Company Overview
Syros Pharmaceuticals is a biopharmaceutical company dedicated to developing new standards of care for the frontline treatment of hematologic malignancies. Founded in 2011 and headquartered in Cambridge, Massachusetts, Syros has been at the forefront of exploring novel therapeutic approaches to address the significant unmet needs in this critical disease area.
The company’s lead product candidate, tamibarotene, is an oral, selective retinoic acid receptor alpha (RARα) agonist that has shown promising results in clinical trials for the treatment of higher-risk myelodysplastic syndrome (HR-MDS), a form of blood cancer with a poor prognosis. Syros believes tamibarotene has the potential to transform the treatment landscape for HR-MDS patients, particularly those with RARA gene overexpression, which the company estimates accounts for approximately 50% of the HR-MDS population.
Company History
Syros’ journey began in 2011 when the company was incorporated with a mission to help patients with blood disorders that have largely eluded other targeted approaches. In 2014, Syros formed a wholly-owned subsidiary, Syros Securities Corporation, to exclusively engage in buying, selling, and holding securities on its own behalf. The following year, the company filed a universal shelf registration statement with the SEC to register for sale up to $250 million of common stock, preferred stock, debt securities, warrants and/or units.
In 2019, Syros formed another wholly-owned subsidiary, Syros Pharmaceuticals Ireland Limited, in Ireland. That same year, the company entered into a collaboration agreement with Global Blood Therapeutics, which later became a subsidiary of Pfizer, for the discovery, development, and commercialization of novel therapies for sickle cell disease and beta thalassemia. However, this collaboration was terminated in October 2023.
Throughout its history, Syros has faced several challenges. In 2023, the company announced a strategic realignment to prioritize key development and pre-launch activities for tamibarotene, discontinuing further investment in other clinical and preclinical programs. As part of this restructuring, Syros implemented expense reduction measures, including a 35% reduction in its employee base.
Product Development
Despite these challenges, Syros has continued to make progress in advancing tamibarotene. The company has engaged partners to develop companion diagnostic tests to support the potential commercialization of tamibarotene, further demonstrating its commitment to bringing this promising therapy to market.
In 2020, Syros presented data from a Phase 2 clinical trial evaluating tamibarotene in combination with azacitidine, a chemotherapy, in newly diagnosed AML patients. The results were encouraging, with a complete response (CR) rate of 61% in patients with RARA overexpression. This data, along with the significant unmet need in HR-MDS, prompted the company to advance tamibarotene into a pivotal Phase 3 trial, known as SELECT-MDS-1, in newly diagnosed HR-MDS patients with RARA overexpression.
The SELECT-MDS-1 trial is a global, randomized, double-blind, placebo-controlled study designed to evaluate the efficacy and safety of tamibarotene in combination with azacitidine compared to placebo plus azacitidine. The primary endpoint of the trial is complete response (CR) rate, with overall survival serving as a key secondary endpoint. In the first quarter of 2024, Syros completed enrollment of the 190 patients necessary to support the CR primary endpoint analysis, and the trial passed a pre-specified interim futility analysis.
Syros is now eagerly anticipating the pivotal data readout from the SELECT-MDS-1 trial, expected in mid-November 2024. If successful, the company believes tamibarotene could rapidly become a new standard of care for HR-MDS patients with RARA overexpression, a population that currently has limited treatment options beyond hypomethylating agents, which have demonstrated limited efficacy.
Financials
Financially, Syros reported $58.3 million in cash and cash equivalents as of September 30, 2024, which the company believes will be sufficient to fund its anticipated operating expenses and capital expenditure requirements into the third quarter of 2025. The company did not recognize any revenue during the third quarter of 2024, as its previous collaboration with Pfizer was terminated in October 2023.
Research and development expenses for the third quarter of 2024 were $20.5 million, down from $28.3 million in the same period of 2023, primarily due to a reduction in external R&D, consulting, contract manufacturing, and headcount-related expenses. General and administrative expenses also decreased to $5.7 million, down from $7.8 million in the prior-year quarter, driven by reduced headcount, consulting, and facilities costs.
Syros reported a net loss of $6.4 million, or $0.16 per share, for the third quarter of 2024, compared to a net loss of $40.1 million, or $1.43 per share, in the third quarter of 2023. The reduction in net loss was largely attributable to the decrease in operating expenses and a gain from the change in fair value of warrant liabilities.
For the most recent fiscal year (2023), Syros reported revenue of $9.94 million and a net loss of $164.57 million. The company’s operating cash flow (OCF) was negative $109.71 million, and its free cash flow (FCF) was negative $109.98 million.
Year-over-year changes in the most recent quarter (Q3 2024) were significant. The company did not generate any revenue in Q3 2024 compared to $3.76 million in Q3 2023, reflecting the termination of the company’s collaboration agreement with Pfizer. Net loss decreased from $40.14 million in Q3 2023 to $6.40 million in Q3 2024, primarily due to lower R&D and G&A expenses as a result of the company’s restructuring in Q4 2023. Both OCF and FCF were negative $20.69 million in Q3 2024.
Liquidity
As of September 30, 2024, Syros had $58.3 million in cash and cash equivalents. The company believes this will be sufficient to fund its anticipated operating expenses and capital expenditure requirements into the third quarter of 2025. This runway provides Syros with the financial flexibility to continue advancing its lead product candidate, tamibarotene, through the critical Phase 3 trial and prepare for potential commercialization.
The company’s debt-to-equity ratio as of December 31, 2023, was -3.93. Syros has a loan and security agreement with Oxford Finance LLC that provides for term loans of up to an aggregate principal amount of $100 million, of which $40 million remains available upon achievement of certain milestones and a $20 million term loan remains available at Oxford’s discretion.
As of September 30, 2024, Syros had a current ratio of 2.25 and a quick ratio of 2.25, indicating a relatively strong short-term liquidity position. However, the company’s history of losses, negative cash flows, and limited liquidity resources have resulted in substantial doubt about its ability to continue as a going concern within one year from the issuance of the condensed consolidated financial statements.
Future Outlook
Looking ahead, Syros is laser-focused on the upcoming pivotal data readout from the SELECT-MDS-1 trial, which the company expects will be a transformative event for the company and a potential game-changer for HR-MDS patients. If successful, Syros plans to move quickly to deliver tamibarotene to the thousands of patients awaiting better treatment options.
The company expects to report pivotal complete response (CR) data from the SELECT-MDS-1 trial in mid-November 2024. In addition to the CR rate, Syros anticipates reporting data on the duration of complete response, time to complete response, overall response rate, and safety/tolerability profile of the tamibarotene plus azacitidine combination. The company believes a successful pivotal trial result that achieves the primary endpoint would be clinically meaningful and likely drive strong usage, as there have been no new treatments approved in frontline higher-risk MDS beyond hypomethylating agents in over a decade.
Syros estimates that by 2029, the total market opportunity for higher-risk MDS therapeutics in the U.S. will be approximately $1.6 billion, with the market opportunity for tamibarotene in the U.S. for patients with RARA overexpression exceeding $800 million.
However, it is important to note that the company’s future is not without risk. The failure of the SELECT-MDS-1 trial to meet its primary endpoint would be a significant setback, and Syros would need to carefully evaluate its next steps. Additionally, the highly competitive nature of the hematologic malignancy landscape and the inherent challenges of drug development pose ongoing risks that the company must navigate.
To address its funding requirements, Syros is exploring various strategies, including raising additional capital through equity or debt financings, business development transactions, and reducing cash expenditures. The company’s future funding needs will depend on the scope, progress, timing, and costs of its clinical development activities, particularly the ongoing SELECT-MDS-1 trial, as well as the company’s ability to satisfy the covenants and avoid events of default under its loan agreement with Oxford Finance LLC.
Nevertheless, Syros’ unwavering commitment to advancing new standards of care for patients with hematologic malignancies, coupled with the potential of tamibarotene, makes the company an intriguing player in the biopharmaceutical industry. As the company approaches this critical juncture, investors will be closely watching the outcome of the SELECT-MDS-1 trial and Syros’ ability to execute on its strategic vision.
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