Synlogic(SYBX) - 2022 Q4 - Annual Report

Financial Performance - Synlogic reported net losses of approximately $66.1 million and $60.6 million for the years ended December 31, 2022 and 2021, respectively, with an accumulated deficit of approximately $357.0 million as of December 31, 2022[466]. - Revenue for the year ended December 31, 2022, was $1.2 million, a decrease of 33% from $1.8 million in 2021[496]. - Other income increased significantly to $1.3 million in 2022, up 524% from $0.2 million in 2021, primarily due to higher interest income from cash and investments[500]. - The company incurred a net cash outflow of $56.9 million from operating activities in 2022, primarily due to the net loss[505]. - The company anticipates continued substantial net losses as it develops product candidates and invests in technology[511]. - The existing cash and marketable securities are expected to provide a cash runway extending into the second half of fiscal 2024[513]. Research and Development - Total research and development expenses for the year ended December 31, 2022, amounted to $52.044 million, an increase from $47.127 million in 2021[475]. - Research and development expenses for specific product candidates included $4.380 million for SYNB1934 and $3.436 million for SYNB1618 in 2022[475]. - The company anticipates substantial research and development costs for the foreseeable future as programs progress through clinical trials[474]. - The company plans to expand its infrastructure and hire additional staff to support growth in research and development efforts[468]. - The company expects significant clinical trial expenditures with CROs and CMOs, which are generally cancellable without penalties[523]. Product Development and Pipeline - The lead drug candidate, SYNB1934, is anticipated to enter the pivotal Phase 3 study, Synpheny-3, in the first half of 2023[448][456]. - SYNB1934 demonstrated approximately two-fold higher activity in metabolizing phenylalanine compared to its predecessor SYNB1618, based on clinical study results[453][454]. - SYNB8802 achieved a dose-dependent reduction in urinary oxalate levels, with a -28% reduction at the 1x10^11 TID dose and a -38% reduction at the 3x10^11 TID dose compared to placebo[459]. - SYNB1353 received Fast Track, Orphan Drug, and Rare Pediatric Disease designations from the FDA for the treatment of homocystinuria, following positive Phase 1 study results[458]. - Synlogic's pipeline includes drug candidates targeting metabolic diseases such as phenylketonuria (PKU), homocystinuria (HCU), enteric hyperoxaluria, and gout[448][460]. Collaborations and Partnerships - The company is collaborating with Roche to discover a novel Synthetic Biotic for the treatment of inflammatory bowel disease (IBD)[462]. - Revenue for the year ended December 31, 2022, was generated from the Roche Collaboration and Option Agreement[471]. Operational and Administrative Expenses - General and administrative expenses are expected to increase as the company prepares for potential commercialization of its product candidates[477]. - General and administrative expenses rose to $16.6 million in 2022, an increase of 8% from $15.4 million in 2021, mainly driven by higher employee-related costs[499]. Risks and Uncertainties - The successful development of product candidates is highly uncertain and subject to various risks[473]. - The ongoing effects of the COVID-19 pandemic continue to pose uncertainties for the company's operating results and financial condition[469]. - The Company faces risks common to early-stage life science companies, including the ability to raise additional capital and regulatory approval processes[524]. Lease and Facility Costs - The total estimated project cost for access to the Azzur Suite during the Initial Term was $4.8 million[518]. - The Company agreed to pay Azzur $0.7 million for renovations and upgrades to the cleanroom space under the Third SOW[520]. - The total remaining liability associated with the Azzur lease was approximately $2.9 million as of December 31, 2022[521]. - The Fourth SOW extended the lease term through March 2023, resulting in an adjustment of $1.8 million to the operating lease right-of-use asset and liabilities[520]. - The Fifth SOW extended the lease term through December 2023 and included options to extend through June 2024 and December 2024[521]. - The Company is reasonably certain not to exercise the termination option through June 2024[522]. Inflation and Economic Impact - The impact of inflation on labor costs and operational expenses is being monitored, although it has not materially affected the business to date[470]. - The Company does not have off-balance sheet arrangements that expose it to financing, liquidity, market, or credit risk[525]. - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[527].