On February 28, 2023 Syndax Pharmaceuticals, Inc. (Nasdaq: SNDX), a clinical-stage biopharmaceutical company developing an innovative pipeline of cancer therapies, reported its financial results for the fourth quarter and full year ended December 31, 2022 and provided a business update (Press release, Syndax, FEB 28, 2023, View Source [SID1234627880]).

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"With two pivotal data readouts expected later this year and potential regulatory filings to follow shortly thereafter, we expect 2023 will be an extraordinary year for Syndax," said Michael A. Metzger, Chief Executive Officer. "The fourth quarter was marked by significant progress on the clinical, regulatory and operational fronts and we expect this positive momentum to continue in 2023. We had a strong presence at the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting where we presented positive revumenib results from the Phase 1 portion of the AUGMENT-101 trial and the axatilimab Phase 1/2 trial data were published in the Journal of Clinical Oncology. These data further support the potential for both our pipeline agents to be first- and best-in-class therapies that could meaningfully change treatment paradigms."

"For revumenib, we are on track to begin reporting topline data from the AUGMENT-101 pivotal trial in the third quarter of this year, with the first data expected to be in patients with KMT2A rearranged (KMT2Ar) acute leukemia and expect to file a New Drug Application (NDA) by year-end 2023. For axatilimab, we also remain on track to report topline results from our pivotal AGAVE-201 trial in chronic graft versus host disease (cGVHD) in mid-2023, with a Biologics License Application (BLA) filing expected to follow by year-end 2023. We look forward to providing updates on all of our progress as we continue to strive toward our mission of realizing a future in which people with cancer live longer and better than ever before."

Recent Pipeline Progress and Anticipated Milestones

Revumenib

The pivotal Phase 2 portion of AUGMENT-101 is enrolling relapsed/refractory (R/R) patients across distinct trial populations: patients with nucleophosmin mutant (mNPM1) acute myeloid leukemia (AML), patients with KMT2Ar AML, and patients with KMT2Ar acute lymphocytic leukemia (ALL), each of which may serve as the basis for regulatory filings. Following the receipt of Breakthrough Therapy designation from the FDA for revumenib for the treatment of R/R acute leukemia harboring a KMT2A rearrangement, regardless of age or tumor type, and based on discussions with the FDA, the Company will pool data from the AUGMENT-101 cohorts enrolling R/R KMT2Ar AML and R/R KMT2Ar ALL to file a single NDA for the treatment of adult and pediatric KMT2Ar acute leukemia. The Company has completed enrollment of a sufficient number of KMT2Ar acute leukemia patients to support this filing strategy and expects to share topline data from the KMT2Ar cohort in the third quarter of 2023 and submit an NDA filing by the end of 2023. The Company also expects to complete enrollment of the NPM1 AML cohort in the second half of 2023.

During two oral presentations at the 64th ASH (Free ASH Whitepaper) Annual Meeting in December 2022, the Company reported updated positive data from the Phase 1 portion of the ongoing Phase 1/2 AUGMENT-101 trial. As of the March 2022 data cutoff date, 60 patients with R/R mutant NPM1 or KMT2Ar acute leukemia were efficacy evaluable. In the efficacy evaluable population, the overall response rate was 53% (32/60) with a CR/CRh rate of 30% (18/60), and 78% (14/18) of patients with CR/CRh attaining minimal residual disease (MRD) negativity. Additional analyses from the trial indicate that at doses which met the protocol defined criteria for a recommended Phase 2 dose, the CR/CRh rate was 27% in both the KMT2Ar (10/37) and the mutant NPM1 (3/11) patient populations. A total of 38% (12/32) of responders proceeded to transplant. The median time to response in the trial was 1.9 months, and the median duration of CR/CRh response was 9.1 months in the efficacy evaluable population as of data cutoff. Revumenib was well-tolerated, and there were no discontinuations due to treatment related adverse events.

Two trials, BEAT-AML and AUGMENT-102, are ongoing and will assess the safety, tolerability, and preliminary anti-leukemic efficacy of revumenib, and establish an appropriate Phase 2 dose when used in combination with other approved agents. BEAT-AML is a front-line combination trial of revumenib with venetoclax and azacitidine being conducted as part of the Leukemia & Lymphoma Society’s Beat AML Master Clinical Trial. AUGMENT-102 is a trial assessing revumenib in combination with chemotherapy in patients with R/R mNPM1 or KMT2Ar acute leukemias.

The Australasian Leukaemia and Lymphoma Group (ALLG) has initiated the INTERCEPT trial of revumenib as monotherapy in patients with AML who are minimal residual disease-positive following initial treatment. The trial is a part of the INTERCEPT AML Master Clinical Trial, a collaborative clinical trial investigating novel therapies to target early relapse and clonal evolution as pre-emptive therapy in AML. Revumenib is the first menin inhibitor to be included in the INTERCEPT AML Master Clinical Trial.

A proof-of-concept clinical trial of revumenib in patients with unresectable metastatic microsatellite stable colorectal cancer has initiated and the Company expects to report initial topline data from the trial by year-end 2023.
Axatilimab

The Company and its partner, Incyte, expect to report topline data from the pivotal AGAVE-201 trial evaluating axatilimab in patients with cGVHD following two or more prior lines of therapy in mid-2023, with the expectation for a BLA filing by year-end 2023.

The Company and Incyte announced that results from the Phase 1/2 trial of axatilimab in patients with recurrent or refractory cGVHD following two or more prior lines of therapy were published in the Journal of Clinical Oncology. The article, titled "Axatilimab for chronic graft-versus-host disease after failure of at least two prior systemic therapies: results of a Phase 1/2 study," is available online.

The Company plans to initiate a 52-week, randomized, double-blind and placebo-controlled Phase 2b trial to assess the efficacy, safety and tolerability of axatilimab in patients with idiopathic pulmonary fibrosis (IPF) in the first half of 2023. The primary endpoint will assess the change from baseline in forced vital capacity, which is the current registrational endpoint in IPF.

The Company is working with Incyte to initiate a trial testing axatilimab in combination with ruxolitinib in steroid naive cGVHD. The Phase 1 trial is expected to begin later this year.
Corporate Updates

In December 2022, the Company announced the appointment of Steve Sabus as Chief Commercial Officer. Mr. Sabus brings to Syndax nearly thirty years of commercial experience launching drugs and building sales and marketing organizations within the biopharmaceutical industry.
Fourth Quarter and Full Year 2022 Financial Results

As of December 31, 2022, Syndax had cash, cash equivalents, short-term and long-term investments of $481.3 million and 69.3 million common shares and prefunded warrants outstanding.

Fourth quarter 2022 research and development expenses increased to $31.8 million from $23.9 million, and for the full year increased to $118.5 million compared to $88.2 million for 2021. The increase was primarily due to increased clinical activities as well as employee related expenses and professional fees partially offset by decreased clinical and manufacturing expenses, in large part the result of axatilimab cost sharing benefits.

General and administrative expenses for the fourth quarter 2022 increased to $10.2 million from $6.9 million and for the full year increased to $33.3 million compared to $25.2 million for 2021. The increase is primarily due to increased pre-commercialization activities as well as employee related expenses and professional fees.

For the three months ended December 31, 2022, Syndax reported a net loss attributable to common stockholders of $39.2 million, or $0.62 per share, compared to a net gain attributable to common stockholders of $96.2 million, or $1.81 per share, for the prior year period. For the year ended December 31, 2022, Syndax reported a net loss attributed to common stockholders of $149.3 million or $2.46 per share, compared to a net gain attributable to common stockholders of $24.9 million or $0.48 per share for the prior year.

Financial Update and Guidance

In December 2022, Syndax issued 7,840,909 shares of its common stock at a price to the public of $22.00 per share. This includes the exercise in full by the underwriters of their option to purchase up to 1,022,727 additional shares of common stock. As a result, Syndax received aggregate net proceeds of $162.0 million after deducting underwriting discounts and commissions and estimated offering expenses payable by Syndax.

For the first quarter of 2023, the Company expects research and development expenses to be $30 to $35 million and total operating expenses to be $40 to $45 million. For the full year of 2023, the Company expects research and development expenses to be $160 to $175 million and total operating expenses to be $225 to $240 million.

Conference Call and Webcast

In connection with the earnings release, Syndax’s management team will host a conference call and live audio webcast at 4:30 p.m. ET today, Tuesday, February 28, 2023.

The live audio webcast and accompanying slides may be accessed through the Events & Presentations page in the Investors section of the Company’s website. Alternatively, the conference call may be accessed through the following:

Conference ID: SNDXQ422
Domestic Dial-in Number: 800-245-3047
International Dial-in Number: 203-518-9765
Live webcast: https://www.veracast.com/webcasts/OpenEx/General/SNDXQ4.cfm

For those unable to participate in the conference call or webcast, a replay will be available on the Investors section of the Company’s website at www.syndax.com approximately 24 hours after the conference call and will be available for 90 days following the call.

On February 28, 2023 Surface Oncology (Nasdaq: SURF), a clinical-stage immuno-oncology company developing next-generation immunotherapies that target the tumor microenvironment, reported that Rob Ross, M.D., chief executive officer, will participate in a Novel Immuno-Oncology (IO) panel discussion at the Cowen 43rd Annual Health Care Conference taking place at the Marriott Copley Place in Boston, MA (Press release, Surface Oncology, FEB 28, 2023, View Source [SID1234627879]).

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The panel discussion will be held on Monday, March 6, 2023, at 9:10 a.m. ET, and a live audio webcast of the session may be accessed by visiting the Events page on the Investors & Media section of the Surface Oncology website. In addition, a replay of the webcast will be available following the discussion.

On February 28, 2023 Supernus Pharmaceuticals, Inc. (Nasdaq: SUPN), a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, reported financial results for the fourth quarter and full year of 2022 and associated Company developments (Press release, Supernus, FEB 28, 2023, View Source [SID1234627878]).

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"In 2022, we continued to execute on our long-term growth strategy focusing on successfully transitioning from our legacy and mature products to our growth products, and finished the year with record revenues of $667.2 million, up 15% from the prior year," said Jack Khattar, President and CEO of Supernus. "Based on this successful transition and with a solid foundation, we are confident that our growth drivers will allow us to offset the impact coming from loss of exclusivity for Trokendi XR and position us well to drive strong revenue and non-GAAP operating income growth in 2024 and beyond."

Qelbree Update

Total IQVIA prescriptions were 117,635 in the fourth quarter of 2022, an increase of 24% compared to total prescriptions of 94,681 in the third quarter of 2022. In January 2023, the most recent month available, total prescriptions reached 42,881.
Continued healthy growth in the U.S. attention-deficit hyperactivity disorder market with 2022 total number of prescriptions reaching more than 90 million, an increase of 9% compared to 2021, according to IQVIA.
The average wholesale acquisition cost per Qelbree prescription continued to increase in the fourth quarter of 2022, driven by increases in the average daily dose and prescription size.
Executed a second significant pharmacy benefit manager contract effective January 2023, and continued making progress in securing and improving managed care coverage.
Qelbree continues to expand its base of prescribers, with approximately 16,822 prescribers in the fourth quarter of 2022, up from 14,265 prescribers from the third quarter of 2022.

Product Pipeline Update

SPN-830 (apomorphine infusion device) – Continuous treatment of motor fluctuations ("off" episodes) in Parkinson’s disease (PD)

The Company will be meeting with the U.S. Food and Drug Administration (FDA) in April 2023 to discuss the Complete Response Letter received in October 2022. We will announce the timing for our resubmission after our discussion with the FDA.
SPN-820 – Novel first-in-class activator of mTORC1

The Phase II multi-center, randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment-resistant depression is ongoing. The study will examine the efficacy and safety of SPN-820 over a course of five weeks of treatment in approximately 270 patients. The primary outcome measure is the change from baseline to end of treatment period on the Montgomery-Asberg Depression Rating Scale (MADRS) Total Score, a standard depression rating scale.
SPN-817 – A novel product candidate for the treatment of epilepsy

The Company has commenced an open-label Phase II clinical study of SPN-817 in patients with treatment-resistant seizures. Depending on the rate of enrollment, the Company expects to have data in the first half of 2024.
Financial Highlights

Net Product Sales

For the three months ended December 31, 2022, net product sales were $163.8 million, a 6% increase over net product sales of $155.0 million for the same period in 2021. For the full year ended December 31, 2022, net product sales were $649.4 million, a 14% increase over net product sales of $567.5 million for the same period in 2021. The increases in both periods were primarily due to net product sales of GOCOVRI and growth in net product sales of Qelbree.

The following table provides information regarding net product sales during the three months and full year ended December 31, 2022 and 2021 (dollars in millions):

Three Months Ended
December 31, Full Year Ended
December 31,
2022 2021 Change % 2022 2021 Change %
Net product sales
Trokendi XR $ 57.2 $ 73.3 (22 )% $ 261.2 $ 304.8 (14 )%
Oxtellar XR 27.4 28.6 (4 )% 115.4 110.7 4 %
GOCOVRI(1) 29.2 9.8 ** 104.4 9.8 **
Qelbree 23.6 7.2 228 % 61.3 9.9 519 %
APOKYN 18.1 25.9 (30 )% 75.3 99.2 (24 )%
Other(2) 8.3 10.2 (19 )% 31.8 33.1 (4 )%
Total net product sales $ 163.8 $ 155.0 6 % $ 649.4 $ 567.5 14 %
___________________________________________
(1) Net product sales as of the acquisition of Adamas Pharmaceuticals, Inc. by the Company (the "Adamas Acquisition") in November 2021.
(2) Includes net product sales of MYOBLOC, XADAGO and Osmolex ER.
** Percentage not meaningful for comparative purposes since net product sales for 2021 included revenues from date of Adamas Acquisition.

Operating earnings (GAAP and non-GAAP)

For the three months ended December 31, 2022, operating earnings (GAAP) was $34.3 million, as compared to operating earnings (GAAP) of $6.1 million for the same period in 2021. The increase was primarily due to full quarter net product sales of the commercial products acquired through the Adamas Acquisition and decreased selling, general and administrative expense due to the Adamas Acquisition-related costs incurred in 2021. For the full year ended December 31, 2022 operating earnings (GAAP) were $46.1 million, as compared to $86.0 million for the same period in 2021. The decrease was primarily due to activities to support the launch of Qelbree to the adult population and amortization of acquired intangible assets from the Adamas Acquisition.

For the three months ended December 31, 2022, adjusted operating earnings (non-GAAP) were $57.6 million, compared to $46.2 million in the fourth quarter of 2021. For the full year ended December 31, 2022, adjusted operating earnings (non-GAAP) were $148.8 million, compared to $167.3 million for the same period of 2021.

Reconciliation of GAAP to Non-GAAP Adjustments

An itemized reconciliation between operating earnings on a GAAP basis and operating earnings on a non-GAAP basis is as follows (dollars in millions):

Three Months Ended
December 31, Full Year Ended
December 31,
2022 2021 2022 2021
Operating earnings – As Reported (GAAP) $ 34.3 $ 6.1 $ 46.1 $ 86.0
Adjustments:
Amortization of intangible assets 20.7 12.0 82.6 30.0
Share-based compensation 4.3 4.0 17.6 17.9
Contingent consideration expense (gain) (2.4 ) 1.1 (0.5 ) (6.5 )
Acquisition-related costs — 22.3 — 22.3
Other R&D — — — 15.0
Depreciation 0.7 0.7 3.0 2.6
Operating earnings – As Adjusted (non-GAAP) $ 57.6 $ 46.2 $ 148.8 $ 167.3

Non-GAAP operating earnings adjusts for non-cash items including amortization of intangible assets, share-based compensation expense, change in fair value of contingent consideration, depreciation, and non-recurring costs. Acquisition-related costs reflect non-recurring acquisition-related costs associated with the Adamas Acquisition. Other R&D reflects a non-cash expense related to the equity investment in Navitor due to the accounting impact of the March 2021 Navitor corporate restructuring. The increase in amortization of intangible assets for the three and twelve month periods ended December 31, 2022 was due to the amortization of acquired intangible assets from the Adamas Acquisition in November 2021.

Net earnings (GAAP)

For the three months ended December 31, 2022, net earnings (GAAP) and diluted earnings per share (GAAP) were $25.5 million and $0.43, respectively, as compared to $2.4 million, or $0.04 per diluted share, in the same period in 2021.

For the full year ended December 31, 2022, net earnings (GAAP) and diluted earnings per share (GAAP) were $60.7 million and $1.04, respectively, as compared to $53.4 million, or $0.98 per diluted share, in the same period in 2021.

Balance sheet

At December 31, 2022, the Company’s cash, cash equivalents, current and long-term marketable securities are approximately $555.2 million, compared to $458.8 million as of December 31, 2021. This increase was primarily due to cash generated from operations.

In February 2023, the Company entered into a credit line agreement with UBS Bank USA providing the Company an uncommitted demand secured line of credit of up to $150.0 million, which can be drawn at any time.

Full Year 2023 Financial Guidance (GAAP)

The Company’s full year 2023 total revenue guidance represents approximately 30% growth at the midpoint compared to full year 2022, excluding revenues of Trokendi XR in both periods. The Company’s full-year 2023 financial guidance is set forth below (dollars in millions):

Amount
Total revenues (1) (Includes $60 million to $80 million of Trokendi XR(2)) $580 – $620
Combined R&D and SG&A expenses $460 – $490
Operating loss (3) $(50) – $(25)
___________________________________________
(1) Includes net product sales and royalty revenue.
(2) Reflects generic entry on Trokendi XR in 2023.
(3) Includes amortization of intangible assets and contingent consideration expense (gain).

Full Year 2023 Financial Guidance – GAAP to Non-GAAP Adjustments

An itemized reconciliation between projected operating loss on a GAAP basis and projected operating earnings on a non-GAAP basis is as follows (dollars in millions):

Amount
Operating loss – GAAP $(50) – $(25)
Adjustments:
Amortization of intangible assets $80 – $80
Share-based compensation $20 – $23
Contingent consideration $10 – $12
Depreciation $5 – $5
Operating earnings – non-GAAP $65 – $95

Non-GAAP Financial Information

This press release contains a financial measure, non-GAAP operating earnings, which does not comply with United States generally accepted accounting principles (GAAP). The non-GAAP financial measure should be considered in addition to, not as a substitute for or in isolation from, or superior to measures prepared in accordance with GAAP. Non-GAAP operating earnings adjusts for non-cash share-based compensation expense, depreciation and amortization, and accretion of contingent consideration, and for factors that are unusual, non-recurring or unpredictable, and excludes those costs, expenses, and other specified items presented in the reconciliation tables in this press release. We believe the use of non-GAAP operating earnings is useful supplemental information to investors regarding the Company’s results of operations and assist management, analysts, and investors in evaluating the performance of the business. There are limitations associated with the use of non-GAAP financial measures. Including such measures may not be entirely comparable to similarly titled measures used by other companies, may not reflect all items of income and expense, as applicable, that affect our operations, potential differences among calculation methodologies, may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. We mitigate these limitations by reconciling the non-GAAP financial measure to the most comparable GAAP financial measure. Investors are encouraged to review the reconciliation. The Company’s financial guidance is also being provided on both a reported and a non-GAAP basis.

Conference Call Details

Supernus will host a conference call and webcast today, February 28, 2023, at 4:30 p.m. Eastern Time to discuss these results. A live webcast will be available in the Events & Presentations section of the Company’s Investor Relations website www.supernus.com/investors.

Participants may also pre-register any time before the call here. Once registration is completed, participants will be provided a dial-in number with a personalized conference code to access the call. Please dial in 15 minutes prior to the start time.

Following the live call, a replay will be available on the Company’s Investor Relations website www.supernus.com/investors. The webcast will be available on the Company’s website for 60 days following the live call.

On February 28, 2023 SpringWorks Therapeutics, Inc. (Nasdaq: SWTX), a clinical-stage biopharmaceutical company focused on developing life-changing medicines for patients with severe rare diseases and cancer, reported financial results for the fourth quarter and full-year periods ended December 31, 2022 and provided an update on recent company developments (Press release, SpringWorks Therapeutics, FEB 28, 2023, View Source [SID1234627877]).

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"2022 was a pivotal year for SpringWorks. We delivered highly positive data from our Phase 3 DeFi trial of nirogacestat in desmoid tumors, which served as the basis for our New Drug Application that was recently accepted by the FDA and granted Priority Review. We are excited to have the opportunity to change the treatment landscape for the desmoid tumor community following an anticipated approval later this year," said Saqib Islam, Chief Executive Officer of SpringWorks. "We are equally encouraged by the potential for mirdametinib to be a best-in-class therapy for children and adults with NF1-PN. We look forward to reporting topline data from our Phase 2b ReNeu trial this year, which could support an NDA submission in the first half of 2024, and to advancing our emerging portfolio of BCMA combinations in multiple myeloma and biomarker-defined metastatic solid tumor programs. We believe that our continued strong execution, a financial position that we expect will fund us well into 2026, and durable intellectual property protections for our lead assets will support our long-term growth as we work towards our ambition of achieving two product launches by 2025."

Recent Business Highlights and Upcoming Milestones

Rare Oncology

In February 2023, the U.S. Food and Drug Administration (FDA) accepted SpringWorks’ New Drug Application (NDA) for nirogacestat, an investigational oral, small molecule gamma secretase inhibitor, in development as a monotherapy for the treatment of adults with desmoid tumors. The application has been granted Priority Review and given a Prescription Drug User Fee Act (PDUFA) action date of August 27, 2023. In addition, the FDA has stated that it is not currently planning to hold an advisory committee meeting to discuss the application. SpringWorks also expects to file a Marketing Authorization Application for nirogacestat with the European Medicines Agency in 2024.
In the fourth quarter of 2022, the Phase 2 study sponsored by the Children’s Oncology Group evaluating nirogacestat in pediatric patients with desmoid tumors met its accrual goal.
In the fourth quarter of 2022, SpringWorks participated in a Type C meeting with the FDA to align on the statistical analysis plan for the Phase 2b ReNeu trial evaluating mirdametinib, an investigational MEK inhibitor, in adult and pediatric patients with NF1-associated plexiform neurofibromas (NF1-PN) and expectations for an anticipated NDA submission in this indication. SpringWorks expects to present topline data from the pediatric and adult cohorts of the Phase 2b ReNeu trial of mirdametinib in NF1-PN in the second half of 2023. Pending these data, SpringWorks anticipates submitting an NDA for mirdametinib as a treatment for NF1-PN in the first half of 2024.
Patients continue to be enrolled in a Phase 2 trial evaluating nirogacestat in ovarian granulosa cell tumors.
B-cell Maturation Antigen (BCMA) Combinations in Multiple Myeloma

SpringWorks continues to advance nirogacestat as a potential cornerstone of BCMA combination therapy across modalities in collaboration with industry leaders. In 2023, SpringWorks expects that additional clinical data of nirogacestat in combination with BCMA-directed therapies will be presented and that additional planned Phase 1 collaborator studies will be initiated.
Biomarker-Defined Metastatic Solid Tumors

The Phase 1 trial evaluating BGB-3245, a selective RAF dimer inhibitor, as a monotherapy in adult patients with RAF mutant solid tumors is advancing into cohort expansion studies. SpringWorks expects data from this trial to be presented at a medical conference in the first half of 2023. In February 2023, the first patient was dosed in a Phase 1/2a combination study of BGB-3245 and mirdametinib. BGB-3245 is being developed by MapKure, LLC, a joint venture between SpringWorks and BeiGene.
The BeiGene-sponsored Phase 1b/2 clinical trial evaluating mirdametinib with BeiGene’s RAF dimer inhibitor, lifirafenib, in adult patients with RAS/RAF mutant and other MAPK pathway aberrant solid tumors is ongoing. SpringWorks expects data from this trial to be presented at a medical conference in the first half of 2023.
In the fourth quarter of 2022, SpringWorks nominated TEAD inhibitor development candidate, SW-682. The Company expects to present additional preclinical data of SW-682 at a medical conference in the first half of 2023 and to file an Investigational New Drug Application for SW-682 in 2023.
General Corporate

SpringWorks has expanded and strengthened its intellectual property portfolio, including a new patent issued by the United States Patent and Trademark Office (USPTO) in November 2022 directed to pharmaceutical compositions of nirogacestat (U.S. Patent No. 11,504,354), which expires in 2042 and represents the seventh Orange Book-listable patent for nirogacestat. In addition, in February 2023, the USPTO granted a new patent directed to dispersible formulations of mirdametinib (U.S. Patent No. 11,571,402), which expires in 2041; this patent covers the formulation of mirdametinib that is being developed for pediatric patients with NF1-PN.
Fourth Quarter and Full Year 2022 Financial Results

Research and Development (R&D) Expenses: R&D expenses were $37.9 million and $146.1 million for the 2022 fourth quarter and full-year periods, respectively, compared to $29.3 million and $101.7 million for the comparable periods of 2021. The increase in R&D expense for the 2022 full-year period was primarily attributable to a $31.8 million increase in internal costs driven by the growth in employee costs associated with increases in the number of personnel, including an increase in stock-based compensation expense, and an increase of $22.6 million in external costs related to drug manufacturing, clinical trial and other research, with the full year increase partially offset by an $11.0 million decrease in licensing costs related to the nonrefundable upfront payment to Katholieke Universiteit Leuven and the Flanders Institute for Biotechnology for the in-licensing of the TEAD inhibitor program in May 2021.
General and Administrative (G&A) Expenses: G&A expenses were $40.5 million and $134.6 million for the 2022 fourth quarter and full-year periods, respectively, compared to $26.5 million and $71.8 million for the comparable periods of 2021. The increase in G&A expense was primarily attributable to an increase in internal costs driven by the growth in employee costs associated with increases in the number of personnel, including an increase in stock-based compensation expense as we continue to expand our operations to support the organization, and an increase in information technology costs and consulting and professional services, including legal, regulatory and compliance, as we continue to build new capabilities, including commercial.
Net Loss Attributable to Common Stockholders: SpringWorks reported a net loss of $74.2 million, or $1.19 per share, for the fourth quarter of 2022 and a net loss of $277.4 million, or $5.21 loss per share, for the year ended December 31, 2022. This compares to a net loss of $56.1 million, or $1.15 per share, for the fourth quarter of 2021 and a net loss of $173.9 million, or $3.59 per share for the year ended December 31, 2021.
Cash Position: Cash, cash equivalents and marketable securities were $597.0 million as of December 31, 2022.

On February 28, 2023 Schrödinger, Inc. (Nasdaq: SDGR), whose physics-based computational platform is transforming the way therapeutics and materials are discovered, reported financial results for the fourth quarter and full-year ended December 31, 2022, and provided its financial outlook for 2023 (Press release, Schrodinger, FEB 28, 2023, View Source [SID1234627876]).

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"We are very pleased with our performance across all areas of our business last year, with strong fourth quarter 2022 software revenue growth even in a challenging macroeconomic environment. Drug discovery revenue for 2022 nearly doubled compared to the prior year, our portfolio advanced and expanded, and we added two new collaborations," stated Ramy Farid, Ph.D., chief executive officer of Schrödinger. "Looking ahead, we are focused on our strategic priorities of driving continued growth in use of our technology, further enhancing the capabilities of our platform, and advancing our collaborative and proprietary pipeline. We are already making important progress on these priorities, and today we announced the selection of our Wee1 development candidate, SGR-3515, and have initiated IND-enabling studies for this program."

"We are pleased that we overcame several headwinds specific to our business in 2022 to deliver strong fourth quarter and full-year financial results. Our software revenue growth was driven by larger renewals from existing customers, including collaborators who significantly scaled up their adoption of our software in their internal discovery programs, and accelerated renewal of multi-year agreements," stated Geoff Porges, MBBS, chief financial officer of Schrödinger. "We expect both software and drug discovery to contribute to revenue growth this year. With significant operating leverage emerging from our business and a strong balance sheet, we are very well positioned for continued growth and investment in the unique opportunities offered by our technology platform."

Fourth Quarter 2022 Financial Results
•Total revenue for the fourth quarter increased 23% to $56.8 million, compared to $46.2 million in the fourth quarter of 2021.
•Software revenue for the fourth quarter increased 24% to $47.8 million, compared to $38.6 million in the fourth quarter of 2021. Multi-year agreements contributed significantly to revenue in the quarter and approximated the contribution to reported revenue from such agreements in the fourth quarter of 2021.
•Drug discovery revenue was $9.0 million for the fourth quarter, compared to $7.6 million in the fourth quarter of 2021.
•Software gross margin increased to 83% for the fourth quarter, compared to 78% in the fourth quarter of 2021.
•Operating expenses were $67.2 million for the fourth quarter, compared to $48.9 million for the fourth quarter of 2021.
•Other income, which includes changes in fair value of equity investments and interest income/expense, was $1.2 million for the fourth quarter, compared to other expense of $7.9 million for the fourth quarter of 2021.
•Net loss for the fourth quarter was $27.2 million, compared to $30.7 million in the fourth quarter of 2021.

Three Months Ended
December 31,
2022 2021 % Change
(in millions)
Total revenue $ 56.8 $ 46.2 23%
Software revenue 47.8 38.6 24%
Drug discovery revenue 9.0 7.6 19%
Software gross margin 83 % 78 %
Operating expenses $ 67.2 $ 48.9 38%
Other income (expense) $ 1.2 $ (7.9) (115)%
Net loss $ (27.2) $ (30.7) (11)%

Full Year 2022 Financial Results
•Total revenue for the full year increased 31% to $181.0 million, compared to $137.9 million for 2021.
•Software revenue for the full year 2022 increased 20% to $135.6 million, compared to $113.2 million for 2021, with multi-year agreements making a similar contribution to reported revenue to the contribution in 2021 and 2020.
•Drug discovery revenue for the full year was $45.4 million for the full year 2022, compared to $24.7 million for 2021.
•Software gross margin was 78% for the full year, compared to 77% for 2021.
•Operating expenses were $247.8 million for the full year, compared to $177.1 million for 2021.
•Other expense, which includes gains/loss on equity investments, changes in fair value of such investments and interest income/expense, was $2.3 million for the full year, compared to other income of $10.6 million for 2021.
•Net loss for the full year was $149.2 million, compared to $101.2 million for 2021.
•At December 31, 2022, Schrödinger had cash, cash equivalents, restricted cash and marketable securities of approximately $456 million, compared to approximately $479 million at September 30, 2022.

Twelve Months Ended
December 31,
2022 2021 % Change
(in millions)
Total revenue $ 181.0 $ 137.9 31%
Software revenue 135.6 113.2 20%
Drug discovery revenue 45.4 24.7 84%
Software gross margin 78 % 77 %
Operating expenses $ 247.8 $ 177.1 40%
Other income (expense) $ (2.3) $ 10.6 (122)%
Net loss $ (149.2) $ (101.2) 47%

Full Year 2022 Key Performance Indicators (KPIs)
Schrödinger today reported 2022 key performance indicators for both the software and drug discovery components of its business.

Software. Total annual contract value (ACV) increased 25% to $140.6 million, and the ACV of Top 10 customers increased 36% to $46.5 million. The number of customers with an ACV over $5 million increased to four from two customers, the number of customers with an ACV over $1 million increased to 18 from 15, and the number of customers with an ACV over $100,000 increased 19% to 227. Schrödinger’s customer retention rate in 2022 was 96%, and the company ended the year with 1,748 customers with an ACV ov her $1,000.

Drug discovery. Schrödinger ended 2022 with 15 ongoing programs eligible for royalties, up from 13 the previous year. For the year ended December 31, 2022, the number of collaborators since 2018 increased to 17 from 15.

Software KPI 2022 2021
Total annual contract value (ACV) $140.6 million $112.1 million
ACV of Top 10 customers $46.5 million $34.1 million
Number of customers over $5M in ACV 4 2
Number of customers over $1M in ACV 18 15
Number of customers over $100,000 in ACV 227 190
Customer retention over $100,000 ACV 96% 98%
Number of active customers with ACV over $1,000 1,748 1,647

Drug Discovery KPI 2022 2021
Ongoing programs eligible for royalties 15 13
Number of collaborators since 2018 17 15

For additional information about our KPIs, see "Operating Metrics" below.

2023 Financial Outlook
As of February 28, 2023, Schrödinger provided the following expectations for the fiscal year ending December 31, 2023:
•Software revenue growth is expected to be in the range of 13 to 17 percent
•Drug discovery revenue is expected to range from $70 million to $90 million
•Software gross margin is expected to be similar to software gross margin for the full year 2022
•Operating expense growth in 2023 is expected to be significantly lower than operating expense growth in 2022 and to be similar to revenue growth in 2023
•Cash used for operating activities in 2023 is expected to be below cash used for operating activities in 2022

For the first quarter of 2023, software revenue is expected to range from $31 million to $35 million, and drug discovery revenue is expected to range from $30 million to $34 million.

Recent Highlights
Corporate
•In February, Schrödinger reported the receipt of an approximately $111.3 million cash distribution from Nimbus Therapeutics in connection with Takeda’s acquisition of Nimbus Lakshmi, Inc., a wholly-owned subsidiary of Nimbus Therapeutics, and its tyrosine kinase 2 (TYK2) inhibitor NDI-034858. Schrödinger expects to receive a second distribution of approximately $36.0 million, also related to Takeda’s $4.0 billion upfront payment to Nimbus, in the second quarter of 2023, for a total distribution of approximately $147.3 million. NDI-034858 is being evaluated for the treatment of multiple autoimmune diseases following positive Phase 2b results in psoriasis. The distribution was on account of Schrödinger’s equity stake in Nimbus, which as of December 31, 2022, was 3.8% on a fully diluted basis.

•In February, Structure Therapeutics, Inc., a collaborator focused on developing novel oral small molecule therapeutics for metabolic and pulmonary diseases, completed an initial public offering for gross proceeds of $185.3 million. Schrödinger participated in the IPO and now holds a 3.7 percent equity stake in Structure Therapeutics.

•In January, Schrödinger announced that it amended its discovery, development and commercialization collaboration with Bristol Myers Squibb to include a new discovery program in neurology. Schrödinger received an additional upfront payment for the new program and is eligible to receive discovery, development and commercialization milestones, as well as royalties on net sales, similar to the terms of the original agreement.

•In January, Schrödinger and Otsuka Pharmaceutical Co., Ltd. announced an innovative multi-part agreement that includes a collaboration to discover molecules for an emerging CNS disease target, as well as a knowledge-transfer agreement and an expanded licensing agreement to deploy Schrodinger’s technology platform at scale in Otsuka’s new drug discovery center in Osaka. Schrödinger received an upfront payment and will be eligible to receive discovery, development and regulatory milestones, as well as tiered royalties on net sales of any products emerging from the drug discovery collaboration in all markets.

Pipeline
•Schrödinger is advancing its MALT1 inhibitor, SGR-1505, in Phase 1 clinical development. A dose-escalation study designed to evaluate the safety, pharmacokinetics, pharmacodynamics, and early signals of clinical activity of SGR-1505 as a monotherapy is open to enrollment in patients with relapsed or refractory B-cell malignancies.

•Schrödinger announced today that it has selected SGR-3515 as its development candidate for its Wee1 program. SGR-3515 demonstrated strong anti-tumor activity with limited off-target effects in preclinical studies. Activities to support IND-enabling studies are underway.

•Schrödinger is continuing to progress its CDC7 inhibitor, SGR-2921, through IND-enabling studies to support a planned IND submission this year. In December, the company presented data at the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting demonstrating that SGR-2921 exhibited strong anti-tumor activity as a monotherapy and in combination with standard of care agents in multiple preclinical tumor models.

•Today, Schrödinger announced that it is expecting the first program from the Bristol Myers Squibb collaboration to advance to development candidate status. Following finalization of this advancement, Schrödinger will recognize a drug discovery milestone associated with advancement of the program, which is projected in the first quarter of 2023.

•In January, Schrödinger announced a new proprietary program targeting LRRK2, a genetically validated target with therapeutic potential for the treatment of Parkinson’s disease. Schrödinger has generated cryo-EM structures of LRRK2 which is helping to accelerate the identification of novel LRRK2 inhibitors.

Platform
•Schrödinger scientists continued to advance the company’s platform, and recently published research highlighting a computational, physics-based approach to enable accurate prediction of brain penetrant molecules. This computational advancement is being leveraged in Schrödinger’s programs in neurology.

•In a collaborative effort with AbbVie, Schrödinger and AbbVie scientists published research demonstrating in silico methods to accurately predict the oxidation risk of residues in monoclonal antibodies, a characteristic that is critical to understand during antibody discovery and development.

•Scientists at L’Oréal and Schrödinger recently published research highlighting the potential of molecular dynamics simulations to study the interactions between complex polymers and biological substrates, such as hair. The research is expected to play an increasingly important role in advancing eco-friendly polymer formulation design.

•Schrödinger reported that it appointed Pratyush Tiwary, Ph.D., to its scientific advisory board. Dr. Tiwary’s research is at the interface of computational chemistry and machine learning, underscoring Schrödinger’s commitment to further integrate next-generation machine learning methods with highly predictive atomistic simulations. Dr. Tiwary is an associate professor at the University of Maryland, College Park in the Department of Chemistry and Biochemistry and the Institute for Physical Science and Technology. He is also an affiliated faculty member of Applied Mathematics, Biophysics, Chemical Physics and Materials Science and Engineering.

Webcast and Conference Call Information
Schrödinger will host a conference call to discuss its fourth quarter and full year 2022 financial results on Tuesday, February 28, 2023, at 4:30 p.m. ET. The live webcast can be accessed under "News & Events" in the investors section of Schrödinger’s website, View Source To participate in the live call, please register for the call here. It is recommended that participants register at least 15 minutes in advance of the call. Once registered, participants will receive the dial-in information. The archived webcast will be available on Schrödinger’s website for approximately 90 days following the event.