- Two struggling cancer drug developers, Syros Pharmaceuticals and Tyme Technologies, announced plans on Tuesday to merge and raise money from private investors in the latest example of the sector-wide downturn’s impact on publicly traded biotechs.
- Under the deal, Syros will acquire Tyme along with its drug pipeline and about $60 million in net cash. A group of investors, including Syros co-founder Flagship Pioneering, are acquiring another $130 million in stock at $0.94 per share.
- The combined company will be run by Syros’ management team and focus on the biotech’s late-stage clinical programs, which include drug prospects for certain blood cancers and solid tumors. The biotech will look for partnerships for its earlier research efforts as well.
The difficult financial climate is leaving each of them with tough decisions to make. Startups may need to stay private for longer than in previous years and raise cash at lower valuations, for instance. Companies that are already public are reorganizing, shedding research programs or reducing their workforces. A recent report from the trade group BIO found that 54 publicly traded biotech companies have announced layoffs this year.
Syros is among those that have been facing a cash crunch. The company had about $113 million in cash at the end of the first quarter, enough to last until the second quarter of next year. In May, Syros changed up its research plans and delayed the start of a Phase 3 trial, citing the tough market conditions. Shares once worth over $23 apiece in 2017 now trade at less than $1, near all-time lows.
Tyme, too, has been looking for ways to stay afloat. In January, the biotech stopped a trial in pancreatic cancer early after disappointing results. Two months later, Tyme announced plans to seek strategic alternatives.
The merger and cash infusion, then, will provide a lifeline. Syros will have a cash balance of $240 million, enough to last into 2025 and start the Phase 3 trial, in a form of leukemia, it couldn’t previously finance. That study should start in the second half of 2023, and Syros intends to report results from another Phase 3 trial, in myelodysplastic syndrome, either late next year or in early 2024.
The deals will “meaningfully strengthen the forecasted cash position and enable us [Syros] to advance our programs to deliver value in both near and long term for all our stakeholders,” chief financial officer Jason Haas said on a conference call.