Syndax(SNDX) - 2025 Q1 - Quarterly Report

FORWARD-LOOKING STATEMENTS This section provides a standard disclaimer regarding forward-looking statements, emphasizing that they are predictions subject to known and unknown risks and uncertainties, advising against reliance on them as future event predictions and stating no duty to update them unless required by law - Forward-looking statements are identified by terms such as 'anticipate,' 'believe,' 'could,' 'estimate,' 'expects,' 'intend,' 'may,' 'plan,' 'potential,' 'predict,' 'project,' 'should,' 'will,' 'would' or similar expressions[5] - Key areas covered by forward-looking statements include estimates for expenses, future revenues, capital requirements, financing needs, R&D activities, clinical trial results, product candidate efficacy and safety, regulatory approvals, license agreements, collaboration success (e.g., Incyte), milestone and royalty payments, strategic plans, intellectual property, market adoption of products (REVUFORJ®, NIKTIMVO™), competitor developments, and impacts of geopolitical actions or economic conditions[8] - The company cannot guarantee future results, levels of activity, performance, or achievements, and is under no duty to update or revise these statements except as required by law[7] PART I. FINANCIAL INFORMATION Item 1. Unaudited Financial Statements This section presents the unaudited consolidated financial statements, including balance sheets, statements of comprehensive loss, stockholders' equity, and cash flows, offering a snapshot of the company's financial position and performance Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | Percentage Change | | :-------------------------------- | :----------------------------- | :------------------------------ | :-------------------- | :------------------ | | ASSETS | | | | | | Total current assets | $548,751 | $603,057 | $(54,306) | -9.00% | | Total assets | $640,707 | $724,816 | $(84,109) | -11.60% | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | Total current liabilities | $94,551 | $103,549 | $(8,998) | -8.69% | | Total long-term liabilities | $331,097 | $333,143 | $(2,046) | -0.61% | | Total liabilities | $425,648 | $436,692 | $(11,044) | -2.53% | | Total stockholders' equity | $215,059 | $288,124 | $(73,065) | -25.36% | - Cash and cash equivalents remained relatively stable at $153,993 thousand as of March 31, 2025, compared to $154,083 thousand at December 31, 2024[13] - Inventory significantly increased from $366 thousand at December 31, 2024, to $4,664 thousand at March 31, 2025, indicating increased product stock[13] Consolidated Statements of Comprehensive Loss This section details the company's financial performance, including revenues, expenses, and net loss, for the specified periods | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | Percentage Change | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------------------ | | Product revenue, net | $20,042 | $0 | $20,042 | N/A | | Total revenues | $20,042 | $0 | $20,042 | N/A | | Cost of product sales | $885 | $0 | $885 | N/A | | Research and development | $61,636 | $56,492 | $5,144 | 9.11% | | Selling, general and administrative | $41,031 | $23,022 | $18,009 | 78.22% | | Collaboration loss | $247 | $0 | $247 | N/A | | Total operating expenses | $103,799 | $79,514 | $24,285 | 30.54% | | Loss from operations | $(83,757) | $(79,514) | $(4,243) | 5.34% | | Royalty interest expense | $(8,049) | $0 | $(8,049) | N/A | | Interest income | $7,183 | $7,256 | $(73) | -1.01% | | Net loss | $(84,846) | $(72,400) | $(12,446) | 17.19% | | Basic loss per share | $(0.98) | $(0.85) | $(0.13) | 15.29% | | Diluted loss per share | $(0.98) | $(0.85) | $(0.13) | 15.29% | - The company began generating product revenue, net, of $20,042 thousand in Q1 2025, compared to none in Q1 2024, primarily from the launch of Revuforj[15] - Selling, general and administrative expenses saw a substantial increase of 78.22% ($18,009 thousand) in Q1 2025 compared to Q1 2024, reflecting commercialization efforts for new products[15] Consolidated Statements of Stockholders' Equity This section outlines changes in the company's equity, including additional paid-in capital, accumulated comprehensive gain, and accumulated deficit | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | :-------------------- | | Additional Paid-In Capital | $1,520,527 | $1,509,110 | $11,417 | | Accumulated Other Comprehensive Gain | $527 | $163 | $364 | | Accumulated Deficit | $(1,306,004) | $(1,221,158) | $(84,846) | | Total Stockholders' Equity | $215,059 | $288,124 | $(73,065) | - Stock-based compensation expense contributed $10,487 thousand to additional paid-in capital for the three months ended March 31, 2025[17] - The accumulated deficit increased by $84,846 thousand, reflecting the net loss for the three months ended March 31, 2025[17] Consolidated Statements of Cash Flows This section summarizes the company's cash inflows and outflows from operating, investing, and financing activities for the specified periods | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net cash used in operating activities | $(95,162) | $(83,548) | $(11,614) | | Net cash provided by (used in) investing activities | $94,142 | $(99,399) | $193,541 | | Net cash provided by financing activities | $930 | $2,168 | $(1,238) | | Net (decrease) increase cash, cash equivalents and restricted cash | $(90) | $(180,779) | $180,689 | | Cash, cash equivalents and restricted cash—end of period | $154,210 | $114,832 | $39,378 | - Net cash used in operating activities increased by $11,614 thousand, primarily due to an increase in operating net loss, accounts receivable, and inventory[20][118] - Investing activities shifted from using $99,399 thousand in Q1 2024 to providing $94,142 thousand in Q1 2025, mainly due to higher proceeds from maturities of available-for-sale securities[20][119][120] Notes to Consolidated Financial Statements This section provides detailed disclosures and explanations for the consolidated financial statements, covering business, accounting policies, significant agreements, and specific financial line items, offering crucial context for understanding the company's financial health and operations 1. Nature of Business This section describes the company's core business as a commercial-stage biopharmaceutical company focused on innovative cancer therapies - Syndax Pharmaceuticals, Inc. is a commercial-stage biopharmaceutical company focused on innovative cancer therapies, with two commercially approved products: Revuforj and Niktimvo[23] - The company operates in one segment and faces risks including revenue generation, regulatory approval for new indications, supply chain issues, intellectual property protection, and compliance with regulations[23][24] 2. Basis of Presentation This section outlines the accounting principles and conventions used in preparing the unaudited interim consolidated financial statements - The unaudited interim consolidated financial statements are prepared in conformity with U.S. GAAP and include all normal and recurring adjustments deemed necessary by management[25][26] - Operating results for the three months ended March 31, 2025, are not necessarily indicative of the full year, and these statements should be read in conjunction with the annual audited financial statements in the Form 10-K[26] 3. Summary of Significant Accounting Policies This section details the key accounting policies applied, including revenue recognition, deferred taxes, and recent accounting pronouncements - The company's significant accounting policies are consistent with those disclosed in the 2024 Form 10-K, with no material changes noted[28] - A full valuation allowance was deemed necessary for all net deferred tax assets as of March 31, 2025, and December 31, 2024, due to expected current year and historical losses[32] - For collaboration revenue, Incyte is identified as the principal in product sales of Niktimvo, with Syndax recognizing its 50% share of net profits as 'Collaboration revenue' or net losses as 'Collaboration loss' within operating expenses[34] - ASU 2024-03, effective for the company for the year ending December 31, 2027, is expected to result in disclosure changes only, expanding disclosures around employee compensation and selling expenses[36] 4. Significant Collaborative Research and License Agreements This section details the company's key agreements with partners like Incyte, AbbVie, UCB Biopharma, and Eddingpharm, outlining terms for co-commercialization, development, milestones, and royalties - Incyte Collaboration: Syndax co-commercializes and co-promotes axatilimab (Niktimvo™) in the U.S. with Incyte, sharing profits and losses equally. Incyte holds exclusive commercialization rights outside the U.S. and is responsible for 55% of global/U.S.-specific development costs, while Syndax covers 45%[37][38] - Under the Incyte Agreements, Syndax is eligible for up to $220.0 million in development/regulatory milestones and $230.0 million in commercialization milestones, plus tiered royalties on ex-U.S. net sales[39] - Vitae Pharmaceuticals, Inc. (AbbVie): Syndax holds an exclusive worldwide license for Menin–KMT2A binding interaction inhibitors (Menin Assets), with potential milestone payments up to $99.0 million and low single to low double-digit royalties on sales, plus up to $70.0 million in sales-based milestones[42] - UCB Biopharma Sprl: Syndax has an exclusive worldwide license for axatilimab (UCB6352), with potential milestone payments up to $119.5 million and low double-digit royalties on sales, plus up to $250.0 million in sales-based milestones. A $10.0 million milestone was paid in Q1 2025 for a Phase III study[44][45] - Eddingpharm Investment Company Limited: A milestone was achieved in April 2024 for the marketing approval of entinostat in China, resulting in a $3.5 million milestone revenue recorded in 2024[47][49] 5. Net Loss per Share Attributable to Common Stockholders This section presents the calculation of basic and diluted net loss per share for common stockholders | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net loss attributable to common stockholders—basic and diluted (in thousands) | $(84,846) | $(72,400) | | Net loss per share attributable to common stockholders—basic and diluted | $(0.98) | $(0.85) | | Weighted-average number of common shares used to compute net loss per share—basic and diluted | 86,171,889 | 85,213,200 | - Due to net losses in all periods presented, diluted net loss per common share is the same as basic net loss per common share[48] 6. Other Receivables This section details other amounts owed to the company, specifically a milestone receivable from a licensing agreement - As of March 31, 2025, the company recorded a $3.6 million milestone receivable related to the marketing approval of entinostat in China under the Eddingpharm license agreement, with full payment expected by December 2026[49] 7. Fair Value Measurements This section provides information on the fair value of financial assets, including cash, cash equivalents, and investments, categorized by valuation inputs | Asset Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------- | :----------------------------- | :------------------------------ | | Cash and cash equivalents | $153,993 | $154,083 | | Short-term investments | $358,204 | $418,801 | | Long-term investments | $89,938 | $119,520 | | Total assets at fair value | $602,135 | $692,404 | - The fair value of Level 1 instruments (cash equivalents) is determined using quoted market prices in active markets, while Level 2 instruments (short and long-term investments) are valued based on observable market data or models[51][53] - Available-for-sale securities as of March 31, 2025, included commercial paper ($223,552 thousand), corporate bonds ($29,489 thousand), and US Treasury securities ($195,101 thousand), totaling $448,142 thousand[55] 8. Prepaid Expenses and Other Current Assets This section lists various prepaid expenses and other current assets, providing a breakdown of their balances at different reporting dates | Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | | Prepaid insurance | $968 | $1,276 | | Interest receivable on investments | $2,170 | $2,634 | | Prepaid subscriptions | $1,721 | $1,605 | | Prepaid state and local taxes | $329 | $298 | | Prepaid rent | $35 | $107 | | Prepaid inventory | $2,701 | $2,009 | | Other | $538 | $612 | | Total | $8,462 | $8,541 | 9. Inventory This section provides a breakdown of the company's inventory, including raw materials, work-in-process, and finished goods | Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------- | :----------------------------- | :------------------------------ | | Raw materials | $1,743 | $0 | | Work-in-process | $572 | $330 | | Finished goods | $2,349 | $36 | | Total Inventory | $4,664 | $366 | - Total inventory increased significantly from $366 thousand at December 31, 2024, to $4,664 thousand at March 31, 2025, driven by increases in raw materials and finished goods[57] 10. Accrued Expenses and Other Current Liabilities This section details various accrued expenses and other current liabilities, including product revenue allowances, clinical study costs, and compensation | Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | | Product revenue allowances | $4,006 | $849 | | Accrued clinical study and trial costs | $22,939 | $23,869 | | Accrued selling, general, and administrative costs | $7,092 | $4,258 | | Accrued compensation and related costs | $7,402 | $14,477 | | Accrued professional fees | $1,109 | $385 | | Accrued milestone costs | $0 | $10,600 | | Accrued royalty interest expense | $12,857 | $4,930 | | Other | $576 | $421 | | Total | $55,981 | $59,789 | 11. Royalty Interest Financing Liability This section describes the financing arrangement with Royalty Pharma, detailing the upfront payment, royalty rates, and accounting treatment as a debt instrument - In November 2024, Syndax entered into a Purchase and Sale Agreement with Royalty Pharma, selling rights to certain revenue streams from net sales of axatilimab (Niktimvo™) in the U.S. for an upfront fee of $350 million[60] - Royalty Pharma receives a 13.8% royalty rate on quarterly net sales of Niktimvo in the U.S., capped at $822.5 million in aggregate payments[61] - The agreement is accounted for as a debt instrument, with an estimated effective annual interest rate of approximately 9.22% for the period ended March 31, 2025. Royalty interest expense recognized for Q1 2025 was $8.0 million[64] | Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------------ | :----------------------------- | :------------------------------ | | Current portion of royalty interest financing liability | $14,149 | $12,116 | | Royalty interest financing liability, less current portion | $335,852 | $337,884 | | Debt issuance costs | $(6,208) | $(6,319) | | Total royalty interest financing liability, net | $343,793 | $343,681 | 12. Stock-Based Compensation This section details the company's stock-based compensation plans, including shares available for issuance and the recognized compensation expense - The number of shares available for issuance under the 2015 Omnibus Incentive Plan increased by 3,427,778 shares in January 2025, and the 2023 Inducement Plan increased by 1,700,000 shares in total during July and December 2024[66] | Expense Category | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Research and development | $3,668 | $4,144 | | Selling, general and administrative | $6,712 | $4,755 | | Total Stock-Based Compensation | $10,380 | $8,899 | - As of March 31, 2025, there were $102.6 million of unrecognized compensation costs related to unvested stock options and RSUs, expected to be recognized over a weighted-average remaining service period of 2.69 years[68] 13. Stockholders' Equity This section provides information on the company's equity structure, including outstanding pre-funded warrants - As of March 31, 2025, there were 285,714 pre-funded warrants outstanding, which were sold in December 2021[70] 14. Commitments and Contingencies This section outlines the company's contractual obligations and potential liabilities, including royalty payments and legal proceedings - The company is obligated to pay royalties on net product sales for direct licensed products like Revuforj under the Vitae License Agreement, recorded as cost of product sales[71][72] - As of March 31, 2025, there were no contingent liabilities recorded, and the company was not party to any material legal or arbitration proceedings[73][139] 15. Segment Reporting This section clarifies that the company operates as a single reportable segment focused on biopharmaceutical cancer therapeutics - The company manages its business activities on a consolidated basis and operates as a single operating and reportable segment: biopharmaceutical cancer therapeutics[74] - The Chief Operating Decision Maker (CODM) uses consolidated net loss to assess segment performance and for budget and forecasting processes[75] | Operating Financial Results | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total Revenue | $20,042 | $0 | | Cost of product sales | $885 | $0 | | Collaboration loss | $247 | $0 | | Research and development expenses | $61,636 | $56,492 | | General and administrative expenses | $34,319 | $18,263 | | Stock-based compensation | $10,380 | $8,900 | | Royalty interest expense | $8,049 | $0 | | Interest expense (income), net | $(7,181) | $(7,201) | | Other expense, net | $221 | $87 | | Segment net loss | $(84,846) | $(72,400) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, results of operations, and liquidity, covering business updates, significant risks, and detailed analysis of revenue, expenses, and cash flows for the three months ended March 31, 2025 Company Overview This section provides a high-level summary of Syndax's business, including its commercial-stage products and overall financial position - Syndax is a commercial-stage biopharmaceutical company with two FDA-approved cancer therapies, Revuforj® (revumenib) and Niktimvo™ (axatilimab-csfr), and ongoing clinical development programs[78] - The company reported a net loss of $84.8 million for the three months ended March 31, 2025, and an accumulated deficit of $1.3 billion, with $602.1 million in cash, cash equivalents, and investments[79] Business Update This section highlights recent commercial and clinical developments for the company's key products, Revuforj and Niktimvo, detailing launch performance, regulatory submissions, and ongoing clinical trials Revumenib This section provides updates on the commercial performance, regulatory submissions, and ongoing clinical trials for Revuforj (revumenib) - Revuforj generated $20.0 million in net revenue in Q1 2025, its first full quarter post-U.S. launch in late November 2024[80] - As of March 2025, 44% of high-priority accounts have ordered Revuforj, and formal formulary coverage policies are in place for approximately 72% of all managed care lives[80] - A supplemental New Drug Application (sNDA) for Revuforj for R/R mutant NPM1 (mNPM1) AML was submitted to the FDA in April 2025, seeking Priority Review under the Real-Time Oncology Review (RTOR) program[80] - Enrollment began in Q1 2025 for the EVOLVE-2 trial, a pivotal Phase 3 study of revumenib in combination with venetoclax and azacitidine in newly diagnosed mNPM1 or KMT2Ar AML patients[80] - Ongoing trials include BEAT AML (100% ORR, 95% CRc rate reported), SAVE (82% ORR, 48% CR/CRh rate reported), and trials evaluating revumenib with intensive chemotherapy and for MRD elimination in AML[83] Niktimvo™ (axatilimab-csfr) This section provides updates on the commercial launch, administration, and ongoing clinical trials for Niktimvo (axatilimab-csfr) - Niktimvo achieved $13.6 million in net revenue in Q1 2025, its first partial quarter post-U.S. launch in late January[83] - Over 1,250 infusions of Niktimvo have been administered year-to-date, with approximately 95% of top accounts and over 70% of bone marrow transplant centers having ordered as of March 2025. A permanent J-code was assigned by CMS effective April 1, 2025[83] - Ongoing trials include two Phase 2/3 studies evaluating axatilimab in combination with standard of care therapies (ruxolitinib or corticosteroids) in newly diagnosed chronic GVHD patients[90] - Enrollment is ongoing in the MAXPIRe trial, a Phase 2 study of axatilimab for idiopathic pulmonary fibrosis (IPF), with topline data anticipated in the second half of 2026[90] Significant Risks and Uncertainties This section outlines the significant economic and business-specific risks and uncertainties that could impact the company's operations and financial results, including macroeconomic conditions and regulatory challenges - Ongoing high interest rates, recession risk, and inflation could negatively affect financing, operating costs, and capital markets[85] - Other risks include supply chain constraints, geopolitical tensions (e.g., wars in Russia/Ukraine, Israel/Hamas), challenges in obtaining regulatory approval for new indications, acquiring/in-licensing products, pharmaceutical development uncertainty, intellectual property protection, and regulatory compliance[85][86] Financial Overview This section provides an overview of the company's revenue streams and expense categories, detailing how product sales, collaboration agreements, and various operational costs are recognized and managed Product Revenue, net This section describes the recognition of net product revenue, primarily from the sales of Revuforj - The company began generating product revenue from sales of Revuforj in the U.S. in November 2024, recording $20.0 million for the three months ended March 31, 2025[87][106] Collaboration Revenue/Collaboration Loss This section explains how revenue or loss from collaborative agreements, specifically for Niktimvo with Incyte, is recognized - Sales of Niktimvo began in February 2025 in collaboration with Incyte, with Syndax recognizing its 50% share of net profits as 'Collaboration revenue' or net losses as 'Collaboration loss' within operating expenses[89][107] Research and Development This section outlines the nature and recognition of research and development expenses, including clinical trial costs and employee expenses - R&D expenses are primarily incurred for product candidate development, including clinical trial costs, employee expenses, manufacturing, license fees, and regulatory costs, and are expensed as incurred[91][95] - The company expects to continue significant R&D spending, with late-stage clinical development programs generally incurring higher costs due to increased trial size and duration[92] Selling, General and Administrative This section describes the components of selling, general, and administrative expenses, including commercialization and employee-related costs - SG&A expenses primarily include commercialization costs, employee-related expenses (salaries, benefits, stock-based compensation), and sales and marketing to support the launch of Revuforj and Niktimvo[94] - These expenses are anticipated to increase further with continued headcount growth to support ongoing research and development and commercialization efforts[97] Royalty Interest Expense This section explains the incurrence of royalty interest expense related to the Royalty Pharma Purchase and Sale Agreement - Royalty interest expense is incurred due to the Purchase and Sale Agreement with Royalty Pharma, signed in November 2024[98][111] Other Interest Expense This section details other interest expenses, primarily related to operational and capital leases - Other interest expense relates to operational and capital leases, which decreased in Q1 2025 compared to the prior year[99][112] Interest Income This section describes the sources of interest income, including cash, cash equivalents, and investments - Interest income is earned on cash, cash equivalents, and short- and long-term investments, and decreased in Q1 2025 due to fluctuations in interest rates and average balances[100][113] Other Expense This section covers other expenses, such as foreign currency revaluation and amortization of debt issuance costs - Other expense includes revaluation of foreign currency related to trade payables and amortization of debt issuance costs, which increased in Q1 2025 primarily due to the latter[101][114] Recent Accounting Pronouncements This section directs readers to further details on new accounting pronouncements within the financial statements notes - For a discussion of new accounting pronouncements, refer to Note 3 - Summary of Significant Accounting Policies[102] Critical Accounting Policies and Estimates This section confirms the consistency of critical accounting estimates with previous annual reports - There have been no material changes to the critical accounting estimates described in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024[104] Results of Operations This section provides a detailed comparison of the company's financial performance for the three months ended March 31, 2025, versus the same period in 2024, highlighting key revenue and expense changes Product Revenue, net This section details the product revenue generated from sales of Revuforj for the current period - Product revenue, net from sales of Revuforj was $20.0 million for the three months ended March 31, 2025, compared to zero in the prior year period[106] Collaboration Revenue/Collaboration Loss This section explains the recognition of collaboration revenue or expense related to Niktimvo sales with Incyte - The company began generating sales of Niktimvo in February 2025, with collaboration revenue or expense reflecting its 50% share of profit/loss with Incyte[107] Cost of Product Sales This section describes the components of cost of product sales, including cost of goods sold and royalties for Revuforj - Cost of product sales includes the cost of goods sold and royalties associated with Revuforj sales in the United States[108] Research and Development This section analyzes the changes in research and development expenses, attributing them to specific product programs and personnel costs | Category | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Revumenib-related costs | $20,805 | $31,441 | $(10,636) | | Axatilimab-related costs | $19,711 | $5,601 | $14,110 | | Other research and development programs | $921 | $966 | $(45) | | Personnel cost and other expenses | $16,531 | $14,340 | $2,191 | | Stock-based compensation | $3,668 | $4,144 | $(476) | | Total research and development expenses | $61,636 | $56,492 | $5,144 | - Total R&D expenses increased by $5.1 million, primarily due to a $14.1 million increase in axatilimab-related costs (driven by IPF and frontline cGVHD trials, and a $10.0 million milestone payment to UCB) and a $2.2 million increase in personnel costs, partially offset by a $10.6 million decrease in revumenib-related costs[109][115] Selling, General and Administrative This section examines the increase in selling, general, and administrative expenses, linking it to commercialization efforts and personnel growth | Category | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Commercial-related expenses | $10,825 | $5,833 | $4,992 | | Other selling, general and administrative expenses | $4,412 | $4,103 | $309 | | Personnel cost and other expenses | $19,082 | $8,330 | $10,752 | | Stock-based compensation | $6,712 | $4,756 | $1,956 | | Total selling, general and administrative expenses | $41,031 | $23,022 | $18,009 | - Total SG&A expenses increased by $18.0 million, primarily due to a $4.9 million increase in commercial-related costs and a $10.7 million increase in personnel costs, both driven by the commercialization of Revuforj and Niktimvo[110][116] Royalty Interest Expense This section explains the increase in royalty interest expense due to the Royalty Pharma agreement - Royalty interest expense increased due to the interest recognized related to the Royalty Pharma Purchase and Sale Agreement, signed in November 2024[111] Other Interest Expense This section details the decrease in other interest expense, primarily from capital leases - Other interest expense decreased due to less interest recognized related to capital leases[112] Interest Income This section attributes the change in interest income to fluctuations in interest rates and investment balances - Interest income decreased due to the fluctuation of interest rates and average balance of cash equivalents and short and long-term investments[113] Other Expense This section explains the increase in other expense, mainly due to the amortization of debt issuance costs - Other expense increased primarily related to the current period amortization of debt issuance costs from the Royalty Pharma Purchase and Sale Agreement[114] Liquidity and Capital Resources This section discusses the company's cash flow activities, current liquidity, and future funding requirements, including details on the Royalty Pharma agreement and At-the-Market Offering Program Cash Flows This section provides a summary of cash flows from operating, investing, and financing activities | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :---------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net cash used in operating activities | $(95,162) | $(83,548) | | Net cash provided by (used in) investing activities | $94,142 | $(99,399) | | Net cash provided by financing activities | $930 | $2,168 | | Net (decrease) increase cash, cash equivalents and restricted cash | $(90) | $(180,779) | Net Cash Used in Operating Activities This section analyzes the increase in net cash used in operating activities, attributing it to changes in net loss, receivables, and inventory - Net cash used in operating activities increased to $95.2 million in Q1 2025 from $83.5 million in Q1 2024, primarily due to an increase in operating net loss, accounts receivable, and inventory, and decreases in prepaid expenses and collaboration payables[118] Net Cash Provided by Investing Activities This section details the shift in investing activities from cash usage to cash provision, driven by maturities of available-for-sale securities - Net cash provided by investing activities was $94.1 million in Q1 2025, resulting from $104.7 million from maturities of available-for-sale securities offset by $10.5 million in purchases[119] Net Cash Provided by Financing Activities This section explains the decrease in net cash provided by financing activities, mainly due to lower proceeds from stock option exercises - Net cash provided by financing activities decreased by $1.2 million in Q1 2025 compared to the prior year, mainly due to lower proceeds from stock option exercises[121] Purchase and Sale Agreement This section describes the agreement with Royalty Pharma, including the upfront payment and royalty terms for Niktimvo sales - In October 2024, the company entered into an agreement with Royalty Pharma, receiving an upfront payment of $350.0 million (gross) for the right to receive 13.8% on quarterly net sales of Niktimvo in the U.S., capped at $822.5 million[122] Future Funding Requirements This section outlines the company's expected capital needs and strategies for financing future operations and growth - The company believes its available cash, cash equivalents, investments, and Revuforj/Niktimvo revenues are sufficient to fund existing and planned near-term cash requirements[124][127][131] - Primary uses of capital include compensation, third-party clinical R&D services, clinical costs, commercialization costs, legal/regulatory expenses, and general overhead[124] - Future capital requirements depend on factors such as clinical trial progress, regulatory approvals, intellectual property costs, market acceptance, manufacturing, pricing/reimbursement, and potential acquisitions[130] - The company expects to finance future cash needs through equity offerings, debt financings, and additional funding from license and collaboration arrangements until substantial product revenue is generated[127][131] At-the-Market Offering Program This section provides details on the company's At-the-Market (ATM) Program, including its size and remaining availability - The company has a $200.0 million At-the-Market (ATM) Program established in May 2023. No shares were sold under this program for the three months ended March 31, 2025[132] - As of March 31, 2025, $157.9 million remained available under the 2023 ATM Program[132] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section describes the company's exposure to market risk, primarily interest rate sensitivity, and its approach to managing investment activities - The company's primary market risk exposure is interest rate sensitivity, affecting its cash, cash equivalents ($154.0 million), and short- and long-term investments ($448.1 million)[133] - Investment objectives prioritize liquidity and principal preservation while maximizing interest income without significantly increasing risk. Due to short-term maturities and low risk, a 100 basis point change in interest rates would not materially affect the fair value of investments[133] - Inflation and changing prices have not had a significant impact on results of operations for the periods presented[134] Item 4. Controls and Procedures This section details management's evaluation of the effectiveness of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting Disclosure Controls and Procedures and Internal Control over Financial Reporting This section confirms the effectiveness of the company's disclosure controls and procedures as evaluated by management - As of March 31, 2025, management, including the CEO and CFO, concluded that the company's disclosure controls and procedures are effective[135] - Disclosure controls ensure that required information is recorded, processed, summarized, and reported within SEC specified time periods and communicated to management for timely decisions[135] Changes in Internal Control over Financial Reporting This section reports on any material changes to the company's internal control over financial reporting during the quarter - There was no change in the company's internal control over financial reporting during the quarter ended March 31, 2025, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting[137] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section confirms the absence of material legal or arbitration proceedings against the company as of the reporting date - As of March 31, 2025, the company was not party to any material legal or arbitration proceedings, and no governmental proceedings are pending or contemplated[139] Item 1A. Risk Factors This section refers to the comprehensive risk factors disclosed in the company's Annual Report on Form 10-K and highlights any new or updated risks - There have been no material changes in the risk factors previously disclosed in the 2024 Form 10-K[140] - A new risk factor includes potential disruptions at the FDA and other government agencies due to layoffs, funding shortages, or global health concerns, which could negatively impact the business by slowing product review and approval times[141] Item 5. Other Information This section provides other relevant information not covered elsewhere, specifically detailing trading arrangements adopted or terminated by directors and officers Trading Arrangements This section details Rule 10b5-1 trading arrangements adopted or amended by company directors and officers | Name and Position | Action | Adoption/Termination Date | Rule 10b5-1* | Non-Rule 10b5-1** | Total Shares of Common Stock to be Sold | Total Shares of Common Stock to be Purchased | Expiration Date | | :-------------------------------- | :----------- | :------------------------ | :----------- | :---------------- | :-------------------------------------- | :------------------------------------------- | :-------------- | | Michael A. Metzger, CEO, Director | Amendment | 3/11/2025 | X | | 157,307 | - | 9/9/2025 | | Dennis Podlesak, Director | Adoption | 3/5/2025 | X | | 65,600 | - | 3/31/2026 | Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, certifications, and XBRL data SIGNATURES This section contains the official signatures of the company's authorized officers, certifying the submission of the Form 10-Q - The report was signed on May 5, 2025, by Michael A. Metzger (Chief Executive Officer) and Keith A. Goldan (Chief Financial Officer and Treasurer)[150][151]