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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-37708
Syndax Pharmaceuticals, Inc.
(Exact Name of Registrant as Specified in Its Charter)
|
|
|
|
Delaware |
32-0162505 |
(State or Other Jurisdiction of Incorporation or Organization) |
(IRS Employer Identification No.) |
|
|
35 Gatehouse Drive, Building D, Floor 3 Waltham, Massachusetts |
02451 |
(Address of Principal Executive Offices) |
(Zip Code) |
(781) 419-1400
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock |
SNDX |
The Nasdaq Stock Market, LLC |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
|
|
|
|
|
Large accelerated filer |
☒ |
|
Accelerated filer |
☐ |
Non-accelerated filer |
☐ |
|
Smaller reporting company |
☐ |
Emerging growth company |
☐ |
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 1, 2024, there were 85,357,675 shares of the registrant’s Common Stock, par value $0.0001 per share, outstanding.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the "safe harbor" created by those sections. All statements other than statements of historical fact are “forward-looking statements” for purposes of this Quarterly Report on Form 10-Q. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “could,” “estimate,” “expects,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative or plural of those terms, and similar expressions.
Forward-looking statements include, but are not limited to, statements about:
•our estimates regarding our expenses, future revenues, anticipated capital requirements and our needs for additional financing;
•the commercialization of NIKTIMVO™ (axatilimab-csfr) for treatment of chronic graft versus host disease, or cGVHD, including the estimated timeline for launch in the United States;
•the initiation, cost, timing, progress and results of our research and development activities, clinical trials and preclinical studies;
•our ability to replicate results in future clinical trials;
•our expectations regarding the potential safety, efficacy or clinical utility of our product candidates as well as the potential use of our product candidates to treat various cancer indications and fibrotic diseases;
•our ability to obtain and maintain regulatory approval for our product candidates and the timing or likelihood of regulatory filings and approvals for such candidates;
•our ability to maintain our licenses with UCB Biopharma Sprl, and Vitae Pharmaceuticals, LLC, a subsidiary of AbbVie Inc.;
•the success of our collaboration with Incyte Corporation, or Incyte, to further develop and commercialize axatilimab;
•the potential milestone and royalty payments under certain of our license agreements;
•the implementation of our strategic plans for our business and development of our product candidates;
•the scope of protection we establish and maintain for intellectual property rights covering our product candidates and our technology;
•the market adoption of Niktimvo and our other product candidates by physicians and patients;
•developments relating to our competitors and our industry; and
•the impact of geo-political actions, including war or the perception that hostilities may be imminent (such as the ongoing wars between Russia and Ukraine and Hamas and Israel as well as the conflicts in the Middle East, including between Israel and Hezbollah), adverse global economic conditions, terrorism, public health crises or natural disasters on our operations, research and development and clinical trials and potential disruption in the operations and business of third-party manufacturers, contract research organizations, or CROs, other service providers, and collaborators with whom we conduct business.
These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance, or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in this report in greater detail in the section titled “Risk Factors” and elsewhere in this report. You should not rely upon forward-looking statements as predictions of future events.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by law, we are under no duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise.
TABLE OF CONTENTS
Part I: FINANCIAL INFORMATION
Item 1: Financial Statements
SYNDAX PHARMACEUTICALS, INC.
(unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
133,019 |
|
|
$ |
295,394 |
|
Short-term investments |
|
|
256,588 |
|
|
|
275,304 |
|
Short-term deposits |
|
|
16,788 |
|
|
|
6,885 |
|
Other receivable |
|
|
3,507 |
|
|
|
— |
|
Prepaid expenses and other current assets |
|
|
4,907 |
|
|
|
3,293 |
|
Total current assets |
|
|
414,809 |
|
|
|
580,876 |
|
Long-term investments |
|
|
10,029 |
|
|
|
29,829 |
|
Property and equipment, net |
|
|
— |
|
|
|
8 |
|
Right-of-use asset, net |
|
|
756 |
|
|
|
1,487 |
|
Restricted cash |
|
|
217 |
|
|
|
217 |
|
Other assets |
|
|
— |
|
|
|
463 |
|
Total assets |
|
$ |
425,811 |
|
|
$ |
612,880 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
4,898 |
|
|
$ |
9,961 |
|
Collaboration payable, net |
|
|
5,506 |
|
|
|
7,232 |
|
Accrued expenses and other current liabilities |
|
|
48,121 |
|
|
|
39,856 |
|
Current portion of right-of-use liability |
|
|
842 |
|
|
|
1,035 |
|
Current portion of capital lease |
|
|
10 |
|
|
|
12 |
|
Total current liabilities |
|
|
59,377 |
|
|
|
58,096 |
|
Long-term liabilities: |
|
|
|
|
|
|
Right-of-use liability, less current portion |
|
|
— |
|
|
|
578 |
|
Capital lease, less current portion |
|
|
2 |
|
|
|
10 |
|
Total long-term liabilities |
|
|
2 |
|
|
|
588 |
|
Total liabilities |
|
|
59,379 |
|
|
|
58,684 |
|
Commitments and contingencies (Note 12) |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock, $0.001 par value, 10,000,000 shares authorized; 0 shares
outstanding at September 30, 2024 and December 31, 2023 |
|
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value, 200,000,000 shares authorized; 85,571,205
and 84,826,632 shares issued and outstanding at September 30, 2024 and
December 31, 2023, respectively |
|
|
9 |
|
|
|
8 |
|
Additional paid-in capital |
|
|
1,493,041 |
|
|
|
1,456,370 |
|
Accumulated other comprehensive gain |
|
|
371 |
|
|
|
218 |
|
Accumulated deficit |
|
|
(1,126,989 |
) |
|
|
(902,400 |
) |
Total stockholders’ equity |
|
|
366,432 |
|
|
|
554,196 |
|
Total liabilities and stockholders’ equity |
|
$ |
425,811 |
|
|
$ |
612,880 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
SYNDAX PHARMACEUTICALS, INC.
(unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Milestone and license revenue |
$ |
12,500 |
|
|
$ |
— |
|
|
$ |
16,000 |
|
|
$ |
— |
|
Total revenues |
|
12,500 |
|
|
|
— |
|
|
|
16,000 |
|
|
|
— |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
$ |
70,971 |
|
|
$ |
39,087 |
|
|
$ |
176,118 |
|
|
$ |
107,906 |
|
Selling, general and administrative |
|
31,106 |
|
|
|
17,268 |
|
|
|
83,189 |
|
|
|
44,143 |
|
Total operating expenses |
|
102,077 |
|
|
|
56,355 |
|
|
|
259,307 |
|
|
|
152,049 |
|
Loss from operations |
|
(89,577 |
) |
|
|
(56,355 |
) |
|
|
(243,307 |
) |
|
|
(152,049 |
) |
Other income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(23 |
) |
|
|
(70 |
) |
|
|
(123 |
) |
|
|
(145 |
) |
Interest income |
|
5,442 |
|
|
|
5,345 |
|
|
|
18,982 |
|
|
|
15,613 |
|
Other income (expense) |
|
32 |
|
|
|
(66 |
) |
|
|
(141 |
) |
|
|
(306 |
) |
Total other income (expense), net |
|
5,451 |
|
|
|
5,209 |
|
|
|
18,718 |
|
|
|
15,162 |
|
Net loss |
$ |
(84,126 |
) |
|
$ |
(51,146 |
) |
|
$ |
(224,589 |
) |
|
$ |
(136,887 |
) |
Other comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on marketable securities |
|
1,188 |
|
|
|
119 |
|
|
|
371 |
|
|
|
351 |
|
Comprehensive loss |
$ |
(82,938 |
) |
|
$ |
(51,027 |
) |
|
$ |
(224,218 |
) |
|
$ |
(136,536 |
) |
Net loss attributable to common stockholders |
$ |
(84,126 |
) |
|
$ |
(51,146 |
) |
|
$ |
(224,589 |
) |
|
$ |
(136,887 |
) |
Net loss per share attributable to common stockholders—basic
and diluted |
$ |
(0.98 |
) |
|
$ |
(0.73 |
) |
|
$ |
(2.63 |
) |
|
$ |
(1.97 |
) |
Weighted-average number of common shares used to compute
net loss per share attributable to common stockholders
—basic and diluted |
|
85,433,569 |
|
|
|
69,855,766 |
|
|
|
85,307,660 |
|
|
|
69,645,888 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
SYNDAX PHARMACEUTICALS, INC.
(unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
2024 |
|
|
2023 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net loss |
|
$ |
(224,589 |
) |
|
$ |
(136,887 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
Depreciation |
|
|
8 |
|
|
|
9 |
|
Accretion of investments |
|
|
(10,528 |
) |
|
|
(11,344 |
) |
Non-cash operating lease expense |
|
|
781 |
|
|
|
496 |
|
Stock-based compensation |
|
|
30,729 |
|
|
|
22,624 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Prepaid expenses and other assets |
|
|
(11,567 |
) |
|
|
(3,281 |
) |
Collaboration (payable) receivable, net |
|
|
(1,726 |
) |
|
|
68 |
|
Other receivable |
|
|
(3,507 |
) |
|
|
— |
|
Other assets |
|
|
463 |
|
|
|
— |
|
Accounts payable |
|
|
(5,063 |
) |
|
|
1,699 |
|
Accrued expenses and other liabilities |
|
|
7,484 |
|
|
|
7,364 |
|
Net cash used in operating activities |
|
|
(217,515 |
) |
|
|
(119,252 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchases of short and long-term investments |
|
|
(180,738 |
) |
|
|
(225,316 |
) |
Proceeds from sales and maturities of short-term investments |
|
|
229,936 |
|
|
|
359,215 |
|
Net cash provided by investing activities |
|
|
49,198 |
|
|
|
133,899 |
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
Proceeds from Employee Stock Purchase Plan |
|
|
1,081 |
|
|
|
633 |
|
Proceeds from stock option exercises |
|
|
4,861 |
|
|
|
5,016 |
|
Net cash provided by financing activities |
|
|
5,942 |
|
|
|
5,649 |
|
NET (DECREASE) INCREASE CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
(162,375 |
) |
|
|
20,296 |
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—beginning of period |
|
|
295,611 |
|
|
|
74,471 |
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH —end of period |
|
$ |
133,236 |
|
|
$ |
94,767 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
SYNDAX PHARMACEUTICALS, INC.
(unaudited)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of Business
Syndax Pharmaceuticals, Inc. is a commercial-stage biopharmaceutical company with one commercially approved product and an innovative pipeline of cancer therapies under development. We were incorporated in Delaware in 2005. We have operations in New York, NY and Waltham, MA and we operate in one segment. References in these notes to condensed consolidated financial statements to “Syndax,” “the Company,” “we,” “us” or “our” refer to Syndax Pharmaceuticals, Inc. and its wholly owned subsidiaries.
2. Basis of Presentation
The Company has prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. The interim unaudited condensed financial statements have been prepared on the same basis as the annual audited financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2024, and the results of operations and comprehensive loss for the three and nine months ended September 30, 2024 and 2023, and cash flows for the nine months ended September 30, 2024 and 2023. The results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024, any other interim periods, or any future year or period. These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2023, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission, or the SEC, on February 27, 2024.
In 2011, the Company established a wholly owned subsidiary in the United Kingdom, which the Company dissolved in June 2024. In 2014, the Company established a wholly owned U.S. subsidiary, and in 2021, the Company established a wholly owned subsidiary in the Netherlands. To date, there have been no material activities for these entities. All intercompany balances and transactions have been eliminated in consolidation.
3. Summary of Significant Accounting Policies
The Company’s significant accounting policies, which are disclosed in the audited consolidated financial statements for the year ended December 31, 2023, and the notes thereto are included in the Company’s Annual Report on Form 10-K that was filed with the SEC on February 27, 2024. Since the date of filing, there have been no material changes to the Company’s significant accounting policies except as noted below.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of costs and expenses during the reporting period. The Company bases estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis.
Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s condensed consolidated financial statements.
Significant Risks and Uncertainties
We are subject to challenges and risks specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with development and commercial operations, including, without limitation, risks and uncertainties associated with: obtaining regulatory approval of our late-stage product candidate; delays or problems in the supply of our products, loss of single source suppliers or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing additional products or product candidates; pharmaceutical product development and the inherent uncertainty of clinical success; the challenges of protecting and enhancing our intellectual property rights; and complying with applicable regulatory requirements.
Income taxes
In accordance with ASC 270, Interim Reporting, and ASC 740, Income Taxes, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the nine months ended September 30, 2024 and 2023, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of September 30, 2024 and December 31, 2023, the Company concluded that a full valuation allowance would be necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements.
Recently Issued and Adopted Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other accounting standard setting bodies that we adopt as of the specified effective date. Unless otherwise discussed below, we do not believe that the adoption of recently issued standards have or may have a material impact on our consolidated statements or disclosures.
Segment Reporting
In December 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires all public entities, including public entities with a single reportable segment, to provide in interim and annual periods one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance. Additionally, the standard requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures. The guidance in this update is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024. The Company is currently in the process of evaluating the effects of this pronouncement on our related disclosures.
4. Significant Collaborative Research and License Agreements
Incyte Collaboration
In September 2021, the Company entered into the Incyte License and Collaboration Agreement, or the Incyte License, with Incyte covering the worldwide development and commercialization of axatilimab. Also in September 2021, the Company entered into a share purchase agreement with Incyte, or the Incyte Share Purchase Agreement. These agreements are collectively referred to as the Incyte Agreements. Under the terms of the Incyte Agreements, Incyte received exclusive commercialization rights outside of the United States, subject to certain royalty payment obligations set forth below. In the United States, Incyte and the Company are co-commercializing and co-promoting axatilimab as Niktimvo™ (axatilimab-csfr). The Company and Incyte share equally the profits and losses from co-commercialization efforts in the United States.
The Company and Incyte have agreed to continue to co-develop axatilimab and to share development costs associated with global and additional U.S.-specific clinical trials, with Incyte responsible for 55% of such costs and the Company responsible for 45% of such costs. Each company will be responsible for funding any of its own independent development activities. Incyte is responsible for 100% of future development costs for trials that are specific to ex-U.S. countries. All development costs related to the collaboration will be subject to a joint development plan.
Under the terms of the Incyte Agreements, in December 2021, Incyte paid the Company a non-refundable cash payment of $117.0 million and the Company issued 1,421,523 shares of common stock with an aggregate purchase price of $35.0 million, or $24.62 per share. Additionally, under the terms of the Incyte Agreements, the Company was eligible, upon execution, to receive up to $220.0 million in future contingent development and regulatory milestones and up to $230.0 million in commercialization milestones as well as tiered royalties ranging in the mid-teens percentage on net sales of the licensed product comprising axatilimab in Europe and Japan and low double digit percentage in the rest of the world outside of the United States. The Company’s right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of licensed patent rights covering the licensed product in that particular country, (b) a specified period of time after the first post - marketing authorization sale of a licensed product in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country.
In August 2024, the U.S. Food and Drug Administration, or FDA, approved Niktimvo for the treatment of cGVHD after failure of at least two prior lines of systemic therapy in adult and pediatric patients weighing at least 40 kg (88.2 lbs). As a result of the approval of Niktimvo, the Company earned a revenue milestone of $12.5 million, which was received in September 2024.
As of September 30, 2024, the Company has recorded approximately $1.7 million as a collaboration receivable due from Incyte related to the Company’s development and pre-commercialization costs under the Incyte Agreements and has recorded approximately $7.2 million as a collaboration payable due to Incyte for development and pre-commercialization costs incurred by Incyte as of September 30, 2024. Both expense and cost offset are recorded as part of operating expenses.
Vitae Pharmaceuticals, Inc.
In October 2017, the Company entered into a license agreement, or the Vitae License Agreement, with Vitae Pharmaceuticals, LLC, or Vitae, a subsidiary of AbbVie, Inc., under which the Company was granted an exclusive, sublicensable, worldwide license to a portfolio of preclinical, orally available, small molecule inhibitors of the Menin–KMT2A binding interaction, or the Menin Assets. Upon execution of the agreement, the Company would potentially be required to pay Allergan up to $99.0 million in one-time development and regulatory milestone payments over the term of the Vitae License Agreement, subject to the achievement of certain milestone events. In the event that the Company or any of its affiliates or sublicensees commercializes the Menin Assets, the Company will also be obligated to pay Vitae low single to low double-digit royalties on sales, subject to reduction in certain circumstances, as well as up to an aggregate of $70.0 million in potential one-time, sales-based milestone payments based on achievement of certain annual sales thresholds. The Company is solely responsible for the development and commercialization of the Menin Assets. Each party may terminate the Vitae License Agreement for the other party’s uncured material breach or insolvency, and the Company may terminate the Vitae License Agreement at any time upon advance written notice to Vitae. Vitae may terminate the Vitae License Agreement if the Company or any of its affiliates or sublicensees institutes a legal challenge to the validity, enforceability, or patentability of the licensed patent rights. Unless terminated earlier in accordance with its terms, the Vitae License Agreement will continue on a country-by-country and product-by-product basis until the later of: (i) the expiration of all of the licensed patent rights in such country; (ii) the expiration of all regulatory exclusivity applicable to the product in such country; and (iii) 10 years from the date of the first commercial sale of the product in such country.
As of the date of the Vitae License Agreement, the asset acquired had no alternative future use nor had it reached a stage of technological feasibility. As the processes or activities that were acquired along with the license do not constitute a “business,” the transaction has been accounted for as an asset acquisition. Since the effective date of the Vitae License Agreement, the Company achieved certain development and regulatory milestones, resulting in $18.0 million in research and development expense, which includes an $8.0 million milestone paid during the first quarter of 2024 for the successful completion of the first pivotal trial in the first indication.
UCB Biopharma Sprl
In 2016, the Company entered into a license agreement, or the UCB License Agreement, as amended from time to time, with UCB Biopharma Sprl, or UCB, under which UCB granted to the Company a worldwide, sublicensable, exclusive license to UCB6352, which the Company refers to as axatilimab, an anti-CSF-1R monoclonal antibody. Upon execution of the agreement, the Company would potentially be required to pay UCB up to $119.5 million in one-time development and regulatory milestone payments over the term of the UCB License Agreement, subject to the achievement of certain milestone events. In the event that the Company or any of its affiliates or sublicensees commercializes axatilimab, the Company will also be obligated to pay UCB low double-digit royalties on sales, subject to reduction in certain circumstances, as well as up to an aggregate of $250.0 million in potential one-time, sales-based milestone payments based on achievement of certain annual sales thresholds. Under certain circumstances, the Company may be required to share a percentage of non-royalty income from sublicensees, subject to certain deductions, with UCB. The Company is solely responsible for the development and commercialization of axatilimab, except that UCB was responsible for performing a limited set of transitional chemistry, manufacturing and control tasks related to axatilimab. Each party may terminate the UCB License Agreement for the other party’s uncured material breach or insolvency, and the Company may terminate the UCB License Agreement at any time upon advance written notice to UCB. UCB may terminate the UCB License Agreement if the Company or any of its affiliates or sublicensees institutes a legal challenge to the validity, enforceability, or patentability of the licensed patent rights. Unless terminated earlier in accordance with its terms, the UCB License Agreement will continue on a country-by-country and product-by-product basis until the later of: (i) the expiration of all of the licensed patent rights in such country; (ii) the expiration of all regulatory exclusivity applicable to the product in such country; and (iii) 10 years from the date of the first commercial sale of the product in such country.
As of the date of the UCB License Agreement, the asset acquired had no alternative future use nor had it reached a stage of technological feasibility. As the processes or activities that were acquired along with the license do not constitute a “business,” the transaction has been accounted for as an asset acquisition. As a result, in 2016, the upfront payment of $5.0 million was recorded as research and development expense in the consolidated statements of operations. Additionally, in connection with its most recent amendment of the UCB License Agreement, in the second quarter of 2022 the Company paid UCB $5.8 million, which was recognized as a milestone expense. Since the effective date of the license agreement, the Company achieved certain development and regulatory milestones and has recorded $31.0 million as research and development expense, which includes a $15.0 million milestone paid during the three months ended September 30, 2024, upon the approval of Niktimvo.
Bayer Pharma AG (formerly known as Bayer Schering Pharma AG)
In March 2007, the Company entered into a license agreement with Bayer Schering Pharma AG, or Bayer, for a worldwide, exclusive license to develop and commercialize entinostat and any other products containing the same active ingredient. The Company will pay Bayer royalties on a sliding scale based on net sales, if any, and make future milestone payments to Bayer of up to $150.0 million in the event that certain specified development and regulatory goals and sales levels are achieved.
Eddingpharm Investment Company Limited
In August 2016, the Company entered into a license agreement with Eddingpharm Investment Company, or Eddingpharm, to develop and commercialize entinostat in China and certain other Asian countries. Eddingpharm will pay the Company royalties on a sliding scale based on net sales, if any, and make future milestone payments up to $10.0 million in the event that certain specified development and regulatory goals are achieved. In April 2024, a milestone was achieved under the Eddingpharm license agreement for the marketing approval of entinostat in China. As a result, the Company recognized $3.5 million of milestone and license revenue in the second quarter of 2024.
5. Net Loss per Share Attributable to Common Stockholders
Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Because the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods. The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
(In thousands, except share and per
share data) |
|
|
(In thousands, except share and per
share data) |
|
Numerator—basic and diluted: |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(84,126 |
) |
|
$ |
(51,146 |
) |
|
$ |
(224,589 |
) |
|
$ |
(136,887 |
) |
Net loss attributable to common
stockholders—basic and diluted |
$ |
(84,126 |
) |
|
$ |
(51,146 |
) |
|
$ |
(224,589 |
) |
|
$ |
(136,887 |
) |
Net loss per share attributable to common
stockholders—basic and diluted |
$ |
(0.98 |
) |
|
$ |
(0.73 |
) |
|
$ |
(2.63 |
) |
|
$ |
(1.97 |
) |
Denominator—basic and diluted: |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares
used to compute net loss per share attributable
to common stockholders—basic and diluted |
|
85,433,569 |
|
|
|
69,855,766 |
|
|
|
85,307,660 |
|
|
|
69,645,888 |
|
The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in common stock equivalent shares):
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
|
2024 |
|
|
2023 |
|
Options to purchase common stock |
|
|
12,205,960 |
|
|
|
10,530,750 |
|
Employee Stock Purchase Plan |
|
|
73,200 |
|
|
|
35,479 |
|
Non-vested restricted stock units (RSUs) |
|
|
1,461,005 |
|
|
|
524,236 |
|
For additional information related to the Company’s common stock see Note 10.
6. Other Receivables
Contemporaneous with the Company’s New Drug Application, or NDA, submission to the FDA for revumenib, it was required to pay a $6.1 million refundable fee under the Prescription Drug User Fee Act, or PDUFA. The $6.1 million fee was paid in January 2024 and was fully refunded in September 2024.
In April 2024, entinostat received marketing approval in China. As of September 30, 2024, the Company recorded a $3.5 million milestone receivable related to achieved milestones under the license agreement with Eddingpharm.
7. Fair Value Measurements
The carrying amounts of cash and cash equivalents, restricted cash, accounts payable, and accrued expenses approximated their estimated fair values due to the short-term nature of these financial instruments. Fair value is defined as the exchange price that would
be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value are performed in a manner to maximize the use of observable inputs and minimize the use of unobservable inputs. The accounting standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:
Level 1— Quoted prices (unadjusted) in active markets that are accessible at the market date for identical unrestricted assets or liabilities.
Level 2— Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs for which all significant inputs are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The table below presents information about the Company’s assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of valuation techniques the Company utilized to determine such fair values (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using |
|
|
|
|
|
|
Quoted |
|
|
|
|
|
|
|
|
|
|
|
|
Prices |
|
|
Significant |
|
|
|
|
|
|
|
|
|
(unadjusted) |
|
|
Other |
|
|
Significant |
|
|
|
Total |
|
|
in Active |
|
|
Observable |
|
|
Unobservable |
|
|
|
Carrying |
|
|
Markets |
|
|
Inputs |
|
|
Inputs |
|
|
|
Value |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
|
(In thousands) |
|
September 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
133,019 |
|
|
$ |
133,019 |
|
|
$ |
— |
|
|
$ |
— |
|
Short-term investments |
|
|
256,588 |
|
|
|
— |
|
|
|
256,588 |
|
|
|
— |
|
Long-term investments |
|
|
10,029 |
|
|
|
— |
|
|
|
10,029 |
|
|
|
— |
|
Total assets |
|
$ |
399,636 |
|
|
$ |
133,019 |
|
|
$ |
266,617 |
|
|
$ |
— |
|
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
295,394 |
|
|
$ |
295,394 |
|
|
$ |
— |
|
|
$ |
— |
|
Short-term investments |
|
|
275,304 |
|
|
|
— |
|
|
|
275,304 |
|
|
|
— |
|
Long-term investments |
|
|
29,829 |
|
|
|
— |
|
|
|
29,829 |
|
|
|
— |
|
Total assets |
|
$ |
600,527 |
|
|
$ |
295,394 |
|
|
$ |
305,133 |
|
|
$ |
— |
|
There have been no material impairments of our assets measured and carried at fair value during the period ended September 30, 2024 and 2023. In addition, there have been no changes in valuation techniques during the periods ended September 30, 2024 and 2023. The fair value of Level 1 instruments classified as cash equivalents are valued using quoted market prices in active markets. The fair value of Level 2 instruments classified as short and long-term investments are determined based on quoted prices in active markets, which are either directly or indirectly observable as of the reporting date with fair value being determined using models or other valuation methodologies.
The Company’s short and long-term investments are classified as available-for-sale securities. As of September 30, 2024, the remaining contractual maturities of the available-for-sale securities were 1 to 13 months, and the balance in the Company’s accumulated other comprehensive gain was comprised solely of activity related to the Company’s available-for-sale securities. There were no realized gains or losses recognized on the sale or maturity of available-for-sale securities, during the three and nine months ended September 30, 2024 and 2023. As a result, the Company did not reclassify any amounts out of accumulated other comprehensive gain for the same periods.
The following table summarizes the available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
|
|
|
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Fair Value |
|
|
|
(In thousands) |
|
September 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial paper |
|
$ |
81,096 |
|
|
$ |
44 |
|
|
$ |
— |
|
|
$ |
81,140 |
|
Corporate bonds |
|
|
40,456 |
|
|
|
17 |
|
|
|
— |
|
|
|
40,473 |
|
US Treasury |
|
|
134,716 |
|
|
|
259 |
|
|
|
— |
|
|
|
134,975 |
|
Federal bonds |
|
|
9,978 |
|
|
|
51 |
|
|
|
— |
|
|
|
10,029 |
|
|
|
$ |
266,246 |
|
|
$ |
371 |
|
|
$ |
— |
|
|
$ |
266,617 |
|
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial paper |
|
$ |
160,657 |
|
|
$ |
149 |
|
|
$ |
— |
|
|
$ |
160,806 |
|
Corporate bonds |
|
|
47,150 |
|
|
|
62 |
|
|
|
— |
|
|
|
47,212 |
|
US Treasury |
|
|
68,111 |
|
|
|
46 |
|
|
|
— |
|
|
|
68,157 |
|
Federal bonds |
|
|
28,998 |
|
|
|
— |
|
|
|
(40 |
) |
|
|
28,958 |
|
|
|
$ |
304,916 |
|
|
$ |
257 |
|
|
$ |
(40 |
) |
|
$ |
305,133 |
|
8. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
Prepaid insurance |
|
|
1,488 |
|
|
|
807 |
|
Interest receivable on investments |
|
|
1,183 |
|
|
|
1,227 |
|
Prepaid subscription |
|
|
1,295 |
|
|
|
769 |
|
Prepaid state and local taxes |
|
|
601 |
|
|
|
264 |
|
Prepaid rent |
|
|
122 |
|
|
|
163 |
|
Other |
|
|
218 |
|
|
|
63 |
|
Total prepaid expenses and other current assets |
|
$ |
4,907 |
|
|
$ |
3,293 |
|
9. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
Accrued clinical study and trial costs |
|
$ |
35,692 |
|
|
$ |
16,346 |
|
Accrued compensation and related costs |
|
|
11,602 |
|
|
|
11,172 |
|
Accrued professional fees |
|
|
619 |
|
|
|
1,450 |
|
Accrued milestone costs |
|
|
— |
|
|
|
10,000 |
|
Other |
|
|
208 |
|
|
|
888 |
|
Total accrued expenses and other current liabilities |
|
$ |
48,121 |
|
|
$ |
39,856 |
|
10. Stock-Based Compensation
In January 2024, the number of shares of common stock available for issuance under the Company’s 2015 Omnibus Incentive Plan, or the 2015 Plan, was increased by 3,393,065 shares of common stock due to the automatic annual provision to increase shares of common stock available under the 2015 Plan. Additionally in December 2023, the Company’s board of directors approved an
increase of 1,100,000 shares of common stock available for issuance under the Company’s 2023 Inducement Plan, or Inducement Plan.
As of September 30, 2024, there were 3,862,670 shares of common stock available for issuance under the 2015 Plan and 76,763 shares of common stock available for issuance under the Inducement Plan.
The Company recognized stock-based compensation expense related to the issuance of stock option awards and restricted stock units to employees and non-employees and related to the Company’s 2015 Employee Stock Purchase Plan, or ESPP, in the condensed consolidated statements of comprehensive loss as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
$ |
5,886 |
|
|
$ |
3,853 |
|
|
$ |
14,347 |
|
|
$ |
10,329 |
|
Selling, general and administrative |
|
6,048 |
|
|
|
4,468 |
|
|
|
16,382 |
|
|
|
12,295 |
|
Total |
$ |
11,934 |
|
|
$ |
8,321 |
|
|
$ |
30,729 |
|
|
$ |
22,624 |
|
Compensation expense by type of award in the three and nine months ended September 30, 2024 and 2023 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options |
$ |
9,300 |
|
|
$ |
7,242 |
|
|
$ |
24,285 |
|
|
$ |
19,654 |
|
RSUs |
|
2,455 |
|
|
|
990 |
|
|
|
6,071 |
|
|
|
2,749 |
|
ESPP |
|
179 |
|
|
|
89 |
|
|
|
373 |
|
|
|
221 |
|
Total |
$ |
11,934 |
|
|
$ |
8,321 |
|
|
$ |
30,729 |
|
|
$ |
22,624 |
|
As of September 30, 2024, there were $93.3 million of unrecognized compensation costs related to employee and non-employee unvested stock options and RSUs granted under the 2023 Inducement Plan, 2015 Plan and the Company’s 2007 Stock Plan, which are expected to be recognized over a weighted-average remaining service period of 2.61 years.
11. Stockholders’ Equity
The following table presents the changes in stockholders’ equity for the three and nine months ended September 30, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except share data) |
|
Common Stock
$0.0001
Par Value |
|
|
Additional
Paid-In
Capital |
|
|
Accumulated
Other
Comprehensive
(Loss)/Income |
|
|
Accumulated
Deficit |
|
|
Total
Stockholders’
Equity |
|
|
|
Shares |
|
|
Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2023 |
|
|
84,826,632 |
|
|
$ |
8 |
|
|
$ |
1,456,370 |
|
|
$ |
218 |
|
|
$ |
(902,400 |
) |
|
$ |
554,196 |
|
Stock purchase under ESPP |
|
|
35,463 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
8,899 |
|
|
|
— |
|
|
|
— |
|
|
|
8,899 |
|
Unrealized loss on investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(974 |
) |
|
|
— |
|
|
|
(974 |
) |
Vesting of RSUs |
|
|
3,750 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Employee withholdings ESPP |
|
|
— |
|
|
|
— |
|
|
|
309 |
|
|
|
— |
|
|
|
— |
|
|
|
309 |
|
Proceeds from exercise of stock options |
|
|
113,841 |
|
|
|
— |
|
|
|
1,859 |
|
|
|
— |
|
|
|
— |
|
|
|
1,859 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(72,400 |
) |
|
|
(72,400 |
) |
Balance as of March 31, 2024 |
|
|
84,979,686 |
|
|
$ |
8 |
|
|
$ |
1,467,437 |
|
|
$ |
(756 |
) |
|
$ |
(974,800 |
) |
|
$ |
491,889 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
9,896 |
|
|
|
— |
|
|
|
— |
|
|
|
9,896 |
|
Unrealized loss on investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(61 |
) |
|
|
— |
|
|
|
(61 |
) |
Vesting of RSUs |
|
|
1,603 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Employee withholdings ESPP |
|
|
— |
|
|
|
— |
|
|
|
237 |
|
|
|
— |
|
|
|
— |
|
|
|
237 |
|
Proceeds from exercise of stock options |
|
|
47,340 |
|
|
|
— |
|
|
|
439 |
|
|
|
— |
|
|
|
— |
|
|
|
439 |
|
Par value adjustment |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(68,063 |
) |
|
|
(68,063 |
) |
Balance as of June 30, 2024 |
|
|
85,028,629 |
|
|
$ |
9 |
|
|
$ |
1,478,009 |
|
|
$ |
(817 |
) |
|
$ |
(1,042,863 |
) |
|
$ |
434,338 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
11,934 |
|
|
|
— |
|
|
|
— |
|
|
|
11,934 |
|
Unrealized gains on investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,188 |
|
|
|
— |
|
|
|
1,188 |
|
Stock purchase under ESPP |
|
|
29,440 |
|
|
|
— |
|
|
|
|