Syndax Pharmaceuticals, Inc. — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 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 results and liquidity
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $0 | $12.4 million | $0 | $13.1 million |
| Research and development expense | $26.9 million | $25.6 million | $86.7 million | $64.3 million |
| General and administrative expense | $8.2 million | $6.8 million | $23.1 million | $18.3 million |
| Net loss | $35.4 million | $20.6 million | $110.1 million | $71.3 million |
| Basic and diluted loss per share | $0.58 | $0.40 | $1.84 | $1.38 |
| Operating cash used | Not provided for quarter | Not provided for quarter | $110.8 million | $71.6 million |
- At September 30, 2022, cash and cash equivalents were $71.4 million and short-term investments were $266.5 million, totaling $337.8 million. Short-term deposits were an additional $12.9 million.
- Current assets were $357.6 million and current liabilities $20.8 million. Total liabilities were $21.6 million, with no term loan outstanding after repayment. The filing reports no material contingent liabilities recorded.
- Cash, cash equivalents and restricted cash declined by $150.6 million over the first nine months. Investing cash outflow was $48.6 million, primarily reflecting purchases of short-term investments net of maturities.
- No product-sales revenue was generated. The comparable 2021 license revenue came from the Kyowa Kirin entinostat agreement, which was terminated in 2021; the Incyte collaboration generated no revenue in the first nine months of 2022.
- Profit margins are not meaningful given the absence of product revenue and continued operating losses.
Material changes and notable items
- Year-to-date operating expenses rose 33% to $109.7 million. R&D increased 35%, mainly from higher revumenib and axatilimab clinical and manufacturing activity, milestones and employee costs; Incyte cost reimbursements partly offset these costs. G&A increased 26%.
- Year-to-date net loss increased by $38.9 million versus 2021, reflecting higher operating costs and no comparable license revenue. Higher interest income partly offset expenses.
- On September 23, 2022, Syndax repaid and terminated its Hercules loan, paying $21.5 million, including a $1.0 million end-of-term fee and $0.4 million prepayment fee. The lender released its security interests.
- The company issued 1.1 million shares through its ATM program in April 2022 for $19.4 million net proceeds; it reported no ATM sales in Q3 and $49.7 million of remaining ATM capacity as of November 2, 2022. Common shares outstanding were 60.1 million at September 30.
Outlook, management commentary and risks
- Management said the September 30 cash, cash equivalents and short-term investments were expected to fund projected operating expenses and capital requirements for at least 12 months. Syndax expects substantial losses and rising R&D and G&A costs, and anticipates needing additional capital over time; future financing could dilute shareholders or constrain operations.
- Revumenib: the pivotal Phase 2 AUGMENT-101 trial continued across three acute-leukemia populations. The company expected enrollment completion in the first trial to extend into Q1 2023, topline data from at least one trial starting in Q3 2023, and its first NDA filing by year-end 2023. These were forward-looking expectations, not guaranteed outcomes.
- Axatilimab: AGAVE-201 enrollment was announced complete on November 3, 2022, after quarter-end; topline data were expected in mid-2023 and a BLA filing later in 2023. A Phase 2b idiopathic pulmonary fibrosis trial was planned for Q4 2022.
- Also after quarter-end, Syndax reported updated AUGMENT-101 Phase 1 results on November 3, 2022: a 30% (18/60) CR/CRh rate and median response duration of 9.1 months. These preliminary results may change as data mature and undergo verification. The filing described QT prolongation as the only dose-limiting toxicity observed.
- Key risks include clinical-trial failure, delay or enrollment challenges; uncertain regulatory approval and commercial uptake; reliance on third-party manufacturers and Incyte for axatilimab; COVID-19, supply-chain and inflation impacts; intellectual-property and licensing risks; and the need for future financing. Management reported effective disclosure controls and no material legal proceedings or recorded contingent liabilities.
Most important facts for investors to verify
- Whether AUGMENT-101 data mature consistently with the reported response results and whether enrollment, topline data and the planned NDA timeline remain on track.
- Whether AGAVE-201 meets its response and other endpoints, and whether the expected BLA timing is achievable.
- Cash burn and remaining liquidity after debt repayment, including the assumptions supporting management’s at-least-12-month runway estimate and any need for further financing.
- Incyte’s continued development and commercialization commitment, cost-sharing and potential milestones or royalties, which are contingent and not assured.
- Potential share dilution from outstanding options and pre-funded warrants, future ATM use or other fundraising.