SNDX - Syndax Pharmaceuticals: Precision Oncology Leveraging Strong Financials And R&D

2023-06-08 08:29:28 ET

Summary

• Syndax Pharmaceuticals offers a unique investment opportunity in precision oncology with a strong financial standing and commitment to research and development.
• The company's drug pipeline includes revumenib, axatilimab, and entinostat, which show potential in addressing unmet needs in cancer treatment and outperforming competitors.
• Despite potential risks and challenges, Syndax's innovative approach and promising clinical results position it for continued growth and success in the biopharmaceutical sector.

In the rapidly evolving landscape of precision medicine and targeted oncology therapies, Syndax Pharmaceuticals ( SNDX ) stands out as a promising investment opportunity due to its innovative drug portfolio and potential to address unmet needs in the cancer treatment arena. Leveraging a stellar balance sheet, robust financial performance, and unwavering commitment to research and development (R&D), this biopharmaceutical company is well-positioned to break new grounds and generate substantial returns for investors. Syndax Pharmaceuticals presents itself as a unique investment opportunity for those seeking exposure to the burgeoning field of precision oncology. Its innovative drug pipeline , strong financial standing, and dedicated approach to R&D set the stage for significant achievements and value creation in the years to come. Therefore, we believe that backing this forward-thinking biopharmaceutical firm is a strategic and potentially rewarding move for forward-looking investors.

Noteworthy Financials

The initial three-month financial performance of Syndax Pharmaceuticals for 2023 demonstrates that this state-of-the-art drug creator is on the brink of exceptional achievements , characterized by remarkable fiscal expansion and a promising road ahead. The financial prospects for Syndax are inarguably impressive, and the company's future appears brilliant.

As of March 31, 2023, Syndax's remarkable financial well-being is apparent, with a striking $449.0 million in cash, cash equivalents, and short- and long-term investments. Amplifying the company's expansion capacity, Syndax also has an aggregate of 69.6 million common shares and prefunded warrants outstanding.

The rise in research and development costs to $34.1 million in the initial quarter, up from $30.0 million in the same period last year, is a positive sign of the company's devotion to groundbreaking discoveries. This increased spending is primarily due to employee-related costs and professional fees, highlighting Syndax's commitment to engaging exceptional talent and proficient service providers to enhance drug creation.

In terms of administration, Syndax has kept up with progress. The company's general and administrative expenses have also grown, rising to $12.0 million from the earlier year's $6.8 million. This growth is attributable to investments in employee-related expenses and professional fees, signifying the company's determination to intensify its operations and tactically situating itself for victory in the pharmaceutical sector.

Although Syndax reported a net loss attributable to common stockholders amounting to $41.1 million, a slight increase from the previous year's $37.2 million, this fact should not obscure informed judgments concerning the company's potential. In fact, the lower per-share loss of $0.59 compared to $0.63 further validates this positive direction.

In the second quarter of 2023, Syndax's financial projections remain strong . The company anticipates research and development costs to vary between $38 and $43 million, and overall operating costs to range between $53 and $58 million. This reliable estimate strengthens the idea that Syndax is well-situated for extraordinary expansion and on the brink of significant accomplishments.

Moreover, the firm's research and development costs are forecasted to reach a remarkable $160 to $175 million by the close of 2023. Concurrently, the total operating costs are expected to lie between $225 and $240 million, guaranteeing that Syndax sustains its sturdy financial standing throughout the year and into the future.

Original Cancer Therapeutics

Syndax Pharmaceuticals is an experimental biopharmaceutical firm committed to creating an array of innovative cancer treatments. In 2023, the organization's primary pipeline comprises three key products: revumenib , axatilimab , and entinostat . Revumenib, a Menin inhibitor, is designed to combat acute leukemias by interrupting the connection between Menin and MLL1 —a co-activator involved in leukemogenesis . At present, revumenib is under evaluation in three critical trials : AUGMENT-101, AUGMENT-102, and AUGMENT-103. These studies include patients with relapsed or refractory acute myeloid leukemia (AML) or acute lymphoblastic leukemia ((ALL)) carrying specific genetic mutations. Syndax Pharmaceuticals foresees unveiling data from these trials beginning in the third quarter of 2023 and potentially pursuing regulatory approvals.

Axatilimab, a monoclonal antibody, impedes CSF-1R activity—a receptor participating in macrophage differentiation and function. This treatment tackles inflammation and fibrosis resulting from chronic graft-versus-host disease (cGvHD), a severe aftermath of allogeneic stem cell transplantation. Axatilimab is presently being assessed in a critical trial titled AGAVE-201 , enrolling patients with steroid-resistant cGvHD who have experienced at least two previous lines of systemic treatment. The company expects to announce data from this trial in mid-2023 and potentially pursue regulatory authorization.

Entinostat is a histone deacetylase (HDAC) inhibitor influencing gene expression related to cellular growth, differentiation, and apoptosis. Entinostat's objective is to boost immunotherapy efficacy by counteracting the immunosuppressive effects produced by tumor cells and their surroundings. At present, entinostat is under investigation alongside pembrolizumab , an anti-PD-1 antibody, in two Phase 3 trials: E2112 and ENCORE 601 . The E2112 trial enrolls patients with hormone receptor-positive, human epidermal growth factor receptor 2-negative (HR+, HER2-) advanced breast cancer, while ENCORE 601 involves patients with microsatellite-stable colorectal cancer. Syndax Pharmaceuticals anticipates publishing data from these trials in 2024 and 2025, respectively.

AUGMENT-101 Results Published

Syndax Pharmaceuticals recently publicized Phase 1 results from their AUGMENT-101 study in Nature . The research evaluates the safety and effectiveness of revumenib in patients battling relapsed/refractory (R/R) acute leukemia with nucleophosmin mutations and KMT2A rearrangements . With a 30% complete response (CR/CRh) achieved among patients, the findings show that revumenib holds promise as an essential treatment for these particular acute leukemia forms.

The AUGMENT-101 study presents favorable data involving 68 patients, increasing the significance and optimism surrounding the results. Furthermore, with a response rate of 30% among those who had undergone a median of four prior treatments, revumenib demonstrates considerable potential as a top-tier therapy. Syndax Pharmaceuticals anticipates the topline data reveal in the third quarter of 2023, with a possible New Drug Application submission by 2023's end. If approved, revumenib would be the premier menin inhibitor available for patients.

Another Nature publication examines MEN1 mutations tied to menin inhibitor treatment resistance, supporting the dependency of both acute leukemia types on menin-KMT2A interaction. These findings underscore the necessity for further ongoing trials to evaluate response rates in mNPM1 or KMT2Ar acute leukemia patients with a lower likelihood of developing functional mutations.

Phase 1 data highlights revumenib's potency, disclosing measurable residual disease ((MRD)) negativity in 78% of patients with complete remission/complete remission with partial hematologic recovery (CR/CRh). Additionally, 38% of responders could undergo transplantation, and a majority of them achieved MRD-negativity before the procedure. With no new safety issues discovered and no treatment-related adverse events reported, the study results signal the efficacy and tolerability of revumenib as a novel treatment option.

Potential Risks

Although revumenib shows promise, it is important to consider potential challenges. One such concern is the specificity of targeting Menin and its potential impact on other cellular processes; modulating Menin's function may affect normal cellular functions, leading to unforeseen side effects. Additionally, the requirement of specific genetic mutations like mNPM1, KMT2Ar, or MLL-r2 for patient enrollment may limit the drug's applicability to a subset of leukemia patients, potentially reducing overall market potential.

A potential challenge associated with axatilimab includes potential immunosuppression , since blocking CSF-1R could affect the normal differentiation and function of macrophages, which play vital roles in immune responses. This may increase the risk of infections or impair the body's ability to combat other diseases. Furthermore, the eligibility criteria for the pivotal trial, including prior lines of systemic therapy and steroid-refractory cGvHD , may limit the patient population that can benefit from axatilimab, potentially impacting its commercial viability.

Lastly, Entinostat aims to enhance the efficacy of immunotherapy by reversing the immunosuppressive effects of tumor cells and the tumor microenvironment. This approach has considerations such as the balance between modulating gene expression and potential off-target effects. HDAC inhibitors can influence the expression of numerous genes, which may lead to unforeseen consequences and adverse events. Moreover, the success of entinostat relies on its combination with pembrolizumab in specific patient populations. By limiting the drug's effectiveness to certain subgroups, such as hormone receptor-positive breast cancer or microsatellite-stable colorectal cancer, its broad applicability and commercial success may be restricted.

Syndax Outperforms Competing Companies

In the competitive landscape, Syndax Pharmaceuticals' products rival some well-established therapeutics. One key competitor for Revumenib is Bristol-Myers Squibb 's ( BMY ) Idhifa , an oral, targeted inhibitor for patients with relapsed or refractory AML harboring mutations in the IDH2 gene . However, Revumenib's targeted approach for Menin inhibition differentiates it from IDH2-mediated mechanisms, offering patients a new treatment option that specifically interrupts Menin-MLL1 interaction. The clinical results demonstrating a 30% complete response rate for revumenib provide evidence of its efficacy in the targeted population, showcasing its potential for facilitating remarkable treatment responses in a currently underserved patient population.

Axatilimab faces competition from existing therapies such as Roche 's Actemra , used to manage severe or life-threatening cytokine release syndrome in adults and pediatric patients. While Actemra targets the interleukin-6 receptor , Axatilimab's mechanism of action focuses on obstructing the CSF-1R pathway involved in cGvHD pathogenesis. Therefore, Axatilimab offers a novel treatment strategy with unique therapeutic advantages, particularly in patients resistant to conventional therapies. Moreover, it can potentially address unmet needs in the cGvHD patient population by targeting the disease's underlying mechanism.

Entinostat's main competitor is Merck 's ( MRK ) Keytruda , which is currently approved for various cancer types. Both therapies belong to the immunotherapy space, with Keytruda targeting PD-1 and entinostat modulating gene expression by inhibiting HDAC. Entinostat's advantage lies in its synergistic potential when combined with Keytruda, providing a dual-action approach to tackle the immunosuppressive tumor microenvironment. This combination broadens the therapeutic possibilities for cancer treatment, offering an innovative option for combating cancer cells' adaptive defenses.

Conclusion

Syndax Pharmaceuticals stands out as an exceptional investment opportunity in the rapidly evolving precision oncology landscape. The company's strong financials and unwavering commitment to research and development signify that this cutting-edge biopharmaceutical firm is inarguably poised for continued growth and success.

With a unique and trailblazing drug pipeline, Syndax Pharmaceuticals deftly navigates the competitive market space, forging its path. The company's prime products - Revumenib, Axatilimab, and Entinostat - each demonstrate a distinctive therapeutic advantage, showcasing Syndax's unwavering dedication to innovation and expanding its portfolio. Furthermore, the company's products have performed remarkably in competitive situations, a testament to Syndax Pharmaceuticals' ability to disrupt the status quo and carve a niche for itself in the oncology space.

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