Item 1.01. Entry into a Material Definitive Agreement
On September 28, 2023, Synlogic, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Chardan Capital Markets, LLC, as underwriter (the “Underwriter”), pursuant to which the Company agreed to issue and sell 3,921,928 shares of its common stock (the “Shares”), pre-funded warrants to purchase up to 3,472,435 shares of its common stock (the “Pre-Funded Warrants”) and accompanying common stock warrants to purchase up to 7,394,363 shares of its common stock (the “Purchase Warrants”) to the Underwriter (the “Offering”). Each full Share will be sold together with one Purchase Warrant at the public offering price of $2.84 per share, less underwriting discounts and commissions. Each full Pre-Funded Warrant will be sold together with one Purchase Warrant at a public offering price of $2.839 per Pre-Funded Warrant, which represents the per Share and Purchase Warrant public offering price less a $0.001 per share exercise price for each such Pre-Funded Warrant. Each full Purchase Warrant is exercisable for one share of the Company’s common stock at an exercise price of $3.408 per whole share of common stock and expires five years from the date of issuance. The institutional investors that participated in the offering included New Enterprise Associates, Inc. (NEA), an additional major institutional investor, a member of the Synlogic Board of Directors, as well as other new and existing investors.
The Warrants are exercisable at any time after the date of issuance. A holder of Warrants may not exercise the Warrant if the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder, 9.99%) of the number of shares of common stock outstanding immediately after giving effect to such exercise. A holder of Warrants may increase or decrease this percentage by providing at least 61 days’ prior notice to the Company.
The Underwriting Agreement contains customary representations, warranties and covenants, conditions to closing, termination provisions and indemnification obligations, including for liabilities under the Securities Act of 1933, as amended.
The Offering is being made pursuant to the registration statement on Form S-1 (File No. 333-274421) that was initially filed by the Company with the Securities and Exchange Commission (“SEC”) on September 8, 2022, amended on September 27, 2023 and September 28, 2023, and declared effective by the SEC on September 28, 2022 and a registration statement on Form S-1 (File No. 333-274759).
The Company estimates that gross proceeds from the Offering will be $21.0 million, before deducting underwriting discounts and commissions and estimated Offering expenses. The Company intends to use the proceeds from the Offering (i) for the continued clinical development of labafenogene marselecobac (SYNB1934) for PKU, including the ongoing Phase 3 study, (ii) to prepare its manufacturing for a potential BLA filing should the Phase 3 study be successful, (iii) to further advance clinical development of SYNB1353 its clinical candidate for HCU, and (iv) for general corporate purposes. The Company anticipates existing cash and cash equivalents and the proceeds from this offering will be sufficient to fund our planned operations into the first half of 2025. The Company expects top-line data readout for the Synpheny-3 pivotal study of labafenogene marselecobac (SYNB1934) in PKU in the first half of 2025.
The Company expects the Offering to close on October 3, 2023, subject to the satisfaction of customary closing conditions.
The foregoing summaries of the form of Underwriting Agreement, form of Pre-Funded Warrants and form of Purchase Warrants do not purport to be complete and are subject to, and qualified in their entirety by, such documents attached as Exhibits 1.1, 4.1 and 4.2, respectively, to this Current Report on Form 8-K, which are incorporated herein by reference.
Item 8.01 Other Information.
On September 29, 2023, the Company issued a press release announcing the pricing of the Offering, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K, and is incorporated by reference into this Item 8.01.
