Synlogic(US:SYBX)2021-05-13 10:02PART I - FINANCIAL INFORMATION Financial Statements Synlogic reported a net loss of $14,971 thousand for Q1 2021, an improvement from the prior year, primarily due to decreased R&D expenses and positive financing cash flow Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $26,704 | $32,507 | | Total current assets | $101,197 | $106,846 | | Total assets | $135,745 | $143,840 | | Total current liabilities | $6,986 | $8,301 | | Total liabilities | $26,695 | $28,705 | | Total stockholders' equity | $109,050 | $115,135 | Consolidated Statements of Operations Highlights (in thousands, except per share data) | Account | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Revenue | $0 | $100 | | Research and development | $11,180 | $12,677 | | General and administrative | $3,851 | $3,821 | | Loss from operations | $(15,031) | $(16,398) | | Net loss | $(14,971) | $(15,828) | | Net loss per share | $(0.36) | $(0.46) | Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(13,976) | $(12,479) | | Net cash provided by investing activities | $154 | $5,817 | | Net cash provided by (used in) financing activities | $8,019 | $(69) | | Net decrease in cash, cash equivalents and restricted cash | $(5,803) | $(6,731) | - In April 2021, the company completed an underwritten public offering, selling 11,500,000 shares of common stock at $3.00 per share, resulting in net proceeds of approximately $32.6 million70 - During Q1 2021, the company sold 2,447,211 shares of common stock through its at-the-market (ATM) offering program, generating net proceeds of approximately $8.1 million46 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's clinical-stage Synthetic Biotic™ medicine pipeline, highlighting decreased R&D expenses and sufficient cash reserves for the next 12 months - The company's proprietary pipeline includes Synthetic Biotic medicines for Phenylketonuria (PKU) with SYNB1618, Enteric Hyperoxaluria with SYNB8802, and an immuno-oncology candidate, SYNB189173 R&D Expense Breakdown by Program (in thousands) | Program | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | SYNB1618 | $977 | $3,634 | | SYNB1891 | $762 | $372 | | SYNB8802 | $1,741 | $0 | | SYNB1934 | $90 | $0 | | Other External & Internal R&D | $7,610 | $8,671 | | Total R&D Expense | $11,180 | $12,677 | - The decrease in R&D expense was primarily due to a $3.3 million reduction in nonclinical development costs and a $0.5 million decrease in clinical costs for SYNB1618, partially offset by a $1.8 million increase for SYNB8802 and a $0.4 million increase for SYNB1891109 - The company believes its cash, cash equivalents, and short-term marketable securities of $94.4 million as of March 31, 2021, will be sufficient to meet anticipated cash requirements for at least the next 12 months112121 - Revenue in Q1 2020 was $0.1 million from the AbbVie collaboration, which was terminated in May 2020, with no revenue recognized in Q1 202195108 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Synlogic is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Synlogic is exempt from providing quantitative and qualitative disclosures about market risk128 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal controls over financial reporting - The company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of the end of the period covered by the report131 - No material changes to the company's internal controls over financial reporting were identified during the fiscal quarter ended March 31, 2021132 PART II - OTHER INFORMATION Legal Proceedings The company is not currently a party to any material legal proceedings - As of the filing date, the company is not involved in any material legal proceedings133 Risk Factors The company faces significant financial, development, regulatory, intellectual property, and operational risks, including reliance on third parties and potential impacts from the COVID-19 pandemic - Financial Risks: The company is a clinical-stage entity with a history of losses ($245.3 million accumulated deficit as of March 31, 2021), expects to incur future losses, and will require substantial additional funding to continue operations138141143 - Development & Technology Risks: The company's Synthetic Biotic™ medicine approach is novel and unproven, which may never lead to marketable products, and clinical trials are costly, time-consuming, and their outcomes are uncertain138157 - Pandemic Risk: The COVID-19 pandemic may materially and adversely affect business and financial results, including potential interruptions to clinical trial activities, patient recruitment, and regulatory reviews140178 - Intellectual Property Risks: The company may not be successful in obtaining or maintaining necessary patent protections for its product candidates, and could face third-party claims of intellectual property infringement140218233 - Third-Party Reliance: The company relies on third parties to conduct aspects of product formulation, research, clinical studies, and manufacturing, and their failure to perform satisfactorily could delay development140250251 - Commercialization Risks: The company faces substantial competition from larger, better-funded companies and must gain market acceptance from physicians, patients, and payors to be successful, with no guarantee of adequate reimbursement for its products if approved140267275 Unregistered Sales of Equity Securities and Use of Proceeds Employees surrendered 15,970 shares of common stock to satisfy tax obligations related to restricted stock vesting during Q1 2021 - In Q1 2021, employees surrendered 15,970 shares to the company to cover tax liabilities upon the vesting of restricted stock awards295 Defaults Upon Senior Securities The company reports no defaults upon senior securities - The company reports no defaults upon senior securities296 Mine Safety Disclosures This item is not applicable to the company - This item is not applicable to the company297 Other Information The company reports no other information for this item - The company reports no other information for this item298 Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO/CFO certifications and Inline XBRL documents