SCYNEXIS, Inc. — FY2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020. This filing reports annual results, not standalone fourth-quarter financials. Amounts below are in U.S. dollars; financial statement amounts are generally shown in millions.
Business context
SCYNEXIS is a clinical-stage biotechnology company developing ibrexafungerp, an oral and intravenous antifungal, for community and hospital indications. At year-end, it had no approved products and no product sales. Its lead program was approaching a possible first approval for oral ibrexafungerp (proposed brand name Brexafemme) to treat vulvovaginal candidiasis (VVC).
Key financial metrics
| Metric | FY2020 / Dec. 31, 2020 | FY2019 / Dec. 31, 2019 |
|---|---|---|
| Revenue | $0 | $0.121 million |
| Research and development expense | $36.5 million | $38.4 million |
| Selling, general and administrative expense | $14.6 million | $10.6 million |
| Operating loss | $51.1 million | $48.9 million |
| Net loss | $55.2 million | $53.7 million |
| Net loss per share, basic and diluted | $5.15 | $9.58 |
| Net cash used in operating activities | $49.4 million | $38.1 million |
| Cash and cash equivalents | $93.0 million | $41.9 million |
| Total assets | $102.5 million | $57.2 million |
| Total liabilities | $79.8 million | $44.3 million |
| Stockholders’ equity | $22.8 million | $12.9 million |
Gross margin is not meaningful because the company reported no product sales. FY2020 cash and cash equivalents plus restricted cash totaled $93.3 million; the cash-flow statement reports $49.4 million used in operations, $6.5 million provided by investing activities, and $94.0 million provided by financing activities.
At year-end, the balance sheet included $16.5 million in combined convertible debt and derivative liabilities and $51.2 million in warrant liabilities ($17.6 million current and $33.6 million noncurrent). The company had issued 6.0% senior unsecured convertible notes with maturities in 2025 and 2026. It reported no off-balance-sheet arrangements.
Material changes versus FY2019
- Net loss widened by $1.5 million, while operating loss increased by $2.2 million. Revenue fell from $0.121 million to zero as the R-Pharm upfront payment had been fully amortized in 2019.
- Operating cash use rose by $11.2 million, despite a lower R&D expense, reflecting development spending and less favorable working-capital changes.
- SG&A increased 37.4% to $14.6 million, mainly from commercial launch preparation, professional services, and personnel costs. R&D declined 4.9%, largely because the VANISH Phase 3 program was substantially complete by early Q3 2020; increased manufacturing, regulatory, and CANDLE study costs partly offset the decline.
- Cash and cash equivalents rose to $93.0 million, primarily following the December 2020 public offering and other financing, partly offset by operating cash use. The December offering generated approximately $79.5 million in net proceeds and included common shares, pre-funded warrants, and two warrant series.
- FY2020 included a $3.1 million income tax benefit from selling New Jersey NOLs and research credits, and a $5.2 million noncash loss from the change in fair value of warrant liabilities. The reported loss per share is affected by the substantially higher weighted-average share count and the July 2020 1-for-10 reverse stock split.
Outlook, management commentary and key risks
- VVC application: The FDA accepted the NDA in December 2020 and granted Priority Review, with a June 1, 2021 PDUFA target date. Management anticipated a potential U.S. launch in the second half of 2021 if approved. The FDA had indicated it was not then planning an advisory committee meeting. Approval was not assured.
- Pipeline: The Phase 3 CANDLE recurrent-VVC study had completed enrollment by March 2021; management expected top-line results and a potential supplemental NDA in the first half of 2022, with possible approval in late 2022. Phase 3 FURI and CARES studies for refractory invasive fungal infections were ongoing, as was the Phase 2 SCYNERGIA study combining ibrexafungerp with voriconazole for invasive aspergillosis. These are forward-looking expectations, not FY2020 results.
- Funding outlook: Management said existing cash, anticipated NOL-sale proceeds, the Hansoh upfront payment, and anticipated Brexafemme sales could fund operations into 2023. The runway depends on approval and commercial uptake assumptions, spending, and access to additional capital; the company warned that actual cash use could be faster. It expected continued losses and negative operating cash flow.
- Commercial and licensing arrangements: After year-end, SCYNEXIS signed a U.S. launch-services agreement with Amplity; a portion of its 2021–2022 service costs is deferred for repayment beginning in 2023. In February 2021 it licensed Greater China rights to Hansoh for a $10 million upfront payment, up to $112 million in milestones, and low-double-digit royalties. These are post-year-end developments.
- COVID-19: Management reported clinical-trial delays, particularly for CANDLE, but said contract manufacturers were operating near normal and supply was sufficient for ongoing trials. The full operational and financial impact remained uncertain.
- Clinical and execution risks: The company depends on outside manufacturers, research organizations, and commercial partners; it had no established commercialization track record. The IV program had previously encountered thrombotic events at infusion sites with an earlier formulation and a related clinical hold. A Phase 1 study of a liposomal IV formulation began dosing in South Africa in March 2021.
- Other risks: The company had never been profitable and had an accumulated deficit of $326.6 million. Further financing may dilute shareholders or impose restrictive terms. Market adoption, reimbursement, competition from generic antifungals, regulatory outcomes, manufacturing reliability, patent protection, and potential drug resistance could materially affect prospects.
Important facts for investors to verify
- Check the FDA’s actual decision and approved labeling for the VVC NDA against the June 1, 2021 target date; the filing itself does not report an approval.
- Track cash burn, operating expenses, financing needs, and whether management’s stated runway into 2023 remains supported by actual cash, commercial revenue, and spending.
- Review CANDLE, FURI, CARES, and SCYNERGIA results and timelines, including whether the studies support the proposed indications and regulatory pathways.
- Assess potential dilution from outstanding warrants, pre-funded warrants, convertible notes, equity plans, and the Aspire Capital facility. The company reported 19.7 million common shares outstanding at year-end and 20.6 million as of March 1, 2021.
- Monitor the $51.2 million warrant liability and its noncash fair-value volatility, as well as note conversion, repayment, and covenant terms.
- Confirm commercial launch readiness, manufacturing supply, Amplity performance and deferred costs, and the timing and conditions attached to Hansoh milestones and royalties.
Audit and controls: Deloitte & Touche issued an unqualified opinion on the financial statements. Management reported effective disclosure controls and internal control over financial reporting as of December 31, 2020; the company was not required to obtain an auditor attestation on internal controls.