Synergy Pharmaceuticals Inc. (NASDAQ:SGYP), a biopharmaceutical company focused on the development and commercialization of novel gastrointestinal (GI) therapies, today reported its financial results and business update for the three months ended September 30, 2018.
Third Quarter 2018 and Recent Highlights
TRULANCE® (plecanatide)
Financial Results
2018 Outlook
About Synergy Pharmaceuticals
Synergy is a biopharmaceutical company focused on the development and commercialization of novel gastrointestinal (GI) therapies. The company has pioneered discovery, research and development efforts around analogs of uroguanylin, a naturally occurring human GI peptide, for the treatment of GI diseases and disorders. Synergy’s proprietary GI platform includes one commercial product TRULANCE® (plecanatide) and a second product candidate - dolcanatide. For more information, please visit www.synergypharma.com.
About Irritable Bowel Syndrome with Constipation (IBS-C)
Irritable bowel syndrome (IBS) is a chronic gastrointestinal disorder characterized by recurrent abdominal pain and associated with two or more of the following: related to defecation, associated with a change in the frequency of stool, or associated with a change in the form (appearance) of the stool. IBS can be subtyped by the predominant stool form: constipation (IBS-C), diarrhea (IBS-D) or mixed (IBS-M).Those within the IBS-C subtype experience hard or lumpy stools more than 25 percent of the time they defecate, and loose or watery stools less than 25 percent of the time.It is estimated that the prevalence of IBS-C in the U.S. adult population is approximately 4 to 5 percent.
About Chronic Idiopathic Constipation (CIC)
CIC affects approximately 14 percent of the global population, disproportionately affecting women and older adults. People with CIC have persistent symptoms of difficult-to-pass and infrequent bowel movements. In addition to physical symptoms including abdominal bloating and discomfort, CIC can adversely affect an individual’s quality of life, including increasing stress levels and anxiety.
About TRULANCE®
TRULANCE® (plecanatide) is a once-daily tablet approved for adults with CIC or IBS-C. With the exception of a single amino acid substitution for greater binding affinity, TRULANCE is structurally identical to uroguanylin, a naturally occurring and endogenous human GI peptide. Uroguanylin activates GC-C receptors in a pH-sensitive manner primarily in the small intestine, stimulating fluid secretion and maintaining stool consistency necessary for regular bowel function.
Indications and Usage
TRULANCE (plecanatide) 3 mg tablets is indicated in adults for the treatment of Chronic Idiopathic Constipation (CIC) and Irritable Bowel Syndrome with Constipation (IBS-C).
IMPORTANT SAFETY INFORMATION
WARNING: RISK OF SERIOUS DEHYDRATION IN PEDIATRIC PATIENTS
TRULANCE® is contraindicated in patients less than 6 years of age; in nonclinical studies in young juvenile mice administration of a single oral dose of plecanatide caused deaths due to dehydration. Use of TRULANCE should be avoided in patients 6 years to less than 18 years of age. The safety and efficacy of TRULANCE have not been established in pediatric patients less than 18 years of age.
Contraindications
Warnings and Precautions
Risk of Serious Dehydration in Pediatric Patients
Diarrhea
Adverse Reactions
Please also see the full Prescribing Information, including Box Warning, for additional risk information.
Forward-Looking Statements
Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward- looking words such as "anticipate," "planned," "believe," "forecast," "estimated," "expected," and "intend," among others. These forward-looking statements are based on Synergy's current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, substantial competition; our ability to continue as a going concern; our need for additional financing; the possibility that we may need to seek bankruptcy protection or pursue strategic alternatives that could result in leaving our current stockholders with little or no financial ownership of the Company; uncertainties of patent protection and litigation; uncertainties of government or third party payer reimbursement; limited sales and marketing efforts and dependence upon third parties; and risks related to failure to obtain FDA clearances or approvals and noncompliance with FDA regulations. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. There are no guarantees that future clinical trials discussed in this press release will be completed or successful or that any product will receive regulatory approval for any indication or prove to be commercially successful. Investors should read the risk factors set forth in Synergy's Annual Report on Form 10-K for the year ended December 31, 2017 and other periodic reports filed with the Securities and Exchange Commission. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Forward-looking statements included herein are made as of the date hereof, and Synergy does not undertake any obligation to update publicly such statements to reflect subsequent events or circumstances.
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Synergy Pharmaceutical Inc. |
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| Condensed Consolidated Balance Sheets | ||||||
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| ($ in thousands) | September 30, 2018 | December 31, 2017 | ||||
| Assets | ||||||
| Cash and cash equivalents | $ | 45,647 | $ | 136,986 | ||
| Accounts receivable | 9,222 | 6,491 | ||||
| Inventories | 21,530 | 17,214 | ||||
| Prepaid expenses and other current assets | 5,259 | 4,469 | ||||
| Total Current Assets | 81,658 | 165,160 | ||||
| Other assets | 1,381 | 1,446 | ||||
| Total Assets | $ | 83,039 | $ | 166,606 | ||
| Liabilities and Stockholders' (Deficit) | ||||||
| Other current liabilities | $ | 38,355 | $ | 38,147 | ||
| Senior convertible notes, net | 17,834 | — | ||||
| Term Loan, net | 101,739 | — | ||||
| Total Current Liabilities | 157,928 | 38,147 | ||||
| Senior convertible notes, net | — | 17,302 | ||||
| Term Loan, net | — | 98,660 | ||||
| Derivative financial instruments – warrants | 9,767 | 17,582 | ||||
| Other long-term liabilities | 11,588 | 433 | ||||
| Total Liabilities | 179,283 | 172,124 | ||||
| Total Stockholders’ Deficit | (96,244 | ) | (5,518 | ) | ||
| Total Liabilities and Stockholders’ Deficit | $ | 83,039 | $ | 166,606 | ||
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Condensed Consolidated Statement of Operations |
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($ in thousands except share and per share data) |
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Three |
Three |
Nine Months |
Nine Months |
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| Net sales | $ | 11,105 | $ | 5,008 | $ | 31,945 | $ | 7,420 | ||||||
| Cost of goods sold | 3,922 | 1,722 | 11,511 | 5,001 | ||||||||||
| Gross profit | 7,183 | 3,286 | 20,434 | 2,419 | ||||||||||
| Costs and Expenses: | ||||||||||||||
| Research and development | 2,904 | 5,876 | 9,140 | 46,346 | ||||||||||
| Selling, general and administrative | 33,887 | 45,110 | 108,647 | 140,083 | ||||||||||
| Total Operating Expenses | 36,791 | 50,986 | 117,787 | 186,429 | ||||||||||
| Loss from Operations | (29,608 | ) | (47,700 | ) | (97,353 | ) | (184,010 | ) | ||||||
| Other Income (Expense): | ||||||||||||||
| Interest expense, net | (3,369 | ) | (1,226 | ) | (9,697 | ) | (2,361 | ) | ||||||
| State R&D tax credits | — | — | 30 | — | ||||||||||
| Debt conversion expense | — | — | — | (1,209 | ) | |||||||||
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Change in fair value of derivative instruments - |
(433 | ) | 55 | 7,815 | 216 | |||||||||
| Total Other Expense | (3,802 | ) | (1,171 | ) | (1,852 | ) | (3,354 | ) | ||||||
| Loss before taxes | (33,410 | ) | (48,871 | ) | (99,205 | ) | (187,364 | ) | ||||||
| Tax expense | (1,133 | ) | — | (1,133 | ) | — | ||||||||
| Net Loss | $ | (34,543 | ) | $ | (48,871 | ) | $ | (100,338 | ) | $ | (187,364 | ) | ||
| Net Loss per Common Share, Basic and Diluted | $ | (0.14 | ) | $ | (0.22 | ) | $ | (0.41 | ) | $ | (0.84 | ) | ||
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Weighted Average Common Shares Outstanding, |
247,994,922 | 224,954,941 | 247,221,231 | 221,854,099 | ||||||||||
Synergy Pharmaceuticals Inc.
Non-GAAP Financial Measures
Adjusted research and development expenses, adjusted selling, general and administrative expenses, and adjusted total operating expenses are not measures of financial performance under accounting principles generally accepted in the United States (“GAAP”) and should not be construed as substitutes for, or superior to, GAAP research and development expenses, GAAP selling, general and administrative expenses and GAAP total operating expenses as a measure of financial performance. However, management uses both GAAP financial measures and the disclosed non-GAAP financial measures internally to evaluate and manage the Company's operations and to better understand its business. Further, management believes the addition of non-GAAP financial measures provides meaningful supplementary information to, and facilitates analysis by, investors in evaluating the Company's financial performance, results of operations and trends. The Company's calculations of adjusted research and development expenses, adjusted selling, general and administrative expenses and adjusted operating expenses, may not be comparable to similarly designated measures reported by other companies, since companies and investors may differ as to what type of events warrant adjustment.
The following table reconciles reported research and development expenses to adjusted research and development expenses (adjusted R&D):
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(Unaudited; $ in thousands) |
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Three |
Three |
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| Research and development expenses | $ | 2,904 | $ | 5,876 | |
| Adjusted to deduct: | |||||
| Stock based compensation expense | 459 | 477 | |||
| Adjusted research and development expenses | $ | 2,445 | $ | 5,399 | |
The following table reconciles reported selling, general and administrative expenses to adjusted selling, general and administrative expenses (adjusted SG&A):
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(Unaudited; $ in thousands) |
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Three |
Three |
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| Selling, general and administrative expenses | $ | 33,887 | $ | 45,110 | |
| Adjusted to deduct: | |||||
| Stock based compensation expense | 2,525 | 3,411 | |||
| Adjusted selling, general and administrative expenses | $ | 31,362 | $ | 41,699 | |
The following table reconciles reported total operating expenses to adjusted operating expenses (adjusted OPEX):
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(Unaudited; $ in thousands) |
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Three |
Three |
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| Total operating expenses | $ | 36,791 | $ | 50,986 | |
| Adjusted to deduct: | |||||
| Stock based compensation expense | 2,984 | 3,888 | |||
| Adjusted operating expenses | $ | 33,807 | $ | 47,098 | |
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For Synergy Pharmaceuticals Inc.
Ted McHugh and Nicole Briguet,
212-584-7610
SynergyIR@edelman.com