On August 6, 2020 Synthetic Biologics, Inc. (NYSE American: SYN), a diversified clinical-stage company leveraging the microbiome to develop therapeutics designed to prevent and treat gastrointestinal (GI) diseases in areas of high unmet need, reported financial results for the quarter ended June 30, 2020 (Press release, Synthetic Biologics, AUG 6, 2020, View Source [SID1234563198]).
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"During the second quarter, we remained diligently focused on advancing our portfolio of GI and microbiome-focused clinical development programs while continuing to navigate the unprecedented global health and economic crisis sparked by the COVID-19 global pandemic," said Steven A. Shallcross, Chief Executive and Financial Officer of Synthetic Biologics. "We made significant progress positioning SYN-020, our orally delivered recombinant version of bovine intestinal alkaline phosphatase (IAP), for its first clinical trial. We were pleased to report the FDA responded to our Investigational New Drug application (IND) with a study-may-proceed letter to conduct a Phase 1 single ascending dose study of SYN-020 in healthy volunteers. Additionally, we expanded our collaboration with Massachusetts General Hospital (MGH) in the form of an exclusive option agreement to license intellectual property and technology to commercially develop SYN-020 for the treatment and prevention of metabolic and inflammatory diseases associated with aging. The Phase 1 clinical trial is intended to support the clinical development of SYN-020 in multiple indications, including an initial indication for the treatment of radiation enteropathy secondary to pelvic cancer therapy and indications that may be developed under the MGH license agreement."
Mr. Shallcross continued, "Enrollment in the Phase 2b investigator-sponsored clinical trial of SYN-010, intended to treat irritable bowel syndrome-constipation (IBS-C) and being conducted out of Cedars-Sinai Medical Center (CSMC), has recommenced following a temporary postponement during the first and second quarter due to the impact of the COVID-19 global pandemic. A data readout in the form of an interim futility analysis is expected during the third quarter and topline data is anticipated during the first quarter of 2021, subject to potential COVID-19 complications." Mr. Shallcross concluded, "We remain in close contact with Washington University as we continue to evaluate opportunities to initiate the planned Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic hematopoietic cell transplant (HCT) recipients in the face of the ongoing COVID-19 pandemic. We continue to closely monitor the crisis caused by the spread of the COVID-19 and look forward to sharing important updates and progress for this and all our GI and microbiome-focused clinical programs."
Clinical Development and Operational Update
Submitted an Investigational New Drug application (IND) to the U.S. Food and Drug Administration (FDA) for SYN-020, the Company’s recombinant version of bovine intestinal alkaline phosphatase (IAP) supporting an initial indication to mitigate the intestinal damage caused by radiation therapy routinely used to treat pelvic cancers (Q2 2020)
Received study-may-proceed letter from FDA to conduct a Phase 1 single ascending dose study in healthy volunteers, designed to evaluate SYN-020 for safety, tolerability, and pharmacokinetic parameters (Q3 2020),
The Phase 1 clinical program is intended to support the clinical development of SYN-020 in multiple indications, including an initial indication for the treatment and prevention of radiation enteropathy secondary to cancer therapy;
Entered into an agreement with Massachusetts General Hospital (MGH) granting the Company an option for an exclusive license to intellectual property and technology related to the use of IAP to maintain GI and microbiome health, diminish systemic inflammation, and treat age-related diseases (Q2 2020)
Under the terms of the agreement, Synthetic Biologics is granted exclusive rights to negotiate a worldwide license with MGH to commercially develop SYN-020 to treat and prevent metabolic and inflammatory diseases associated with aging,
If executed, the Company plans to use this license in the advancement of an expanded clinical development program for SYN-020;
Enrollment in the investigator-sponsored Phase 2b clinical trial of SYN-010, intended to treat IBS-C, has recommenced following a temporary halt in Q1 and Q2 2020 due to the COVID-19 global pandemic; however, the ability to continue to recruit new patients into this clinical trial remains at the discretion of CSMC and contingent upon the impact of the COVID-19 global pandemic
A data readout in the form of an interim futility analysis is expected during the third quarter of 2020 and topline data is anticipated during the first quarter of 2021, subject to the impact of COVID-19,
CSMC and Synthetic Biologics are co-funding the study. The patent rights covering the use of SYN-010 are owned by CSMC and are exclusively licensed by CSMC to Synthetic Biologics;
Received written notification from the FDA informing the Company that the FDA determined the Phase 1b/2a clinical program in adult allogeneic hematopoietic cell transplant (HCT) recipients may proceed per the submitted clinical program protocol (Q3 2020)
Due to the unique challenges posed by the global COVID-19 pandemic, Washington University continues to evaluate non-essential activities, which may have a direct impact on planned and ongoing clinical trials, including the SYN-004 (ribaxamase) Phase 1b/2a clinical program in allogeneic HCT recipients,
At this time, the Company has determined that postponing the initiation of the planned Phase 1b/2a clinical trial in allogeneic HCT recipients until at least the first quarter of 2021 remains the appropriate course of action due to continued uncertainty surrounding the ongoing global COVID-19 pandemic;
On July 30, 2020, the Company received written communication from NYSE American LLC (the "Exchange"), the Company’s current listing exchange, stating that in addition to Section 1003(iii), it is now also not in compliance with both Section 1003(i) and Section 1003(ii) of the NYSE American Company Guide since it reported a stockholders’ deficit of ($4.0) million as of March 31, 2020 and losses from continuing operations and/or net losses in its five most recent fiscal years ended December 31, 2019
The Company has previously submitted a plan of compliance which was accepted by the Exchange addressing how it intends to regain compliance with the Exchange continued listing standards by November 25, 2020, the end of the current compliance plan period,
The NYSE American notification does not affect the Company’s business operations or the listing of the Company’s shares on the Exchange, and does not represent any change or amendment to the Company’s consolidated financial statements or to its quarterly reports for the quarter ended March 30, 2020 or to its annual report on Form 10-K for the year ended December 31, 2019.
Quarter Ended June 30, 2020 Financial Results
General and administrative expenses increased by 23% to $1.3 million for the three months ended June 30, 2020, from $1.0 million for the three months ended June 30, 2019. This increase is primarily due to increased legal costs related to business development, patent execution and employee contract matters, vacation expense, and insurance costs. The charge related to stock-based compensation expense was $67,000 for the three months ended June 30, 2020, compared to $59,000 the three months ended June 30, 2019.
Research and development expenses decreased by 38% to $1.6 million for the three months ended June 30, 2020, from $2.6 million for the three months ended June 30, 2019. This decrease is primarily the result of the response to the global COVID-19 pandemic by our clinical development partners which led to the postponement of the Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic HCT recipients and a temporary halt during the second quarter in new enrollment in the Phase 2b investigator sponsored clinical trial of SYN-010. The charge related to stock-based compensation expense was $19,000 for the three months ended June 30, 2020, compared to $31,000 for the three months ended June 30, 2019.
Other income was $6,000 for the three months ended June 30, 2020, compared to other income of $80,000 for the three months ended June 30, 2019. Other income for the three months ended June 30, 2020 and 2019 is primarily comprised of interest income.
Cash and cash equivalents as of June 30, 2020 totaled $8.1 million, a decrease of $7.0 million from December 31, 2019.
Conference Call
Synthetic Biologics will hold a conference call today, Thursday, August 6, 2020, at 4:30 p.m. (EST). The dial-in information for the call is as follows, U.S. toll free: 1-888-347-5280 or International: +1 412-902-4280. Participants are asked to dial in 15 minutes before the start of the call to register. The call will also be webcast over the Internet at View Source." target="_blank" title="View Source." rel="nofollow">View Source An archive of the call will be available for replay at the same URL, View Source, for 90 days after the call.