ZILRETTA were purchased in the second quarter, which is essentially in line with the first quarter of 2020. In May 2020, Flexion completed an underwritten public offering of 10,615,385 shares of its common stock, including the exercise in full of the underwriters option to purchase shares, raising total net proceeds of 97.3 million, after underwriting discounts and commissions. Also in May, Flexion restarted enrollment in the Phase 1, dose-escalation trial evaluating the safety and tolerability of FX201, its investigation gene therapy product candidate for OA. Throughout the quarter Flexion continued to advance the preclinical program for FX301, its locally administered NaV1.7 inhibitor product candidate, known as funapide formulated for extended release in a thermosensitive hydrogel. The Company anticipates initiating FX301 clinical trials in 2021. In addition, the Company intends to initiate a trial investigating ZILRETTA in shoulder OA in 2021. After voluntarily pausing ZILRETTA manufacturing early in the second quarter, Flexion announced plans to recommence manufacturing in the fourth quarter of this year to help ensure adequate and uninterrupted supply of ZILRETTA to meet future demand.Indication and Select Important Safety Information for ZILRETTAIndication: ZILRETTA is indicated as an intra-articular injection for the management of osteoarthritis pain of the knee.Limitation of Use: The efficacy and safety of repeat administration of ZILRETTA have not been demonstrated.Contraindication: ZILRETTA is contraindicated in patients who are hypersensitive to triamcinolone acetonide, corticosteroids or any components of the product.Warnings and Precautions: Intra-articular Use Only: ZILRETTA has not been evaluated and should not be administered by epidural, intrathecal, intravenous, intraocular, intramuscular, intradermal, or subcutaneous routes. ZILRETTA should not be considered safe for epidural or intrathecal administration. Serious Neurologic Adverse Reactions with Epidural and Intrathecal Administration: Serious neurologic events have been reported following epidural or intrathecal corticosteroid administration. Corticosteroids are not approved for this use. Hypersensitivity reactions: Serious reactions have been reported with triamcinolone acetonide injection. Institute appropriate care if an anaphylactic reaction occurs. Joint infection and damage: A marked increase in joint pain, joint swelling, restricted motion, fever and malaise may suggest septic arthritis. If this occurs, conduct appropriate evaluation and if confirmed, institute appropriate antimicrobial treatment.Adverse Reactions: The most commonly reported adverse reactions incidence 1 in clinical studies included sinusitis, cough, and contusions.Please see ZilrettaLabel.com for full Prescribing Information.About ZILRETTA On October 6, 2017, ZILRETTA was approved by the U.S. FDA as the first and only extended-release intra-articular therapy for patients confronting osteoarthritis-related knee pain. ZILRETTA employs proprietary microsphere technology combining triamcinolone acetonide a commonly administered, short-acting corticosteroid with a poly lactic-co-glycolic acid PLGA matrix to provide extended pain relief. The pivotal Phase 3 trial on which the approval of ZILRETTA was based showed that ZILRETTA significantly reduced OA knee pain for 12 weeks, with some people experiencing pain relief through Week 16. Learn more at FX201 FX201 humantakinogene hadenovec is a novel, intra-articular gene therapy product candidate which utilizes a helper-dependent adenovirus HDAd vector based on human serotype 5 Ad5 that is designed to transfer a gene to cells in the joint to produce an anti-inflammatory protein, interleukin-1 receptor antagonist IL-1Ra, under the control of an inflammation-sensitive promoter. Inflammation is a known cause of pain, and chronic inflammation is thought to play a major role in the progression of OA. 