SCYNEXIS, Inc. (SCYX) is a biotechnology company at the forefront of developing novel antifungal agents to overcome and prevent difficult-to-treat and drug-resistant infections. With a focus on the proprietary class of antifungal compounds called fungerps, SCYNEXIS is paving the way for innovative solutions to address the growing challenge of fungal infections.
Company History and Development
The company's history can be traced back to its inception in 1999, when it was founded with the goal of pioneering advancements in the field of antifungal therapies. Over the years, SCYNEXIS has steadily built a robust pipeline of product candidates, anchored by its lead compound, ibrexafungerp, which has demonstrated promising results in the treatment of various fungal infections.
In 2013, SCYNEXIS exclusively licensed the rights to ibrexafungerp from Merck, with Merck assigning the related patents to SCYNEXIS the following year. Ibrexafungerp is the first representative of SCYNEXIS's novel class of antifungal compounds called triterpenoids. The company's relationship with Merck continued to evolve, with amendments to the license agreement in 2016 and 2018 clarifying milestone payment terms. In 2019, SCYNEXIS paid a $1 million milestone payment to Merck following the initiation of the VANISH Phase 3 VVC program. A fourth amendment in 2020 eliminated two cash milestone payments related to the first NDA filing and marketing approval in the U.S. for ibrexafungerp in VVC treatment.
FDA Approvals and Pipeline Expansion
In June 2021 and December 2022, the U.S. Food and Drug Administration (FDA) approved BREXAFEMME (ibrexafungerp tablets) for the treatment of patients with vulvovaginal candidiasis (VVC), also known as vaginal yeast infection, and for the reduction in the incidence of recurrent vulvovaginal candidiasis (RVVC), respectively. This milestone marked a significant achievement for the company, as it transitioned from a clinical-stage to a commercial-stage biopharmaceutical entity.
SCYNEXIS has further expanded its pipeline with the development of SCY-247, a second-generation antifungal compound from the fungerp class. The company anticipates initiating a Phase 1 study for SCY-247 in the fourth quarter of 2024, underscoring its commitment to advancing its antifungal pipeline.
Financials and Liquidity
Financially, SCYNEXIS has been actively managing its resources to support its research and development efforts. As of September 30, 2024, the company reported cash, cash equivalents, and investments totaling $84.9 million, including a recent $10.0 million development milestone payment received from its licensing partner, GlaxoSmithKline (GSK). This financial position is expected to provide a cash runway into the third quarter of 2026, allowing SCYNEXIS to continue its ongoing clinical studies and advance its pipeline.
For the fiscal year 2023, SCYNEXIS reported revenue of $140.14 million, net income of $67.04 million, and operating cash flow of $60.16 million. However, the company experienced a significant decrease in revenue in the third quarter of 2024, reporting only $660,000 in revenue compared to the same period in the previous year. This 72.20% year-over-year decline was primarily attributed to the voluntary recall of BREXAFEMME and the temporary hold on clinical studies of ibrexafungerp.
The company's financial position remains stable, with a debt-to-equity ratio of 0.23 and a current ratio of 3.13 as of Q3 2024. SCYNEXIS had $28.73 million in cash and cash equivalents and $56.22 million in investments at the end of the third quarter. The company's quick ratio, matching its current ratio at 3.13, indicates a strong ability to meet short-term obligations.
In May 2023, SCYNEXIS fully repaid a $60 million loan facility it previously held with Hercules Capital and Silicon Valley Bank, using proceeds from the GSK licensing deal.
Strategic Partnerships and Challenges
In March 2023, SCYNEXIS entered into a significant licensing agreement with GSK, granting the pharmaceutical giant an exclusive, royalty-bearing, sublicensable license for the development and commercialization of ibrexafungerp, including the approved product BREXAFEMME, for all indications in countries outside of Greater China and certain other regions. This partnership represents a strategic move for SCYNEXIS, as it allows the company to leverage GSK's global reach and resources to maximize the commercial potential of its lead asset.
Under the terms of the agreement, SCYNEXIS is eligible to receive up to $49 million in regulatory approval milestone payments, up to $57.5 million in commercial milestone payments based on first commercial sale in invasive candidiasis in the U.S. and EU, and sales milestone payments of up to $179.5 million depending on the timing of GSK's relaunch of BREXAFEMME in the U.S. Additionally, SCYNEXIS will receive royalties on net sales in the mid-single digit to mid-teen range.
However, the company faced a setback in September 2023 when it voluntarily recalled BREXAFEMME and placed a temporary hold on clinical studies of ibrexafungerp. This decision was made after SCYNEXIS became aware that a non-antibacterial beta-lactam drug substance was manufactured using equipment common to the ibrexafungerp manufacturing process, presenting a potential risk of cross-contamination. The company is working diligently to resolve this issue and anticipates the restart of the Phase 3 MARIO study, after the FDA's lifting of the clinical hold, in the first quarter of 2025.
In November 2023, a securities class action lawsuit was filed against SCYNEXIS and certain executives, alleging that the company failed to disclose the manufacturing cross-contamination issue and the likelihood of recalling ibrexafemme and halting clinical studies. SCYNEXIS disputes these allegations and is actively defending against the litigation.
Future Outlook and Recent Performance
Despite these challenges, SCYNEXIS remains committed to its mission of developing innovative antifungal solutions. The company's pipeline, anchored by ibrexafungerp and SCY-247, continues to garner attention within the industry. SCYNEXIS has also received various designations from regulatory authorities, including Qualified Infectious Disease Product (QIDP) and Fast Track designations for ibrexafungerp, which may provide additional market exclusivity and expedited regulatory paths.
In the third quarter of 2024, SCYNEXIS reported revenue of $660,000 and a net loss of $2.8 million. For the nine months ended September 30, 2024, the company reported total revenue of $2.77 million, primarily from license agreement revenue associated with the GSK agreement. Research and development expenses for this period were $22.09 million, while selling, general and administrative expenses were $9.74 million. The company reported a net loss of $16.86 million for the nine-month period.
Looking ahead, SCYNEXIS is well-positioned to navigate the challenges in the antifungal space and capitalize on the growing demand for effective treatments. With its experienced management team, robust pipeline, and strategic partnerships, the company is poised to continue its pursuit of innovative solutions to overcome the rising threat of drug-resistant fungal infections. The anticipated initiation of the Phase 1 study for SCY-247 in the fourth quarter of 2024 and the potential restart of the MARIO study in early 2025 represent key milestones that could drive future growth and value creation for SCYNEXIS.