aibioSCYNEXIS sets up at-the-market program for up to $50,000,000 of stock with Cantor
Tickers SCYX
SCYNEXIS can sell up to $50,000,000 of stock through Cantor Fitzgerald, which earns a 3.0% commission, with the stock at $1.33 on November 5, 2024. Its approved drug is off the market under a recall, and the supplement gives no cash balance.
Key facts
- Company
- SCYNEXIS, Inc. (NASDAQ: SCYX)
- News type
- Financings
- Primary source
- SCYNEXIS, Inc. 424B5 (2024-11-06)
SCYNEXIS, Inc. has signed a Controlled Equity Offering sales agreement with Cantor Fitzgerald & Co. that lets it sell up to $50,000,000 of common stock from time to time. A prospectus supplement and a Form 8-K, both dated November 6, 2024, describe it. Sales are made at the market, and SCYNEXIS is not obligated to sell any shares. The last reported sale price of the stock on November 5, 2024 was $1.33 per share.
Cantor is entitled to a commission of 3.0% of the gross sales price of shares it sells. Cantor need not sell any specific number or dollar amount, and no proceeds go into escrow. Cantor is deemed an underwriter under the Securities Act, and the company has agreed to indemnify it against certain liabilities. The 8-K names Cooley LLP as counsel to SCYNEXIS for the validity opinion. The supplement says Latham & Watkins LLP represents Cantor.
Two earlier programs ended
The agreement ends two earlier sales agreements, both dated May 17, 2021: one with Cantor and one with Ladenburg Thalmann & Co. Inc. Under those agreements, SCYNEXIS could sell up to $50 million of stock through the two agents. The 8-K says the company sold approximately $3.8 million of stock under them. The 8-K gives no dates for those sales.
The shares are offered under a Form S-3 shelf registration, File No. 333-275520, filed November 13, 2023 and declared effective November 27, 2023.
Share count and potential dilution
The supplement bases its share count on 37,943,241 shares outstanding at September 30, 2024. It excludes several other sources of stock: 2,912,307 shares under outstanding options at a weighted-average exercise price of $7.23, 3,151,124 restricted stock units, 15,248,811 warrant shares at a weighted-average exercise price of $3.50, 1,138,200 shares on conversion of convertible notes, and 10,716,267 shares issuable on pre-funded warrants at $0.001. It also lists 7,907,361 shares available for future grants.
The risk factors warn that buyers and existing holders will experience significant dilution if shares sell below the price they paid. Because the shares go straight into the market, the price received will vary, possibly significantly. The proceeds are earmarked only for working capital and general corporate purposes, which the supplement says may not improve the company's financial condition or market value.
The product under recall
SCYNEXIS's approved product, BREXAFEMME (ibrexafungerp tablets), was announced as approved by the FDA in June 2021 for vulvovaginal candidiasis, and in December 2022 for reducing the incidence of recurrent vulvovaginal candidiasis. GSK holds an exclusive, royalty-bearing, sublicensable license for ibrexafungerp in all indications outside Greater China and certain other countries already licensed to third parties. The license was signed in March 2023 and amended in December 2023. As of September 30, 2024, SCYNEXIS had received $125.0 million in upfront and development milestones under it, including a $10.0 million development milestone in the third quarter of 2024.
That income sits alongside a recall. After GSK reviewed the manufacturing process and equipment at the vendor that makes the drug substance, SCYNEXIS learned that a non-antibacterial beta-lactam drug substance had been made on equipment common to ibrexafungerp production. The company says FDA draft guidance recommends segregating that manufacture, and that without it there is a risk of cross contamination. It says it is not known whether any ibrexafungerp was contaminated, and it has received no adverse event reports from such contamination. Even so, it recalled BREXAFEMME from the market and placed a temporary hold on clinical studies, including the Phase 3 MARIO study.
The FDA then placed a clinical hold after SCYNEXIS announced its voluntary hold in September 2023. The company expects to restart MARIO in the first quarter of 2025, but only after the FDA lifts the hold. The hold also covers a Phase 1 lactation study. The FDA allows the compassionate use program to continue, provided a treating physician concludes the benefit-risk balance is favorable and the patient consents.
What the supplement leaves out
The supplement does not state SCYNEXIS's cash balance or its net loss. It incorporates its financial statements and risk factors from its most recent annual report by reference.