Business context and reporting period
The filing is Synthetic Biologics, Inc.’s unaudited Form 10-Q for the three months ended March 31, 2020. The company describes itself as a clinical-stage therapeutics developer focused on microbiome-related products, including SYN-004, SYN-010 and SYN-020. The request identifies Theriva Biologics, Inc., but the filing names Synthetic Biologics, Inc. (ticker SYN); verify the issuer identity.
Key financial metrics
| Metric | Q1 2020 | Q1 2019 or comparison |
|---|---|---|
| Revenue | No meaningful revenue reported | No meaningful revenue reported |
| Research and development expense | $1.635 million | $2.418 million |
| General and administrative expense | $1.393 million | $1.154 million |
| Operating loss | $3.028 million | $3.572 million |
| Net loss | $2.990 million | $3.528 million |
| Net loss attributable to common stockholders | $3.430 million; $0.20 per share | $3.971 million; $0.25 per share |
| Operating cash used | $4.960 million | $4.224 million |
| Cash and cash equivalents | $10.085 million at March 31, 2020 | $15.045 million at December 31, 2019 |
| Total liabilities | $3.281 million | $5.748 million at December 31, 2019 |
| Stockholders’ deficit | $4.000 million | $1.057 million at December 31, 2019 |
Margins are not meaningful because the filing reports no meaningful revenue. No borrowings are reported; liabilities include operating lease obligations of $663,000, of which $258,000 is current. Current assets were $11.169 million and current liabilities were $2.876 million at quarter-end.
Material changes versus the prior comparable period
- Operating expenses fell 15% overall. R&D declined 32%, mainly because of lower indirect program costs, reduced headcount-related costs and lower SYN-020 manufacturing costs; G&A rose 21%, primarily due to insurance, registration and legal costs.
- Net loss attributable to common stockholders narrowed to $3.430 million from $3.971 million. Loss per share improved to $0.20 from $0.25, while weighted-average shares rose to 17.1 million from 15.7 million.
- Operating cash use increased to $4.960 million from $4.224 million. The company had no investing or financing cash flows in either quarter.
- Cash declined $4.960 million from year-end 2019. Stockholders’ deficit widened, reflecting the quarterly loss and preferred-stock-related items, partly offset by stock-based compensation and Series B conversions.
Outlook, commentary, risks and unusual items
- Going concern and funding: Management stated that available capital was insufficient to fund operations beyond the next twelve months and that substantial doubt existed about the company’s ability to continue as a going concern. It said cash available in early May was expected to fund operations through at least the end of Q1 2021, with spending constrained by paused or delayed trials. Additional equity, debt or partnership funding was being pursued, but no third-party funding commitments existed.
- COVID-19: CSMC temporarily halted new enrollment in the SYN-010 Phase 2b study; a futility analysis and potential data readout were anticipated in Q3 2020, subject to pandemic effects. Washington University postponed initiation of the SYN-004 Phase 1b/2a study in allogeneic HCT recipients, with preliminary guidance pointing to Q1 2021, subject to approvals and conditions. Management cautioned that further disruption could materially harm development timelines, finances and growth prospects.
- Pipeline milestones: The company anticipated an IND filing for SYN-020 in Q2 2020. Future Phase 3 and later-stage studies for SYN-004, SYN-010 and SYN-020 were dependent on obtaining adequate funding or partners; management did not intend to begin major registrational programs without resources to complete them.
- Listing risk: At March 31, stockholders’ deficit was $4.0 million, below the NYSE American’s stated $6.0 million equity threshold applicable to the company. The exchange had accepted a compliance plan through November 25, 2020; failure to regain compliance or make progress could lead to delisting.
- Other items: No impairment charge was recorded after a COVID-19-triggered qualitative review of long-lived assets. The company reported no material litigation, no off-balance-sheet arrangements and no subsequent events requiring disclosure through May 5, 2020. Disclosure controls were assessed as effective, with no material quarterly change in internal control over financial reporting.
Important facts for investors to verify
- Confirm that this Synthetic Biologics filing is the intended filing for the requested company, Theriva Biologics.
- Check the actual cash runway and financing obtained after the filing date, including whether the stated Q1 2021 runway assumption held.
- Review the status and results of the SYN-010 futility analysis, enrollment, and data readout, and the revised SYN-004 trial start and regulatory approvals.
- Verify whether SYN-020’s anticipated Q2 2020 IND filing occurred and whether additional funding or partnerships were secured for later-stage trials.
- Monitor progress under the NYSE American compliance plan and any resulting listing or capital-raising consequences.