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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on June 20, 2016

Registration No. 333-211818


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Amendment No. 1 to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



SYROS PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  2834
(Primary Standard Industrial
Classification Code Number)
  45-3772460
(I.R.S. Employer
Identification No.)

620 Memorial Drive, Suite 300
Cambridge, Massachusetts 02139
(617) 744-1340

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)



Nancy Simonian, M.D.
President and Chief Executive Officer
Syros Pharmaceuticals, Inc.
620 Memorial Drive, Suite 300
Cambridge, Massachusetts 02139
(617) 744-1340

(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

Steven D. Singer
Cynthia T. Mazareas
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Telephone: (617) 526-6000
Fax: (617) 526-5000

 

Divakar Gupta
Nicole C. Brookshire
Richard C. Segal
Cooley LLP
1114 Avenue of the Americas
New York, New York 10036
Telephone: (212) 479-6000
Fax: (212) 479-6275



Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement is declared effective.

          If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

          If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

CALCULATION OF REGISTRATION FEE

       
 
Title of Class of Securities
Being Registered

  Proposed Maximum
Aggregate
Offering Price(1)(2)

  Amount of
Registration Fee(3)

 

Common Stock, $0.001 par value per share

  $73,600,000   $7,412

 

(1)
In accordance with Rule 457(o) under the Securities Act of 1933, as amended, the number of shares being registered and the proposed maximum offering price per share are not included in this table.

(2)
Estimated solely for purposes of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. Includes the offering price of shares that the underwriters have the option to purchase to cover overallotments, if any.

(3)
The Registrant previously paid $6,949 of this amount in connection with the initial filing of this Registration Statement.

          The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

PROSPECTUS (Subject to completion) Dated June 20, 2016



4,000,000 Shares

LOGO

Common Stock

        This is the initial public offering of our common stock. We are offering 4,000,000 shares of our common stock. We have applied to list our common stock on The NASDAQ Global Market under the symbol "SYRS." We expect that the initial public offering price for our common stock will be between $14.00 and $16.00 per share.

        We are an "emerging growth company" under applicable Securities and Exchange Commission rules and will be eligible for reduced public company disclosure requirements for this prospectus and future filings. See "Summary—Implications of Being an Emerging Growth Company."

        Our business and investment in our common stock involve significant risks. These risks are described in the section titled "Risk Factors" beginning on page 13 of this prospectus.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.



 
  Per Share   Total  

Initial public offering price

  $            $           

Underwriting discounts and commissions(1)

  $            $           

Proceeds, before expenses, to Syros Pharmaceuticals, Inc. 

  $            $           

(1)
We refer you to the section entitled "Underwriting" beginning on page 184 for additional information regarding total underwriting compensation.

        Certain of our existing principal stockholders have indicated an interest in purchasing an aggregate of approximately $35.0 million in shares of our common stock in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell more, less or no shares to any of these potential purchasers and any of these potential purchasers could determine to purchase more, less or no shares in this offering.

        The underwriters may also purchase up to an additional 600,000 shares from us at the initial public offering price, less the underwriting discounts and commissions, within 30 days from the date of this prospectus to cover overallotments.

        The underwriters expect to deliver the shares against payment in New York, New York on or about July     , 2016.



Cowen and Company   Piper Jaffray

JMP Securities
Wedbush PacGrow

   

June     , 2016


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TABLE OF CONTENTS

 
  Page  

Summary

    1  

Risk Factors

   
13
 

Special Note Regarding Forward-Looking Statements and Industry Data

   
62
 

Use of Proceeds

   
64
 

Dividend Policy

   
65
 

Capitalization

   
66
 

Dilution

   
68
 

Selected Consolidated Financial Data

   
71
 

Management's Discussion and Analysis of Financial Condition and Results of Operations

   
73
 

Business

   
92
 

Management

   
143
 

Executive Compensation

   
151
 

Transactions with Related Persons

   
164
 

Principal Stockholders

   
168
 

Description of Capital Stock

   
173
 

Shares Eligible for Future Sale

   
177
 

Material U.S. Federal Income and Estate Tax Considerations for Non-U.S. Holders of Common Stock

   
179
 

Underwriting

   
183
 

Legal Matters

   
190
 

Experts

   
190
 

Where You Can Find More Information

   
190
 

Index to Consolidated Financial Statements

   
F-1
 



        You should rely only on the information contained in this prospectus or in any free writing prospectus prepared by us or on our behalf. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdictions where the offer and sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since such date. Information contained on our website is not a part of this prospectus. Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about, and to observe any restrictions relating to, this offering and the distribution of this prospectus outside of the United States.

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SUMMARY

        This summary highlights, and is qualified in its entirety by, the more detailed information and consolidated financial statements included elsewhere in this prospectus. This summary does not contain all of the information that may be important to you. You should read and carefully consider the entire prospectus, especially our consolidated financial statements and the related notes thereto included elsewhere in this prospectus and the "Risk Factors" section of this prospectus, before deciding to invest in our common stock.

Overview

        We are a biopharmaceutical company pioneering an understanding of the region of the genome controlling the activation and repression of genes. Our goal is to advance a new wave of medicines to control the expression of disease-driving genes. We have built a proprietary gene control platform designed to systematically and efficiently analyze this unexploited region of DNA in human disease tissue to identify and drug novel targets linked to genomically defined patient populations. Because gene expression is fundamental to the function of all cells, we believe that our gene control platform has broad potential to create medicines that achieve profound and durable benefit across therapeutic areas and a range of diseases. By focusing on genomically defined subsets of patients, we believe we can conduct efficient clinical trials with a higher likelihood of success. We are currently focused on developing treatments for cancer and immune-mediated diseases and are building a pipeline of gene control medicines. We plan to begin a Phase 2 clinical trial for our lead product candidate, SY-1425 (tamibarotene), in mid-2016. This trial will enroll genomically defined subsets of patients with relapsed or refractory acute myelogenous leukemia, or AML, and relapsed high-risk myelodysplastic syndrome, or MDS. We plan to initiate a Phase 1/2 clinical trial for our development candidate SY-1365, initially for the treatment of acute leukemia, in the first half of 2017. Both of these programs may have potential in additional indications. Using our platform, we are also generating a pipeline of novel preclinical drug candidates for genomically defined subsets of currently underserved patients. Our goal is to build a fully integrated biopharmaceutical company based on our leadership position in gene control.

Our Focus—Gene Control Medicines

        There are approximately 200 different cell types in the human body. Despite having identical genomes, each of these cell types has a different function. For example, a skin cell functions differently from a muscle cell despite sharing the exact same DNA. What determines a cell's type and function is the specific set of genes that is expressed, or turned "on" or "off," in that particular cell. This coordinated activation and repression of genes, known as the cell's gene expression program, is controlled by non-coding regions of the genome. Alterations in these non-coding regions change a cell's gene expression program, altering its normal function and leading to disease. Because this biology is fundamental to the function of all cells, it applies across diseases, whether the cause is genetic, environmental, bacterial, viral or multi-factorial.

        Although researchers have long believed that alterations in non-coding regions of DNA, which account for 98% of the genome, play a key role in driving disease, the scientific community has lacked the tools to study these regions of the genome, rendering them poorly understood. As a result, the discovery and development of targeted therapies to date has focused almost exclusively on abnormal proteins resulting from genetic alterations found in regions of DNA that encode for proteins, which represent less than 2% of the entire genome.

        While targeted therapies, in which the right drug is matched to the right patient, have dramatically improved the ability to treat certain cancers and other serious diseases, the identification of new drug targets by sequencing coding regions of DNA has been largely exhausted. Moreover, in cancer,

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inhibiting abnormal proteins resulting from single genetic alterations can often lead to drug resistance and limited durable clinical benefit. Furthermore, many serious diseases continue to go unaddressed due to the limitations of current drug discovery approaches. Taken together, these factors underscore the need for fundamentally new approaches to drug discovery and development.

        Based on the work of our scientific founders, we believe we have developed the first proprietary platform designed to systematically and efficiently analyze non-coding regions of the genome in healthy and diseased cells taken from patient tissues to identify alterations in gene expression programs that represent optimal points of therapeutic intervention and develop drugs to control the expression of disease-driving genes. By doing so, we believe our gene control platform will allow us to (i) identify a wide array of potential new drug targets across a range of diseases, (ii) provide a new lens for diagnosing and segmenting patients, including those with complex, multi-factorial diseases that have eluded segmentation with other genomic-based approaches, and (iii) advance a new wave of medicines that have the potential to influence multiple drivers of disease through a single target, making them less susceptible to drug resistance and providing patients with a more profound and durable benefit than many of today's targeted therapies.

        In contrast to therapies that target a single abnormal protein, gene control medicines target alterations in the cell's underlying gene expression program, modulating the coordinated expression of the crucial set of genes that contribute to disease. The relatively few gene control medicines available today are among the most important targeted therapies and are widely used for their approved indications. These drugs, including estrogen receptor inhibitors for breast cancer, androgen receptor inhibitors for prostate cancer and glucocorticoids for inflammatory diseases, illustrate the significant therapeutic potential of gene control medicines. However, the poor understanding of non-coding regions of DNA has historically prevented a systematic approach to identifying these critical points of therapeutic intervention, making gene control a largely untapped field for targeted drug discovery and development.

Our Gene Control Platform

        We believe that we have created a systematic and efficient approach to analyzing non-coding regions of the genome in human disease tissue to identify and drug novel targets linked to genomically defined patient populations. Our proprietary gene control platform consists of two fundamental pillars: identifying novel gene control targets linked to genomically defined patient populations, and drugging gene control targets.

Identifying Novel Gene Control Targets

        Starting from human tissue samples, we compare diseased cells to normal cells and analyze the cells of different patient subsets within a disease to systematically and efficiently identify alterations in gene expression programs that represent optimal points of therapeutic intervention and associated biomarkers for patient selection. We home in on a cell's gene expression program by using genomic tools to locate super-enhancers, which are highly specialized regions of non-coding DNA that are central to orchestrating gene expression programs and drive the increased expression of the genes crucial to the function of a given cell. Analysis of super-enhancers and their associated genes provides critical insights into changes in gene expression programs that contribute to disease. We have invested significant resources in our tissue processing, genomics and computational biology capabilities to industrialize the analysis of gene expression programs to reveal the genes crucial to cell type and function in diseased cells. We have amassed one of the largest known datasets of gene expression programs across a wide range of human diseases and cell types and have validated multiple novel disease targets and biomarkers. To date, we have analyzed or are in the process of analyzing gene expression programs in AML, breast cancer, ovarian cancer, hepatocellular carcinoma, pancreatic cancer, renal cell carcinoma, non-disease and lupus immune cells, polycystic kidney disease, spinal

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muscular atrophy and Alzheimer's disease. Through those efforts, we have identified approximately 50 novel drug targets in oncology, immuno-oncology and autoimmune diseases and validated seven of those targets using biological methods to knock out the target gene or chemical methods to modulate the target's activity. The discovery and validation of these targets has led to the identification of our product candidate SY-1425 as well as additional novel preclinical drug candidates in earlier stages of research and development. We plan to analyze gene expression programs in several other cancers, including colorectal, lung and melanoma, as well as several other diseases and cell types including additional inflammatory disorders and immune cells from tumors. Our long-term goal is to analyze gene expression programs in serious diseases where we believe currently underserved patients can benefit from gene control medicines.

Drugging Gene Control Targets

        Our platform is designed to identify drug targets across a broad range of therapeutic areas and therapeutic modalities. We focus our internal drug discovery efforts on small molecule chemistry to target specialized proteins responsible for gene expression, including transcription factors, transcriptional kinases and other transcriptional and regulatory proteins, for several reasons. First, because these specialized proteins play a central role in implementing gene expression programs, they are among the most promising and high-potential gene control targets for therapeutic intervention. Transcription factors bind directly to DNA sequences to control the transcription of genetic information from DNA. Transcription factors perform this function with other transcriptional and regulatory proteins, including transcriptional kinases. Second, transcriptional and regulatory proteins have historically been difficult to drug and represent an opportunity to bring novel and differentiated therapies to patients. Third, we have built a differentiated combination of expertise, tools and capabilities that we believe will give us cutting-edge insights into drugging transcriptional and regulatory proteins. Through significant investments in developing our capabilities in biochemistry, structural biology and medicinal chemistry and in developing a sophisticated suite of proprietary assays, which are internally developed tests that we use to measure the biochemical, biophysical, cellular and genomic activity of known and novel compounds against gene control targets, we believe we will be able to overcome challenges that have prevented others from systematically and successfully developing gene control medicines. We are building a pipeline of product candidates to modulate gene expression programs through two distinct approaches: internal efforts to discover novel drugs against our validated gene control targets, and externally focused efforts to link existing drugs to novel genomically defined patient populations identified through our platform. These externally focused efforts could enable us to identify drugs that we may seek to in-license or acquire or use as starting points for our own drug discovery and development programs to accelerate our development path.

Our Clinical Programs

        We are leveraging our platform to develop a pipeline of gene control product candidates. By focusing on genomically defined subsets of patients who are most likely to respond, we believe we will conduct efficient clinical trials and rapidly achieve clinical proof-of-concept. With positive clinical results in areas of unmet medical need, we intend to apply for Breakthrough Therapy designation and

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Fast Track designation which, if granted, could accelerate our clinical development path. Our most advanced drug programs are summarized in the table below:

Program   Initial
Indications
  Planned
Milestones
  Potential
Indications
  Syros
Commercial
Rights
SY-1425 (RARa agonist)   AML and MDS  

Initiate Phase 2 clinical trial in
mid-2016

Expect initial data readout in mid-2017

 

Breast cancer

Acute promyelocytic leukemia (APL)

  North America, Europe
                    
SY-1365 (CDK7 inhibitor)   Acute leukemia  

Initiate Phase 1/2 clinical trial in
1H 2017

Expect initial data readout in
1H 2018

 

Small cell lung cancer

Triple negative breast cancer

MYCN-amplified neuroblastoma

  Worldwide

SY-1425

        SY-1425 (tamibarotene) is an oral, potent and selective agonist, or activator, of the transcription factor RARa. We leveraged our platform to analyze gene expression programs in primary AML and breast cancer patient tumor cells and discovered that RARA, the gene that codes for RARa, was associated with a super-enhancer in some patients' tumors but not in others. We also identified a proprietary biomarker, which we refer to as the RARA biomarker, related to the super-enhancer associated with RARA. The super-enhancer associated with RARA is believed to lock cells in an immature, proliferative and undifferentiated state. Treatment with SY-1425 in cancer cells with the super-enhancer associated with RARA appears to promote differentiation of these cells.

        We are initially advancing SY-1425 into novel genomically defined patient populations with AML and MDS. We chose these initial indications due to high levels of observed efficacy of SY-1425 in our preclinical models, the significant unmet medical need of these patients and the potential for accelerated development. We intend to pursue additional indications, including breast cancer, in the near future. We plan to use our RARA biomarker for patient selection.

        We have the exclusive North American and European commercial rights to the existing preclinical data for SY-1425 in all human cancers under our license agreement with TMRC Co., Ltd. SY-1425 is approved as tamibarotene in Japan for the treatment of APL, a form of AML, for which the drug has a well-characterized efficacy and safety profile. We intend to explore the development of SY-1425 for the treatment of APL in North America and Europe.

Our Preclinical Data

        We have conducted multiple preclinical studies of SY-1425 in AML and breast cancer. In a mouse model implanted with human AML cells with the RARA biomarker, known as a RARA biomarker-positive patient-derived xenograft, or PDX, model, SY-1425 was observed to have significant anti-tumor activity and prolonged survival in treated animals relative to untreated animals. In contrast, in a PDX model with human AML cells without the RARA biomarker, SY-1425 was not observed to have an effect on tumor control or survival. These data demonstrate a strong link between the RARA biomarker

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and response to treatment with SY-1425, and provide meaningful evidence that patients with the RARA biomarker will be promising candidates for treatment with SY-1425.

SY-1425 Clinical Development Plan

        We plan to initiate a Phase 2 clinical trial in mid-2016 that will enroll genomically defined subsets of patients with relapsed or refractory AML or relapsed high-risk MDS. In May 2016, the U.S. Food and Drug Administration, or FDA, accepted our Investigational New Drug, or IND, application for this trial. We plan to select patients for this trial using the RARA biomarker. We believe patients whose tumors have this biomarker will be more likely to experience a profound and durable clinical benefit from treatment with SY-1425. We expect to have initial data from this study in mid-2017, or 12 months after the first patient is enrolled. We also plan to evaluate SY-1425 in newly diagnosed AML patients 60 years of age or older who are not suitable candidates for standard chemotherapy and low-risk transfusion-dependent MDS patients. In order to prospectively select patients in these populations using our RARA biomarker, we will seek clearance for the use of the biomarker test from the FDA through the Investigational Device Exemption process.

SY-1365

        SY-1365 is a highly potent and selective small molecule inhibitor of the transcriptional kinase known as cyclin-dependent kinase 7, or CDK7. We are investigating SY-1365 for the treatment of cancers that are dependent on a high and constant expression of certain transcription factors for their growth and survival, a phenomenon known as transcriptional addiction. CDK7 is a transcriptional kinase that is associated with super-enhancers controlling the expression of the transcription factors driving these cancers' growth and survival.

        Inhibiting CDK7 preferentially lowers the expression of disease-driving genes controlled by super-enhancers, including oncogenic transcription factors MYB and MYC, and results in the selective killing of cancer cells over non-cancerous cells. Preclinical studies of our CDK7 inhibitors demonstrated that transcriptionally addicted cancers are particularly sensitive to selective inhibition of CDK7, including AML, T-ALL, a form of acute lymphoblastic leukemia, or ALL, MYCN-amplified neuroblastoma, small cell lung cancer and triple negative breast cancer.

Our Preclinical Data

        SY-1365 has shown promising efficacy and safety in our in vivo and in vitro preclinical studies. In terms of efficacy, SY-1365 was observed to have complete responses and survival benefit in cell-derived xenograft, or CDX, and PDX models of AML. In one such study, mice treated with SY-1365 experienced initial clearance of the disease and maintained residual low levels of human leukemia cells. In fact, 80% of treated mice remained alive and levels of human leukemia cells in the blood remained at less than 5% beyond the dosing period. By contrast, in untreated mice, the cancer progressed, reaching levels of human leukemia cells of greater than 50% in blood and greater than 90% in tissues.

        In terms of selectivity and safety, in cell lines, SY-1365 was observed to preferentially kill cancer cells by inducing robust, sustained and dose-dependent apoptosis of AML cells with minimal impact on non-cancerous cells. In addition, SY-1365 was observed to have markedly fewer negative effects on healthy cells than a pan-CDK inhibitor. Pan-CDK inhibitors have been observed to result in blood cell death, or myelosuppression.

SY-1365 Clinical Development Plan

        We have begun IND-enabling activities for SY-1365, and our goal is to initiate a Phase 1/2 clinical trial in patients with acute leukemia, including AML and ALL, in the first half of 2017. We expect to have initial data from this study in the first half of 2018. We believe there is a well-defined path to

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clinical proof-of-concept in acute leukemia. We then plan to expand into a broader set of cancers using our platform to identify patient subsets with transcriptionally addicted cancers, such as small cell lung cancer, triple negative breast cancer and MYCN-amplified neuroblastoma. We continue to explore the potential of CDK7 inhibition in additional cancers.

Other Programs

        We are using our platform to analyze gene expression programs across additional cancers, inflammatory diseases and other diseases to identify optimal points of therapeutic intervention in specific subsets of patients and to create a pipeline of novel preclinical drug candidates targeting transcriptional and regulatory proteins, as well as to link existing drugs to novel genomically defined patient populations.

Our Team

        We were founded by leaders in the field of gene control from the Whitehead Institute for Biomedical Research at the Massachusetts Institute of Technology, or Whitehead, and the Dana-Farber Cancer Institute, or Dana-Farber, an affiliate of Harvard Medical School. Our management team consists of drug discovery, development and commercialization experts with experience in translating scientific discoveries into innovative treatments, including Avonex and Tysabri for multiple sclerosis, Velcade and Ninlaro for hematological malignancies, Ibrance for breast cancer, Entyvio for ulcerative colitis and Kalydeco and Orkambi for cystic fibrosis.

Our Financial Position

        As of March 31, 2016, we had cash and cash equivalents of $62.1 million. We believe our current cash position is sufficient to enable us to reach an initial clinical data readout for SY-1425 in AML and MDS and to fund our operating expenses and capital expenditure requirements at least through mid-2017. To date, our investors include Flagship Ventures, ARCH Venture Partners, Fidelity Management and Research Company, Deerfield Management Company, Polaris Partners, WuXi PharmaTech, Redmile Group, Aisling Capital, Alexandria Venture Investments and Casdin Capital.

Our Strategy

        Our mission is to transform the lives of patients through the creation of novel gene control medicines by building a fully integrated, leading biopharmaceutical company. To achieve this mission, we are executing on the following strategy:

    Rapidly and efficiently advance our lead programs through clinical development.  We intend to enrich our trials with patients most likely to respond, which we believe will enable us to rapidly establish clinical proof-of-concept.

    Develop a robust pipeline of gene control product candidates.  We plan to continue to leverage our gene control platform to systematically and efficiently identify optimal points of therapeutic intervention and associated biomarkers in specific patient populations. We intend to continue to generate a pipeline of gene control product candidates either through our internal drug discovery efforts or by linking existing drugs to novel patient populations.

    Maintain our leadership position in the field of gene control.  Our long-term goal is to analyze gene expression programs in serious diseases where we believe currently underserved patients can benefit from gene control medicines. We intend to use these analyses of gene expression programs to pinpoint crucial genes driving disease and to validate the associated targets for therapeutic intervention.

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    Continue to foster a culture of innovation.  We are committed to pioneering science and leadership in gene control medicines. We will continue to foster an environment that encourages innovation, excellence and productivity and develops our team as leaders in the field of gene control.

    Execute strategic collaborations to maximize value and extend the potential of our gene control platform across multiple disease areas. We intend to engage in strategic collaborations for both our programs and our platform. For our programs, we are focused on partnerships that could expand our geographic reach and allow us to expand into additional indications. For our platform, we are seeking target and drug discovery collaborations that allow us to leverage the potential of our platform in cancers and other serious diseases beyond those that we can address on our own. We believe that our platform provides significant optionality for collaborations around therapeutic modalities and target classes that fall outside of our current focus on small molecule drugs targeting transcriptional and regulatory proteins.

Risks Associated with Our Business

        Our business is subject to a number of risks of which you should be aware before making an investment decision. These risks are discussed more fully in the "Risk Factors" section of this prospectus immediately following this prospectus summary. These risks include the following:

    We have incurred significant losses since inception, expect to incur significant and increasing losses for at least the next several years and may never achieve or maintain profitability.

    We have a limited operating history, no products approved for sale and no history of commercializing pharmaceutical products, which may make it difficult to evaluate the prospects for our future viability.

    We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

    Our approach to the discovery and development of product candidates based on our gene control platform is unproven, and we do not know whether or when we will be able to develop any products of commercial value.

    In the near term, we are dependent on the successful development and commercialization of our lead product candidate, SY-1425, and our development candidate SY-1365.

    Our gene control platform may fail to help us discover and develop additional potential product candidates.

    Clinical drug development involves a lengthy and expensive process and has an uncertain outcome.

    If clinical trials of any product candidates that we develop fail to demonstrate safety and efficacy, we may incur additional costs or experience delays in completing, or be unable to complete, the development and commercialization of these product candidates. A clinical trial of tamibarotene for the treatment of lung cancer conducted by a third party was terminated when data suggested the endpoint of progression-free survival for 18 months would not be reached.

    Adverse events or undesirable side effects caused by product candidates that we develop may be identified during development and could delay or prevent their marketing approval or limit their use. For example, SY-1425 is a retinoid, a class of compounds related to vitamin A that have been observed in certain circumstances to cause birth defects.

    We expect to rely on third parties to conduct clinical trials and certain aspects of our research and preclinical testing, to manufacture preclinical, clinical and commercial supplies of our product candidates and to develop our companion diagnostics.

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    We are dependent on licenses with third parties for important intellectual property related to our business.

    If we are unable to obtain and maintain sufficient patent protection for our product candidates and gene control platform, including through existing and future licenses, or if the scope of the patent protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to commercialize our product candidates successfully may be adversely affected. We do not have composition of matter patent protection with respect to SY-1425.

Our Corporate Information

        We were incorporated under the laws of the State of Delaware on November 9, 2011 under the name LS22, Inc. Our executive offices are located at 620 Memorial Drive, Suite 300, Cambridge, Massachusetts 02139, and our telephone number is (617) 744-1340. Our website address is www.syros.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

        Except as otherwise indicated herein or as the context otherwise requires, references in this prospectus to "Syros," "the company," "we," "us" and "our" refer to Syros Pharmaceuticals, Inc. and our wholly owned subsidiary Syros Securities Corporation.

        The Syros logo, "Syros" and "Syros Pharmaceuticals" are our trademarks. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. The trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners.

Implications of Being an Emerging Growth Company

        As a company with less than $1.0 billion of revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not emerging growth companies. In particular, in this prospectus, we have provided only two years of audited consolidated financial statements and have not included all of the executive compensation related information that would be required if we were not an emerging growth company. The JOBS Act also provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. We have irrevocably elected not to avail ourselves of this exemption and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Because we intend to rely on certain disclosure and other requirements of the JOBS Act, the information contained herein may be different than the information you receive from other public companies in which you hold stock. In addition, it is possible that some investors will find our common stock less attractive as a result of our determination to avail ourselves of exemptions under the JOBS Act, which may result in a less active trading market for our common stock and higher volatility in our stock price. We will remain an emerging growth company until the earlier to occur of: (1) the last day of the fiscal year in which we have total annual gross revenues of $1.0 billion or more; (2) the last day of the fiscal year following the fifth anniversary of the date of the closing of this offering; (3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (4) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.

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THE OFFERING

Common stock offered by us

  4,000,000 shares

Common stock to be outstanding immediately after this offering

 

22,760,161 shares, or 23,360,161 shares if the underwriters exercise their option to purchase additional shares in full

Underwriters' option to purchase additional shares

 

600,000 shares

Use of proceeds

 

We estimate that we will receive net proceeds from this offering of approximately $52.8 million, assuming an initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from this offering together with our existing cash and cash equivalents, to fund clinical activity readouts for our product and development candidates. In particular, we intend to use the net proceeds from this offering to fund a Phase 2 clinical trial of SY-1425 and to complete IND-enabling activities and the Phase 1 portion of our planned Phase 1/2 clinical trial of SY-1365; in each case, clinical trial expenses may include clinical research outsourcing, drug manufacturing, companion diagnostic development and internal personnel costs. We also intend to use a portion of the proceeds for new and ongoing research activities including our preclinical programs and our platform. The balance will be used for working capital and other general corporate purposes. See the "Use of Proceeds" section in this prospectus for a more complete description of the intended use of proceeds from this offering.

Risk factors

 

You should read the "Risk Factors" section of this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.

Proposed NASDAQ Global Market symbol

 

"SYRS"



        The number of shares of our common stock to be outstanding after this offering is based on 2,771,361 shares of our common stock outstanding as of June 15, 2016 and 15,988,800 additional shares of our common stock issuable upon the automatic conversion of all outstanding shares of our preferred stock upon the closing of this offering.

        The number of shares of our common stock to be outstanding after this offering excludes:

    2,043,612 shares of our common stock issuable upon the exercise of stock options outstanding as of June 15, 2016, at a weighted-average exercise price of $4.67 per share;

    98,742 shares of our common stock available for future issuance as of June 15, 2016 under our 2012 equity incentive plan; and

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    3,120,000 and 586,666 additional shares of our common stock that will become available for future issuance under our 2016 stock incentive plan and our 2016 employee stock purchase plan, respectively, each of which will become effective immediately prior to the closing of this offering, as well as any automatic annual increases in the number of shares of common stock reserved for future issuance under these plans.

        Unless otherwise indicated, all information in this prospectus assumes:

    the filing and effectiveness of our restated certificate of incorporation and the adoption of our amended and restated bylaws, which will occur immediately prior to the closing of this offering;

    no exercise of the outstanding stock options described above;

    no exercise by the underwriters of their option to purchase up to 600,000 additional shares of our common stock to cover overallotments, if any; and

    the automatic conversion of all outstanding shares of our preferred stock into an aggregate of 15,988,800 shares of our common stock upon the closing of this offering.

        In addition, all information in this prospectus gives effect to a one-for-3.75 reverse stock split of our common stock and a corresponding adjustment in the ratio at which our preferred stock will convert into common stock, which became effective on June 17, 2016.

        Certain of our existing principal stockholders have indicated an interest in purchasing an aggregate of approximately $35.0 million in shares of our common stock in this offering at the initial public offering price. Assuming an initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, these stockholders would purchase an aggregate of approximately 2,333,333 of the 4,000,000 shares offered in this offering based on these indications of interest. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell more, less or no shares to any of these potential purchasers and any of these potential purchasers could determine to purchase more, less or no shares in this offering.

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SUMMARY CONSOLIDATED FINANCIAL INFORMATION

        You should read the following summary consolidated financial data together with our consolidated financial statements and the related notes included elsewhere in this prospectus and the "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of this prospectus. We have derived the statement of operations data for the years ended December 31, 2014 and 2015 from our audited consolidated financial statements included elsewhere in this prospectus. We have derived the statement of operations data for the three months ended March 31, 2015 and 2016 and the balance sheet data as of March 31, 2016 from our unaudited consolidated financial statements included elsewhere in this prospectus, which have been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, the unaudited consolidated financial data reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information as of and for the periods presented. Our historical results are not necessarily indicative of results that should be expected in any future period, and our results for any interim period are not necessarily indicative of results that should be expected for any full year.

 
  Year Ended December 31,   Three Months Ended
March 31,
 
 
  2014   2015   2015   2016  
 
  (in thousands, except share and per share data)
 
 
   
   
  (unaudited)
 

Statements of Operations Data:

                         

Revenue

  $   $ 317   $   $  

Operating expenses:

                         

Research and development

    10,923     24,408     3,736     8,265  

General and administrative

    2,512     5,729     836     2,371  

Total operating expenses

    13,435     30,137     4,572     10,636  

Loss from operations

    (13,435 )   (29,820 )   (4,572 )   (10,636 )

Other income, net

    4     2     4     48  

Net loss and comprehensive loss

  $ (13,431 ) $ (29,818 ) $ (4,568 ) $ (10,588 )

Net loss per share applicable to common stockholders—basic and diluted(1)

  $ (10.26 ) $ (17.55 ) $ (3.44 ) $ (5.15 )

Weighted-average number of common shares used in net loss per share applicable to common stockholders—basic and diluted(1)

    1,525,018     1,980,286     1,682,690     2,394,470  

Pro forma net loss per share—basic and diluted (unaudited)(1)

                         $ (2.09 )                        $ (0.59 )

Weighted-average number of common shares used in pro forma net loss per share—basic and diluted (unaudited)(1)

                           14,593,998                            17,947,602  

(1)
See Note 2 to our consolidated financial statements included elsewhere in this prospectus for a description of the method used to calculate basic and diluted net loss per share and unaudited pro forma basic and diluted net loss per share as well as the weighted-average number of common shares used in the calculation of the per share amounts.

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        The following table sets forth our summary consolidated balance sheet data as of March 31, 2016:

    on an actual basis;

    on a pro forma basis to give effect to (i) the conversion of all outstanding shares of our preferred stock into an aggregate of 15,988,800 shares of common stock and (ii) the change in our total stockholders' (deficit) equity resulting from the stock-based compensation expense associated with the vesting of 53,334 shares of restricted common stock and the vesting of performance-based option awards to purchase up to 59,387 shares of our common stock, each upon the closing of this offering; and

    on a pro forma as adjusted basis to give further effect to the issuance and sale of 4,000,000 shares of our common stock in this offering at an assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

 
  March 31, 2016  
 
  Actual   Pro Forma   Pro Forma
As Adjusted(2)
 
 
  (in thousands)
 

Balance Sheet Data:

                   

Cash and cash equivalents

  $ 62,133   $ 62,133   $ 114,933  

Working capital(1)

    57,824     57,824     110,624  

Total assets

    70,825     70,825     123,625  

Convertible preferred stock

    121,807          

Total stockholders' (deficit) equity

    (57,890 )   63,917     116,717  

(1)
We define working capital as current assets less current liabilities. See our consolidated financial statements for further details regarding our current assets and current liabilities.

(2)
The pro forma as adjusted information presented in the summary consolidated balance sheet data is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, working capital, total assets and total stockholders' equity by $3.7 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Each increase (decrease) of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, working capital, total assets and total stockholders' equity by $14.0 million, assuming no change in the assumed initial public offering price per share and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

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RISK FACTORS

        Investing in our common stock involves a high degree of risk. Before you decide to invest in our common stock, you should carefully consider the risks described below, together with the other information contained in this prospectus, including our consolidated financial statements and the related notes included elsewhere in this prospectus. If any of the following risks actually occurs, our business, financial condition, results of operations and future growth prospects could be harmed. In these circumstances, the market price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to Our Financial Position and Need for Additional Capital

We have incurred significant losses since inception, expect to incur significant and increasing losses for at least the next several years, and may never achieve or maintain profitability.

        We have incurred significant annual net operating losses in every year since our inception. We expect to continue to incur significant and increasing net operating losses for at least the next several years. Our net losses were $13.4 million and $29.8 million for the years ended December 31, 2014 and 2015, respectively, and $10.6 million for the three months ended March 31, 2016. As of March 31, 2016, we had an accumulated deficit of $64.1 million. We have not generated any revenues from product sales, have not completed the development of any product candidate and may never have a product candidate approved for commercialization. We have financed our operations to date primarily through private placements of our preferred stock. We have devoted substantially all of our financial resources and efforts to research and development and general and administrative expense to support such research and development. Our net losses may fluctuate significantly from quarter to quarter and year to year. Net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders' (deficit) equity and working capital.

        We anticipate that our expenses will increase substantially if and as we:

    continue to develop and begin clinical trials with respect to SY-1425, including a Phase 2 clinical trial we expect to initiate in mid-2016;

    continue to develop SY-1365, including initiating a Phase 1/2 clinical trial in the first half of 2017;

    initiate and continue research, preclinical and clinical development efforts for our preclinical programs;

    further develop our gene control platform;

    seek to identify and develop additional product candidates;

    acquire or in-license other product candidates or technologies;

    seek regulatory and marketing approvals for our product candidates that successfully complete clinical trials, if any;

    establish sales, marketing, distribution and other commercial infrastructure in the future to commercialize various products for which we may obtain marketing approval, if any;

    require the manufacture of larger quantities of product candidates for clinical development and, potentially, commercialization;

    maintain, expand and protect our intellectual property portfolio;

    hire and retain additional personnel, such as clinical, quality control and scientific personnel;

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    add operational, financial and management information systems and personnel, including personnel to support our product development and help us comply with our obligations as a public company; and

    add equipment and physical infrastructure to support our research and development programs.

        Our ability to become and remain profitable depends on our ability to generate revenue. We do not expect to generate significant revenue unless and until we are, or any future collaborator is, able to obtain marketing approval for, and successfully commercialize, one or more of our product candidates. Successful commercialization will require achievement of key milestones, including initiating and successfully completing clinical trials of our product candidates, obtaining marketing approval for these product candidates, manufacturing, marketing and selling those products for which we, or any of our future collaborators, may obtain marketing approval, satisfying any post-marketing requirements and obtaining reimbursement for our products from private insurance or government payors. Because of the uncertainties and risks associated with these activities, we are unable to accurately predict the timing and amount of revenues, and if or when we might achieve profitability. We and any future collaborators may never succeed in these activities and, even if we do, or any future collaborators do, we may never generate revenues that are large enough for us to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our pipeline of product candidates or continue our operations and cause a decline in the value of our common stock.

We have a limited operating history, no products approved for sale and no history of commercializing pharmaceutical products, which may make it difficult to evaluate the prospects for our future viability.

        We commenced operations in 2011. Our operations to date have been limited to financing and staffing our company, developing our gene control platform and conducting preclinical research. We have not yet demonstrated an ability to successfully conduct clinical trials, obtain marketing approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in the early stages of development, especially clinical stage biopharmaceutical companies such as ours. Any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products.

        We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives. We will eventually need to transition from a company with a development focus to a company capable of supporting commercial activities. We may not be successful in such a transition.

        We expect our financial condition and operating results to continue to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. Accordingly, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance.

We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

        Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is a very time consuming, expensive and uncertain process that takes years to complete. We expect our expenses to increase in connection with our ongoing activities, particularly as we initiate clinical trials of SY-1425, advance the development of SY-1365, initiate new research and preclinical development

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efforts and seek marketing approval for any product candidates that we successfully develop. Moreover, under license agreements with various licensors, we are obligated to make milestone payments upon the successful completion of specified development and commercialization activities. In addition, if we obtain marketing approval for any product candidate that we may successfully develop, we may incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution to the extent that such sales, marketing, manufacturing and distribution are not the responsibility of a future collaborator. Furthermore, following the closing of this offering, we expect to incur significant additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we may be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts.

        We plan to use the net proceeds of this offering primarily to fund our ongoing research and development efforts. We will be required to expend significant funds in order to advance the development of SY-1425 and SY-1365, as well as our other preclinical programs. In addition, while we may seek one or more collaborators for future development of our current product candidate or any future product candidates that we may develop for one or more indications, we may not be able to enter into a collaboration for any of our product candidates for such indications on suitable terms, on a timely basis or at all. In any event, the net proceeds of this offering and our existing cash and cash equivalents will not be sufficient to fund all of the efforts that we plan to undertake or to fund the completion of development of our product candidates or our other preclinical programs. Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources. We do not have any committed external source of funds. Adequate additional financing may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy.

        We believe that the net proceeds from this offering, together with our existing cash and cash equivalents as of March 31, 2016, will enable us to fund our operating expenses and capital expenditure requirements at least through mid-2018. Our estimate as to how long we expect the net proceeds from this offering, together with our existing cash and cash equivalents, to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned. Our future funding requirements, both short-term and long-term, will depend on many factors, including:

    the scope, progress, timing, costs and results of clinical trials of SY-1425 and SY-1365;

    research and preclinical development efforts for any future product candidates that we may develop;

    our ability to enter into and the terms and timing of any collaborations, licensing agreements or other arrangements;

    the number of future product candidates that we pursue and their development requirements;

    the outcome, timing and costs of seeking regulatory approvals;

    the costs of commercialization activities for any of our product candidates that receive marketing approval to the extent such costs are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;

    the costs of acquiring potential new product candidates or technology;

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    the costs of any physician education programs relating to selecting and treating genomically defined patient populations;

    the timing and amount of milestone and other payments due to licensors for patent and technology rights used in our development platform;

    revenue received from commercial sales, if any, of our current and future product candidates;

    our headcount growth and associated costs as we expand our research and development and establish a commercial infrastructure;

    the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against intellectual property related claims; and

    the costs of operating as a public company.

Raising additional capital may cause dilution to our stockholders, including purchasers of common stock in this offering, restrict our operations or require us to relinquish rights to our technologies or product candidates.

        We expect our expenses to increase in connection with our planned operations. To the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, your ownership interest may be diluted, and the terms of these securities could include liquidation or other preferences and anti-dilution protections that could adversely affect your rights as a common stockholder. In addition, debt financing, if available, would result in fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, creating liens, redeeming stock or declaring dividends, that could adversely impact our ability to conduct our business. In addition, securing financing could require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management's ability to oversee the development of our product candidates.

        If we raise additional funds through collaborations or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Risks Related to the Discovery, Development and Commercialization of Product Candidates

Our approach to the discovery and development of product candidates based on our gene control platform is novel and unproven, and we do not know whether we will be able to develop any products of commercial value.

        We are focused on discovering and developing medicines for the treatment of cancer and other diseases based upon our gene control platform. We are leveraging our platform to create a pipeline of gene control drug candidates for genomically defined patients whose diseases have not been adequately addressed to date by other genomics approaches and to design and conduct efficient clinical trials with a higher likelihood of success. While we believe that applying our gene control platform to create medicines for genomically defined patient populations may potentially enable drug research and clinical development that is more efficient than conventional small molecule drug research and development, our approach is both novel and unproven. Because our approach is both novel and unproven, the cost and time needed to develop our product candidates is difficult to predict, and our efforts may not result in the discovery and development of commercially viable medicines. We may also be incorrect about the effects of our product candidates on the diseases of genomically defined patient populations,

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which may limit the utility of our approach or the perception of the utility of our approach. Furthermore, our estimates of genomically defined patient populations available for study and treatment may be lower than expected, which could adversely affect our ability to conduct clinical trials and may also adversely affect the size of any market for medicines we may successfully commercialize.

        We have not yet succeeded and may never succeed in demonstrating efficacy and safety for our current or any future product candidates in clinical trials or in obtaining marketing approval thereafter. For example, although we have discovered and evaluated compounds using our novel gene control platform, we have not yet advanced a compound into any phase of clinical development.

Our gene control platform may fail to help us discover and develop additional potential product candidates.

        A significant portion of the research that we are conducting involves identifying novel targets and points of intervention and developing new compounds using our gene control platform. The drug discovery that we are conducting using our gene control platform may not be successful in identifying compounds that have commercial value or therapeutic utility. Our gene control platform may initially show promise in identifying potential product candidates, yet fail to yield viable product candidates for clinical development or commercialization for a number of reasons, including:

    compounds created through our gene control platform may not demonstrate efficacy, safety or tolerability;

    potential product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to receive marketing approval and achieve market acceptance;

    competitors may develop alternative therapies that render our potential product candidates non-competitive or less attractive; or

    a potential product candidate may not be capable of being produced at an acceptable cost.

        Our research programs to identify new product candidates will require substantial technical, financial and human resources, and we may be unsuccessful in our efforts to identify new product candidates. If we are unable to identify suitable additional compounds for preclinical and clinical development, our ability to develop product candidates and obtain product revenues in future periods could be compromised, which could result in significant harm to our financial position and adversely impact our stock price.

In the near term, we are dependent on the success of SY-1425 and SY-1365. If we are unable to initiate or complete the clinical development of, obtain marketing approval for or successfully commercialize SY-1425 or SY-1365, either alone or with a collaborator, or if we experience significant delays in doing so, our business could be substantially harmed.

        We currently have no products approved for sale and are investing a significant portion of our efforts and financial resources in the development of SY-1425 and SY-1365. Our prospects are substantially dependent on our ability, or that of any future collaborator, to develop, obtain marketing approval for and successfully commercialize product candidates in one or more disease indications.

        The success of SY-1425 and SY-1365 will depend on several factors, including the following:

    initiation and successful enrollment and completion of clinical trials;

    a safety, tolerability and efficacy profile that is satisfactory to the U.S. Food and Drug Administration, or FDA, or any comparable foreign regulatory authority for marketing approval;

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    timely receipt of marketing approvals from applicable regulatory authorities;

    the performance of our future collaborators, if any;

    the extent of any required post-marketing approval commitments to applicable regulatory authorities;

    establishment of supply arrangements with third-party raw materials suppliers and manufacturers including with respect to the supply of active pharmaceutical ingredient for SY-1425;

    establishment of arrangements with third-party manufacturers to obtain finished drug product that is appropriately packaged for sale;

    adequate ongoing availability of raw materials and drug product for clinical development and any commercial sales;

    obtaining and maintaining patent, trade secret protection and regulatory exclusivity, both in the United States and internationally, including our ability to maintain our license agreement with TMRC, which we refer to as the TMRC license agreement;

    protection of our rights in our intellectual property portfolio;

    successful launch of commercial sales following any marketing approval;

    a continued acceptable safety profile following any marketing approval;

    commercial acceptance by patients, the medical community and third-party payors;

    successful identification of biomarkers for patient selection;

    continued availability of appropriate tissue samples to enable the identification of novel targets in genomically defined subsets of patients; and

    our ability to compete with other therapies.

        Many of these factors are beyond our control, including clinical development, the regulatory submission process, potential threats to our intellectual property rights and the manufacturing, marketing and sales efforts of any future collaborator. If we are unable to develop, receive marketing approval for and successfully commercialize SY-1425 or SY-1365, on our own or with any future collaborator, or experience delays as a result of any of these factors or otherwise, our business could be substantially harmed.

If clinical trials of any future product candidates that we, or any future collaborators, may develop fail to satisfactorily demonstrate safety and efficacy to the FDA and other regulators, we, or any future collaborators, may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of these product candidates.

        We, and any future collaborators, are not permitted to commercialize, market, promote or sell any product candidate in the United States without obtaining marketing approval from the FDA. Foreign regulatory authorities, such as the European Medicines Agency, or the EMA, impose similar requirements. We, and any future collaborators, must complete extensive preclinical development and clinical trials to demonstrate the safety and efficacy of our product candidates in humans before we will be able to obtain these approvals.

        Clinical testing is expensive, is difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. The clinical development of our product candidates is susceptible to the risk of failure inherent at any stage of product development, including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, the occurrence of adverse events that are severe or medically or commercially unacceptable, failure to

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comply with protocols or applicable regulatory requirements and determination by the FDA or any comparable foreign regulatory authority that a product candidate may not continue development or is not approvable. For example, a Phase 2 clinical trial of tamibarotene (SY-1425) for the treatment of late-stage non-small cell lung cancer, or NSCLC, under a previous license between TMRC and a third party was terminated when interim data suggested that the primary endpoint of progression-free survival for 18 months after starting therapy would not be reached. Interim data also showed that tamibarotene combined with paclitaxel and carboplatin chemotherapy was associated with increased toxicity in this non-selected NSCLC patient population. Although we have no current plans to conduct studies of SY-1425 in NSCLC or combine tamibarotene with paclitaxel and carboplatin in late-stage NSCLC patients, we face a similar risk of failure in our planned clinical trials of SY-1425. It is possible that even if one or more of our product candidates has a beneficial effect, that effect will not be detected during clinical evaluation as a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or analysis of our clinical trials. Conversely, as a result of the same factors, our clinical trials may indicate an apparent positive effect of a product candidate that is greater than the actual positive effect, if any. Similarly, in our clinical trials we may fail to detect toxicity of or intolerability caused by our product candidates, or mistakenly believe that our product candidates are toxic or not well tolerated when that is not in fact the case.

        Any inability to successfully complete preclinical and clinical development could result in additional costs to us, or any future collaborators, and impair our ability to generate revenues from product sales, regulatory and commercialization milestones and royalties. Moreover, if we, or any future collaborators, are required to conduct additional clinical trials or other testing of our product candidates beyond the trials and testing that we or they contemplate, if we, or they, are unable to successfully complete clinical trials of our product candidates or other testing, or the results of these trials or tests are unfavorable, uncertain or are only modestly favorable, or there are unacceptable safety concerns associated with our product candidates, we, or any future collaborators, may:

    incur additional unplanned costs;

    be delayed in obtaining marketing approval for our product candidates;

    not obtain marketing approval at all;

    obtain approval for indications or patient populations that are not as broad as intended or desired;

    obtain approval with labeling that includes significant use or distribution restrictions or significant safety warnings, including boxed warnings;

    be subject to additional post-marketing testing or other requirements; or

    be required to remove the product from the market after obtaining marketing approval.

        Our failure to successfully initiate and complete clinical trials of our product candidates and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market any of our product candidates would significantly harm our business.

Adverse events or undesirable side effects caused by, or other unexpected properties of, product candidates that we develop may be identified during development and could delay or prevent their marketing approval or limit their use.

        Adverse events or undesirable side effects caused by, or other unexpected properties of, SY-1425, SY-1365 or any future product candidates that we may develop could cause us, any future collaborators, an institutional review board or regulatory authorities to interrupt, delay or halt clinical trials of one or more of our product candidates and could result in a more restrictive label or the delay or denial of marketing approval by the FDA or comparable foreign regulatory authorities. Because gene control techniques are relatively new, side effects from gene control approaches may be

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unpredictable. Tamibarotene has been observed to be associated with adverse events, such as mild or moderate dry skin, skin rash, headache and bone pain, as well as retinoic acid syndrome and elevated levels of cholesterol, lipids, liver function enzymes and white blood cells, which were severe in certain cases. Furthermore, retinoids such as SY-1425 may cause birth defects and therefore may carry a warning on their label. Other examples of retinoids, a class of chemical compounds that are related to vitamin A, include all trans retinoic acid or ATRA, Retin-A, retinol (found in over-the-counter skin creams), isotretinoin and bexarotene. We have not yet tested SY-1365 in humans so the safety profile that SY-1365 will demonstrate in human clinical trials is unknown. If any of our product candidates is associated with adverse events or undesirable side effects or has properties that are unexpected, we, or any future collaborators, may need to abandon development or limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Many compounds that initially showed promise in clinical or earlier stage testing have later been found to cause undesirable or unexpected side effects that prevented further development of the compound.

If we, or any future collaborators, experience any of a number of possible unforeseen events in connection with clinical trials of our current product candidate or any future product candidates that we, or any future collaborators, may develop, potential clinical development, marketing approval or commercialization of our product candidates could be delayed or prevented.

        We, or any future collaborators, may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent clinical development, marketing approval or commercialization of our current product candidate or any future product candidates that we, or any future collaborators, may develop, including:

    regulators or institutional review boards may not authorize us, any future collaborators or our or their investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;

    we, or any future collaborators, may have delays in reaching or fail to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;

    clinical trials of our product candidates may produce unfavorable or inconclusive results;

    we, or any future collaborators, may decide, or regulators may require us or them, to conduct additional clinical trials or abandon product development programs;

    the number of patients required for clinical trials of our product candidates may be larger than we, or any future collaborators, anticipate, patient enrollment in these clinical trials may be slower than we, or any future collaborators, anticipate or participants may drop out of these clinical trials at a higher rate than we, or any future collaborators, anticipate;

    our estimates of the genomically defined patient populations available for study may be higher than actual patient numbers and result in our inability to sufficiently enroll our trials;

    the cost of planned clinical trials of our product candidates may be greater than we anticipate;

    our third-party contractors or those of any future collaborators, including those manufacturing our product candidates or components or ingredients thereof or conducting clinical trials on our behalf or on behalf of any future collaborators, may fail to comply with regulatory requirements or meet their contractual obligations to us or any future collaborators in a timely manner or at all;

    patients that enroll in a clinical trial may misrepresent their eligibility to do so or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the clinical trial, increase the needed enrollment size for the clinical trial or extend the clinical trial's duration;

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    we, or any future collaborators, may have to delay, suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of the product candidate;

    regulators or institutional review boards may require that we, or any future collaborators, or our or their investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or their standards of conduct, a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of the product candidate or findings of undesirable effects caused by a chemically or mechanistically similar product or product candidate;

    the FDA or comparable foreign regulatory authorities may disagree with our, or any future collaborators', clinical trial designs or our or their interpretation of data from preclinical studies and clinical trials;

    the FDA or comparable foreign regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we, or any future collaborators, enter into agreements for clinical and commercial supplies;

    the supply or quality of raw materials or manufactured product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply; and

    the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient to obtain marketing approval.

        Product development costs for us, or any future collaborators, will increase if we, or they, experience delays in testing or pursuing marketing approvals and we, or they, may be required to obtain additional funds to complete clinical trials and prepare for possible commercialization of our product candidates. We do not know whether any preclinical tests or clinical trials will begin as planned, will need to be restructured, or will be completed on schedule or at all. Significant preclinical study or clinical trial delays also could shorten any periods during which we, or any future collaborators, may have the exclusive right to commercialize our product candidates or allow our competitors, or the competitors of any future collaborators, to bring products to market before we, or any future collaborators, do and impair our ability, or the ability of any future collaborators, to successfully commercialize our product candidates and may harm our business and results of operations. In addition, many of the factors that lead to clinical trial delays may ultimately lead to the denial of marketing approval of any of our product candidates.

Failure to successfully validate, develop and obtain regulatory approval for companion diagnostics could harm our drug development strategy.

        As one of the key elements of our development strategy, we seek to identify genomically defined subsets of patients within a disease category who may derive benefit from the product candidates we are developing. In collaboration with partners, we plan to develop companion diagnostics to help us to more accurately identify patients within a particular subset, both during our clinical trials and in connection with the commercialization of our product candidates that we are developing or may in the future develop. Companion diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities as medical devices and require separate regulatory approval prior to commercialization. We do not develop companion diagnostics internally and thus we will be dependent on the sustained cooperation and effort of our third-party collaborators in developing and obtaining approval for these companion diagnostics. We and our collaborators may encounter difficulties in developing and obtaining approval for the companion diagnostics, including issues relating to selectivity/specificity, analytical validation, reproducibility, or clinical validation. Any delay or failure by our

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collaborators to develop or obtain regulatory approval of the companion diagnostics could delay or prevent approval of our product candidates. In addition, our collaborators may encounter production difficulties that could constrain the supply of the companion diagnostics, and both they and we may have difficulties gaining acceptance of the use of the companion diagnostics in the clinical community. If such companion diagnostics fail to gain market acceptance, it would have an adverse effect on our ability to derive revenues from sales, if any, of our products. In addition, the diagnostic company with whom we contract may decide to discontinue selling or manufacturing the companion diagnostic that we anticipate using in connection with development and commercialization of our product candidates or our relationship with such diagnostic company may otherwise terminate. We may not be able to enter into arrangements with another diagnostic company to obtain supplies of an alternative diagnostic test for use in connection with the development and commercialization of our product candidates or do so on commercially reasonable terms, which could adversely affect and/or delay the development or commercialization of our product candidates.

If we, or any future collaborators, experience delays or difficulties in the enrollment of patients in clinical trials, our or their receipt of necessary regulatory approvals could be delayed or prevented.

        We, or any future collaborators, may not be able to initiate or continue clinical trials for our current product candidate or any future product candidates that we, or any future collaborators, may develop if we, or they, are unable to locate and enroll a sufficient number of eligible patients to participate in clinical trials. Patient enrollment is a significant factor in the timing of clinical trials, and is affected by many factors, including:

    the size and nature of the patient population;

    the severity of the disease under investigation;

    the availability of approved therapeutics for the relevant disease;

    the proximity of patients to clinical sites;

    the eligibility criteria for the trial;

    the design of the clinical trial;

    efforts to facilitate timely enrollment;

    competing clinical trials; and

    clinicians' and patients' perceptions as to the potential advantages and risks of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating.

        In particular, we intend to enrich our clinical trials with patients most likely to respond to our gene control therapies. However, genomically defined diseases may have relatively low prevalence and it may be difficult for us or third parties with whom we collaborate to identify patients for our trials, which may lead to delays in enrollment for our trials. We intend to develop, or engage third parties to develop, companion diagnostics for use in our clinical trials, but we or such third parties may not be successful in developing such companion diagnostics, furthering the difficulty in identifying genomically defined subsets of patients for our clinical trials. Our inability to enroll a sufficient number of genomically defined patients for our clinical trials would result in significant delays and could require us to abandon one or more clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for our product candidates, which would cause the value of our company to decline and limit our ability to obtain additional financing. Further, if we are unable to include a sufficient number of genomically defined patients in our trials, this could compromise our ability to seek participation in FDA's expedited review and approval programs, including Breakthrough Therapy designation and Fast Track designation, or otherwise to seek to accelerate clinical development and regulatory timelines.

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        Our inability, or the inability of any future collaborators, to enroll a sufficient number of patients for our, or their, clinical trials could result in significant delays or may require us or them to abandon one or more clinical trials altogether. Enrollment delays in our, or their, clinical trials may result in increased development costs for our product candidates, delay or halt the development of and approval processes for our product candidates and jeopardize our, or any future collaborators', ability to commence sales of and generate revenues from our product candidates, which could cause the value of our company to decline and limit our ability to obtain additional financing, if needed.

Results of preclinical studies and early clinical trials may not be predictive of results of future late-stage clinical trials.

        We have not conducted any clinical trials, and all our data results from preclinical studies. We cannot assure you that we will be able to replicate in human clinical trials the results we observed in animal models. Moreover, the outcome of preclinical studies and early clinical trials may not be predictive of the success of later clinical trials, and interim results of clinical trials do not necessarily predict success in future clinical trials. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in earlier development, and we could face similar setbacks. The design of a clinical trial can determine whether its results will support approval of a product and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. We have limited experience in designing clinical trials and may be unable to design and execute a clinical trial to support marketing approval. In addition, preclinical and clinical data are often susceptible to varying interpretations and analyses. Many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval for the product candidates. Even if we, or any future collaborators, believe that the results of clinical trials for our product candidates warrant marketing approval, the FDA or comparable foreign regulatory authorities may disagree and may not grant marketing approval of our product candidates.

        In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the dosing regimen and other clinical trial protocols and the rate of dropout among clinical trial participants. If we fail to receive positive results in clinical trials of our product candidates, the development timeline and regulatory approval and commercialization prospects for our most advanced product candidates, and, correspondingly, our business and financial prospects would be negatively impacted.

We have never obtained marketing approval for a product candidate and we may be unable to obtain, or may be delayed in obtaining, marketing approval for our current product candidates or any future product candidates that we, or any future collaborators, may develop.

        We have never obtained marketing approval for a product candidate. It is possible that the FDA may refuse to accept for substantive review any new drug applications, or NDAs, that we submit for our product candidates or may conclude after review of our data that our application is insufficient to obtain marketing approval of our product candidates. If the FDA does not accept or approve our NDAs for any of our product candidates, it may require that we conduct additional clinical trials, preclinical studies or manufacturing validation studies and submit that data before it will reconsider our applications. Depending on the extent of these or any other FDA-required trials or studies, approval of any NDA or application that we submit may be delayed by several years, or may require us to expend more resources than we have available. It is also possible that additional trials or studies, if performed and completed, may not be considered sufficient by the FDA to approve our NDAs. In addition, our development programs contemplate the development of companion diagnostics by our third-party collaborators. Companion diagnostics are subject to regulation as medical devices and must themselves

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be approved for marketing by the FDA or certain other foreign regulatory agencies before we may commercialize our product candidates.

        Any delay in obtaining, or an inability to obtain, marketing approvals would prevent us from commercializing our product candidates or any companion diagnostics, generating revenues and achieving and sustaining profitability. If any of these outcomes occurs, we may be forced to abandon our development efforts for our product candidates, which could significantly harm our business.

Even if any product candidates that we, or any future collaborators, may develop receive marketing approval, we or others may later discover that the product is less effective than previously believed or causes undesirable side effects that were not previously identified, which could compromise our ability, or that of any future collaborators, to market the product.

        Clinical trials of SY-1425, SY-1365 or any future product candidates that we, or any future collaborators, may develop will be conducted in carefully defined subsets of patients who have agreed to enter into clinical trials. Consequently, it is possible that our clinical trials, or those of any future collaborator, may indicate an apparent positive effect of a product candidate that is greater than the actual positive effect, if any, or alternatively fail to identify undesirable side effects. If, following approval of a product candidate, we, or others, discover that the product is less effective than previously believed or causes undesirable side effects that were not previously identified, any of the following adverse events could occur:

    regulatory authorities may withdraw their approval of the product or seize the product;

    we, or any future collaborators, may be required to recall the product, change the way the product is administered or conduct additional clinical trials;

    additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the particular product;

    we may be subject to fines, injunctions or the imposition of civil or criminal penalties;

    regulatory authorities may require the addition of labeling statements, such as a "black box" warning or a contraindication;

    we, or any future collaborators, may be required to create a Medication Guide outlining the risks of the previously unidentified side effects for distribution to patients;

    we, or any future collaborators, could be sued and held liable for harm caused to patients;

    the product may become less competitive; and

    our reputation may suffer.

        Any of these events could harm our business and operations, and could negatively impact our stock price.

Even if our current product candidates, or any future product candidate that we, or any future collaborators, may develop receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success, in which case we may not generate significant revenues or become profitable.

        We have never commercialized a product, and even if one of our product candidates is approved by the appropriate regulatory authorities for marketing and sale, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. Physicians are often reluctant to switch their patients from existing therapies even when new and potentially more effective or convenient treatments enter the market. Further, patients often acclimate to the therapy that they are currently taking and do not want to switch unless their physicians recommend switching products or they are required to switch therapies due to lack of reimbursement for existing therapies.

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        Efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may not be successful. If any of our product candidates is approved but does not achieve an adequate level of market acceptance, we may not generate significant revenues and we may not become profitable. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:

    the efficacy and safety of the product;

    the potential advantages of the product compared to competitive therapies;

    the prevalence and severity of any side effects;

    whether the product is designated under physician treatment guidelines as a first-, second- or third-line therapy;

    our ability, or the ability of any future collaborators, to offer the product for sale at competitive prices;

    the product's convenience and ease of administration compared to alternative treatments;

    the willingness of the target patient population to try, and of physicians to prescribe, the product;

    limitations or warnings, including distribution or use restrictions, contained in the product's approved labeling;

    the strength of sales, marketing and distribution support;

    changes in the standard of care for the targeted indications for the product; and

    availability and amount of coverage and reimbursement from government payors, managed care plans and other third-party payors.

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

        Because we have limited financial and managerial resources, we intend to focus on developing product candidates for specific indications that we identify as most likely to succeed, in terms of both their potential for marketing approval and commercialization. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that may prove to have greater commercial potential.

        Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable product candidates. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to the product candidate.

If we are unable to establish sales, marketing and distribution capabilities or enter into sales, marketing and distribution arrangements with third parties, we may not be successful in commercializing any product candidates if approved.

        We do not have a sales, marketing or distribution infrastructure and have no experience in the sale, marketing or distribution of pharmaceutical products. To achieve commercial success for any approved product, we must either develop a sales and marketing organization or outsource these functions to third parties. We plan to build focused capabilities to commercialize development programs for certain indications where we believe that the medical specialists for the indications are sufficiently concentrated to allow us to effectively promote the product with a targeted sales team. The

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development of sales, marketing and distribution capabilities will require substantial resources, will be time consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing and distribution capabilities is delayed or does not occur for any reason, we could have prematurely or unnecessarily incurred these commercialization costs. This may be costly, and our investment could be lost if we cannot retain or reposition our sales and marketing personnel. In addition, we may not be able to hire or retain a sales force in the United States that is sufficient in size or has adequate expertise in the medical markets that we plan to target. If we are unable to establish or retain a sales force and marketing and distribution capabilities, our operating results may be adversely affected. If a potential partner has development or commercialization expertise that we believe is particularly relevant to one of our products, then we may seek to collaborate with that potential partner even if we believe we could otherwise develop and commercialize the product independently.

        In certain indications, we plan to seek to enter into collaborations that we believe may contribute to our ability to advance development and ultimately commercialize our product candidates. We also intend to seek to enter into collaborations where we believe that realizing the full commercial value of our development programs will require access to broader geographic markets or the pursuit of broader patient populations or indications. As a result of entering into arrangements with third parties to perform sales, marketing and distribution services, our product revenues or the profitability of these product revenues may be lower, perhaps substantially lower, than if we were to directly market and sell products in those markets. Furthermore, we may be unsuccessful in entering into the necessary arrangements with third parties or may be unable to do so on terms that are favorable to us. In addition, we may have little or no control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively.

        If we do not establish sales, marketing and distribution capabilities, either on our own or in collaboration with third parties, we will not be successful in commercializing any of our product candidates that receive marketing approval.

We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

        The development and commercialization of new products is highly competitive. We expect that we, and any future collaborators, will face significant competition from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide with respect to any of our product candidates that we, or any future collaborators, may seek to develop or commercialize in the future. Specifically, there are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of product candidates for the treatment of the key indications of our most advanced programs, such as the use of chemotherapy followed by stem cell transplantation in the case of AML, MDS and ALL. SY-1425 may also face competition from other drug candidates currently in clinical development for relapsed or refractory AML and MDS, including drug candidates in development from Daiichi Sankyo Company, Limited, Boehringer Ingelheim GmbH, Agios Pharmaceuticals, Inc., Novartis AG, Astellas Pharma Inc. and Karyopharm Therapeutics Inc. We are aware of only one other selective RARa program, which is being undertaken by IO Therapeutics, Inc. and which appears to be in early preclinical development. SY-1365 may face competition from other drug candidates currently in clinical development for relapsed or refractory AML and MDS or from other drug candidates currently in development for relapsed and refractory ALL, including drug candidates in development from Amgen Inc., Novartis AG, F. Hoffman-La Roche AG and Juno Therapeutics, Inc. We are aware of two other selective cyclin-dependent kinase 7, or CDK7, inhibitor programs, both of which appear to be in early preclinical development.

        Our competitors may succeed in developing, acquiring or licensing technologies and products that are more effective, have fewer side effects or more tolerable side effects or are less costly than any

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product candidates that we are currently developing or that we may develop, which could render our product candidates obsolete and noncompetitive.

        Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer or more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we, or any future collaborators, may develop. Our competitors also may obtain FDA or other marketing approval for their products before we, or any future collaborators, are able to obtain approval for ours, which could result in our competitors establishing a strong market position before we, or any future collaborators, are able to enter the market.

        Many of our existing and potential future competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining marketing approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, the development of our product candidates.

Even if we, or any future collaborators, are able to commercialize any product candidate that we, or they, develop, the product may become subject to unfavorable pricing regulations, third-party payor reimbursement practices or healthcare reform initiatives, any of which could harm our business.

        The commercial success of our product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates will be paid by third-party payors, including government health care programs and private health insurers. If coverage is not available, or reimbursement is limited, we, or any future collaborators, may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us, or any future collaborators, to establish or maintain pricing sufficient to realize a sufficient return on our or their investments. In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors and coverage and reimbursement levels for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time consuming and costly process that may require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

        There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved drugs. Marketing approvals, pricing and reimbursement for new drug products vary widely from country to country. Some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we, or any future collaborators, might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay commercial launch of the product, possibly for lengthy time periods, which may negatively impact the revenues we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability or the ability of any future collaborators to recoup our or their investment in one or more product candidates, even if our product candidates obtain marketing approval.

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        Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Therefore, our ability, and the ability of any future collaborators, to commercialize successfully any of our product candidates will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from third-party payors. Third-party payors decide which medications they will cover and establish reimbursement levels. The healthcare industry is acutely focused on cost containment, both in the United States and elsewhere. Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications, which could affect our ability or that of any future collaborators to sell our product candidates profitably. These payors may not view our products, if any, as cost-effective, and coverage and reimbursement may not be available to our customers, or those of any future collaborators, or may not be sufficient to allow our products, if any, to be marketed on a competitive basis. Cost-control initiatives could cause us, or any future collaborators, to decrease the price we, or they, might establish for products, which could result in lower than anticipated product revenues. If the prices for our products, if any, decrease or if governmental and other third-party payors do not provide coverage or adequate reimbursement, our prospects for revenue and profitability will suffer.

        There may also be delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the indications for which the drug is approved by the FDA or comparable foreign regulatory authorities. Moreover, eligibility for reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Reimbursement rates may vary, by way of example, according to the use of the product and the clinical setting in which it is used. Reimbursement rates may also be based on reimbursement levels already set for lower cost drugs or may be incorporated into existing payments for other services.

        In addition, increasingly, third-party payors are requiring higher levels of evidence of the benefits and clinical outcomes of new technologies and are challenging the prices charged. Further, the net reimbursement for drug products may be subject to additional reductions if there are changes to laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. An inability to promptly obtain coverage and adequate payment rates from both government-funded and private payors for any of our product candidates for which we, or any future collaborator, obtain marketing approval could significantly harm our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

Product liability lawsuits against us could divert our resources, cause us to incur substantial liabilities and limit commercialization of any products that we may develop.

        We will face an inherent risk of product liability claims as a result of the clinical testing of our product candidates despite obtaining appropriate informed consents from our clinical trial participants. We will face an even greater risk if we or any future collaborators commercially sell any product that we may or they may develop. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Regardless of the merits or eventual outcome, liability claims may result in:

    decreased demand for our product candidates or products that we may develop;

    injury to our reputation and significant negative media attention;

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    withdrawal of clinical trial participants;

    significant costs to defend resulting litigation;

    substantial monetary awards to trial participants or patients;

    loss of revenue;

    reduced resources of our management to pursue our business strategy; and

    the inability to commercialize any products that we may develop.

        Although we intend to maintain clinical trial liability insurance coverage in the amount of up to $5.0 million in the aggregate, this insurance may not fully cover potential liabilities that we may incur. The cost of any product liability litigation or other proceeding, even if resolved in our favor, could be substantial. We will need to increase our insurance coverage if and when we commercialize any product that receives marketing approval. In addition, insurance coverage is becoming increasingly expensive. If we are unable to obtain or maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit the development and commercial production and sale of our product candidates, which could harm our business, financial condition, results of operations and prospects.

If the FDA or comparable foreign regulatory authorities approve generic versions of any of our products that receive marketing approval, or such authorities do not grant our products appropriate periods of data exclusivity before approving generic versions of our products, the sales of our products could be adversely affected.

        Once an NDA is approved, the product covered thereby becomes a "reference-listed drug" in the FDA's publication, "Approved Drug Products with Therapeutic Equivalence Evaluations," or the Orange Book. Manufacturers may seek approval of generic versions of reference-listed drugs through submission of abbreviated new drug applications, or ANDAs, in the United States. In support of an ANDA, a generic manufacturer need not conduct clinical trials. Rather, the applicant generally must show that its product has the same active ingredient(s), dosage form, strength, route of administration and conditions of use or labeling as the reference-listed drug and that the generic version is bioequivalent to the reference-listed drug, meaning it is absorbed in the body at the same rate and to the same extent. Generic products may be significantly less costly to bring to market than the reference-listed drug and companies that produce generic products are generally able to offer them at lower prices. Thus, following the introduction of a generic drug, a significant percentage of the sales of any branded product or reference-listed drug may be typically lost to the generic product.

        The FDA may not approve an ANDA for a generic product until any applicable period of non-patent exclusivity for the reference-listed drug has expired. The Federal Food, Drug, and Cosmetic Act, or FDCA, provides a period of five years of non-patent exclusivity for a new drug containing a new chemical entity, or NCE. Specifically, in cases where such exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification that a patent covering the reference-listed drug is either invalid or will not be infringed by the generic product, in which case the applicant may submit its application four years following approval of the reference-listed drug. Because the composition of matter patent for SY-1425 has expired, it is possible that another applicant could obtain approval of tamibarotene from the FDA before us, in which case our NDA would not be eligible for NCE exclusivity. See "—Risks Related to Our Intellectual Property—We do not have composition of matter patent protection with respect to SY-1425." If any product we develop does not receive five years of NCE exclusivity, the FDA may approve generic versions of such product three years after its date of approval, subject to the requirement that the ANDA applicant certifies to any patents listed for our products in the Orange Book. Manufacturers may seek to launch these generic products following the expiration of the applicable marketing exclusivity period, even if we still have patent protection for our product.

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        Competition that our products may face from generic versions of our products could negatively impact our future revenue, profitability and cash flows and substantially limit our ability to obtain a return on our investments in those product candidates.

Risks Related to Our Dependence on Third Parties

We expect to rely on third parties to conduct our clinical trials and certain aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research or testing.

        We expect to rely on third parties, such as contract research organizations, clinical data management organizations, medical institutions and clinical investigators, to conduct our clinical trials. We currently rely and expect to continue to rely on third parties to conduct certain aspects of our research and preclinical testing. Any of these third parties may terminate their engagements with us at any time. If we need to enter into alternative arrangements, it would delay our product development activities.

        Our reliance on these third parties for research and development activities will reduce our control over these activities, but will not relieve us of our responsibilities. For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA requires us to comply with standards, commonly referred to as good clinical practices, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

        Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our medicines.

        We also expect to rely on other third parties to store and distribute drug supplies for our clinical trials. Any performance failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our medicines, producing additional losses and depriving us of potential product revenue.

We currently depend on third-party manufacturers to produce our preclinical and clinical drug supplies and we intend to rely upon third-party manufacturers to produce commercial supplies of any approved product candidates.

        We do not have any manufacturing facilities. We currently rely, and expect to continue to rely, on third-party manufacturers for the manufacture of our product candidates for preclinical and clinical testing and for commercial supply of any of these product candidates for which we or our collaborators obtain marketing approval.

        We do not currently have a long term supply agreement with any third-party manufacturers. We may be unable to establish any agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

    reliance on the third party for regulatory compliance and quality assurance;

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    the possible breach of the manufacturing agreement by the third party;

    the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us; and

    reliance on the third party for regulatory compliance, quality assurance, and safety and pharmacovigilance reporting.

        Third-party manufacturers may not be able to comply with current good manufacturing practices, or cGMP, regulations or similar regulatory requirements outside the United States. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or medicines, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our medicines and harm our business and results of operations.

        Any medicines that we may develop may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us.

        Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval. We do not currently have arrangements in place for redundant supply for bulk drug substances. If any one of our current contract manufacturers cannot perform as agreed, we may be required to replace that manufacturer. Although we believe that there are several potential alternative manufacturers who could manufacture our product candidates, we may incur added costs and delays in identifying and qualifying any such replacement.

        Our current and anticipated future dependence upon others for the manufacture of our product candidates or medicines may adversely affect our future profit margins and our ability to commercialize any medicines that receive marketing approval on a timely and competitive basis.

We expect to seek to establish collaborations and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans.

        We expect to seek one or more collaborators for the development and commercialization of one or more of our product candidates. Likely collaborators may include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies. In addition, if we are able to obtain marketing approval for product candidates from foreign regulatory authorities, we intend to enter into strategic relationships with international biotechnology or pharmaceutical companies for the commercialization of such product candidates outside of the United States.

        We face significant competition in seeking appropriate collaborators. Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator's resources and expertise, the terms and conditions of the proposed collaboration, and the proposed collaborator's evaluation of a number of factors. Those factors may include the potential differentiation of our product candidate from competing product candidates, design or results of clinical trials, the likelihood of approval by the FDA or comparable foreign regulatory authorities and the regulatory pathway for any such approval, the potential market for the product candidate, the costs and complexities of manufacturing and delivering the product to patients and the potential of competing products. The collaborator may also consider alternative product candidates or technologies for similar indications that may be available for collaboration and whether such a collaboration could be more attractive than the one with us for our product candidate. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we

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may not be able to further develop our product candidates or bring them to market and generate product revenue.

Collaborations are complex and time consuming to negotiate and document.

        Any collaboration agreements that we enter into in the future may contain, restrictions on our ability to enter into potential collaborations or to otherwise develop specified product candidates. Further, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators. We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are unable to do so, we may have to curtail the development of the product candidate for which we are seeking to collaborate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.

If we enter into collaborations with third parties for the development and commercialization of any product candidates, our prospects with respect to those product candidates will depend in significant part on the success of those collaborations.

        We expect to enter into collaborations for the development and commercialization of one or more product candidates we may develop. We have not entered into any collaborations to date. If we enter into such collaborations, we will have limited control over the amount and timing of resources that our collaborators will dedicate to the development or commercialization of our product candidates. Our ability to generate revenues from these arrangements will depend on any future collaborators' abilities to successfully perform the functions assigned to them in these arrangements. In addition, any future collaborators may have the right to abandon research or development projects and terminate applicable agreements, including funding obligations, prior to or upon the expiration of the agreed upon terms.

        Collaborations involving our product candidates pose a number of risks, including the following:

    collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;

    collaborators may not perform their obligations as expected;

    collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs, based on clinical trial results, changes in the collaborators' strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities;

    collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

    collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates;

    a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products;

    disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time consuming and expensive;

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    collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;

    collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and

    collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.

        Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all. If any future collaborator of ours is involved in a business combination, it could decide to delay, diminish or terminate the development or commercialization of any product candidate licensed to it by us.

Risks Related to Our Intellectual Property

If we fail to comply with our obligations under our existing and any future intellectual property licenses with third parties, we could lose license rights that are important to our business.

        We are party to several license agreements under which we license patent rights and other intellectual property related to or business, including: a license agreement with Dana-Farber under which we were granted an exclusive worldwide license under specified patents relating to CDK7 inhibitors and JNK inhibitors; a license agreement with the Whitehead Institute for Biomedical Research, or Whitehead, and the Dana-Farber Cancer Institute, or Dana-Farber, pursuant to which we were granted a predominantly exclusive, with certain non-exclusive exceptions (see corresponding agreement summary in "Business—License Agreements—Whitehead Institute for Biomedical Research and Dana-Farber Cancer Institute, Inc.") worldwide license under specified patents relating to modulators of Myc/Max Screen and relating to Chem-Seq; a license agreement with Whitehead pursuant to which we were granted an exclusive worldwide license under specified patents relating to super-enhancers until April 2016, which license can remain exclusive thereafter, on a field-by-field basis, as long as we can demonstrate that we are using commercially reasonable efforts in the applicable field; and the TMRC license agreement, pursuant to which we were granted a license under specified patent rights, data, regulatory filings and other intellectual property for the North American and European development and commercialization of SY-1425 for the treatment of human cancer indications. We may enter into additional license agreements in the future. Our license agreements impose, and we expect that future license agreements will impose, various diligence, milestone payment, royalty, insurance and other obligations on us. If we fail to comply with our obligations under these licenses, our licensors may have the right to terminate these license agreements, in which event we might not be able to market any product that is covered by these agreements, or our licensors may convert the license to a non-exclusive license, which could adversely affect the value of the product candidate being developed under the license agreement. Termination of these license agreements or reduction or elimination of our licensed rights may also result in our having to negotiate new or reinstated licenses with less favorable terms.

We do not have composition of matter patent protection with respect to SY-1425.

        We own certain patents and patent applications with claims directed to specific methods of using SY-1425 and we expect to have marketing exclusivity from the FDA and EMA for a period of seven and ten years, respectively because SY-1425 has not been approved in these markets. However, composition of matter protection in the United States and elsewhere covering SY-1425 has expired. We may be limited in our ability to list our patents in the FDA's Orange Book if the use of our product, consistent with its FDA-approved label, would not fall within the scope of our patent claims. Also, our

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competitors may be able to offer and sell products so long as these competitors do not infringe any other patents that we (or third parties) hold, including patents with claims directed to the manufacture of SY-1425 and/or method of use patents. In general, method of use patents are more difficult to enforce than composition of matter patents because, for example, of the risks that the FDA may approve alternative uses of the subject compounds not covered by the method of use patents, and others may engage in off-label sale or use of the subject compounds. Physicians are permitted to prescribe an approved product for uses that are not described in the product's labeling. Although off-label prescriptions may infringe our method of use patents, the practice is common across medical specialties and such infringement is difficult to prevent or prosecute. FDA approval of uses that are not covered by our patents would limit our ability to generate revenue from the sale of SY-1425, if approved for commercial sale. Off-label sales would limit our ability to generate revenue from the sale of SY-1425, if approved for commercial sale.

Our intellectual property licenses with third parties may be subject to disagreements over contract interpretations, which could narrow the scope of our rights to the relevant intellectual property or technology or increase our financial or other obligations to our licensors.

        The agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could harm our business, financial condition, results of operations and prospects.

We may not be successful in obtaining or maintaining necessary rights to current or future product candidates through acquisitions and in-licenses.

        We currently have rights to certain intellectual property, through licenses from third parties, to develop SY-1425 and SY-1365. Because our programs may require the use of proprietary rights by third parties, the growth of our business likely will depend, in part, on our ability to acquire, in-license or use these proprietary rights. We may be unable to acquire or in-license any compositions, methods of use, processes or other intellectual property rights from third parties that we identify as necessary for any product candidates. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment.

        We sometimes collaborate with non-profit and academic institutions to accelerate our preclinical research or development under written agreements with these institutions. Typically, these institutions provide us with an option to negotiate a license to any of the institution's rights in technology resulting from the collaboration. Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us or we may decide not to execute such option if we believe such license is not necessary to pursue our program. If we are unable or opt not to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue our program.

        If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, we may be required to expend significant time and resources to redesign our product candidates or the methods for manufacturing them or to

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develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize the affected product candidate, which could harm our business significantly.

We depend upon our license with TMRC, and we may not be able to maintain that license.

        We have entered into a standby license with TMRC and Toko providing that if at any time the license agreement between Toko and TMRC relating to the SY-1425 rights, that TMRC has licensed to us terminates or otherwise ceases to be in effect for any reason, Toko will grant directly to us such rights and licenses with respect to SY-1425 as are necessary for us to continue to develop SY-1425. If the TMRC license agreement terminates and this standby license terminates, then we may lose rights to SY-1425 that may be necessary to the development and commercialization of SY-1425, which could have a material adverse impact on our business.

If we are unable to obtain and maintain sufficient patent protection for any product candidates, or if the scope of the patent protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our product candidates may be adversely affected.

        Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our proprietary product candidates. If we do not adequately protect our intellectual property, our competitors may be able to erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability. To protect our proprietary position, we file patent applications in the United States and abroad related to our novel product candidates that are important to our business. We also license or purchase patent applications filed by others. The patent application and approval process is expensive and time consuming. We may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

        Agreements through which we license patent rights may not give us control over patent prosecution or maintenance, so that we may not be able to control which claims or arguments are presented and may not be able to secure, maintain, or successfully enforce necessary or desirable patent protection from those patent rights. We have not had and do not have primary control over patent prosecution and maintenance for certain of the patents and patent applications we license, and therefore cannot guarantee that these patents and applications will be prosecuted in a manner consistent with the best interests of our business. We cannot be certain that patent prosecution and maintenance activities by our licensors have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents.

        We, or any future partners, collaborators or licensees, may fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection for them. Therefore, we may miss potential opportunities to strengthen our patent position.

        It is possible that defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope or patent term adjustments. If we or our partners, collaborators, licensees, or licensors, whether current or future, fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated. If our partners, collaborators, licensees or licensors, are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised. If there are material defects in the form, preparation, prosecution, or enforcement of our patents or patent applications, such patents may be invalid and/or unenforceable, and such applications may never result in valid, enforceable patents. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.

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        The patent position of biotechnology and pharmaceutical companies generally is highly uncertain. No consistent policy regarding the breadth of claims allowed in biotechnology and pharmaceutical patents has emerged to date in the United States or in many foreign jurisdictions. In addition, the determination of patent rights with respect to pharmaceutical compounds commonly involves complex legal and factual questions, which has in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.

        Pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications. Assuming the other requirements for patentability are met, currently, the first to file a patent application is generally entitled to the patent. However, prior to March 16, 2013, in the United States, the first to invent was entitled to the patent. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases, not at all. Therefore, we cannot be certain that we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. Similarly, we cannot be certain that parties from whom we do or may license or purchase patent rights were the first to make relevant claimed inventions, or were the first to file for patent protection for them. If third parties have filed patent applications on inventions claimed in our patents or applications on or before March 15, 2013, an interference proceeding in the United States can be initiated by such third parties to determine who was the first to invent any of the subject matter covered by the patent claims of our applications. If third parties have filed such applications after March 15, 2013, a derivation proceeding in the United States can be initiated by such third parties to determine whether our invention was derived from theirs.

        Moreover, because the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, our patents or pending patent applications may be challenged in the courts or patent offices in the United States and abroad. There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found. If such prior art exists, it may be used to invalidate a patent, or may prevent a patent from issuing from a pending patent application. For example, such patent filings may be subject to a third-party preissuance submission of prior art to the U.S. Patent and Trademark Office, or USPTO, to other patent offices around the world. Alternately or additionally, we may become involved in post-grant review procedures, oppositions, derivations, proceedings, reexaminations, inter partes review or interference proceedings, in the United States or elsewhere, challenging patents or patent applications in which we have rights, including patents on which we rely to protect our business. An adverse determination in any such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products. In addition, given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.

        Pending and future patent applications may not result in patents being issued which protect our business, in whole or in part, or which effectively prevent others from commercializing competitive products. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. In addition, the laws of foreign countries may not protect our rights to the same extent or in the same manner as the laws of the United States.

        Issued patents that we have or may obtain or license may not provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive

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advantage. Our competitors may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner. Our competitors may also seek approval to market their own products similar to or otherwise competitive with our products. Alternatively, our competitors may seek to market generic versions of any approved products by submitting ANDAs to the FDA in which they claim that patents owned or licensed by us are invalid, unenforceable or not infringed. In these circumstances, we may need to defend or assert our patents, or both, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court or other agency with jurisdiction may find our patents invalid or unenforceable, or that our competitors are competing in a non-infringing manner. Thus, even if we have valid and enforceable patents, these patents still may not provide protection against competing products or processes sufficient to achieve our business objectives. We are aware of a third party that is offering super-enhancer identification and analysis services, which we believe infringe our recently issued in-licensed United States patent relating to this subject matter. We are in communication with that third party and are seeking to have them cease offering those services in light of our issued patent. If we are unsuccessful we may be required to file infringement claims against that party with all of the associated risks of patent infringement litigation set forth herein. If that party continues to offer these services, it may affect our ability to attract corporate partners who are interested in super-enhancer identification and analysis and may negatively affect the value of our technology platform and therefore harm our business.

        Pursuant to the terms of some of our license agreements with third parties, some of our third party licensors have the right, but not the obligation in certain circumstances to control enforcement of our licensed patents or defense of any claims asserting the invalidity of these patents. Even if we are permitted to pursue such enforcement or defense, we will require the cooperation of our licensors, and cannot guarantee that we would receive it and on what terms. We cannot be certain that our licensors will allocate sufficient resources or prioritize their or our enforcement of such patents or defense of such claims to protect our interests in the licensed patents. If we cannot obtain patent protection, or enforce existing or future patents against third parties, our competitive position and our financial condition could suffer.

If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business would be harmed.

        In addition to the protection afforded by patents, we also rely on trade secret protection for certain aspects of our technology platform, including certain aspects of our gene control platform. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, consultants, independent contractors, advisors, contract manufacturers, suppliers and other third parties. We also enter into confidentiality and invention or patent assignment agreements with employees and certain consultants. Any party with whom we have executed such an agreement may breach that agreement and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time consuming, and the outcome is unpredictable. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret. Further, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such third party, or those to whom they communicate such technology or information, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our business and competitive position could be harmed.

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We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.

        Competitors may infringe our patents, trademarks, copyrights or other intellectual property. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents are invalid or unenforceable, or both. In any patent infringement proceeding, there is a risk that a court will decide that a patent of ours is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue. There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent's claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patent claims do not cover the invention. An adverse outcome in a litigation or proceeding involving one or more of our patents could limit our ability to assert those patents against those parties or other competitors, and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products. Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks.

        Even if we establish infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could adversely affect the price of shares of our common stock. Moreover, there can be no assurance that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before they are concluded. Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings.

If we are sued for infringing intellectual property rights of third parties, such litigation could be costly and time consuming and could prevent or delay us from developing or commercializing our product candidates.

        Our commercial success depends, in part, on our ability to develop, manufacture, market and sell our product candidates and use our gene control technology without infringing the intellectual property and other proprietary rights of third parties. Third parties may have U.S. and non-U.S. issued patents and pending patent applications relating to compounds and methods of use for the treatment of the disease indications for which we are developing our product candidates. If any third-party patents or patent applications are found to cover our product candidates or their methods of use, we may not be free to manufacture or market our product candidates as planned without obtaining a license, which may not be available on commercially reasonable terms, or at all.

        There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to our product candidates, including interference proceedings before the USPTO. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates. Because patent applications can take

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many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may be accused of infringing. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. Accordingly, third parties may assert infringement claims against us based on existing or future intellectual property rights. The outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance. The pharmaceutical and biotechnology industries have produced a significant number of patents, and it may not always be 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. If we were sued for patent infringement, we would need to demonstrate that our product candidates, 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 is difficult. For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could significantly harm our business and operating results. In addition, we may not have sufficient resources to bring these actions to a successful conclusion.

        If we are found to infringe a third party's intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing or commercializing the infringing product candidate or product. Alternatively, we may be required to obtain a license from such third party in order to use the infringing technology and continue developing, manufacturing or marketing the infringing product candidate or product. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. Alternatively or additionally, it could include terms that impede or destroy our ability to compete successfully in the commercial marketplace. In addition, we could be found liable for monetary damages, including treble damages and attorneys' fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations, which could harm our business. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.

Changes to the patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.

        As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity and is therefore costly, time consuming and inherently uncertain. Recent patent reform legislation in the United States, including the Leahy-Smith America Invents Act, or the America Invents Act, could increase those uncertainties and costs. The America Invents Act was signed into law on September 16, 2011, and many of the substantive changes became effective on March 16, 2013. The America Invents Act reforms United States patent law in part by changing the U.S. patent system from a "first to invent" system to a "first inventor to file" system, expanding the definition of prior art, and developing a post-grant review system. This legislation changes United States patent law in a way that may weaken our ability to obtain patent protection in the United States for those applications filed after March 16, 2013.

        Further, the America Invents Act created new procedures to challenge the validity of issued patents in the United States, including post-grant review and inter partes review proceedings, which some third parties have been using to cause the cancellation of selected or all claims of issued patents of competitors. For a patent with an effective filing date of March 16, 2013 or later, a petition for

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post-grant review can be filed by a third party in a nine month window from issuance of the patent. A petition for inter partes review can be filed immediately following the issuance of a patent if the patent has an effective filing date prior to March 16, 2013. A petition for inter partes review can be filed after the nine month period for filing a post-grant review petition has expired for a patent with an effective filing date of March 16, 2013 or later. Post-grant review proceedings can be brought on any ground of invalidity, whereas inter partes review proceedings can only raise an invalidity challenge based on published prior art and patents. These adversarial actions at the USPTO review patent claims without the presumption of validity afforded to U.S. patents in lawsuits in U.S. federal courts, and use a lower burden of proof than used in litigation in U.S. federal courts. Therefore, it is generally considered easier for a competitor or third party to have a U.S. patent invalidated in a USPTO post-grant review or inter partes review proceeding than invalidated in a litigation in a U.S. federal court. If any of our patents are challenged by a third party in such a USPTO proceeding, there is no guarantee that we or our licensors or collaborators will be successful in defending the patent, which would result in a loss of the challenged patent right to us.

        In addition, recent court rulings in cases such as Association for Molecular Pathology v. Myriad Genetics, Inc.; BRCA1- & BRCA2-Based Hereditary Cancer Test Patent Litigation; and Promega Corp. v. Life Technologies Corp. have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents once obtained. Depending on future actions by the U.S. Congress, the U.S. courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

We may not be able to enforce our intellectual property rights throughout the world.

        Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. The requirements for patentability may differ in certain countries, particularly in developing countries; thus, even in countries where we do pursue patent protection, there can be no assurance that any patents will issue with claims that cover our products.

        Moreover, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws. Additionally, laws of some countries outside of the United States and Europe do not afford intellectual property protection to the same extent as the laws of the United States and Europe. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, including India, China and other developing countries, do not favor the enforcement of patents and other intellectual property rights. This could make it difficult for us to stop the infringement of our patents or the misappropriation of our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. Consequently, we may not be able to prevent third parties from practicing our inventions in certain countries outside the United States and Europe. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop and market their own products and, further, may export otherwise infringing products to territories where we have patent protection, if our ability to enforce our patents to stop infringing activities is inadequate. These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

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        Agreements through which we license patent rights may not give us sufficient rights to permit us to pursue enforcement of our licensed patents or defense of any claims asserting the invalidity of these patents (or control of enforcement or defense) of such patent rights in all relevant jurisdictions as requirements may vary.

        Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and resources from other aspects of our business. Moreover, such proceedings could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Furthermore, while we intend to protect our intellectual property rights in major markets for our products, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our products. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.

Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time.

        Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. We expect to seek extensions of patent terms in the United States and, if available, in other countries where we are prosecuting patents. In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits a patent term extension of up to five years beyond the normal expiration of the patent, which is limited to the approved indication (or any additional indications approved during the period of extension). However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request. If this occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case.

We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.

        Many of our employees and our licensors' employees, including our senior management, were previously employed at universities or at other biotechnology or pharmaceutical companies, some of which may be competitors or potential competitors. Some of these employees, including each member of our senior management, executed proprietary rights, non-disclosure and non-competition agreements, or similar agreements, in connection with such previous employment. Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such third party. Litigation may be necessary to defend against such claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel or sustain damages. Such intellectual property rights could be awarded to a third party, and we could be required to obtain a license from such third party to commercialize our technology or products. Such a license may not be available on commercially reasonable terms or at all. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

        In addition, while we typically require our employees, consultants and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact

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develops intellectual property that we regard as our own, which may result in claims by or against us related to the ownership of such intellectual property. If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to our senior management and scientific personnel.

Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

        Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and applications are required to be paid to the USPTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and applications. The USPTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and after a patent has issued. There are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

Risks Related to Regulatory Approval and Marketing of Our Product Candidates and Other Legal Compliance Matters

Even if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time consuming and uncertain and may prevent us or any future collaborators from obtaining approvals for the commercialization of some or all of our product candidates. As a result, we cannot predict when or if, and in which territories, we, or any future collaborators, will obtain marketing approval to commercialize a product candidate.

        The research, testing, manufacturing, labeling, approval, selling, marketing, promotion and distribution of products are subject to extensive regulation by the FDA and comparable foreign regulatory authorities. We, and any future collaborators, are not permitted to market our product candidates in the United States or in other countries until we, or they, receive approval of an NDA from the FDA or marketing approval from applicable regulatory authorities outside the United States. Our product candidates are in various stages of development and are subject to the risks of failure inherent in drug development. We have not submitted an application for or received marketing approval for any of our product candidates in the United States or in any other jurisdiction. We have limited experience in conducting and managing the clinical trials necessary to obtain marketing approvals, including FDA approval of an NDA.

        The process of obtaining marketing approvals, both in the United States and abroad, is lengthy, expensive and uncertain. It may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate's safety and efficacy. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities. The FDA or other regulatory authorities may determine that our product candidates are not safe and effective, only moderately effective or have undesirable or unintended side effects, toxicities or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use. Moreover, the FDA or other regulatory authorities may fail to approve the companion diagnostics we contemplate developing with partners. Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

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        In addition, changes in marketing approval policies during the development period, changes in or the enactment or promulgation of additional statutes, regulations or guidance or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate. Any marketing approval we, or any future collaborators, ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

        Any delay in obtaining or failure to obtain required approvals could negatively affect our ability or that of any future collaborators to generate revenue from the particular product candidate, which likely would result in significant harm to our financial position and adversely impact our stock price.

If we are required by the FDA to obtain approval of a companion diagnostic in connection with approval of a candidate therapeutic product, and we do not obtain or there are delays in obtaining FDA approval of a diagnostic device, we will not be able to commercialize the product candidate and our ability to generate revenue will be materially impaired.

        In August 2014, the FDA issued final guidance clarifying the requirements that will apply to approval of therapeutic products and in vitro companion diagnostics. According to the guidance, if FDA determines that a companion diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, FDA generally will not approve the therapeutic product or new therapeutic product indication if the companion diagnostic is not also approved or cleared for that indication. Under the Federal Food, Drug, and Cosmetic Act, or FDCA, companion diagnostics are regulated as medical devices and the FDA has generally required companion diagnostics intended to select the patients who will respond to cancer treatment to obtain premarket approval, or a PMA. Consequently, we anticipate that certain of our companion diagnostics may require us or our collaborators to obtain a PMA. The PMA process, including the gathering of clinical and preclinical data and the submission to and review by the FDA, involves a rigorous premarket review during which the applicant must prepare and provide the FDA with reasonable assurance of the device's safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling. PMA approval is not guaranteed and may take considerable time, and the FDA may ultimately respond to a PMA submission with a not approvable determination based on deficiencies in the application and require additional clinical trial or other data that may be expensive and time-consuming to generate and that can substantially delay approval. As a result, if we or our collaborators are required by the FDA to obtain approval of a companion diagnostic for a candidate therapeutic product, and we or our collaborators do not obtain or there are delays in obtaining FDA approval of a diagnostic device, we will not be able to commercialize the product candidate and our ability to generate revenue will be materially impaired.

        In its August 2014 guidance, FDA also indicated that companion diagnostics used to make treatment decisions in clinical trials of a therapeutic product generally will be considered investigational devices. When a companion diagnostic is used to make critical treatment decisions, such as patient selection, the FDA stated that the diagnostic will be considered a significant risk device requiring an IDE. We plan to use our RARA biomarker to prospectively select patients in our evaluation of SY-1425 for newly diagnosed AML patients 60 years of age or older who are not suitable candidates for standard chemotherapy and low-risk transfusion-dependent MDS patients. Accordingly, these studies will need to meet the requirements of FDA's IDE regulations. There is a risk that FDA may find that we do not comply with those requirements and, if this were to occur, we would not be able to proceed with our planned trial of SY-1425 in these patient populations.

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Failure to obtain marketing approval in foreign jurisdictions would prevent our product candidates from being marketed abroad. Any approval we are granted for our product candidates in the United States would not assure approval of our product candidates in foreign jurisdictions.

        In order to market and sell our products in the European Union and other foreign jurisdictions, we, and any future collaborators, must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The marketing approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, a product must be approved for reimbursement before the product can be approved for sale in that country. We, and any future collaborators, may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. We may file for marketing approvals but not receive necessary approvals to commercialize our products in any market.

We, or any future collaborators, may not be able to obtain orphan drug designation or orphan drug exclusivity for our product candidates and, even if we do, that exclusivity may not prevent the FDA or the EMA from approving competing products.

        Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States. We, or any future collaborators, may seek orphan drug designations for product candidates and may be unable to obtain such designations.

        Even if we, or any future collaborators, obtain orphan drug designation for a product candidate, we, or they, may not be able to obtain orphan drug exclusivity for that product candidate. Generally, a product with orphan drug designation only becomes entitled to orphan drug exclusivity if it receives the first marketing approval for the indication for which it has such designation, in which case the FDA or the EMA will be precluded from approving another marketing application for the same drug for that indication for the applicable exclusivity period. The applicable exclusivity period is seven years in the United States and ten years in Europe. The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be lost if the FDA or the EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

        Even if we, or any future collaborators, obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs can be approved for the same condition and the same drug can be approved for different conditions. Even after an orphan drug is approved, the FDA can subsequently approve the same drug for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.

Even if we, or any future collaborators, obtain marketing approvals for our product candidates, the terms of approvals and ongoing regulation of our products may limit how we manufacture and market our products, which could impair our ability to generate revenue.

        Once marketing approval has been granted, an approved product and its manufacturer and marketer are subject to ongoing review and extensive regulation. We, and any future collaborators,

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must therefore comply with requirements concerning advertising and promotion for any of our product candidates for which we or they obtain marketing 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 labeling. Thus, we and any future collaborators will not be able to promote any products we develop for indications or uses for which they are not approved.

        In addition, manufacturers of approved products and those manufacturers' facilities are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to cGMPs, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation and reporting requirements. We, our contract manufacturers, any future collaborators and their contract manufacturers could be subject to periodic unannounced inspections by the FDA to monitor and ensure compliance with cGMPs.

        Accordingly, assuming we, or any future collaborators, receive marketing approval for one or more of our product candidates, we, and any future collaborators, and our and their contract manufacturers will continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance and quality control.

        If we, and any future collaborators, are not able to comply with post-approval regulatory requirements, we, and any future collaborators, could have the marketing approvals for our products withdrawn by regulatory authorities and our, or any future collaborators', ability to market any future products could be limited, which could adversely affect our ability to achieve or sustain profitability. Further, the cost of compliance with post-approval regulations may have a negative effect on our operating results and financial condition.

Any of our product candidates for which we, or any future collaborators, obtain marketing approval in the future could be subject to post-marketing restrictions or withdrawal from the market and we, or any future collaborators, may be subject to substantial penalties if we, or they, fail to comply with regulatory requirements or if we, or they, experience unanticipated problems with our products following approval.

        Any of our product candidates for which we, or any future collaborators, obtain marketing approval, as well as the manufacturing processes, post-approval studies and measures, labeling, advertising and promotional activities for such product, among other things, will be subject to ongoing requirements of and review by the FDA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping. Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of approval, including the requirement to implement a Risk Evaluation and Mitigation Strategy.

        The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of a product. The FDA and other agencies, including the Department of Justice, closely regulate and monitor the post-approval marketing and promotion of products to ensure that they are manufactured, marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling. The FDA imposes stringent restrictions on manufacturers' communications regarding off-label use and if we, or any future collaborators, do not market any of our product candidates for which we, or they, receive marketing approval for only their approved indications, we, or they, may be subject to warnings or enforcement action for off-label marketing. Violation of the FDCA and other statutes, including the False Claims Act, relating to the promotion and advertising of prescription drugs may lead to investigations or allegations of violations of federal and state health care fraud and abuse laws and state consumer protection laws.

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        In addition, later discovery of previously unknown adverse events or other problems with our products or their manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including:

    restrictions on such products, manufacturers or manufacturing processes;

    restrictions on the labeling or marketing of a product;

    restrictions on product distribution or use;

    requirements to conduct post-marketing studies or clinical trials;

    warning letters or untitled letters;

    withdrawal of the products from the market;

    refusal to approve pending applications or supplements to approved applications that we submit;

    recall of products;

    restrictions on coverage by third-party payors;

    fines, restitution or disgorgement of profits or revenues;

    suspension or withdrawal of marketing approvals;

    refusal to permit the import or export of products;

    product seizure; or

    injunctions or the imposition of civil or criminal penalties.

We may seek a Breakthrough Therapy designation for one or more of our product candidates, but we might not receive such designation, and even if we do, such designation may not lead to a faster development or regulatory review or approval process.

        We may seek a Breakthrough Therapy designation for one or more of our product candidates. A Breakthrough Therapy is defined as a product that is intended, alone or in combination with one or more other products, to treat a serious condition, and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For biologics that have been designated as Breakthrough Therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Products designated as Breakthrough Therapies by the FDA may also be eligible for priority review if supported by clinical data at the time the NDA is submitted to FDA.

        Designation as a Breakthrough Therapy is within the discretion of the FDA. Accordingly, even if we believe that one of our product candidates meets the criteria for designation as a Breakthrough Therapy, the FDA may disagree and instead determine not to make such designation. Even if we receive Breakthrough Therapy designation, the receipt of such designation for a product candidate may not result in a faster development or regulatory review or approval process compared to products considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our product candidates qualify as Breakthrough Therapies, the FDA may later decide that the product candidates no longer meet the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

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We may seek Fast Track designation for one or more of our product candidates, but we might not receive such designation, and even if we do, such designation may not actually lead to a faster development or regulatory review or approval process.

        If a product is intended for the treatment of a serious condition and nonclinical or clinical data demonstrate the potential to address unmet medical need for this condition, a product sponsor may apply for FDA Fast Track designation. If we seek Fast Track designation for a product candidate, we may not receive it from the FDA. However, even if we receive Fast Track designation, Fast Track designation does not ensure that we will receive marketing approval or that approval will be granted within any particular timeframe. We may not experience a faster development or regulatory review or approval process with Fast Track designation compared to conventional FDA procedures. In addition, the FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program. Fast Track designation alone does not guarantee qualification for the FDA's priority review procedures.

Current and future legislation may increase the difficulty and cost for us and any future collaborators to obtain marketing approval of and commercialize our product candidates and affect the prices we, or they, may obtain.

        In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability, or the ability of any future collaborators, to profitably sell any products for which we, or they, obtain marketing approval. We expect that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we, or any future collaborators, may receive for any approved products.

        In March 2010 for example, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the PPACA. Among the provisions of the PPACA of potential importance to our business and our product candidates are the following:

    an annual, non-deductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents;

    an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;

    expansion of healthcare fraud and abuse laws, including the civil False Claims Act and the federal Anti-Kickback Statute, new government investigative powers and enhanced penalties for noncompliance;

    a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer's outpatient drugs to be covered under Medicare Part D;

    extension of manufacturers' Medicaid rebate liability;

    expansion of eligibility criteria for Medicaid programs;

    expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;

    new requirements to report certain financial arrangements with physicians and teaching hospitals;

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    a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and

    a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

        In addition, other legislative changes have been proposed and adopted since the PPACA was enacted. These changes include the Budget Control Act of 2011, which, among other things, led to aggregate reductions to Medicare payments to providers of up to 2% per fiscal year that started in 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2025 unless additional Congressional action is taken, and the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding. Further, there have been several recent U.S. Congressional inquiries and proposed bills designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

        Legislative and regulatory proposals have also been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by the United States Congress of the FDA's approval process may significantly delay or prevent marketing approval, as well as subject us and any future collaborators to more stringent product labeling and post-marketing testing and other requirements.

Governments outside the United States tend to impose strict price controls, which may adversely affect our revenues, if any.

        In some countries, such as the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we, or any future collaborators, may be required to conduct a clinical trial that compares the cost-effectiveness of our product to other available therapies. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed.

We may be subject to certain healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, fines, disgorgement, exclusion from participation in government healthcare programs, curtailment or restricting of our operations, and diminished profits and future earnings.

        Healthcare providers, third-party payors and others will play a primary role in the recommendation and prescription of any products for which we obtain marketing approval. Our future arrangements with healthcare providers and third-party payors will expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute any products for which we obtain marketing approval. Potentially applicable U.S. federal and state healthcare laws and regulations include the following:

        Anti-Kickback Statute.    The federal Anti-Kickback Statute prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration,

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directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid;

        False Claims Laws.    The federal false claims laws, including the civil False Claims Act, impose criminal and civil penalties, including those from civil whistleblower or qui tam actions against individuals or entities for 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;

        HIPAA.    The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil liability for executing or attempting to execute a scheme to defraud any healthcare benefit program;

        HIPAA and HITECH.    HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or the HITECH Act, also imposes obligations on certain types of individuals and entities, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

        False Statements Statute.    The federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services;

        Transparency Requirements.    The federal Physician Payments Sunshine Act requires certain manufacturers of 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 report annually to the U.S. Department of Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests; and

        Analogous State and Foreign Laws.    Analogous state laws and regulations, such as state anti-kickback and false claims laws, and transparency 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, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, in addition to requiring drug manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures. Many state laws also 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. Foreign laws also govern the privacy and security of health information in many circumstances.

        Efforts to ensure that our business arrangements with third parties, and our business generally, will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, disgorgement, contractual damages, and reputational harm, any of which could substantially disrupt our operations. If any of the physicians or other providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

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We are subject to U.S. and foreign anti-corruption and anti-money laundering laws with respect to our operations and non-compliance with such laws can subject us to criminal and/or civil liability and harm our business.

        We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, and possibly other state and national anti-bribery and anti-money laundering laws in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, third-party intermediaries, joint venture partners and collaborators from authorizing, promising, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. We may have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations. In addition, we may engage third party intermediaries to promote our clinical research activities abroad and/or to obtain necessary permits, licenses, and other regulatory approvals. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize or have actual knowledge of such activities.

        Prior to the completion of this offering, we will adopt a Code of Business Conduct and Ethics, which will be effective upon the completion of this offering, and expect to prepare and implement policies and procedures to ensure compliance with such code. The Code of Business Conduct and Ethics mandates compliance with the FCPA and other anti-corruption laws applicable to our business throughout the world. However, we cannot assure you that our employees and third party intermediaries will comply with this code or such anti-corruption laws. Noncompliance with anti-corruption and anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting with certain persons, the loss of export privileges, reputational harm, adverse media coverage, and other collateral consequences. If any subpoenas, investigations, or other enforcement actions are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of operations and financial condition could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management's attention and resources and significant defense and compliance costs and other professional fees. In certain cases, enforcement authorities may even cause us to appoint an independent compliance monitor which can result in added costs and administrative burdens.

We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws.

        Our products and solutions are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury Department's Office of Foreign Assets Controls. Exports of our products and solutions outside of the United States must be made in compliance with these laws and regulations. If we fail to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges; fines, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers.

        In addition, changes in our products or solutions or changes in applicable export or import laws and regulations may create delays in the introduction, provision, or sale of our products and solutions in international markets, prevent customers from using our products and solutions or, in some cases,

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prevent the export or import of our products and solutions to certain countries, governments or persons altogether. Any limitation on our ability to export, provide, or sell our products and solutions could adversely affect our business, financial condition and results of operations.

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.

        We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste products. Even if we contract with third parties for the disposal of these materials and waste products, we cannot completely eliminate the risk of contamination or injury resulting from these materials. In the event of contamination or injury resulting from the use or disposal of our hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

        We maintain workers' compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, but this insurance may not provide adequate coverage against potential liabilities. However, we do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us.

        In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Current or future environmental laws and regulations may impair our research, development or production efforts. In addition, failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions.

Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.

        Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. The most recent global financial crisis caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn, such as the most recent global financial crisis, could result in a variety of risks to our business, including weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all. This is particularly true in the European Union, which is undergoing a continued severe economic crisis. A weak or declining economy could strain our suppliers, possibly resulting in supply disruption, or cause delays in payments for our services by third-party payors or our collaborators. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

Our internal computer systems, or those of our collaborators or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

        Our internal computer systems and those of our current and any future collaborators and other contractors or consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we have not experienced any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions. For example, the loss of clinical trial data from completed or

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future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of our product candidates could be delayed.

Our employees may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.

        We are exposed to the risk of employee fraud or other misconduct, including intentional failures to comply with FDA regulations or similar regulations of comparable foreign regulatory authorities, provide accurate information to the FDA or comparable foreign regulatory authorities, comply with manufacturing standards we have established, comply with federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities, report financial information or data accurately or disclose unauthorized activities to us. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws, standards or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions.

Risks Related to Employee Matters and Managing Growth

Our future success depends on our ability to retain our executive officers and to attract, retain and motivate qualified personnel.

        We are highly dependent on the pharmaceutical research and development and business development expertise of Nancy Simonian, M.D., our president and chief executive officer; Kyle D. Kuvalanka, our chief operating officer; Eric R. Olson, Ph.D., our chief scientific officer; David A. Roth, M.D., our chief medical officer; and Jorge Conde, our chief strategy officer. Each of these executive officers is employed "at will," meaning any of them may terminate his or her employment with us at any time with or without notice and for any reason or no reason. In the future, we may be dependent on other members of our management, scientific and development team.

        Our ability to compete in the biotechnology and pharmaceuticals industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel. Our industry has experienced a high rate of turnover of management personnel in recent years. If we lose one or more of our executive officers or other key employees, our ability to implement our business strategy successfully could be seriously harmed. Furthermore, replacing executive officers or other key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to develop, gain marketing approval of and commercialize products successfully. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these additional key employees on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.

        We rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and

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advisors may be employed by other entities and may have commitments under consulting or advisory contracts with those entities that may limit their availability to us. If we are unable to continue to attract and retain highly qualified personnel, our ability to develop and commercialize our product candidates will be limited.

We expect to expand our organization, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

        As of June 15, 2016, we had 49 full-time employees. We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of drug manufacturing, regulatory affairs and sales, marketing and distribution. To manage these growth activities, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Our management may need to devote a significant amount of its attention to managing these growth activities. Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion or relocation of our operations, retain key employees, or identify, recruit and train additional qualified personnel. Our inability to manage the expansion or relocation of our operations effectively may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could also require significant capital expenditures and may divert financial resources from other projects, such as the development of additional product candidates. If we are unable to effectively manage our expected growth, our expenses may increase more than expected, our ability to generate revenues could be reduced and we may not be able to implement our business strategy, including the successful commercialization of our product candidates.

We may engage in acquisitions that could disrupt our business, cause dilution to our stockholders or reduce our financial resources.

        In the future, we may enter into transactions to acquire other businesses, products or technologies. Because we have not made any acquisitions to date, our ability to do so successfully is unproven. If we do identify suitable candidates, we may not be able to make such acquisitions on favorable terms, or at all. Any acquisitions we make may not strengthen our competitive position, and these transactions may be viewed negatively by customers or investors. We may decide to incur debt in connection with an acquisition or issue our common stock or other equity securities to the stockholders of the acquired company, which would reduce the percentage ownership of our existing stockholders. We could incur losses resulting from undiscovered liabilities of the acquired business that are not covered by the indemnification we may obtain from the seller. In addition, we may not be able to successfully integrate the acquired personnel, technologies and operations into our existing business in an effective, timely and non-disruptive manner. Acquisitions may also divert management attention from day-to-day responsibilities, increase our expenses and reduce our cash available for operations and other uses. We cannot predict the number, timing or size of future acquisitions or the effect that any such transactions might have on our operating results.

Risks Related to Our Common Stock and This Offering

No public market for our common stock currently exists, and an active trading market for our common stock may not develop.

        Prior to this offering, there has been no public market for our common stock. The initial public offering price for our common stock will be determined through negotiations with the underwriters. This price will not necessarily reflect the price at which investors in the market will be willing to buy and sell our shares following this offering. Although we have applied to list our common stock on The

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NASDAQ Global Market, an active trading market for our shares may never develop or, if developed, be maintained following this offering. If an active market for our common stock does not develop or is not maintained, it may be difficult for you to sell shares you purchase in this offering without depressing the market price for the shares or at all. An inactive trading market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

If you purchase shares of common stock in this offering, you will suffer immediate dilution in the book value of your investment.

        The initial public offering price of our common stock is substantially higher than the net tangible book value per share of our common stock. Therefore, if you purchase shares of our common stock in this offering, you will pay a price per share that substantially exceeds our net tangible book value per share after this offering. Based on the assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, you will experience immediate dilution of $9.82 per share, representing the difference between our pro forma as adjusted, net tangible book value per share after giving effect to this offering and the assumed initial public offering price. Purchasers of common stock in this offering will have contributed approximately 32.8% of the aggregate price paid by all purchasers of our stock and will own approximately 17.7% of our common stock outstanding after this offering, excluding any shares of our common stock that they may have acquired prior to this offering. Furthermore, if the underwriters exercise their overallotment option or our previously issued options to acquire common stock at prices below the assumed initial public offering price are exercised, you will experience further dilution. For additional information on the dilution that you will experience immediately after this offering, see the section titled "Dilution."

The price of our common stock is likely to be highly volatile, which could result in substantial losses for purchasers of our common stock in this offering.

        Our stock price is likely to be highly volatile. The stock market in general and the market for smaller pharmaceutical and biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your common stock at or above the initial public offering price and you may lose some or all of your investment. The market price for our common stock may be influenced by many factors, including:

    the timing and results of clinical trials of SY-1425 and SY-1365;

    the success of existing or new competitive products or technologies;

    regulatory actions with respect to our product candidates or our competitors' products and product candidates;

    announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments;

    commencement or termination of collaborations for our development programs;

    failure or discontinuation of any of our development programs;

    results of clinical trials of product candidates of our competitors;

    regulatory or legal developments in the United States and other countries;

    developments or disputes concerning patent applications, issued patents or other proprietary rights;

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    the recruitment or departure of key personnel;

    the level of expenses related to any of our product candidates or clinical development programs;

    the results of our efforts to develop additional product candidates or products;

    actual or anticipated changes in estimates as to financial results or development timelines or recommendations by securities analysts;

    announcement or expectation of additional financing efforts;

    sales of our common stock by us, our insiders or other stockholders;

    variations in our financial results or those of companies that are perceived to be similar to us;

    changes in estimates or recommendations by securities analysts, if any, that cover our stock;

    changes in the structure of healthcare payment systems;

    market conditions in the pharmaceutical and biotechnology sectors;

    general economic, industry and market conditions; and

    the other factors described in this "Risk Factors" section.

        Additionally, our stock price is likely to be volatile, and in the past companies that have experienced volatility in the market price of their stock have been subject to an increased incidence of securities class action litigation. This risk is especially relevant for us because pharmaceutical companies have experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management's attention and resources, which could harm our business.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively or in ways with which you agree.

        Although we currently intend to use the net proceeds from this offering in the manner described in the section titled "Use of Proceeds" in this prospectus, our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common stock. You will not have the opportunity to influence our decisions on how to use our net proceeds from this offering. The failure by our management to apply these funds effectively could result in financial losses that could harm our business, cause the price of our common stock to decline and delay the development of our product candidates. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

We are an "emerging growth company," and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.

        We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may remain an emerging growth company for up to five years. For so long as we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or SOX Section 404, not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a

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nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. In this prospectus, we have provided only two years of audited financial statements and have not included all of the executive compensation related information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

        In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices.

        As a public company, and particularly after we are no longer an "emerging growth company," we will incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The NASDAQ Global Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. We expect that we will need to hire additional accounting, finance and other personnel in connection with our becoming, and our efforts to comply with the requirements of being, a public company and our management and other personnel will need to devote a substantial amount of time towards maintaining compliance with these requirements. These requirements will increase our legal and financial compliance costs and will make some activities more time consuming and costly. For example, we expect that the rules and regulations applicable to us as a public company may make it more difficult and more expensive for us to obtain director and officer liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors. We are currently evaluating these rules and regulations, and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

We have identified material weaknesses in our internal control over financial reporting. If we are unable to remedy our material weaknesses, or if we fail to establish and maintain effective internal controls, we may be unable to produce timely and accurate financial statements, and we may conclude that our internal control over financial reporting is not effective, which could adversely impact our investors' confidence and our stock price.

        Prior to this offering, we were a private company and had limited accounting and financial reporting personnel and other resources with which to address our internal controls and related procedures. In connection with the audit of our consolidated financial statements for the years ended December 31, 2013 and 2014, we and our independent registered public accounting firm identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements

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will not be prevented or detected on a timely basis. The material weaknesses related to our controls over the classification of certain indirect and other expenses between general and administrative and research and development, and to the accounting for stock-based compensation. We also identified deficiencies related to our controls over our accounting for income taxes. The material weaknesses that we identified were due to the lack of appropriate oversight and review procedures by accounting personnel to properly identify and evaluate certain accounting matters that resulted in errors in our financial statements.

        We are implementing measures designed to improve our internal control over financial reporting to remediate these material weaknesses, including the following:

    we are formalizing our processes and internal control documentation and strengthening supervisory reviews by our management;

    we have hired additional qualified accounting personnel and engaged financial consultants, both of whom have significant accounting and financial reporting experience, which will enable the implementation of internal controls over financial reporting and segregating duties amongst accounting personnel;

    we expect to hire additional senior accounting and finance staff to complete this remediation; and

    we intend to implement certain accounting systems to automate manual processes, such as tracking and accounting for stock-based awards.

        We expect to incur additional costs to remediate these weaknesses, primarily personnel costs and external consulting fees. We cannot assure you that the measures we have taken to date, together with any measures we may take in the future, will be sufficient to remediate the control deficiencies that led to the material weaknesses in our internal control over financial reporting or to avoid potential future material weaknesses. In addition, neither our management nor an independent registered public accounting firm has ever performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act because no such evaluation has been required. Had we or our independent registered public accounting firm performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act, additional material weaknesses may have been identified. If we are unable to successfully remediate our existing or any future material weaknesses in our internal control over financial reporting, or if we identify any additional material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting, and our stock price may decline as a result. We also could become subject to investigations by NASDAQ, the Securities and Exchange Commission, or SEC, or other regulatory authorities.

As a result of becoming a public company, we will be obligated to develop and maintain proper and effective internal controls over financial reporting. Any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common shares.

        Pursuant to SOX Section 404 we will be required to furnish a report by our management on our internal control over financial reporting beginning with our second filing of an Annual Report on Form 10-K with the Securities and Exchange Commission, or SEC, after we become a public company. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Our independent

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registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until our first annual report required to be filed with the SEC following the date we are no longer an "emerging growth company," as defined in the JOBS Act. At such time as we are required to obtain auditor attestation, if we then have a material weakness, we would receive an adverse opinion regarding our internal control over financial reporting from our independent registered accounting firm.

        To achieve compliance with SOX Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. During our evaluation of our internal control, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our ordinary shares could decline, and we could be subject to sanctions or investigations by NASDAQ, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

A significant portion of our total outstanding shares is restricted from immediate resale but may be sold into the market in the near future, which could cause the market price of our common stock to decline significantly, even if our business is doing well.

        Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock. Following this offering, we will have 22,760,161 shares of common stock outstanding based on the 18,760,161 shares of our common stock outstanding as of June 15, 2016 after giving effect to the conversion of all outstanding shares of our preferred stock into 15,988,800 shares of our common stock upon the closing of this offering. Of these shares, the 4,000,000 shares sold by us in this offering may be resold in the public market immediately, unless purchased by our affiliates. The remaining 18,760,161 shares are currently restricted under securities laws or as a result of lock-up or other agreements, but will be able to be sold after this offering as described in the "Shares Eligible for Future Sale" section of this prospectus. The representatives of the underwriters may release these stockholders from their lock-up agreements with the underwriters at any time and without notice, which would allow for earlier sales of shares in the public market.

        Moreover, after this offering, holders of an aggregate of 16,774,912 shares of our common stock will have rights, subject to conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also plan to register all 5,818,869 shares of common stock that we may issue under our equity compensation plans. Once we register these shares, they can be freely sold in the public market upon issuance and once vested, subject to volume limitations applicable to affiliates and the

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lock-up agreements described in the "Underwriting" section of this prospectus. If additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.

We might not be able to utilize a significant portion of our net operating loss carryforwards and research and development tax credit carryforwards.

        As of December 31, 2015, we had federal and state net operating loss carryforwards of $44.8 million and $44.3 million, respectively, and federal and state research and development tax credit carryforwards of $1.4 million and $0.9 million, respectively, each of which if not utilized will expire at various dates through 2035. These net operating loss and tax credit carryforwards could expire unused and be unavailable to offset future income tax liabilities. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an "ownership change," which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation's ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited. We have not determined if we have experienced Section 382 ownership changes in the past and if a portion of our net operating loss and tax credit carryforwards are subject to an annual limitation under Section 382. In addition, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, including this offering, some of which may be outside of our control. We have not conducted a detailed study to document whether our historical activities qualify to support the research and development credit carryforwards. A detailed study could result in adjustment to our research and development credit carryforwards. If we determine that an ownership change has occurred and our ability to use our historical net operating loss and tax credit carryforwards is materially limited, or if our research and development carryforwards are adjusted, it would harm our future operating results by effectively increasing our future tax obligations.

We do not anticipate paying any cash dividends on our capital stock in the foreseeable future. Accordingly, stockholders must rely on capital appreciation, if any, for any return on their investment.

        We have never declared nor paid cash dividends on our capital stock. We currently plan to retain all of our future earnings, if any, to finance the operation, development and growth of our business. In addition, the terms of any future debt or credit agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

Concentration of ownership of our common stock among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions.

        Based upon shares outstanding as of June 15, 2016, upon the closing of this offering, our executive officers and directors, combined with our stockholders who owned more than 5% of our outstanding common stock before this offering and their affiliates, will, in the aggregate, beneficially own shares representing approximately 71.8% of our common stock. As a result, if these stockholders were to choose to act together, they would be able to control all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, would control the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of ownership control may:

    delay, defer or prevent a change in control;

    entrench our management or the board of directors; or

    impede a merger, consolidation, takeover or other business combination involving us that other stockholders may desire.

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        Some of these persons or entities may have interests different than yours. For example, because many of these stockholders purchased their shares at prices substantially below the price at which shares are being sold in this offering and have held their shares for a longer period, they may be more interested in selling our company to an acquirer than other investors or they may want us to pursue strategies that deviate from the interests of other stockholders.

        Certain of our existing principal stockholders have indicated an interest in purchasing an aggregate of approximately $35.0 million in shares of our common stock in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell more, less or no shares to any of these potential purchasers and any of these potential purchasers could determine to purchase more, less or no shares in this offering.

Provisions in our certificate of incorporation and bylaws and under Delaware law may prevent or frustrate attempts by our stockholders to change our management or hinder efforts to acquire a controlling interest in us.

        Provisions in our certificate of incorporation and our bylaws that will become effective upon the closing of this offering may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Among other things, these provisions:

    establish a classified board of directors such that all members of the board are not elected at one time;

    allow the authorized number of our directors to be changed only by resolution of our board of directors;

    limit the manner in which stockholders can remove directors from the board;

    establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on at stockholder meetings;

    require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;

    limit who may call a special meeting of stockholders;

    authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a "poison pill" that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and

    require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our certificate of incorporation or bylaws.

        Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our

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outstanding voting stock, unless the merger or combination is approved in a prescribed manner. This could discourage, delay or prevent someone from acquiring us or merging with us, whether or not it is desired by, or beneficial to, our stockholders. This could also have the effect of discouraging others from making tender offers for our common stock, including transactions that may be in your best interests. These provisions may also prevent changes in our management or limit the price that investors are willing to pay for our stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline.

        The trading market for our common stock will likely depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. We do not currently have research coverage, and there can be no assurance that analysts will cover us, or provide favorable coverage. Securities or industry analysts may elect not to provide research coverage of our common stock after this offering, and such lack of research coverage may negatively impact the market price of our common stock. In the event we do have analyst coverage, if one or more analysts downgrade our stock or change their opinion of our stock, our share price would likely decline. In addition, if one or more analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

Our certificate of incorporation that will become effective upon the closing of this offering designates the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could discourage lawsuits against our company and our directors and officers.

        Our certificate of incorporation that will become effective upon the closing of this offering provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or employees to our company or our stockholders, any action asserting a claim against us arising pursuant to any provision of the General Corporation Law of the State of Delaware or our certificate of incorporation or bylaws, or any action asserting a claim against us governed by the internal affairs doctrine. This exclusive forum provision may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors or officers, which may discourage such lawsuits against us and our directors and officers.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

        This prospectus contains forward-looking statements that involve substantial risks and uncertainties. The forward-looking statements are contained principally in the sections of this prospectus entitled "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," but are also contained elsewhere in this prospectus. All statements, other than statements of historical facts, contained in this prospectus, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. The forward-looking statements and opinions contained in this prospectus are based upon information available to us as of the date of this prospectus and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.

        These forward-looking statements include, among other things, statements about:

    our plans to initiate clinical trials for SY-1425 and SY-1365;

    planned clinical trials for our product candidates, whether conducted by us or by any future collaborators, including the timing of these trials and of the anticipated results;

    our plans to research, develop and commercialize our current and future product candidates;

    our expectations regarding the potential benefits of our gene control platform and our approach;

    our plans to seek to enter into collaborations for the development and commercialization of certain product candidates;

    the potential benefits of any future collaboration;

    the timing of and our ability to obtain and maintain regulatory approvals for our product candidates;

    the rate and degree of market acceptance and clinical utility of any products for which we receive marketing approval;

    our commercialization, marketing and manufacturing capabilities and strategy;

    our intellectual property position and strategy;

    our ability to identify additional products or product candidates with significant commercial potential;

    our expectations related to the use of proceeds from this offering;

    our estimates regarding expenses, future revenue, capital requirements and need for additional financing;

    developments relating to our competitors and our industry; and

    the impact of government laws and regulations.

        We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the

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forward-looking statements we make. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We have included important factors in the cautionary statements included in this prospectus, particularly in the "Risk Factors" section, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments that we may make or enter into.

        You should read this prospectus and the documents that we have filed as exhibits to the registration statement of which this prospectus is a part completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended, do not protect any forward-looking statements that we make in connection with this offering.

        This prospectus includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. All of the market data used in this prospectus involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. We believe that the information from these industry publications, surveys and studies is reliable. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of important factors, including those described in the section titled "Risk Factors." These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

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USE OF PROCEEDS

        We estimate that the net proceeds from our issuance and sale of 4,000,000 shares of our common stock in this offering will be $52.8 million, or $61.2 million if the underwriters exercise their overallotment option in full, assuming an initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

        Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our net proceeds from this offering by $3.7 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Each increase (decrease) of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) our net proceeds from this offering by $14.0 million, assuming no change in the assumed initial public offering price per share and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

        As of March 31, 2016, we had cash and cash equivalents of $62.1 million. We currently estimate that we will use the net proceeds from this offering, together with our existing cash and cash equivalents, as follows:

    approximately $25.0 million to fund our proof-of-concept Phase 2 clinical trial of SY-1425 in AML and MDS, including clinical research outsourcing, drug manufacturing, companion diagnostic development and internal personnel costs, with costs to be approximately allocated based on the number of AML and MDS patients enrolled in this trial, respectively;

    approximately $20.0 million to complete our IND-enabling activities and the Phase 1 portion of our planned Phase 1/2 clinical trial for SY-1365, including clinical research outsourcing, drug manufacturing and internal personnel costs;

    approximately $40.0 million for new and ongoing research activities, including for our preclinical programs and our platform with a goal of systematically delivering additional INDs; and

    the remainder for working capital and other general corporate purposes.

        This expected use of the net proceeds from this offering and our existing cash and cash equivalents represents our intentions based upon our current plans and business conditions. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development and commercialization efforts, the status of and results from clinical trials, any collaborations that we may enter into with third parties for our product candidates and any unforeseen cash needs. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering and our existing cash and cash equivalents. We have no current agreements, commitments or understandings for any material acquisitions or licenses of any products, businesses or technologies.

        Based on our planned use of the net proceeds from this offering, we estimate that such funds will be sufficient to enable us to reach clinical activity data readouts for SY-1425 in AML and MDS and SY-1365 in acute leukemias and to fund our operating expenses and capital expenditure requirements at least through mid-2018. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. We do not expect that the net proceeds from this offering and our existing cash and cash equivalents will be sufficient to enable us to fund the completion of development of any of our product candidates.

        Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in short-term, investment-grade, interest-bearing instruments and U.S. government securities.

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DIVIDEND POLICY

        We have never declared nor paid cash dividends on our common stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. We do not intend to pay cash dividends in respect of our common stock in the foreseeable future. Any future determination to pay cash dividends will be made at the discretion of our board of directors and will depend on restrictions and other factors our board of directors may deem relevant. Investors should not purchase our common stock with the expectation of receiving cash dividends.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents and our capitalization as of March 31, 2016 on:

    an actual basis excluding 142,215 shares of our common stock that are subject to repurchase by us;

    a pro forma basis to give effect to (i) the conversion of all outstanding shares of our preferred stock into an aggregate of 15,988,800 shares of common stock, (ii) the vesting of 53,334 shares of restricted common stock, (iii) the change in our total stockholders' (deficit) equity resulting from the stock-based compensation expense associated with the vesting of 53,334 shares of restricted common stock and the vesting of performance-based option awards to purchase up to 59,387 shares of our common stock and (iv) the filing and effectiveness of our restated certificate of incorporation, each upon the closing of this offering; and

    a pro forma as adjusted basis to give further effect to the issuance and sale of 4,000,000 shares of our common stock in this offering at an assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

        You should read this table together with our consolidated financial statements and the related notes included elsewhere in this prospectus and the sections of this prospectus titled "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Capital Stock."

 
  March 31, 2016  
 
  Actual   Pro Forma   Pro Forma
As Adjusted
 
 
  (unaudited)(in thousands, except share and per share data)
 

Cash and cash equivalents

  $ 62,133   $ 62,133   $ 114,933  

Series A convertible preferred stock, $0.001 par value; 30,350,000 shares authorized, issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma as adjusted

  $ 29,015   $   $  

Series B convertible preferred stock, $0.001 par value; 29,608,081 shares authorized, issued and outstanding, actual; no shares authorized, issued and outstanding pro forma and pro forma as adjusted

    92,792          

Stockholders' (deficit) equity:

                   

Preferred stock, $0.001 par value: no shares authorized, issued and outstanding actual; 10,000,000 shares authorized, no shares issued and outstanding pro forma and pro forma as adjusted

             

Common stock, $0.001 par value; 78,886,062 shares authorized, 2,404,350 shares issued and outstanding, actual; 200,000,000 shares authorized, 18,446,484 shares issued and outstanding, pro forma; 200,000,000 shares authorized, 22,446,484 shares issued and outstanding, pro forma as adjusted

    2     18     22  

Additional paid-in capital

    6,209     128,725     181,521  

Accumulated deficit

    (64,101 )   (64,826 )   (64,826 )

Total stockholders' (deficit) equity

    (57,890 )   63,917     116,717  

Total capitalization

  $ 63,917   $ 63,917   $ 116,717  

        Our capitalization following the closing of this offering will depend on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase (decrease) in

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the assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each additional paid-in-capital, total stockholders' equity and total capitalization by $3.7 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated expenses payable by us. Each increase (decrease) of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of additional paid-in-capital, total stockholders' equity and total capitalization by $14.0 million, assuming no change in the assumed initial public offering price per share and after deducting underwriting discounts and commissions and estimated expenses payable by us.

        The number of shares of our common stock shown as outstanding on an actual, pro forma and pro forma as adjusted basis in the table above does not include:

    2,217,953 shares of our common stock issuable upon the exercise of stock options outstanding as of March 31, 2016, at a weighted-average exercise price of $4.14 per share;

    149,197 shares of our common stock available for future issuance as of March 31, 2016 under our 2012 equity incentive plan; and

    3,120,000 and 586,666 additional shares of our common stock that will become available for future issuance under our 2016 stock incentive plan and our 2016 employee stock purchase plan, respectively, each of which will become effective immediately prior to the closing of this offering, as well as any automatic annual increases in the number of shares of common stock reserved for future issuance under these plans.

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DILUTION

        If you invest in our common stock in this offering, your ownership interest will be diluted immediately to the extent of the difference between the public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock after this offering.

        Our historical net tangible book deficit as of March 31, 2016 was $57.9 million, or $22.73 per share of our common stock. Our historical net tangible book deficit is the amount of our total tangible assets less our total liabilities. Historical net tangible book deficit per share represents historical net tangible book deficit, divided by the 2,546,565 shares of our common stock outstanding as of March 31, 2016, including 142,215 shares of unvested restricted stock subject to repurchase by us.

        Our pro forma net tangible book value as of March 31, 2016 was $63.9 million, or $3.45 per share of our common stock. Pro forma net tangible book value represents the amount of our total tangible assets less our total liabilities. Pro forma net tangible book value per share represents pro forma net tangible book value divided by the 18,535,365 shares of our common stock, including the automatic conversion of all outstanding shares of our preferred stock into an aggregate of 15,988,800 shares of our common stock upon the closing of this offering, outstanding as of March 31, 2016.

        After giving effect to our issuance and sale of 4,000,000 shares of our common stock in this offering at an assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31, 2016 would have been $116.7 million, or $5.18 per share. This represents an immediate increase in pro forma as adjusted net tangible book value per share of $1.73 to existing stockholders and immediate dilution of $9.82 in pro forma as adjusted net tangible book value per share to new investors purchasing common stock in this offering. Dilution per share to new investors is determined by subtracting pro forma as adjusted net tangible book value per share after this offering from the initial public offering price per share paid by new investors. The following table illustrates this dilution on a per share basis:

Assumed initial public offering price per share

        $ 15.00  

Historical net tangible book value (deficit) per share as of March 31, 2016

  $ (22.73 )      

Increase per share attributable to pro forma adjustments

    26.18        

Pro forma net tangible book value per share as of March 31, 2016

    3.45        

Increase in net tangible book value per share attributable to new investors

    1.73        

Pro forma as adjusted net tangible book value per share after this offering

          5.18  

Dilution per share to new investors

        $ 9.82  

        The dilution information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted net tangible book value per share by $0.17 and dilution per share to new investors purchasing shares in this offering by $0.83, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. An increase of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase the pro forma as adjusted net tangible book value per share after this offering by $0.37 and decrease the dilution per share to new investors participating in this offering by $0.37, assuming no change in the assumed initial public offering price and after deducting estimated underwriting discounts and

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commissions and estimated offering expenses payable by us. A decrease of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would decrease the pro forma as adjusted net tangible book value per share after this offering by $0.41 and increase the dilution per share to new investors participating in this offering by $0.41, assuming no change in the assumed initial public offering price and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

        If the underwriters exercise their overallotment option in full, the pro forma as adjusted net tangible book value will increase to $5.41 per share, representing an immediate increase to existing stockholders of $1.96 per share and an immediate dilution of $9.59 per share to new investors. If any shares are issued upon exercise of outstanding options, you will experience further dilution.

        The following table summarizes, on a pro forma as adjusted basis as of March 31, 2016, the number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid by existing stockholders and by new investors purchasing shares of common stock in this offering. The calculation below is based on an assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting underwriting discounts and commissions and estimated offering expenses payable by us.

 
   
   
  Total
Consideration
   
 
 
  Shares Purchased    
 
 
  Average Price
Per Share
 
 
  Number   Percent   Amount   Percent  
 
   
   
  (in thousands)
   
   
 

Existing stockholders

    18,535,365     82.3 % $ 122,685     67.2 % $ 6.62  

New investors

    4,000,000     17.7     60,000     32.8     15.00  

Total

    22,535,365     100 % $ 182,685     100 % $ 8.11  

        Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors by $4.0 million and, in the case of an increase, would increase the percentage of total consideration paid by new investors by 1.4 percentage points and, in the case of a decrease, would decrease the percentage of total consideration paid by new investors by 1.5 percentage points, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. An increase (decrease) of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors by $15.0 million and, in the case of an increase, would increase the percentage of total consideration paid by new investors by 5.1 percentage points and, in the case of a decrease, would decrease the percentage of total consideration paid by new investors by 6.0 percentage points, assuming no change in the assumed initial public offering price.

        The number of shares purchased from us by existing stockholders is based on 18,535,365 shares of our common stock outstanding as of March 31, 2016, after giving effect to the automatic conversion of all of our outstanding shares of preferred stock into 15,988,800 shares of common stock upon the closing of this offering, and excludes:

    2,217,953 shares of our common stock issuable upon the exercise of stock options outstanding as of March 31, 2016, at a weighted-average exercise price of $4.14 per share;

    149,197 additional shares of our common stock available for future issuance as of March 31, 2016 under our 2012 equity incentive plan; and

    3,120,000 and 586,666 additional shares of our common stock that will become available for future issuance under our 2016 stock incentive plan and our 2016 employee stock purchase plan,

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      respectively, each of which will become effective immediately prior to the closing of this offering, as well as any automatic annual increases in the number of shares of common stock reserved for future issuance under these plans.

        To the extent that stock options are exercised, new stock options are issued under our equity incentive plans, or we issue additional shares of common stock in the future, there will be further dilution to investors participating in this offering. In addition, we may choose to raise additional capital because of market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

        If the underwriters exercise their overallotment option in full, the following will occur:

    the percentage of shares of our common stock held by existing stockholders will decrease to 80.1% of the total number of shares of our common stock outstanding after this offering; and

    the number of shares of our common stock held by new investors will increase to 4,600,000, or 19.9% of the total number of shares of our common stock outstanding after this offering.

        Certain of our existing principal stockholders have indicated an interest in purchasing an aggregate of approximately $35.0 million in shares of our common stock in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell more, less or no shares to any of these existing stockholders and any of these existing stockholders could determine to purchase more, less or no shares in this offering. The foregoing discussion and tables do not reflect any potential purchases by these existing stockholders or their affiliated entities. If these existing stockholders are allocated and purchase the shares in which they have indicated an interest in purchasing, our existing stockholders would hold 92.6% (90.2% if the underwriters exercise their over-allotment option in full) of the total number of shares of our common stock outstanding after this offering and our new investors would hold 7.4% (9.8% if the underwriters exercise their over-allotment option in full) of the total number of shares of our common stock outstanding after this offering.

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SELECTED CONSOLIDATED FINANCIAL DATA

        You should read the following selected consolidated financial data together with our consolidated financial statements and the related notes included elsewhere in this prospectus and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of this prospectus. We have derived the statement of operations data for the years ended December 31, 2014 and 2015 and the balance sheet data as of December 31, 2014 and 2015 from our audited consolidated financial statements included elsewhere in this prospectus. We have derived the statement of operations data for the three months ended March 31, 2015 and 2016 and the balance sheet data as of March 31, 2016 from our unaudited consolidated financial statements included elsewhere in this prospectus, which have been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, the unaudited consolidated financial data reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information as of and for the periods presented. Our historical results are not necessarily indicative of results that should be expected in any future period, and our results for any interim period are not necessarily indicative of results that should be expected for any full year.

 
  Year Ended December 31,   Three Months Ended
March 31,
 
 
  2014   2015   2015   2016  
 
  (in thousands, except share and per share data)
 
 
   
   
  (unaudited)
 

Statements of Operations Data:

                         

Revenue

  $   $ 317   $   $  

Operating expenses:

                         

Research and development

    10,923     24,408     3,736     8,265  

General and administrative

    2,512     5,729     836     2,371  

Total operating expenses

    13,435     30,137     4,572     10,636  

Loss from operations

    (13,435 )   (29,820 )   (4,572 )   (10,636 )

Other income, net

    4     2     4     48  

Net loss and comprehensive loss

  $ (13,431 ) $ (29,818 ) $ (4,568 ) $ (10,588 )

Net loss per share applicable to common stockholders—basic and diluted(1)

  $ (10.26 ) $ (17.55 ) $ (3.44 ) $ (5.15 )

Weighted-average number of common shares used in net loss per share applicable to common stockholders—basic and diluted(1)

    1,525,018     1,980,286     1,682,690     2,394,470  

Pro forma net loss per share—basic and diluted (unaudited)(1)

                           $ (2.09 )       $ (0.59 )

Weighted-average number of common shares used in pro forma net loss per share—basic and diluted (unaudited)(1)

                             14,593,998           17,947,602  

(1)
See Note 2 to our consolidated financial statements included elsewhere in this prospectus for a description of the method used to calculate basic and diluted net loss per share and unaudited pro forma basic and diluted net loss per share as well as the weighted-average number of common shares used in the calculation of the per share amounts.

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  December 31,    
 
 
  March 31,
2016
 
 
  2014   2015  
 
  (in thousands)
  (unaudited)
 

Balance Sheet Data:

                   

Cash and cash equivalents

  $ 60,393   $ 35,909   $ 62,133  

Working capital(1)

    59,291     28,493     57,824  

Total assets

    61,494     43,631     70,825  

Convertible preferred stock

    82,013     82,013     121,807  

Total stockholders' deficit

    (21,772 )   (47,964 )   (57,890 )

(1)
We define working capital as current assets less current liabilities. See our consolidated financial statements for further details regarding our current assets and current liabilities.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

        You should read the following discussion and analysis of our financial condition and results of operations together with the section of this prospectus titled "Selected Consolidated Financial Data" and our consolidated financial statements and related notes included elsewhere in this prospectus. This discussion and other parts of this prospectus contain forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations and intentions. As a result of many factors, including those factors set forth in the "Risk Factors" section of this prospectus, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

        We are a biopharmaceutical company pioneering an understanding of the region of the genome controlling the activation and repression of genes. Our goal is to advance a new wave of medicines to control the expression of disease-driving genes. We have built a proprietary gene control platform designed to systematically and efficiently analyze this unexploited region of DNA in human disease tissue to identify and drug novel targets linked to genomically defined patient populations. Because gene expression is fundamental to the function of all cells, we believe that our gene control platform has broad potential to create medicines that achieve profound and durable benefit across therapeutic areas and a range of diseases. By focusing on genomically defined subsets of patients, we believe we can conduct efficient clinical trials with a higher likelihood of success. We are currently focused on developing treatments for cancer and immune-mediated diseases and are building a pipeline of gene control medicines. We plan to begin a Phase 2 clinical trial for our lead product candidate, SY-1425 (tamibarotene), in mid-2016. This trial will enroll genomically defined subsets of patients with relapsed or refractory acute myelogenous leukemia, or AML, and relapsed high-risk myelodysplastic syndrome, or MDS. We plan to initiate a Phase 1/2 clinical trial for our development candidate SY-1365, initially for the treatment of acute leukemia, in the first half of 2017. Both of these programs may have potential in additional indications. Using our platform, we are also generating a pipeline of novel preclinical drug candidates for genomically defined subsets of currently underserved patients. Our goal is to build a fully integrated biopharmaceutical company based on our leadership position in gene control.

        Since our inception in November 2011, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, developing our technology platform and conducting preclinical research for our product candidates. We do not have any products approved for sale and have not generated any revenue from product sales. We have financed our operations to date primarily through private placements of preferred stock. From inception through March 31, 2016, we have raised an aggregate of $122.2 million of gross proceeds from sales of our preferred stock and the issuance of convertible notes that subsequently converted to preferred stock to fund operations.

        Since inception, we have incurred significant operating losses. Our net losses were $13.4 million and $29.8 million for the years ended December 31, 2014 and 2015, respectively, and $4.6 million and $10.6 million for the three months ended March 31, 2015 and 2016, respectively. As of March 31, 2016, we had an accumulated deficit of $64.1 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future. We anticipate that our expenses will increase significantly in connection with our ongoing activities, as we:

    pursue clinical development of SY-1425, including a Phase 2 clinical trial we expect to initiate in the middle of 2016;

    continue development efforts for SY-1365, for which we plan to initiate a Phase 1/2 clinical trial in the first half of 2017;

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    continue our disease mapping efforts;

    initiate and continue research, preclinical and clinical development efforts for other gene control programs;

    seek regulatory and marketing approvals for our product candidates that successfully complete clinical trials, if any;

    continue investment in our proprietary gene control platform;

    develop and scale up our manufacturing processes and capabilities to support our ongoing preclinical activities and clinical trials of our product candidates;

    maintain, expand and protect our intellectual property portfolio;

    hire and retain key scientific personnel; and

    expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development and manufacturing efforts and our operations as a public company upon closing of this offering.

        Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

        As of March 31, 2016, we had cash and cash equivalents of $62.1 million. We believe that the anticipated net proceeds from this offering, together with our existing cash and cash equivalents as of March 31, 2016, will enable us to fund our operating expenses and capital expenditure requirements at least through mid-2018. See "—Liquidity and Capital Resources."

Financial Operations Overview

Revenue

        To date, we have not generated any revenue from product sales and do not expect to generate any revenue from product sales for the foreseeable future. For additional information about our revenue recognition policy, see the section titled "—Critical Accounting Policies and Estimates—Revenue."

Expenses

Research and Development Expenses

        Research and development expenses consist primarily of costs incurred for our research activities, including development of our gene control platform and gene control product candidates, which initially focus on cancer indications, and which include:

    employee-related expenses including salaries and benefits;

    stock-based compensation expense;

    external costs of funding research performed by third parties that conduct research and development and preclinical activities on our behalf and of purchasing lab supplies used in designing, developing and manufacturing preclinical study materials;

    consulting, licensing and professional fees related to research and development activities; and

    facilities costs, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and insurance.

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        Research and development costs are expensed as incurred. Nonrefundable advance payments made to vendors for goods or services that will be received in the future for use in research and development activities are deferred and capitalized, even when there is no alternative future use for the research and development, until related goods or services are provided.

        The following summarizes our most advanced current research and development programs:

    Our lead product candidate, SY-1425, is an oral, potent and selective RARa agonist. We plan to initiate a Phase 2 clinical trial in genomically defined subsets of patients with AML and MDS in mid-2016.

    Our development candidate SY-1365 is a highly potent and selective small molecule inhibitor of cyclin-dependent kinase 7, or CDK7. We expect to initiate a Phase 1/2 clinical trial in patients with acute leukemia, including AML and ALL, in the first half of 2017.

        We typically use our employee, consultant and infrastructure resources across our development programs. We track outsourced development costs by product candidate or development program, but we do not allocate personnel costs, other internal costs or external consultant costs to specific product candidates or development programs.

        We have not provided program costs for the year ended December 31, 2014 because prior to 2015, we did not track or record our research and development expenses on a program-by-program basis. The following table summarizes our research and development expenses by program (in thousands):

 
   
  Three Months Ended
March 31,
 
 
  Year Ended
December 31,
2015
 
 
  2015   2016  
 
   
  (unaudited)
 

SY-1365 and other CDK7 program external costs

  $ 6,998   $ 1,352   $ 1,980  

SY-1425 external costs

    1,484     24     1,397  

Other research and platform programs external costs

    6,239     721     1,701  

Employee-related expenses, including stock-based compensation

    8,077     1,417     2,578  

Facilities and other expenses

    1,610     222     609  

Total research and development expenses

  $ 24,408   $ 3,736   $ 8,265  

        We expect our research and development expenses will increase for the foreseeable future as we seek to advance our programs. At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of our product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from sales of our product candidates. This is due to the numerous risks and uncertainties associated with developing such product candidates, including the uncertainty of:

    successful completion of preclinical studies, including activities related to an investigational new drug application, or IND, and minimally efficacious dose studies in animals, where applicable and requested under the good laboratory practice, or GLP, requirements of the U.S. Food and Drug Administration, or FDA;

    approval of INDs for our product candidates to commence planned or future clinical trials;

    successful enrollment in, and completion of preclinical studies and clinical trials;

    successful data from our clinical program that supports an acceptable benefit-risk profile of our product candidates in the intended populations;

    successful development, and subsequent clearance or approval, of companion diagnostics for use as screening criteria for potential patients;

    receipt of regulatory approvals from applicable regulatory authorities;

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    establishment of arrangements with third-party manufacturers for clinical supply and commercial manufacturing and, where applicable, commercial manufacturing capabilities;

    establishment and maintenance of patent and trade secret protection or regulatory exclusivity for our product candidates;

    commercial launch of our product candidates, if and when approved, whether alone or in collaboration with others;

    enforcement and defense of intellectual property rights and claims;

    maintenance of a continued acceptable safety profile of the product candidates following approval; and

    retention of key research and development personnel.

        Any changes in the outcome of any of these variables with respect to the development of our product candidates in preclinical and clinical development could mean a significant change in the costs and timing associated with the development of these product candidates. For example, if the FDA or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect or if we experience significant delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development of our product candidates.

General and Administrative Expenses

        General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance and administrative functions. Other significant costs include corporate facility costs not otherwise included in research and development expenses, legal fees related to patent and corporate matters and fees for accounting and consulting services.

        We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research activities and development of our product candidates and remediate our material weakness in our internal control over financial reporting. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs as well as investor and public relations expenses associated with being a public company.

Other Income, Net

        Other income, net consists of interest income on our cash and cash equivalents and interest expense related to our equipment financing arrangement.

Critical Accounting Policies and Estimates

        Our management's discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The preparation of these financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates, if any, will be reflected in the financial statements prospectively from the date of the change in estimates.

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        While our significant accounting policies are described in more detail in the notes to our financial statements appearing elsewhere in this prospectus, we believe the following accounting policies used in the preparation of our financial statements require the most significant judgments and estimates.

Revenue

        As of March 31, 2016, all of our revenue was generated exclusively from our research agreement with a multinational pharmaceutical company. We recognize revenue in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 605 Revenue Recognition, or ASC 605. Accordingly, revenue is recognized for each unit of accounting when all of the following criteria are met:

    persuasive evidence of an arrangement exists;

    delivery has occurred or services have been rendered;

    the seller's price to the buyer is fixed or determinable; and

    collectability is reasonably assured.

        We analyze multiple element arrangements based on the guidance in ASC Topic 605-25, Revenue Recognition—Multiple Element Arrangements, or ASC 605-25. Pursuant to the guidance in ASC 605-25, we evaluate multiple element arrangements to determine (1) the deliverables included in the arrangement and (2) whether the individual deliverables represent separate units of accounting or whether they must be accounted for as a combined unit of accounting. This evaluation involves subjective determinations and we are required to make judgements about the individual deliverables and whether such deliverables are separate from other aspects of the contractual relationship. Deliverables are considered separate units of accounting provided that: (i) the delivered item(s) has value to the customer on a standalone basis and (ii) the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially within our control.

        We recognize arrangement consideration allocated to each unit of accounting when all of the revenue recognition criteria in ASC 605 are satisfied for that particular unit of accounting. In the event that a deliverable does not represent a separate unit of accounting, we recognize revenue from the combined unit of accounting over the contractual or estimated performance period for the undelivered items, which is typically the term of our research and development obligations. If there is no discernible pattern of performance or objectively measurable performance measures do not exist, then we recognize revenue under the arrangement on a straight-line basis over the period we are expected to complete our performance obligations or upon completion when the final act is of such significance to the overall arrangement that performance has not substantively occurred until the completion of that act. Conversely, if the pattern of performance over which the service is provided to the customer can be determined and objectively measurable performance measures exist, then we recognize revenue under the arrangement using the proportional performance method.

        Our research agreement contains a single unit of accounting and we recognize service revenue based upon the completed performance method of revenue recognition as we are unable to reasonably estimate the period of performance of the services and the delivery of the final study report is significant to the arrangement.

Research and Development Expenses

        As part of the process of preparing our financial statements, we are required to estimate our accrued expenses as of each balance sheet date. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the

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service when we have not yet been invoiced or otherwise notified of the actual cost. The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We make estimates of our accrued expenses as of each balance sheet date based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. The significant estimates in our accrued research and development expenses include the costs incurred for services performed by our service providers in connection with research and development activities for which we have not yet been invoiced.

        We record our expenses related to research and development activities based on our estimates of the services received and efforts expended pursuant to quotes and contracts with vendors that conduct research and development on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the research and development expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid accordingly. Non-refundable advance payments for goods and services that will be used in future research and development activities are deferred and capitalized, even when there is no alternative future use for the research and development, until related goods or services are provided.

        Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from the actual status and timing of services performed, it could result in us reporting amounts that are too high or too low in any particular period. To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred.

        We have and may in the future in-license the rights to develop and commercialize product candidates. For each in-license transaction we evaluate whether we have acquired processes or activities along with inputs that would be sufficient to constitute a "business" as defined under U.S. GAAP. A "business" as defined under U.S. GAAP consists of inputs and processes applied to those inputs that have the ability to create outputs. Although businesses usually have outputs, outputs are not required for an integrated set of activities to qualify as a business. When we determine that we have not acquired sufficient processes or activities to constitute a business, any up-front payments, as well as milestone payments, are immediately expensed as acquired research and development in the period in which they are incurred.

Stock-Based Compensation

        We apply the fair value recognition provisions of ASC Topic 718, Compensation—Stock Compensation, or ASC 718. Determining the amount of stock-based compensation to be recorded requires us to develop estimates of the fair value of stock options as of their grant date. Calculating the fair value of stock-based awards requires that we make highly subjective assumptions.

        We use the Black-Scholes option pricing model to value our stock option awards. Use of this valuation methodology requires that we make assumptions as to the volatility of our common stock, the expected term of our stock options, the risk free interest rate for a period that approximates the expected term of our stock options and our expected dividend yield. Because we are a privately held company with a limited operating history, we utilize data from a representative group of public companies to estimate expected stock price volatility. For purposes of identifying representative companies, we considered characteristics such as number of product candidates in early stages of product development, area of therapeutic focus, length of trading history and similar vesting provisions. The expected volatility was determined using an average of the historical volatilities of the

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representative group of companies for a period equal to the expected term of the option grant. We intend to consistently apply this process using the same representative companies until a sufficient amount of historical information regarding the volatility of our own share price becomes available or until circumstances change, such that the identified entities are no longer representative companies. In the latter case, more suitable, similar entities whose share prices are publicly available would be utilized in the calculation.

        We use the "simplified method" to estimate the expected term of stock option grants to employees. Under this approach, the weighted-average expected option term is presumed to be the average of the contractual term (ten years) and the vesting term (generally four years) of our stock options. We utilize this method due to lack of historical exercise data and the "plain-vanilla" nature of our stock-based awards. For options granted to non-employees, we utilize the contractual term of the arrangement as the basis for the expected option term assumption. The risk-free rate is based on the yield curve of U.S. Treasury securities in effect at the time of grant with periods commensurate with the expected term of the options being valued. We have never paid, and do not anticipate paying, any cash dividends in the foreseeable future, and therefore use an expected dividend yield of zero in the option-pricing model.

        We have computed the fair value of each stock option on the date of grant using the following weighted-average assumptions:

 
  December 31,   March 31,  
 
  2014   2015   2015   2016  

Weighted-average risk-free interest rate

    2.00 %   1.78 %   1.47 %   1.39 %

Expected dividend yield

    0 %   0 %   0 %   0 %

Expected option term

    7.03     6.09     6.08     6.08  

Volatility

    85.51 %   82.71 %   84.32 %   85.52 %

        We are also required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from our estimates. The term "forfeitures" is distinct from "cancellations" or "expirations" and represents only the unvested portion of the surrendered option. We use historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. To the extent that actual forfeitures differ from our estimates, the difference is recorded as a cumulative adjustment in the period in which the estimates are revised. Stock-based compensation expense recognized in the financial statements is based on awards that are ultimately expected to vest. Through March 31, 2016, actual forfeitures have not been material.

        We expense the fair value of our stock-based awards to employees on a straight-line basis over the associated service period, which is generally the vesting period. For stock-based awards granted to consultants and non-employees, we recognize compensation expense over the period during which the services are rendered by such consultants and non-employees. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value of our common stock for restricted stock and updated assumptions in the Black-Scholes option-pricing model for stock options.

        We record the expense for stock-based awards that contain performance-based milestones in accordance with the accelerated attribution model. Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions as of the reporting date. For certain of our performance-based awards, notwithstanding any vesting in accordance with the achievement of performance-based milestones, such awards vest in full on the sixth anniversary of the vesting commencement date. Compensation expense for such awards is recognized over the six-year vesting period unless management determines that the achievement of any performance-based milestones are probable, in which case expense is accelerated.

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        The following table presents the grant dates, number of underlying shares of common stock and the per share exercise prices of stock options granted between January 1, 2014 and June 15, 2016, along with the fair value per share utilized to calculate stock-based compensation expense:

Date of Issuance
  Type of
Award
  Number of
Shares
  Exercise Price
of Award per
Share(1)
  Fair Value
of Common
Stock per
Share at
Grant
  Per Share
Estimated
Fair
Value of
Award(2)
 

1/29/2014

  Options     1,333   $ 1.01   $ 0.98   $ 0.71  

6/3/2014

  Options     180,777   $ 1.39   $ 1.39   $ 1.01  

9/4/2014

  Options     17,689   $ 1.39   $ 1.39   $ 1.01  

10/22/2014

  Options     91,783   $ 3.04   $ 3.04   $ 2.43  

2/5/2015

  Options     224,513   $ 3.04   $ 4.16 (3) $ 3.16  

6/9/2015

  Options     386,102   $ 3.04   $ 5.96 (3) $ 4.76  

9/17/2015

  Options     64,330   $ 6.94   $ 6.94   $ 4.90  

9/21/2015

  Options     258,071   $ 6.94   $ 6.94   $ 4.89  

10/11/2015

  Options     54,497   $ 6.94   $ 7.31 (4) $ 5.23  

10/21/2015

  Options     47,332   $ 6.94   $ 7.31 (4) $ 5.24  

12/23/2015

  Options     287,036   $ 9.08   $ 8.85   $ 6.27  

3/31/2016

  Options     125,253   $ 8.51   $ 8.51   $ 6.13  

6/1/2016

  Options     64,798   $ 11.66   $ 11.66   $ 8.42  

(1)
The Exercise Price of Award per Share represents the fair value of our common stock on the date of grant, as determined by our board of directors, taking into account our most recently available independent third-party valuation of our common stock as well as additional factors that may have changed since the date of such valuation.

(2)
The Per Share Estimated Fair Value of Award reflects the fair value of options as estimated at the date of grant using the Black-Scholes option-pricing model.

(3)
At the time of the option grants on February 5, 2015 and June 9, 2015, our board of directors determined the fair value of our common stock was $3.04 per share, based on an independent third-party valuation report dated as of October 9, 2014. However, as described below, in connection with a retrospective fair value assessment for financial reporting purposes we adjusted the fair value of common stock at the date of these grants.

(4)
At the time of the option grants on October 11, 2015 and October 21, 2015, our board of directors determined the fair value of our common stock was $6.94 per share, based on an independent third-party valuation report dated as of September 9, 2015. In connection with a retrospective fair value assessment for financial reporting purposes performed as of October 21, 2015, we adjusted the fair value of common stock at the date of these grants.

        Stock-based compensation expense totaled approximately $3.2 million for the year ended December 31, 2015 and $0.7 million for the three months ended March 31, 2016. As of March 31, 2016, we had $7.1 million of unrecognized compensation expense related to unvested stock options and unvested restricted stock which we expect to recognize over a weighted-average period of 3.1 years. We expect the impact of our stock-based compensation expense for restricted stock and stock options granted to employees, directors and other service providers to increase in future periods due to potential increases in the value of our common stock and headcount.

Determination of Fair Value of Common Stock on Grant Dates

        We are required to estimate the fair value of our common stock underlying our stock-based awards when performing the fair value calculations using the Black-Scholes option pricing model. The fair value of our common stock underlying our stock-based awards was determined on each grant date by

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our board of directors, with input from management, considering our most recently available independent third-party valuations of common stock and our board of directors' assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of grant. These independent third-party valuations of our common stock were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants Audit and Accounting Practice Aid Series: Valuation of Privately Held Company Equity Securities Issued as Compensation, or the Practice Aid. Once a public trading market for our common stock has been established in connection with the closing of this offering, it will no longer be necessary for us to estimate the fair value of our common stock in connection with our accounting for stock options and restricted stock, as the fair value of our common stock will be its trading price on The NASDAQ Global Market.

        For financial reporting purposes, we performed common stock valuations, with the assistance of an independent third-party valuation specialist, as of April 1, 2014, October 9, 2014, September 9, 2015, December 10, 2015, March 21, 2016 and May 27, 2016, which resulted in valuations of our common stock of $1.39, $3.04, $6.94, $8.85, $8.51 and $11.66, respectively, as of those dates. With the assistance of an independent third-party valuation specialist, we performed retrospective common stock valuations for financial reporting purposes as of March 31, 2015, June 30, 2015 and October 21, 2015, which resulted in valuations of our common stock of $4.65, $5.96 and $7.31 per share, respectively, as of those dates. In conducting these independent third-party valuations, we considered all objective and subjective factors that we believed to be relevant for each valuation conducted, including our best estimate of our business condition, prospects and operating performance at each valuation date. Within the valuations performed, a range of factors, assumptions and methodologies were used. The significant factors included:

    the lack of an active public market for our common and preferred stock;

    prices of shares of our preferred stock that we had sold to outside investors in arm's length transactions, and the rights, preferences and privileges of that convertible stock relative to our common stock;

    our results of operations and financial position and the status of our research and preclinical development efforts;

    the material risks related to our business;

    our business strategy;

    the market performance of publicly traded companies in the life sciences and biotechnology sectors;

    the likelihood of achieving a liquidity event for the holders of our common stock, such as an initial public offering, or IPO, given prevailing market conditions; and

    recent independent third-party valuations of our common stock prepared in accordance with methodologies outlined in the Practice Aid.

        There are significant judgments and estimates inherent in the determination of the fair value of our common stock. These judgments and estimates include assumptions regarding our future operating performance, the time to completing an IPO or other liquidity event, the related company valuations associated with such events and the determinations of the appropriate valuation methods. If we had made different assumptions, our stock-based compensation expense, net loss and net loss per share applicable to common stockholders could have been significantly different.

Common Stock Valuations Methodologies

        Common stock valuation methodologies.    The valuations of our common stock were prepared in accordance with the guidelines in the Practice Aid, which prescribes several valuation approaches for determining the value of an enterprise, such as the cost, market and income approaches, and various

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methodologies for allocating the value of an enterprise to its capital structure and specifically the common stock.

        The market approach estimates the fair value of a company by applying market multiples of comparable companies in a similar line of business and considers the price that investors have paid for the equity of publicly traded companies or venture investments in a private firm. Through the creation of multiples of revenue, operating income, net income and other key metrics for comparable assets, a method of obtaining a relative valuation of an asset can be made.

        Generally, our enterprise value was determined using the market approach valuation method.

        Methods used to allocate our enterprise value to classes of securities.    In accordance with the Practice Aid, we considered the following methods for allocating the enterprise value across our classes and series of capital stock to determine the fair value of our common stock at each valuation date:

        OPM.    The option pricing method, or OPM, treats common stock and preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company's securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders exceed the value of the liquidation preferences at the time of a liquidity event, such as a strategic sale or merger. The common stock is modeled as a call option on the underlying equity value at a predetermined exercise price. In the model, the exercise price is based on a comparison with the total equity value rather than, as in the case of a regular call option, a comparison with a per share stock price. Thus, common stock is considered to be a call option with a claim on the enterprise at an exercise price equal to the remaining value immediately after the preferred stock liquidation preference is paid.

        The OPM uses the Black-Scholes option-pricing model to price the call options. This model defines the securities' fair values as functions of the current fair value of a company and uses assumptions, such as the anticipated timing of a potential liquidity event and the estimated volatility of the equity securities.

        The OPM backsolve approach was used to estimate enterprise value under the OPM. The OPM backsolve approach uses the OPM to derive the implied equity value for one type of equity security from a contemporaneous sale transaction involving another type of the company's equity securities. In the OPM, the assumed volatility factor was based on the historical trading volatility of our publicly traded peer companies. At each valuation date, a determination was made by us as to the appropriate volatility to be used, considering such factors as the expected time to a liquidity event and our stage of development.

        To derive the fair value of the common stock using the OPM, the proceeds to the common stockholders were calculated based on the preferences and priorities of the preferred stock and common stock. We then applied a discount for lack of marketability to the common stock to account for the lack of access to an active public market.

        PWERM.    Under a probability-weighted expected return method, or PWERM, the value of the various equity securities are estimated based upon an analysis of future values for the enterprise, assuming various outcomes. The common stock value is based on the probability-weighted present value of expected future investment returns considering each of the possible outcomes available as well as the rights of each class of stock. The future value of the common stock under each outcome is discounted back to the valuation date at an appropriate risk-adjusted discount rate and probability weighted to arrive at an indication of value for the common stock.

        Hybrid Method.    The hybrid method is a PWERM where the equity value in one of the scenarios is calculated using an OPM. In the hybrid method used by us, two types of future-event scenarios were considered: an IPO and an unspecified liquidity event. The enterprise value for the IPO scenario was determined using a market approach. The enterprise value for the unspecified liquidity event scenario was determined using the OPM backsolve approach. The relative probability of each type of future-

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event scenario was determined based on an analysis of market conditions at the time, including then-current IPO valuations of similarly situated companies, and expectations as to the timing and likely prospects of the future-event scenarios.

        To determine the enterprise value for the IPO scenario, we used the guideline public company method, which includes comparisons to publicly traded companies in the biopharmaceutical industry that recently completed IPOs. That enterprise value was then discounted back to the valuation date at an appropriate risk-adjusted discount rate.

        To derive the fair value of the common stock for each scenario under the hybrid method, the proceeds to the common stockholders were calculated based on the conversion rights and preferences of the preferred stock. We then applied a discount for lack of marketability to the common stock to account for the lack of access to an active public market.

        Prior to January 1, 2015, our common stock valuations were prepared utilizing OPM. Our common stock valuations in 2015 and 2016 were prepared utilizing the hybrid method.

Results of Operations

Comparison of Three Months Ended March 31, 2015 and 2016

        The following table summarizes our results of operations for the three months ended March 31, 2015 and 2016, together with the changes in those items in dollars (in thousands):

 
  Three Months Ended March 31,    
   
 
 
  Dollar Change   Percentage Change  
 
  2015   2016  
 
  (unaudited)
   
   
 

Statements of Operations Data:

                         

Revenue

  $   $   $     n/a  

Operating expenses:

                         

Research and development

    3,736     8,265     4,529     121 %

General and administrative

    836     2,371     1,535     184 %

Total operating expenses

    4,572     10,636     6,064     133 %

Other income, net

    4     48     44     1,100 %

Net loss and comprehensive loss

  $ (4,568 ) $ (10,588 ) $ (6,020 )   132 %

Revenue

        In November 2014, we entered into a research agreement with a multinational pharmaceutical company. We did not earn any revenue under this agreement for the three months ended March 31, 2015 and 2016. The amount of revenue to be recognized under this agreement in future periods may fluctuate.

Research and Development Expense

        Research and development expense increased by $4.6 million from $3.7 million for the three months ended March 31, 2015 to $8.3 million for the three months ended March 31, 2016. The

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following table summarizes our research and development expenses for the three months ended March 31, 2015 and 2016, together with the changes to those items in dollars (in thousands):

 
  Three Months Ended March 31,    
 
 
  Dollar Change  
 
  2015   2016  
 
  (unaudited)
   
 

External research and preclinical development

  $ 1,946   $ 4,486   $ 2,540  

Employee-related expenses, excluding stock based-compensation

    955     2,018     1,063  

Stock-based compensation

    462     560     98  

Consulting, licensing and professional fees

    151     592     441  

Facilities and other expenses

    222     609     387  

Total research and development expenses

  $ 3,736   $ 8,265   $ 4,529  

        The increase in research and development expense was primarily attributable to research and development activities associated with advancing our lead preclinical programs and enhancing our internal capabilities and included the following:

    approximately $2.5 million for costs from third parties that conduct research and development and preclinical activities on our behalf, including approximately $0.9 million for in vivo study and toxicology costs and $0.5 million in contract manufacturing and clinical development for SY-1425;

    approximately $1.1 million for increased personnel related expenses, including increased salary and benefits primarily due to the hire of research and development personnel;

    approximately $0.4 million in consulting, licensing and professional fees, including clinical and regulatory consultants for SY-1425; and

    approximately $0.4 million for increases in facilities costs including rent, depreciation and maintenance expenses.

General and Administrative Expense

        General and administrative expense increased by $1.5 million from $0.8 million for the three months ended March 31, 2015 to $2.3 million for the three months ended March 31, 2016. The increase in general and administrative expense was primarily attributable to the following:

    approximately $0.8 million for employee-related costs, including salary and benefits as a result of the increase in administrative function headcount; and

    approximately $0.4 million primarily for consulting and professional fees, including increased corporate legal fees and human resources costs.

Other Income, Net

        Other income, net increased by $44,000 from $4,000 for the three months ended March 31, 2015 to $48,000 for the three months ended March 31, 2016, primarily due to higher invested cash balances.

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Comparison of Years Ended December 31, 2014 and 2015

        The following table summarizes our results of operations for the years ended December 31, 2014 and 2015, together with the changes in those items in dollars (in thousands):

 
  Year Ended
December 31,
   
   
 
 
  Dollar Change   Percentage Change  
 
  2014   2015  

Revenue

  $   $ 317   $ 317     n/a  

Operating expenses:

                         

Research and development

    10,923     24,408     13,485     123 %

General and administrative

    2,512     5,729     3,217     128 %

Total operating expenses

    13,435     30,137     16,702     124 %

Other income (expense), net

    4     2     (2 )   (50 )%

Net loss and comprehensive loss

  $ (13,431 ) $ (29,818 ) $ (16,387 )   122 %

Revenue

        Revenue was $0.3 million for the year ended December 31, 2015 and related to the completion of a research project under our research agreement with a multinational pharmaceutical company. We did not earn any revenue for the year ended December 31, 2014. The amount of revenue to be recognized under this agreement in future periods may fluctuate.

Research and Development Expense

        Research and development expense increased by $13.5 million from $10.9 million for the year ended December 31, 2014 to $24.4 million for the year ended December 31, 2015. The following table summarizes our research and development expenses for the years ended December 31, 2014 and December 31, 2015, together with the changes to those items in dollars (in thousands):

 
  Year Ended
December,
   
 
 
  Dollar Change  
 
  2014   2015  

External research and preclinical development

  $ 5,520   $ 12,749   $ 7,229  

Employee-related expenses, excluding stock-based compensation

    2,984     5,344     2,360  

Stock-based compensation

    830     2,733     1,903  

Consulting, licensing and professional fees

    682     1,972     1,290  

Facilities and other expenses

    907     1,610     703  

Total research and development expenses

  $ 10,923   $ 24,408   $ 13,485  

        The increase in research and development expense was primarily attributable to research and develop activities associated with advancing our lead preclinical programs and enhancing our internal capabilities and included the following:

    approximately $7.2 million for costs from third parties that conduct research and development and preclinical activities on our behalf, including approximately $2.6 million in chemistry expenses for contract chemistry personnel and increased chemistry analysis and $1.2 million for in vivo study costs;

    approximately $1.9 million for increased stock-based compensation expense;

    approximately $2.4 million for increased personnel related expenses, including increased salary and benefits primarily due to the hire of research and development personnel;

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    approximately $1.3 million in consulting, licensing and professional fees including the $0.5 million upfront payment made under the TMRC license agreement; and

    approximately $0.7 million for increases in facilities costs including rent, depreciation and maintenance expenses.

General and Administrative Expense

        General and administrative expense increased by $3.2 million from $2.5 million for the year ended December 31, 2014 to $5.7 million for year ended December 31, 2015. The increase in general and administrative expense was primarily attributable to the following:

    approximately $1.2 million for employee-related costs, including salary and benefits as a result of the increase in administrative function headcount;

    approximately $0.9 million primarily for consulting and professional fees, including increased corporate legal fees in support of the negotiations of the TMRC license agreement and the negotiations of our operating lease agreement for office space and increased public relations expenses; and

    approximately $0.4 million for increased stock-based compensation expense.

Other Income, Net

        Other income, net decreased by $2,000 from $4,000 for the year ended December 31, 2014 to $2,000 for the year ended December 31, 2015. Interest income on our invested cash and cash equivalents increased from $4,000 for the year ended December 31, 2014 to $20,000 for the year ended December 31, 2015. For the year ended December 31, 2015, the interest income was offset by interest expense of $18,000 related to our equipment financing arrangement.

Liquidity and Capital Resources

Sources of Liquidity

        We have funded our operations from inception through March 31, 2016 primarily through gross proceeds of $122.2 million from sales of our preferred stock and the issuance of convertible notes that subsequently coverted into preferred stock. As of March 31, 2016, we had cash and cash equivalents of $62.1 million.

Cash Flows

        The following table provides information regarding our cash flows for the years ended December 31, 2014 and 2015 and the three months ended March 31, 2015 and March 31, 2016 (in thousands):

 
  Year Ended
December 31,
  Three Months Ended March 31,  
 
  2014   2015   2015   2016  
 
   
   
  (unaudited)
 

Net cash provided by (used in):

                         

Operating activities

  $ (11,969 ) $ (23,030 ) $ (3,269 ) $ (10,618 )

Investing activities

    (201 )   (1,176 )   (108 )   (1,525 )

Financing activities

    68,762     (278 )       38,367  

Net increase (decrease) in cash and cash equivalents

  $ 56,592   $ (24,484 ) $ (3,377 ) $ 26,224  

Net Cash Used in Operating Activities

        The use of cash in all periods resulted primarily from our net losses adjusted for non-cash charges and changes in components of working capital.

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        Net cash used in operating activities was $10.6 million during the three months ended March 31, 2016 compared to $3.2 million during the three months ended March 31, 2015. The increase in cash used in operating activities was primarily due to an increase in our net loss of $6.0 million for the three months ended March 31, 2016 as compared to the three months ended March 31, 2015.

        Net cash used in operating activities was $23.0 million during the year ended December 31, 2015 compared to $12.0 million during the year ended December 31, 2014. The increase in cash used in operating activities was primarily due to an increase in net loss of $16.4 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014.

Net Cash Used in Investing Activities

        Net cash used in investing activities was $1.5 million during the three months ended March 31, 2016 compared to $0.1 million during the three months ended March 31, 2015. The increase in cash used in investing activities was due to increased purchases of property and equipment.

        Net cash used in investing activities was $1.2 million during the year ended December 31, 2015 compared to $0.2 million during the year ended December 31, 2014. The increase in cash used in investing activities was due to increased purchases of property and equipment.

Net Cash Provided by (Used in) Financing Activities

        Net cash provided by financing activities was $38.4 million during the three months ended March 31, 2016 and there was $0 provided by financing activities during the three months ended March 31, 2015. The increase in cash provided by financing activities was primarily due to the issuance of $39.8 million of Series B preferred stock during the three months ended March 31, 2016.

        Net cash used in financing activities was $0.3 million during the year ended December 31, 2015 compared to net cash provided by financing activities of $68.8 million during the year ended December 31, 2014. The decrease in cash provided by financing activities was primarily due to the issuance of $15.8 million of Series A-3 preferred stock and $53.1 million of Series B preferred stock during the year ended December 31, 2014, with no preferred stock issuance occurring during the year ended December 31, 2015.

Funding Requirements

        We expect our expenses to increase in connection with our ongoing activities, particularly as we initiate clinical trials of SY-1425, advance the development of SY-1365, initiate new research and preclinical development efforts and seek marketing approval for any product candidates that we successfully develop. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to establishing sales, marketing, distribution and other commercial infrastructure to commercialize such products. Furthermore, upon the closing of this offering, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

        We believe that the anticipated net proceeds from this offering, together with our existing cash and cash equivalents as of March 31, 2016, will enable us to fund our operating expenses and capital expenditure requirements at least through mid-2018. Our future capital requirements will depend on many factors, including:

    the scope, progress, timing, costs and results of clinical trials of SY-1425 and SY-1365;

    research and preclinical development efforts for any future product candidates that we may develop;

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    our ability to enter into and the terms and timing of any collaborations, licensing agreements or other arrangements;

    the number of future product candidates that we pursue and their development requirements;

    the outcome, timing and costs of seeking regulatory approvals;

    the costs of commercialization activities for any of our product candidates that receive marketing approval to the extent such costs are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;

    the costs of acquiring potential new product candidates or technology;

    the costs of any physician education programs relating to selecting and treating genomically defined patient populations;

    the timing and amount of milestone and other payments due to licensors for patent and technology rights used in our development platform;

    revenue received from commercial sales, if any, of our current and future product candidates;

    our headcount growth and associated costs as we expand our research and development and establish a commercial infrastructure;

    the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against intellectual property related claims; and

    the costs of operating as a public company.

        Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.

        Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. 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.

        If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

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Contractual Obligations

        The following table summarizes our significant contractual obligations as of payment due date by period at December 31, 2015 (in thousands):

 
  Total   Less Than
1 Year
  1 to 3 Years   3 to 5 Years   More than
5 Years
 

Operating lease commitments(1)

  $ 6,212   $ 1,217   $ 2,540   $ 2,455   $  

Capital lease(2)

  $ 367   $ 152   $ 215          

(1)
We lease office space at 620 Memorial Drive in Cambridge, Massachusetts under a non-cancelable operating lease that expires in October 2020.

(2)
We have a capital lease for laboratory equipment that expires in March 2018.

        We enter into agreements in the normal course of business with our contract research organizations and institutions to license intellectual property. We have not included these future payments in the table of contractual obligations above since the contracts are cancelable at any time by us, generally upon 30 to 90 days prior written notice.

        Our license agreements include potential milestone payments that are contingent upon the successful development and commercialization of products using the intellectual property licensed under such agreements. Under our agreements with Dana-Farber and Whitehead, the maximum aggregate potential milestone payments payable by us total approximately $6.9 million. Under the applicable agreement, we are also required to pay annual maintenance fees, as well as tiered, single-digit percentage royalties, on a country-by-country, product-by-product basis, on net product sales.

        Under the amended and restated TMRC license agreement, we may make additional payments upon the successful achievement of pre-specified clinical and regulatory milestones in an aggregate amount of approximately $13.0 million per indication. We paid the balance of the upfront license fee of $0.5 million under this agreement in May 2016. Upon the successful dosing of the first patient in our Phase 2 clinical trial of SY-1425, which we expect to occur in mid-2016, we are obligated to make a $1.0 million milestone payment.

        Payments that are contingent upon achievement of developmental and commercial milestones, the likelihood of which cannot be reasonably estimated at this time, are not reflected in the table above.

Off-Balance Sheet Arrangements

        We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable Securities and Exchange Commission rules.

Quantitative and Qualitative Disclosures About Market Risk

        We are exposed to market risk related to changes in interest rates. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments, including cash equivalents, are in the form of a money market fund and marketable securities and are invested in U.S. Treasury obligations.

        We are also exposed to market risk related to changes in foreign currency exchange rates. We contract with vendors that are located in Asia and Europe and certain invoices are denominated in foreign currencies. We are subject to fluctuations in foreign currency rates in connection with these arrangements. We do not currently hedge our foreign currency exchange rate risk. As of December 31, 2015, we had minimal or no liabilities denominated in foreign currencies.

        Inflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the years ended December 31, 2014 and 2015 and the three months ended March 31, 2015 and 2016, respectively.

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Internal Control over Financial Reporting

        In connection with the audit of our financial statements as of and for the years ended December 31, 2014 and 2013, we identified material weaknesses in our internal control over financial reporting. The material weaknesses related to our controls over the classification of certain indirect and other expenses between general and administrative and research and development, and to the accounting for stock-based compensation. We also identified deficiencies related to our controls over our accounting for income taxes. The material weaknesses were due to the lack of appropriate oversight and review procedures by accounting personnel to properly identify and evaluate certain accounting matters that resulted in errors in our financial statements.

        We are implementing measures designed to improve our internal control over financial reporting to remediate these material weaknesses, including the following:

    we are formalizing our processes and internal control documentation and strengthening supervisory reviews by our management;

    we have hired additional qualified accounting personnel and engaged financial consultants, all of whom have significant accounting and financial reporting experience, which will enable the implementation of internal controls over financial reporting and segregating duties among accounting personnel;

    we expect to hire additional senior accounting and finance staff to complete this remediation; and

    we intend to implement certain accounting systems to automate manual processes, such as tracking and accounting for stock-based awards.

        These additional resources and procedures are designed to enable us to broaden the scope and quality of our internal review of underlying information related to financial reporting and to formalize and enhance our internal control procedures. With the oversight of senior management, we have begun taking steps and plan to take additional measures to remediate the underlying causes of the material weaknesses.

        We, and our independent registered public accounting firm, were not required to perform an evaluation of our internal control over financial reporting as of December 31, 2015 in accordance with the provisions of the Sarbanes-Oxley Act. Accordingly, we cannot provide assurance that we have identified all, or that we will not in the future have additional, material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our internal control over financial reporting as required by reporting requirements under Section 404 of the Sarbanes-Oxley Act after the closing of this offering.

JOBS Act

        In April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107 of the JOBS Act provides that an emerging growth company, or EGC, can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

        We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an EGC, we intend to rely on certain of these exemptions, including the exemption from the requirement to provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and with the exemption from any requirement that may be

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adopted by the Public Company Accounting Oversight Board, or PCAOB, regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an EGC until the earlier of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.0 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the date of the closing of this offering; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.

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BUSINESS

Overview

        We are a biopharmaceutical company pioneering the understanding of the region of the genome controlling the activation and repression of genes. Our goal is to advance a new wave of medicines to control the expression of disease-driving genes. We have built a proprietary gene control platform designed to systematically and efficiently analyze this unexploited region of DNA in human disease tissue to identify and drug novel targets linked to genomically defined patient populations. Because gene expression is fundamental to the function of all cells, we believe that our gene control platform has broad potential to create medicines that achieve profound and durable benefit across therapeutic areas and a range of diseases. By focusing on genomically defined subsets of patients, we believe we can conduct efficient clinical trials with a higher likelihood of success. We are currently focused on developing treatments for cancer and immune-mediated diseases and are building a pipeline of gene control medicines. We plan to begin a Phase 2 clinical trial for our lead product candidate, SY-1425 (tamibarotene), in mid-2016. This trial will enroll genomically defined subsets of patients with relapsed or refractory acute myelogenous leukemia, or AML, and relapsed high-risk myelodysplastic syndrome, or MDS. We plan to initiate a Phase 1/2 clinical trial for our development candidate SY-1365, initially for the treatment of acute leukemia, in the first half of 2017. Both of these programs may have potential in additional indications. Leveraging our platform, we are also generating a pipeline of novel preclinical drug candidates for genomically defined subsets of currently underserved patients. Our goal is to build a fully integrated biopharmaceutical company based on our leadership position in gene control.

        The discovery and development of targeted therapies, in which the right drug is matched to the right patient, has dramatically improved the ability to treat certain cancers and other serious diseases. However, targeted drug discovery and development to date has focused almost exclusively on genetic alterations found in regions of DNA that code for proteins, which represent less than 2% of the entire genome, and the identification of new drug targets by sequencing these coding regions has been largely exhausted. Moreover, in cancer, inhibiting abnormal proteins resulting from single genetic alterations in coding DNA can often lead to drug resistance and limited durable clinical benefit. Furthermore, many serious diseases continue to go unaddressed due to the limitations of current drug discovery approaches. Taken together, these factors underscore the need for fundamentally new approaches to drug discovery and development.

        Researchers have long believed that alterations in non-coding regions of DNA, which account for the other 98% of the genome, play a key role in driving disease. However, the scientific community has lacked the tools to study these regions of the genome, rendering them poorly understood and largely unexploited for targeted drug discovery and development. The work of our scientific founders, leaders in the field of gene control, as well as other academic researchers is now shedding light on the importance of non-coding regions of the genome in maintaining health and driving disease. Rapidly growing scientific evidence points to non-coding regions of DNA as fundamental to determining cell type and function and to alterations in these non-coding regions as involved in the development and progression of a broad range of diseases.

        While all cells share the same genome, each of the nearly 200 different cell types in the human body has a different function. For example, a skin cell functions differently from a muscle cell despite sharing the exact same DNA. What determines a cell's type and function is the specific set of genes that is expressed, or turned "on" or "off," in that particular cell. This coordinated activation and repression of genes, known as the cell's gene expression program, is controlled by non-coding regions of the genome. Alterations in these non-coding regions change a cell's gene expression program, altering its normal function and leading to disease. Because this biology is fundamental to the function of all cells, it applies across diseases, whether the cause is genetic, environmental, bacterial, viral or multi-factorial.

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        The relatively few gene control medicines available today are among the most important targeted therapies and are widely used for their approved indications. Drugs targeting specialized proteins known as transcription factors that play a central role in the expression of disease-driving genes, such as estrogen receptors in breast cancer, androgen receptors in prostate cancer and glucocorticoid receptors in inflammation, are important examples of gene control medicines that have produced transformative patient benefits. For example, tamoxifen, a gene control medicine that targets a transcription factor, revolutionized the treatment of certain breast cancers and is prescribed 1.9 million times annually in the United States, illustrating the significant therapeutic potential of gene control medicines. However, the difficulty of studying non-coding regions of the genome has historically prevented a systematic approach to identifying these critical points of therapeutic intervention.

        We are solely focused on the discovery and development of gene control medicines. Building on the discoveries of our scientific founders, we believe we have built the first proprietary platform designed to systematically and efficiently analyze non-coding regions of the genome in healthy and diseased cells taken from patient tissues to identify optimal points of therapeutic intervention and develop drugs to control the expression of disease-driving genes. By doing so, we believe our gene control platform will allow us to (i) identify a wide array of potential new drug targets across a range of diseases, (ii) provide a new lens for diagnosing and segmenting patients, including those with complex, multi-factorial diseases that have eluded segmentation with other genomic-based approaches, and (iii) advance a new wave of medicines that have the potential to influence multiple drivers of disease through a single target, making them less susceptible to drug resistance and providing patients with a more profound and durable benefit than many of today's targeted therapies.

        Our gene control platform consists of two fundamental pillars: identifying novel gene control targets linked to genomically defined patient populations, and drugging gene control targets.

        The first pillar of our platform is designed to systematically and efficiently home in on the specific set of genes most crucial to determining a cell's type and function. Starting from human tissue samples, we compare diseased cells to normal cells and analyze the cells of different patient subsets within a disease to identify alterations in gene expression programs that represent optimal points of therapeutic intervention and associated biomarkers for patient selection. We home in on a cell's gene expression program by using genomic tools to locate super-enhancers, which are highly specialized regions of non-coding DNA that are central to orchestrating gene expression programs and drive the increased expression of the genes crucial to the function of a given cell. Analysis of super-enhancers and their associated genes provides critical insights into changes in gene expression programs that contribute to disease. We have invested significant resources in our tissue processing, genomics and computational biology capabilities to industrialize the analysis of gene expression programs to reveal the genes crucial to cell type and function in diseased cells. We have amassed one of the largest known datasets of gene expression programs across a wide range of human diseases and cell types and have validated multiple novel disease targets and biomarkers. To date, we have analyzed or are in the process of analyzing gene expression programs in AML, breast cancer, ovarian cancer, hepatocellular carcinoma, pancreatic cancer, renal cell carcinoma, non-disease and lupus immune cells, polycystic kidney disease, spinal muscular atrophy and Alzheimer's disease. Through those efforts, we have identified approximately 50 novel drug targets in oncology, immuno-oncology and autoimmune diseases and validated seven of those targets using biological methods to knock out the target gene or chemical methods to modulate the target's activity. The discovery and validation of these targets has led to the identification of our product candidate SY-1425 as well as additional novel preclinical drug candidates in earlier stages of research and development. We plan to analyze gene expression programs in several other cancers, including colorectal, lung and melanoma, as well as several other diseases and cell types including additional inflammatory disorders and immune cells from tumors. Our long-term goal is to analyze gene expression programs in all serious diseases where we believe currently underserved patients can benefit from gene control medicines.

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        The second pillar of our platform is our small molecule chemistry capabilities to drug gene control targets. While our platform is capable of identifying drug targets across a broad range of target classes and therapeutic modalities, our internal drug discovery effort is focused on small molecule chemistry to target specialized proteins responsible for gene expression, including transcription factors, transcriptional kinases and other transcriptional and regulatory proteins. We focus on these specialized proteins for several reasons. First, because these specialized proteins play a central role in implementing gene expression programs, they are among the most promising and high-potential gene control targets for therapeutic intervention. Transcription factors bind directly to DNA sequences to control the transcription of genetic information from DNA. Transcription factors perform this function with other transcriptional and regulatory proteins, including transcriptional kinases. Second, transcriptional and regulatory proteins have historically been difficult to drug and represent an opportunity to bring novel and differentiated therapies to patients. Third, we have built a differentiated combination of expertise, tools and capabilities that we believe will give us cutting-edge insights into drugging transcriptional and regulatory proteins. Through significant investments in developing our capabilities in biochemistry, structural biology and medicinal chemistry and in developing a sophisticated suite of proprietary assays, which are internally developed tests that we use to measure the biochemical, biophysical, cellular and genomic activity of known and novel compounds against gene control targets, we believe we will be able to overcome challenges that have prevented others from systematically and successfully developing gene control medicines. We are building a pipeline of product candidates to modulate gene expression programs through two distinct approaches: internal efforts to discover novel drugs against our validated gene control targets and externally focused efforts to link existing drugs to novel genomically defined patient populations identified through our platform. These externally focused efforts could enable to us identify drugs that we may seek to in-license or acquire or use as starting points for our own drug discovery and development programs to accelerate our development path. Our CDK7 inhibitor, SY-1365, demonstrates our ability to create proprietary gene control drug candidates targeting transcriptional biology. Our SY-1425 program demonstrates our ability to link existing drugs to novel genomically defined subsets of patients, with the aim of accelerating our clinical development path.

        We are leveraging our platform to develop a pipeline of gene control product candidates. Our most advanced drug programs are summarized in the table below:

Program   Initial
Indications
  Planned Milestones   Potential Indications   Syros
Commercial
Rights

SY-1425 (RARa
agonist)

 

AML and MDS

 

Initiate Phase 2 clinical trial in mid-2016

Expect initial data readout in mid-2017

 

Breast cancer

Acute promyelocytic
leukemia (APL)

 

North America,
Europe

SY-1365 (CDK7 inhibitor)

 

Acute leukemia

 

Initiate Phase 1/2 clinical trial in 1H 2017

Expect initial data readout in 1H 2018

 

Small cell lung cancer

Triple negative breast
cancer

MYCN-
amplified
neuroblastoma

 

Worldwide

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        Our lead product candidate, SY-1425, is an oral, potent and selective agonist, or activator, of the transcription factor RARa. We plan to initiate a Phase 2 clinical trial in genomically defined subsets of relapsed or refractory AML and relapsed high-risk MDS patients in mid-2016. We also plan to evaluate SY-1425 in newly diagnosed AML patients 60 years of age or older who are not suitable candidates for standard chemotherapy and low-risk transfusion-dependent MDS patients, subject to receipt of FDA clearance to use our biomarker test to prospectively select patients in these populations. Using our platform, we identified subsets of AML and breast cancer patients who have a super-enhancer associated with the RARA gene. We identified a proprietary biomarker, which we refer to as the RARA biomarker, related to the super-enhancer associated with RARA. The super-enhancer associated with RARA is believed to lock cells in an immature, proliferative and undifferentiated state. Treatment with SY-1425 in cancer cells with the super-enhancer associated with RARA appears to promote differentiation of these cells. In in vivo mouse models implanted with human AML tumors, SY-1425 was observed to be effective in stopping the growth of tumors with the RARA biomarker but not in tumors without the RARA biomarker. Importantly, a strong survival benefit was seen in mice with RARA biomarker-positive tumors that were treated with SY-1425. We observed the RARA biomarker in approximately 25% of AML tissues we analyzed. We believe that a similar percentage of AML and MDS patients will have the RARA biomarker. Based on our current clinical development plan, we believe that the potential market opportunity for SY-1425 is approximately 12,250 patients diagnosed annually with AML and MDS in the United States, Canada and the five largest European countries by population, Germany, the United Kingdom, France, Spain and Italy. These patient populations include relapsed or refractory AML patients, AML patients who are elderly or unfit for standard treatments, relapsed high-risk MDS patients and low-risk transfusion-dependent MDS patients. Similarly, we have observed the RARA biomarker in approximately 35% of breast cancer patient samples we analyzed, leading us to believe that approximately 55,000 metastatic breast cancer patients diagnosed annually in the countries listed above could benefit from SY-1425.

        We have the exclusive North American and European commercial rights to the existing preclinical data for SY-1425 in human cancer under our license agreement with TMRC Co., Ltd., or TMRC. SY-1425 is approved as tamibarotene in Japan for the treatment of acute promyelocytic leukemia, or APL, a form of AML, for which the drug has a well characterized efficacy and safety profile. Given the drug's demonstrated efficacy in APL and the significant unmet medical need, we intend to explore SY-1425 for treatment of APL in North America and Europe. There are an estimated 2,500 new APL cases diagnosed each year in the United States, Canada and the five largest European countries.

        Our development candidate SY-1365 is a highly potent and selective small molecule inhibitor of the transcriptional kinase known as cyclin-dependent kinase 7, or CDK7. We are investigating SY-1365 for the treatment of cancers that are dependent on a high and constant expression of certain transcription factors for their growth and survival, a phenomenon known as transcriptional addiction, and plan to initially develop it in acute leukemia. In preclinical studies, SY-1365 was observed to preferentially kill cancer cells by inducing robust, sustained and dose-dependent apoptosis of AML cells with minimal impact on non-cancerous cells. We have begun IND-enabling activities for SY-1365 and plan to initiate a Phase 1/2 clinical trial in patients with acute leukemia, including AML and ALL, in the first half of 2017. We selected acute leukemia as our first clinical development indication due to high levels of observed efficacy in our preclinical models and because few treatment options exist for these patients. Subject to strong clinical results, there could be an opportunity for accelerated clinical development. We believe that all of the approximately 37,000 AML and 12,000 ALL patients diagnosed annually in the United States, Canada, the five largest European countries and Japan could benefit from an effective CDK7 inhibitor.

        We were founded by leaders in the field of gene control from the Whitehead Institute for Biomedical Research at the Massachusetts Institute of Technology, or Whitehead, and the Dana-Farber Cancer Institute, or Dana-Farber, an affiliate of Harvard Medical School. Many of our employees have

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been members of teams that uncovered innovative scientific findings and delivered highly impactful drugs to the marketplace. Our management team consists of drug discovery, development and commercialization experts with experience in translating scientific discoveries into innovative treatments, including Avonex and Tysabri for multiple sclerosis, Velcade and Ninlaro for hematological malignancies, Ibrance for breast cancer, Entyvio for ulcerative colitis and Kalydeco and Orkambi for cystic fibrosis.

Our Principles

        We maintain a culture that embodies the following core principles with the aim to provide long-term benefits to patients and to create significant value for our employees, investors and other stakeholders:

    We are committed to transforming the lives of patients.

    We are pioneering in our science.

    We challenge each other to achieve excellence.

    We work with passion, integrity and respect.

    We like rigorous work and serious fun.

Our Strategy

        Our mission is to transform the lives of patients through the creation of novel gene control medicines by building a fully integrated, leading biopharmaceutical company. To achieve this mission, we are executing on the following strategy:

    Rapidly and efficiently advance our lead programs through clinical development.  We intend to advance SY-1425 into a Phase 2 clinical trial in mid-2016 in genomically defined subsets of relapsed or refractory AML and relapsed high-risk MDS patients. For SY-1365, we expect to initiate a Phase 1/2 clinical trial in patients with acute leukemia in the first half of 2017. For both of these programs, we intend to enrich our clinical trials with patients most likely to respond, which we believe will enable us to rapidly and efficiently establish clinical proof-of-concept. Because AML, MDS and ALL are diseases of significant unmet medical need, we could be eligible, subject to encouraging clinical results, to apply for Breakthrough Therapy designation and Fast Track designation which, if granted, could accelerate clinical development and regulatory review.

    Develop a robust pipeline of gene control product candidates.  We plan to continue leveraging our gene control platform to systematically and efficiently pinpoint genes that cause disease and to identify optimal therapeutic points of intervention in genomically defined patient populations. Employing our pioneering drug discovery and development approach, we intend to continue to either internally create selective small molecule drugs against these targets or link existing drugs to novel patient populations, enabling us to potentially accelerate our clinical development path. We aim to generate at least one investigational new drug application, or IND, submission every other year, on average.

    Maintain our leadership position in the field of gene control.  We are pioneering a novel approach to discover and develop gene control medicines. To fortify our leadership position, we intend to enhance our technologies to create the most extensive dataset of gene expression programs. We also intend to expand our validation technologies to continue to identify and validate novel targets and biomarkers across many serious diseases. Our long-term goal is to analyze gene expression programs in serious diseases where gene control is a potential viable therapeutic strategy and to identify and drug novel targets based on our understanding of these

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      gene expression programs. We plan to continue investing in building our drugging capabilities, including developing additional proprietary assays and enhancing our biochemistry, structural biology and medicinal chemistry expertise to create or acquire gene control medicines targeting disease drivers identified by our platform.

    Continue to foster a culture of innovation.  We are committed to pioneering science and to leadership in gene control medicines. Our employees are critical to the successful achievement of our leadership vision. We will continue to foster an environment that encourages innovation, excellence and productivity and develops our team as leaders in the field of gene control.

    Execute strategic collaborations to maximize value and extend the potential of our gene control platform across multiple disease areas.  We intend to engage in strategic collaborations around both our programs and our platform. With respect to our programs, we currently own the rights to develop and commercialize SY-1425 in North America and Europe for all cancer indications. We currently retain full commercial rights to SY-1365 and all our other preclinical programs. We intend to maintain U.S. commercial rights for these programs, while pursuing collaborations that could maximize value for these programs by allowing us to expand our geographic reach and expand into additional indications. With respect to our platform, we are seeking target and drug discovery collaborations that allow us to expand the potential of our platform in additional cancers and other serious diseases beyond those that we can address on our own. We believe that our platform provides significant optionality for collaborations around drug modalities and target classes that fall outside of our current focus on small molecule drugs targeting transcriptional and regulatory proteins.

Our Focus—Gene Control Medicines

        There are approximately 200 different cell types in the human body. Despite having identical genomes, each of these cell types has a different function. For example, a skin cell functions differently than a muscle cell despite sharing the exact same DNA. What determines cell type and function is the specific set of genes that is expressed, or turned "on" or "off," in that given cell. This coordinated activation and repression of genes, known as the cell's gene expression program, is controlled by non-coding regions of the genome. The process of gene expression is carried out by a number of cellular components, key to which are transcription factors, transcriptional kinases and other transcriptional and regulatory proteins. These transcriptional and regulatory proteins bind with specific regions of non-coding DNA, called enhancers, to control the rate of transcription of genetic information from DNA into the cell.

        In disease, alterations in non-coding regions of the genome can change a cell's gene expression program, altering the type and function of that cell. Because the altered gene expression program is implemented by transcription factors, transcriptional kinases and other transcriptional and regulatory proteins, these proteins are important points for therapeutic intervention. Because this biology is fundamental to the function of all cells, it applies across diseases, whether the cause is genetic, environmental, bacterial, viral or multi-factorial.

        Although researchers have long believed that alterations in non-coding regions of DNA, which account for 98% of the genome, play a key role in driving disease, the scientific community has lacked the tools to study these regions of the genome, rendering them poorly understood. As a result, the discovery and development of targeted therapies to date has focused almost exclusively on abnormal proteins resulting from genetic alterations found in regions of DNA that encode for proteins, which represent less than 2% of the entire genome.

        While targeted therapies, in which the right drug is matched to the right patient, have dramatically improved the ability to treat certain cancers and other serious diseases, the identification of new drug targets by sequencing coding regions of DNA has been largely exhausted. Moreover, in cancer,

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inhibiting abnormal proteins resulting from single genetic alterations can often lead to drug resistance and limited durable clinical benefit. Furthermore, many serious diseases continue to go unaddressed due to the limitations of current drug discovery approaches. Taken together, these factors underscore the need for fundamentally new approaches to drug discovery and development.

        In contrast to therapies that target a single abnormal protein, gene control medicines target the cell's underlying gene expression program, influencing the expression of the crucial set of genes that contribute to disease. The relatively few gene control medicines available today are among the most important targeted therapies and are widely used for their approved indications. Drugs that target transcription factors, such as estrogen receptors in breast cancer, androgen receptors in prostate cancer and glucocorticoid receptors in inflammation, are important examples of gene control medicines that have produced transformative patient benefits. For example, tamoxifen, a gene control medicine targeting a transcription factor, revolutionized the treatment of certain breast cancers and is prescribed 1.9 million times annually in the United States, illustrating the significant therapeutic potential of gene control medicines. However, the difficulty in studying non-coding regions of the genome historically prevented a systematic approach to identifying these critical points of intervention, making gene control a largely untapped field for targeted drug discovery and development.

        Based on the work of Syros' scientific founders Richard A. Young, Ph.D., James Bradner, M.D. and Nathanael Gray, Ph.D., and other scientists, there is now a rapidly growing scientific understanding of how alterations in non-coding regions of the genome drive disease and how to modulate gene control targets. One of the seminal discoveries that pushed the field forward came out of Dr. Young's laboratory at the Whitehead Institute. He discovered that a very small unique subset of enhancers, called super-enhancers, are central to orchestrating gene expression programs. These highly specialized regulatory regions of non-coding DNA bring together the cellular components needed for gene expression, assembling large amounts of transcription factors, transcriptional kinases and other transcriptional and regulatory proteins to drive increased expression of genes crucial to a given cell's type and function. The findings from Young's three original publications on super-enhancers have been cited in approximately 1,000 subsequent publications since they were published in the scientific journal Cell in 2013.

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        The graphics below illustrate the components and structure of super-enhancers, which drive the expression of genes that are crucial to cell type and function.

GRAPHIC

        Super-enhancers exist in both normal and diseased cells. In many different diseases, super-enhancers are associated with, and drive the expression of, disease-causing genes. For example, multiple well-known genes that are implicated in cancer, such as MYC, are associated with super-enhancers. Notably, analysis of super-enhancers and their associated genes allows us to rapidly and systematically elucidate gene expression programs, pinpointing the genes crucial to the function of a given cell and providing critical insights into changes in gene expression programs that contribute to disease.

        These and other discoveries from our scientific founders, coupled with technological advancements, have enabled our pioneering approach to therapeutic gene control. We believe we have built the first proprietary platform designed to systematically and efficiently analyze non-coding regions of the genome in healthy and diseased cells taken from patient tissues to identify alterations in gene expression programs that represent optimal points of therapeutic intervention and develop drugs to control the expression of disease-driving genes. By doing so, we believe our gene control platform will allow us to (i) identify a wide array of potential new drug targets across a range of diseases, (ii) provide a new lens for diagnosing and segmenting patients, including those with complex, multi-factorial diseases that have eluded segmentation with other genomic-based approaches, and (iii) advance a new wave of medicines that have the potential to influence multiple drivers of disease through a single target, making them less susceptible to drug resistance and providing patients with a more profound and durable benefit than many of today's targeted therapies.

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Our Gene Control Platform

        Our proprietary gene control platform consists of two fundamental pillars:

    Identifying novel gene control targets linked to genomically defined patient populations. We analyze gene expression programs in diseased and healthy cells taken from patient tissues to identify disease-causing alterations that represent optimal points of therapeutic intervention and associated biomarkers in specific patient populations.

    Drugging gene control targets.  We develop product candidates to modulate these gene control targets through:

    internal drug discovery efforts focused on creating small molecule drugs targeting transcription factors, transcriptional kinases and other transcriptional and regulatory proteins; and

    externally focused efforts to link existing drugs to specific patient populations identified through our platform. These externally focused efforts could enable us to identify drugs that we may seek to in-license or acquire or use as starting points for our own drug discovery programs to accelerate our development path.


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Identifying Novel Gene Control Targets

        We have invested significant resources in building capabilities to discover novel gene control targets and associated biomarkers. Our approach is disease-focused. Our platform consists of technologies and capabilities to analyze gene expression programs directly from patient tissue samples. We do this by employing our expertise and technologies in computational, gene control and cellular biologies. We have in-licensed intellectual property from the laboratories of our scientific founders at the Whitehead Institute and Dana-Farber. We have significantly improved this licensed technology, including computational algorithms and tissue processing systems, which have produced a highly efficient, scalable approach to analyze gene expression programs using small amounts of patient tissue. In addition, we are developing our own intellectual property related to this technology. These advancements have enabled us to generate one of the largest known datasets of gene expression programs and identify novel targets across many diseases and cell types. To date, we have analyzed or are in the process of analyzing gene expression programs in AML, breast cancer, ovarian cancer, hepatocellular carcinoma, pancreatic cancer, renal cell carcinoma, non-disease and lupus immune cells,

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polycystic kidney disease, spinal muscular atrophy and Alzheimer's disease. Through those efforts, we have identified approximately 50 novel drug targets in oncology, immuno-oncology and autoimmune diseases and validated seven of those targets using biological methods to knock out the target gene or chemical methods to modulate the target's activity. The discovery and validation of these targets has led to the identification of our product candidate SY-1425 as well as additional novel preclinical drug candidates in earlier stages of research and development. We plan to analyze gene expression programs in several other cancers, including colorectal, lung and melanoma as well as several other diseases and cell types, including additional inflammatory disorders and immune cells from tumors. Our long-term goal is to analyze gene expression programs in serious diseases where we believe currently underserved patients can benefit from gene control medicines.

Analyzing Gene Expression Programs in Disease

Generated and Ongoing   Planned
AML

Breast cancer

Ovarian cancer

Hepatocellular carcinoma

Pancreatic cancer

Renal cell carcinoma

Normal immune cells

Systemic lupus erythematosus

Polycystic kidney disease

Spinal muscular atrophy

Alzheimer's disease

  Colorectal cancer

Lung cancer

Melanoma

Additional cancers

Immune cells from tumors

Other inflammatory disorders, including autoimmune diseases and fibrotic diseases

Other rare genetic disorders

        We use our platform to pinpoint crucial genes in disease. We compare gene expression programs in diseased cells versus healthy cells and analyze the cells of different patient subsets within a disease to identify novel drug targets linked to genomically defined subsets of patients. We obtain human disease tissue samples from our network of academic collaborators and commercial providers. We then analyze these samples using a variety of genomic tools, including chromatin immunoprecipitation followed by whole genome sequencing, or ChIP-seq, and proprietary computational methods. The combination of these tools allows us to identify the location of DNA elements, including super-enhancers and their associated genes, on the genome. We validate this potential pool of targets by using biological methods for knocking down or out the target gene in cell lines, or by testing existing drugs against a specific target, to determine if the target represents an attractive point of therapeutic intervention.

Validation of Our Approach

        We have validated our approach by successfully linking known targets of successful, marketed drugs to super-enhancers in human disease tissue. Additionally, using our platform, we have identified super-enhancers associated with genes linked to the hallmarks of cancer, including genes important in proliferation, invasion and metastasis and immune avoidance, in cancer cells from patient tissue samples. In breast cancer, we were able to recapitulate current knowledge of disease biology and identify clinically validated targets. We analyzed tissue samples from patients with three different types of breast cancer, HER2+, ER+ and triple negative. In HER2+ breast cancer patient samples, we

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successfully identified a super-enhancer associated with the ERBB2 gene, which when overexpressed can lead to HER2+ breast cancer.

        Similarly, in ER+, or estrogen receptor-positive, breast cancer patient samples, super-enhancers were associated with the ESR1 gene, which produces estrogen receptor. Therapies targeting the proteins encoded by the ERBB2 and ESR1 genes include highly successful marketed drugs, such as Herceptin (trastuzumab) for HER2+ breast cancer and tamoxifen for ER+ breast cancer. Using our platform, we also identified novel drug targets in subsets of patients with HER2+, ER+ and triple negative breast cancer. Notably, the super-enhancer associated with RARA, which we also discovered in subsets of AML and MDS patients and is the focus of our SY-1425 program, was found in subsets of patients across all three types of breast cancer.

Drugging Gene Control Targets

        We develop product candidates against gene control targets through:

    internal drug discovery efforts focused on creating small molecule drugs targeting transcription factors, transcriptional kinases and other transcriptional and regulatory proteins; and

    linking existing drugs, which we could in-license, to specific patient populations identified through our platform—a strategy designed to accelerate our clinical development path.

        We have developed significant core internal capabilities in small molecule chemistry, biochemistry and structural biology to characterize the structure and function of transcription factors, transcriptional kinases and other transcriptional and regulatory proteins in order to generate novel chemical matter. We have also developed a sophisticated suite of proprietary assays, which are internally developed tests to measure the biochemical, biophysical, cellular and genomic activity of known and novel compounds against gene control targets.

        While our platform is designed to identify drug targets across a broad range of therapeutic areas and therapeutic modalities, our drug discovery and development efforts are focused on small molecule drugs to target specialized proteins responsible for gene expression, including transcription factors, transcriptional kinases and other transcriptional and regulatory proteins. Because these specialized proteins play a central role in implementing gene expression programs, they are among the most promising and high potential gene control targets for therapeutic intervention. The graphic below illustrates our areas of focus for development of product candidates.

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Drugging Transcriptional Kinases

        SY-1365 demonstrates our ability to identify tumors with transcriptional dependencies and to selectively drug transcriptional kinases. Using our core capabilities in gene control biology and biochemistry, we believe that we created the first selective, small molecule inhibitor of CDK7 with in vivo efficacy.

Drugging Transcription Factors

        Leveraging our expertise in biology, biochemistry and chemistry, we have developed a suite of proprietary screens and assays to demonstrate direct binding of novel transcription factor inhibitors and to directly assess transcription factor inhibition in cells. Using our capabilities and expertise in X-ray crystallography and medicinal chemistry, we are developing proprietary atomic-level knowledge of the structural determinants of transcription factor inhibition by small molecules. We have generated novel molecules that are in early preclinical development and show biophysical evidence of potent direct transcription factor binding and robust cellular activity.

Linking Existing Drugs to Novel Patient Populations

        SY-1425 demonstrates our ability to link existing drugs to novel genomically defined patient populations identified through our platform. We have established a process to systematically screen existing compounds for relationships between drug sensitivity and super-enhancers that we identify in human disease tissue. To date, we have identified multiple drug and enhancer relationships, the most advanced leading to the identification of our SY-1425 program. We expect this approach to enable us to more rapidly enter clinical development by accessing compounds that serve as accelerated starting points for our own programs.

Advantages of our Platform and Approach

        We believe that there are significant advantages to systematically identifying and drugging gene control targets for specific patient populations. Among these advantages are:

    Systematic, reproducible and unbiased approach to identifying core disease drivers in multiple serious diseases.  We take a disease-centric approach. We start with human tissue and, through our platform, systematically identify the core drivers of disease. We identify optimal therapeutic points of intervention in a target- and pathway-agnostic manner, opening up a wide array of potential new drug targets.

    Highly differentiated and pioneering approach with broad applicability across therapeutic areas and diseases.  We are pioneering the understanding of the non-coding, regulatory region of the genome, which has been largely unexploited for drug discovery and development, to uncover novel disease drivers in genomically defined patient populations and advance a new wave of medicines that have the potential to control the expression of disease-driving genes. We have built a differentiated combination of expertise, capabilities and tools to create medicines targeting transcription factors, transcriptional kinases and other transcriptional and regulatory proteins, which have been historically difficult to drug. Because gene expression is fundamental to the function of all cells, we believe that our platform has broad applicability across therapeutic areas and diseases.

    Ability to discover and develop medicines that address significant patient need.  We are initially focused on difficult-to-treat cancers or cancer subtypes for which current therapies are inadequate. Because gene control medicines affect multiple disease-driving genes, we believe they will be less susceptible to the development of drug resistance than other types of genomic-based targeted medicines, potentially resulting in a more profound and durable benefit for

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      patients. This is evidenced by the proven durable benefits of the gene control medicines available today.

    Potential for efficient clinical development.  We intend to enrich our clinical trials with genomically defined subsets of patients who are most likely to respond to our treatment, which we believe will enable us to determine if there are strong signals of efficacy early in clinical development and well before investments are made in expensive late-stage clinical studies. Subject to encouraging clinical results, we could be eligible to apply for Breakthrough Therapy designation and Fast Track designation which, if granted, could accelerate clinical development and regulatory review, allowing us to bring our therapies to patients expeditiously.

Our Clinical Programs

SY-1425

Overview

        SY-1425 (tamibarotene) is an oral, potent and selective agonist of the transcription factor RARa. In September 2015, we in-licensed rights to develop and commercialize SY-1425 for oncology indications in North America and Europe. In mid-2016, we plan to initiate a Phase 2 clinical trial that will enroll genomically defined subsets of patients with relapsed or refractory AML and relapsed high-risk MDS pursuant to an IND accepted by the U.S. Food and Drug Administration, or FDA, in May 2016. We plan to select patients for this trial using the RARA biomarker we identified. We believe patients whose tumors have this biomarker will be more likely to experience a profound and durable clinical benefit from treatment with SY-1425. We also plan to evaluate SY-1425 in newly diagnosed AML patients sixty years of age or older who are not suitable for standard chemotherapy and low-risk transfusion-dependent MDS patients. In order to prospectively select patients in these populations using our RARA biomarker, we will seek clearance for the use of the biomarker test from the FDA through the Investigational Device Exemption, or IDE, process.

Linking SY-1425 to Novel Patient Populations

        We leveraged our platform to analyze gene expression programs in primary AML and breast cancer patient tissue samples. We discovered that RARA, the gene that codes for RARa, was associated with a super-enhancer in some patients' tumors but not in others.

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        The function of RARa differs depending on whether it is bound to its ligand. In the absence of a ligand, RARa represses differentiation. We believe that in tumors with the RARA-associated super-enhancer, there is an abundance of unliganded RARa, resulting in the repression of differentiation, thereby locking the cell in an immature, proliferative and undifferentiated state. Introducing a RARa

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agonist, such as SY-1425, simulates the activity of a ligand, activating differentiation, as illustrated in the graphic below.

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        SY-1425 is an oral, selective RARa agonist. Based on experiments we conducted, we have concluded that the mechanism of action of SY-1425 on non-APL AML cells with the RARA-associated super-enhancer is very similar to the mechanism of approved retinoic acid agonists in APL, a subset of AML with a genetic alteration of the RARA gene. This gives us increased confidence that SY-1425 may also work in this new subset of AML and MDS patients identified by our platform.

        We selected SY-1425 based on its superior potency on RARa, its selectivity for RARa over related proteins RARb and RARg and its superior pharmacokinetic profile compared to all trans retinoic acid, or ATRA, a pan-agonist of RARa, RARb, and RARg. SY-1425 is approved, as tamibarotene (marketed as Amnolake), in Japan for use in acute recurrent or intractable APL, for which it has demonstrated efficacy and a well-established safety profile.

        Through our platform, we have identified a biomarker for the super-enhancer associated with RARA that we will use for patient selection. Our in vivo studies demonstrated that cancer cells with the RARA biomarker showed reduced rates of proliferation and differentiated to more mature cells when treated with SY-1425, while cancer cells without the biomarker continued to proliferate. Our studies also demonstrated that cancer cells with the RARA biomarker were up to 1,000 times more sensitive to SY-1425 than cancer cells without the biomarker, as shown below. This sensitivity was consistent across multiple cancer cells lines.

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Our Preclinical Data

        We have conducted multiple preclinical studies of SY-1425 in AML, excluding APL, and in breast cancer. In certain studies, we use mouse models in which mice are implanted with human tumors, which are referred to as patient-derived xenograft models, or PDX models. In PDX models of AML, SY-1425 was observed to be effective in reducing the growth of tumors and prolonging survival in mice with tumors with the RARA biomarker, but did not appear to stop tumor growth or prolong survival in mice whose tumors did not have the biomarker.

        As shown below, in a PDX model derived from AML patient tumor cells with the RARA biomarker, referred to as RARA biomarker-positive AML, half of the mice were treated with SY-1425, and the other half of the mice went untreated. In the untreated group, the cancer progressed, as measured by the percentage of human leukemia cells in the blood. Correspondingly, high levels of these cancer cells were measured in the bone marrow and spleen of the untreated mice. None of the untreated mice in the study survived beyond 25 days. In contrast, the cancer was observed to be controlled in the mice treated with SY-1425, as measured by the levels of human leukemia cancer cells detected in the blood. Similarly, low levels of these cancer cells were measured in the bone marrow and spleen. Notably, all of the mice treated with SY-1425 survived until the end of the 35-day study.

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        In contrast, as shown below, in a PDX model without the RARA biomarker, SY-1425 was observed to have no effect on tumor control or survival. In both the treated and untreated groups, the cancer progressed, as measured by the percentage of human leukemia cells detected in the blood. Correspondingly, high levels of these cancer cells were measured in the bone marrow and spleen in both groups of mice. None of the mice in either group survived beyond 20 days. These data demonstrate a strong link between the RARA biomarker and response to treatment with SY-1425, and

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provide meaningful evidence that patients with the RARA biomarker may be promising candidates for a clinical trial of SY-1425.

GRAPHIC

        We have also compared the activity of SY-1425 to the activity of ATRA in the RARA biomarker-positive PDX model. We observed superior anti-tumor activity and survival with SY-1425 compared to ATRA, with ATRA-treated mice demonstrating similar survival to the untreated mice.

        Additionally, in our preclinical studies in breast cancer, we observed a strong link between sensitivity to treatment with SY-1425 and breast cancer tumors with the RARA biomarker. SY-1425 was observed to result in significant tumor growth inhibition in PDX models derived from tumors with the RARA biomarker but was observed to have no effect in RARA biomarker-negative PDX models.

SY-1425 Clinical Development Plan

        We plan to develop SY-1425 in North America and Europe for treatment of AML and MDS in genomically defined subsets of patients with the RARA biomarker. In the United States, we expect to initiate a Phase 2 clinical trial in relapsed or refractory AML, excluding APL, and relapsed high-risk MDS in mid-2016. This Phase 2 clinical trial will be a multi-center, open-label trial exploring activity in these patient populations. We anticipate that we will enroll approximately 40 patients, who will have been prospectively selected using our RARA biomarker. The primary endpoint of the trial will be overall response rate. We also plan to measure pharmacodynamic markers, duration of response, safety and tolerability, survival and biomarker predictability. We expect to receive initial data from this trial in mid-2017, or 12 months after the first patient is enrolled.

        We have entered into an agreement with a third party commercial provider to continue developing our novel RARA biomarker into a validated laboratory test under Clinical Laboratory Improvement Amendment, or CLIA, guidelines using a well-established diagnostic platform and approach that may be used to prospectively enroll RARA biomarker-positive patients in our clinical trial. This CLIA laboratory test could become the basis for a commercial companion diagnostic. We are evaluating commercial providers to lead the development of a potential commercial companion diagnostic for the RARA biomarker but have not yet entered in to an agreement with a third party for this work. We expect to do so in 2016.

        Tamibarotene (SY-1425) has been extensively studied and has a well-established safety profile. We expect to use the same dosage used in the treatment of APL in Japan in our Phase 2 clinical trial. This same dosage for SY-1425 was previously used in a U.S. trial in relapsed and refractory APL, for which an IND was opened. We have in-licensed the preclinical data package that was used for approval in Japan and the IND filing in the United States.

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        We also plan to evaluate SY-1425 in newly diagnosed AML patients 60 years of age or older who are not suitable candidates for standard chemotherapy as well as low-risk transfusion-dependent MDS patients. We believe SY-1425 is ideally suited for these patient groups because, in contrast to cytotoxic chemotherapy, it has been generally well tolerated in a related patient population with APL, and because SY-1425 is orally administered and has the potential to be used chronically. In order to prospectively select patients in these populations using our RARA biomarker, we will seek clearance for the use of the biomarker test from the FDA through the IDE process.

        We chose AML and MDS for our initial indications due to high levels of observed efficacy of SY-1425 in our preclinical models, the significant unmet medical need of these patients and the potential for accelerated development. We intend to pursue additional indications, including breast cancer. Our preclinical data in breast cancer supports the development of SY-1425 in genomically defined subsets of patients with breast cancers with our RARA biomarker. We plan to initiate clinical trials in these patients upon establishing proof-of-concept in AML and MDS. We also believe there are subsets of patients with other tumor types with our RARA biomarker and continue to research the role of the super-enhancer associated with RARA in additional cancers.

Existing Clinical Data

        Tamibarotene (SY-1425) is approved and marketed as Amnolake in Japan for treatment of acute recurrent or intractable APL. Given the demonstrated efficacy of the drug in acute recurrent or intractable APL, we intend to evaluate SY-1425 for treatment of APL in North America and Europe. Extensive clinical work had been conducted on tamibarotene prior to our in-licensing it from TMRC. The effectiveness of tamibarotene has been evaluated in patients with APL, including for relapsed patients and as maintenance therapy for newly diagnosed patients.

    In a Phase 2 clinical trial of tamibarotene as a single agent in patients who relapsed following treatment with ATRA, 58% achieved a complete response. The majority of these patients went on to receive a bone marrow transplant or chemotherapy after treatment with tamibarotene and maintained a complete response for at least 14 months.

    In a Phase 3 clinical trial comparing tamibarotene as an add-on therapy to arsenic trioxide, or ATO, a standard of care for APL, versus ATRA as an add-on therapy to ATO in relapsed patients, patients in the tamibarotene-treated group demonstrated:

    An overall complete response rate of 80%, compared to 54% in the ATRA-treated group (p=0.022); and

    A complete molecular remission rate of 23%, compared to 3% in the ATRA-treated group (p=0.0275). Complete molecular remission is achieved when there is no evidence of disease in the patient's blood cells as detected by DNA-based tests.

    In a different Phase 3 clinical trial comparing tamibarotene to ATRA as maintenance therapy in newly diagnosed APL patients, the four-year relapse-free survival rate in high-risk patients treated with tamibarotene was 87%, compared to 58% in high-risk patients treated with ATRA (p=0.028).

        In all these studies, tamibarotene was generally well tolerated. Adverse effects included mild or moderate dry skin, skin rash, headache and bone pain, as well as retinoic acid syndrome and elevated levels of cholesterol, lipids, liver function enzymes and white blood cells, which were severe in certain cases. One such adverse effect, retinoic acid syndrome, is referenced on the drug's label and was infrequently observed clinically. Retinoic acid syndrome is a side effect associated with retinoids and arsenic trioxide and can be mitigated by regular monitoring of clinical parameters, including white

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blood cell counts. A summary of four published clinical studies of tamibarotene use in APL is provided below.

Design   Number of
Patients
  Patient Population   Tamibarotene Treatment   Efficacy / Duration
Phase 2 in relapsed APL1   25   Relapse after ATRA-induced CR   6 mg/m2 daily, discontinued at CR   CR = 58%
(14/24 evaluable)
(³ 14 months duration in 5 patients in conjunction with BMT, 7 patients in conjunction with CT)

Phase 3 tamibarotene vs. ATRA as APL maintenance2

 

269

 

Front-line following ATRA-induced CR and consolidation

 

Tamibarotene 6 mg/m2 vs. ATRA 45 mg/m2 14 days every 3 months for 2 years

 

Overall 4-year RFS: 91% vs. 84%;
4-year RFS in high risk: 87% vs. 58% (tamibarotene vs. ATRA)

Phase 2 in relapsed/refractory APL after ATRA and ATO3

 

14

 

Patients with prior lines of treatment (9 with 2 prior lines, 3 with 3 prior lines and 2 with 5 prior lines)

 

6 mg/m2 daily for 56 day induction period then every other month as consolidation for up to one year

 

CR = 36%
CRi = 29%
mEFS = 3.5 months
mOS = 9.5 months

Phase 3,

 

71

 

 

 

6 mg/m2/day

 

 

 

Tamibarotene

 

ATRA
tamibarotene           tamibarotene, 25 mg/       +ATO   +ATO
vs. ATRA as add-on to ATO in relapsed APL4           m2/day ATRA add-on to 0.15 mg/kg/day ATO for 56 days   CR
CRm
  80%
23%
  54%
  3%

Table legend:

CR = complete remission   CRm = complete molecular remission   CRi = complete remission with incomplete blood count recovery
RFS = relapse-free survival   mEFS = median event-free survival   mOS = median overall survival
BMT = bone marrow transplant   CT = chemotherapy    
1.
Tobita, et al. Blood, August 1997.
2.
Shinagawa, et al. Journal of Clinical Oncology, November 2014.
3.
Sanford D, et al. British Journal of Haematology, July 2015.
4.
Wang et al, ASH presentation, December 2015.

        Tamibarotene was also studied in a Phase 2 clinical trial for the treatment of unselected late-stage non-small cell lung cancer under a previous license between TMRC and a third party. The trial evaluated the efficacy and safety of adding tamibarotene or placebo to paclitaxel and carboplatin in patients with stage IIIb (plus pleural effusion) or IV non-small cell lung cancer. This trial was terminated when interim data suggested that a primary endpoint of progression-free survival for 18 months after starting therapy would not be reached. Interim data also showed that tamibarotene combined with paclitaxel and carboplatin chemotherapy was associated with increased toxicity in this non-selected non-small cell lung cancer patient population (Levitt DJ et al J Clin Oncol 34, 2006 (suppl; abstr e20560)).

SY-1425 Market Opportunity

        We believe that SY-1425 has the potential to address significant unmet medical need across a range of blood cancers and solid tumors. Based on our analysis of super-enhancers associated with RARA in patient samples, and on RARA biomarker data in publicly available databases, we estimate that approximately 25% of AML and MDS patients and approximately 35% of breast cancer patients may benefit from RARa agonist therapy like SY-1425.

        There are an estimated 33,000 new AML diagnoses in the United States, Canada and the five largest European countries each year. AML remains an area of significant unmet medical need. In the United States, newly diagnosed patients have a 25% five-year survival rate. There has been little improvement in treatment options for AML in the past 20 years, with typical treatment including older

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chemotherapeutics and stem cell transplantation. Nearly half of newly diagnosed patients, or approximately 16,000 patients, are elderly or unfit for treatment with standard therapies, leaving this group with very few to no treatment options.

        Of the estimated 33,000 newly diagnosed patients each year in the countries listed above, approximately 30% or 10,000 AML patients eventually relapse or are refractory to current treatment options. In the absence of adequate therapies, these relapsed or refractory patients may be put into clinical trials for new and emerging therapies.

        Based on our analysis of super-enhancers associated with RARA in patient samples and on RARA biomarker data in publicly available databases, we believe that approximately 25% of AML patients could benefit from treatment with a RARa agonist such as SY-1425. Thus we estimate that in the countries listed above, approximately 2,500 patients who eventually relapse or are refractory to current treatment options and 4,000 patients who are elderly or unfit for standard treatments could benefit from treatment with a RARa agonist such as SY-1425.

        There are approximately 32,000 new MDS diagnoses in the countries listed above each year, with up to one-third of these newly diagnosed patients estimated to be likely to progress to AML. In the United States, high-risk patients have a median survival of only approximately two years, while the low-risk patient population has a median survival of approximately six years. As with AML, treatment options are limited. More than half of the newly diagnosed patients, or approximately 17,000 patients, have low-risk transfusion-dependent MDS.

        Of the estimated 32,000 newly diagnosed patients in the countries listed above each year, approximately 19% or 6,000 MDS patients have relapsed high-risk MDS.

        Based on RARA biomarker data in publicly available databases, we believe that approximately 25% of MDS patients could benefit from treatment with a RARa agonist such as SY-1425. Thus we estimate that in the countries listed above, approximately 1,500 patients diagnosed with relapsed high-risk MDS each year and 4,250 patients diagnosed with low-risk transfusion-dependent MDS each year could benefit from treatment with a RARa agonist such as SY-1425.

        Approximately 485,000 women in the countries listed above are diagnosed with breast cancer annually, with 158,000 of these women categorized as metastatic and eligible for systemic therapies. Breast cancer is categorized and treated by the stage for risk of metastatic recurrence and by whether it is driven by estrogen receptor and progesterone receptor signaling, referred to as being hormone positive, driven by HER2 receptor signaling, referred to as being HER2+, or neither, which is referred to as being triple negative. Despite advances in treatments for hormone-positive and receptor-positive patients, the lack of similar advances in treatment options for triple negative breast cancer patients, which represent approximately 15 to 20% of all newly diagnosed breast cancer patients each year in the countries listed above, represents a significant unmet medical need. In the United States, the five-year survival rate of newly diagnosed metastatic breast cancer is approximately 26%. In the United States, 40,000 women die annually from breast cancer, making breast cancer one of the largest causes of cancer-related deaths. Based on our analysis of patient samples, we believe that approximately 35% of metastatic patients, or 55,000 patients in the countries listed above, have the RARA biomarker and would benefit from a product candidate like SY-1425.

        There are an estimated 2,500 new APL cases diagnosed in the United States, Canada and the five largest European countries each year. Despite advances in treating APL, the disease remains associated with a significant incidence of early death due to disease-related susceptibility to bleeding or hemorrhage.

SY-1365

Overview

        SY-1365 is a highly potent and selective small molecule CDK7 inhibitor focused on cancers that are dependent on a high and constant expression of certain transcription factors for their growth and

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survival, a phenomenon known as transcriptional addiction. Using our platform, we have generated several potent and selective small molecule CDK7 inhibitors, including SY-1365. We chose SY-1365 as our development candidate based on its promising efficacy and safety observed in our preclinical studies. We have begun IND-enabling activities for SY-1365. We plan to initiate a Phase 1/2 clinical trial in patients with acute leukemia, including AML and ALL, in in the first half of 2017.

Drugging Transcriptional Kinases

        Using our CDK7 inhibitor SY-079, known in the scientific literature as THZ1, a "tool" or research compound, our scientific founders and collaborators demonstrated that transcriptionally addicted cancers are particularly sensitive to selective inhibition of CDK7. CDK7, a member of the cyclin-dependent kinase, or CDK, family, is a transcriptional kinase that plays a central role in the expression of transcription factors in these cancers. CDK7 is associated with super-enhancers that control the expression of the transcription factors driving the cancer's growth and survival. Inhibiting CDK7 preferentially lowers the expression of disease-driving transcription factors controlled by super-enhancers, and results in the selective killing of cancer cells over non-cancerous cells.

        Our scientific founders and collaborators conducted preclinical studies in cell lines of T-ALL, a form of ALL that originates in T-cells, MYCN-amplified neuroblastoma, a form of neuroblastoma resulting from amplification of the gene MYCN, and small cell lung cancer. As shown in the graphic below, CDK7 inhibition resulted in reduced expression levels of the specific transcription factor contributing to each of these cancers: RUNX1 in T-ALL and MYCN in neuroblastoma and small cell lung cancer. These findings have been published in Cell, Nature and Cancer Cell.

GRAPHIC

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        As shown below, in additional preclinical studies conducted by our scientific founders and collaborators, SY-079 also demonstrated significant anti-tumor activity in cell line-derived, or CDX, models of T-ALL and MYCN-amplified neuroblastoma, as well as a survival benefit similar to chemotherapy in a genetically engineered mouse model of small cell lung cancer. In the T-ALL model, the tumor size was measured by the bioluminescence, or the aggregate brightness of chemically tagged tumor cells in an imaging study. In the MYCN-amplified neuroblastoma model, tumor size was estimated by total volume. In the small cell lung cancer model, researchers demonstrated a survival benefit similar to chemotherapy in genetically engineered mice treated with SY-079.

GRAPHIC

        Our scientific founders and collaborators have also demonstrated the strong potential of CDK7 inhibition, using SY-079, as a novel treatment strategy for triple negative breast cancer, a highly aggressive form of breast cancer that is transcriptionally addicted. In a PDX model of triple negative breast cancer, SY-079 selectively impacted the expression of a set of crucial genes, killing cancer cells and inhibiting tumor growth. This exemplifies our gene control approach of influencing multiple crucial genes driving cancer with one inhibitor in a targeted fashion. The graphic below illustrates the impact of increased exposure of SY-079 on cell growth on ER/PR+ breast cancer cell lines as compared to triple negative breast cancer cell lines.

GRAPHIC

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        As illustrated above, SY-079 was observed to have a dramatic impact on cell growth in triple negative breast cancer cell lines, as measured by the estimated percentage of proliferating cells. The ER/PR+ breast cancer cell lines were significantly less sensitive to treatment with SY-079. These findings were published in Cell.

        In an AML cell line treated with a CDK7 inhibitor, expression levels of genes associated with super-enhancers that we studied were observed to be more highly repressed on average than those of the genes we studied that are not associated with super-enhancers.