Business Overview and Company History
SCYNEXIS, Inc. is a biotechnology company dedicated to pioneering innovative medicines to overcome and prevent challenging and drug-resistant infections. With a focus on developing its proprietary antifungal platform, the company has made significant strides in advancing its lead candidate ibrexafungerp and its second-generation compound SCY-247.
SCYNEXIS was founded in 1999 and is headquartered in Jersey City, New Jersey. The company is focused on developing a novel class of antifungal agents called triterpenoids, which are structurally distinct glucan synthase inhibitors. The lead candidate, ibrexafungerp, is the first representative of this novel class and has demonstrated in vitro and in vivo activity against a broad range of human fungal pathogens, including multi-drug resistant strains.
In 2014, SCYNEXIS completed its initial public offering, becoming a publicly traded company. Over the next several years, the company continued to advance ibrexafungerp through clinical development. In June 2021, the U.S. Food and Drug Administration (FDA) approved ibrexafungerp (branded as BREXAFEMME) for the treatment of patients with vulvovaginal candidiasis (VVC), also known as vaginal yeast infection. This marked an important milestone for the company. In December 2022, the FDA further approved BREXAFEMME for the reduction in the incidence of recurrent VVC. BREXAFEMME was the first new oral antifungal medication for VVC approved by the FDA in over 20 years.
In 2022, SCYNEXIS faced a significant challenge when it became aware that a non-antibacterial beta-lactam drug substance was manufactured using equipment common to the manufacturing process for ibrexafungerp. This presented a risk of cross-contamination, and out of an abundance of caution, the company recalled BREXAFEMME from the market and placed a temporary hold on clinical studies of ibrexafungerp in September 2023. The FDA concurred with the voluntary hold. The company worked diligently to resolve this issue and was able to continue its compassionate use program for ibrexafungerp.
SCYNEXIS's second-generation antifungal compound, SCY-247, is in the preclinical development stage. The company anticipates initiating a Phase 1 study for SCY-247 in the fourth quarter of 2024. Both ibrexafungerp and SCY-247 have received Qualified Infectious Disease Product (QIDP) and Fast Track designations from the FDA for various indications, which may provide additional market exclusivity and expedited regulatory paths.
In March 2023, SCYNEXIS entered into a license agreement with GlaxoSmithKline (GSK), granting GSK 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 agreement provided SCYNEXIS with a $90 million upfront payment and the potential for up to $306 million in regulatory and commercial milestone payments, as well as tiered royalties in the mid-single digit to mid-teen range on net sales in the GSK territory.
Financial Performance and Liquidity
As of September 30, 2024, SCYNEXIS reported cash, cash equivalents, and investments of $84.9 million, including a $10 million development milestone payment received from GSK in the third quarter of 2024. The company projects a cash runway of more than two years, which should support its ongoing development efforts and operations.
For the nine months ended September 30, 2024, SCYNEXIS reported total revenue of $2.77 million, primarily consisting of license agreement revenue associated with the GSK partnership. The company's net loss for the period was $16.86 million, with research and development expenses of $22.09 million and selling, general, and administrative expenses of $9.74 million.
In the full year 2023, SCYNEXIS reported total revenue of $140.14 million, including $130.10 million in license agreement revenue recognized upon the transfer of the ibrexafungerp license to GSK. The company's net income for the year was $67.04 million, with research and development expenses of $30.93 million and selling, general, and administrative expenses of $20.92 million. The annual operating cash flow and free cash flow for 2023 were both $60.16 million.
For the most recent quarter (Q3 2024), SCYNEXIS reported quarterly revenue of $660,000, a decrease from $1.76 million in Q3 2023, representing a 62.5% year-over-year decline. The quarterly net loss increased from $1.76 million in Q3 2023 to $2.81 million in Q3 2024.
SCYNEXIS primarily sells its products in the United States. The company's liquidity position remains strong, with a debt-to-equity ratio of 0.27, a current ratio of 3.13, and a quick ratio of 3.13. The previous Loan Agreement was fully repaid in May 2023.
Ongoing Development and Corporate Milestones
SCYNEXIS continues to make progress with its pipeline. The company's second-generation compound, SCY-247, is advancing through IND-enabling activities, with the initiation of a Phase 1 study anticipated in the fourth quarter of 2024. Preclinical data on SCY-247 has been presented at various medical conferences, highlighting its potent and broad antifungal activity.
Regarding the ibrexafungerp program, SCYNEXIS recently delivered the final clinical study reports for the completed FURI, CARES, and NATURE trials in refractory or resistant invasive fungal infections to GSK. This milestone triggered a $10 million development payment to SCYNEXIS in the third quarter of 2024.
The company is also working to resolve the clinical hold and product recall related to potential cross-contamination issues with the manufacturing of ibrexafungerp. SCYNEXIS is collaborating with the FDA and has initiated new manufacturing agreements to produce new batches of ibrexafungerp, with the goal of restarting the impacted clinical studies, including the Phase 3 MARIO study, in the first quarter of 2025.
Risks and Challenges
SCYNEXIS faces several risks and challenges, including the successful development and commercialization of its pipeline candidates, the resolution of the ibrexafungerp manufacturing and clinical hold issues, and the ability to secure additional funding to support its ongoing operations and research and development activities.
The company also operates in a highly competitive and regulated industry, where the success of its products is subject to market acceptance, reimbursement challenges, and the ability to maintain intellectual property protection.
Additionally, SCYNEXIS is involved in ongoing legal proceedings related to a securities class action lawsuit and shareholder derivative complaints. In November 2023, a securities class action lawsuit was filed against SCYNEXIS and certain executives, alleging misleading statements related to the manufacturing issue. SCYNEXIS disagrees with the allegations and intends to defend the lawsuit. These legal proceedings could result in significant financial and operational impacts if the outcomes are unfavorable.
Industry Trends
The global antifungal drugs market is expected to grow at a compound annual growth rate (CAGR) of 3.5% from 2022 to 2030. This growth is driven by the increasing prevalence of fungal infections and the rising demand for effective antifungal treatments. As a company focused on developing innovative antifungal solutions, SCYNEXIS is well-positioned to capitalize on this growing market trend.
Conclusion
SCYNEXIS is a biotechnology company with a compelling focus on developing innovative antifungal treatments to address the growing challenge of difficult-to-treat and drug-resistant infections. The company's lead candidate, ibrexafungerp, has already received FDA approval for the treatment of VVC and the reduction in the incidence of recurrent VVC, and its second-generation compound, SCY-247, is advancing through the development pipeline.
While SCYNEXIS faces various risks and challenges, including the resolution of the ibrexafungerp manufacturing and clinical hold issues, the company's strategic partnership with GSK and its strong financial position provide a solid foundation for its continued growth and development efforts. With a cash runway of more than two years and promising product candidates in development, SCYNEXIS is poised to make significant contributions to the field of antifungal treatments. As SCYNEXIS navigates these challenges, investors will continue to monitor the company's progress in bringing its innovative antifungal solutions to market and its ability to capitalize on the growing global demand for effective antifungal therapies.