Theriva Biologics, Inc. (then Synthetic Biologics, Inc.) — 10-Q Summary
Reporting period: Quarter and nine months ended September 30, 2015. The filing identifies the issuer as Synthetic Biologics, Inc.; it describes a clinical-stage biopharmaceutical company with no meaningful product revenue.
Financial performance and position
- Revenue: No revenue is reported for the three- or nine-month periods. The company stated it did not expect product revenue in the near term before regulatory approval and commercialization.
- Quarter results: Operating expenses were $11.65 million, including $10.05 million of R&D and $1.60 million of G&A. Net loss was $7.51 million; net loss attributable to the company was $6.77 million. Basic loss per share was $0.08.
- Nine-month results: Operating expenses were $29.59 million, including $24.05 million of R&D and $5.54 million of G&A. Net loss was $33.49 million; net loss attributable to the company was $32.76 million. Basic loss per share was $0.42.
- Cash flow: Nine-month operating cash use was $27.92 million, versus $11.30 million in 2014. Investing cash use was $0.46 million. Financing provided $42.66 million, primarily from the July stock offering. Cash increased $14.28 million to $31.81 million.
- Liquidity and balance sheet: Current assets were $42.14 million and current liabilities $17.30 million, implying a current ratio of about 2.4. Total assets were $42.63 million and total liabilities $17.50 million. No conventional borrowing or debt balance is reported; liabilities included $10.66 million of warrant liabilities and deferred rent. Accumulated deficit was $133.80 million.
- Margins: Not meaningful because the filing reports no revenue.
Changes versus comparable periods
- Quarterly R&D expense rose 172% from $3.69 million to $10.05 million; G&A increased 32% from $1.22 million to $1.60 million. Quarterly net loss widened from $4.91 million to $7.51 million, despite $4.14 million of non-cash warrant fair-value income.
- Nine-month R&D increased 160% from $9.25 million to $24.05 million, and G&A rose 33% from $4.15 million to $5.54 million. Nine-month net loss increased from $13.30 million to $33.49 million, including $3.91 million of non-cash warrant fair-value expense.
- Cash at September 30, 2015 was up from $17.53 million at December 31, 2014. The company raised $46.0 million gross, or approximately $42.6 million net, in a July 2015 public offering of 15.3 million shares. Outstanding shares increased substantially.
Business, outlook, and risks
- Key programs included Phase 2 candidates SYN-004 for prevention of C. difficile infection and antibiotic-associated diarrhea, SYN-010 for IBS-C, and Trimesta for relapsing-remitting MS and cognitive dysfunction in MS. SYN-005 for pertussis was preclinical; the PKU program was at discovery stage.
- Management reported initiating a Phase 2b SYN-004 proof-of-concept trial in September 2015, planned to enroll about 370 patients. It anticipated an interim blinded-data analysis in Q4 2015 and topline data from two SYN-004 Phase 2a trials in Q4 2015 and the first half of 2016. Phase 3 trials for SYN-004 and SYN-010 were anticipated to begin in 2016.
- After quarter-end, the company reported completion of enrollment in its first SYN-010 Phase 2 trial and initiation of a second Phase 2 trial; topline results were anticipated in Q4 2015 and the first half of 2016, respectively. These are management expectations, not assured outcomes.
- The PKU collaboration with Intrexon involved a $3.0 million share-based technology access fee, potential milestone payments of up to $27 million per product, and royalties on future sales. The company also incurred a $1.35 million share-based milestone R&D charge to Prev ABR.
- Management cited continued operating losses and negative operating cash flow, substantial expected clinical and development spending, and no committed financing sources. Additional funding may be required sooner or in greater amounts than anticipated; unavailable or unacceptable financing could force delays, reductions, or discontinuation of programs and would dilute shareholders if raised through equity.
- Material risks include clinical and regulatory uncertainty, dependence on collaborators and academic investigators for development and data, license diligence obligations, competition, and potential inability to retain or recruit personnel. Management said there were no material changes to previously disclosed risk factors other than the updates in this filing. No legal proceedings were reported.
- Warrant liabilities are measured using a Black-Scholes model with significant Level 3 assumptions; changes in estimated fair value affect reported earnings but are non-cash. Management stated disclosure controls were effective and reported no material change in internal control over financial reporting.
Investor verification points
- Confirm subsequent SYN-004 and SYN-010 trial enrollment, interim analyses, data releases, and whether the anticipated 2016 Phase 3 timelines were achieved.
- Assess cash burn against the $31.81 million quarter-end cash balance, prepaid clinical-trial costs, and the company’s continuing financing needs; the filing gives no explicit cash-runway estimate.
- Review potential dilution from the public offering, outstanding warrants and options, and future financing, alongside the $10.66 million warrant liability and its valuation assumptions.
- Verify the status and completeness of UCLA Trimesta MRI analyses and any resulting development or partnering plans.
- Track collaboration and license obligations, including Intrexon’s potential milestones and royalties, and whether the company can meet required development and funding commitments.