Flex Pharma and Salarius Pharmaceuticals Announce Merger Agreement to Accelerate Clinical Development of Novel Epigenetic Therapy for Cancer

– Lead Candidate in Clinical Trial for Treating Ewing Sarcoma –
– Salarius Completes $6.4 Million Private Placement –
– Conference Call and Live Audio Webcast Scheduled for Today at 9:00 a.m. ET –

January 4, 2019 – Boston, MA and Houston, TX – Flex Pharma, Inc. (NASDAQ: FLKS), and SalariusPharmaceuticals, LLC, a clinical-stage oncology company targeting the epigenetic causes of cancers,today announced that the companies have entered into a definitive merger agreement under which privately-held Salarius will merge with a wholly-owned subsidiary of Flex Pharma. Management believes that the proposed transaction will position the combined company to recognize multiple value inflection points based on Salarius’ clinical pipeline, which targets rare, orphan cancers with no targeted treatments and cancers that have a high unmet need.

Salarius recently completed a $6.4 million private placement, which combined with cash from Flex Pharma is expected to fund the combined company to mid-2020, allowing it to report early cohort data from an ongoing Phase 1 Ewing sarcoma trial. Upon the closing of the transaction, Flex Pharma stockholders will own approximately 19.9% of the combined company and current Salarius investors will own approximately 80.1% of the combined company. Flex Pharma stockholders will also receive a right to receive warrants, six months and one day following the closing date of the transaction, allowing them to purchase additional shares. The total value of these warrants will be calculated such that upon exercise Flex Pharma stockholders would own an additional 2.4%, or a total of 22.3%, of the value of the combined entity, subject to adjustment based on Flex Pharma’s net cash at closing. A live conference call and webcast is scheduled for today at 9:00 a.m. Eastern Time.

Upon closing of the transaction, Flex Pharma is expected to be renamed Salarius Pharmaceuticals, Inc. and be under the leadership of Salarius’ current management team, led by Chief Executive Officer, David Arthur. The Salarius clinical pipeline will become the lead assets of the company following the transaction. Flex Pharma President and Chief Executive Officer, William McVicar, Ph.D., is expected to join the Board of Directors of the combined company following the closing of the transaction.

“After completing a comprehensive and highly competitive selection process, we are confident that the proposed transaction with Salarius offers the best opportunity for significant near- and long-term value creation,” stated Dr. McVicar. “We were impressed by the compelling science supporting Salarius’ novel drug, as well as the company’s strong financial position and management team. Based on our diligence, we believe Salarius could be poised to advance multiple potential product opportunities that address significant unmet needs in oncology. I look forward to supporting the company and being a member of the Salarius Board of Directors following the closing of the transaction. Finally, I would like to thank our stockholders for their support and patience during this strategic process and to reiterate that the entire team is fully committed to enhancing stockholder value with this transaction and beyond.”

Salarius’ lead compound, Seclidemstat, targets the epigenetic dysregulation underlying Ewing sarcoma, a devastating pediatric, adolescent and young adult bone cancer for which no targeted therapies currently exist. Seclidemstat is a differentiated, reversible inhibitor of the lysine-specific demethylase 1 enzyme, or LSD1, which is a widely studied epigenetic enzyme and a validated drug target for clinical development. The company is currently enrolling patients in an open-label Phase 1 dose escalation/dose expansion study, which is expected to conclude in 2020. Salarius is also preparing to initiate additional studies in advanced solid tumors, including prostate, breast and ovarian cancers.

Salarius’ Chief Executive Officer, David Arthur, commented, “This strategic transaction and Nasdaq listing represent a growth opportunity for both companies. As an emerging public company, we believe that the enhanced visibility and exposure to institutional investors will enable Salarius to showcase the potential of its clinical pipeline, and the progression of its programs should drive increased stockholder value. Our goal is to become a recognized leader in epigenetic cancer therapy.”

Mr. Arthur is a seasoned life sciences executive with more than 25 years’ experience in biopharma leadership, building and leading multi-disciplinary teams, as well as launching and managing pharmaceutical and drug delivery device brands. For much of his career, he held executive roles at Eli Lilly and Boehringer-Ingelheim managing product development, business development and global commercialization.

About the Proposed Transaction
The transaction has been approved unanimously by the Board of Director of Flex Pharma and Board of Managers of Salarius. The proposed transaction is expected to close in the first half of 2019, subject to the approval of Flex Pharma stockholders at a special stockholder meeting and other customary conditions, including approval by Salarius’ members.

Flex Pharma’s strategic advisor in the transaction is Wedbush PacGrow. Healthios Capital Markets is serving as financial advisor to Salarius Pharmaceuticals. Dentons Canada LLP and Duane Morris LLP are serving as legal counsel to Flex Pharma and Pillsbury Winthrop Shaw Pittman LLP is serving as legal counsel to Salarius Pharmaceuticals.

Webcast
A live audio webcast of the call will be available online from the investor relations section of the Flex Pharma website at www.flex-pharma.com and will be archived there for 30 days.

About Salarius
Salarius Pharmaceuticals, LLC is a clinical-stage oncology company targeting the epigenetic causes of cancers and is developing treatments for patients that need them the most. The company’s lead candidate, Seclidemstat, is currently in clinical development for treating Ewing sarcoma, for which it has Orphan Drug designation and Pediatric Rare Disease Designation by the U.S. Food and Drug Administration. Salarius believes that Seclidemstat is the only reversible inhibitor of the epigenetic modulator LSD1 currently in human trials, and that it could have potential for improved safety and efficacy compared to other LSD1-targeted therapies. Salarius is also developing Seclidemstat for a number of cancers with high unmet need and expects to commence additional clinical studies in 2019 targeting advanced solid tumors, including prostate, breast and ovarian cancers. For more information, please visit salariuspharma.com.

About Flex Pharma
Flex Pharma, Inc. is a biotechnology company that was founded in 2014 by National Academy of Science members Rod MacKinnon, M.D. (2003 Nobel Laureate) and Bruce Bean, Ph.D., recognized leaders in the fields of ion channels and neurobiology, along with Christoph Westphal, M.D., Ph.D.

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Contacts:
Flex Pharma, Inc.
William McVicar
Chief Executive Officer
(617) 874-1821
wmcvicar@flex-pharma.com

Salarius Pharmaceuticals, LLC
Tiberend Strategic Advisors, Inc.
Joshua Drumm, Ph.D. (Investors)
(212) 375-2664
jdrumm@tiberend.com

David Schemelia (Media)
(212) 375 6298
dschemelia@tiberend.com

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