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What changed in SCYNEXIS INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SCYNEXIS INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+262 added−312 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-28)

Top changes in SCYNEXIS INC's 2024 10-K

262 paragraphs added · 312 removed · 215 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

83 edited+21 added−30 removed136 unchanged
Biggest changeFailure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recall requests, product seizures, total or partial suspension of production or distribution, injunctions, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. 13 The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice (GLP) regulations; • submission to the FDA of an investigational new drug application (IND) which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (GCP) to establish the safety and efficacy of the proposed drug for each indication, subject to on-going IRB review; • submission to the FDA of an NDA; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current Good manufacturing practice (cGMP) regulations and guidance, and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and • FDA review and approval of the NDA.
Biggest changeThe process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice (GLP) regulations; • submission to the FDA of an investigational new drug application (IND) which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (GCP) to establish the safety and efficacy of the proposed drug for each indication, subject to on-going IRB review; • submission to the FDA of an NDA; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current Good manufacturing practice (cGMP) regulations and guidance, and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and • FDA review and approval of the NDA.
Current FDA draft guidance recommends segregating the manufacture of non-antibacterial beta-lactam compounds from other compounds since beta-lactam compounds have the potential to act as sensitizing agents that may trigger hypersensitivity or an allergic reaction in some people. In the absence of the recommended segregation, there is a risk of cross contamination.
Current FDA draft guidance recommends segregating the manufacture of non-antibacterial beta-lactam compounds from other compounds since beta-lactam compounds have the potential to act as sensitizing agents that may trigger hypersensitivity or an allergic reaction in some people. In the absence of the recommended segregation, there is a risk of cross contamination.
It is not known whether any ibrexafungerp has been contaminated with a beta-lactam compound and we have not received any reports of adverse events due to the possible beta-lactam cross contamination.
It is not known whether any ibrexafungerp has been contaminated with a beta-lactam compound and we have not received any reports of adverse events due to the possible beta-lactam cross contamination.
Pursuant to the terms of the GSK License Agreement, we granted GSK an exclusive (even as to us and our affiliates), royalty-bearing, sublicensable license for the development, manufacture, and commercialization of ibrexafungerp, including the approved product BREXAFEMME, for all indications, in all countries other than those in the Greater China region and certain other countries already licensed to third parties (the GSK Territory).
Pursuant to the terms of the GSK License Agreement, we granted GSK an exclusive (even as to us and our affiliates), royalty-bearing, sublicensable license for the development, manufacture, and commercialization of ibrexafungerp, including the approved product BREXAFEMME, for all indications, in all countries other than those in the Greater China region and certain other countries already licensed to third parties (the GSK Territory).
Pharmaceutical Coverage, Pricing and Reimbursement Our ability to commercialize BREXAFEMME and any of our product candidates successfully will depend in part on the extent to which the United States and foreign governmental authorities, private health insurers and other third-party payors establish appropriate coverage and reimbursement levels for our product candidates and related treatments.
Pharmaceutical Coverage, Pricing and Reimbursement The ability to commercialize BREXAFEMME and any of our product candidates successfully will depend in part on the extent to which the United States and foreign governmental authorities, private health insurers and other third-party payors establish appropriate coverage and reimbursement levels for our product candidates and related treatments.
Class Action Lawsuit On November 7, 2023, a securities class action was filed by Brian Feldman against us and certain of our executives in the United States District Court, District of New Jersey, alleging that, during the period from March 31, 2023 to September 22, 2023, we made materially false and/or misleading statements, as well as failed to disclose material adverse facts about our business, operations, and prospects, alleging specifically that we failed to disclose to investors: (1) that the equipment used to manufacture ibrexafungerp was also used to manufacture a non-antibacterial beta-lactam drug substance, presenting a risk of cross-contamination; (2) that we did not have effective internal controls and procedures, as well as adequate internal oversight policies to ensure that its vendor complied with current Good Manufacturing Practices (cGMP); (3) that, due to the substantial risk of cross-contamination, we were reasonably likely to recall its ibrexafungerp tablets and halt its clinical studies; and (4) as a result of the foregoing, our statements about our business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Class Action Lawsuit On November 7, 2023, a securities class action was filed by Brian Feldman against us and certain of our executives in the United States District Court, District of New Jersey, alleging that, during the period from March 31, 2023 to September 22, 2023, we made materially false and/or misleading statements, as well as failed to disclose material adverse facts about our business, operations, and prospects, alleging specifically that we failed to disclose to investors: (1) that the equipment used to manufacture ibrexafungerp was also used to manufacture a non-antibacterial beta-lactam drug substance, presenting a risk of cross-contamination; (2) that we did not have effective internal controls and procedures, as well as adequate internal oversight 6 policies to ensure that its vendor complied with current Good Manufacturing Practices (cGMP); (3) that, due to the substantial risk of cross-contamination, we were reasonably likely to recall its ibrexafungerp tablets and halt its clinical studies; and (4) as a result of the foregoing, our statements about our business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Moreover, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the Affordable Care Act, provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act; • the federal civil and criminal false claims laws, including the civil False Claims Act that can be enforced by private citizens through civil whistleblower or qui tam actions and civil monetary penalties laws, prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the Federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, prohibits, among other things, executing or attempting to execute a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • the federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to CMS information regarding payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals as well as information regarding ownership and investment interests held by physicians and their immediate family members; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and their implementing regulations, also imposes obligations, including mandatory contractual terms, on “covered entities,” including certain healthcare providers, health plans, healthcare clearinghouses, and their respective “business associates,” that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity as well as their covered subcontractors, with respect to safeguarding the privacy, security and transmission of individually identifiable health information, as well as analogous state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and 17 • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non- governmental third-party payors, including private insurers.
Moreover, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the Affordable Care Act, provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act; • the federal civil and criminal false claims laws, including the civil False Claims Act that can be enforced by private citizens through civil whistleblower or qui tam actions and civil monetary penalties laws, prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the Federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, prohibits, among other things, executing or attempting to execute a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; 16 • the federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to CMS information regarding payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals as well as information regarding ownership and investment interests held by physicians and their immediate family members; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and their implementing regulations, also imposes obligations, including mandatory contractual terms, on “covered entities,” including certain healthcare providers, health plans, healthcare clearinghouses, and their respective “business associates,” that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity as well as their covered subcontractors, with respect to safeguarding the privacy, security and transmission of individually identifiable health information, as well as analogous state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non- governmental third-party payors, including private insurers.
Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, including a boxed warning, require that post‑approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market 15 and profitability of the product.
Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, including a boxed warning, require that post‑approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product.
Such obligations may include, without limitation, the Federal Trade Commission Act, the California Consumer Privacy Act of 2018 (CCPA), the Canadian Personal Information Protection and Electronic Documents Act, Canada’s Anti-Spam Legislation, the European Union’s General Data Protection Regulation 2016/679 (EU GDPR), the EU GDPR as it forms part of United Kingdom (UK) law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (UK GDPR), and the Payment Card Industry Data Security Standard (PCI DSS).
Such obligations may include, without limitation, the Federal Trade Commission Act, the California Consumer Privacy Act of 2018 (CCPA), the Canadian Personal Information Protection and Electronic Documents Act, Canada’s Anti-Spam Legislation, the European Union’s General Data Protection Regulation 2016/679 (EU GDPR), the EU GDPR as it forms part of United 15 Kingdom (UK) law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (UK GDPR), and the Payment Card Industry Data Security Standard (PCI DSS).
In addition, the California Privacy Rights Act of 2020 (CPRA), effective January 1, 2023, expanded the CCPA by, among other things, giving California residents the ability to limit use of certain sensitive personal data, establishing restrictions on personal data retention, expanding the types of data breaches that are 16 subject to the CCPA’s private right of action, and establishing a new California Privacy Protection Agency to implement and enforce the new law.
In addition, the California Privacy Rights Act of 2020 (CPRA), effective January 1, 2023, expanded the CCPA by, among other things, giving California residents the ability to limit use of certain sensitive personal data, establishing restrictions on personal data retention, expanding the types of data breaches that are subject to the CCPA’s private right of action, and establishing a new California Privacy Protection Agency to implement and enforce the new law.
Government Regulation Government Regulation Government authorities in the United States, at the federal, state and local level, and in other countries extensively regulate, among other things, the research, development, testing, manufacture, including any manufacturing changes, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, import and export of pharmaceutical products such as those we are developing.
Government Regulation Government Regulation 12 Government authorities in the United States, at the federal, state and local level, and in other countries extensively regulate, among other things, the research, development, testing, manufacture, including any manufacturing changes, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, import and export of pharmaceutical products such as those we are developing.
Invasive Candidiasis / rIFI Treatment options for invasive candidiasis are limited to three main drug classes: echinocandins, azoles, and amphotericin B. The echinocandins are considered the first line recommended therapy in most invasive candidiasis settings. Because the echinocandins can be administered only intravenously, orally administered azoles are often used as step-down agents after initial IV echinocandin therapy.
Invasive Candidiasis / rIFI Treatment options for IC are limited to three main drug classes: echinocandins, azoles, and amphotericin B. The echinocandins are considered the first line recommended therapy in most invasive candidiasis settings. Because the echinocandins can be administered only intravenously, orally administered azoles are often used as step-down agents after initial IV echinocandin therapy.
In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution. Information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health (NIH) for public dissemination on their ClinicalTrials.gov website.
In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution. Information about certain clinical trials must be submitted 13 within specific timeframes to the National Institutes of Health (NIH) for public dissemination on their ClinicalTrials.gov website.
The agreement may be terminated if either party is in material breach and fails to remedy the breach after receiving written notice. In January 2014, Merck assigned the patents to us related to ibrexafungerp that it had exclusively licensed to us. Under the terms of the patent assignment, Merck no longer has responsibility to maintain the patents.
The agreement may be terminated if either party is in material breach and fails to remedy the breach after receiving written notice. In January 2014, Merck assigned the 11 patents to us related to ibrexafungerp that it had exclusively licensed to us. Under the terms of the patent assignment, Merck no longer has responsibility to maintain the patents.
Despite yeast 9 infections being so common and prevalent, with millions of women suffering from them every year, it is still an under-appreciated, under-reported, and under-served women’s health condition. Treatments for VVC have historically included several topical azole antifungals and oral fluconazole.
Despite yeast infections being so common and prevalent, with millions of women suffering from them every year, it is still an under-appreciated, under-reported, and under-served women’s health condition. Treatments for VVC have historically included several topical azole antifungals and oral fluconazole.
This rolling review is available if the applicant provides, and the FDA approves, a schedule for the submission of the remaining information and the applicant pays applicable user fees. However, the FDA's time period goal for reviewing an application does not begin until the last section of the NDA is submitted.
This rolling review is available if the applicant provides, and the FDA approves, a schedule for the submission of the remaining information and the applicant pays applicable user fees. However, the FDA's time period goal for reviewing an application does not begin until the last section of 14 the NDA is submitted.
If enrollment resumes, approximately 220 patients will be enrolled and randomized in the study. The primary objective of the study is to determine whether treatment of IC with IV echinocandins followed by oral ibrexafungerp is as effective as treatment with IV echinocandins followed by oral fluconazole (or BAT), the current standard of 7 care.
If enrollment resumes, approximately 220 patients will be enrolled and randomized in the study. The primary objective of the study is to determine whether treatment of IC with IV echinocandins followed by oral ibrexafungerp is as effective as treatment with IV echinocandins followed by oral fluconazole (or BAT), the current standard of care.
The amendment eliminates two cash milestone payments that we would have paid to Merck upon the first filing of a NDA, triggered by the 12 FDA acceptance for filing of our NDA for ibrexafungerp for the treatment of VVC, and first marketing approval in the U.S. in June 2021 for our NDA for ibrexafungerp for the treatment of VVC.
The amendment eliminates two cash milestone payments that we would have paid to Merck upon the first filing of a NDA, triggered by the FDA acceptance for filing of our NDA for ibrexafungerp for the treatment of VVC, and first marketing approval in the U.S. in June 2021 for our NDA for ibrexafungerp for the treatment of VVC.
As a result, with respect to Medicare reimbursement for services in the hospital inpatient setting, hospitals could have a financial incentive to use the least expensive drugs for the treatment of invasive fungal infections, particularly the IV formulations of these drugs, as they are typically administered in the hospital.
As a result, with respect to Medicare reimbursement for services in the 17 hospital inpatient setting, hospitals could have a financial incentive to use the least expensive drugs for the treatment of invasive fungal infections, particularly the IV formulations of these drugs, as they are typically administered in the hospital.
Intellectual Property 19 We strive to protect the proprietary technology that we believe is important to our business, including seeking and maintaining patents intended to cover our product candidates and compositions, and their methods of use and other inventions that are commercially important to the development of our business.
Intellectual Property We strive to protect the proprietary technology that we believe is important to our business, including seeking and maintaining patents intended to cover our product candidates and compositions, and their methods of use and other inventions that are commercially important to the development of our business.
Manufacturing and Supply of Ibrexafungerp and SCY-247 Ibrexafungerp is a semi-synthetic compound that involves fermentation and synthetic chemical steps in its manufacturing process. The synthetic process does not require any specialized equipment and uses readily sourced intermediates.
Manufacturing and Supply of Ibrexafungerp and SCY-247 10 Ibrexafungerp is a semi-synthetic compound that involves fermentation and synthetic chemical steps in its manufacturing process. The synthetic process does not require any specialized equipment and uses readily sourced intermediates.
Treatment of VVC We have completed the enrollment of the VANQUISH Phase 3b open-label trial (VANQUISH study) evaluating the safety and efficacy of ibrexafungerp in patients with complicated vulvovaginal candidiasis who failed to respond to treatment with fluconazole.
Treatment of VVC We have completed the VANQUISH Phase 3b open-label trial (VANQUISH study) evaluating the safety and efficacy of ibrexafungerp in patients with complicated vulvovaginal candidiasis who failed to respond to treatment with fluconazole.
These agents combine the well-established activity of glucan synthase inhibitors with the potential flexibility of having oral and IV formulations. SCY-247 is in preclinical development stage and has demonstrated broad-spectrum antifungal activity, in vitro and in vivo . We anticipate that the FDA may grant QIDP and Fast Track designations for the IV and oral formulations of SCY-247.
These agents combine the well-established activity of glucan synthase inhibitors with the potential flexibility of having oral and IV formulations. SCY-247 is in clinical development stage and has demonstrated broad-spectrum antifungal activity, in vitro and in vivo . We anticipate that the FDA may grant QIDP and Fast Track designations for the IV and oral formulations of SCY-247.
Preclinical Developments – SCY-247 SCY-247 is a second-generation antifungal compound, from a novel class of structurally-distinct glucan synthase inhibitors, triterpenoids (fungerps), that are under development as therapeutic options for systemic fungal diseases. The triterpenoid class of antifungals represents the first new class of antifungal compounds since 2001.
SCY-247 SCY-247 is a second-generation antifungal compound, from a novel class of structurally-distinct glucan synthase inhibitors, triterpenoids (fungerps), that are under development as therapeutic options for systemic fungal diseases. The triterpenoid class of antifungals represents the first new class of antifungal compounds since 2001.
In the azole class, fluconazole, itraconazole, posaconazole, and oral voriconazole are generic. Caspofungin, the largest selling echinocandin, is now available on a generic basis. If approved, we believe ibrexafungerp will be capable of delivering value supportive of premium pricing over competitive generic products.
In the azole class, fluconazole, itraconazole, posaconazole, and oral voriconazole are generic. Caspofungin, the largest selling echinocandin, is now available on a generic basis. If approved, we believe the fungerps will be capable of delivering value supportive of premium pricing over competitive generic products.
Under the terms of the updated GSK License Agreement, as amended by the Binding MOU, we are eligible to receive potential: • regulatory approval milestone payments of up to $49 million (revised from up to $70 million as provided in the GSK License Agreement); • commercial milestone payments of up to $57.5 million based on first commercial sale in invasive candidiasis (U.S./EU) (revised from up to $115 million as provided in the GSK License Agreement); and • and sales milestone payments of up to $179.5 / $169.75 / $145.5 million (depending on the date of GSK’s relaunch of BREXAFEMME in the U.S.) (revised from up to $242.5 million as provided in the GSK License Agreement).
Under the terms of the updated GSK License Agreement, as amended by the Binding MOU, we are eligible to receive potential: • regulatory approval milestone payments of up to $49 million (revised from up to $70 million as provided in the GSK License Agreement); • commercial milestone payments of up to $57.5 million based on first commercial sale in IC (U.S./EU) (revised from up to $115 million as provided in the GSK License Agreement); and • and sales milestone payments of up to $179.5 / $169.75 / $145.5 million (depending on the date of GSK’s relaunch of BREXAFEMME in the U.S.) (revised from up to $242.5 million as provided in the GSK License Agreement).
The key competitive factors affecting the success of ibrexafungerp, if approved, are likely to be its efficacy, safety, convenience, use in outpatient settings, the level of generic competition and the availability of reimbursement from government and other third-party payors.
The key competitive factors affecting the success of the fungerps, if approved, are likely to be its efficacy, safety, convenience, use in outpatient settings, the level of generic competition and the availability of reimbursement from government and other third-party payors.
If approved, we believe that ibrexafungerp’s unique features, including being from a novel antifungal class, broad-spectrum of activity including resistant strains, IV and oral formulations, fungicidal activity versus Candida , high tissue penetration, and favorable safety profile, will differentiate it from competing products and allow premium pricing to generics and other competing products.
If approved, we believe that the fungerp's unique features, including being from a novel antifungal class, broad-spectrum of activity including resistant strains, IV and oral formulations, fungicidal activity versus Candida , high tissue penetration, and favorable safety profile, will differentiate it from competing products and allow premium pricing to generics and other competing products.
The information contained on, or that can be accessed through, our website is not part of this Annual Report, and the inclusion of our website address in this Annual Report is an inactive textual reference only. 20
The information contained on, or that can be accessed through, our website is not part of this Annual Report, and the inclusion of our website address in this Annual Report is an inactive textual reference only. 19
Product Recall and Clinical Hold Following a review by GSK of the manufacturing process and equipment at the vendor that manufactures the ibrexafungerp drug substance, we became aware that a non-antibacterial beta-lactam drug substance was manufactured using equipment common to the manufacturing process for ibrexafungerp.
Product Recall and Clinical Hold Following a review in 2023 by GSK of the manufacturing process and equipment at the vendor that manufactures the ibrexafungerp drug substance, we became aware that exetimibe, a non-antibacterial beta-lactam drug substance, was manufactured using equipment common to the manufacturing process for ibrexafungerp.
On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, or IRA, into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.
On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.
We will continue to be responsible for the execution and costs of the ongoing clinical studies of ibrexafungerp but will have the potential to receive up to $72.35 million in development milestones (revised from up to $75.5 million as provided in the GSK License Agreement), which comprise: $25 million already paid; $10 million for the delivery to GSK of final clinical study reports for the completed FURI, CARES, and NATURE clinical studies; up to $30 million for the achievement of two interim milestones associated with our resumption and continued performance of the MARIO Study after the clinical hold is lifted; and $7.35 million for the successful completion of the MARIO Study.
We will continue to be responsible for the execution and costs of the ongoing clinical studies of ibrexafungerp, which at this stage is only the MARIO study, but will have the potential to receive up to $72.35 million in development milestones (revised from up to $75.5 million as provided in the GSK License Agreement), which comprise: $25 million already paid; $10 million already paid for the delivery to GSK of the final clinical study reports for the completed FURI, CARES, and NATURE clinical studies; up to $30 million for the achievement of two interim milestones associated with our resumption and continued performance of the MARIO study (as defined below) after the clinical hold is lifted; and $7.35 million for the successful completion of the MARIO study.
It is also unclear how such challenges and the healthcare reform measures of the Biden administration will impact the Affordable Care Act and our business. Other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted.
It is also unclear how such challenges and the healthcare reform measures of the second Trump administration will impact the Affordable Care Act and our business. Other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted.
Patent No. 7,863,465). The ‘465 patent is currently set to expire in 2029. The SCY-247 composition of matter is covered by a patent in several other jurisdictions worldwide, including Europe, Japan, and China. Employees As of March 1, 2024, we had 29 employees, all of whom were employed on a full-time basis.
Patent No. 7,863,465). The ‘465 patent is currently set to expire in 2029. The SCY-247 composition of matter is covered by a patent in several other jurisdictions worldwide, including Europe, Japan, and China. Employees As of March 1, 2025, we had 28 employees, all of whom were employed on a full-time basis.
Following a review by GSK of the manufacturing process and equipment at the vendor that manufactures the ibrexafungerp drug substance, we became aware that a non-antibacterial beta-lactam drug substance was manufactured using equipment common to the manufacturing process for ibrexafungerp.
Following a review in 2023 by GSK of the manufacturing process and equipment at the vendor that manufactures the ibrexafungerp drug substance, we became aware that exetimibe, a non-antibacterial beta-lactam drug substance, was manufactured using equipment common to the manufacturing process for ibrexafungerp.
Competitors also may obtain FDA, or other regulatory, approval for their products more rapidly than we or GSK obtains approval for our ibrexafungerp products. In addition, the commercial success of ibrexafungerp may be affected because in many cases insurers or other third-party payors seek to encourage the use of generic products.
Competitors also may obtain FDA, or other regulatory, approval for their products more rapidly than we or GSK (in the case of ibrexafungerp) obtain approvals. In addition, the commercial success of ibrexafungerp may be affected because in many cases insurers or other third-party payors seek to encourage the use of generic products.
As of March 1, 2024, we are the owner of more than ten issued U.S. patents and more than 125 issued non-U.S. patents with claims to novel compounds, compositions containing them, processes for their preparation, and their uses as pharmaceutical agents, with terms expiring between 2027 and 2038.
As of March 1, 2025, we are the owner of more than ten issued U.S. patents and more than 135 issued non-U.S. patents with claims to novel compounds, compositions containing them, processes for their preparation, and their uses as pharmaceutical agents, with terms expiring between 2027 and 2038.
The commercial opportunity for ibrexafungerp could be reduced or eliminated if competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than products that we or GSK may develop.
The commercial opportunity for the fungerps could be reduced or eliminated if competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than products that we or GSK (in the case of ibrexafungerp) may develop.
The parties closed the transactions contemplated by the GSK License Agreement in May 2023 and we received an upfront payment of $90.0 million. In June 2023, we announced the achievement of a $25.0 million performance-based development milestone under the GSK License Agreement.
The parties closed the transactions contemplated by the GSK License Agreement in May 2023 and we received an upfront payment of $90.0 million. In June 2023 and July 2024, we announced the achievement of a $25.0 million and a $10.0 million performance-based development milestone under the GSK License Agreement, respectively.
Competition for Ibrexafungerp Our competitors include large pharmaceutical and biotechnology companies, and specialty pharmaceutical and generic drug companies. The leading antifungal drugs representing each main class are as follows: Azoles.
Competition for the Fungerps Competitors include large pharmaceutical and biotechnology companies, and specialty pharmaceutical and generic drug companies. The leading antifungal drugs representing each main class are as follows: Azoles.
The parties closed the transactions contemplated by the GSK License Agreement in May 2023 and we received an upfront payment of $90.0 million. In June 2023, we announced the achievement of a $25.0 million performance-based development milestone under the GSK License Agreement.
The parties closed the transactions contemplated by the GSK License Agreement in May 2023 and we received an upfront payment of $90.0 million. In June 2023 and July 2024, we announced the achievement of a $25.0 million and a $10.0 million performance-based development milestone under the GSK License Agreement, respectively.
For example, in the United States the Affordable Care Act substantially changed the way healthcare is financed by both governmental and private insurers, and continues to significantly impact the U.S. pharmaceutical industry. There have been executive, judicial and congressional challenges to certain aspects of the Affordable Care Act. For example, on June 17, 2021 the U.S.
For example, in the United States the Affordable Care Act substantially changed the way healthcare is financed by both governmental and private insurers, and continues to significantly impact the U.S. pharmaceutical industry. There have been amendments to and executive, judicial and congressional challenges to certain aspects of the Affordable Care Act.
We believe that ibrexafungerp has the ability to perform well in the future fungal infection market given the limited competitive marketplace, the unmet medical need, and the often high mortality rate of many of these infections.
We believe that the fungerps have the ability to perform well in the future fungal infection market given the limited competitive marketplace, the unmet medical need, and the often high mortality rate of many of these infections.
Collaborations and Licensing Agreements Associated with Our Core Drug Development Operations We have a number of licensing and collaboration agreements associated with our core drug development operations, including the following: GSK On March 30, 2023, we entered into a license agreement (the GSK License Agreement) with GSK.
Collaborations and Licensing Agreements Associated with Our Core Drug Development Operations We have a number of licensing and collaboration agreements associated with our core drug development operations, including the following: GSK On March 30, 2023 (as amended in December 2023), we entered into the GSK License Agreement.
Cancidas® (caspofungin), a product that became generic in March 2017, and Mycamine® (micafungin), a generic product. Pfizer markets the echinocandin Eraxis® (anidulafungin); and Polyenes . AmBisome® (liposomal amphotericin B), a product sold by Gilead in Europe, by Astellas in the U.S. and by Dainippon-Sumitomo in Japan.
Rezzayo® (rezafungin) marketed by Melinta Therapeutics, Cancidas® (caspofungin), a product that became generic in March 2017, and Mycamine® (micafungin), a generic product. Pfizer markets the echinocandin Eraxis® (anidulafungin); and Polyenes . AmBisome® (liposomal amphotericin B), a product sold by Gilead in Europe, by Astellas in the U.S. and by Dainippon-Sumitomo in Japan.
In response to the hold on clinical studies of ibrexafungerp by the FDA due to possible beta-lactam cross contamination, we have entered into certain new manufacturing agreements with third-party contract manufacturers to begin producing new batches of ibrexafungerp which we believe will allow us to lift the clinical hold and restart our impacted clinical studies, the Phase 3 MARIO study and a Phase 1 lactation study.
In response to the hold on clinical studies of ibrexafungerp by the FDA due to possible beta-lactam cross contamination, we have entered into certain new manufacturing agreements with third-party contract manufacturers to produce new batches of ibrexafungerp which we believe will allow us to lift the clinical hold and restart the Phase 3 MARIO study.
In response to the hold on clinical studies of ibrexafungerp by the FDA due to possible beta-lactam cross contamination, we have entered into certain new manufacturing agreements with third-party contract manufacturers to begin producing new batches of ibrexafungerp which we believe will allow us to lift the clinical hold and restart our impacted clinical studies, the Phase 3 MARIO study and a Phase 1 lactation study.
In response to the hold on clinical studies of ibrexafungerp by the FDA due to possible beta-lactam cross contamination, we have entered into certain new manufacturing agreements with third-party contract manufacturers to produce new batches of ibrexafungerp which we believe will allow us to lift the clinical hold and restart the Phase 3 MARIO study.
Noxafil® (posaconazole) marketed by Merck and Cresemba® (isavuconazole), approved in the U.S. and other global markets and marketed by Astellas in the U.S.; Diflucan® (fluconazole), Pfizer, off-patent with multiple generics, Terazol (terconazole), Jannsen, off-patent with multiple generics, Gynazole (butoconazole), Perrigo, off patent with multiple generics; 10 Echinocandins .
Noxafil® (posaconazole) marketed by Merck and Cresemba® (isavuconazole), approved in the U.S. and other global markets and marketed by Astellas in the U.S.; Vivjoa® (oteseconzaole) marketed by Mycovia Pharmaceuticals, Inc., Diflucan® (fluconazole), Pfizer, off-patent with multiple generics, Terazol (terconazole), Jannsen, off-patent with multiple generics, Gynazole (butoconazole), Perrigo, off patent with multiple generics; Echinocandins .
Ibrexafungerp is being developed as oral and IV formulations and has demonstrated potent activity against a large collection of medically relevant strains of Candida and Aspergillus genera, including multidrug-resistant strains, as well as Pneumocystis, Coccidioides, Histoplasma and Blastomyces genera.
They are being developed as oral and IV formulations and have demonstrated potent activity against a large collection of medically relevant strains of Candida and Aspergillus genera, including multidrug-resistant strains, as well as Pneumocystis , Coccidioides , Histoplasma , and Blastomyces genera.
For example, sales, marketing and scientific/educational grant programs must comply with the federal and state anti-fraud and abuse laws, false claims laws, the privacy provisions of the Health Insurance Portability and Accountability Act, or HIPAA, and payment transparency laws.
For example, sales, marketing and scientific/educational grant programs must comply with the federal and state anti-fraud and abuse laws, false claims laws, the privacy provisions of HIPAA and payment transparency laws.
A drug manufacturing program subject to extensive governmental regulations requires robust quality assurance systems and experienced personnel with the relevant technical and regulatory expertise as well as strong project management skills. We believe we have a team that is capable of managing these activities until GSK assumes responsibility for them pursuant to the GSK License Agreement.
A drug manufacturing program subject to extensive governmental regulations requires robust quality assurance systems and experienced personnel with the relevant technical and regulatory expertise as well as strong project management skills. We believe we have a team that is capable of managing these activities.
Ibrexafungerp is the first representative of this novel class of antifungals with additional assets from the “fungerp” family, including SCY-247, in preclinical stages of development.
Ibrexafungerp is the first representative of this novel class of antifungals with additional assets from the “fungerp” family under development, including SCY-247 which is currently in clinical stages of development.
Ibrexafungerp has unique attributes that define its potential to address significant unmet medical needs and provide considerable commercial opportunities, including: • oral bioavailability, unlike other glucan synthase inhibitors, allowing for convenient long-term outpatient use; • distinct chemical structure from other glucan synthase inhibitors, providing a unique spectrum of activity and pharmacokinetic profile; • activity against azole-resistant and most echinocandin-resistant Candida strains, including Candida auris and multidrug-resistant strains; • activity against azole-resistant Aspergillus strains; • fungicidal (i.e., killing the fungi) capabilities against the Candida genus compared to azoles, which are fungistatic (i.e., only inhibiting the growth of fungi); • high tissue penetration, allowing high concentrations in the organs commonly affected by fungal infections; • generally well tolerated with over 1,600 subjects and patients exposed; and • 20-hour half-life with a low risk of drug-drug interactions.
Unique attributes of this novel class of antifungals that define its potential to address significant unmet medical needs and provide considerable commercial opportunities include: • oral bioavailability, unlike other glucan synthase inhibitors, allowing for convenient long-term outpatient use; • distinct chemical structure from other glucan synthase inhibitors, providing a unique spectrum of activity and pharmacokinetic profile; • activity against azole-resistant and most echinocandin-resistant Candida strains, including Candida auris and multidrug-resistant strains; • activity against azole-resistant Aspergillus strains; • fungicidal (i.e., killing the fungi) capabilities against the Candida genus compared to azoles, which are fungistatic (i.e., only inhibiting the growth of fungi); • high tissue penetration, allowing high concentrations in the organs commonly affected by fungal infections; • half life adequate for once a day administration; and • low risk of drug-drug interactions.
The primary end point of the study will be all-cause mortality at 30 days after initiation of antifungal therapy. The data from the MARIO study is intended to be supportive of an NDA submission for ibrexafungerp as step-down therapy in patients with IC. Such submission would be made by GSK and any resulting approval would be held by GSK.
The primary end point of the study will be all-cause mortality at 30 days after initiation of antifungal therapy and global response. The data from the MARIO study is intended to be supportive of an NDA submission for ibrexafungerp as step-down therapy in patients with IC.
GSK License Agreement On March 30, 2023, we entered into a license agreement (the GSK License Agreement) with GSK.
GSK License Agreement On March 30, 2023, we entered into a license agreement (as amended in December 2023, the GSK License Agreement) with GSK.
For the treatment of invasive fungal infections, we expect that prescribing physicians will be located at major medical centers, where physicians specializing in critical care, infectious disease specialists, and physicians treating immune compromised or immuno-suppressed patients, such as oncologists and those performing solid organ transplants and stem cell transplants, are likely to be found.
We believe that SCY-247, if approved, has the potential to address significant gaps with commercially available therapies for certain indications. 8 For the treatment of invasive fungal infections, we expect that prescribing physicians will be located at major medical centers, where physicians specializing in critical care, infectious disease specialists, and physicians treating immune compromised or immuno-suppressed patients, such as oncologists and those performing solid organ transplants and stem cell transplants, are likely to be found.
We continue to progress the development activities for SCY-247. Some of these activities, including assessing the activity of the compound against Candida auris and Mucorales are being supported by NIH grants. We anticipate initiating a Phase 1 study for SCY-247 in the second half of 2024.
We continue to progress the development activities for SCY-247. Some of these activities, including assessing the activity of the compound against multi-drug resistant pathogens such as Candida auris and Mucorales, are being supported by NIH grants. We initiated a Phase 1 study for SCY-247 in the fourth quarter of 2024.
The complaint seeks unspecified damages, interest, fees and costs on behalf of all persons and entities who purchased and/or acquired shares of our common stock between March 31, 2023 to September 22, 2023. We disagree with the allegations and intend to defend the litigation vigorously .
The complaint seeks unspecified damages, interest, fees and costs on behalf of all persons and entities who purchased and/or acquired shares of our common stock between March 31, 2023 to September 22, 2023. We have filed a motion to dismiss.
Phase 3: The drug is administered to an expanded patient population with the target disease, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product. 14 Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur.
Phase 3: The drug is administered to an expanded patient population with the target disease, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
Merck We initially discovered and developed ibrexafungerp through a research collaboration with Merck Sharp & Dohme Corp. (Merck), a subsidiary of Merck & Co., Inc. In May 2013, Merck transferred to us all development and commercialization rights for ibrexafungerp (also known as MK-3118). This decision was made following a review and prioritization of Merck’s infectious disease portfolio.
In May 2013, Merck transferred to us all development and commercialization rights for ibrexafungerp (also known as MK-3118). This decision was made following a review and prioritization of Merck’s infectious disease portfolio.
SCY-247, a second-generation antifungal compound from this novel class, is in preclinical development stage. We anticipate initiating a Phase 1 study for SCY-247 in the second half of 2024.
SCY-247, a second-generation antifungal compound from this novel class, is in clinical development and we initiated a Phase 1 study for SCY-247 in the fourth quarter of 2024.
Nonetheless, out of an abundance of caution and in line with GSK’s recommendation, we have recalled BREXAFEMME® (ibrexafungerp tablets) from the market and placed a temporary hold on clinical studies of ibrexafungerp, including the Phase 3 MARIO study. The patient-level and clinical product recall has been initiated and we are working with an experienced vendor to manage the process.
Nonetheless, out of an abundance of caution and in line with GSK’s recommendation, we recalled BREXAFEMME® (ibrexafungerp tablets) from the market and placed a temporary hold on the clinical studies of ibrexafungerp, including the Phase 3 MARIO study.
Nonetheless, out of an abundance of caution and in line with GSK’s recommendation, we have recalled BREXAFEMME (ibrexafungerp tablets) from the market and placed a temporary hold on clinical studies of ibrexafungerp, including the Phase 3 MARIO study. The patient-level and clinical product recall has been initiated and we are working with an experienced vendor to manage the process.
Nonetheless, out of an abundance of caution and in line with GSK’s recommendation, we recalled BREXAFEMME® (ibrexafungerp tablets) from the market and placed a temporary hold on clinical studies of ibrexafungerp, including the Phase 3 MARIO study.
Key Development Milestones We are seeking to achieve the following key milestones: • to lift the clinical hold placed on ibrexafungerp by the FDA to enable the resumption of enrollment in the MARIO study, a global Phase 3 study to evaluate ibrexafungerp as an oral step-down treatment for IC in the hospital setting; • to provide topline data for the FURI study to GSK in the first half of 2024; • to provide topline data for the Phase 2 SCYNERGIA study and the Phase 3b VANQUISH study to GSK in the first half of 2024; and • to initiate a Phase 1 study for SCY-247 in the second half of 2024.
Key Development Milestones We are seeking to achieve the following key near term milestones: 7 • to lift the clinical hold placed on ibrexafungerp by the FDA to enable the resumption of enrollment in the MARIO study, a global Phase 3 study to evaluate ibrexafungerp as an oral step-down treatment for IC in the hospital setting; and • to complete the Phase 1 study for SCY-247 to guide for next steps of clinical development.
Phase 1, Phase 2 and Phase 3 clinical trials sometimes cannot be completed successfully within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk.
Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk.
The GSK License Agreement was amended in connection with the delay in the commercialization of BREXAFEMME (see "Product Recall and Clinical Hold" below) and further clinical development of ibrexafungerp associated with this event.
On December 26, 2023, we and GSK entered into a binding memorandum of understanding (Binding MOU) for amendment to the GSK License Agreement. The GSK License Agreement was amended in connection with the delay in the commercialization of BREXAFEMME (see "Product Recall and Clinical Hold" below) and further clinical development of ibrexafungerp associated with this event.
This study is a randomized, double-blind trial with the objective of assessing the safety and efficacy of oral ibrexafungerp in combination with voriconazole, compared to voriconazole alone. We completed enrollment with 22 patients included and the data analysis is ongoing. We anticipate providing topline data for the SCYNERGIA study to GSK in the first half of 2024.
This study is a randomized, double-blind trial with the objective of assessing the safety and efficacy of oral ibrexafungerp in combination with voriconazole, compared to voriconazole alone. We completed the study with 22 patients enrolled and provided the final clinical study report to GSK in September 2024.
Other states have also submitted SIP proposals that are pending review by the FDA. Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs.
Other states have also 18 submitted SIP proposals that are pending review by the FDA. Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs. The current Trump administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, CMS and related agencies.
It is unclear whether the models will be utilized in any health reform measures in the future. Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act.
Further, on December 7, 2023, an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act was announced.
Refractory Invasive Fungal Infections (rIFI) We enrolled 233 patients in our Phase 3 FURI study investigating the potential of ibrexafungerp as a treatment for fungal infections that are refractory or intolerant to other antifungals and we anticipate providing topline data to GSK in the first half of 2024.
Refractory Invasive Fungal Infections (rIFI) We enrolled 233 patients in our Phase 3 FURI study investigating the potential of ibrexafungerp as a treatment for fungal infections that are refractory or intolerant to other antifungals. We also achieved a target enrollment of 30 patients in our Phase 3 CARES study, focused on patients with infections caused by C. auris.
Ibrexafungerp Target Product Profile Ibrexafungerp, the first agent in a novel antifungal class, acts through the inhibition of the glucan synthase complex, an established target in antifungal therapeutics.
Triterpenoid Antifungals The triterpenoid antifungals (the fungerps) are a novel antifungal class that act through the inhibition of the glucan synthase complex, an established target in antifungal therapeutics.
Other antifungals in development include Fosmanogepix (APX-001) being developed by Amplyx Pharmaceuticals Inc., the polyene amphotericin B oral formulation MAT2203 being developed by Matinas BioPharma Holdings Inc., and Olorofim (F901318) being developed by F2G Limited. These companies may have greater resources than ours.
Various other producers market and sell generic oral voriconazole, fluconazole and itraconazole. Other antifungals in development include Fosmanogepix being developed by Basilea Pharmaceuticals Inc., the polyene amphotericin B oral formulation MAT2203 being developed by Matinas BioPharma Holdings Inc., and Olorofim (F901318) being developed by F2G Limited.
There is a clear need for new antifungal treatment options for patients with invasive candidiasis that are refractory or intolerant to available therapies as well as for those who would benefit from oral therapy.
Specifically, 90% of Candida auris isolates have been reported to be resistant to at least one antifungal agent and 30% of isolates resistant to at least two antifungals. 9 There is a clear need for new antifungal treatment options for patients with IC that are refractory or intolerant to available therapies as well as for those who would benefit from oral therapy.
Drug compendia are publications that summarize the available medical evidence for particular drug products and identify which uses of a drug are supported or not supported by the available evidence, whether or not such uses have been approved by the FDA. 18 Healthcare Reform In the United States and some foreign jurisdictions there have been, and continue to be, several legislative and regulatory changes and proposed reforms of the healthcare system to contain costs, improve quality, and expand access to care.
Healthcare Reform In the United States and some foreign jurisdictions there have been, and continue to be, several legislative and regulatory changes and proposed reforms of the healthcare system to contain costs, improve quality, and expand access to care.
On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges.
These provisions began to take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges. On August 15, 2024, HHS announced the agreed-upon prices of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges.
In September 2023, after we have announced our voluntary clinical hold, the FDA concurred with our voluntary hold and placed a clinical hold. We are working with the FDA to discuss paths for resolution of this issue. The clinical hold and recall affected two ongoing clinical studies: the Phase 3 MARIO study and a Phase 1 lactation study.
We are working with the FDA to discuss paths for resolution of this issue. The clinical hold and recall affected the Phase 3 MARIO study. Our clinical stage compound, SCY-247, was not affected by these developments.
Further, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.
For example, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs that have been on the market for at least 7 years covered under Medicare, or the Medicare Drug Price Negotiation Program, and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
We will continue to be responsible for the execution and costs of these clinical studies of ibrexafungerp.
We will continue to be responsible for the execution and costs of the Phase 3 MARIO study, the remaining ongoing clinical study of ibrexafungerp. For all studies listed below, we are responsible to provide to GSK the study reports upon completion of the studies.
We also achieved a target enrollment of 30 patients in our Phase 3 CARES study, focused on patients with infections caused by C. auris . Topline data from the CARES study is positive and consistent with previously disclosed results from interim analyses. It is anticipated that the data will be presented at a future scientific meeting.
The results from the FURI and CARES studies are positive and consistent with previously disclosed results from interim analyses. We provided the final clinical study reports for the FURI and CARES studies to GSK in July 2024. It is anticipated that the data will be presented at a future scientific meeting.
This milestone payment followed a development goal for the Phase 3 MARIO study for ibrexafungerp in IC as we continued executing ongoing ibrexafungerp trials. The GSK License Agreement was amended in connection with the delay in the commercialization of BREXAFEMME and further clinical development of ibrexafungerp associated with this event.
The GSK License Agreement was amended in connection with the delay in the commercialization of BREXAFEMME and further clinical development of ibrexafungerp associated with this event. Merck We initially discovered and developed ibrexafungerp through a research collaboration with Merck Sharp & Dohme Corp. (Merck), a subsidiary of Merck & Co., Inc.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeConsequently, if these practices and standards are not adhered to by 35 these providers, the development and commercialization of ibrexafungerp and any future product candidates we may seek to develop could be delayed, which could severely harm our business and financial condition.
Biggest changeConsequently, if these practices and standards are not adhered to by these providers, the development and commercialization of ibrexafungerp and any future product candidates we may seek to develop could be delayed, which could severely harm our business and financial condition. 34 Risks Relating to Our Intellectual Property We were dependent on Merck for the establishment of our intellectual property rights related to ibrexafungerp, and if Merck did not establish our intellectual property rights with sufficient scope to protect ibrexafungerp, we may have limited or no ability to assert intellectual property rights to ibrexafungerp.
The following factors, in addition to other factors described in this “Risk Factors” section and elsewhere in this report, may have a significant impact on the market price of our common stock: • the level of sales of BREXAFEMME; • the results of our preclinical testing or clinical trials; • the ability to obtain additional funding; • any delay in submitting an NDA or similar foreign applications for ibrexafungerp for the treatment of indications other than VVC, RVVC, and any future product candidate we may seek to develop or any adverse development or perceived adverse development with respect to the FDA’s review of that NDA or a foreign regulator’s review of a similar applications; • maintenance of our existing collaborations or ability to enter into new collaborations; • our collaboration partners’ election to develop or commercialize product candidates under our collaboration agreements or the termination of any programs under our collaboration agreements; • any intellectual property infringement actions in which we or our licensors and collaboration partners may become involved; • our ability to successfully develop and commercialize future product candidates; • changes in laws or regulations applicable to future products; • adverse regulatory decisions; • introduction of new products, services or technologies by our competitors; • achievement of financial projections we may provide to the public; • achievement of the estimates and projections of the investment community; • the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; • changes in the structure of healthcare payment systems; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our collaboration partners or our competitors; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • legislation or regulation that mandates or encourages the use of generic products; • additions or departures of key scientific or management personnel; • significant lawsuits, including patent or stockholder litigation; • changes in the market valuations of similar companies; 43 • general economic and market conditions and overall fluctuations in the U.S. equity markets; • sales of our common stock by us, our executive officers and directors or our stockholders in the future; and • trading volume of our common stock.
The following factors, in addition to other factors described in this “Risk Factors” section and elsewhere in this report, may have a significant impact on the market price of our common stock: • the level of sales of BREXAFEMME; • the results of our preclinical testing or clinical trials; • the ability to obtain additional funding; • any delay in submitting an NDA or similar foreign applications for ibrexafungerp for the treatment of indications other than VVC, RVVC, and any future product candidate we may seek to develop or any adverse development or perceived adverse development with respect to the FDA’s review of that NDA or a foreign regulator’s review of a similar applications; • maintenance of our existing collaborations or ability to enter into new collaborations; • our collaboration partners’ election to develop or commercialize product candidates under our collaboration agreements or the termination of any programs under our collaboration agreements; • any intellectual property infringement actions in which we or our licensors and collaboration partners may become involved; • our ability to successfully develop and commercialize future product candidates; • changes in laws or regulations applicable to future products; • adverse regulatory decisions; • introduction of new products, services or technologies by our competitors; • achievement of financial projections we may provide to the public; • achievement of the estimates and projections of the investment community; • the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; • changes in the structure of healthcare payment systems; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our collaboration partners or our competitors; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • legislation or regulation that mandates or encourages the use of generic products; • additions or departures of key scientific or management personnel; • significant lawsuits, including patent or stockholder litigation; • changes in the market valuations of similar companies; 42 • general economic and market conditions and overall fluctuations in the U.S. equity markets; • sales of our common stock by us, our executive officers and directors or our stockholders in the future; and • trading volume of our common stock.
The commencement, enrollment and completion of clinical trials can be delayed for a variety of reasons, including: 23 • inability to reach agreements on acceptable terms with prospective clinical research organizations, or CROs, and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • difficulty identifying and engaging qualified clinical investigators; • regulatory objections to commencing a clinical trial or proceeding to the next phase of investigation, including inability to reach agreement with the FDA or non-U.S. regulators regarding the scope or design of our clinical trials or for other reasons such as safety concerns that might be identified during preclinical development or early stage clinical trials; • inability to identify and maintain a sufficient number of eligible trial sites, many of which may already be engaged in other clinical trial programs, including some that may be for the same indication as our product candidates; • withdrawal of clinical trial sites from our clinical trials as a result of changing standards of care; • inability to obtain institutional review board (or ethics review committee) approval to conduct a clinical trial at prospective sites; • difficulty identifying, recruiting and enrolling eligible patients to participate in clinical trials for a variety of reasons, including meeting the enrollment criteria for our study and competition from other clinical trial programs for the same indication as product candidates we seek to commercialize; • inability to retain patients in clinical trials due to the treatment protocol, personal issues, side effects from the therapy or lack of efficacy; • inability to produce and/or obtain in a timely manner sufficient quantity of our products to satisfy the requirements of the clinical trials; • inability to enroll patients, or slow down in the rate of enrolling patients, in clinical trials due to unforeseen natural disasters, public health crises, political crises and other catastrophic events or other events outside of our control, such as COVID-19, which may cause participants to not want to participate in these trials or otherwise have any unnecessary contact with the medical community; and • inability to obtain sufficient funding to commence a clinical trial.
The commencement, enrollment and completion of clinical trials can be delayed for a variety of reasons, including: • inability to reach agreements on acceptable terms with prospective clinical research organizations, or CROs, and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • difficulty identifying and engaging qualified clinical investigators; • regulatory objections to commencing a clinical trial or proceeding to the next phase of investigation, including inability to reach agreement with the FDA or non-U.S. regulators regarding the scope or design of our clinical trials or for other reasons such as safety concerns that might be identified during preclinical development or early stage clinical trials; • inability to identify and maintain a sufficient number of eligible trial sites, many of which may already be engaged in other clinical trial programs, including some that may be for the same indication as our product candidates; 22 • withdrawal of clinical trial sites from our clinical trials as a result of changing standards of care; • inability to obtain institutional review board (or ethics review committee) approval to conduct a clinical trial at prospective sites; • difficulty identifying, recruiting and enrolling eligible patients to participate in clinical trials for a variety of reasons, including meeting the enrollment criteria for our study and competition from other clinical trial programs for the same indication as product candidates we seek to commercialize; • inability to retain patients in clinical trials due to the treatment protocol, personal issues, side effects from the therapy or lack of efficacy; • inability to produce and/or obtain in a timely manner sufficient quantity of our products to satisfy the requirements of the clinical trials; • inability to enroll patients, or slow down in the rate of enrolling patients, in clinical trials due to unforeseen natural disasters, public health crises, political crises and other catastrophic events or other events outside of our control, such as COVID-19, which may cause participants to not want to participate in these trials or otherwise have any unnecessary contact with the medical community; and • inability to obtain sufficient funding to commence a clinical trial.
During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services. 41 We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by AI, telecommunications failures, earthquakes, fires, floods, and other similar threats.
During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services. 40 We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by AI, telecommunications failures, earthquakes, fires, floods, and other similar threats.
Any threatened or actual government enforcement action could also generate adverse publicity and require that we devote substantial resources that could otherwise be used in other aspects of our business. 32 Regulations, guidelines and recommendations published by various government agencies and organizations may affect the use of ibrexafungerp and any future product candidates we may seek to develop.
Any threatened or actual government enforcement action could also generate adverse publicity and require that we devote substantial resources that could otherwise be used in other aspects of our business. Regulations, guidelines and recommendations published by various government agencies and organizations may affect the use of ibrexafungerp and any future product candidates we may seek to develop.
For example, BREXAFEMME competes, and ibrexafungerp for other indications will compete, against current leading antifungal drugs, including voriconazole from the azole class, caspofungin from the echinocandin class, and liposomal amphotericin B from the polyenes class, many of which are currently available in generic form, or expected to be available in generic form at the time IV ibrexafungerp might be approved.
For example, BREXAFEMME competes, and ibrexafungerp for other indications will compete, against current leading antifungal drugs, including voriconazole from the azole class, caspofungin 26 from the echinocandin class, and liposomal amphotericin B from the polyenes class, many of which are currently available in generic form, or expected to be available in generic form at the time IV ibrexafungerp might be approved.
Further, as we advance ibrexafungerp and SCY-247 through preclinical studies, clinical trials and commercialization for other indications, we will need to increase our product development, scientific, marketing, sales and administrative headcount to manage these efforts. Our management, personnel and systems currently in place may not be adequate to support this future growth.
Further, as we advance ibrexafungerp and SCY-247 through clinical studies, clinical trials and commercialization for other indications, we will need to increase our product development, scientific, marketing, sales and administrative headcount to manage these efforts. Our management, personnel and systems currently in place may not be adequate to support this future growth.
Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products “off-label.” Although off-label prescriptions may infringe or contribute to or induce the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute.
Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products “off-label.” Although off-label 35 prescriptions may infringe or contribute to or induce the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute.
We do not know whether future changes to the regulatory environment will be favorable or unfavorable to our business prospects. If BREXAFEMME, ibrexafungerp for other indications or any other future product candidates for which we receive regulatory approval do not achieve broad market acceptance, the revenue that is generated from their sales will be limited.
We do not know whether future changes to the regulatory environment will be favorable or unfavorable to our business prospects. 24 If BREXAFEMME, ibrexafungerp for other indications or any other future product candidates for which we receive regulatory approval do not achieve broad market acceptance, the revenue that is generated from their sales will be limited.
These initiatives have ranged from proposals to fundamentally change federal and state healthcare reimbursement programs, including providing comprehensive healthcare coverage to the public under governmental funded programs, to minor modifications to existing programs. In March 2010, Congress enacted the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or the Affordable Care Act.
These initiatives have ranged from proposals to fundamentally change federal and state healthcare reimbursement programs, including providing comprehensive healthcare coverage to the public under governmental funded programs, to minor modifications to existing programs. In March 2010, Congress enacted the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (the Affordable Care Act).
If we fail to achieve successful collaborations, our operating results and financial condition will be materially and adversely affected. We depend on third-party contractors for a substantial portion of our drug development activities and may not be able to control their work as effectively as if we performed these functions ourselves.
If we fail to achieve successful collaborations, our operating results and financial condition will be materially and adversely affected. 33 We depend on third-party contractors for a substantial portion of our drug development activities and may not be able to control their work as effectively as if we performed these functions ourselves.
If we are unable to reach agreements with suitable collaborators for product candidates, we could face increased costs, we may be forced to limit the number of product candidates we can commercially develop or the territories in which we commercialize them and we might fail to commercialize products or 34 programs for which a suitable collaborator cannot be found.
If we are unable to reach agreements with suitable collaborators for product candidates, we could face increased costs, we may be forced to limit the number of product candidates we can commercially develop or the territories in which we commercialize them and we might fail to commercialize products or programs for which a suitable collaborator cannot be found.
Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label. As such, we may not 30 promote products for indications or uses for which they do not have approval.
Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label. As such, we may not promote products for indications or uses for which they do not have approval.
Government agencies may issue regulations and guidelines directly applicable to us, our partners or our potential future partners and our product candidates. In addition, professional societies, practice management groups, private health/science foundations and organizations involved in various diseases from time to time publish guidelines or recommendations to the healthcare and patient communities.
Government agencies may issue regulations and guidelines directly applicable to us, our partners or our potential future partners and our product candidates. In addition, professional societies, practice management groups, private health/science foundations and organizations involved in various diseases from time to time publish guidelines or recommendations to the 31 healthcare and patient communities.
One or more strains of fungal pathogens may develop resistance to ibrexafungerp more rapidly than we currently expect, either because our hypothesis 26 of the mechanism of action is incorrect or because a strain of fungi undergoes some unforeseen genetic mutation that permits it to survive.
One or more strains of fungal pathogens may develop resistance to ibrexafungerp more rapidly than we currently expect, either because our hypothesis of the mechanism of action is incorrect or because a strain of fungi undergoes some unforeseen genetic mutation that permits it to survive.
There are many foreign and domestic pharmaceutical companies, biotechnology companies, public and private universities, government agencies and research organizations actively engaged in research and development of 27 products that may target the same markets as ibrexafungerp and any future product candidates we may seek to develop.
There are many foreign and domestic pharmaceutical companies, biotechnology companies, public and private universities, government agencies and research organizations actively engaged in research and development of products that may target the same markets as ibrexafungerp and any future product candidates we may seek to develop.
All third-party payors, whether governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs, including mechanisms to encourage the use of generic drugs. Congress has also considered 28 policies to lower the reimbursement formulas in federal and state healthcare programs.
All third-party payors, whether governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs, including mechanisms to encourage the use of generic drugs. Congress has also considered policies to lower the reimbursement formulas in federal and state healthcare programs.
Furthermore, coverage of, and reimbursement for, drugs can differ significantly from payor to payor and may require significant time and resources to obtain. In addition, new laws or regulations could impact future coverage and reimbursement. Healthcare policy changes may have a material adverse effect on us.
Furthermore, coverage of, and reimbursement for, drugs can differ significantly from payor to payor and may require significant time and resources to obtain. In addition, new laws or regulations could impact future coverage and reimbursement. 27 Healthcare policy changes may have a material adverse effect on us.
In addition, the design of a clinical trial can determine whether its results will support approval of a product application, or approval of a supplemental application to add a new indication or other changes, and flaws or shortcomings in the design of a clinical trial may not become apparent until the clinical trial is well advanced.
In addition, the design of a clinical trial can determine whether 23 its results will support approval of a product application, or approval of a supplemental application to add a new indication or other changes, and flaws or shortcomings in the design of a clinical trial may not become apparent until the clinical trial is well advanced.
The federal Health Insurance Portability and Accountability Act of 1996. or HIPAA, which prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, regardless of 31 the payor (e.g., public or private).
The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) which prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, regardless of the payor (e.g., public or private).
If we are sued for patent infringement, we would need to demonstrate that our products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, and we may not be able to do this. Proving invalidity or unenforceability is difficult.
If we are sued for patent infringement, we would need to demonstrate that our products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, and we may not be able to do this. Proving invalidity or unenforceability is 36 difficult.
The pharmaceutical and biotechnology industries have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is 37 subject to interpretation by the courts, and the interpretation is not always uniform.
The pharmaceutical and biotechnology industries have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.
It also imposed an annual tax on pharmaceutical manufacturers or importers who sell “branded prescription drugs.” There have been executive, judicial and Congressional challenges to certain aspects of the Affordable Care Act.
It also imposed an annual tax on pharmaceutical manufacturers or importers who sell “branded prescription drugs.” There have been amendments to and executive, judicial and Congressional challenges to certain aspects of the Affordable Care Act.
Method of use patents protect the use of a product for the method recited in 36 the claims. This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method.
Method of use patents protect the use of a product for the method recited in the claims. This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method.
In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of a product candidate. 24 Clinical failure can occur at any stage of clinical development.
In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of a product candidate. Clinical failure can occur at any stage of clinical development.
Regulatory approval is a lengthy, expensive and uncertain process and there is no guarantee that ibrexafungerp will be approved by the FDA for the additional indications we are pursuing.
Regulatory 21 approval is a lengthy, expensive and uncertain process and there is no guarantee that ibrexafungerp will be approved by the FDA for the additional indications we are pursuing.
U.S. and global market and economic 22 conditions have been, and continue to be, disrupted and volatile due to many factors, including component shortages and related supply chain challenges, geopolitical developments such as pandemics and conflicts and related sanctions, bank failures, and increasing inflation rates and the responses by central banking authorities to control such inflation, among others.
U.S. and global market and economic conditions have been, and continue to be, disrupted and volatile due to many factors, including component shortages and related supply chain challenges, geopolitical developments such as pandemics and conflicts and related sanctions, bank failures, and increasing inflation rates and tariffs and the responses by central banking authorities to control such inflation, among others.
Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our cash position and results of operations. 39 Our research and development activities could be affected or delayed as a result of possible restrictions on animal testing.
Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our cash position and results of operations. 38 Our research and development activities could be affected or delayed as a result of possible restrictions on animal testing.
Although there are 40 currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.
Although there are 39 currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.
It is unclear how such challenges and the healthcare reform measures of the Biden Administration will impact the Affordable Care Act and our business. In addition, other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted.
It is unclear how such challenges and the healthcare reform measures of the second Trump Administration will impact the Affordable Care Act and our business. In addition, other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted.
Security 42 incidents and attendant consequences may cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.
Security 41 incidents and attendant consequences may cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.
If we are unable to retain our current executive officers and key employees our ability to implement our business strategy successfully could be seriously harmed. We may need to expand our operations and increase the size of our company, and we may experience difficulties in managing growth. As of March 1, 2024, we had 29 full time employees.
If we are unable to retain our current executive officers and key employees our ability to implement our business strategy successfully could be seriously harmed. We may need to expand our operations and increase the size of our company, and we may experience difficulties in managing growth. As of March 1, 2025, we had 28 full time employees.
We do not know whether our current clinical trials of ibrexafungerp will be completed on schedule or at all, or whether any future clinical trials of ibrexafungerp or any future product candidates we may seek to develop will be allowed to commence or, if commenced, will be completed on schedule or at all.
We do not know whether our current clinical trials of ibrexafungerp and SCY-247 will be completed on schedule or at all, or whether any future clinical trials of ibrexafungerp or any future product candidates we may seek to develop will be allowed to commence or, if commenced, will be completed on schedule or at all.
On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, or IRA, into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.
On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.
Our ability to access capital could be adversely affected by general conditions in the U.S. and global economies, the U.S. and global financial markets and adverse geopolitical and macroeconomic developments.
Unfavorable U.S. and global economic conditions could adversely affect our ability to access capital . Our ability to access capital could be adversely affected by general conditions in the U.S. and global economies, the U.S. and global financial markets and adverse geopolitical and macroeconomic developments.
We have obtained limited product liability insurance coverage for our clinical trials domestically and in selected foreign countries where we are conducting clinical trials as required by local country regulations, in addition to limited product liability coverage for BREXAFEMME. Our coverage is currently limited to $25.0 million per occurrence and $25.0 million in the aggregate per year.
We have obtained limited product liability insurance coverage for our clinical trials domestically and in selected foreign countries where we are conducting clinical trials as required by local country regulations, in addition to limited product liability coverage for BREXAFEMME. Our annual limit is $25.0 million per occurrence and $25.0 million aggregate.
For example, if the results of our completed, ongoing or planned Phase 2 and Phase 3 clinical trials of ibrexafungerp do not achieve, to the satisfaction of regulators, the primary efficacy endpoints and demonstrate an acceptable level of safety, the prospects for approval of ibrexafungerp would be materially and adversely affected.
For example, if the results of our completed and current Phase 3 clinical trials of ibrexafungerp do not achieve, to the satisfaction of regulators, the primary efficacy endpoints and demonstrate an acceptable level of safety, the prospects for approval of ibrexafungerp would be materially and adversely affected.
Such scrutiny has resulted in several recent congressional inquiries, Presidential executive orders, and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
Such scrutiny has resulted in several recent congressional inquiries, Presidential executive orders, and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. Further, the IRA, among other things (i) directs the U.S.
The following factors relating to our business, as well as factors described elsewhere in this report, may contribute to these fluctuations: • the costs associated with completing the ongoing clinical studies for ibrexafungerp, which are difficult for us to predict; • any delays in regulatory review and approval of ibrexafungerp; • delays in the timing of submission of any new drug application, or NDA, or supplement thereto, as well as commencement, enrollment and the timing of clinical testing, of any product candidates we may seek to develop; • market acceptance of BREXAFEMME and any future product candidates for which we obtain FDA approval; • changes in regulations and regulatory policies; • competition from existing products or new products that may emerge; 21 • the ability of patients or healthcare providers to obtain coverage of, or sufficient reimbursement for, any products we are able to develop; • our ability to establish or maintain collaborations, licensing or other arrangements; • costs related to, and outcomes of, potential litigation; • potential product liability claims; and • potential liabilities associated with hazardous materials.
The following factors relating to our business, as well as factors described elsewhere in this report, may contribute to these fluctuations: • the costs associated with completing the ongoing and anticipated clinical studies for ibrexafungerp and SCY-247, which are difficult for us to predict, including the potential costs associated with the anticipated resumption of the Phase 3 MARIO study if the clinical hold is lifted; • any delays in regulatory review and approval of ibrexafungerp; • delays in the timing of submission of any new drug application, or NDA, or supplement thereto, as well as commencement, enrollment and the timing of clinical testing, of any product candidates we may seek to develop; • market acceptance of BREXAFEMME and any future product candidates for which we obtain FDA approval; 20 • changes in regulations and regulatory policies; • competition from existing products or new products that may emerge; • the ability of patients or healthcare providers to obtain coverage of, or sufficient reimbursement for, any products we are able to develop; • our ability to establish or maintain collaborations, licensing or other arrangements; • costs related to, and outcomes of, potential litigation; • potential product liability claims; and • potential liabilities associated with hazardous materials.
We do not expect to be profitable in the foreseeable future. We incurred net losses in each year since our inception except for net income of $67.0 million for the year ended December 31, 2023, primarily due to the $90.0 million upfront payment received under the GSK License Agreement.
We do not expect to be profitable in the foreseeable future. We incurred net losses in each year since our inception except for the year ended December 31, 2023 which was primarily due to the $90.0 million upfront payment received under the GSK License Agreement in May 2023.
We currently have one product approved for sale, BREXAFEMME, which is approved for the treatment of VVC and for the reduction in the incidence of RVVC, and we cannot guarantee that we will obtain more marketable products.
We currently have one product approved which is subject to a product recall, BREXAFEMME, which is approved for the treatment of VVC and for the reduction in the incidence of RVVC, and we cannot guarantee that we will obtain more marketable products.
Although we believe these provisions together provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our board of directors, they would apply even if the offer may be considered beneficial by some stockholders.
Although we believe these provisions together provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our board of directors, they would apply even if the offer may be considered beneficial by some stockholders. ITEM 1B. UNRESOLV ED STAFF COMMENTS None.
Our need to effectively manage our operations, growth and various projects requires that we: • successfully attract and recruit new employees with the expertise and experience we will require; • manage our clinical programs effectively, which we anticipate being conducted at numerous clinical sites; • develop a marketing and sales infrastructure; and • continue to develop our operational, financial and management controls, reporting systems and procedures. 38 If we are unable to successfully manage this growth, our business may be adversely affected.
Our need to effectively manage our operations, growth and various projects requires that we: • successfully attract and recruit new employees with the expertise and experience we will require; • manage our clinical programs effectively, which we anticipate being conducted at numerous clinical sites; • develop a marketing and sales infrastructure; and • continue to develop our operational, financial and management controls, reporting systems and procedures.
Data from preclinical studies and clinical trials may receive greater scrutiny with respect to safety, which may make the FDA or other regulatory authorities more likely to terminate clinical trials before completion, or require longer or additional clinical trials that may result in substantial additional expense, a delay or failure in obtaining approval or approval for a more limited indication or conditions of use than originally sought. 25 In addition, data obtained from preclinical studies and clinical trials are subject to different interpretations, which could delay, limit or prevent regulatory review or approval of product candidates.
Data from preclinical studies and clinical trials may receive greater scrutiny with respect to safety, which may make the FDA or other regulatory authorities more likely to terminate clinical trials before completion, or require longer or additional clinical trials that may result in substantial additional expense, a delay or failure in obtaining approval or approval for a more limited indication or conditions of use than originally sought.
Other Risks Relating to Our Business We may face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability for a product candidate and may have to limit its commercialization.
If we are unable to successfully manage this growth, our business may be adversely affected. 37 Other Risks Relating to Our Business We may face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability for a product candidate and may have to limit its commercialization.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and their implementing regulations, which impose certain obligations with respect to safeguarding the privacy, security and transmission of individually identifiable health information on “covered entities,” such as certain healthcare providers, health plans, and healthcare clearinghouses and their respective “business associates,” as well as their covered subcontractors, that perform services for them, which involve the creation, receipt, use, maintenance, transmission or disclosure of, individually identifiable health information for or on behalf of a covered entity.
Similar to the federal Anti-Kickback Statute, a person or entity need not have actual knowledge the statute or specific intent to violate it, in order to have committed a violation. 30 HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and their implementing regulations, which impose certain obligations with respect to safeguarding the privacy, security and transmission of individually identifiable health information on “covered entities,” such as certain healthcare providers, health plans, and healthcare clearinghouses and their respective “business associates,” as well as their covered subcontractors, that perform services for them, which involve the creation, receipt, use, maintenance, transmission or disclosure of, individually identifiable health information for or on behalf of a covered entity.
As of December 31, 2023, we had an accumulated deficit of approximately $355.2 million. On a prospective basis, our strategic focus, along with the commitment of our financial resources, will be directed towards the development of ibrexafungerp. We had cash, cash equivalents, and investments of $98.0 million as of December 31, 2023.
As of December 31, 2024, we had an accumulated deficit of approximately $376.5 million. On a prospective basis, our strategic focus, along with the commitment of our financial resources, will be directed towards the development of SCY-247 and ibrexafungerp. We had cash, cash equivalents, and investments of $75.1 million as of December 31, 2024.
We are dependent on our existing third-party collaboration with Hansoh to commercialize ibrexafungerp in the Greater China region, and if Hansoh is not successful in commercializing ibrexafungerp in these areas, we will lose a significant source of potential revenue.
If GSK determines not to pursue commercialization of ibrexafungerp in those countries, we will not receive any commercial or sales milestone or royalty payments under the GSK License Agreement. 32 We are dependent on our existing third-party collaboration with Hansoh to commercialize ibrexafungerp in the Greater China region, and if Hansoh is not successful in commercializing ibrexafungerp in these areas, we will lose a significant source of potential revenue.
The marketing authorization process in other countries may include all of the risks detailed above regarding failure to obtain FDA approval in the United States as well as other risks.
Research and marketing authorization procedures vary among countries and can involve additional product testing and administrative review periods. The marketing authorization process in other countries may include all of the risks detailed above regarding failure to obtain FDA approval in the United States as well as other risks.
If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured or disagrees with the promotion, marketing or labeling of a product, a regulatory agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market.
Failure to comply with FDA advertising and promotion standards, which are often subject to interpretation by regulators, may result in a wide range of exposure and liability for us. 29 If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured or disagrees with the promotion, marketing or labeling of a product, a regulatory agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market.
Further federal, state and foreign legislative and regulatory developments are likely, and we expect ongoing initiatives to increase pressure on drug pricing, which could have a negative impact on our sales of any future approved products.
Further federal, state and foreign legislative and regulatory developments are likely, and we expect ongoing initiatives to increase pressure on drug pricing, which could have a negative impact on our sales of any future approved products. 28 We expect that a portion of the market for BREXAFEMME, ibrexafungerp for other indications, and any other product candidates we may seek to develop will be outside the United States.
It is unclear whether the models will be utilized in any health reform measures in the future. Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act.
Further, on December 7, 2023, an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act was announced.
Before we or any commercial partners (including GSK) can market and commercialize any product candidates outside of the United States, there are numerous and varying regulatory requirements of other countries that will apply. Research and marketing authorization procedures vary among countries and can involve additional product testing and administrative review periods.
However, our product candidates may never receive approval or be commercialized outside of the United States. Before we or any commercial partners (including GSK) can market and commercialize any product candidates outside of the United States, there are numerous and varying regulatory requirements of other countries that will apply.
Since we expect lower resistance relative to other antifungal drug classes to be a major factor in the commercialization of ibrexafungerp, rapid development of such resistance or development of cross resistance with echinocandins would have a major adverse impact on the acceptability and sales of ibrexafungerp.
Since we expect lower resistance relative to other antifungal drug classes to be a major factor in the commercialization of ibrexafungerp, rapid development of such resistance or development of cross resistance with echinocandins would have a major adverse impact on the acceptability and sales of ibrexafungerp. 25 Our approved product and product candidates may have undesirable side effects that may delay or prevent marketing approval, or, if approval is received, require them to be taken off the market or otherwise limit their sales.
Changes in FDA personnel responsible for review of our submissions could also impact the manner in which our data are viewed.
In addition, data obtained from preclinical studies and clinical trials are subject to different interpretations, which could delay, limit or prevent regulatory review or approval of product candidates. Changes in FDA personnel responsible for review of our submissions could also impact the manner in which our data are viewed.
The ongoing military action along with the potential for a wider conflict could further increase financial market volatility and cause negative effects on regional and global economic markets, industries, and companies. It is not currently possible to determine the severity of any potential adverse impact of this event on our financial condition, or more broadly, upon the global economy.
The ongoing geopolitical conflicts in various parts of the world, including but not limited to Russia, Ukraine and the Middle East, are difficult to predict. The ongoing military action along with the potential for a wider conflict could further increase financial market volatility and cause negative effects on regional and global economic markets, industries, and companies.
We may not be successful in establishing and maintaining development and commercialization collaborations, which could adversely affect our ability to develop and commercialize product candidates. Developing pharmaceutical products, conducting clinical trials, obtaining regulatory approval, establishing manufacturing capabilities and marketing approved products is expensive.
Developing pharmaceutical products, conducting clinical trials, obtaining regulatory approval, establishing manufacturing capabilities and marketing approved products is expensive.
Further, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions take effect progressively starting in fiscal year 2023.
Department of Health and Human Services, (HHS), to negotiate the price of certain high-expenditure, single-source drugs that have been on the market for at least 7 years covered under Medicare, or the Medicare Drug Price Negotiation Program and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges. It is unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry.
These provisions take effect progressively starting in fiscal year 2023. On August 15, 2024, HHS announced the agreed-upon prices of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges.
While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. 29 We cannot predict what healthcare reform initiatives may be adopted in the future, particularly in light of the new presidential administration.
While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. The current Trump administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, CMS and related agencies.
Removed
Our operating activities may be restricted as a result of covenants related to the indebtedness under our senior convertible notes and we may be required to repay the notes and our loan payable in an event of default, which could have a materially adverse effect on our business.
Added
On January 17, 2025, HHS selected fifteen additional products covered under Part D for price negotiation in 2025. Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program.
Removed
On March 7, 2019, we entered into a senior convertible note purchase agreement with Puissance Life Science Opportunities Fund VI (Puissance), pursuant to which we issued and sold to Puissance $16 million of our 6.0% senior convertible notes due 2025. We may be required to repay the outstanding notes if an event of default occurs under the note purchase agreements.
Added
These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA.
Removed
Under the note purchase agreements, an event of default will occur if, among other things: we fail to make payments under the note purchase agreement; we breach any of our covenants under the note purchase agreements, subject to specified cure periods with respect to certain breaches; or we or our subsidiaries become subject to bankruptcy, insolvency or reorganization proceedings.
Added
We cannot predict what healthcare reform initiatives may be adopted in the future.
Removed
We may not have enough available cash or be able to raise additional funds through equity or debt financings to repay such indebtedness at the time any such event of default occurs.
Added
Generally, worldwide economic conditions remain uncertain, particularly due to the effects of the war between Russia and Ukraine and the conflicts in the Middle East, disruptions in the banking system and financial markets, and increased inflation.
Removed
In this case, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant to others rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Added
It is not currently possible to determine the severity of any potential adverse impact of this event on our financial condition, or more broadly, upon the global economy. We may not be successful in establishing and maintaining development and commercialization collaborations, which could adversely affect our ability to develop and commercialize product candidates.
Removed
Our business, financial condition and results of operations could be materially adversely affected as a result of any of these events. Unfavorable U.S. and global economic conditions could adversely affect our ability to access capital .
Added
For example, on November 6, 2024, we entered into a Controlled Equity Offering SM Sales Agreement (the Sales Agreement) with Cantor Fitzgerald & Co., as sales agent, pursuant to which we may issue and sell shares of our common stock for an aggregate maximum offering price of $50.0 million under an “at-the-market” offering program under which we have sold zero shares of our common stock as of December 31, 2024.
Removed
Our approved product and product candidates may have undesirable side effects that may delay or prevent marketing approval, or, if approval is received, require them to be taken off the market or otherwise limit their sales.
Added
In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt securities or equity.
Removed
For example, the Tax Cuts and Jobs Act of 2017 included a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the Affordable Care Act on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”.
Removed
On June 17, 2021 the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.
Removed
For example, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs. In response to Biden’s executive order, on September 9, 2021, the U.S.
Removed
Department of Health and Human Services, or HHS, released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.
Removed
In response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the CMS Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care.
Removed
We expect that a portion of the market for BREXAFEMME, ibrexafungerp for other indications, and any other product candidates we may seek to develop will be outside the United States. However, our product candidates may never receive approval or be commercialized outside of the United States.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCYBE RSECURITY Risk Management and Strategy We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature such as data about our research and clinical trials (“Information Systems and Data”).
Biggest changeCYBE RSECURITY Risk Management and Strategy We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature such as data about our research and clinical trials (the Information Systems and Data).
Depending on the environment, systems, and data, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: an incident response process; disaster recovery/business continuity plans; encrypting certain data; using network security controls; maintaining access controls; managing assets; and maintaining cybersecurity insurance.
Depending on the environment, systems, and data, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: an incident response process; disaster recovery/business 43 continuity plans; encrypting certain data; using network security controls; maintaining access controls; managing assets; and maintaining cybersecurity insurance.
In addition, the Company’s incident response process includes reporting to the Audit Committee for certain cybersecurity incidents. The Audit Committee receives periodic reports from company management, including our Chief Legal Officer, concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to 45 address them.
In addition, the Company’s incident response process includes reporting to the Audit Committee for certain cybersecurity incidents. The Audit Committee receives periodic reports from company management, including our Chief Legal Officer, concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe complaint seeks unspecified damages, interest, fees and costs on behalf of all persons and entities who purchased and/or acquired shares of our common stock between March 31, 2023 to September 22, 2023. We disagree with the allegations and intend to defend the litigation vigorously . ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 46 PART II
Biggest changeThe complaint seeks unspecified damages, interest, fees and costs on behalf of all persons and entities who purchased and/or acquired shares of our common stock between March 31, 2023 to September 22, 2023. We have filed a motion to dismiss.
LEGAL PROCEEDINGS On November 7, 2023, a securities class action was filed by Brian Feldman against us and certain of our executives in the United States District Court, District of New Jersey, alleging that, during the period from March 31, 2023 to September 22, 2023, we made materially false and/or misleading statements, as well as failed to disclose material adverse facts about our business, operations, and prospects, alleging specifically that we failed to disclose to investors: (1) that the equipment used to manufacture ibrexafungerp was also used to manufacture a non-antibacterial beta-lactam drug substance, presenting a risk of cross-contamination; (2) that we did not have effective internal controls and procedures, as well as adequate internal oversight policies to ensure that its vendor complied with current Good Manufacturing Practices (cGMP); (3) that, due to the substantial risk of cross-contamination, we were reasonably likely to recall its ibrexafungerp tablets and halt its clinical studies; and (4) as a result of the foregoing, our statements about our business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
LEGAL PROCEEDINGS On November 7, 2023, a securities class action was filed by Brian Feldman against us and certain of our executives in the United States District Court, District of New Jersey, alleging that, during the period from March 31, 2023 to September 22, 2023, we made materially false and/or misleading statements, as well as failed to disclose material adverse facts about our business, operations, and prospects, alleging specifically that we failed to disclose to investors: (1) that the equipment used to manufacture ibrexafungerp was also used to manufacture a non-antibacterial beta-lactam drug substance, presenting a risk of cross-contamination; (2) that we did not have effective internal controls and procedures, as well as adequate internal oversight 44 policies to ensure that its vendor complied with current Good Manufacturing Practices (cGMP); (3) that, due to the substantial risk of cross-contamination, we were reasonably likely to recall its ibrexafungerp tablets and halt its clinical studies; and (4) as a result of the foregoing, our statements about our business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Added
On May 1, 2024, and again on June 4, 2024, purported shareholder derivative complaints were filed in the United States District Court, District of New Jersey. The complaints name our directors and certain of our officers and assert state and federal claims based on the same alleged misstatements as the securities class action complaint.
Added
These cases were consolidated and are currently stayed. We disagree with the allegations and we intend to defend these litigations vigorously . ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 45 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our securities during the fourth quarter of 2023. ITEM 6. [RESE RVED] 47
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our securities during the fourth quarter of 2024.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the Nasdaq Global Market under the symbol “SCYX.” Stockholders As of March 1, 2024, there were approximately 43 stockholders of record of our common stock, which excludes stockholders whose shares were held in nominee or street name by brokers.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the Nasdaq Global Market under the symbol “SCYX.” Stockholders As of March 1, 2025, there were approximately 43 stockholders of record of our common stock, which excludes stockholders whose shares were held in nominee or street name by brokers.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCash Flows The following table sets forth the significant sources and uses of cash for the years ended December 31, 2023 and 2022 (dollars in thousands): Years Ended December 31, 2023 2022 Cash, cash equivalents, and restricted cash, January 1 $ 46,032 $ 104,702 Net cash provided by (used in) operating activities 60,159 (79,883 ) Net cash used in investing activities (34,877 ) (27,389 ) Net cash (used in) provided by financing activities (36,721 ) 48,602 Net (decrease) in cash, cash equivalents, and restricted cash (11,439 ) (58,670 ) Cash, cash equivalents, and restricted cash, December 31 $ 34,593 $ 46,032 Operating Activities The $140.0 million increase in net cash provided by operating activities for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to the $90.0 million upfront receipt upon the closing of the GSK License Agreement and the receipt of a $25.0 million performance-based development milestone under the GSK License Agreement, offset by the continued development costs associated with ibrexafungerp and SCY-247.
Biggest changeCash Flows The following table sets forth the significant sources and uses of cash for the years ended December 31, 2024 and 2023 (dollars in thousands): Years Ended December 31, 2024 2023 Cash, cash equivalents, and restricted cash, January 1 $ 34,593 $ 46,032 Net cash (used in) provided by operating activities (24,009 ) 60,159 Net cash provided by (used in) investing activities 6,150 (34,877 ) Net cash used in financing activities (139 ) (36,721 ) Net decrease in cash, cash equivalents, and restricted cash (17,998 ) (11,439 ) Cash, cash equivalents, and restricted cash, December 31 $ 16,595 $ 34,593 Operating Activities The $84.2 million decrease in net cash (used in) provided by operating activities for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to the $115.0 million in upfront and development milestones received under the GSK License Agreement in the prior period and the continued development costs associated with SCY-247 and ibrexafungerp in the year ended December 31, 2024, offset in part by the $10.0 million development milestone received under the GSK License Agreement in the year ended December 31, 2024. 52 Net cash used in operating activities of $24.0 million for the year ended December 31, 2024, primarily consisted of the $21.3 million net loss adjusted for non-cash charges that included the gain on change in fair value of the warrant liabilities of $13.8 million, stock-based compensation expense of $3.3 million, accretion of investment discount of $1.3 million, and the amortization of debt issuance costs and discount of $1.7 million, plus a net favorable change in operating assets and liabilities of $7.3 million.
We are developing our proprietary antifungal platform “fungerps”, a novel class of antifungal agents called triterpenoids, that are a structurally distinct glucan synthase inhibitors and have generally shown in vitro and in vivo activity against a broad range of human fungal pathogens such as Candida and Aspergillus genera, including multidrug-resistant strains, as well as Pneumocystis , Coccidioides , Histoplasma and Blastomyces genera and most common mucorales species.
We are developing our proprietary antifungal platform “fungerps”, a novel class of antifungal agents called triterpenoids, that are structurally distinct glucan synthase inhibitors and have generally shown in vitro and in vivo activity against a broad range of human fungal pathogens such as Candida and Aspergillus genera, including multidrug-resistant strains, as well as Pneumocystis , Coccidioides , Histoplasma and Blastomyces genera and most common mucorales species.
As a result, we will need additional capital to fund our operations, which we may obtain through one or more of equity offerings, debt financings, or other non-dilutive third-party funding (e.g., grants), strategic alliances and licensing or collaboration arrangements.
As a result, we will need additional capital to fund our operations, which we may obtain through one or more of equity offerings, debt financings, other non-dilutive third-party funding (e.g., grants), strategic alliances and licensing or collaboration arrangements.
Our future capital requirements will depend on many factors, including: • our ability to successfully achieve the development, regulatory, and commercial milestones under our GSK License Agreement; • the progress, costs, and the clinical and preclinical research and development of ibrexafungerp and SCY-247; • the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals; • the ability of our product candidates to progress through clinical development successfully; • our need to expand our research and development activities; • the costs associated with securing, establishing and maintaining commercialization and manufacturing capabilities; • our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights; • our need and ability to hire additional management and scientific and medical personnel; • our need to implement additional, as well as to enhance existing, internal systems and infrastructure, including financial and reporting processes and systems; and • the economic and other terms, timing and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future.
Our future capital requirements will depend on many factors, including: • our ability to successfully achieve the development, regulatory, and commercial milestones under our GSK License Agreement; 53 • the progress, costs, and the clinical and preclinical research and development of ibrexafungerp and SCY-247; • the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals; • the ability of our product candidates to progress through clinical development successfully; • our need to expand our research and development activities; • the costs associated with securing, establishing and maintaining commercialization and manufacturing capabilities; • our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights; • our need and ability to hire additional management and scientific and medical personnel; • our need to implement additional, as well as to enhance existing, internal systems and infrastructure, including financial and reporting processes and systems; and • the economic and other terms, timing and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future.
In applying these assumptions, we considered the following factors: • we estimate expected volatility based on the volatility of our own common stock trading history and implied volatility; • the assumed dividend yield is based on our expectation of not paying dividends on our underlying common stock for the foreseeable future; • we determine the average expected life of stock options based on the simplified method in accordance with SEC Staff Accounting Bulletin Nos. 107 and 110.
In applying these assumptions, we considered the following factors: 55 • we estimate expected volatility based on the volatility of our own common stock trading history and implied volatility; • the assumed dividend yield is based on our expectation of not paying dividends on our underlying common stock for the foreseeable future; • we determine the average expected life of stock options based on the simplified method in accordance with SEC Staff Accounting Bulletin Nos. 107 and 110.
In arrangements that include the sale or license of intellectual property and other promised services, we first identify if the licenses are distinct from the other promises in the arrangement. If the license is not distinct, the license is combined with other services into a single performance obligation.
In arrangements that include the sale or license of intellectual property and other promised services, we first identify if the licenses are distinct from the 54 other promises in the arrangement. If the license is not distinct, the license is combined with other services into a single performance obligation.
These payments became due upon the earliest of (A) one business day following receipt by us of the $90 million upfront payment payable to us under the GSK License Agreement, (B) June 1, 2023, or (C) the termination of the GSK License Agreement.
These payments became due upon the earliest of (A) one business day 48 following receipt by us of the $90 million upfront payment payable to us under the GSK License Agreement, (B) June 1, 2023, or (C) the termination of the GSK License Agreement.
We estimate product returns from consumers and customers across distribution channels, utilizing third-party data and other assumptions, and these are recorded within gross-to-net expenses on our consolidated statement of operations. Additionally, we estimate costs for any additional fees, including but not limited to freight and destruction charges for returned products and costs incurred by third party vendors.
We estimate product recall from consumers and customers across distribution channels, utilizing third-party data and other assumptions, and these are recorded within gross-to-net expenses on our consolidated statement of operations. Additionally, we estimate costs for any additional fees, including but not limited to freight and destruction charges for returned products and costs incurred by third party vendors.
For a distinct unit-of-account that is not within the scope of Topic 606, we will recognize and 56 measure the distinct unit-of-account based on other authoritative ASC Topics or on a reasonable, rational, and consistently applied policy election. Analyzing the arrangement to identify performance obligations requires the use of judgment.
For a distinct unit-of-account that is not within the scope of ASC 606, we will recognize and measure the distinct unit-of-account based on other authoritative ASC topics or on a reasonable, rational, and consistently applied policy election. Analyzing the arrangement to identify performance obligations requires the use of judgment.
License Agreement Revenue We have entered into arrangements involving the sale or license of intellectual property and the provision of other services.
Revenue Recognition License Agreement Revenue We have entered into arrangements involving the sale or license of intellectual property and the provision of other services.
Other Expense (Income) 51 Substantially all of our other expense (income) during the periods reported consists of costs associated with: • fair value adjustments to our warrant and derivative liabilities; • interest expense; • amortization of debt issuance costs and discount; • other income associated with research and development tax credits; and • interest income associated with our held-to-maturity investments and money market accounts.
Other Expense (Income) Substantially all of our other expense (income) during the periods reported consists of costs associated with: • fair value adjustments to our warrant and derivative liabilities; • interest expense; • amortization of debt issuance costs and discount; • other income associated with research and development credits; and • interest income associated with our held-to-maturity investments and money market accounts.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Operating results for the year ended December 31, 2023, are not necessarily indicative of results that may occur in future fiscal years. Some of the statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Operating results for the year ended December 31, 2024, are not necessarily indicative of results that may occur in future fiscal years. Some of the statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements.
We are continually evaluating our operating plan and assessing the optimal cash utilization for our ibrexafungerp development strategy. We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect.
We are continually evaluating our operating plan and assessing the optimal cash utilization for our SCY-247 and ibrexafungerp development strategy. We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect.
(Hercules Capital) and Silicon Valley Bridge Bank, N.A. (as successor to Silicon Valley Bank) (SVBB) were parties to a Loan and Security Agreement dated as of May 13, 2021 (the Loan Agreement), pursuant to which Hercules Capital, SVBB and each of the other lenders from time-to-time party to the Loan Agreement (collectively, the Lenders) loaned to us $35 million.
(as successor to Silicon Valley Bank) (SVBB) were parties to a Loan and Security Agreement dated as of May 13, 2021 (the Loan Agreement), pursuant to which Hercules Capital, SVBB and each of the other lenders from time-to-time party to the Loan Agreement (collectively, the Lenders) loaned to us $35 million.
If we determine that an arrangement includes goods or services that are central to our business operations for consideration, we will then identify the performance obligations in the contract using the unit-of-account guidance in Topic 606.
If we determine that an arrangement includes goods or services that are central to our business operations for consideration, we will then identify the performance obligations in the contract using the unit-of-account guidance in ASC 606.
Our research and development expense primarily consists of: • costs related to executing preclinical studies and clinical trials, including development milestones, drug formulation, manufacturing and other development; • salaries and personnel-related costs, including benefits and any stock-based compensation for personnel performing research and development functions; • fees paid to clinical research organizations (CROs), vendors, consultants and other third parties who support our product candidate development and intellectual property protection; • medical affairs related expense and salary that is incurred to discover, develop, or improve potential product candidates; • other costs in seeking regulatory approval of our products; and • allocated overhead.
Our research and development expense primarily consists of: 49 • costs related to executing preclinical studies and clinical trials, including development milestones, drug formulation, manufacturing and other development; • salaries and personnel-related costs, including benefits and any stock-based compensation for personnel performing research and development functions; • fees paid to clinical research organizations (CROs), vendors, consultants and other third parties who support our product candidate development; • medical affairs related expense and salary that is incurred to discover, develop, or improve potential product candidates; • other costs in seeking regulatory approval of our products; and • allocated overhead.
Other expenses include facility-related costs not otherwise allocated to research and development expense, professional fees for accounting, auditing, tax and legal services, consulting costs for general and administrative purposes, information systems maintenance and marketing efforts.
Other expenses include facility-related costs not otherwise allocated to research and development expense, professional fees for accounting, auditing, tax and legal services, consulting costs for general and administrative purposes, patent application and legal fees, information systems maintenance and marketing efforts.
The 2023 and 2022 debt issuance costs and discount for our March 2019 convertible notes primarily consisted of an allocated portion of advisory fees and other issuance costs and the initial fair value of the derivative liability. Interest Income.
The debt issuance costs and discount for our March 2019 convertible notes primarily consisted of an allocated portion of advisory fees and other issuance costs and the initial fair value of the derivative liability. Interest Income.
For a distinct unit-of-account that is within the scope of Topic 606, we will apply all of the accounting requirements in Topic 606 to that unit-of-account, including the recognition, measurement, presentation and disclosure requirements.
For a distinct unit-of-account that is within the scope of ASC 606, we will apply all of the accounting requirements in ASC 606 to that unit-of-account, including the recognition, measurement, presentation and disclosure requirements.
When entering into any arrangement involving the sale or license of intellectual property rights and other services, we determine whether the arrangement is subject to accounting guidance in ASC 606, Revenue from Contracts with Customers, as well as ASC 808, Collaborative Arrangements (Topic 808).
When entering into any arrangement involving the sale or license of intellectual property rights and other services, we determine whether the arrangement is subject to accounting guidance in Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (ASC 606), as well as ASC 808, Collaborative Arrangements .
Product Recall and Clinical Hold Following a review by GSK of the manufacturing process and equipment at the vendor that manufactures the ibrexafungerp drug substance, we became aware that a non-antibacterial beta-lactam drug substance was manufactured using equipment common to the manufacturing process for ibrexafungerp.
Product Recall and Clinical Hold Following a review in 2023 by GSK of the manufacturing process and equipment at the vendor that manufactures the ibrexafungerp drug substance, we became aware that exetimibe, a non-antibacterial beta-lactam drug substance, was manufactured using equipment common to the manufacturing process for ibrexafungerp.
We will continue to be responsible for the execution and costs of the ongoing clinical studies of ibrexafungerp but will have the potential to receive up to $72.35 million in development milestones (revised from up to $75.5 million as provided in the GSK License Agreement), which comprise: $25 million already paid; $10 million for the delivery to GSK of final clinical study reports for the completed FURI, CARES, and NATURE clinical studies; up to $30 million for the achievement of two interim milestones associated with our resumption and continued performance of the MARIO Study after the clinical hold is lifted; and $7.35 million for the successful completion of the MARIO Study.
We will continue to be responsible for the execution and costs of the ongoing clinical studies of ibrexafungerp, which at this stage is only the Phase 3 MARIO study, but will have the potential to receive up to $72.35 million in development milestones (revised from up to $75.5 million as provided in the GSK License Agreement), which comprise: $25 million already paid; $10 million already paid for the delivery to GSK of the final clinical study reports for the completed FURI, CARES, and NATURE clinical studies; up to $30 million for the achievement of two interim milestones associated with our resumption and continued performance of the MARIO study after the clinical hold is lifted; and $7.35 million for the successful completion of the Phase 3 MARIO study.
Cost of Product Revenues. For the year ended December 31, 2023, cost of product revenue consists primarily of the $14.5 million in impairment expense recognized in the period in addition to distribution, freight, and royalty costs associated with BREXAFEMME.
For the year ended December 31, 2023, cost of product revenue consists primarily of the $14.5 million in impairment expense recognized in the period in addition to manufacturing, distribution, freight, and royalty costs associated with BREXAFEMME. Research and Development.
For the years ended December 31, 2023 and 2022, we recognized a loss of $0.2 million and a gain of $1.3 million, respectively, in the fair value adjustment related to the derivative liability primarily due to the increase and decrease in our stock price during the periods, respectively. Income Tax Expense (Benefit).
For the years ended December 31, 2024 and 2023, we recognized a gain of $0.2 million and a loss of $0.2 million, respectively, in the fair value adjustment related to the derivative liability primarily due to the decrease and increase in our stock price during the periods, respectively. Income Tax Expense.
For the years ended December 31, 2023 and 2022, we recognized a loss of $3.2 million and a gain of $22.3 million, respectively, for the fair value adjustment for warrant liabilities primarily due to the increase and decrease in our stock price during the periods, respectively. Derivative Liabilities Fair Value Adjustment.
For the years ended December 31, 2024 and 2023, we recognized a gain of $13.8 million and a loss of $3.2 million, respectively, for the fair value adjustment for warrant liabilities primarily due to the decrease and increase in our stock price during the periods, respectively. Derivative Liabilities Fair Value Adjustment.
We also completed a follow-on public offering of our common stock in April 2015 and public offerings of our common stock and warrants in June 2016, March 2018, December 2019, December 2020, and April 2022. Our principal source of liquidity is cash, cash equivalents, and investments which totaled $98.0 million as of December 31, 2023.
We also completed a follow-on public offering of our common stock in April 2015 and public offerings of our common stock and warrants in June 2016, March 2018, December 2019, December 2020, and April 2022. Our principal source of liquidity is cash, cash equivalents, and investments which totaled $75.1 million as of December 31, 2024.
As of December 31, 2023, our accumulated deficit was $355.2 million. We expect we will continue to incur significant research and development expense as we continue to execute our research and drug development strategy. We also expect that we will continue to incur significant selling, general and administrative expenses to support our public reporting company operations and ongoing operations.
As of December 31, 2024, our accumulated deficit was $376.5 million. We expect we will continue to incur significant research and development expense as we continue to execute our research and drug development strategy. We also expect that we will continue to incur significant selling, general and administrative expenses to support our public reporting company operations and ongoing operations.
For the years ended December 31, 2023 and 2022, we recognized $3.1 million and $5.2 million, respectively, in interest expense associated with our Loan Agreement and convertible debt. The decrease in interest expense was primarily due to the repayment of the Loan Agreement in May 2023. Other Income.
For the years ended December 31, 2024 and 2023, we recognized $0.8 million and $3.1 million, respectively, in interest expense associated with our Loan Agreement and convertible debt. The decrease in interest expense was primarily due to the repayment of the Loan Agreement in May 2023. Other Income.
In response to the hold on clinical studies of ibrexafungerp by the FDA due to possible beta-lactam cross contamination, we have entered into certain new manufacturing agreements with third-party contract manufacturers to begin producing new batches of ibrexafungerp which we believe will allow us to lift the clinical hold and restart our impacted clinical studies, the Phase 3 MARIO study and a Phase 1 lactation study.
In response to the hold on clinical studies of ibrexafungerp by the FDA due to possible beta-lactam cross contamination, we have entered into certain new manufacturing agreements with third-party contract manufacturers to produce new batches of ibrexafungerp which we believe will allow us to lift the clinical hold and restart the Phase 3 MARIO study.
(Amplity). We believe our capital resources are sufficient to fund our on-going operations for a period of at least 12 months subsequent to the issuance of the accompanying consolidated financial statements. 53 As of December 31, 2023, our accumulated deficit was $355.2 million. We anticipate that we will continue to incur losses for at least the next several years.
We believe our capital resources are sufficient to fund our on-going operations for a period of at least 12 months subsequent to the issuance of the accompanying consolidated financial statements. As of December 31, 2024, our accumulated deficit was $376.5 million. We anticipate that we will continue to incur losses for at least the next several years.
GSK License Agreement On March 30, 2023, we entered into a license agreement (the GSK License Agreement) with GlaxoSmithKline Intellectual Property (No. 3) Limited (GSK).
GSK License Agreement On March 30, 2023, we entered into a license agreement (as amended in December 2023, the GSK License Agreement) with GlaxoSmithKline Intellectual Property (No. 3) Limited (GSK).
Ibrexafungerp is the first representative of this novel class of antifungals with additional assets from the “fungerp” family, including SCY-247, in preclinical stages of development.
Ibrexafungerp is the first representative of this novel class of antifungals with additional assets from the “fungerp” family under development, including SCY-247 which is currently in clinical stages of development.
The parties closed the GSK License Agreement in May 2023 and we received an upfront payment of $90.0 million. In June 2023, we announced the achievement of a $25.0 million performance-based development milestone under the GSK License Agreement.
The parties closed the transactions contemplated by the GSK License Agreement in May 2023 and we received an upfront payment of $90.0 million. In June 2023 and July 2024, we announced the achievement of a $25.0 million and a $10.0 million performance-based development milestone under the GSK License Agreement, respectively.
SCY-247 is a broad-spectrum antifungal with a potential oral and IV systemic therapeutic option for multiple drug-resistant pathogens. Some of these activities, including assessing the activity of the compound against Candida auris and Mucorales are being supported by NIH grants.
SCY-247 is a broad-spectrum antifungal with a potential oral and IV systemic therapeutic option for multiple drug-resistant pathogens. Some of these activities, including assessing the activity of the compound against multi-drug resistant pathogens such as Candida auris and Mucorales, are being supported by NIH grants. We initiated a Phase 1 study for SCY-247 in the fourth quarter of 2024.
Actual results may differ from these estimates under different assumptions or conditions. 55 While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements for the year ended December 31, 2023, included in this Annual Report, we believe that the following accounting policies are critical to the process of making significant judgments and estimates in the preparation of our consolidated financial statements and understanding and evaluating our reported financial results.
While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements for the year ended December 31, 2024, included in this Annual Report, we believe that the following accounting policies are critical to the process of making significant judgments and estimates in the preparation of our consolidated financial statements and understanding and evaluating our reported financial results.
For the years ended December 31, 2023 and 2022, we recognized $4.0 million and $1.4 million, respectively, in interest income associated with our money market accounts and investments. The increase in interest income was primarily due to the increase in the interest rates on our money market accounts and investments. Interest Expense.
For the years ended December 31, 2024 and 2023, we recognized $4.3 million and $4.0 million, respectively, in interest income associated with our money market accounts and investments. The increase was primarily due to the interest income being earned on our money market funds and investments for the full period in 2024. Interest Expense.
Investing Activities Net cash used in investing activities of $34.9 million for the year ended December 31, 2023, consisted of purchases of $85.5 million and maturities of $50.6 million in investments. Net cash used in investing activities of $27.4 million for the year ended December 31, 2022, consisted of purchases of short-term investments.
Investing Activities Net cash provided by investing activities of $6.2 million for the year ended December 31, 2024, consisted of purchases of $36.4 million and maturities of $42.6 million in investments. Net cash used in investing activities of $34.9 million for the year ended December 31, 2023, consisted of purchases of $85.5 million and maturities of $50.6 million in investments.
We recognize compensation expense over the requisite service period, which is equal to the vesting period. 57 Stock-based compensation expense has been reported in our statements of operations as follows (dollars in thousands): Years Ended December 31, 2023 2022 Research and development $ 873 $ 1,076 Selling, general and administrative 1,751 2,436 Total $ 2,624 $ 3,512 On December 31, 2023, the aggregate intrinsic value of outstanding options to purchase shares of our common stock was $0.2 million, based upon the $2.23 closing sales price per share of our common stock as reported on the Nasdaq Global Market on that date.
Stock-based compensation expense has been reported in our statements of operations as follows (dollars in thousands): Years Ended December 31, 2024 2023 Research and development $ 988 $ 873 Selling, general and administrative 2,358 1,751 Total $ 3,346 $ 2,624 On December 31, 2024, the aggregate intrinsic value of outstanding options to purchase shares of our common stock was zero, based upon the $1.21 closing sales price per share of our common stock as reported on the Nasdaq Global Market on that date.
SCY-247, a second-generation antifungal compound from this novel class, is in preclinical development stage. We anticipate initiating a Phase 1 study for SCY-247 in the second half of 2024.
SCY-247, a second-generation antifungal compound from this novel class, is in clinical development and we initiated a Phase 1 study for SCY-247 in the fourth quarter of 2024.
As a result, we will need additional capital to fund our operations, which we may obtain through one or more of equity offerings, debt financings, other non-dilutive third-party funding (e.g., grants), strategic alliances and licensing or collaboration arrangements. We may offer shares of our common stock pursuant to our effective shelf registration statements.
As a result of our continued significant expenses, we may need additional capital to fund our operations, which we may obtain through one or more of equity offerings, debt financings, or other non-dilutive third-party funding, strategic alliances and licensing or collaboration arrangements.
Nonetheless, out of an abundance of caution and in line with GSK’s recommendation, we have recalled BREXAFEMME (ibrexafungerp tablets) from the market and placed a temporary hold on clinical studies of ibrexafungerp, including the Phase 3 MARIO study. The patient-level and clinical product recall has been initiated and we are working with an experienced vendor to manage the process.
Nonetheless, out of an abundance of caution and in line with GSK’s recommendation, we recalled BREXAFEMME® (ibrexafungerp tablets) from the market and placed a temporary hold on clinical studies of ibrexafungerp, including the Phase 3 MARIO study.
For the years ended December 31, 2023 and 2022, we recognized zero and $3,000 in other income associated with certain research and development tax credits. Warrant Liabilities Fair Value Adjustment .
For the year ended December 31, 2024, we recognized $0.2 million in other income associated with certain research and development tax credits. Warrant Liabilities Fair Value Adjustment .
For the year ended December 31, 2023, revenue primarily consists of the $130.1 million recognized upon the transfer of the license associated with the GSK License Agreement in May 2023 and $4.4 million in license agreement revenue recognized as part of the Binding MOU. For the year ended December 31, 2022, revenues primarily consists of product sales of BREXAFEMME.
For the year ended December 31, 2024, revenue consists of the $3.7 million in license agreement revenue associated with the GSK License Agreement. For the year ended December 31, 2023, revenue primarily consists of the $130.1 million recognized upon the transfer of the license associated with the GSK License Agreement in May 2023. Cost of Product Revenues.
Debt financing, similar to our Loan Agreement or the convertible senior notes we sold in March 2019 and April 2020, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
The increase of $1.4 million, or 88%, was primarily driven by the recognition of $1.9 million in amortization during the year ended December 31, 2023 for the remaining debt issuance costs and discount associated with the loan payable with Hercules and SVBB which was fully paid in May 2023.
The decrease of $1.3 million, or 42%, was primarily driven by the recognition, in the prior period, of $1.9 million in amortization for the remaining debt issuance costs and discount associated with the Loan Agreement which was fully paid in May 2023.
This includes conducting preclinical studies and clinical trials, manufacturing and other development efforts, and activities related to regulatory filings for product candidates. We recognize research and development expenses as they are incurred.
Research and Development Expense Research and development expense consists of expenses incurred while performing research and development activities to discover, develop, or improve potential product candidates we seek to develop. This includes conducting preclinical studies and clinical trials, manufacturing and other development efforts, and activities related to regulatory filings for product candidates.
The fair values of these warrants have been determined using the Black-Scholes valuation model. We determine the risk-free interest rate by reference to implied yields available from U.S. Treasury securities and utilize the remaining term of the warrant as the expected term.
Warrant Liabilities We account for the outstanding warrants associated with the December 2020 and April 2022 public offerings as liabilities measured at fair value. The fair values of these warrants have been determined using the Black-Scholes valuation model. We determine the risk-free interest rate by reference to implied yields available from U.S.
The complaint seeks unspecified damages, interest, fees and costs on behalf of all persons and entities who purchased and/or acquired shares of our common stock between March 31, 2023 to September 22, 2023. We disagree with the allegations and intend to defend the litigation vigorously . Preclinical Developments – SCY 247 We continue progressing development activities for SCY-247.
The complaint seeks unspecified damages, interest, fees and costs on behalf of all persons and entities who purchased and/or acquired shares of our common stock between March 31, 2023 to September 22, 2023. We have filed a motion to dismiss.
Under the terms of the updated GSK License Agreement, as amended by the Binding MOU, we are eligible to receive potential: • regulatory approval milestone payments of up to $49 million (revised from up to $70 million as provided in the GSK License Agreement); • commercial milestone payments of up to $57.5 million based on first commercial sale in invasive candidiasis (U.S./EU) (revised from up to $115 million as provided in the GSK License Agreement); and 48 • and sales milestone payments of up to $179.5 / $169.75 / $145.5 million (depending on the date of GSK’s relaunch of BREXAFEMME in the U.S.) (revised from up to $242.5 million as provided in the GSK License Agreement).
Under the terms of the updated GSK License Agreement, as amended by the Binding MOU, we are eligible to receive potential: • regulatory approval milestone payments of up to $49 million (revised from up to $70 million as provided in the GSK License Agreement); • commercial milestone payments of up to $57.5 million based on first commercial sale in IC (U.S./EU) (revised from up to $115 million as provided in the GSK License Agreement); and • and sales milestone payments of up to $179.5 / $169.75 / $145.5 million (depending on the date of GSK’s relaunch of BREXAFEMME in the U.S.) (revised from up to $242.5 million as provided in the GSK License Agreement). 47 These milestones are based on annual net sales in the GSK Territory, with a total of $64 / $54.25 / $46.5 million to be paid upon achievement of multiple sales thresholds up through $200 million; a total of $45.5 / $45.5 / $39 million to be paid upon achievement of multiple sales thresholds between $300 million and $500 million; and $35 / $35 / $30 million to be paid at each sales threshold of $750 million and $1 billion.
The GSK License Agreement is being amended in connection with the delay in the commercialization of BREXAFEMME (see "Product Recall and Clinical Hold" section) and further clinical development of ibrexafungerp associated with this event.
On December 26, 2023, we and GSK entered into a binding memorandum of understanding (Binding MOU) for amendment to the GSK License Agreement. The GSK License Agreement was amended in connection with the delay in the commercialization of BREXAFEMME (see "Product Recall and Clinical Hold" section) and further clinical development of ibrexafungerp associated with this event.
The assumptions used in the Black-Scholes option-pricing model for the years ended December 31, 2023 and 2022 are set forth below: Employee Stock Options Years Ended December 31, 2023 2022 Weighted average risk-free interest rate 3.98 % 2.45 % Weighted average expected term (in years) 6.04 6.04 Weighted average expected volatility 74.77 % 73.80 % Non-Employee Stock Options Years Ended December 31, 2023 2022 Weighted average risk-free interest rate 3.89 % 3.18 % Weighted average expected term (in years) 5.50 5.63 Weighted average expected volatility 80.12 % 74.20 % Warrant Liabilities We account for the outstanding warrants associated with the March 2018, December 2020, and April 2022 public offerings as liabilities measured at fair value.
The assumptions used in the Black-Scholes option-pricing model for the years ended December 31, 2024 and 2023 are set forth below: Employee Stock Options Years Ended December 31, 2024 2023 Weighted average risk-free interest rate 4.04 % 3.98 % Weighted average expected term (in years) 6.02 6.04 Weighted average expected volatility 80.94 % 74.77 % Non-Employee Stock Options Years Ended December 31, 2024 2023 Weighted average risk-free interest rate 4.26 % 3.89 % Weighted average expected term (in years) 5.50 5.50 Weighted average expected volatility 83.83 % 80.12 % We record the fair value of stock options issued as of the grant date as compensation expense.
Components of Operating Results Revenue Revenue consists of license agreement revenue associated with GSK and Hansoh and product sales of BREXAFEMME. Our product revenue, net comprised of sales of BREXAFEMME that we sold as principal given we control BREXAFEMME product until delivery to our wholesalers at which point control is transferred.
Our product revenue, net comprised of sales of BREXAFEMME that we sold as principal given we control BREXAFEMME product until delivery to our wholesalers at which point control is transferred. Cost of Product Revenue Cost of product revenue consists primarily of inventory impairment expense, distribution, freight expenses, royalties due to Merck, and other manufacturing costs associated with BREXAFEMME.
The increase of $3.7 million, or 13.5%, was primarily driven by an increase of $2.6 million in clinical development expense, an increase of $0.5 million in preclinical expense, an increase of $0.4 million in chemistry, manufacturing, and controls (CMC) expense, and an increase of $0.5 million in salary expense primarily associated with medical affairs. 52 The $2.6 million increase in clinical development expense for the year ended December 31, 2023, was primarily driven by an increase of $1.8 million in expense associated with the costs for the MARIO study, an increase of $1.1 million in expense associated with the closing activities of the FURI, CARES, and SCYNERGIA studies, and an increase of $0.6 million associated with a Phase 1 study of oral ibrexafungerp which was substantially complete in the second quarter of 2023 and is intended to support the potential NDA filing for the treatment of IC, offset in part by a $1.3 million decrease in expense associated with the CANDLE Phase 3 study which was substantially complete in the first quarter of 2022.
The $7.4 million decrease in clinical expense was primarily due to a $4.4 million decrease in expense for the Phase 3 MARIO study as a result of the clinical hold on ibrexafungerp, a $1.6 million decrease in the expense associated with the FURI, CARES, and SCYNERGIA studies which were substantially complete by the second quarter of 2024, a $1.0 million decrease in expense associated with a Phase 1 study of oral ibrexafungerp that was substantially completed in the prior period and is intended to support the potential NDA filing for the treatment of IC, and a $1.0 million decrease in expense associated with the Phase 1 lactation study, offset in part by a $0.8 increase in expense recognized in the year ended December 31, 2024 for the Phase 1 study for SCY-247 which was initiated in the fourth quarter of 2024.
The $0.5 million increase in preclinical expense was primarily associated with the expense recognized for certain preclinical studies associated with SCY-247. The $0.4 million increase in CMC expense for the year ended December 31, 2023, was primarily driven by increased costs associated with drug supply for SCY-247. Selling, General and Administrative .
The $0.7 million increase in preclinical expense was primarily associated with certain preclinical costs associated with the continued development of SCY-247. Selling, General and Administrative . For the year ended December 31, 2024, selling, general and administrative expenses decreased to $14.5 million from $20.9 million for the year ended December 31, 2023.
For the years ended December 31, 2023 and 2022, our income tax (expense) benefit recognized consists primarily of an income tax expense for state taxes and an income tax benefit associated with the sale of our NOLs and research and development credits, respectively.
Income Tax Expense For the years ended December 31, 2024 and 2023, our income tax expense recognized consists primarily of income tax expense for U.S. federal and state income taxes.
The $2.0 million increase in professional fees is primarily due to a $3.1 million expense incurred during the current period for business development associated with the GSK License Agreement. Amortization of Debt Issuance Costs and Discount. For the years ended December 31, 2023 and 2022, we recognized $3.0 million and $1.6 million in amortization of debt issuance costs and discount.
The $5.8 million decrease in professional fees was primarily due to a $3.1 million expense incurred during the prior period for business development associated with the GSK License Agreement, a $0.8 million nonrecurring legal expense incurred in the prior period, a $0.7 million decrease in legal costs associated with the GSK License Agreement, and a $0.5 million expense recognized in the prior period to write off a deferred asset for certain commitment fees associated with the Loan Agreement. 51 Amortization of Debt Issuance Costs and Discount.
For the year ended December 31, 2023, selling, general and administrative expenses decreased to $20.9 million from $63.0 million for the year ended December 31, 2022.
For the year ended December 31, 2024, research and development expenses decreased to $26.4 million from $30.9 million for the year ended December 31, 2023.
The decrease of $42.0 million, or 66.8%, was primarily driven by a decrease of $33.5 million in commercial expense due to the costs incurred in the prior comparable period associated with the active promotion of BREXAFEMME which ceased in the fourth quarter of 2022, a decrease of $5.2 million in salary related primarily driven by the workforce reduction in the fourth quarter of 2022 concentrated in the commercial and medical affairs functions, a $2.8 million decrease associated with other medical affairs related expense, a $1.6 million decrease in severance expense primarily driven by the workforce reduction in the fourth quarter of 2022, a $1.5 million decrease in information technology expense, offset in part by an increase in professional fees of $2.0 million.
The decrease of $6.5 million, or 30.9%, was primarily driven by a decrease of $5.8 million in professional fees and a decrease of $0.9 million in commercial expense due to the costs incurred in the prior period associated with BREXAFEMME, offset by a net increase of $0.2 million in other selling, general, and administrative expense.
Results of Operations for the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022, and period-to-period percentage change (dollars in thousands): Years Ended December 31, 2023 2022 Period-to-Period Change Revenue: Product revenue, net $ 1,044 $ 4,988 (3,944 ) (79.1 )% License agreement revenue 139,097 103 138,994 134,945.6 % Total revenue 140,141 5,091 135,050 2,652.7 % Operating expenses: Cost of product revenue 15,624 628 14,996 2,387.9 % Research and development 30,928 27,259 3,669 13.5 % Selling, general and administrative 20,920 62,961 (42,041 ) (66.8 )% Total operating expenses 67,472 90,848 (23,376 ) (25.7 )% Income (loss) from operations 72,669 (85,757 ) 158,426 (184.7 )% Other expense (income): Amortization of debt issuance costs and discount 2,994 1,589 1,405 88.4 % Interest income (3,954 ) (1,415 ) (2,539 ) 179.4 % Interest expense 3,130 5,198 (2,068 ) (39.8 )% Other income — (3 ) 3 (100.0 )% Warrant liabilities fair value adjustment 3,166 (22,301 ) 25,467 (114.2 )% Derivative liabilities fair value adjustment 154 (1,316 ) 1,470 (111.7 )% Total other expense (income) 5,490 (18,248 ) 23,738 (130.1 )% Income (loss) before taxes 67,179 (67,509 ) 134,688 (199.5 )% Income tax (expense) benefit (138 ) 4,700 (4,838 ) (102.9 )% Net income (loss) $ 67,041 $ (62,809 ) $ 129,850 (206.7 )% Revenue.
Results of Operations for the Years Ended December 31, 2024 and 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023, and period-to-period percentage change (dollars in thousands): 50 Years Ended December 31, 2024 2023 Period-to-Period Change Revenue: Product revenue, net $ — $ 1,044 (1,044 ) (100.0 )% License agreement revenue 3,746 139,097 (135,351 ) (97.3 %) Total revenue 3,746 140,141 (136,395 ) (97.3 %) Operating expenses: Cost of product revenue — 15,624 (15,624 ) (100.0 %) Research and development 26,405 30,928 (4,523 ) (14.6 )% Selling, general and administrative 14,458 20,920 (6,462 ) (30.9 )% Total operating expenses 40,863 67,472 (26,609 ) (39.4 )% (Loss) income from operations (37,117 ) 72,669 (109,786 ) (151.1 )% Other expense (income): Amortization of debt issuance costs and discount 1,726 2,994 (1,268 ) (42.4 )% Interest income (4,291 ) (3,954 ) (337 ) 8.5 % Interest expense 828 3,130 (2,302 ) (73.5 )% Other income (235 ) — (235 ) — Warrant liabilities fair value adjustment (13,812 ) 3,166 (16,978 ) (536.3 )% Derivative liabilities fair value adjustment (196 ) 154 (350 ) (227.3 )% Total other (income) expense (15,980 ) 5,490 (21,470 ) (391.1 )% (Loss) income before taxes (21,137 ) 67,179 (88,316 ) (131.5 )% Income tax (expense) (151 ) (138 ) (13 ) 9.4 % Net (loss) income $ (21,288 ) $ 67,041 $ (88,329 ) (131.8 )% Revenue.
Liquidity and Capital Resources Sources of Liquidity As of December 31, 2023, we had cash, cash equivalents, and investments of approximately $98.0 million, compared to cash, cash equivalents, and investments of $73.5 million as of December 31, 2022.
For the year ended December 31, 2024, we recognized $0.2 million in income tax expense primarily for U.S. federal income tax. Liquidity and Capital Resources Sources of Liquidity As of December 31, 2024, we had cash, cash equivalents, and investments of approximately $75.1 million, compared to cash, cash equivalents, and investments of $98.0 million as of December 31, 2023.
We estimate expected volatility using the historical volatility of our common stock given we have sufficient history to support the expected terms of the warrants and implied volatility. See Note 2 to our consolidated financial statements on this Annual Report for further details.
Treasury securities and utilize the remaining term of the warrant as the expected term. We estimate expected volatility using the historical volatility of our common stock given we have sufficient history to support the expected terms of the warrants and implied volatility.
In September 2023, after we have announced our voluntary clinical hold, the FDA concurred with our voluntary hold and placed a clinical hold. We are working with the FDA to discuss paths for resolution of this issue. The clinical hold and recall affected two ongoing clinical studies: the Phase 3 MARIO study and a Phase 1 lactation study.
We are working with the FDA to discuss paths for resolution of this issue. The clinical hold and recall affected the Phase 3 MARIO study. Our clinical stage compound, SCY-247, was not affected by these developments.
Financing Activities Net cash used in financing activities of $36.7 million for the year ended December 31, 2023, consisted primarily of the full repayment of the Loan Agreement with Hercules and SVBB in May 2023. 54 Net cash provided by financing activities of $48.6 million for the year ended December 31, 2022, consisted primarily of the gross proceeds of $45.0 million from the April 2022 public offering, the $2.2 million in gross proceeds from common stock issued under our ATM and common stock purchase agreement, and the $5.0 million received from the Loan Agreement, offset in part by payments of offering costs and underwriting discounts and commissions of $3.6 million.
Net cash used in financing activities of $36.7 million for the year ended December 31, 2023, consisted primarily of the full repayment of the Loan Agreement with Hercules and SVBB in May 2023.
The net favorable change in operating assets and liabilities consisted primarily of an increase in accrued expenses, other liabilities and other of $2.3 million due to the increase of $2.4 million in other liabilities associated with the long term deferred fees due to Amplity, a decrease in prepaid expenses, other assets deferred costs and other of $1.6 million primarily due to a $1.1 million decrease in prepaid inventory, offset in part due to a decrease in accounts payable of $1.5 million and an increase in accounts receivable of $1.2 million.
The net unfavorable change of $7.7 million in operating liabilities is primarily due to the $2.7 million decrease in accounts payable and a $3.7 million decrease in accrued expenses primarily due to the $2.1 million decrease in accrued research and development expenses and a $1.4 million decrease in accrued product recall.
We anticipate initiating a Phase 1 study for SCY-247 in the second half of 2024. 50 Liquidity We have operated as a public entity since we completed our initial public offering in May 2014, which we refer to as our IPO.
These cases were consolidated and are currently stayed. We disagree with the allegations and we intend to defend these litigations vigorously. Liquidity We have operated as a public entity since we completed our initial public offering in May 2014, which we refer to as our IPO.
Removed
This milestone payment followed a development goal for the Phase 3 MARIO study for ibrexafungerp in IC as we continued executing ongoing ibrexafungerp trials. On December 26, 2023, we and GSK entered into a binding memorandum of understanding (Binding MOU) for amendment to the GSK License Agreement.
Added
We are in the process of destroying all of the patient-level and clinical drug product returned to date with the assistance of an experienced vendor and we are substantially complete with the product recall. In September 2023, after we announced our voluntary clinical hold, the FDA concurred with our voluntary hold and placed a clinical hold.
Removed
These milestones are based on annual net sales in the GSK Territory, with a total of $64 / $54.25 / $46.5 million to be paid upon achievement of multiple sales thresholds up through $200 million; a total of $45.5 / $45.5 / $39 million to be paid upon achievement of multiple sales thresholds between $300 million and $500 million; and $35 / $35 / $30 million to be paid at each sales threshold of $750 million and $1 billion.
Added
We are working on the resolution of this issue and we anticipate the restart of the Phase 3 MARIO study, after the FDA's lifting of the clinical hold, in the second quarter of 2025. SCY-247 We continue to progress the development activities for SCY-247.
Removed
The clinical hold does not impact the recently completed FURI, CARES, VANQUISH and SCYNERGIA clinical studies, for which dosing is complete. The NATURE study, which is an observational study in patients with IC treated with standard of care antifungals (not ibrexafungerp), is also not affected by this hold.
Added
The Phase 1 study is a randomized, double-blind, placebo-controlled study of single and multiple ascending doses of oral SCY-247 in approximately 100 healthy subjects. The primary endpoint is safety and tolerability, and the secondary endpoint is pharmacokinetics. We expect to release the single ascending and multiple ascending dose data in the third quarter of 2025.
Removed
The FDA determined that the compassionate use program for ibrexafungerp, which provides ibrexafungerp to patients with limited or no other treatment options, can continue provided the patient’s treating physician concludes a favorable benefit-risk assessment and the patient is made aware of and consents to the risk.
Added
Loan Agreement We, Hercules Capital, Inc. (Hercules Capital) and Silicon Valley Bridge Bank, N.A.
Removed
This applies to patients currently in the program as well as for new patients, pending confirmation of available supply. Our preclinical stage compound, SCY-247, is not affected by these developments.
Added
On May 1, 2024, and again on June 4, 2024, purported shareholder derivative complaints were filed in the United States District Court, District of New Jersey. The complaints name our directors and certain of our officers and assert state and federal claims based on the same alleged misstatements as the securities class action complaint.
Removed
Ibrexafungerp Update Enrollment is on clinical hold in our prospective, randomized, double-blind, global Phase 3 study to evaluate the efficacy, safety and tolerability of oral ibrexafungerp as a step-down therapy for patients with IC including candidemia following IV echinocandin therapy in the hospital compared to currently available therapies (the MARIO study).
Added
We may offer shares of our common stock pursuant to our effective shelf registration statements or our “at-the-market” offering program pursuant to the Sales Agreement. Components of Operating Results Revenue Revenue consists of license agreement revenue associated with GSK and product sales of BREXAFEMME.
Removed
Eligible patients with IC will receive treatment with IV echinocandin and will then be switched to either oral ibrexafungerp or a standard of care option, either oral fluconazole or best available therapy (BAT) for subjects with infections caused by fluconazole non-susceptible strains, once step-down criteria are met.
Added
We recognize research and development expenses as they are incurred.
Removed
If enrollment resumes, approximately 220 patients will be enrolled and randomized in the study. The primary objective of the study is to determine whether treatment of IC with IV echinocandins followed by oral ibrexafungerp is as effective as treatment with IV echinocandins followed by oral fluconazole (or BAT), the current standard of care.

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