Theriva Biologics, Inc. — 2013 Q1 filing summary
Entity and period: The supplied filing is Synthetic Biologics, Inc.’s unaudited Form 10-Q for the quarter ended March 31, 2013, signed May 15, 2013. This does not match the request metadata naming Theriva Biologics. The filing describes a development-stage biotechnology business; its financial statements are in thousands of dollars except per-share amounts.
Financial results and position
| Metric | Q1 2013 | Q1 2012 / comparison |
|---|---|---|
| Revenue | No revenue line reported | Laboratory fees of $115,000 were reported within discontinued operations in Q1 2012 |
| General and administrative expense | $1.122 million | $1.468 million, down about 24% |
| Research and development expense | $1.118 million | $386,000, up about 190% |
| Operating loss | $2.240 million | $1.854 million |
| Net loss | $2.228 million; $0.05 per share | $1.200 million; $0.04 per share, including $649,000 income from discontinued operations |
| Operating cash flow | Use of $1.662 million | Use of $1.415 million |
At March 31, 2013, cash was $8.520 million, total current assets $11.454 million, total assets $11.684 million, and stockholders’ equity $11.488 million. Current liabilities were $196,000, consisting of accounts payable; the filing reports no debt balance. A $700,000 note receivable was classified as current, with principal and unpaid interest due March 1, 2014. Cash declined $1.434 million during the quarter, to $8.520 million. There was no meaningful revenue-based margin disclosed.
Material changes and business developments
- R&D spending rose substantially, primarily from added employee and infectious-disease program costs. G&A fell, mainly due to lower consulting, legal, and non-cash stock-compensation costs.
- The Q1 2012 comparison includes a $677,000 gain on sale of the Adeona Clinical Laboratory and $649,000 of discontinued-operations income; the laboratory had been sold in March 2012.
- The company’s programs included Trimesta (oral estriol) Phase II trials for relapsing-remitting MS and cognitive dysfunction; SYN-004 for C. difficile prevention was preclinical, while related first-generation P1A had Phase I/II data; SYN-005 for pertussis was preclinical; and the Acinetobacter antibody program was in discovery. Fibromyalgia candidate Effirma was partnered with Meda AB.
- The company discontinued further development of AEN-100 for ALS and said it was seeking partners for the related zinc-based assets.
- Q1 financing cash inflow was $231,000 from stock-option exercises. The company issued 291,666 shares through those exercises. Shares outstanding were 44,654,414 as of May 14, 2013.
Outlook, risks, and unusual items
Management said existing cash was expected to fund planned operating needs for at least the next 12 months, based on current plans and assumptions. The company had no committed financing sources and expected to rely on cash on hand, equity or debt financing, licensing, partnerships, and grants. Management cautioned that actual funding needs could be greater or arise sooner; failure to raise capital could force delays, reductions, or discontinuation of development and could dilute shareholders.
- Trimesta’s relapsing-remitting MS Phase II trial was fully enrolled; top-line results were expected in the first half of 2014. Management said more than $8 million in grant funding was expected to support that trial through completion. Enrollment in the cognitive-dysfunction trial was ongoing; the company had pledged approximately $500,000 over three years.
- Meda reported FDA permission to conduct a Phase II proof-of-concept study of flupirtine for fibromyalgia. Any milestones or royalties to Synthetic Biologics depend on Meda’s development and commercialization success.
- The Prev asset-purchase agreement includes development milestones and potential asset-return provisions if specified studies or an IND are not initiated within the contractual periods, subject to stated extension terms.
- Key risks include clinical and regulatory failure or delay, dependence on collaborators and grant funding, manufacturing and supply constraints, intellectual-property challenges, competition, and the need for additional capital. The company also noted thin trading and potential NYSE MKT listing risk.
- Management reported disclosure controls were effective as of March 31, 2013 and no material change in internal control over financial reporting during the quarter. No legal proceedings were reported.
Important facts for investors to verify
- Confirm the issuer: the filing is for Synthetic Biologics, Inc., not Theriva Biologics, and the reporting period is Q1 2013.
- Check the company’s subsequent cash use, financing, and runway against management’s 12-month estimate; it had no committed financing.
- Verify progress and timing of the Trimesta trials and the expected first-half 2014 MS results, including continued grant support.
- Review the status, costs, and contractual milestones for SYN-004, the Intrexon programs, and the Prev assets.
- Assess the timing and collectability of the $700,000 note receivable due in March 2014, and review potential dilution from outstanding options and warrants.