UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period to
Commission File Number
(Exact name of registrant as specified in its charter)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
Trading Symbol |
Name of Each Exchange on Which Registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 1, 2022, there were
SCYNEXIS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022
TABLE OF CONTENTS
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Item 1. |
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1 |
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Unaudited Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 |
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1 |
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2 |
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3 |
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Notes to the Condensed Consolidated Financial Statements (unaudited) |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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Item 1A. |
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Item 6. |
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
SCYNEXIS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
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September 30, 2022 |
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December 31, 2021 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term investments |
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— |
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Prepaid expenses and other current assets |
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Accounts receivable, net |
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Inventory, net |
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Restricted cash |
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Total current assets |
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Other assets |
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Deferred offering costs |
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Restricted cash |
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Intangible assets, net |
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Operating lease right-of-use asset (See Note 8) |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Other liabilities, current portion (See Note 7) |
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Operating lease liability, current portion (See Note 8) |
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Total current liabilities |
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Other liabilities (See Note 7) |
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Warrant liabilities |
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Convertible debt and derivative liability (See Note 7) |
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Loan payable |
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Operating lease liability (See Note 8) |
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Total liabilities |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of the financial statements.
1
SCYNEXIS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Revenue: |
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Product revenue, net |
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$ |
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$ |
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$ |
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$ |
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License agreement revenue |
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Total revenue |
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Operating expenses: |
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Cost of product revenue |
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Research and development |
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Selling, general and administrative |
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Total operating expenses |
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Loss from operations |
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Other expense (income): |
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Loss on extinguishment of debt |
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Amortization of debt issuance costs and discount |
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Interest income |
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Interest expense |
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Warrant liabilities fair value adjustment |
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Derivative liabilities fair value adjustment |
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Total other expense (income) |
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Loss before taxes |
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Income tax benefit |
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Net loss |
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$ |
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$ |
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$ |
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$ |
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Net loss per share attributable to common stockholders – basic |
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Net loss per share – basic |
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$ |
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$ |
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$ |
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$ |
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Net loss per share attributable to common stockholders – diluted |
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Net loss per share – diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average common shares outstanding – basic and diluted |
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Basic |
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Diluted |
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The accompanying notes are an integral part of the financial statements.
2
SCYNEXIS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
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Nine Months Ended September 30, |
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2022 |
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2021 |
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Cash flows from operating activities: |
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Net loss |
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$ |
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$ |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Stock-based compensation expense |
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Accretion of short-term investment discount |
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( | ) |
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— |
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Amortization of debt issuance costs and discount |
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Change in fair value of warrant liabilities |
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Change in fair value of derivative liabilities |
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Noncash operating lease expense for right-of-use asset |
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Loss on extinguishment of debt |
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Changes in operating assets and liabilities: |
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Prepaid expenses, accounts receivable, inventory, and other |
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Accounts payable, accrued expenses, other liabilities, and other |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Purchase of intangible assets |
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Purchase of short-term investments |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Proceeds from common stock issued |
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Payments of offering costs and underwriting discounts and commissions |
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Proceeds from loan payable |
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Payments of loan payable issuance costs |
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Proceeds from employee stock purchase plan issuances |
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Repurchase of shares to satisfy tax withholdings |
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Net cash provided by financing activities |
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Net (decrease) increase in cash, cash equivalents, and restricted cash |
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Cash, cash equivalents, and restricted cash at beginning of period |
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Cash, cash equivalents, and restricted cash at end of period |
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$ |
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$ |
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Supplemental cash flow information: |
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Cash paid for interest |
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$ |
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$ |
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Cash received for interest |
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$ |
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$ |
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Noncash financing and investing activities: |
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Common stock issued for settlement of senior convertible notes |
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$ |
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$ |
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Purchased intangible assets included in accounts payable and accrued expenses |
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$ |
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$ |
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Deferred offering and issuance costs included in accounts payable and accrued expenses |
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$ |
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$ |
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Deferred offering costs reclassified to additional-paid-in capital |
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$ |
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$ |
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Reclass of warrant liability to additional paid in capital |
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$ |
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$ |
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Reclass of deferred asset associated with issuance of loan payable to debt discount |
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$ |
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$ |
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Settlement of liability for exercise of warrants |
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$ |
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$ |
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The accompanying notes are an integral part of the financial statements.
3
SCYNEXIS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Description of Business and Basis of Preparation
Organization
SCYNEXIS, Inc. (“SCYNEXIS” or the “Company”) is a Delaware corporation formed on November 4, 1999. SCYNEXIS is a biotechnology company, headquartered in Jersey City, New Jersey, and is pioneering innovative medicines to overcome and prevent difficult-to-treat and drug-resistant infections. The Company is developing its lead product candidate, ibrexafungerp, as a broad-spectrum, intravenous (“IV”)/oral agent for severe, hospital-based indications. In June 2021, the U.S. Food and Drug Administration (“FDA”) approved BREXAFEMME® (ibrexafungerp tablets) for treatment of patients with vulvovaginal candidiasis (“VVC”), also known as vaginal yeast infection. The FDA has accepted the Company's submission of a supplemental New Drug Application to expand the label of BREXAFEMME to include the prevention of recurrent VVC. The FDA granted the submission Priority Review and assigned the Prescription Drug User Fee Act target decision date as November 30, 2022.
In October 2022, the Company announced that it is actively pursuing a U.S. commercialization partner to out-license BREXAFEMME in order to refocus its resources on the clinical development of ibrexafungerp for severe, hospital-based indications. As a result, the Company has begun to wind down its promotional activities associated with BREXAFEMME, while keeping BREXAFEMME on the market and available to patients. Additionally, the Company will conclude the partnership with its contracted commercial sales partner, Amplity Health ("Amplity"), which is expected to conclude on November 30, 2022, and the Company will undertake a workforce reduction.
The Company has incurred significant losses and negative cash flows from operations since its initial public offering in May 2014 and expects to continue to incur losses and negative cash flows for the foreseeable future. As a result, the Company had an accumulated deficit of $
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Intercompany balances and transactions are eliminated in consolidation.
New Jersey Technology Business Tax Certificate Transfer (NOL) Program
The New Jersey Technology Business Tax Certificate Transfer (NOL) program, administered by the New Jersey Economic Development Authority, enables approved biotechnology companies to sell their unused net operating losses (“NOLs”) and research and development tax credits to unaffiliated, profitable corporate taxpayers in the State of New Jersey. For the nine months ended September 30, 2022, the Company recognized a $
Unaudited Condensed Consolidated Financial Information
The accompanying unaudited condensed consolidated financial statements and notes have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”), as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification” or “ASC”) for interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, and cash flows. The results of operations for the three and nine months ended September 30, 2022, are not necessarily indicative of the results for the full year or the results for any future periods. These unaudited condensed consolidated financial statements should be read in conjunction with
4
the financial statements and notes set forth in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 29, 2022.
Use of Estimates
The preparation of unaudited condensed consolidated financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and judgements include: revenue recognition including gross to net estimates and the identification of performance obligations in licensing arrangements, determination of the fair value of stock-based compensation grants; the estimate of services and effort expended by third-party research and development service providers used to recognize research and development expense; and the estimates and assumptions utilized in measuring the fair values of the warrant and derivative liabilities each reporting period.
2. Summary of Significant Accounting Policies
The accompanying unaudited condensed consolidated financial statements and notes follow the same significant accounting policies as those described in the notes to the audited consolidated financial statements of the Company for the year ended December 31, 2021, except as described below.
Short-Term Investments
The Company's held-to-maturity short-term investments in U.S. government securities are carried at amortized cost and any premiums or discounts are amortized or accreted through the maturity date of the investment. Any impairment that is not deemed to be temporary is recognized in the period identified.
Basic and Diluted Net Loss per Share of Common Stock
The Company calculates net loss per common share in accordance with ASC 260, Earnings Per Share. Basic net loss per common share for the three and nine months ended September 30, 2022 and 2021 was determined by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Per ASC 260, Earnings Per Share, the weighted average number of common shares outstanding utilized for determining the basic net loss per common share for the three and nine months ended September 30, 2022 includes the outstanding pre-funded warrants to purchase
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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Net loss |
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Dilutive effect of warrant liability |
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Dilutive effect of convertible debt |
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Net loss allocated to common shares |
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$ |
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$ |
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Weighted average common shares outstanding – basic |
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Dilutive effect of warrant liability |
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Dilutive effect of convertible debt |
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Weighted average common shares outstanding – diluted |
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Net loss per share – diluted |
$ |
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$ |
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$ |
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$ |
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5
The following potentially dilutive shares of common stock have not been included in the computation of diluted net loss per share for the three and nine months ended September 30, 2022 and 2021, as the result would be anti-dilutive:
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Outstanding stock options |
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Outstanding restricted stock units |
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Warrants to purchase common stock associated with March 2018 public offering – Series 2 |
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Warrants to purchase common stock associated with December 2019 public offering |
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Warrants to purchase common stock associated with December 2020 public offering - Series 1 |
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— |
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— |
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Warrants to purchase common stock associated with December 2020 public offering - Series 2 |
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Warrants to purchase common stock associated with April 2022 Public Offering |
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