Silo Pharma, Inc. (NASDAQ:SILO) is a developmental stage biopharmaceutical company focused on advancing novel formulations and drug delivery systems for traditional therapeutics and psychedelic treatments. The company’s diversified pipeline targets a range of underserved conditions, including post-traumatic stress disorder (PTSD), Alzheimer’s disease, fibromyalgia, and multiple sclerosis.
Business Overview and History
Silo Pharma was originally incorporated in 2010 under the name Gold Swap, Inc. in the state of New York. In 2019, the company underwent a name change to Uppercut Brands, Inc. and then to its current name, Silo Pharma, Inc., in 2020. The company reincorporated in the state of Delaware in 2013 and then in Nevada in 2023.
Silo Pharma’s focus on developing novel therapeutics utilizing conventional drugs and psychedelic formulations began in 2020 with the incorporation of its wholly-owned subsidiary, Silo Pharma Inc., in Florida. The company’s pipeline has since expanded to include four key programs: SPC-15 for PTSD and stress-induced anxiety disorders, SP-26 for fibromyalgia and chronic pain, SPC-14 for Alzheimer’s disease, and SPU-16 for multiple sclerosis.
Silo has established several key partnerships and licensing agreements to advance its pipeline. In February 2021, the company entered into a Master License Agreement with the University of Maryland, Baltimore, which granted Silo Pharma an exclusive, worldwide, sublicensable, royalty-bearing license to certain intellectual property. In January 2021, Silo entered into a patent license agreement with Aikido Pharma Inc., granting Aikido an exclusive, worldwide license to certain of Silo Pharma’s intellectual property.
Additionally, in April 2021, Silo entered into a sublicense agreement with Aikido Pharma Inc., granting Aikido an exclusive worldwide sublicense to Silo Pharma’s licensed patents. This agreement provided for an upfront license fee, sales-based royalty payments, and milestone payments up to $1.9 million. The company also recorded an equity investment from Aikido Pharma at this time.
Throughout its history, Silo Pharma has faced various challenges, including the need to raise additional capital to fund its research and development activities and navigating the complex regulatory landscape in developing novel therapeutics. Despite these challenges, the company has made progress in advancing its pipeline of product candidates and establishing key partnerships to further its development efforts.
Financials and Liquidity
For the nine months ended September 30, 2024, Silo Pharma reported total revenues of $54,080, primarily consisting of license fee revenues recognized over the estimated 15-year term of a licensing agreement. The company’s cost of revenues for this period was $4,380.
Operating expenses for the nine-month period totaled $2.94 million, consisting of compensation expense of $511,460, professional fees of $899,950, research and development costs of $1.29 million, insurance expense of $63,910, and selling, general and administrative expenses of $174,280.
Silo Pharma reported a net loss of $2.66 million for the nine months ended September 30, 2024, compared to a net loss of $2.58 million in the prior-year period. The company’s net loss for the most recent fiscal year (2023) was $3.70 million.
As of September 30, 2024, Silo Pharma had $4.86 million in cash and cash equivalents, $3.15 million in short-term debt investments, and working capital of $7.22 million. The company’s balance sheet reflects total assets of $8.57 million and total liabilities of $1.78 million, resulting in a current ratio of 7.90 and a quick ratio of 7.90, indicating a strong liquidity position.
During the nine months ended September 30, 2024, Silo Pharma used $2.92 million in net cash from operating activities, reflecting the company’s focus on research and development efforts. The company generated $1.01 million in net cash from investing activities, primarily from the sale of short-term debt investments, and $3.24 million in net cash from financing activities, largely from the sale of common stock and warrants.
For the most recent fiscal year (2023), Silo Pharma reported revenue of $72.10K, with negative operating cash flow (OCF) and free cash flow (FCF) of $3.22 million. In the most recent quarter (Q3 2024), the company reported revenue of $18.02K, with a net loss of $928.81K and negative OCF and FCF of $1.35 million.
It’s worth noting that Silo Pharma has no outstanding debt, resulting in a debt-to-equity ratio of 0. The company’s strong liquidity position is further evidenced by its current ratio and quick ratio of 7.90, indicating that current assets far exceed current liabilities.
Pipeline and Research & Development
Silo Pharma’s lead candidate, SPC-15, is an intranasal prophylactic treatment for PTSD and stress-induced anxiety disorders. In 2024, the company announced the completion of a pre-Investigational New Drug (pre-IND) meeting with the U.S. Food and Drug Administration (FDA) regarding the development plan for SPC-15, and the submission of a pre-IND briefing package and meeting request. Silo plans to pursue the FDA’s 505(b)(2) regulatory pathway for SPC-15, which could shorten clinical timelines and reduce drug development costs.
The company’s SP-26 program focuses on a time-release ketamine-based implant for the treatment of fibromyalgia and chronic pain. In 2024, Silo reported positive results from sterilization and dissolution testing of the SP-26 implant, demonstrating stability and consistent drug release. The company also expanded its development agreement with Sever Pharma Solutions to continue the scale-up, extrusion, and analytical testing of the SP-26 implant.
Silo’s SPC-14 program targets Alzheimer’s disease, and in 2024, the company secured an exclusive global license from Columbia University to further develop, manufacture, and commercialize this asset. The company plans to utilize the FDA’s 505(b)(2) pathway for SPC-14, which could expedite the clinical development process.
Additionally, Silo’s SPU-16 program focuses on a central nervous system-homing peptide for the treatment of multiple sclerosis. In 2024, the company announced a partnership with WuXi AppTec to advance the preclinical development of SPU-16 through a small animal study.
Risks and Challenges
As a developmental stage biopharmaceutical company, Silo Pharma faces several risks and challenges common to the industry, including:
Clinical Trial Risks: The company’s drug candidates are in various stages of clinical development, and the outcomes of these trials are inherently uncertain. Failures or delays in clinical trials could hinder Silo’s ability to bring its products to market.
Financing and Liquidity Risks: As a developmental stage company, Silo Pharma requires significant capital to fund its research and development activities. Failure to obtain adequate financing or manage cash flow effectively could jeopardize the company’s ability to continue operations.
Competitive Landscape: Silo Pharma operates in a highly competitive biopharmaceutical industry, and its success will depend on its ability to differentiate its products and maintain a competitive advantage.
Intellectual Property Risks: The company’s success depends, in part, on its ability to protect its intellectual property and avoid infringing on the intellectual property rights of others. Challenges in this area could hinder Silo’s development and commercialization efforts.
Industry Trends and Market Position
The biopharmaceutical industry has experienced a compound annual growth rate (CAGR) of approximately 10-12% over the past 5 years. This growth has been driven by increased research and development investment, new drug approvals, and rising demand for innovative treatments. However, as an early-stage company, Silo Pharma’s growth and performance may not directly correlate with broader industry trends.
Silo Pharma’s focus on developing novel therapeutics for underserved conditions, including PTSD, Alzheimer’s disease, fibromyalgia, and multiple sclerosis, positions the company to potentially address significant unmet medical needs. The company’s approach of utilizing both conventional drugs and psychedelic formulations sets it apart from many competitors in the biopharmaceutical space.
While Silo Pharma does not provide a breakdown of performance by geographic markets, it is likely that the company primarily operates in the United States at this stage of its development. As the company progresses its pipeline candidates through clinical trials and potentially towards commercialization, it may seek to expand its geographic reach.
Outlook and Conclusion
Silo Pharma’s diverse pipeline of novel therapeutics targeting underserved conditions, such as PTSD, Alzheimer’s disease, fibromyalgia, and multiple sclerosis, presents significant growth potential. The company’s recent licensing agreements, partnerships, and progress in advancing its drug candidates through the regulatory process demonstrate its commitment to developing innovative solutions for patients in need.
The company’s strong liquidity position, with $8.01 million in liquid assets as of September 30, 2024, provides a solid foundation for continued research and development efforts. However, as a developmental stage biopharmaceutical company, Silo Pharma faces a variety of risks and challenges that must be carefully navigated. The company’s ability to secure regulatory approvals, successfully complete clinical trials, and maintain a strong financial position will be critical to its long-term success.
Overall, Silo Pharma’s focus on addressing unmet medical needs through its differentiated drug portfolio and unique delivery systems positions the company as a promising player in the biopharmaceutical industry. As the company continues to execute on its strategic priorities, investors will closely monitor its progress in advancing its pipeline candidates and its ability to translate scientific innovations into value for patients and shareholders alike.
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