Theriva Biologics, Inc. — filing summary
Issuer and period: The supplied 10-Q is filed by Synthetic Biologics, Inc. (Nevada), the company identified in the filing; it covers the quarter and six months ended June 30, 2013. The filing does not identify the issuer as Theriva Biologics. Financial statements are unaudited and amounts below are in U.S. dollars unless noted.
Business context and pipeline
The company described itself as a development-stage biotechnology business focused on infectious diseases and multiple sclerosis, with no meaningful recurring product revenue. Programs included oral beta-lactamase candidates for preventing C. difficile infection (first-generation P1A had Phase I/II data; SYN-004 was preclinical), preclinical Pertussis antibody SYN-005, Acinetobacter antibody discovery, and Trimesta (oral estriol) for MS. Enrollment was complete in the relapsing-remitting MS Phase II trial, with top-line results expected in the first half of 2014; enrollment continued in the cognitive dysfunction trial. Fibromyalgia candidate Effirma was partnered with Meda AB, which bore future development costs.
Financial performance and position
| Metric | Q2 2013 / June 30, 2013 | Comparable period / prior year-end |
|---|---|---|
| Revenue | No continuing-operations revenue reported | No continuing-operations revenue reported |
| Operating expenses | $2.461 million for Q2; $4.701 million for six months | $1.723 million for Q2 2012; $3.577 million for six months 2012 |
| Net loss | $2.497 million for Q2; $4.725 million for six months | $1.872 million for Q2 2012; $3.072 million for six months 2012 |
| Net loss per share | $0.06 for Q2; $0.11 for six months | $0.05 for Q2 2012; $0.09 for six months 2012 |
| Cash | $6.877 million | $9.954 million at December 31, 2012 |
| Current assets / current liabilities | $9.457 million / $0.229 million | $12.463 million / $0.395 million at December 31, 2012 |
| Total assets / total liabilities | $9.627 million / $0.229 million | $13.423 million / $0.395 million at December 31, 2012 |
| Accumulated deficit | $73.666 million | $68.941 million at December 31, 2012 |
For the six months, operating cash use was $3.295 million, investing cash use was $0.013 million, and financing cash provided was $0.231 million, primarily from option exercises. Cash decreased $3.077 million. The company reported no debt in the balance sheet. A $0.700 million note receivable from the sale of its former laboratory was due March 1, 2014, bore 5.7% interest, and was secured by the laboratory’s assets. Profit margins are not meaningful because the filing reports no continuing-operations revenue.
Changes versus comparable periods
- Q2 research and development expense increased 120% to $1.203 million; six-month R&D increased 149% to $2.321 million, principally reflecting higher employee and infectious-disease program costs.
- Q2 general and administrative expense rose 7% to $1.258 million. Six-month G&A fell 10% to $2.380 million, mainly due to lower outside legal and consulting fees.
- Six-month net loss widened from $3.072 million to $4.725 million. The 2012 comparison included $0.493 million of income from discontinued laboratory operations, including a $0.677 million gain on sale; no discontinued-operation income was reported in 2013.
- Cash fell from $9.954 million at year-end 2012 to $6.877 million at June 30, 2013. Outstanding common shares were 44,735,896 issued and 44,654,414 outstanding at quarter-end.
Outlook, financing, and risks
- Management said existing cash was expected to fund planned operating needs for at least the next 12 months, but cautioned that actual needs could be greater and additional financing might be unavailable or unacceptable. No financing was committed.
- A shelf registration statement became effective July 16, 2013, allowing up to $50 million of securities; its ATM component permits up to $15 million of common-stock sales through Cantor Fitzgerald at a 3% commission. No ATM shares had been sold as of the filing.
- Key risks include continuing losses and negative operating cash flow, dependence on future capital and grants, clinical and regulatory failure or delays, dependence on Intrexon and other collaborators, manufacturing and supply constraints, intellectual-property exposure, and potential shareholder dilution. The filing also describes milestone obligations and possible asset-return rights under the Prev C. difficile asset agreement.
- Management reported disclosure controls effective as of June 30, 2013, with no material change in internal control during the quarter. No legal proceedings were reported.
Important facts for investors to verify
- Confirm issuer identity and corporate history: this is a 2013 Synthetic Biologics filing, not a filing under the Theriva Biologics name.
- Track cash consumption, financing availability, and whether the stated 12-month operating runway remained achievable.
- Verify collection of the $700,000 secured note and any related interest when due in March 2014.
- Check subsequent progress and results for Trimesta, SYN-004, SYN-005, and the Acinetobacter program, including any changes to trial timelines or funding.
- Monitor ATM or other securities issuance, potential dilution, and milestone or asset-return provisions in collaboration and acquisition agreements.