Theriva Biologics, Inc. (then Synthetic Biologics, Inc.) — Q2 2021 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2021. The filing identifies the company as a diversified clinical-stage therapeutics developer focused on gastrointestinal diseases; it reports no meaningful product revenue and expects no product revenue in the near term.
Financial performance and position
| Metric | Q2 2021 / June 30, 2021 | Comparable period / prior year-end |
|---|---|---|
| Revenue | No revenue reported | No revenue reported |
| Operating expenses | $3.197 million | $2.889 million in Q2 2020 |
| Net loss | $3.195 million for Q2; $5.732 million for six months | $2.883 million and $5.873 million, respectively, in 2020 |
| Net loss attributable to common stockholders | $3.195 million for Q2; $14.654 million for six months, including preferred-stock-related deemed dividends and adjustments | $3.322 million and $6.752 million, respectively, in 2020 |
| Basic and diluted loss per share | $0.02 for Q2; $0.13 for six months | $0.18 and $0.38, respectively, in 2020 |
| Cash and cash equivalents | $74.291 million | $6.227 million at December 31, 2020 |
| Operating cash flow | $(5.924) million for six months | $(6.986) million for six months in 2020 |
| Total assets / liabilities | $77.255 million / $3.524 million | $8.410 million / $3.152 million at December 31, 2020 |
| Debt and lease obligations | No conventional borrowings reported; operating lease liabilities totaled $1.622 million, including $1.426 million long-term |
Gross and operating margins are not meaningful because the company reported no revenue. Current assets were $75.632 million and current liabilities were $2.098 million, implying working capital of approximately $73.534 million at quarter-end.
Material changes and financing
- Six-month operating expenses fell 3% to $5.734 million from $5.917 million. R&D declined 6% to $3.049 million as lower indirect and manufacturing costs outweighed new clinical-trial spending; Q2 R&D rose 21% year over year to $1.932 million as trials began dosing.
- Cash increased by $68.064 million, principally from $65.960 million of net ATM proceeds and $8.042 million from warrant exercises. The company sold approximately 78.7 million common shares through its ATM program and 11.66 million warrants were exercised during the six months.
- Common shares outstanding increased from approximately 29.25 million at December 31, 2020 to approximately 132.04 million at June 30, 2021. The Series A and Series B preferred shares were converted to common stock during the first half.
- The six-month common-stockholder loss substantially exceeded net loss because of a $7.402 million deemed dividend associated with inducement of Series A conversion and approximately $1.497 million of Series B preferred discount accretion.
Outlook, development, and risks
- Management estimated that June 30 cash would fund operations through at least the end of Q1 2023, including the described SYN-004 and SYN-020 programs. Larger future trials may require additional capital; no committed financing for those trials was in place. Further equity financing could materially dilute shareholders.
- SYN-004: the Phase 1b/2a trial in allogeneic hematopoietic cell transplant recipients began enrollment and dosing in Q2 2021. A first-cohort data readout was anticipated in Q4 2021, subject to enrollment and pandemic conditions. Management said a broad Phase 3 program would not be feasible without a partner at that time.
- SYN-020: the Phase 1 single-ascending-dose study was completed; preliminary results indicated favorable tolerability, with no drug-attributed adverse events or serious adverse events reported. Additional data were expected in Q3 2021; a multiple-ascending-dose study was planned, with screening anticipated in Q3 2021 and topline data anticipated in Q2 2022, subject to pandemic conditions.
- Management was evaluating strategic options, including in-licensing, acquisitions, and other transactions, while pursuing SYN-004 and SYN-020 development. It anticipated R&D spending to increase as trials enrolled.
- COVID-19 had delayed clinical activity and could again disrupt enrollment, timelines, partners, suppliers, or operations. Other stated risks include clinical and regulatory uncertainty, dependence on future financing and potential partners, dilution, stock-price volatility, and continued NYSE American listing compliance. The company reported regaining listing compliance in May 2021.
- The company renewed its facility lease, extending the term through December 2027; the filing reports no material finance leases. It reported no material pending legal proceedings, no off-balance-sheet arrangements, and effective disclosure controls as of June 30, 2021.
Key facts for investors to verify
- Whether the clinical timelines and preliminary SYN-020 safety findings were subsequently confirmed, and the progress and results of the SYN-004 study.
- Whether cash burn, trial costs, and management’s Q1 2023 runway estimate remain supportable, especially if studies expand or are delayed.
- The effect of the large first-half share issuance, remaining warrants and options, and any future financing on dilution and authorized-share capacity.
- The reconciliation of net loss to the much larger six-month loss attributable to common stockholders, including the Series A inducement deemed dividend and Series B discount accretion.
- Potential impacts of COVID-19 and other clinical, regulatory, partnership, and listing risks on development plans and financing needs.