Business context and reporting period
Filing identity: The filing is Synaptogenix, Inc.’s Form 10-K for the fiscal year ended December 31, 2021, not a filing for TAO Synergies Inc. or a standalone 2021 fourth quarter. The filing was signed March 29, 2022.
Synaptogenix is a clinical-stage biopharmaceutical company focused on Bryostatin-1 for Alzheimer’s disease (AD), with earlier-stage work involving Fragile X syndrome, multiple sclerosis and Niemann-Pick Type C disease. The company reported no product revenue and depends on external funding.
Financial results and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $4.34 million | $3.07 million |
| General and administrative expense | $8.28 million | $8.09 million |
| Total operating expenses | $12.62 million | $11.16 million |
| Net loss | $12.61 million | $12.70 million |
| Basic and diluted loss per share | $2.51 | $12.03 |
| Cash used in operating activities | $8.71 million | $8.10 million |
| Cash and cash equivalents at year-end | $34.21 million | $5.80 million |
Operating expenses rose 13.1%, primarily as R&D spending increased 41.3% with the ongoing AD trial. The reported net loss was slightly lower than in 2020; that comparison includes a $1.7 million warrant amendment expense in 2020, while 2021 had no such expense. There is no meaningful revenue margin to assess. The balance sheet reports $1.99 million of current liabilities and no borrowings; debt is not separately reported as outstanding.
Working capital was $33.51 million at December 31, 2021, versus $5.12 million a year earlier. Financing cash flow included approximately $23.8 million in net proceeds from two 2021 private placements and $13.35 million from warrant exercises. Management said approximately $32.3 million of cash and cash equivalents available around the filing date was expected to fund operations for at least 12 months from filing, including the current Phase 2 program. The company also cautioned it would need additional capital to pursue further clinical development and regulatory approval. No formal financial guidance was provided.
Clinical, operational and other material developments
- The prior confirmatory Phase 2 AD trial did not meet its primary endpoint: at week 13, mean Severe Impairment Battery scores increased 1.3 points on Bryostatin-1 versus 2.1 points on placebo, with no statistically significant between-group difference. A post-hoc analysis in a moderate-severity subgroup found improvement from baseline in both arms; the treatment-versus-placebo difference was not statistically significant (p=0.2727). These analyses do not establish efficacy.
- A further Phase 2 study was underway. The company reported 110 patients enrolled and 20 clinical sites contracted as of March 15, 2022. Management planned to discuss the totality of the clinical data with the FDA after trial completion.
- The NIH awarded up to $2.7 million to support the study; virtually all of the grant had been received by February 2022. Trial services and related recruitment agreements increased the estimated gross budget to approximately $12 million.
- The company planned a Phase 1 Fragile X trial in the first half of 2022, estimating trial and IND costs at approximately $700,000. A February 2022 Cleveland Clinic collaboration would explore Bryostatin-1 for multiple sclerosis; future work was not yet specified.
- 2021 share-based compensation was $3.28 million. The company raised capital through equity and warrants, increasing common shares outstanding from 1.26 million at year-end 2020 to 6.73 million at year-end 2021; warrant and equity issuance create dilution risk.
- The company identified material weaknesses in internal controls over financial reporting, including segregation of duties, period-end reporting and IT controls. Management said remediation was underway, but disclosure controls were deemed ineffective at year-end. The auditor gave an unqualified opinion on the financial statements and did not audit internal-control effectiveness.
Risks, contingencies and unusual items
Key risks include clinical failure or delay, the need for additional financing, dependence on CROs and limited bryostatin supply, regulatory and manufacturing requirements, and reliance on licensed technology. The CRE license is important to the business and may be terminable in specified circumstances. COVID-19 could disrupt recruitment, trial sites, suppliers or operations, although the company reported no significant impact or delays at the time. The company reported no pending legal proceedings and no indemnification claims as of the reporting date; certain spin-off-related indemnities are uncapped. Cash concentration is also notable: approximately $27.7 million was held in a money market fund not insured by the FDIC at December 31, 2021.
The 2020 comparison is affected by the December 2020 spin-off from Neurotrope, including parent-company allocations, a $1.7 million warrant amendment expense and a $2.43 million deemed dividend affecting loss attributable to common shareholders. The filing describes the financial statements as audited under U.S. GAAP.
Most important facts for investors to verify
- Confirm the issuer and period: this is Synaptogenix’s FY2021 10-K, despite the request metadata naming TAO Synergies Inc. and 2021 Q4.
- Review complete trial results, protocol and statistical analysis for the ongoing Phase 2 study, including the FDA’s response and whether further trials are required.
- Reconcile the trial cost disclosures: the filing gives differing cumulative expense figures in different sections, while estimating a gross study budget of about $12 million and NIH support of $2.7 million.
- Check cash runway against actual operating burn, trial commitments and potential financing needs; management’s runway estimate is not a guarantee.
- Assess dilution from outstanding warrants, future equity financing and equity compensation, and monitor remediation of the disclosed internal-control weaknesses.
- Verify bryostatin supply plans, key license terms and any subsequent developments affecting the CRE relationship or the company’s other collaborations.