Syndax Pharmaceuticals, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. Comparisons are with Q1 2023 for operating results and cash flows, and December 31, 2023 for balance-sheet figures. Syndax is a clinical-stage biopharmaceutical company; it reported no product revenue and has no products approved for commercial sale.
Financial results and liquidity
| Metric | Q1 2024 | Comparable period / change |
|---|---|---|
| Revenue | $0 | $0 in Q1 2023 |
| Research and development expense | $56.5 million | Up 66% from $34.1 million |
| Selling, general and administrative expense | $23.0 million | Up 92% from $12.0 million |
| Total operating expenses | $79.5 million | Up 73% from $46.0 million |
| Net loss | $72.4 million | Versus $41.1 million; loss per share was $0.85 versus $0.59 |
| Operating cash used | $83.5 million | Versus $39.2 million |
| Cash, cash equivalents and short- and long-term investments | $522.0 million | Down from $600.5 million at December 31, 2023 |
Interest income was $7.3 million, up 43% year over year, primarily reflecting higher interest rates and average invested balances. No operating margin is meaningful because the company had no revenue. Cash, cash equivalents and restricted cash totaled $114.8 million at quarter-end; investment balances were $407.4 million. The $180.8 million decrease in cash, cash equivalents and restricted cash included $99.4 million net cash used to purchase investments, as well as operating cash use.
Total liabilities were $51.1 million, primarily current liabilities; reported lease and capital-lease obligations were small. The filing reports no material contingent liabilities accrued and no material legal proceedings. Management stated available cash and investments should fund projected expenses and capital requirements for at least the next 12 months.
Changes versus the prior comparable period
- Net loss increased by $31.3 million, as operating expenses rose faster than interest income.
- R&D expense rose $22.4 million. Revumenib-related costs increased $16.5 million, reflecting registrational and combination trials, companion-diagnostic work, pre-commercial manufacturing and milestone payments. Personnel and other R&D costs also increased.
- SG&A expense rose $11.1 million, including higher pre-marketing and commercialization costs and increased personnel expenses as Syndax prepared for potential launches.
- Weighted-average shares increased to 85.2 million from 69.4 million; quarter-end shares outstanding were 85.0 million.
Outlook, developments and risks
- Revumenib: The FDA granted Priority Review for the NDA for adult and pediatric relapsed or refractory KMT2A-rearranged acute leukemia, with a September 26, 2024 PDUFA target date and review under the Real-Time Oncology Review program. Enrollment in the pivotal mNPM1 AML cohort was complete; topline data were expected in Q4 2024 and could support an sNDA in the first half of 2025. Syndax planned to initiate a pivotal combination trial by year-end 2024.
- Axatilimab: The FDA accepted the BLA for chronic GVHD after at least two prior systemic therapies, granted Priority Review and set an August 28, 2024 PDUFA date. A Phase 2 IPF trial is ongoing. Incyte planned to initiate two cGVHD combination trials in 2024.
- Management expects R&D and SG&A expenses to continue increasing, including commercial-launch preparation in 2024, and anticipates significant losses for at least the next several years. Future costs and timelines depend on trial progress, regulatory requirements, manufacturing, enrollment and commercialization needs.
- The company had $157.9 million remaining under its $200 million ATM program as of May 1, 2024; it sold no ATM shares in Q1. Additional financing may be needed and could dilute shareholders or require less favorable arrangements.
- Key risks include clinical efficacy and safety uncertainty, regulatory review and approval, trial enrollment and execution, reliance on third-party manufacturers and Incyte, competition, intellectual-property protection, commercialization and reimbursement, and inflation, supply-chain and geopolitical disruption. The company cautions that preliminary clinical data may change. No material legal proceedings were reported; management said disclosure controls were effective and there was no material change in internal control over financial reporting during the quarter.
Most important facts for investors to verify
- FDA decisions and timing for revumenib and axatilimab, including any requests for additional data or trials.
- Upcoming revumenib mNPM1 AML topline data and progress in combination trials; check final data against any preliminary results.
- Quarterly operating cash use, investment balances and actual runway relative to management’s at-least-12-month estimate.
- Growth in launch-preparation costs, milestone and collaboration payments, and any use of the ATM or other financing.
- Incyte’s development and commercialization commitments and the effect of collaboration cost-sharing on Syndax’s expenses.