SCYNEXIS, Inc. — 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. The filing was signed March 28, 2022. SCYNEXIS is a biotechnology company developing ibrexafungerp, an antifungal drug. Its first approved product, BREXAFEMME, launched in the U.S. in 2021 for vulvovaginal candidiasis (VVC).
Financial performance and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Total revenue | $13.2 million | None |
| Product revenue | $1.1 million | None |
| License revenue | $12.1 million | None |
| Research and development expense | $23.8 million | $36.5 million |
| Selling, general and administrative expense | $49.9 million | $14.6 million |
| Operating loss | $(60.8) million | $(51.1) million |
| Net loss | $(32.9) million | $(55.2) million |
| Net loss per share | $(1.25) | $(5.15) |
| Cash used in operating activities | $54.6 million | $49.4 million |
- 2021 revenue included a $10.0 million nonrefundable Hansoh upfront payment, additional license-related revenue, and initial BREXAFEMME sales. Revenue remained modest relative to operating costs.
- Reported product revenue less cost of product revenue ($0.3 million) implies an approximately 72% product gross margin; this is an early-launch figure and does not reflect all pre-approval manufacturing costs, which were expensed as R&D.
- Net loss narrowed by $22.3 million, despite a larger operating loss. A $30.4 million noncash gain from warrant-liability remeasurement was a major contributor to the improvement; the prior year included a $5.2 million warrant-liability loss.
- Cash and cash equivalents were $104.5 million at year-end, up from $93.0 million. Cash, cash equivalents, and restricted cash totaled $104.7 million. Stockholders’ equity was $41.3 million; accumulated deficit was $359.5 million.
- Year-end debt included a $30.0 million principal balance under the Hercules/Silicon Valley Bank term loan (reported carrying value: $28.7 million) and convertible debt and related derivative liabilities reported together at $11.6 million. The loan bears interest at the greater of 9.05% or prime plus 5.80%.
- Financing cash inflows were $67.1 million, including $32.8 million from warrant exercises, $5.7 million gross proceeds through ATM and Aspire share sales, and $30.0 million of term-loan funding.
Material changes and operating developments
- The FDA approved BREXAFEMME in June 2021; the U.S. commercial launch was announced in September. IQVIA data cited approximately 4,600 prescriptions in 2021, including 3,674 in the fourth quarter. More than 1,600 providers prescribed it in the fourth quarter.
- R&D expense fell 34.9%, mainly because of lower manufacturing, clinical-development, and NDA-preparation spending. SG&A rose 241.3%, largely reflecting launch, commercial, medical-affairs, compensation, and information-technology costs.
- The company recorded $12.1 million in revenue from its Hansoh license for Greater China. Hansoh may also owe up to $112 million in development and commercial milestones and low-double-digit royalties; these future amounts are contingent, not guaranteed.
- Net product revenue was concentrated among three wholesalers, representing 47%, 25%, and 23% of gross revenue, respectively.
Outlook, commentary, and risks
- Management estimated that year-end cash, the expected $4.7 million sale of New Jersey tax attributes, a $5.0 million loan tranche tied to positive CANDLE results, and anticipated BREXAFEMME sales would fund operations into the second quarter of 2023. The $5.0 million tranche was funded in March 2022. This runway depends on assumptions and could be shorter; the company expects continued losses and requires additional capital.
- In February 2022, SCYNEXIS reported positive Phase 3 CANDLE results for preventing recurrent VVC and planned an NDA supplement in the second quarter of 2022, with potential approval by year-end. This was a forward-looking target, not an approval.
- Other stated milestones included progressing the Phase 3 MARIO study of oral step-down treatment for invasive candidiasis, continuing FURI and CARES enrollment, and reporting Phase 2 SCYNERGIA results in the second half of 2022. SCYNERGIA enrollment had been slower than planned, partly due to COVID-19 pressures on hospital resources.
- The liposomal IV formulation completed a Phase 1 study in 64 healthy subjects, with no serious adverse events reported; infusion-site reactions were the most common events. Earlier IV development had involved infusion-site tolerability concerns and thrombotic events with a prior formulation.
- Key risks include limited BREXAFEMME adoption and reimbursement, reliance on a single marketed product, clinical and regulatory failure or delay, competition and antifungal resistance, dependence on contract manufacturers and commercial partners, dilution from future financing, and loan covenants. A loan covenant based on trailing three-month ibrexafungerp net product revenue begins June 30, 2022, subject to a specified cash-based waiver.
- COVID-19 had delayed some trial-site start-up and enrollment activity. The company reported adequate supply for current launch and trials at the filing date, but future effects remained uncertain. It also noted possible adverse effects from Russia-related sanctions on its R-Pharm collaboration.
Important facts for investors to verify
- BREXAFEMME’s prescription growth, net sales, gross-to-net deductions, payer coverage, and repeat use. The filing gives differing coverage descriptions: more than 81 million commercially insured lives or approximately 48% in one passage, and more than 54% of commercially covered lives elsewhere.
- Whether the recurrent-VVC NDA supplement was submitted and whether the FDA acted on it; the year-end 2022 approval timing was only an expectation.
- Cash burn, actual financing needs and runway, and compliance with the term-loan revenue covenant and other debt terms.
- Clinical enrollment and results for MARIO, FURI, CARES, and SCYNERGIA, including whether COVID-19 or safety issues alter timelines or study plans.
- Hansoh and other collaboration progress, contingent milestone and royalty prospects, manufacturing capacity, and the impact of Russia-related sanctions on R-Pharm-related expectations.