Syndax Pharmaceuticals, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. Syndax is a clinical-stage biopharmaceutical company with no approved products and no product-sales revenue. Its lead candidates are revumenib and axatilimab; entinostat development has been deprioritized.
Financial performance and position
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Revenue | $0 | $0.4m | $0 | $0.8m |
| Research and development expense | $29.7m | $16.9m | $59.8m | $38.7m |
| General and administrative expense | $8.0m | $5.8m | $14.8m | $11.5m |
| Net loss | $37.6m | $22.9m | $74.7m | $50.6m |
| Basic and diluted loss per share | $0.62 | $0.44 | $1.25 | $0.98 |
- Cash and investments: $378.9m at June 30, 2022, comprising $120.2m cash and cash equivalents, $246.6m short-term investments and $12.1m long-term investments. This compares with $439.9m of cash and investments at year-end 2021. Current assets were $392.3m and current liabilities $30.9m.
- Cash flow: Operating activities used $82.2m in the first half, versus $46.6m a year earlier. Investing activities used $41.8m, mainly reflecting purchases of marketable securities, and financing activities provided $22.3m, including $19.4m net ATM proceeds. Cash, cash equivalents and restricted cash declined by $101.7m.
- Debt: $20.0m principal outstanding under the Hercules term loan. The loan carries a variable rate subject to a 9.25% floor; principal maturities are $14.8m in 2023 and $5.2m in 2024. Monthly interest-only payments run through January 2023.
- Margins: Not meaningful because the company reported no revenue in 2022 and has no product sales.
Material changes and unusual items
- Year-over-year first-half net loss increased $24.1m. R&D expense rose $21.0m, primarily from higher clinical and manufacturing activity, including axatilimab and menin programs, partly offset by collaboration cost reimbursements. G&A expense rose $3.3m.
- First-half 2022 R&D included a $5.8m milestone expense related to the axatilimab program under the UCB agreement. The filing also reports a $2.0m development and regulatory milestone expense in February 2022 under the menin-assets license.
- The prior-year license revenue came from Kyowa Kirin; that entinostat license was cancelled in Q3 2021. Syndax recognized no additional revenue under the Incyte axatilimab collaboration in the first half of 2022.
- The company sold 1.11m shares through its ATM program in the first half for $19.4m net. It reported $49.7m of ATM capacity remaining as of August 5, 2022.
Outlook, risks and contingencies
- Management stated existing cash, cash equivalents and investments were expected to fund projected operating and capital needs for at least 12 months. The company expects significant losses and rising R&D and G&A expenses, and anticipates needing additional capital longer term. Additional equity financing could dilute shareholders.
- Revumenib: AUGMENT-101 pivotal Phase 2 enrollment was ongoing. Management expected to complete enrollment in one of the three pivotal cohorts by year-end 2022, report topline data starting in the first half of 2023, and potentially file the first NDA later in 2023. Updated Phase 1 data were anticipated in Q4 2022. These are expectations, not guarantees.
- Axatilimab: The pivotal Phase 2 AGAVE-201 cGVHD trial was enrolling, with topline data expected in the first half of 2023 and a potential BLA filing later in 2023. A Phase 2b IPF trial of approximately 170 patients was planned for Q4 2022. Incyte was expected to initiate a Phase 1 combination trial in steroid-refractory cGVHD in Q4 2022.
- Principal risks include clinical-trial efficacy, safety, enrollment and timing; regulatory approval uncertainty; reliance on third-party manufacturers and trial providers; possible COVID-19-related disruption; Incyte’s execution and priorities; and the need for future financing. Management said COVID-19’s impact was not then causing financial effects but could disrupt trials, supply and operations.
- No material legal proceedings or contingent liabilities were reported as of June 30, 2022. Management concluded disclosure controls were effective; no material change in internal control over financial reporting was reported for the quarter.
Key facts for investors to verify
- Progress, enrollment and data timing for AUGMENT-101 and AGAVE-201, and whether the anticipated 2023 regulatory submissions remain achievable.
- Actual cash burn and investment balances relative to the stated 12-month funding outlook, including the timing and terms of any additional financing.
- Axatilimab collaboration reimbursements, development costs, milestones and Incyte’s continued commitment to the program.
- Loan terms, variable-rate exposure and scheduled principal repayments, alongside potential ATM issuance and resulting dilution.
- The clinical and supply-chain effects of COVID-19 and other risks that could delay trials or increase development costs.