Theriva Biologics, Inc. — requested filing summary
Entity and period clarification: The supplied filing is Synthetic Biologics, Inc.’s unaudited Form 10-Q for the quarter and six months ended June 30, 2020—not a filing by Theriva Biologics, Inc. The summary below reflects the filing’s stated issuer, Synthetic Biologics, Inc. Amounts are in U.S. dollars; financial statement figures are in thousands unless otherwise noted.
Business context and reporting period
Synthetic Biologics was a clinical-stage biotechnology company developing microbiome-focused therapies. Its principal programs were SYN-004 for protection against antibiotic-related gut effects, SYN-010 for IBS-C, and early-stage SYN-020, an oral intestinal alkaline phosphatase formulation. The report was filed August 6, 2020.
Financial results and liquidity
| Metric | Three months ended June 30, 2020 | Six months ended June 30, 2020 |
|---|---|---|
| Revenue | No revenue reported | No revenue reported |
| General and administrative expense | $1.286 million | $2.679 million |
| Research and development expense | $1.603 million | $3.238 million |
| Operating loss | $2.889 million | $5.917 million |
| Net loss | $2.883 million | $5.873 million |
| Net loss attributable to common stockholders | $3.322 million | $6.752 million |
| Net loss per common share | $0.18 | $0.38 |
- Cash and cash equivalents were $8.059 million at June 30, 2020, down from $15.045 million at December 31, 2019. Operating cash use was $6.986 million in the first half; there were no investing or financing cash flows reported for that period.
- Total assets were $9.582 million and total liabilities were $3.763 million at June 30. The filing reports no borrowings; lease liabilities were $602,000, including $268,000 current and $334,000 long-term.
- Stockholders’ deficit was $6.850 million, compared with a deficit of $1.057 million at year-end 2019. Accumulated deficit was $242.289 million.
- Margins are not meaningful given the absence of reported revenue. The filing does not provide a clear revenue base for calculating margins.
Changes versus the prior comparable period
- For the second quarter, operating expenses declined to $2.889 million from $3.638 million in 2019, and net loss narrowed to $2.883 million from $3.558 million. Common-stockholder loss was $3.322 million versus $3.709 million; loss per share was $0.18 versus $0.23.
- For the first half, operating expenses declined to $5.917 million from $7.211 million in 2019, and net loss narrowed to $5.873 million from $7.086 million. Common-stockholder loss was $6.752 million versus $7.680 million; loss per share was $0.38 versus $0.48.
- Management attributed lower R&D expense mainly to clinical delays and enrollment pauses related to COVID-19. G&A expense rose 23% in the quarter and 22% for the half-year, primarily due to legal, insurance, employee-related and registration costs.
- Cash fell by $6.986 million during the first half, compared with a $7.206 million decline in the first half of 2019. Common shares outstanding increased from 16.806 million at December 31, 2019 to 18.644 million at June 30, 2020, primarily reflecting conversions of Series B preferred stock.
Outlook, risks, contingencies and notable developments
- Going concern and funding: Management stated that cash was insufficient to fund operations for the 12 months following the report’s issuance, and the filing says substantial doubt exists about the company’s ability to continue as a going concern. Separately, management estimated in its liquidity discussion that cash available in early August could fund operations through at least the end of Q1 2021. The company was pursuing debt or equity financing but had no committed third-party financing; future funding availability and terms were uncertain. Additional equity could dilute shareholders.
- COVID-19 and clinical outlook: SYN-010 enrollment was temporarily halted during the first and second quarters and had recommenced, subject to the clinical partner’s capacity and pandemic conditions. The SYN-004 Phase 1b/2a trial in allogeneic HCT recipients was postponed to Q1 2021. The company anticipated an SYN-010 interim futility analysis in Q3 2020 and topline data in Q1 2021, both subject to COVID-19. Later-stage programs were contingent on funding or partnerships.
- Subsequent FDA updates: The company reported that it received FDA study-may-proceed notification on July 30, 2020 for a Phase 1 SYN-020 study, following an IND submission on June 30. It also reported FDA notification that the SYN-004 Phase 1b/2a program could proceed under the submitted protocol; trial initiation remained subject to site and pandemic constraints.
- Listing risk: The company reported stockholders’ deficit and NYSE American listing-standard deficiencies. On July 30, 2020, it received notice of additional noncompliance; it remained subject to a compliance plan with a November 25, 2020 deadline. Delisting could impair share liquidity and future fundraising.
- Other: The company recorded no long-lived-asset impairment after a COVID-19-triggered assessment. It reported no material legal proceedings and no off-balance-sheet arrangements. The filing states disclosure controls were effective as of June 30, 2020.
Most important facts for investors to verify
- Confirm issuer identity: the source document is for Synthetic Biologics, Inc., not Theriva Biologics, Inc.
- Check subsequent cash, operating burn, and whether financing was secured; the filing identifies substantial going-concern uncertainty and gives differing runway formulations.
- Verify actual timing and progress of SYN-010 enrollment and data, and initiation of the SYN-004 and SYN-020 clinical programs.
- Review the outcome of the NYSE American compliance process and whether the company regained listing compliance.
- Assess potential dilution from future financing and conversion of outstanding preferred stock and warrants.