On February 27, 2019 Synthetic Biologics, Inc. (NYSE American: SYN), a clinical-stage company developing therapeutics that preserve the microbiome to protect and restore the health of patients, reported financial results for the year ended December 31, 2018 (Press release, Synthetic Biologics, FEB 27, 2019, View Source [SID1234533810]).
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Synthetic Biologics, Inc. www.syntheticbiologics.com (PRNewsFoto/Synthetic Biologics, Inc.)
"During the fourth quarter, we remained sharply focused on executing our strategy to advance and demonstrate the significant value of our portfolio of GI and microbiome-focused clinical assets," stated Steven A. Shallcross, Chief Executive and Financial Officer. "We are pleased to report that patient enrollment is continuing for our investigator-sponsored Phase 2b clinical trial of SYN-010, our modified-release formulation of lovastatin lactone designed to treat an underlying cause of irritable bowel syndrome with constipation. We believe data derived from this study will solidify our existing clinical outcomes data, including dose-response, and potentially simplify future registration studies. We anticipate a topline data readout from this study in the second half of 2019."
Mr. Shallcross continued, "During the fourth quarter, we also announced the results of our End-of-Phase 2 meeting with the U.S. Food & Drug Administration (FDA) during which key elements of a Phase 3 clinical program were confirmed to support a marketing application for SYN-004 for the prevention of Clostridium difficile infection (CDI). In parallel, we continue to evaluate strategies to pursue a secondary clinical indication for SYN-004 in a specialized patient population which may allow for a more narrow and less costly clinical development pathway. One such indication is the prevention of acute graft-versus-host-disease (aGVHD) in allogeneic hematopoietic cell transplant (HCT) recipients, where protection of the gut microbiome from antibiotic damage may provide a distinct benefit to patient outcomes. Discussions with key opinion leaders who are experts in allogeneic HCT are ongoing, and we look forward to sharing updates and progress for this potential indication."
"With the steps we have taken at the end of the fourth quarter to fortify our long-term financial footing, we have created a strong foundation upon which to execute our strategy to advance and showcase the value of our late stage clinical assets. Our entire organization is excited and committed to achieving the important clinical development milestones we have established for 2019," concluded Mr. Shallcross.
Clinical Development and Operational Update
Commenced enrollment of Phase 2b investigator-sponsored clinical study of SYN-010, for the treatment of IBS-C,
The Phase 2b clinical study is being conducted by the Medically Associated Science and Technology (MAST) Program at Cedars-Sinai Medical Center and is a 12-week, placebo-controlled, double-blind, randomized clinical trial evaluating two dose strengths of oral SYN-010 (21 mg and 42 mg) in approximately 150 patients diagnosed with IBS-C,
The primary objective for the study will be to determine the efficacy of SYN-010, measured as an improvement from baseline in the weekly average number of complete spontaneous bowel movements (CSBMs) during the 12-week treatment period for SYN-010 21 mg and 42 mg daily doses relative to placebo,
Secondary efficacy endpoints for both dose strengths of SYN-010 will measure changes from baseline in abdominal pain, bloating, stool frequency as well as the use of rescue medication relative to placebo,
Topline data readout anticipated for 2H 2019,
Cedars-Sinai Medical Center and Synthetic Biologics are co-funding the study. The patent rights covering the use of SYN-010 are owned by Cedars-Sinai Medical Center and are exclusively licensed by Cedars-Sinai Medical Center to Synthetic Biologics;
Held an End-of-Phase 2 meeting with FDA and confirmed key elements of the Phase 3 clinical program to support a marketing application for SYN-004 (ribaxamase),
A single Phase 3 clinical trial may be sufficient for marketing approval for the prevention of antibiotic-mediated CDI,
The Phase 3 clinical program will entail a single, global, event-driven clinical trial with a fixed maximum number of patients for total enrollment,
The primary efficacy endpoint will be the reduction in the incidence of CDI at one month after the last drug dose in the ribaxamase treatment group versus placebo,
A separate co-primary safety endpoint is non-inferiority in mortality rates between the SYN-004 treatment group and placebo at 3 months post-randomization;
Continued to evaluate a potential secondary indication for SYN-004 (ribaxamase) for the prevention of acute graft-versus-host-disease (aGVHD) in allogeneic hematopoietic cell transplantation (HCT) recipients,
Identification of key investigators and the development of clinical protocols and a pre-IND package is ongoing,
Anticipate initiation of a Phase 1/2 investigator-sponsored clinical study in HCT patients in 2H 2019, contingent upon the identification of a research partner and subsequent Institutional Review Board (IRB) approval;
Identified potential clinical indications for SYN-020 (intestinal alkaline phosphatase) in areas of unmet medical need including, enterocolitis associated with radiation therapy for cancer and autoimmune enterocolitis associated with checkpoint inhibitor therapy for cancer,
Preclinical efficacy studies are ongoing,
Anticipate filing a US IND application in Q4 2019,
Plan to commence a Phase 1 clinical trial in Q1 2020;
Strengthened balance sheet by raising gross proceeds of approximately $18.6 million from the closing of a public offering of common stock and Series B Convertible Preferred Stock in support of our lead clinical development activities
Raised additional net proceeds of approximately $12.2 million from the utilization of the Company’s "at-the-market" facility through the end of 2018.
Year Ended December 31, 2018 Financial Results
General and administrative expenses decreased to $5.7 million for the year ended December 31, 2018, compared to $7.5 million for the year ended December 31, 2017. This decrease of 24% is due to the decreased stock-based compensation expense related to forfeitures and share price, along with the reduction of salary, travel and consulting expense, offset by higher registration, investor relations and legal costs. The charge relating to stock-based compensation expense was $1.0 million for the year ended December 31, 2018, compared to $2.0 million for the year ended December 31, 2017.
Research and development expenses decreased to $11.8 million for the year ended December 31, 2018, from $18.8 million for the year ended December 31, 2017. This decrease of 37% is primarily the result of lower SYN-004 (ribaxamase) and SYN-010 program costs for 2018 since no clinical trials were ongoing during the year. The research and development costs incurred during the quarter were primarily related to planning for future Phase 3 (SYN-004) and Phase 2b/3 (SYN-010) clinical programs as we sought to secure the financial resources necessary for the completion of these clinical trials. We anticipate research and development expense to increase due to the ongoing Phase 2b investigator-sponsored clinical trial for SYN-010 and development activities associated with the potential initiation of a Phase 1/2 investigator-sponsored clinical trial for the prevention of aGVHD in HCT recipients for SYN-004. Research and development expenses also include a charge relating to non-cash stock-based compensation expense of $1.1 million for the year ended December 31, 2018, compared to $1.4 million for the year ended December 31, 2017.
Other income was $4.2 million for the year ended December 31, 2018, compared to other income of $10.8 million for the year ended December 31, 2017. Other income for the year ended December 31, 2018 is primarily due to non-cash income of $4.1 million from the change in fair value of warrants. The decrease in the fair value of warrants was due to the decrease in our stock price from December 31, 2017.
In connection with the issuance and subsequent conversions of the Series B Convertible Preferred Stock in 2018 and the issuance of the Series A Convertible Preferred Stock in 2017, the Company recognized non-cash deemed dividends of $11.7 million and $6.9 million respectively, for the beneficial conversion feature resulting from the intrinsic value of the Series B and Series A conversion options as of the issuance date.
Cash and cash equivalents on December 31, 2018 were $28.9 million, an increase of $11.8 million from December 31, 2017.
Conference Call
Synthetic Biologics will hold a conference call today, Wednesday, February 27, 2019, 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.