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Synlogic Reports Second Quarter 2018 Financial Results and Provides Program Updates

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- Data from Phase 1/2 studies of SYNB1618 and SYNB1020 expected by
end of 2018 –

– On track to advance first immuno-oncology program into IND-enabling
studies in fourth quarter of 2018 –

Synlogic, Inc. (Nasdaq:
SYBX
), a clinical stage company applying synthetic biology to
probiotics to develop novel, living medicines, today reported its
financial results for the second quarter ended June 30, 2018 and
provided an update on its programs.

"Synlogic's recent progress, including initiation of two clinical trials
and multiple presentations of preclinical data, highlight the potential
of Synthetic Biotic medicines across a range of diseases," said Aoife
Brennan, M.B., B.Ch., Synlogic's interim president and chief executive
officer and chief medical officer. "In the second half of 2018, we look
to continue this momentum as we advance our clinical pipeline, with data
expected from phase 1/2 clinical trials of our two lead programs,
SYNB1020 in patients with hyperammonemia due to cirrhosis and SYNB1618
in healthy volunteers. In addition, we look forward to advancing our
first immuno-oncology program into IND-enabling studies for the
treatment of cancer."

Recent Highlights
Pipeline

  • Presentation of preclinical data highlighting potential of
    Synthetic Biotic medicines in immuno-oncology (IO)
    at the annual
    meeting of the Federation of Clinical Immunology Societies (FOCIS
    2018), including the platform's broad capabilities to generate
    candidates that secrete or consume immunologically relevant compounds
    for the potential treatment of cancer and inflammation. Data presented
    in two sessions demonstrate that intratumorally injected E. coli
    Nissle was able to colonize and persist in the tumor, and that
    multiple functions can be engineered into a single bacterial strain.
    These properties support the continued development of Synthetic Biotic
    immunotherapies for the treatment of solid tumors, particularly "cold"
    tumors that may be resistant to current immunotherapies due to their
    lack of infiltrating immune cells or a highly immunosuppressive tumor
    microenvironment. Synlogic plans to advance its first immuno-oncology
    program into IND-enabling studies in the fourth quarter of 2018.
  • Presentation of preclinical data supporting continued development
    of SYNB1618 for the treatment of Phenylketonuria (PKU)
    in a
    plenary session at the annual meeting of the American Society for
    Microbiology (ASM Microbe 2018). The data demonstrate, in a mouse
    model of PKU and healthy non-human primates, that orally administered
    SYNB1618 can result in significant decreases in blood phenylalanine
    levels and dose-responsive pharmacokinetics. Synlogic is currently
    evaluating SYNB1618 in a Phase 1/2a clinical trial for the management
    of PKU and expects to report interim data from healthy volunteers
    before the end of 2018 and full data that includes cohorts of patients
    with PKU in 2019.
  • Presentation of new preclinical data highlighting beneficial
    activity of SYNB1020 in animal model of liver disease
    at Digestive
    Disease Week (DDW 2018). The data demonstrate that, in addition to
    lowering systemic levels of ammonia, administration of SYNB1020
    resulted in reduced indicators of liver damage, providing additional
    support for its continued development for the potential treatment of
    liver disease. SYNB1020 is currently being evaluated in a Phase 1b/2a
    clinical trial in patients with elevated ammonia due to cirrhosis,
    with topline data expected at the end of 2018.

Corporate

  • Strengthened balance sheet: As of June 30, 2018, Synlogic had
    cash, cash equivalents, and short-term investments of $143.2 million
    which includes $28.9 million in net proceeds generated by a registered
    direct offering completed in April 2018.
  • Addition to Russell 3000® Index following its annual
    reconstitution, providing Synlogic increased visibility and exposure
    to institutional investors.

Second Quarter 2018 Financial Results
For the three months
ended June 30, 2018, Synlogic reported a consolidated net loss of $14.6
million, or $0.59 per share, compared to a consolidated net loss of $9.4
million, or $4.70 per share, for the corresponding period in 2017.

Research and development expenses were $10.9 million for the three
months ended June 30, 2018 compared to $8.5 million for the
corresponding period in 2017. The increase was primarily due to an
increase in expenses associated with Synlogic's SYNB1618 program
including its ongoing Phase 1/2a clinical trial, an increase in
compensation and other employee-related expenses associated with
increased headcount, partially offset by one-time equity-based and
patent-related charges of $2.1 million associated with Synlogic's MIT-BU
license agreement.

General and administrative expenses for the three months ended June 30,
2018 were $4.7 million compared to $3.0 million for the corresponding
period in 2017. The increase was primarily due to an increase of $1.2
million in compensation costs associated with the separation of
Synlogic's former chief executive officer, as well as compensation and
other employee-related expenses associated with increased headcount.

Revenues were $0.3 million for the three months ended June 30, 2018,
compared to $2.1 million for the corresponding period in 2017. Revenue
for both periods was associated with Synlogic's collaboration with
AbbVie to develop Synthetic Biotic medicines for the treatment of
irritable bowel disease (IBD). The decrease in revenue was primarily the
result of a milestone achieved and recognized during the three months
ended June 30, 2017.

Six-months Results
For the six months ended June 30, 2018,
the consolidated net loss was $25.8 million, or $1.14 per share,
compared to a consolidated net loss of $16.8 million, or $9.20 per
share, for the corresponding period in 2017.

Total operating expenses were $27.6 million for the six months ended
June 30, 2018, compared to $19.1 million for the corresponding period in
2017. The increase in operating expenses was primarily due to
compensation-related expenses associated with increased headcount,
increased external costs associated with development of Synlogic's
Synthetic Biotic programs including process and formulation development,
pre-clinical and clinical studies as well as increased general and
administrative expenses as a consequence of becoming a public company.

About Synlogic
Synlogic is pioneering the development of a
novel class of living medicines, Synthetic Biotic medicines, based on
its proprietary drug development platform. Synlogic leverages the tools
and principles of synthetic biology to genetically engineer probiotic
microbes to perform or deliver critical functions missing or damaged due
to disease. Synlogic's two lead programs, SYNB1020 and SYNB1618, target
hyperammonemia as a result of liver damage or genetic disease, and PKU,
respectively. When delivered orally, Synthetic Biotic medicines can act
from the gut to compensate for the dysfunctional metabolic pathway and
have a systemic effect, with the potential to significantly improve
symptoms of disease for affected patients. In addition, the company is
leveraging the broad potential of its platform to create Synthetic
Biotic medicines for the treatment of more common diseases, including
liver disease, inflammatory and immune disorders, and cancer. Synlogic
is collaborating with AbbVie to develop Synthetic Biotic-based
treatments for inflammatory bowel disease (IBD). For more information,
please visit www.synlogictx.com.

Forward-Looking Statements
This press release contains
"forward-looking statements" that involve substantial risks and
uncertainties for purposes of the safe harbor provided by the Private
Securities Litigation Reform Act of 1995. All statements, other than
statements of historical facts, included in this press release regarding
strategy, future operations, future financial position, future revenue,
projected expenses, prospects, plans and objectives of management are
forward-looking statements. In addition, when or if used in this press
release, the words "may," "could," "should," "anticipate," "believe,"
"estimate," "expect," "intend," "plan," "predict" and similar
expressions and their variants, as they relate to Synlogic may identify
forward-looking statements. Examples of forward-looking statements,
include, but are not limited to, statements regarding the potential of
Synlogic's platform to develop therapeutics to address a wide range of
diseases including: inborn errors of metabolism, liver disease,
inflammatory and immune disorders, and cancer; the future clinical
development of Synthetic Biotic medicines; the approach Synlogic is
taking to discover and develop novel therapeutics using synthetic
biology; the potential of Synlogic's technology to treat hyperammonemia
and phenylketonuria; and the expected timing of Synlogic's anticipated
clinical trial initiations and availability of clinical trial data.
Actual results could differ materially from those contained in any
forward-looking statement as a result of various factors, including: the
uncertainties inherent in the preclinical development process; the
ability of Synlogic to protect its intellectual property rights; and
legislative, regulatory, political and economic developments, as well as
those risks identified under the heading "Risk Factors" in Synlogic's
filings with the SEC. The forward-looking statements contained in this
press release reflect Synlogic's current views with respect to future
events. Synlogic anticipates that subsequent events and developments
will cause its views to change. However, while Synlogic may elect to
update these forward-looking statements in the future, Synlogic
specifically disclaims any obligation to do so. These forward-looking
statements should not be relied upon as representing Synlogic's view as
of any date subsequent to the date hereof.

Synlogic, Inc.    
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands)   For the three months ended For the six months ended
June 30, 2018   June 30, 2017 June 30, 2018 June 30, 2017
 
Revenue $ 254 $ 2,111 $ 608 $ 2,222
 
Operating expenses
Research and development 10,872 8,532 19,233 13,650
General and administrative   4,734   3,036   8,363   5,403
Total operating expenses   15,606   11,568   27,596   19,053
Loss from operations (15,352) (9,457) (26,988) (16,831)
Other income (expense), net   761   69  

1,232

  75
Net loss $ (14,591) $ (9,388) $ (25,756) $ (16,756)
 

Net loss per share attributable to common shareholders - basic and
diluted

$ (0.59) $ (4.70) $ (1.14) $ (9.20)

Weighted-average common shares used in computing net loss per
share attributable to common shareholders - basic and diluted

  24,803,379   1,997,228   22,503,802   1,821,736
 
     
Synlogic, Inc.
Condensed Consolidated Balance Sheets Data
(unaudited)
(in thousands)
June 30, 2018 December 31, 2017

Assets

Cash, cash equivalents and short-term investments $ 143,212 $ 87,025
Fixed assets 14,594 9,783
Other assets   3,267   2,891
Total assets $ 161,073 $ 99,699
 
Liabilities and Stockholders' Equity
Current liabilities $ 8,203 $ 9,027
Long-term liabilities   8,250   5,634
Total liabilities   16,453   14,661
Total stockholders' equity   144,620   85,038
Total liabilities and stockholders' equity $ 161,073 $ 99,699

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