Theriva Biologics, Inc. (then Synthetic Biologics, Inc.) — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021. The filing describes a clinical-stage biotechnology company developing GI and microbiome-focused therapeutics. Financial figures below are in U.S. dollars; statement amounts are in thousands unless stated otherwise.
Financial performance and liquidity
| Metric | Q1 2021 | Q1 2020 / prior date |
|---|---|---|
| Revenue | None reported | None reported |
| General and administrative expense | $1.419 million | $1.393 million |
| Research and development expense | $1.118 million | $1.635 million |
| Operating loss | $2.537 million | $3.028 million |
| Net loss | $2.537 million | $2.990 million |
| Net loss attributable to common stockholders | $11.459 million | $3.430 million |
| Basic and diluted loss per share | $0.13 | $0.20 |
| Net cash used in operating activities | $3.328 million | $4.960 million |
- There were no revenues, so revenue margins are not meaningful. R&D expense fell 32%, primarily reflecting lower indirect program costs, reduced manufacturing and market research costs, and delayed clinical activity.
- Common-stockholder loss included a $7.402 million deemed dividend related to inducement of Series A preferred conversion and $1.497 million of Series B preferred discount accretion. These items drove common-stockholder loss above the company’s operating net loss.
- Cash and cash equivalents were $76.887 million at March 31, up from $6.227 million at year-end. Operating cash use was offset by $65.960 million of net ATM proceeds and $8.042 million from warrant exercises.
- Current assets were $78.636 million versus current liabilities of $2.122 million. Total liabilities were $2.230 million, principally lease obligations; the filing reports no outstanding debt. Lease liabilities totaled $405,000, including $297,000 current and $108,000 long-term.
- Stockholders’ equity was $76.824 million, compared with a $7.540 million deficit at December 31, 2020; accumulated deficit reached $259.553 million.
Material changes and business developments
- The company sold approximately 78.7 million common shares through its ATM program for approximately $66.0 million net and received approximately $8.0 million from exercising 11.7 million warrants. Shares outstanding increased from 29.25 million at December 31, 2020 to 132.04 million at March 31, 2021.
- All outstanding Series A preferred shares converted into approximately 9.0 million common shares after the company lowered the conversion price to $1.50 and removed the change-of-control put. All remaining Series B preferred stock was also converted.
- R&D spending shifted among programs: direct costs for SYN-020 were $172,000 and for SYN-004 were $148,000; SYN-010’s Phase 2b study had been discontinued in 2020 after an interim futility analysis, and its license was terminated.
Outlook, commentary, and risks
- Management estimated that March 31 cash would fund operations through at least the end of Q1 2023, including the planned and ongoing early-stage SYN-004 and SYN-020 programs. The filing cautions that later-stage trials, especially a broad-indication Phase 3 program for SYN-004, would require additional financing or a partner. No committed financing for future trials was identified.
- Management expected R&D expense to increase as clinical trials enrolled. No formal revenue or earnings guidance was provided.
- As of the filing, Washington University had begun enrolling and dosed the first patient in the SYN-004 Phase 1b/2a study; the first-cohort readout was anticipated in Q4 2021. SYN-020’s Phase 1a single-ascending-dose study was underway, with topline data anticipated in Q3 2021; a multiple-ascending-dose study was planned for Q3 2021. These are forward-looking timelines, not reported results.
- COVID-19 had delayed trial activity and could further affect enrollment, timelines, costs, and partner operations. Management said it could not estimate the pandemic’s full financial or operational impact.
- The company reported a history of significant losses, minimal revenue, and expected continuing losses. Additional equity financing could materially dilute shareholders; access to financing on acceptable terms is uncertain. The filing also describes stock-price volatility and limited authorized-share capacity as risks.
- No legal proceedings were reported that management considered likely to have a material adverse effect. Disclosure controls were assessed as effective, with no material change in internal control over financial reporting reported for the quarter.
Key facts investors should verify
- Whether reported cash and the Q1 2023 runway estimate remain adequate as clinical enrollment and development spending progress.
- Actual trial enrollment, safety and efficacy data, and timing for SYN-004 and SYN-020 versus the stated expectations.
- Future capital needs and the extent of dilution, including remaining ATM capacity, warrant exercises, and authorized-share availability.
- The composition of common-stockholder loss, particularly the noncash preferred-stock deemed dividend and accretion items.
- Whether COVID-19, clinical-partner capacity, or other development risks materially change program timelines or costs.