Business Overview and History
Syros Pharmaceuticals was founded in November 2011 with a focus on developing medicines that control the expression of genes to treat cancer and other diseases. The company's proprietary platform technology, known as the Syros Gene Control Platform, has enabled the identification of novel drug targets and the development of small molecule therapeutics that selectively modulate gene expression.
In 2015, Syros achieved a significant milestone by successfully completing its initial public offering, raising crucial funds to advance its pipeline of product candidates. This event marked an important step in the company's growth trajectory, providing the financial resources needed to pursue its ambitious research and development goals.
Over the subsequent years, Syros made steady progress in its mission, entering into collaboration agreements and advancing its lead program, tamibarotene, into clinical development for the treatment of acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS). These efforts demonstrated the company's commitment to translating its scientific discoveries into potential therapies for patients with hematologic malignancies.
However, in 2020, Syros encountered its first major setback when it terminated its collaboration with Pfizer related to the discovery, development, and commercialization of novel therapies for sickle cell disease and beta thalassemia. This unexpected challenge prompted the company to re-evaluate its strategic priorities and refocus its efforts on the development of tamibarotene for MDS.
The company faced further difficulties in 2023 when it announced a strategic realignment to prioritize key development and pre-launch activities for tamibarotene in MDS and AML. This realignment included a significant reduction of approximately 35% of the company's employee base and the termination of its clinical development program for SY-2101 oral arsenic trioxide for the treatment of newly diagnosed acute promyelocytic leukemia, as well as its preclinical and discovery-stage programs. These cost-cutting measures were implemented to preserve the company's cash runway and focus its resources on the advancement of tamibarotene.
One of Syros' lead product candidates, tamibarotene, is an oral, selective retinoic acid receptor alpha (RARα) agonist that the company has been advancing for the treatment of higher-risk myelodysplastic syndrome (HR-MDS) and acute myeloid leukemia (AML). Tamibarotene has shown promising results in early-stage clinical trials, particularly in patients with RARA gene overexpression, a genetic biomarker that Syros has identified as a potential predictor of response to the therapy.
In 2020, Syros' fortunes took a turn as the company encountered setbacks in its clinical development pipeline. The SELECT-AML-1 Phase 2 trial evaluating tamibarotene in combination with venetoclax and azacitidine for newly diagnosed, unfit AML patients was terminated due to disappointing results from a prespecified interim analysis. This development led to a significant decline in the company's stock price, and the subsequent need for Syros to reevaluate its strategic priorities.
Undeterred, Syros doubled down on its focus on the HR-MDS opportunity and initiated the pivotal SELECT-MDS-1 Phase 3 trial evaluating tamibarotene in combination with azacitidine in newly diagnosed HR-MDS patients with RARA gene overexpression. This trial represented a critical juncture for the company, as a successful outcome could pave the way for regulatory approval and the commercialization of tamibarotene as a potential new standard of care for this patient population.
Financial Overview
Syros' financial performance has been characterized by consistent net losses, reflecting the company's ongoing investment in research and development activities. In the fiscal year 2023, the company reported a net loss of $164.6 million, with revenue of $9.9 million. The company did not generate any revenue from product sales, as its pipeline candidates remained in the clinical development stage.
The company's cash and cash equivalents stood at $139.5 million as of December 31, 2023, providing a runway to support its operations and the continued advancement of its pipeline. However, this figure decreased to $58.3 million by September 30, 2024. Syros has been actively managing its cash resources, having raised additional funds through equity offerings and a loan agreement with Oxford Finance LLC, which was amended in 2024 to increase the available debt financing to $100 million.
The company's research and development expenses have been the primary driver of its financial performance, accounting for $108.2 million, or 79.3% of its total operating expenses in 2023. This significant investment reflects Syros' commitment to its clinical development programs, particularly the ongoing SELECT-MDS-1 trial.
For the nine months ended September 30, 2024, Syros did not generate any revenue, compared to $9.6 million in revenue recognized during the same period in 2023, which was related to the company's now-terminated collaboration with Global Blood Therapeutics. Research and development expenses decreased by 23% year-over-year to $67.1 million, primarily due to a reduction in costs associated with the company's prior clinical programs and the elimination of expenses related to its discovery efforts following a restructuring in Q4 2023. General and administrative expenses also decreased by 22% to $17.4 million over the same period.
Liquidity and Solvency
Syros' liquidity position, as measured by its current ratio and quick ratio, remained relatively strong as of September 30, 2024, at 2.25 and 2.25, respectively. This suggests that the company has sufficient short-term assets to cover its current liabilities, providing a cushion to weather any near-term operational challenges.
However, the company's long-term solvency, as indicated by its debt-to-equity ratio of -5.41 as of December 31, 2023, raises significant concerns. The negative ratio reflects a negative equity position, likely due to accumulated losses. This substantial debt burden, exacerbated by the 2024 loan amendment, could limit Syros' financial flexibility and potentially constrain its ability to raise additional capital in the future, should the need arise.
Syros believes its current cash position will fund its planned operating expenses and capital requirements into the third quarter of 2025. However, the company has expressed substantial doubt about its ability to continue as a going concern, as it will require substantial additional funding to execute its operating plan and advance tamibarotene and any future product candidates through development and commercialization.
Operational and Strategic Developments
In the midst of these financial challenges, Syros has remained focused on its clinical development efforts, particularly the pivotal SELECT-MDS-1 trial. The trial, which was designed to evaluate the combination of tamibarotene and azacitidine in newly diagnosed HR-MDS patients with RARA gene overexpression, represented a critical milestone for the company.
Syros is expecting to report pivotal primary endpoint data, specifically the complete remission (CR) rate, from the first 190 patients enrolled in the SELECT-MDS-1 Phase 3 trial of tamibarotene plus azacitidine versus placebo plus azacitidine in mid-November 2024. The company is targeting to enroll a total of 550 patients in the SELECT-MDS-1 trial to support a future evaluation of the key secondary endpoint of overall survival.
Syros also expects to report data on secondary endpoints such as duration of complete response, time to complete response, and overall response rate (including CR, partial response, and hematologic improvement) along with safety data. The company believes that a successful pivotal trial result that achieves the primary endpoint would be clinically meaningful and likely drive strong usage of tamibarotene, as there have been no new treatments approved in frontline higher-risk MDS beyond hypomethylating agents in over a decade.
Syros has also been actively pursuing the development of a companion diagnostic test to identify patients with RARA gene overexpression, a critical biomarker for tamibarotene's potential efficacy. The company has partnered with Qiagen Manchester Limited to develop a kit-based testing solution, which could play a vital role in any future commercialization efforts for tamibarotene.
Market Opportunity and Industry Trends
Syros estimates that approximately 9,000 HR-MDS patients are diagnosed in the United States each year. The company projects that the total market opportunity for HR-MDS therapeutics in the U.S. will be around $1.6 billion by 2029. Furthermore, Syros believes the total U.S. market opportunity for tamibarotene in HR-MDS patients with RARA overexpression will exceed $800 million by 2029.
While specific industry growth data has not been provided, the substantial market opportunity for HR-MDS therapeutics suggests a growing demand for innovative treatments in this area. The lack of new approved treatments for frontline higher-risk MDS beyond hypomethylating agents in over a decade underscores the potential impact of successful new therapies in this field.
Risks and Challenges
Syros faces a number of risks and challenges that could impact its long-term prospects. The outcome of the SELECT-MDS-1 trial is crucial for the future of tamibarotene, the company's lead product candidate, and the company's ability to successfully develop and commercialize this therapy. Additionally, the highly competitive nature of the hematologic malignancies landscape, with numerous established and well-funded players, presents a significant challenge for Syros as it seeks to establish a foothold in the market.
The company's reliance on external collaborations and partnerships for the development of its companion diagnostic tests also introduces additional risks, as the success of these efforts is largely dependent on the performance and strategic priorities of its partners.
Moreover, Syros' financial position, characterized by ongoing net losses and a substantial debt burden, could limit its ability to weather unexpected setbacks or to pursue alternative development paths for its pipeline. The company's ability to raise additional capital, either through equity offerings or debt financing, could be crucial to its long-term survival and growth.
Outlook and Conclusion
Syros Pharmaceuticals finds itself at a critical juncture, with the upcoming results of the SELECT-MDS-1 trial potentially determining its future trajectory. The company's leadership has focused its efforts on advancing tamibarotene and realizing its potential in the treatment of HR-MDS patients with RARA overexpression.
The company's ability to leverage its proprietary gene control platform and successfully develop tamibarotene will be crucial in determining its long-term trajectory. Additionally, the successful development and commercialization of a companion diagnostic test could provide a valuable tool to support the potential future use of tamibarotene.
While recent financial challenges and the substantial doubt about the company's ability to continue as a going concern present significant hurdles, the potential market opportunity for tamibarotene in HR-MDS offers a glimmer of hope. As Syros awaits the pivotal data from the SELECT-MDS-1 trial, its ability to adapt, innovate, and effectively navigate the complex regulatory and commercial landscape will be the key determinants of its long-term success in the evolving biotech industry.