Syros Pharmaceuticals, Inc. (SYRS) Bundle
Understanding Syros Pharmaceuticals, Inc. (SYRS) Revenue Streams
Understanding Syros Pharmaceuticals, Inc.’s Revenue Streams
Revenue Recognition: As of September 30, 2024, the company did not recognize any revenue, whereas for the same period in 2023, it recognized $3.8 million of revenue, all attributed to a collaboration with Global Blood Therapeutics, Inc. (GBT). The collaboration was terminated in October 2023, thus eliminating future revenue from this source.
Year-over-Year Revenue Growth Rate: The year-over-year revenue growth rate reflects a 100% decrease when comparing the three months ended September 30, 2024 to the same period in 2023, where revenue was $3.8 million. For the nine months ended September 30, 2024, the company reported $0 in revenue, down from $9.6 million for the same period in 2023, also a 100% decrease.
Contribution of Different Business Segments: For the nine months ended September 30, 2023, the entire revenue of $9.6 million was attributed to the collaboration with GBT.
Significant Changes in Revenue Streams: The termination of the collaboration with GBT marks a significant change in revenue streams, as it was the sole source of revenue for the company.
| Period | Revenue ($ millions) | Year-over-Year Change (%) | Revenue Source |
|---|---|---|---|
| Q3 2023 | 3.8 | - | Collaboration with GBT |
| Q3 2024 | 0.0 | -100% | None |
| 9M 2023 | 9.6 | - | Collaboration with GBT |
| 9M 2024 | 0.0 | -100% | None |
A Deep Dive into Syros Pharmaceuticals, Inc. (SYRS) Profitability
A Deep Dive into Syros Pharmaceuticals, Inc. Profitability
Gross Profit Margin: The company reported a gross profit margin of 0% for the nine months ended September 30, 2024, as no revenue was recognized during this period. In contrast, for the same period in 2023, the gross profit margin was approximately 43.5%, attributed to $9.6 million in revenue.
Operating Profit Margin: The operating profit margin for the nine months ended September 30, 2024, was -100%, reflecting a loss from operations of $84.5 million against zero revenue. This represents an improvement over the nine months ended September 30, 2023, where the operating margin was -117%, with a loss from operations of $101.8 million.
Net Profit Margin: The net profit margin for the nine months ended September 30, 2024, was -49.4%, with a net loss of $33.4 million on zero revenue. For the same period in 2023, the net profit margin was -104%, with a net loss of $100.2 million.
Trends in Profitability Over Time
Over the past year, the company's financial results have shown significant fluctuations:
- Net loss for the three months ended September 30, 2024, was $6.4 million, a decrease from $40.1 million for the same period in 2023.
- For the nine months ended September 30, 2024, the net loss was $33.4 million, down from $100.2 million in 2023.
Comparison of Profitability Ratios with Industry Averages
The profitability ratios of the company have faced challenges compared to industry averages:
| Metric | Syros Pharmaceuticals, Inc. (2024) | Industry Average |
|---|---|---|
| Gross Profit Margin | 0% | 50%+ |
| Operating Profit Margin | -100% | -20% to -30% |
| Net Profit Margin | -49.4% | -10% to -15% |
Analysis of Operational Efficiency
Operational efficiency has shown some improvement despite ongoing losses:
- Total operating expenses decreased from $111.4 million for the nine months ended September 30, 2023, to $84.5 million in 2024, a reduction of 24%.
- Research and development expenses decreased by 23%, from $86.7 million in 2023 to $67.1 million in 2024.
- General and administrative expenses also dropped by 22%, from $22.4 million to $17.4 million.
- Cost management initiatives have led to a significant decline in loss from operations, from $101.8 million in the previous year to $84.5 million.
Debt vs. Equity: How Syros Pharmaceuticals, Inc. (SYRS) Finances Its Growth
Debt vs. Equity: How Syros Pharmaceuticals, Inc. Finances Its Growth
Debt Levels
As of September 30, 2024, Syros Pharmaceuticals reported total debt of $41.1 million net of debt discount, comprising long-term obligations primarily resulting from a credit facility with Oxford Finance. The company had no current portion of debt due at that time, as it had previously settled short-term obligations.
Debt-to-Equity Ratio
The company's debt-to-equity ratio stands at approximately 3.68, calculated using total liabilities of $96.1 million against stockholders' equity (deficit) of $(11.1 million). This is significantly higher than the industry average of around 0.5, indicating a heavy reliance on debt financing compared to equity.
Recent Debt Issuances and Credit Ratings
In May 2024, Syros Pharmaceuticals amended its Loan and Security Agreement with Oxford Finance, increasing the available term loans from $60 million to $100 million. This amendment included the funding of a $20 million term loan, with additional loans contingent upon achieving specific milestones.
The company has managed to maintain a satisfactory credit rating, which is essential for securing future financing, although specific ratings were not disclosed in the latest reports.
Balancing Debt Financing and Equity Funding
Syros Pharmaceuticals has primarily financed its operations through a combination of debt and equity. As of September 30, 2024, the company had $58.3 million in cash and cash equivalents, providing a buffer for operational expenses. Furthermore, the company issued common stock that raised $45 million in December 2023, which was aimed at bolstering its cash reserves and funding ongoing clinical trials.
| Type | Amount (in millions) |
|---|---|
| Total Debt | $41.1 |
| Total Equity (Deficit) | $(11.1) |
| Debt-to-Equity Ratio | 3.68 |
| Cash and Cash Equivalents | $58.3 |
| Recent Equity Issuance | $45.0 |
Overall, the company's strategy highlights a significant reliance on debt financing, which poses both risks and opportunities for growth as it seeks to advance its clinical programs while managing its financial obligations effectively.
Assessing Syros Pharmaceuticals, Inc. (SYRS) Liquidity
Assessing Syros Pharmaceuticals, Inc. (SYRS) Liquidity
Current Ratio: As of September 30, 2024, the current ratio stands at approximately 2.25. This is calculated from current assets of $63.931 million and current liabilities of $28.392 million.
Quick Ratio: The quick ratio is approximately 2.13, derived from current assets of $63.931 million minus inventories (which are negligible) divided by current liabilities of $28.392 million.
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, is currently $35.539 million. This reflects a decrease from the previous year, where working capital was $108.299 million at December 31, 2023.
Cash Flow Statements Overview
The cash flow statements for the nine months ended September 30, 2024, show the following trends:
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash used in operating activities | ($81,454) | ($91,145) |
| Net cash provided by investing activities | $427 | $35,815 |
| Net cash used in financing activities | ($224) | $82 |
| Net decrease in cash, cash equivalents, and restricted cash | ($81,251) | ($55,248) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, cash and cash equivalents amount to $58.3 million. The company has reported an accumulated deficit of $756.2 million and has not generated any revenue from product sales since the termination of its collaboration agreement with Global Blood Therapeutics in October 2023.
The company’s reliance on financing through equity securities and credit facilities raises concerns regarding its ability to sustain operations. Future liquidity is dependent on successful fundraising efforts and operational efficiency.
Is Syros Pharmaceuticals, Inc. (SYRS) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the following valuation metrics are relevant for assessing whether the company is overvalued or undervalued:
- Price-to-Earnings (P/E) Ratio: The company reported a net loss of $33,431,000 for the nine months ended September 30, 2024. With a stock price of approximately $6.13 and 26,832,457 shares outstanding, the P/E ratio is not applicable due to the absence of earnings.
- Price-to-Book (P/B) Ratio: The book value per share is calculated as total stockholders' equity of $(11,123,000) divided by 26,832,457 shares, resulting in a P/B ratio of approximately -0.41.
- Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: Given the negative EBITDA and net losses, the EV/EBITDA ratio cannot be calculated meaningfully.
The financial metrics are summarized in the table below:
| Metric | Value |
|---|---|
| Stock Price | $6.13 |
| Net Loss (9M 2024) | $(33,431,000) |
| Shares Outstanding | 26,832,457 |
| P/E Ratio | N/A |
| P/B Ratio | -0.41 |
| EV/EBITDA Ratio | N/A |
Stock price trends over the last 12 months indicate significant volatility. The stock has fluctuated between approximately $5.00 and $8.00, with a notable decline from a high of around $8.00 in late 2023.
The company does not currently pay dividends, and thus, the dividend yield and payout ratios are not applicable.
Analyst consensus on stock valuation as of late 2024 indicates a mix of "Hold" and "Sell" ratings, reflecting concerns over ongoing losses and the lack of revenue generation.
Key Risks Facing Syros Pharmaceuticals, Inc. (SYRS)
Key Risks Facing Syros Pharmaceuticals, Inc. (SYRS)
Industry Competition: The pharmaceutical industry is highly competitive, with numerous companies developing similar therapies. This competition can result in pricing pressures and reduced market share. The company has not generated any revenue from product sales to date and may face challenges in achieving commercial success, especially in the face of established competitors.
Regulatory Changes: Changes in regulations or delays in obtaining regulatory approvals can adversely impact product development timelines. As of September 30, 2024, the company had not completed the development of any product candidate and may never achieve marketing approval.
Market Conditions: Economic downturns, inflation, or changes in healthcare policies can impact funding and investment in biotech companies. The company reported a net loss of $33.4 million for the nine months ended September 30, 2024, and continues to rely on external financing to support its operations.
Operational Risks
The company's operational risks include reliance on key personnel and potential disruptions in research and development activities. The company has incurred significant net operating losses since inception, with an accumulated deficit of $756.2 million as of September 30, 2024. A reduction in workforce or changes in management can adversely affect progress on clinical trials and other key projects.
Financial Risks
The company reported cash and cash equivalents of $58.3 million as of September 30, 2024. This amount is expected to fund operations into the third quarter of 2025. However, the company faces substantial doubt about its ability to continue as a going concern if additional financing is not secured. The company has plans to mitigate this risk by raising additional capital through equity or debt financings.
Strategic Risks
Strategically, the company may face challenges in executing its plans, especially if it cannot secure collaborations or licensing agreements. The termination of a collaboration agreement with Global Blood Therapeutics in October 2023 eliminated a source of revenue, with no revenue recognized for the nine months ended September 30, 2024. The company’s reliance on external funding presents a risk, as it may not be able to raise necessary capital on favorable terms, which could delay or limit research and development efforts.
Mitigation Strategies
The company intends to mitigate risks through:
- Raising additional capital through equity or debt financing.
- Reducing cash expenditures where possible.
- Exploring business development opportunities, including the potential sale of assets related to SY-2101.
| Risk Factor | Description | Financial Impact (as of September 30, 2024) |
|---|---|---|
| Industry Competition | High competition in the pharmaceutical sector leading to pricing pressures. | Net loss of $33.4 million. |
| Regulatory Changes | Delays or changes in regulations affecting product approval timelines. | Accumulated deficit of $756.2 million. |
| Market Conditions | Economic downturns affecting funding and investment. | Cash and cash equivalents of $58.3 million. |
| Operational Risks | Reliance on key personnel and potential disruptions in R&D. | Significant net losses since inception. |
| Strategic Risks | Challenges in executing plans and securing collaborations. | No revenue recognized for nine months. |
Future Growth Prospects for Syros Pharmaceuticals, Inc. (SYRS)
Future Growth Prospects for Syros Pharmaceuticals, Inc. (SYRS)
Analysis of Key Growth Drivers
Syros Pharmaceuticals has several potential growth drivers that could significantly impact its future performance:
- Product Innovations: The company is advancing its lead product candidate, tamibarotene, which is currently being evaluated in clinical trials. As of September 30, 2024, external costs for the tamibarotene program totaled $44.98 million for the nine months ended, reflecting ongoing investment in its development.
- Market Expansions: The termination of the collaboration with Global Blood Therapeutics (GBT) in October 2023, which previously generated $9.6 million in revenue for the nine months ended September 30, 2023, has opened opportunities for Syros to seek new partnerships.
- Acquisitions: The company may engage in strategic acquisitions to bolster its product pipeline or enhance operational capabilities, although specific plans have not been disclosed as of now.
Future Revenue Growth Projections and Earnings Estimates
Due to the lack of product sales, Syros Pharmaceuticals has not generated revenue from product sales and does not expect to do so in the near future. However, the focus on clinical trials and potential future partnerships suggests long-term revenue generation. Analysts estimate that if tamibarotene receives regulatory approval, it could capture significant market share in its targeted indications.
| Period | Revenue ($ Million) | Net Loss ($ Million) | Estimated Future Revenue ($ Million) |
|---|---|---|---|
| 2023 | 9.6 | 100.19 | Projected growth based on clinical success |
| 2024 (YTD) | 0 | 33.43 | Potential revenue from new collaborations |
Strategic Initiatives or Partnerships That May Drive Future Growth
The company is actively seeking new collaborations following the termination of its agreement with GBT. The strategic focus includes:
- Raising Capital: As of September 30, 2024, Syros had $58.3 million in cash and cash equivalents, which it plans to utilize for ongoing clinical trials and operational expenses.
- Business Development Transactions: Management has indicated intentions to explore options such as selling SY-2101-related assets to enhance liquidity.
Competitive Advantages That Position the Company for Growth
Syros Pharmaceuticals has distinct advantages in the competitive landscape:
- Specialized Expertise: The company possesses specialized knowledge in gene control and oncology, which differentiates it from competitors.
- Strong Research Pipeline: With a robust pipeline focused on innovative therapies, the company is well-positioned to address unmet medical needs in oncology.
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Article updated on 8 Nov 2024
Resources:
- Syros Pharmaceuticals, Inc. (SYRS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Syros Pharmaceuticals, Inc. (SYRS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Syros Pharmaceuticals, Inc. (SYRS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.