Syndax Pharmaceuticals, Inc. (SNDX) Bundle
Understanding Syndax Pharmaceuticals, Inc. (SNDX) Revenue Streams
Understanding Syndax Pharmaceuticals, Inc. (SNDX)’s Revenue Streams
The company reported a milestone and license revenue of $12.5 million for the three months ended September 30, 2024. This revenue was attributed to the FDA approval of the product Niktimvo, received on August 14, 2024.
For the nine months ended September 30, 2024, total revenues reached $16 million, comprised of $12.5 million from the milestone related to Niktimvo and $3.5 million recognized under a license agreement with Eddingpharm.
Year-over-Year Revenue Growth Rate
In comparison to the same periods in 2023, the company did not generate any revenue in the three and nine months ended September 30, 2023, indicating a year-over-year growth of 100% for both periods in 2024.
Contribution of Different Business Segments to Overall Revenue
| Revenue Source | Q3 2024 Revenue (in millions) | 9M 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | 9M 2023 Revenue (in millions) |
|---|---|---|---|---|
| Milestone and License Revenue | $12.5 | $16.0 | $0.0 | $0.0 |
| Product Sales Revenue | $0.0 | $0.0 | $0.0 | $0.0 |
| Total Revenue | $12.5 | $16.0 | $0.0 | $0.0 |
Analysis of Significant Changes in Revenue Streams
The notable increase in revenue for the three and nine months ended September 30, 2024, can be attributed to the achievement of milestone payments related to the approval of Niktimvo, marking the first revenue generation since the company’s inception.
The company has not generated product sales revenue to date, indicating a reliance on milestone and license agreements for revenue generation.
A Deep Dive into Syndax Pharmaceuticals, Inc. (SNDX) Profitability
A Deep Dive into Syndax Pharmaceuticals, Inc. Profitability
Gross Profit Margin: Syndax Pharmaceuticals reported total revenues of $12.5 million for the three months ended September 30, 2024, resulting from a milestone payment. For the nine months ended September 30, 2024, total revenues reached $16 million.
Operating Profit Margin: The operating loss for the three months ended September 30, 2024, was $(89.6) million, while the loss for the nine months was $(243.3) million.
Net Profit Margin: The net loss for the three months ended September 30, 2024, was $(84.1) million, and for the nine months, the net loss was $(224.6) million.
Trends in Profitability Over Time
Comparing year-on-year performance, the net loss for the three months ended September 30, 2023, was $(51.1) million, indicating an increase in loss of 64.5% in the same quarter of 2024. For the nine-month period, the loss increased from $(136.9) million in 2023 to $(224.6) million in 2024, reflecting a rise of 64.0%.
Comparison of Profitability Ratios with Industry Averages
The average gross profit margin for biotech companies typically hovers around 70% to 80%, while Syndax's gross profit margin is currently 78.1% based on milestone revenue. In contrast, the operating margin for similar biotech firms is often negative due to high R&D costs, similar to Syndax's operating margin of (717.8%) for the latest quarter.
| Metric | Syndax Pharmaceuticals (2024) | Industry Average |
|---|---|---|
| Gross Profit Margin | 78.1% | 70% - 80% |
| Operating Profit Margin | (717.8%) | Varies (typically negative) |
| Net Profit Margin | (672.0%) | Varies (typically negative) |
Analysis of Operational Efficiency
Syndax's total operating expenses for the three months ended September 30, 2024, amounted to $102.1 million, up from $56.4 million in the same period of 2023. The increase in expenses was driven primarily by research and development costs, which were $71.0 million for the recent quarter, compared to $39.1 million the previous year.
The company's research and development expenses for the nine months ended September 30, 2024, totaled $176.1 million, up from $107.9 million in the prior year, representing a significant increase of 63.3%.
Personnel costs, including stock-based compensation, have also increased, reflecting the company's ongoing investment in expanding its clinical pipeline and preparing for potential commercialization.
| Expense Category | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Research and Development | $70.9 million | $39.1 million | +81.5% |
| Selling, General and Administrative | $31.1 million | $17.3 million | +80.0% |
| Total Operating Expenses | $102.1 million | $56.4 million | +80.8% |
Debt vs. Equity: How Syndax Pharmaceuticals, Inc. (SNDX) Finances Its Growth
Debt vs. Equity: How Syndax Pharmaceuticals, Inc. Finances Its Growth
Debt Levels
As of September 30, 2024, Syndax Pharmaceuticals reported total liabilities of $59.4 million, which include short-term and long-term debt. The breakdown of these liabilities is as follows:
| Type of Liability | Amount (in thousands) |
|---|---|
| Current liabilities | $59,377 |
| Long-term liabilities | $2 |
| Total liabilities | $59,379 |
The company has minimal long-term debt, indicating a preference for equity financing over debt financing.
Debt-to-Equity Ratio
The debt-to-equity ratio is a crucial metric for evaluating financial leverage. As of September 30, 2024, the company's total stockholders' equity stood at $366.4 million. Therefore, the debt-to-equity ratio can be calculated as follows:
Debt-to-Equity Ratio = Total Liabilities / Total Equity = $59.4 million / $366.4 million = 0.162
This ratio is significantly lower than the industry average, which typically ranges from 0.5 to 1.0, signaling a conservative approach to leveraging debt in financing growth.
Recent Debt Issuances and Credit Ratings
In May 2023, the company initiated an At-the-Market (ATM) equity offering program, allowing for the issuance of up to $200 million in common stock. As of September 30, 2024, no shares had been sold under this program, but $157.9 million remained available for future equity financing.
As of the latest reports, Syndax has not issued any new long-term debt or received any credit ratings from major agencies, reflecting its focus on maintaining a low debt profile.
Balancing Debt Financing and Equity Funding
The company strategically balances its financing through a combination of equity and limited debt. The recent financial results show:
- Net cash used in operating activities for the nine months ended September 30, 2024, was $(217.5 million).
- Net cash provided by financing activities was $5.9 million, primarily from the exercise of stock options and participation in the Employee Stock Purchase Plan.
- As of September 30, 2024, cash, cash equivalents, and short-term investments totaled $399.6 million.
This financial structure indicates a preference for maintaining liquidity and flexibility, allowing for ongoing investment in research and development while minimizing reliance on debt financing.
Assessing Syndax Pharmaceuticals, Inc. (SNDX) Liquidity
Assessing Syndax Pharmaceuticals, Inc. Liquidity
Current and Quick Ratios
The current ratio of Syndax Pharmaceuticals, Inc. as of September 30, 2024, is calculated as follows:
| Current Assets (in thousands) | Current Liabilities (in thousands) | Current Ratio |
|---|---|---|
| $414,809 | $59,377 | 6.98 |
The quick ratio, which excludes inventory from current assets, is not directly applicable here as the company primarily operates in the pharmaceutical sector where inventory is minimal. The quick ratio is essentially the same as the current ratio in this context, indicating a strong liquidity position.
Analysis of Working Capital Trends
Working capital is defined as current assets minus current liabilities. As of September 30, 2024, the working capital for Syndax Pharmaceuticals is:
| Current Assets (in thousands) | Current Liabilities (in thousands) | Working Capital (in thousands) |
|---|---|---|
| $414,809 | $59,377 | $355,432 |
This indicates a robust working capital position, which suggests that the company can cover its short-term obligations comfortably.
Cash Flow Statements Overview
Here is a summary of the cash flow statements for the nine months ended September 30, 2024:
| Cash Flow Activities | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash Used in Operating Activities | ($217,515) | ($119,252) |
| Net Cash Provided by Investing Activities | $49,198 | $133,899 |
| Net Cash Provided by Financing Activities | $5,942 | $5,649 |
| Net (Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash | ($162,375) | $20,296 |
The increase in net cash used in operating activities from 2023 to 2024 reflects a rise in operational expenditures, primarily due to increased research and development costs.
Liquidity Concerns or Strengths
As of September 30, 2024, the company has cash, cash equivalents, and short- and long-term investments totaling $399.6 million. This significant liquidity position provides a buffer against operational risks and allows the company to fund ongoing research and development activities.
However, the net cash used in operating activities has increased, indicating that while the company is well-capitalized, it is incurring substantial losses as it invests heavily in its pipeline. The accumulated deficit as of the same date stands at $1.1 billion, which highlights the need for continued capital management and potential future funding rounds to sustain operations without jeopardizing liquidity.
Is Syndax Pharmaceuticals, Inc. (SNDX) Overvalued or Undervalued?
Valuation Analysis
The valuation analysis of the company as of 2024 focuses on various financial metrics to determine whether it is overvalued or undervalued. Key ratios include the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios.
Price-to-Earnings (P/E) Ratio
As of September 30, 2024, the net loss attributable to common stockholders was $(224.6 million), resulting in a net loss per share of $(2.63). Given the company's current stock price of approximately $4.60, the P/E ratio cannot be calculated as earnings are negative.
Price-to-Book (P/B) Ratio
As of September 30, 2024, the total stockholders' equity was $366.4 million with 85.3 million shares outstanding, resulting in a book value per share of approximately $4.30. With a current stock price of $4.60, the P/B ratio is approximately 1.07.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
As of September 30, 2024, the enterprise value calculation includes total liabilities of $59.4 million and cash equivalents of $399.6 million, leading to an enterprise value of approximately $(340.2 million). The EBITDA for the nine months ended September 30, 2024, was $(243.3 million). Given that both values are negative, the EV/EBITDA ratio cannot be determined.
Stock Price Trends
Over the last 12 months, the stock price has fluctuated between a low of $2.50 and a high of $6.00. The stock is currently trading at approximately $4.60, showing a significant recovery from the lows experienced earlier in the year.
Dividend Yield and Payout Ratios
The company does not currently pay any dividends, and thus the dividend yield is 0%. The payout ratio is also 0% as there are no earnings to distribute as dividends.
Analyst Consensus on Stock Valuation
Analyst consensus indicates a mixed outlook with recommendations as follows:
- Buy: 3 analysts
- Hold: 5 analysts
- Sell: 2 analysts
| Metric | Value |
|---|---|
| Net Loss (9M 2024) | $(224.6 million) |
| Net Loss Per Share | $(2.63) |
| Current Stock Price | $4.60 |
| P/E Ratio | N/A |
| Book Value Per Share | $4.30 |
| P/B Ratio | 1.07 |
| Enterprise Value | $(340.2 million) |
| EBITDA (9M 2024) | $(243.3 million) |
| EV/EBITDA Ratio | N/A |
| Dividend Yield | 0% |
| Analyst Consensus | 3 Buy, 5 Hold, 2 Sell |
| Average Price Target | $5.00 |
Key Risks Facing Syndax Pharmaceuticals, Inc. (SNDX)
Key Risks Facing Syndax Pharmaceuticals, Inc.
As a clinical-stage biopharmaceutical company, Syndax Pharmaceuticals, Inc. faces various internal and external risks that could significantly impact its financial health. Below is a detailed analysis of these risk factors.
Industry Competition
The biopharmaceutical industry is highly competitive, with numerous companies engaged in the development of similar therapeutic products. The approval of Niktimvo in August 2024 has positioned the company in a competitive landscape, but the success of its products depends on their efficacy and safety compared to existing treatments. The company has reported that it has not generated any product revenues to date, which could be a reflection of the competitive pressures in the market.
Regulatory Changes
Changes in regulations can impact the development and commercialization timelines of the company’s products. The New Drug Application (NDA) for revumenib is currently under review, with a Prescription Drug User Fee Act (PDUFA) target action date of December 26, 2024. Any delays or changes in the regulatory landscape could adversely affect the company's financial projections.
Operational Risks
Operational risks include the ability to effectively manage clinical trials and product development. The company has incurred significant research and development expenses, reporting a total of $176.1 million for the nine months ended September 30, 2024, compared to $107.9 million for the same period in 2023. Increased costs associated with trials, particularly for revumenib and axatilimab, may strain financial resources if not managed properly.
Financial Risks
The company reported a net loss of $224.6 million for the nine months ended September 30, 2024, up from $136.9 million in the prior year. As of the same date, Syndax had an accumulated deficit of $1.1 billion, indicating ongoing financial challenges that could hinder its ability to raise additional capital. The need for continuous funding through equity or debt raises the risk of dilution for existing shareholders.
Market Conditions
Market conditions can significantly affect the company's stock performance and capital raising efforts. The ongoing volatility in the biopharmaceutical sector, coupled with macroeconomic factors such as inflation and interest rates, could impact investor sentiment and access to capital.
Mitigation Strategies
Syndax has established various strategies to mitigate these risks. The company has entered into collaborations, such as with Incyte for the commercialization of Niktimvo, which can provide additional revenue streams and share the financial burden of development. Furthermore, the company is actively pursuing additional funding sources and milestone payments from existing agreements to support its operational needs.
| Risk Factor | Details | Financial Impact |
|---|---|---|
| Industry Competition | High competition in biopharmaceuticals | Potential for reduced market share and revenues |
| Regulatory Changes | Pending NDA for revumenib | Delays could impact revenue generation |
| Operational Risks | Increased R&D expenses | Reported $176.1 million in 2024 |
| Financial Risks | Ongoing net losses | Net loss of $224.6 million in 2024 |
| Market Conditions | Volatility in biopharmaceutical stocks | Possible impact on capital raising |
Future Growth Prospects for Syndax Pharmaceuticals, Inc. (SNDX)
Future Growth Prospects for Syndax Pharmaceuticals, Inc.
Analysis of Key Growth Drivers
The approval of the product Niktimvo on August 14, 2024, is a significant milestone for the company, generating a milestone revenue of $12.5 million for the three months ended September 30, 2024. This product is anticipated to launch in the U.S. market by early 2025, providing a pathway for revenue generation where none currently exists.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, total revenues amounted to $16 million, consisting of the previously mentioned milestone revenue and an additional $3.5 million recognized under a license agreement with Eddingpharm. Future revenue estimates are tied to the successful commercialization of Niktimvo and the ongoing development of other product candidates, including revumenib, which has a Prescription Drug User Fee Act (PDUFA) target action date set for December 26, 2024.
Strategic Initiatives or Partnerships
The company is co-promoting Niktimvo with Incyte in the U.S., leveraging Incyte's established marketing capabilities. This partnership is expected to enhance market penetration and sales effectiveness. Furthermore, the company has entered into a Royalty Agreement with Royalty Pharma, which includes a $350 million upfront payment and potential future payments totaling $822.5 million.
Competitive Advantages
The company has a robust pipeline supported by significant investments in research and development, which totaled $176.1 million for the nine months ended September 30, 2024. This investment is crucial for sustaining long-term growth and addressing unmet medical needs in oncology and other therapeutic areas. Additionally, the company maintains a strong cash position of $399.6 million as of September 30, 2024, providing a buffer for continued operations and development.
| Financial Metric | Value (in thousands) |
|---|---|
| Revenue (Q3 2024) | $12,500 |
| Revenue (9 Months Ended Sept 30, 2024) | $16,000 |
| Research and Development Expenses (9 Months Ended Sept 30, 2024) | $176,118 |
| Net Loss (Q3 2024) | $(84,126) |
| Cash, Cash Equivalents, and Investments | $399,600 |
| Royalty Agreement Upfront Payment | $350,000 |
| Potential Future Payments (Royalty Agreement) | $822,500 |
The strategic focus on innovative product development, coupled with strong partnerships and a healthy financial position, positions the company favorably for future growth in the biopharmaceutical sector.
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Updated on 16 Nov 2024
Resources:
- Syndax Pharmaceuticals, Inc. (SNDX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Syndax Pharmaceuticals, Inc. (SNDX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Syndax Pharmaceuticals, Inc. (SNDX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.