Theriva Biologics, Inc. annual report, FY2020

Business context and reporting period

The supplied filing is Synthetic Biologics, Inc.’s Form 10-K for the fiscal year ended December 31, 2020, filed March 4, 2021. It is not a Theriva Biologics, Inc. filing; investors should confirm the intended issuer. The company was a clinical-stage biotechnology developer focused on gastrointestinal and microbiome-related therapies. This is an annual report, not a standalone fourth-quarter report.

Its lead programs were SYN-004 (ribaxamase), being developed for protection from antibiotic-related microbiome injury and related complications, and SYN-020, an oral intestinal alkaline phosphatase. The company had no products approved for sale and no significant revenue source.

Financial results and position

MetricFY 2020FY 2019
RevenueNo significant revenue reportedNo significant revenue reported
Research and development expense$5.1 million$11.1 million
General and administrative expense$5.0 million$4.6 million
Net loss$10.1 million$15.4 million
Net loss per common share$0.66$0.98
Cash used in operating activities$12.2 million$13.9 million

At December 31, 2020, cash and cash equivalents were $6.2 million, versus $15.0 million a year earlier. Total assets were $8.4 million; total liabilities were $3.2 million, including $0.5 million of operating lease liabilities. The company reported a $7.5 million stockholders’ deficit and an accumulated deficit of $248.1 million. No conventional borrowing balance is disclosed in the supplied financial statements; lease liabilities are reported. Gross margin is not meaningful because the company had no significant product revenue.

Changes versus the prior comparable period

  • R&D expense fell 54% year over year, primarily due to reduced preclinical and manufacturing activity, COVID-related delays, and discontinuation of SYN-010 development.
  • G&A expense increased 8.7%, with higher legal, insurance, registration, and other costs.
  • Net loss narrowed to $10.1 million from $15.4 million, while operating cash use decreased to $12.2 million from $13.9 million.
  • Cash declined by $8.8 million during 2020. The company raised approximately $3.4 million net through at-the-market share sales during the year.

Outlook, risks, and unusual items

  • Funding and dilution: The company said year-end cash alone was insufficient to fund its plans indefinitely and that later-stage trials would require additional financing or a partner. After year-end through March 3, 2021, it reported approximately $63.8 million of net proceeds from at-the-market stock sales and $8.0 million from warrant exercises; it estimated cash of $72.6 million and runway through at least the end of Q1 2023. These financings materially increased the share count; 129.7 million common shares were outstanding on March 3, 2021.
  • SYN-004: FDA clearance and Washington University IRB approval allowed a Phase 1b/2a trial in up to 36 allogeneic transplant recipients to proceed. Patient screening began in Q1 2021. The broader Phase 3 program for CDI prevention was estimated to cost more than $80 million and was contingent on financing or partnership.
  • SYN-020: The FDA allowed a Phase 1 single-ascending-dose study to proceed. Management anticipated starting the study in Q2 2021 and a topline readout in Q3 2021, subject to pandemic conditions; a multiple-dose study was also planned.
  • SYN-010: A planned interim futility analysis found the program unlikely to meet its primary endpoint. The Phase 2b study was discontinued and the CSMC license agreement was terminated in November 2020.
  • COVID-19: The pandemic delayed clinical activities and could further disrupt enrollment, sites, suppliers, manufacturing, and timelines. Management said the full effect remained uncertain.
  • Listing and capital risks: The company had a $7.5 million stockholders’ deficit and remained under an NYSE American compliance extension through May 25, 2021. Failure to regain compliance could lead to delisting.
  • Unusual equity items: An at-the-market issuance triggered a reduction in the October 2018 warrants’ exercise price from $1.38 to $0.69 and an $880,000 deemed dividend. Series B preferred-stock conversions also generated $1.4 million of deemed dividends in 2020. All Series A preferred shares were converted into approximately 9.0 million common shares in January–February 2021.
  • Audit and controls: The independent auditor issued an unqualified opinion on the financial statements and identified liquidity evaluation as a critical audit matter. Management reported effective disclosure controls and internal control over financial reporting; the auditor did not audit internal controls.

Important facts for investors to verify

  • Confirm the requested issuer: the filing is for Synthetic Biologics, Inc., not Theriva Biologics, Inc.
  • Verify subsequent financing proceeds, cash available, post-financing share count, and potential additional dilution from warrants and preferred-stock conversions.
  • Check current NYSE American listing compliance and the outcome of the compliance extension.
  • Confirm actual SYN-004 and SYN-020 trial start dates, enrollment, results, costs, and any partnership or financing arrangements.
  • Review the full audited statements and notes for preferred-stock terms, warrant dilution, lease obligations, and the tax-footnote revision related to net operating loss limitations.