Syndax Pharmaceuticals, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021. Syndax is a clinical-stage biopharmaceutical company with no approved products and no product-sale revenue. Its lead programs are SNDX-5613 and axatilimab; entinostat development was deprioritized.
Financial results and liquidity
| Metric | Q1 2021 | Q1 2020 / comparison |
|---|---|---|
| Revenue | $0.4 million | $0.4 million; unchanged, entirely license fees |
| Research and development | $21.9 million | $9.6 million; up 129% |
| General and administrative | $5.7 million | $5.9 million; down 4% |
| Net loss | $27.7 million | $15.2 million |
| Net loss per share, basic and diluted | $0.54 | $0.56 |
| Operating cash used | $22.6 million | $15.9 million |
| Cash, cash equivalents and short-term investments | $271.3 million at March 31, 2021 | $293.1 million at December 31, 2020 |
R&D growth primarily reflected increased clinical and manufacturing activity for axatilimab and SNDX-5613, including a $2.0 million axatilimab milestone expense. Operating cash use rose with the larger net loss. Investing cash use was $29.2 million, mainly purchases of short-term investments; financing provided $1.0 million, principally from option exercises and the employee stock purchase plan. Cash, cash equivalents and restricted cash decreased by $50.9 million during the quarter.
At March 31, current assets were $278.9 million and current liabilities were $24.6 million. Term-loan principal outstanding was $20.0 million, with a reported carrying amount of $20.2 million including fees and issuance costs. The loan bears interest at 9.85% as of quarter-end; interest-only payments run through October 1, 2021, followed by principal and interest payments through September 2023. No additional $10 million tranche was drawn.
Material changes and operating developments
- R&D expense increased $12.3 million year over year, with external R&D spending up 186%; G&A declined modestly.
- Management reported Phase 1/2 AUGMENT-101 data for SNDX-5613, including 7 of 31 patients achieving CR/CRh and an overall response rate of 48% among evaluable patients. The filing cautions that interim data may change as follow-up and verification continue.
- Enrollment was complete in axatilimab’s Phase 2 expansion cohort. Updated results for 40 patients were anticipated later in 2021; topline results from pivotal Phase 2 AGAVE-201 were expected in 2023.
- The company entered a new $75 million at-the-market equity sales agreement in March 2021; no shares were sold under it in Q1.
Outlook, risks and contingencies
Management said existing cash, cash equivalents and short-term investments were expected to fund current operating plans for at least the next 12 months. The company expected continued significant losses and increased R&D and G&A spending, and stated that additional capital may be needed sooner if plans or circumstances change. No specific revenue or earnings guidance was provided.
COVID-19 had not caused a material financial impact as of the filing, but management anticipated a slight ongoing effect on patient enrollment and warned of possible delays to trials, manufacturing, supply, regulatory interactions and access to capital. The company relies on third parties for clinical supply and trial execution. Major development risks include clinical efficacy and safety uncertainty, enrollment and regulatory delays, competition, intellectual-property protection, and potential dilution or restrictions from future financing.
Other notable items: the Phase 3 E2112 entinostat trial did not meet its primary overall-survival endpoint, prompting the company to deprioritize entinostat. Remaining ECOG-ACRIN agreement payments were approximately $3.2 million, estimated over about one year; $2.3 million was accrued at quarter-end. No material legal proceedings were reported. Management concluded disclosure controls were effective and reported no material quarterly change in internal control over financial reporting.
Investor facts to verify
- Whether subsequent SNDX-5613 and axatilimab clinical updates support the reported interim response signals, and whether trial timelines were achieved.
- Cash-burn trajectory and whether the stated minimum 12-month funding horizon remains valid as trial and manufacturing costs evolve.
- Loan repayment terms, interest exposure, and compliance with lender covenants.
- Potential dilution from the $75 million ATM program and outstanding pre-funded warrants (3,307,952 at March 31, 2021).
- Future milestone, royalty and other obligations under product licenses, including the accrued $2.0 million axatilimab milestone and remaining ECOG-ACRIN commitments.