10-Q
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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 March 31, 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 May 1, 2024, there were 84,987,060 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 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, Inc., a subsidiary of Allergan plc, which was acquired by 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 our 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 war between Russia and Ukraine and the war in Israel), 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.

ii


 

TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Unaudited Financial Statements:

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023

 

1

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Loss for the three months ended
March 31,2024 and 2023

 

2

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023

 

3

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

4

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

12

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

19

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

19

 

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

21

 

 

 

 

 

Item 1A.

 

Risk Factors

 

21

 

 

 

 

 

Item 5.

 

Other Information

 

48

 

 

 

 

Item 6.

 

Exhibits

 

49

 

 

iii


 

Part I: FINANCIAL INFORMATION

Item 1: Financial Statements

SYNDAX PHARMACEUTICALS, INC.

(unaudited)

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

 

 

 

March 31, 2024

 

 

December 31, 2023

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

114,615

 

 

$

295,394

 

Short-term investments

 

 

319,963

 

 

 

275,304

 

Short-term deposits

 

 

8,583

 

 

 

6,885

 

Other receivable

 

 

6,073

 

 

 

 

Prepaid expenses and other current assets

 

 

4,665

 

 

 

3,293

 

Total current assets

 

 

453,899

 

 

 

580,876

 

Long-term investments

 

 

87,416

 

 

 

29,829

 

Property and equipment, net

 

 

5

 

 

 

8

 

Right-of-use asset, net

 

 

1,243

 

 

 

1,487

 

Restricted cash

 

 

217

 

 

 

217

 

Other assets

 

 

248

 

 

 

463

 

Total assets

 

$

543,028

 

 

$

612,880

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

8,809

 

 

$

9,961

 

Collaboration payable, net

 

 

7,547

 

 

 

7,232

 

Accrued expenses and other current liabilities

 

 

33,395

 

 

 

39,856

 

Current portion of right-of-use liability

 

 

1,042

 

 

 

1,035

 

Current portion of capital lease

 

 

12

 

 

 

12

 

Total current liabilities

 

 

50,805

 

 

 

58,096

 

Long-term liabilities:

 

 

 

 

 

 

Right-of-use liability, less current portion

 

 

327

 

 

 

578

 

Capital lease, less current portion

 

 

7

 

 

 

10

 

Total long-term liabilities

 

 

334

 

 

 

588

 

Total liabilities

 

 

51,139

 

 

 

58,684

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value, 10,000,000 shares authorized; 0 shares
   outstanding at March 31, 2024 and December 31, 2023

 

 

 

 

 

 

Common stock, $0.0001 par value, 200,000,000 shares authorized; 84,979,686
   and
84,826,632 shares issued and outstanding at March 31, 2024 and
   December 31, 2023, respectively

 

 

8

 

 

 

8

 

Additional paid-in capital

 

 

1,467,437

 

 

 

1,456,370

 

Accumulated other comprehensive (loss) gain

 

 

(756

)

 

 

218

 

Accumulated deficit

 

 

(974,800

)

 

 

(902,400

)

Total stockholders’ equity

 

 

491,889

 

 

 

554,196

 

Total liabilities and stockholders’ equity

 

$

543,028

 

 

$

612,880

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


 

SYNDAX PHARMACEUTICALS, INC.

(unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands, except share and per share data)

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Operating expenses:

 

 

 

 

 

Research and development

$

56,492

 

 

$

34,054

 

Selling, general and administrative

 

23,022

 

 

 

11,961

 

Total operating expenses

 

79,514

 

 

 

46,015

 

Loss from operations

 

(79,514

)

 

 

(46,015

)

Other income (expense), net:

 

 

 

 

 

Interest expense

 

(55

)

 

 

(40

)

Interest income

 

7,256

 

 

 

5,076

 

Other expense

 

(87

)

 

 

(147

)

Total other income, net

 

7,114

 

 

 

4,889

 

Net loss

$

(72,400

)

 

$

(41,126

)

Other comprehensive loss:

 

 

 

 

 

Unrealized (loss) gain on marketable securities

 

(974

)

 

 

470

 

Comprehensive loss

$

(73,374

)

 

$

(40,656

)

Net loss attributable to common stockholders

$

(72,400

)

 

$

(41,126

)

Net loss per share attributable to common stockholders—basic
   and diluted

$

(0.85

)

 

$

(0.59

)

Weighted-average number of common shares used to compute
   net loss per share attributable to common stockholders
   —basic and diluted

 

85,213,200

 

 

 

69,438,890

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


 

SYNDAX PHARMACEUTICALS, INC.

(unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$

(72,400

)

 

$

(41,126

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation

 

 

3

 

 

 

3

 

Accretion of investments

 

 

(3,821

)

 

 

(3,967

)

Non-cash operating lease expense

 

 

244

 

 

 

110

 

Stock-based compensation

 

 

8,899

 

 

 

6,238

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

(2,854

)

 

 

2,899

 

Collaboration receivable (payable), net

 

 

315

 

 

 

2,082

 

Other receivable

 

 

(6,073

)

 

 

 

Accounts payable

 

 

(1,152

)

 

 

3,707

 

Accrued expenses and other liabilities

 

 

(6,709

)

 

 

(9,174

)

Net cash used in operating activities

 

 

(83,548

)

 

 

(39,228

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of short and long-term investments

 

 

(167,385

)

 

 

(61,585

)

Proceeds from sales and maturities of short-term investments

 

 

67,986

 

 

 

81,500

 

Net cash (used in) provided by investing activities

 

 

(99,399

)

 

 

19,915

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from Employee Stock Purchase Plan

 

 

309

 

 

 

196

 

Proceeds from stock option exercises

 

 

1,859

 

 

 

2,278

 

Net cash provided by financing activities

 

 

2,168

 

 

 

2,474

 

NET (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(180,779

)

 

 

(16,839

)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—beginning of period

 

 

295,611

 

 

 

74,471

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH —end of period

 

$

114,832

 

 

$

57,632

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


 

SYNDAX PHARMACEUTICALS, INC.

(unaudited)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Business

Syndax Pharmaceuticals, Inc., is a clinical stage biopharmaceutical company developing an innovative pipeline of cancer therapies. We were incorporated in Delaware in 2005. We base our operations in Waltham, Massachusetts 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 March 31, 2024, and the results of operations and comprehensive loss for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023. The results for the three months ended March 31, 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. 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

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.

4


 

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 will co-commercialize axatilimab, with the Company having the right to co-promote axatilimab with Incyte, subject to the Company’s exercise of its co-promotion option. Incyte will be responsible for leading all aspects of the commercialization of axatilimab in the United States. The Company and Incyte will share equally the profits and losses from co-commercialization efforts in the United States. The Company and Incyte have agreed to co-develop axatilimab and to share development costs associated with global and 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 is eligible 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.

As of March 31, 2024, the Company has recorded $4.0 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 $11.5 million as a collaboration payable due to Incyte for development and pre-commercialization costs incurred by Incyte as of March 31, 2024. Both expense and cost offset are recorded as part of research and development expense and general and administrative expense.

Vitae Pharmaceuticals, Inc.

In October 2017, the Company entered into a license agreement, or the Allergan License Agreement, with Vitae Pharmaceuticals, Inc., a subsidiary of Allergan plc, or Allergan, under which Allergan granted the Company 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. Subject to the achievement of certain milestone events, the Company may be required to pay Allergan up to $99.0 million in one-time development and regulatory milestone payments over the term of the Allergan License Agreement. 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 Allergan 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 Allergan License Agreement for the other party’s uncured material breach or insolvency, and the Company

5


 

may terminate the Allergan License Agreement at any time upon advance written notice to Allergan. Allergan may terminate the Allergan 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 Allergan 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 Allergan 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 Allergan License Agreement, the Company achieved certain development and regulatory milestones, resulting in $16.0 million in expense, which includes $8.0 million in milestone expense payable to AbbVie, Inc., which acquired Allergan, in the three months ended March 31, 2024.

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. Subject to the achievement of certain milestone events, the Company may 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. 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 $16.0 million as research and development expense, which includes $10.0 million paid in the three months ended March 31, 2024.

6


 

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.

 

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 March 31,

 

 

2024

 

 

2023

 

 

(In thousands, except share and per
share data)

 

Numerator—basic and diluted:

 

 

 

 

 

Net loss

$

(72,400

)

 

$

(41,126

)

Net loss attributable to common
   stockholders—basic and diluted

$

(72,400

)

 

$

(41,126

)

Net loss per share attributable to common
   stockholders—basic and diluted

$

(0.85

)

 

$

(0.59

)

Denominator—basic and diluted:

 

 

 

 

 

Weighted-average number of common shares
   used to compute net loss per share attributable
   to common stockholders—basic and diluted

 

85,213,200

 

 

 

69,438,890

 

 

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):

 

 

March 31,

 

 

 

2024

 

 

2023

 

Options to purchase common stock

 

 

11,872,530

 

 

 

9,536,312

 

Employee Stock Purchase Plan

 

 

31,645

 

 

 

15,331

 

Non-vested restricted stock units (RSUs)

 

 

1,520,999

 

 

 

392,288

 

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 U.S. Food and Drug Administration 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 payment was made in January 2024.

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.

7


 

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)

 

March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

114,615

 

 

$

94,707

 

 

$

19,908

 

 

$

 

Short-term investments

 

 

319,963

 

 

 

 

 

 

319,963

 

 

 

 

Long-term investments

 

 

87,416

 

 

 

 

 

 

87,416

 

 

 

 

Total assets

 

$

521,994

 

 

$

94,707

 

 

$

427,287

 

 

$

 

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 March 31, 2024 and 2023. In addition, there have been no changes in valuation techniques during the periods ended March 31, 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 cash equivalents and 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 March 31, 2024, the remaining contractual maturities of the available-for-sale securities were 1 to 19 months, and the balance in the Company’s accumulated other comprehensive loss 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 months ended March 31, 2024 and 2023. As a result, the Company did not reclassify any amounts out of accumulated other comprehensive loss for the same periods. The Company has a limited number of available-for-sale securities that are not in significant loss positions as of March 31, 2024, which the Company does not intend to sell, and it has concluded it will not be required to sell before recovery of the amortized cost for the investment at maturity.

8


 

The following table summarizes the available-for-sale securities:

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

 

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

 

 

(In thousands)

 

March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

$

180,927

 

 

$

 

 

$

(101

)

 

$

180,826

 

Corporate bonds

 

 

47,604

 

 

 

 

 

 

(72

)

 

 

47,532

 

US Treasury

 

 

176,012

 

 

 

 

 

 

(548

)

 

 

175,464

 

Federal bonds

 

 

23,500

 

 

 

 

 

 

(35

)

 

 

23,465

 

 

 

$

428,043

 

 

$

 

 

$

(756

)

 

$

427,287

 

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):

 

 

March 31, 2024

 

 

December 31, 2023

 

Prepaid insurance

 

$

1,817

 

 

$

807

 

Interest receivable on investments

 

 

1,513

 

 

 

1,227

 

Prepaid subscription

 

 

689

 

 

 

769

 

Prepaid state and local taxes

 

 

399

 

 

 

264

 

Prepaid rent

 

 

164

 

 

 

163

 

Other

 

 

83

 

 

 

63

 

Total prepaid expenses and other current assets

 

$

4,665

 

 

$

3,293

 

 

9. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

 

 

March 31, 2024

 

 

December 31, 2023

 

Accrued clinical study and trial costs

 

$

18,110

 

 

$

16,346

 

Accrued compensation and related costs

 

 

4,567

 

 

 

11,172

 

Accrued professional fees

 

 

1,642

 

 

 

1,450

 

Accrued milestone costs

 

 

8,000

 

 

 

10,000

 

Other

 

 

1,076

 

 

 

888

 

Total accrued expenses and other current liabilities

 

$

33,395

 

 

$

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

9


 

increase of 1,100,000 shares of common stock available for issuance under the Company’s 2023 Inducement Plan, or Inducement Plan.

As of March 31, 2024, there were 3,417,671 shares of common stock of available for issuance under the 2015 Plan and 1,071,950 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 March 31,

 

 

2024

 

 

2023

 

 

 

 

 

 

 

Research and development

$

4,144

 

 

$

2,778

 

Selling, general and administrative

 

4,755

 

 

 

3,460

 

Total

$

8,899

 

 

$

6,238

 

 

Compensation expense by type of award in the three months ended March 31, 2024 and 2023 was as follows:

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

 

 

 

 

 

 

Stock options

$

7,157

 

 

$

5,393

 

RSUs

 

1,645

 

 

 

781

 

ESPP

 

97

 

 

 

64

 

Total

$

8,899

 

 

$

6,238

 

 

As of March 31, 2024, there were $105.0 million of unrecognized compensation costs related to employee and non-employee unvested stock options and RSUs granted under the 2015 Plan and the Company’s 2007 Stock Plan, which are expected to be recognized over a weighted-average remaining service period of 2.8 years.

11. Stockholders’ Equity

The following table presents the changes in stockholders’ equity for the three months ended March 31, 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

 

 

10


 

The following table presents the changes in stockholders’ equity for the three months ended March 31, 2023:

(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, 2022

 

 

68,111,385

 

 

$

7

 

 

$

1,161,288

 

 

$

(806

)

 

$

(693,040

)

 

$

467,449

 

Stock purchase under ESPP

 

 

16,537

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

6,238

 

 

 

 

 

 

 

 

 

6,238

 

Unrealized gain on short-term investments

 

 

 

 

 

 

 

 

 

 

 

470

 

 

 

 

 

 

470

 

Vesting of RSUs

 

 

5,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee withholdings ESPP

 

 

 

 

 

 

 

 

196

 

 

 

 

 

 

 

 

 

196

 

Prefunded warrants, exercise

 

 

85,998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

276,506

 

 

 

 

 

 

2,278

 

 

 

 

 

 

 

 

 

2,278

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(41,126

)

 

 

(41,126

)

Balance as of March 31, 2023

 

 

68,495,426

 

 

$

7

 

 

$

1,170,000

 

 

$

(336

)

 

$

(734,166

)

 

$

435,505

 

 

At-the Market Program

In May 2023, the Company entered into a sales agreement with Cowen and Company, or TD Cowen, under which the Company could, from time to time, issue and sell shares of its common stock having aggregate sales proceeds of up to $200.0 million, in a series of one or more ATM equity offerings, or the 2023 ATM Program. TD Cowen is not required to sell any specific share amounts but acts as the Company’s sales agent, using commercially reasonable efforts consistent with its normal trading and sales practices. Pursuant to the sales agreement, shares will be sold pursuant to the previous shelf registration statement on Form S-3ASR (Registration No. 333-277424), which became automatically effective upon the filing on February 27,2024. The Company’s common stock will be sold at prevailing market prices at the time of the sale, and as a result, prices may vary. For the period ended March 31, 2024, the Company sold no shares of common stock under the 2023 ATM Program.

 

Pre-Funded Warrants

In December 2021, the Company sold pre-funded warrants to purchase 1,142,856 shares of common stock. As of March 31, 2024, 285,714 pre-funded warrants were considered issued and outstanding.

12. Commitments and Contingencies

From time to time, the Company may be subject to various claims and proceedings in the ordinary course of business. If the potential loss from any claim, asserted or unasserted, or proceeding is considered probable and the amount is reasonably estimable, the Company will accrue a liability for the estimated loss. There were no contingent liabilities recorded as of March 31, 2024.

11


 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the unaudited financial information and the notes thereto included in this Quarterly Report on Form 10-Q and the audited financial information and the notes thereto included in our Annual Report on Form 10-K that was filed with the Securities and Exchange Commission, or SEC, on February 27, 2024.

Company Overview

We are a clinical-stage biopharmaceutical company developing an innovative pipeline of cancer therapies. Our two lead product candidates are revumenib, and axatilimab. We are developing revumenib, a potent, selective, small molecule inhibitor of the menin-MLL binding interaction for the treatment of KMT2A rearranged, or KMT2Ar, also known as mixed lineage leukemia rearranged or MLLr, acute leukemias including acute lymphoblastic leukemia, or ALL, and acute myeloid leukemia, or AML, and nucleophosmin1, also known as NPM1, mutant AML. We are also exploring the use of revumenib as a treatment in solid tumors, specifically its activity in metastatic colorectal cancer. We are developing axatilimab, a monoclonal antibody that blocks the colony stimulating factor 1 receptor, or CSF-1R, in chronic graft-versus-host disease, or cGVHD, as well as idiopathic pulmonary fibrosis, or IPF. We plan to continue to leverage the technical and business expertise of our management team and scientific collaborators to license, acquire and develop additional therapeutics to expand our pipeline.

We have no products approved for commercial sale and have not generated any product revenues from product sales to date. We continue to incur significant research and development and other expenses related to our ongoing operations. Except for 2021, we have not been profitable and have incurred losses in each period since our inception in 2005. For the three months ended March 31, 2024 and 2023, we reported a net loss of $72.4 million and $41.1 million, respectively. As of March 31, 2024, we had an accumulated deficit of $974.8 million. As of March 31, 2024, we had cash, cash equivalents and short and long-term investments of $522.0 million.

Clinical Developments

Revumenib

In March 2024, we announced that the FDA had granted Priority Review for the New Drug Application (NDA) filing for revumenib, a potent, selective small molecule menin inhibitor, for the treatment of adult and pediatric relapsed or refractory (R/R) KMT2A-rearranged (KMT2Ar) acute leukemia. The NDA filing is being reviewed under the FDA’s Real-Time Oncology Review Program (RTOR) and has been assigned a Prescription Drug User Fee Act (PDUFA) target action date of September 26, 2024. RTOR allows for a more efficient review and close engagement between the sponsor and the FDA throughout the submission process, which historically has led to earlier approvals.
In March 2024, we also announced the completion of enrollment in the AUGMENT-101 pivotal trial cohort of patients with R/R mutant nucleophosmin (mNPM1) acute myeloid leukemia (AML). Topline data is expected in the fourth quarter of 2024 and could support a supplemental NDA (sNDA) filing for revumenib in R/R mNPM1 AML in the first half of 2025.
Positive results from a subset of the pivotal AUGMENT-101 trial in pediatric patients with R/R KMT2Ar AML and acute lymphoid leukemia (ALL) treated with revumenib were featured in a plenary session at the American Society of Pediatric Hematology/Oncology (ASPHO) Annual Meeting in April 2024.
Multiple Phase 1 combination trials of revumenib in mNPM1 and KMT2Ar acute leukemias are ongoing across the treatment landscape. The trials are expanding to validate recommended Phase 2 doses, with additional data expected in the second half of 2024. These trials include:
o
BEAT-AML: Evaluating the combination of revumenib with venetoclax and Azacytidine in front-line AML patients. This trial is being conducted as part of the Leukemia & Lymphoma Society’s Beat AML® Master Clinical Trial.
o
SAVE: Evaluating the all-oral combination of revumenib with venetoclax and decitabine/cedazuridine in R/R AML or mixed phenotype acute leukemias. The trial is being conducted by investigators from the MD Anderson Cancer Center.
o
AUGMENT-102: Evaluating the combination of revumenib with fludarabine and cytarabine in patients with R/R acute leukemias.
A Phase 1 trial of revumenib in combination with 7+3 chemotherapy followed by maintenance treatment in newly diagnosed patients with mNPM1 or KMT2Ar acute leukemias was initiated during the quarter.
We plan to initiate a pivotal trial of revumenib in combination with venetoclax and azacitidine in newly diagnosed mNPM1 or KMT2Ar acute leukemia patients unfit to receive intensive chemotherapy by year-end 2024.
Enrollment is ongoing in a Phase 1 proof-of-concept clinical trial of revumenib in patients with unresectable metastatic microsatellite stable colorectal cancer. We expect to provide an update on the trial in the second quarter of 2024.

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Axatilimab

In February, we announced that the FDA had accepted the Biologics License Application (BLA) filing for axatilimab, an anti-CSF-1R antibody, in patients with chronic graft-versus-host disease (GVHD) after failure of at least two prior lines of systemic therapy. The application was granted Priority Review and assigned a PDUFA action date of August 28, 2024.
Enrollment is ongoing in a 26-week randomized, double-blinded, placebo-controlled Phase 2 trial of axatilimab on top of standard of care in patients with idiopathic pulmonary fibrosis (IPF).
Our partner Incyte plans to initiate two combination trials with axatilimab in chronic GVHD in 2024, including a Phase 2 combination trial with ruxolitinib and a Phase 3 combination trial with steroids.

Corporate Updates

In March 2024, we announced the appointment of Steven Closter as Chief Commercial Officer. Mr. Closter brings to Syndax more than 30 years of commercial experience in the biopharmaceutical industry.

Significant Risks and Uncertainties

The current inflationary environment may materially affect our business and operating results by increasing the cost of our clinical trial materials and supplies, driving the U.S. Federal Reserve system to increase interest rates, which in turn increased our overhead costs. Rising interest rates could make it more difficult for us to obtain traditional financing on acceptable terms, if at all. Additionally, the ongoing recession risk together with the foregoing, could result in further economic uncertainty and volatility in the capital markets in the near term and, as a result could negatively affect our operations. Furthermore, such economic conditions have produced downward pressure on share prices. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, additional high inflation could increase our operating costs, including our labor costs and research and development costs. These costs may also be negatively impacted due to supply chain constraints, global geopolitical tensions as a result of the ongoing war between Russia and Ukraine and the war in Israel, worsening macroeconomic conditions and employee availability and wage increases, which may result in additional stress on our working capital.

Additionally, we are subject to other 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; 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.

Financial Overview

Revenue

To date, we have not generated any product revenues. Our ability to generate revenue and become profitable depends upon our ability to obtain marketing approval of and successfully commercialize our product candidates. We generated no revenue during the three months ended March 31, 2024 and 2023.

In September 2021, we granted Incyte an exclusive license to develop and commercialize axatilimab in the United States and the rest of the world. For the three months ended March 31, 2024, no revenue has been recognized under the Incyte Agreements.

Research and Development

Since our inception, we have primarily focused on our clinical development programs. Research and development expenses consist primarily of costs incurred for the development of our product candidates and include:

expenses incurred under agreements related to our clinical trials, including the costs for investigative sites and contract research organizations that conduct our clinical trials;
employee-related expenses associated with our research and development activities, including salaries, benefits, travel and non-cash stock-based compensation expenses;
manufacturing process-development, clinical supplies and technology-transfer expenses;
license fees and milestone payments under our license agreements;
consulting fees paid to third parties;
allocated facilities and overhead expenses; and
costs associated with regulatory operations and regulatory compliance requirements.

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Internal and external research and development costs are expensed as they are incurred. Cost-sharing amounts received by us are recorded as reductions to research and development expense. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or other information provided to us by our vendors.

Research and development activities are central to our business model. Drug candidates in late stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of late-stage clinical trials. We plan to continue to spend a significant amount of our resources on research and development activities for the foreseeable future as we continue to advance the development of our drug candidates. The amount of research and development expenses allocated to external spending will continue to grow, while we expect our internal spending to grow at a slower and more controlled pace.

It is difficult to determine, with certainty, the duration and completion costs of our current or future preclinical programs, research studies and clinical trials of our product candidates. The duration, costs and timing of research studies and clinical trials of our product candidates will depend on a variety of factors that include, but are not limited to, the following:

per patient costs;
the number of patients that participate;
the number of clinical trial sites;
the countries in which the clinical trials are conducted;
the length of time required to enroll eligible patients;
the potential additional safety monitoring or other studies requested by regulatory agencies;
the duration of patient monitoring;
the efficacy and safety profile of the product candidates; and
timing and receipt of any regulatory approvals.

In addition, the probability of success for each drug candidate will depend on numerous factors, including competition, manufacturing capability and commercial viability. The successful development of our drug candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs of the efforts that will be necessary to complete the remainder of the development of our product candidates for the period, if any, in which material net cash inflows from these potential drug candidates may commence. Clinical development timelines, the probability of success and development costs can differ materially from expectations.

Selling, General and Administrative

Selling, general and administrative expenses consist primarily of employee-related expenses, including salaries, benefits, non-cash stock-based compensation and travel expenses, for our employees in executive, finance, human resources, business development and support functions. Other selling, general and administrative expenses include facility-related costs not otherwise allocated to research and development expenses and accounting, tax, legal, information technology and consulting services. We anticipate that our selling, general and administrative expenses will further increase in the future as we continue to increase our headcount to support our continued research and development and anticipated commercialization of our product candidates. Additionally, in anticipation of expected regulatory approvals of revumenib and axatilimab, we have begun preparation for commercial launches of both drug candidates and, as as result, expect an increase in employee-related and sales and marketing expenses and other commercial expenses in 2024.

Interest Expense

Interest expense consists primarily of interest expense on our operational and capital leases.

Interest Income

Interest income consists of income earned on our cash, cash equivalents and short and long-term investment balances.

Other Income (Expense) , net

Other income (expense) net includes income (expense), consisting of revaluation of foreign currency related to trade payables.

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Recent Accounting Pronouncements

For a discussion of new accounting pronouncements please read Note 3 “Summary of Significant Accounting Policies,” , to our unaudited condensed consolidated financial statements included in this report.

Critical Accounting Estimates

Our management’s discussion and analysis of financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenue and expenses and related disclosures of contingent assets and liabilities. We base our estimates on historical experience, known trends and events and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. In making estimates and judgments, management employs critical accounting policies.

There have been no material changes to our critical accounting estimates described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Results of Operations

Comparison of the three months ended March 31, 2024 and 2023:

 

 

 

Three Months Ended March 31,

 

 

Change

 

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

 

(In thousands)

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

56,492

 

 

$

34,054

 

 

$

22,438

 

 

 

66

%

Selling, general and administrative

 

 

23,022

 

 

 

11,961

 

 

 

11,061

 

 

 

92

%

Total operating expenses

 

 

79,514

 

 

 

46,015

 

 

 

33,499

 

 

 

73

%

Loss from operations

 

 

(79,514

)

 

 

(46,015

)

 

 

33,499

 

 

 

-73

%

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(55

)

 

 

(40

)

 

 

(15

)

 

 

38

%

Interest income

 

 

7,256

 

 

 

5,076

 

 

 

2,180

 

 

 

43

%

Other expense

 

 

(87

)

 

 

(147

)

 

 

60

 

 

 

-41

%

Total other income (expense), net

 

 

7,114

 

 

 

4,889

 

 

 

2,225

 

 

 

46

%

Net loss

 

$

(72,400

)

 

$

(41,126

)

 

$

31,274

 

 

 

-76

%

Research and Development

The following table summarizes the research and development expenses for the three months ended March 31, 2024 and 2023:

 

 

 

Three Months Ended March 31,

 

 

Change

 

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

 

(In thousands)

 

Revumenib-related costs

 

$

31,441

 

 

$

14,987

 

 

$

16,454

 

 

 

110

%

Axatilimab-related costs

 

 

5,601

 

 

 

5,049

 

 

 

552

 

 

 

11

%

Other research and development programs

 

 

966

 

 

 

1,695

 

 

 

(729

)

 

 

-43

%

Personnel cost and other expenses

 

 

14,340

 

 

 

9,545

 

 

 

4,795

 

 

 

50

%

Stock-based compensation

 

 

4,144

 

 

 

2,778

 

 

 

1,366

 

 

 

49

%

Total research and development expenses

 

$

56,492

 

 

$

34,054

 

 

$

22,438

 

 

 

66

%

For the three months ended March 31, 2024, our total research and development expenses increased $22.4 million, or 66%, from the comparable quarter in the prior period. The increase is primarily due to:

An increase in $16.5 million in revumenib-related costs due to increases in registrational clinical trial expenses, the initiation of 1L/combination trials, higher companion diagnostic development costs, pre-commercial manufacturing activities and milestones payments.
An increase of $0.6 million in axatilimab-related costs due to an increase in CMC-related expenses, partially offset by lower registrational trial costs, net of expense reimbursement from Incyte, our co-development partner of $2.0 million and

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$3.5 million for the three months ended March 31, 2024 and 2023, respectively. The decrease in co-development partner costs is primarily due to lower registrational trial cost related expenses.
An increase of $6.2 million in personnel costs, including non-cash stock-based compensation, and other expenses related to increases in headcount to support on-going clinical trials and regulatory expenses, NDA activities and related expenses and overhead expenses (e.g., information technology and facilities).

The following table summarizes the internal and external research and development expenses for the three months ended March 31, 2024 and 2023:

 

 

 

Three Months Ended March 31,

 

 

Change

 

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

 

(In thousands)

 

External research and development expenses

 

$

39,215

 

 

$

22,791

 

 

$

16,424

 

 

 

72

%

Internal research and development expenses

 

 

17,277

 

 

 

11,263

 

 

 

6,014

 

 

 

53

%

Total research and development expenses

 

$

56,492

 

 

$

34,054

 

 

$

22,438

 

 

 

66

%

We expect research and development expenses to fluctuate from quarter-to-quarter depending on the timing of clinical trial activities, clinical manufacturing, and other development activities.

Selling, General and Administrative

The following tables summarizes the selling, general and administrative expenses for the three months ended March 31, 2024 and 2023:

 

 

 

Three Months Ended March 31,

 

 

Change

 

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

 

(In thousands)

 

Commercial related expenses

 

$

5,833

 

 

$

1,513

 

 

$

4,320

 

 

 

286

%

Other selling, general and administrative expenses

 

 

4,103

 

 

 

2,604

 

 

 

1,499

 

 

 

58

%

Personnel cost and other expenses

 

 

8,330

 

 

 

4,384

 

 

 

3,946

 

 

 

90

%

Stock-based compensation

 

 

4,756

 

 

 

3,460

 

 

 

1,296

 

 

 

37

%

Total selling, general and administrative expenses

 

$