Synlogic Reports Third Quarter 2024 Financial Results

Rhea-AI Summary

Synlogic (NASDAQ: SYBX) has reported its Q3 2024 financial results. The company ended the quarter with $19.4 million in cash and cash equivalents. The company reported no revenue, compared to $0.4 million in Q3 2023. There was a $0.7 million benefit in R&D expenses, compared to $9.6 million expenses in Q3 2023, due to clinical trial closeouts and Synpheny-3 discontinuation. G&A expenses decreased to $1.2 million from $3.4 million year-over-year. The company reported a net loss of $0.1 million ($0.01 per share), improved from a $12.1 million loss ($2.57 per share) in Q3 2023. The company has retained Lucid Capital Markets to explore strategic alternatives.

Positive

• Significant reduction in net loss to $0.1 million from $12.1 million YoY
• Decreased G&A expenses by 65% to $1.2 million
• Benefit of $0.7 million in R&D expenses due to trial closeouts

Negative

• No revenue generation in Q3 2024 compared to $0.4M in Q3 2023
• Discontinued Synpheny-3 pivotal study leading to restructuring charges
• Workforce reduction and restructuring costs of $0.3 million
• Strategic review indicates potential financial/operational challenges

Insights

Financial Analyst

The Q3 2024 financial results reveal a concerning picture despite the superficially improved net loss. The company's $19.4 million cash position and zero revenue generation raise significant liquidity concerns. The reduced net loss of $0.1 million versus $12.1 million year-over-year primarily stems from cost-cutting measures and one-time benefits, not operational improvements. The $0.7 million R&D benefit from trial closeouts and the significant reduction in G&A expenses to $1.2 million from $3.4 million reflect the company's strategic pivot and workforce reduction following the discontinuation of their pivotal Synpheny-3 study. The engagement of Lucid Capital Markets for strategic alternatives exploration suggests the company is actively seeking an exit strategy, which could range from a merger to an acquisition, though there's no guarantee of a successful transaction.

WINCHESTER, Mass., Nov. 12, 2024 (GLOBE NEWSWIRE) -- Synlogic, Inc. (Nasdaq: SYBX), a biopharmaceutical company advancing novel therapeutics to transform the care of serious diseases, today reported financial results for the third quarter 2024 and provided a corporate update.

As previously announced, the Company retained Lucid Capital Markets, LLC to act as its financial advisor to explore and evaluate strategic options for maximizing shareholder value. Potential strategic alternatives that may be explored or evaluated as part of this process include the potential for an acquisition, merger, business combination or other strategic transaction involving the Company. The Synlogic Board of Directors has not set a timetable for the conclusion of this review, nor has it made any decisions related to any further actions or potential strategic options at this time. There can be no assurance, however, that this process will result in any such transaction.

Third Quarter 2024 Financial Results

As of September 30, 2024 Synlogic had cash and cash equivalents of $19.4 million.

There was no revenue for the three months ended September 30, 2024, compared to $0.4 million for the corresponding period in 2023. Revenue for the three months ended September 30, 2023 was associated with the prior research collaboration with Roche.

There was a benefit of $0.7 million related to research and development expenses for the three months ended September 30, 2024, compared to expenses of $9.6 million for the corresponding period in 2023. During the three months ended September 30, 2024, Synlogic received a refund related to the closeout of one of its clinical trials and estimates of manufacturing expenses that Synlogic incurred were revised due to the decision to discontinue Synpheny-3, resulting in a benefit upon reversal of the accrual.

General and administrative expenses for the three months ended September 30, 2024 were $1.2 million compared to $3.4 million for the corresponding period in 2023.

There were restructuring charges of $0.3 million for the three months ended September 30, 2024. The restructuring and other charges were a result of the Company’s decision in February 2024 to discontinue Synpheny-3, its pivotal study of labafenogene marselecobac (SYNB1934) in phenylketonuria (PKU) and evaluate strategic options for the Company. The restructuring charges were primarily related to severance expense as a result of the reduction in workforce.

For the three months ended September 30, 2024, Synlogic reported a consolidated net loss of $(0.1) million, or ($0.01) per share, compared to a consolidated net loss of $(12.1) million, or $(2.57) per share, for the corresponding period in 2023.

About Synlogic

Synlogic is a biopharmaceutical company advancing novel therapeutics to transform the care of serious diseases in need of new treatment options. Synlogic designs, develops and manufactures these drug candidates, which are produced by applying precision genetic engineering to well-characterized probiotics.

Forward Looking Statements

This press release contains "forward-looking statements" that involve substantial risks and uncertainties for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release regarding strategy, future operations, clinical development plans, future financial position, future revenue, projected expenses, prospects, plans and objectives of management are forward-looking statements. In addition, when or if used in this press release, the words "may," "could," "should," "anticipate," "believe," "look forward," "estimate," "expect," “focused on,” "intend," "on track," "plan," "predict" and similar expressions and their variants, as they relate to Synlogic, may identify forward-looking statements.  Actual results could differ materially from those contained in any forward-looking statements as a result of various factors, including: the Company may not execute on its planned exploration and evaluation of strategic alternatives; and the availability of suitable third parties with which to conduct contemplated strategic transactions; as well as those risks identified under the heading "Risk Factors" in Synlogic's filings with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this press release reflect Synlogic's current views with respect to future events. Synlogic anticipates that subsequent events and developments will cause its views to change. However, while Synlogic may elect to update these forward-looking statements in the future, Synlogic specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Synlogic's view as of any date subsequent to the date hereof.

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Contact: info@synlogictx.com

Synlogic, Inc. Condensed Consolidated Statements of Operations (unaudited)
(in thousands, except share and per share data)		For the Three Months Ended September 30								For the Nine Months Ended September 30
			2024				2023				2024				2023
Revenue		$	—			$	393			$	8			$	602
Operating expenses
	Research and development		(713	)			9,616				9,164				33,831
	General and administrative		1,165				3,400				5,228				11,291
	Restructuring and other charges		296				—				24,790				—
Total operating expenses			748				13,016				39,182				45,122
Loss from operations			(748	)			(12,623	)			(39,174	)			(44,520	)
Total other income, net			631				548				16,534				1,784
Loss before income taxes			(117	)			(12,075	)			(22,640	)			(42,736	)
Income tax expense			—				(3	)			(5	)			(12	)
Net loss		$	(117	)		$	(12,078	)		$	(22,645	)		$	(42,748	)
Net loss per share - basic and diluted		$	(0.01	)		$	(2.57	)		$	(1.86	)		$	(9.17	)
Weighted-average common shares used in computing net loss per share - basic and diluted			12,223,922				4,699,847				12,186,830				4,662,444

Synlogic, Inc. Condensed Consolidated Balance Sheets (unaudited)
(in thousands, except share data)
		September 30, 2024				December 31, 2023
Assets
	Cash, cash equivalents & marketable securities	$	19,389			$	47,746
	Property and equipment, net		—				5,603
	Other assets		1,366				22,201
Total assets		$	20,755			$	75,550
Liabilities and stockholders' equity
	Current liabilities	$	7,647			$	30,288
	Long-term liabilities		—				12,491
	Total liabilities		7,647				42,779
	Total stockholders' equity		13,108				32,771
Total liabilities and stockholders' equity		$	20,755			$	75,550
Common stock and common stock equivalents
	Common stock		11,696,109				9,186,157
	Common stock warrants (pre-funded)		722,183				2,973,183
Total common stock			12,418,292				12,159,340

Certain prior period amounts have been revised to correct for an immaterial error impacting previously issued financial statements, which are more fully described in our Quarterly Report on Form 10-Q for the period ended September 30, 2024.

FAQ

What was Synlogic's (SYBX) net loss per share in Q3 2024?

Synlogic reported a net loss of $0.01 per share in Q3 2024, compared to a loss of $2.57 per share in Q3 2023.

How much cash does Synlogic (SYBX) have as of September 30, 2024?

Synlogic had cash and cash equivalents of $19.4 million as of September 30, 2024.

Why did Synlogic (SYBX) report an R&D benefit in Q3 2024?

Synlogic reported an R&D benefit of $0.7 million due to clinical trial closeout refunds and revised manufacturing expense estimates following the discontinuation of Synpheny-3.

What strategic alternatives is Synlogic (SYBX) exploring?

Synlogic is exploring potential strategic alternatives including an acquisition, merger, business combination, or other strategic transaction involving the Company.