Syndax Pharmaceuticals, Inc. — Q2 2023 Form 10-Q
Reporting period: Three and six months ended June 30, 2023. The unaudited filing was signed August 3, 2023. Syndax is a clinical-stage biopharmaceutical company developing cancer therapies; it had no approved products and generated no product revenue.
Key financial metrics
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $34.8m | $29.7m | $68.8m | $59.8m |
| General and administrative expense | $14.9m | $8.0m | $26.9m | $14.8m |
| Total operating expenses | $49.7m | $37.7m | $95.7m | $74.6m |
| Net loss | $44.6m | $37.6m | $85.7m | $74.7m |
| Net loss per share, basic and diluted | $0.64 | $0.62 | $1.23 | $1.25 |
| Operating cash used | — | — | $74.6m | $82.2m |
Margins: Not meaningful because the company had no revenue. Q2 interest income was $5.2m, versus $0.9m a year earlier, partly offsetting operating losses. Six-month interest income was $10.3m, versus $1.1m.
Liquidity and debt: At June 30, cash, cash equivalents and short- and long-term investments totaled $418.3m, down from $481.3m at December 31, 2022. Current assets were $409.1m and current liabilities $30.2m. Total liabilities were $31.3m, primarily operating-lease obligations; the Hercules loan had been terminated in September 2022. Management said available funds should cover projected operating expenses and capital needs for at least 12 months. A new $200m ATM equity program was available; no shares were sold under it through June 30.
Changes versus comparable periods
- Q2 operating expenses rose 32% and net loss increased $7.0m year over year. For the first half, operating expenses rose 28% and net loss increased $11.0m.
- R&D expense increased, primarily from employee-related costs and headcount, while clinical and manufacturing costs declined in some areas. G&A increased substantially, driven by employee-related expenses and professional fees.
- Six-month operating cash use improved by $7.6m year over year. Investing activities provided $93.8m in 2023, mainly reflecting maturities of available-for-sale securities; financing provided $3.8m, compared with $22.3m in 2022, which included ATM proceeds.
- Weighted-average shares for Q2 increased to 69.6m from 60.2m. Stock-based compensation was $14.3m for the first half, versus $7.4m a year earlier.
Outlook, developments and risks
- Revumenib: The pivotal Phase 2 AUGMENT-101 study was enrolling relapsed or refractory KMT2A-rearranged and NPM1-mutant acute leukemia cohorts. Management expected pooled KMT2A-rearranged topline data in Q3 2023, an NDA submission by year-end, and completion of NPM1-mutant AML enrollment by year-end. Other studies and a new combination trial were also planned; timelines and outcomes remain uncertain.
- Axatilimab: In July 2023, after quarter-end, Syndax and Incyte reported positive topline Phase 2 AGAVE-201 results in chronic graft-versus-host disease. Reported response rates across three dose cohorts were 74%, 67% and 50%. The companies expected a BLA submission by year-end 2023, subject to regulatory alignment, and planned additional trials.
- The Incyte collaboration shares U.S. development costs 45% Syndax/55% Incyte; Incyte leads U.S. commercialization. Syndax is eligible for development, regulatory and commercial milestones and royalties, but timing and receipt are uncertain.
- Management expects significant R&D and G&A spending and continued losses. Future capital needs depend on trial costs, regulatory requirements, manufacturing, reimbursement and commercialization plans. The company may need further financing; equity issuance could dilute shareholders.
- Key risks include clinical failure or delays, regulatory uncertainty, patient enrollment, reliance on third-party manufacturers and Incyte, competition, intellectual-property and licensing risks, and inflation, supply-chain and broader economic pressures. The filing reported no material legal proceedings and no contingent liabilities recorded at June 30.
- Disclosure controls were assessed as effective, with no material change in internal control over financial reporting during the quarter.
Investor verification priorities
- Check final, audited clinical data and regulatory developments for revumenib and axatilimab against the timelines and preliminary results described in the filing.
- Monitor cash use, trial spending and the company’s stated minimum 12-month runway; the estimate depends on assumptions that may change.
- Verify collaboration cost-sharing, receivables/payables and any milestone or royalty terms as development progresses; collaboration payments are not assured.
- Track use of the $200m ATM program, other financing and share-count growth, including equity compensation and potential dilution.
- Assess manufacturing capacity, third-party supply risks, regulatory requirements and licensing obligations that could affect program costs or execution.