SpringWorks Therapeutics(SWTX) - 2023 Q4 - Annual Report

PART I Business Overview SpringWorks Therapeutics is a commercial-stage biopharmaceutical company with OGSIVEO approved and a pipeline for rare diseases and cancer - SpringWorks Therapeutics is a commercial-stage biopharmaceutical company focused on developing and commercializing life-changing medicines for underserved patient populations suffering from devastating rare diseases and cancer, applying a precision medicine approach[18] - OGSIVEO™ (nirogacestat) is the company's first commercial product, approved by the FDA on November 27, 2023, as the first and only therapy for adult patients with progressing desmoid tumors requiring systemic treatment[19][31][64] - Mirdametinib, an investigational oral MEK inhibitor, showed positive topline results from the Phase 2b ReNeu trial in adult and pediatric patients with NF1-PN, with an NDA submission planned for the first half of 2024[20][45][49] - The company's strategic priorities include successfully commercializing OGSIVEO in the U.S. and seeking global regulatory approval, advancing mirdametinib towards marketing approval, expanding nirogacestat and mirdametinib opportunities in rare oncology and genetically defined cancers, delivering new medicines through early-stage candidates, and maximizing portfolio potential via strategic partnerships[25][32] - OGSIVEO's FDA approval was based on the Phase 3 DeFi trial, which demonstrated a 71% reduction in the risk of disease progression (HR = 0.29; p<0.001) and an objective response rate (ORR) of 41% with OGSIVEO versus 8% with placebo[32] - Mirdametinib's Phase 2b ReNeu trial showed confirmed objective response rates of 52% in pediatric patients and 41% in adult patients with NF1-PN, with median best tumor volume reductions of -42% and -41% respectively, and generally well-tolerated safety profiles[47][48] - The company relies on third parties for manufacturing all drug substance and product requirements, with commercial supply agreements in place for nirogacestat and plans for additional CMO arrangements[111] - Key intellectual property for nirogacestat includes U.S. patents covering composition of matter expiring in 2025, drug substance/product in 2039, pharmaceutical compositions in 2042, and methods of treating desmoid tumors in 2043, with Orphan Drug Exclusivity until October 27, 2030[106][295] - Key intellectual property for mirdametinib includes U.S. patents covering polymorphic forms and pharmaceutical compositions expiring in 2041, and methods of treatment expiring in 2041 and 2043, with Orphan Drug Designation for NF1-PN[107][295] - As of December 31, 2023, the company had 305 full-time employees, with 142 in R&D, 71 in commercial operations, and 92 in strategic business development, finance, and general administration[216] Risk Factors The company faces significant risks in commercialization, pipeline development, third-party reliance, and regulatory compliance - The business heavily depends on the successful commercialization of OGSIVEO in the U.S. and other jurisdictions, with no assurance of achieving expected revenue levels or profitability due to limited commercial experience and potential reimbursement challenges[234][235][237] - Successful development and regulatory approval of product candidates like mirdametinib are critical, and delays or failures in clinical trials due to safety, efficacy, or regulatory issues could materially harm the business[241][242][243] - Reliance on third-party contract manufacturers and suppliers for drug substance and product exposes the company to risks of supply limitations, interruptions, or quality issues, which could delay or impair development and commercialization efforts[269][271][274] - The company's intellectual property, including licensed patents for nirogacestat and mirdametinib, faces risks of expiration, invalidation, or unenforceability, which could diminish competitive advantage and impact financial performance[285][295][369] - Significant net losses have been incurred since inception ($325.1 million in 2023, $277.4 million in 2022, $173.9 million in 2021), and substantial additional capital will be required to fund ongoing R&D, commercialization, and operational expansion[307][314][553] - The company is subject to extensive government regulation, including anti-kickback, fraud and abuse, and data privacy laws (HIPAA, GDPR, CCPA), with non-compliance potentially leading to significant penalties, reputational harm, and operational restrictions[191][195][201][207][423][464] - Cybersecurity threats, including information theft, data corruption, and operational disruption, pose a significant risk due to increasing reliance on IT systems and third-party providers, potentially leading to financial loss and reputational damage[479][480][481][486] Summary of company-specific material risk factors The company's business depends on successful commercialization and pipeline development, facing risks in third-party reliance and intellectual property - The company's business is heavily dependent on the successful commercialization of OGSIVEO and the development of current product candidates like mirdametinib[231] - Key risks include limited commercial experience, reliance on third parties for preclinical studies, clinical trials, and manufacturing, and the ability to obtain and maintain intellectual property protection[231][232][233] - Other significant risks involve government regulation, managing organizational growth, the need for additional capital, and factors related to common stock performance[233] Company-specific material risk factors This section details specific risks in R&D, commercialization, third-party reliance, IP, regulation, operations, finance, and common stock Risks related to our research and development and commercialization Uncertainties in OGSIVEO commercialization and pipeline development pose risks of delays, regulatory issues, and market acceptance challenges - The company's ability to successfully commercialize OGSIVEO in the U.S. and other jurisdictions is uncertain, with no guarantee of achieving expected revenue levels due to limited commercial experience and potential reimbursement challenges[234][235][237] - Future success is highly dependent on the successful development, regulatory approval, and commercialization of product candidates, particularly mirdametinib, with potential for significant harm if safety, efficacy, or regulatory issues arise[241][242][243] - Interim or preliminary clinical trial data may not be predictive of final results and are subject to change, potentially harming business prospects and causing stock price fluctuations[247][249] - Difficulties in patient enrollment for clinical trials, especially for rare diseases like NF1-PN, could delay or adversely affect clinical development activities and increase costs[255][257][258] - Even if approved, product candidates may fail to achieve market acceptance by physicians, patients, and third-party payers due to factors like efficacy, safety, cost, and competition[260][261] Risks related to our reliance on third parties High dependence on third-party contractors for clinical trials, manufacturing, and supply creates risks of delays, quality issues, and disruptions - The company relies on third parties (CROs, investigators) to conduct preclinical studies and clinical trials, and their failure to meet contractual duties, deadlines, or regulatory requirements could delay or prevent regulatory approval and commercialization[263][264][266] - Dependence on third-party contract manufacturers for preclinical, clinical, and commercial product supplies exposes the company to risks of limited or interrupted supply,