Syndax Pharmaceuticals, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Syndax is a clinical-stage biopharmaceutical company with no approved products and no product sales. Amounts below are in U.S. dollars; financial figures are in millions unless noted.
Financial results and liquidity
| Metric | Q1 2023 | Q1 2022 / comparison |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $34.1 | $30.0; up 13% |
| General and administrative expense | $12.0 | $6.8; up 75% |
| Total operating expenses | $46.0 | $36.9; up 25% |
| Net loss | $41.1 | $37.2; loss widened about 11% |
| Net loss per share | $0.59 | $0.63; loss per share narrowed |
| Net cash used in operating activities | $39.2 | $41.9 |
| Interest income | $5.1 | $0.2 |
- Cash, cash equivalents and short- and long-term investments totaled $449.0 at March 31, 2023, down from $481.3 at December 31, 2022. Cash and cash equivalents alone were $57.5; investments were $391.4.
- Total assets were $459.8; total liabilities were $24.3, primarily current operating obligations and lease liabilities. The filing reports no material borrowings; the prior term loan was terminated in September 2022.
- Management said available cash and investments should fund projected operating expenses and capital requirements for at least the next 12 months. The company expects continuing losses and will need additional capital to support longer-term plans.
- Quarter-end operating cash use was $39.2. Investing activities provided $19.9, principally reflecting net maturities of investments; financing activities provided $2.5, mainly from stock-option exercises. Cash, cash equivalents and restricted cash decreased $16.8.
Material changes versus the prior-year quarter
- R&D expense rose $4.0. Higher employee-related costs were partly offset by lower clinical and manufacturing expenses; the filing cites increased revumenib and axatilimab clinical activity and manufacturing changes, as well as lower license fees.
- G&A expense increased $5.1, primarily from employee-related expenses and professional fees.
- Interest income increased $4.9, mainly due to higher interest rates and a larger average investment balance. Lower interest expense reflected termination of the term loan in 2022.
- Net loss increased, while loss per share narrowed from $0.63 to $0.59, alongside a higher weighted-average share count.
Outlook, clinical programs and risks
- Revumenib: Management expected pooled topline data from the pivotal AUGMENT-101 KMT2A-rearranged acute leukemia analysis in Q3 2023 and an NDA filing by year-end 2023. It expected to complete enrollment in the NPM1-mutant AML cohort in the second half of 2023. Initial safety data from two combination trials were expected by year-end; preliminary data from a metastatic colorectal cancer study were also expected by year-end.
- Axatilimab: Syndax and Incyte remained on track for pivotal AGAVE-201 topline data in mid-2023 and a BLA filing by year-end. They expected to start a cGVHD combination trial in the second half of 2023; Syndax also expected to initiate a Phase 2 idiopathic pulmonary fibrosis trial in that period.
- These are management expectations, not guaranteed outcomes. Clinical efficacy and safety, trial enrollment and timing, regulatory review, manufacturing and supply, competition, and Incyte’s continued performance are material uncertainties.
- The company reported no material contingent liabilities and no material legal proceedings as of March 31, 2023. It noted macroeconomic, inflation, interest-rate, geopolitical and supply-chain risks that could affect costs, operations and access to financing.
- The company had $49.7 available under its at-the-market equity program as of May 3, 2023. Future equity or debt financing could dilute shareholders or impose restrictive terms.
- Stock-based compensation was $6.2 in the quarter. The company granted 1.94 million stock options; unrecognized compensation cost was $77.8, expected to be recognized over a weighted-average 3.1 years.
Key facts for investors to verify
- Whether the revumenib data, enrollment milestones and NDA timetable were achieved, and how final clinical results compare with interim findings.
- Whether axatilimab’s AGAVE-201 results support the anticipated BLA filing and whether the expected trials began on schedule.
- Current cash and investment balances, quarterly operating cash use, and the assumptions underlying management’s at-least-12-month runway estimate.
- Any changes to development spending, collaboration cost-sharing or milestone expectations under the Incyte and other license agreements.
- Potential dilution from the ATM program, outstanding options and pre-funded warrants, and future financing needs.