[May 10, 2016] |
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Synergy Pharmaceuticals Reports First Quarter 2016 Financial Results and Business Update
Synergy (News - Alert) Pharmaceuticals Inc. (NASDAQ:SGYP), a biopharmaceutical company
focused on the development and commercialization of novel
gastrointestinal (GI) therapies, today reported its financial results
and business update for the three months ended March 31, 2016.
"2016 is off to a strong and promising start for Synergy, highlighted by
the U.S. Food and Drug Administration (FDA) acceptance of our first new
drug application (NDA) for plecanatide in chronic idiopathic
constipation (CIC)," said Gary S. Jacob, Chairman and Chief Executive
Officer of Synergy Pharmaceuticals. "We continued to expand the utility
and value of our uroguanylin-based platform technology while
significantly strengthening our overall financial position. Moving
forward, we believe we are well positioned to successfully execute on
key pre-launch activities and will continue to evaluate all strategic
options to ensure a successful launch of plecanatide early next year.
Meanwhile, we expect top-line data from our two pivotal phase 3 trials
with plecanatide in irritable bowel syndrome with constipation (IBS-C)
in the third quarter and intend to file our second NDA in IBS-C by the
end of this year. Our first quarter results demonstrate our profound
commitment to optimizing the value of plecanatide and dolcanatide and
bringing these important new treatment options to patients suffering
from GI diseases."
First Quarter 2016 and Recent Highlights
Synergy's Uroguanylin Based GI Platform
Our proprietary GI platform is based on uroguanylin, a naturally
occurring human GI peptide, and includes two lead product candidates -
plecanatide and dolcanatide. Plecanatide is our first uroguanylin analog
currently being evaluated for the treatment of CIC and IBS-C.
Dolcanatide is our second uroguanylin analog currently being explored
for the treatment of ulcerative colitis (UC). We discovered, are
developing and control worldwide rights to our uroguanylin based GI
platform.
Plecanatide CIC Development Update
-
On January 29, 2016, we filed our first NDA with the FDA for
plecanatide in CIC. The NDA has been accepted for FDA review and the
Prescription Drug User Fee Act (PDUFA) target action date is January
29, 2017. The plecanatide NDA in CIC is supported by two double-blind
placebo-controlled phase 3 trials and one open-label long term safety
study. A total of more than 2,700 patients with CIC received a
once-daily dose of either plecanatide or placebo across the two
placebo-controlled trials. Additionally, over 3,500 patients were
exposed to plecanatide in the CIC clinical development program.
Plecanatide IBS-C Development Update
-
We are presently evaluating plecanatide in two pivotal phase 3 trials
in patients with IBS-C. Each randomized, 12-week, double-blind
placebo-controlled trial is assessing the efficacy and safety of
plecanatide (3.0 and 6.0mg), taken as a tablet once-a-day, in
approximately 1,050 patients with IBS-C. The primary endpoint for both
trials is the percentage of patients who are Overall Responders during
the 12-week treatment period. An Overall Responder, as defined by the
FDA, is a patient who is a weekly responder (i.e. meets both a 30%
abdominal pain intensity reduction and stool frequency increase
criteria in the same week) for at least 6 of the 12 treatment weeks.
Plecanatide has previously met this endpoint in a phase 2b IBS-C trial
that was completed in 2014. We expect top-line data results from the
two ongoing phase 3 IBS-C trials in the third quarter of this year. We
intend to file our second NDA for plecanatide in IBS-C by the end of
this year.
Dolcanatide UC Development Update
-
On January 11, 2016, we announced positive proof-of-concept data with
dolcanatide in patients with ulcerative colitis. This was a phase 1b
double-blind, placebo-controlled, four-week study evaluating 28
patients with mild-to-moderate ulcerative colitis. We are presently
evaluating how best to move dolcanatide forward in clinical
development for the treatment of ulcerative colitis.
Plecanatide Launch Readiness Update
-
Our team is actively engaged in key pre-launch activities to develop
and execute on a comprehensive and efficient launch strategy that we
believe will ensure plecanatide is well positioned for success. We are
currently focused on three key areas: product readiness, market
readiness and organizational readiness. Activities supporting these
three key priorities include ensuring a thorough supply chain plan,
using market and customer insights to develop successful branding,
positioning and communication platforms, evaluating all salesforce and
market access strategic options, continuing KOL engagement and other
medical affairs-driven initiatives, as well as attracting key talent
throughout the organization who are highly experienced in launch
preparation and execution.
Financial Results
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As of March 31, 2016 we had $84.2 million of cash, cash equivalents
and available-for-sale securities on hand as compared to $111.8
million as of December 31, 2015.
-
On May 5, 2016 we announced an $89.8 million registered direct
offering of our common stock to certain institutional investors at a
price of $3.00 per share. The net proceeds from the offering, after
deducting estimated offering expenses, were approximately $89.7
million. The offering closed on May 6, 2016.
-
Net cash used in operating activities was $27.6 million in the first
quarter of 2016, as compared to $23.1 million in the first quarter of
2015.
-
Research and development expenses in the first quarter of 2016 were
$21.2 million, as compared to $18.2 million in the first quarter of
2015. This increase in research and development expenses was due
primarily to greater spending on IBS-C studies and fees related to our
NDA filing, offset partially by a reduction in CIC clinical trial
expenses.
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Selling, general and administrative expenses were $6.4 million in the
first quarter of 2016, as compared to approximately $4.6 million in
the first quarter of 2015. These increased expenses were primarily a
result of new selling and marketing spend in preparation of our
anticipated commercial launch next year.
-
On March 28, 2016 we announced the closing of separate,
privately-negotiated exchanges with certain holders of $79.8 million
aggregate principal amount of our 7.50% Convertible Senior Notes
("Notes") due 2019, representing approximately 50% of the outstanding
aggregate principal amount of the Notes, for 35.3 million shares of
our common stock. Subsequent to this exchange, the principal balance
of the Notes at March 31, 2016 was $79.2 million as compared to $159.0
million at December 31, 2015. The annual interest expense reduction
attributable to the Notes exchanged is $6.0 million per annum.
-
Net loss in the first quarter of 2016 was $59.9 million, or $0.51 per
share, as compared to a net loss of $27.4 million, or $0.28 per share,
incurred in the first quarter of 2015. This increase in net loss was
primarily a result of the debt conversion expense attributable to our
convertible notes exchange transaction, which amounted to $25.6
million, or $0.22 per share.
About Synergy Pharmaceuticals Inc.
Synergy is a biopharmaceutical company focused on the development and
commercialization of novel gastrointestinal (GI) therapies. Our
proprietary GI platform is based on uroguanylin and includes two lead
product candidates - plecanatide and dolcanatide. Plecanatide is our
first uroguanylin analog currently being evaluated for use as a
once-daily tablet for two functional GI disorders, CIC and IBS-C.
Plecanatide is a 16-amino acid peptide that is structurally similar to
uroguanylin, a naturally occurring human GI peptide, with the exception
of a single amino acid change. Plecanatide is designed to replicate the
function of uroguanylin by working locally in the upper GI tract to
stimulate digestive fluid movement and support regular bowel function.
Dolcanatide is our second uroguanylin analog currently being explored
for inflammatory bowel disease. Dolcanatide is designed to be an analog
of uroguanylin with enhanced resistance to standard digestive breakdown
by proteases in the intestine. For more information, please visit www.synergypharma.com.
Forward-Looking Statements
Certain statements in this press release are forward-looking within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements may be identified by the use of forward- looking words such
as "anticipate," "planned," "believe," "forecast," "estimated,"
"expected," and "intend," among others. These forward-looking statements
are based on Synergy's current expectations and actual results could
differ materially. There are a number of factors that could cause actual
events to differ materially from those indicated by such forward-looking
statements. These factors include, but are not limited to, substantial
competition; our ability to continue as a going concern; our need for
additional financing; uncertainties of patent protection and litigation;
uncertainties of government or third party payer reimbursement; limited
sales and marketing efforts and dependence upon third parties; and risks
related to failure to obtain FDA clearances or approvals and
noncompliance with FDA regulations. As with any pharmaceutical under
development, there are significant risks in the development, regulatory
approval and commercialization of new products. There are no guarantees
that future clinical trials discussed in this press release will be
completed or successful or that any product will receive regulatory
approval for any indication or prove to be commercially successful.
Investors should read the risk factors set forth in Synergy's Form 10-K
for the year ended December 31, 2015 and other periodic reports filed
with the Securities and Exchange Commission. While the list of factors
presented here is considered representative, no such list should be
considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements.
Forward-looking statements included herein are made as of the date
hereof, and Synergy does not undertake any obligation to update publicly
such statements to reflect subsequent events or circumstances.
Synergy Pharmaceuticals Inc.
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Condensed Consolidated Balance Sheets
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($ in thousands)
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March 31, 2016 (unaudited)
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December 31, 2015
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Assets
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Cash, cash equivalents and short term available
for sale securities
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$
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84,155
|
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|
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$
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111,750
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Prepaid expenses and other current assets
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3,361
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|
|
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3.305
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Total Current Assets
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87,516
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115,055
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Other Assets
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877
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874
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Total Assets
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$
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88,393
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$
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115,929
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Liabilities and Stockholders' Deficit
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Total Current Liabilities
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$
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19,264
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$
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19,579
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Senior Convertible Notes
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75,565
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151,241
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Derivative financial instruments -warrants
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|
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62
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|
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322
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Total Liabilities
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94,891
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171,142
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Total Stockholders' Deficit
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(6,498
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)
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(55,213
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)
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Total Liabilities and Stockholders' Deficit
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$
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83,393
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$
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115,929
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Condensed Consolidated Statement of Operations
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($ in thousands except share and per share data)
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(unaudited)
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Three Months
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Three Months
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ended
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ended
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March 31, 2016
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March 31, 2015
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Revenues
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$
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--
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$
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--
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Costs and Expenses:
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Research and development
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21,175
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18,198
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Selling, general and administrative
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6,375
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4606
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Loss from Operations
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(27,550
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)
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(22,804
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)
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Interest income (expense) - net
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(7036
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)
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(4,317
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Debt conversion expense
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(25,615
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)
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--
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Change in Fair Value of Financial Instruments
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260
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|
|
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(268
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)
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Total Other (Loss)
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(32,391
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)
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(4,585
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)
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Net Loss
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$
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(59,941
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)
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$
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(27,389
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)
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Net Loss per common share, basic and diluted
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$
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(0.51
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)
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$
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(0.28
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)
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Weighted Average Common Shares Outstanding
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|
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117,626,669
|
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|
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96,683,525
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View source version on businesswire.com: http://www.businesswire.com/news/home/20160510006828/en/
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