Wall Street expects a year-over-year increase in earnings on higher revenues when C4 Therapeutics, Inc. (CCCC) reports results for the quarter ended December 2023. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss ...

Table of Contents Table of Contents NOTE REGARDING COMPANY REFERENCES Table of Contents Table of Contents C4 Therapeutics, Inc. See accompanying notes to unaudited condensed consolidated financial statements. Table of Contents | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |----------------------------------------------------------------------------------------------|--------------------------------|----------------------|-------|-------|----------------------------------------|-------------- ...

Financial Performance - For the six months ended June 30, 2023, the company reported a net loss of $70.7 million, compared to a net loss of $59.0 million for the same period in 2022[41]. - The company reported a comprehensive loss of $35.2 million for the quarter, compared to a comprehensive loss of $28.3 million in the previous quarter[30]. - The company reported a net loss of $35.922 million for the three months ended June 30, 2023, compared to a net loss of $27.412 million for the same period in 2022, reflecting an increase in losses of approximately 31.5%[124]. - The net cash used in operating activities was $52.1 million for the six months ended June 30, 2023, compared to $48.8 million for the same period in 2022[35]. - The company expects to continue incurring operating losses for the foreseeable future[41]. Cash and Securities - Cash, cash equivalents, and marketable securities totaled $286.7 million as of June 30, 2023, expected to fund operations for at least the next twelve months[41]. - The company reported cash equivalents and marketable securities totaling $286.450 million as of June 30, 2023, compared to $39.009 million at the end of 2022[46]. - The company’s total marketable securities, current and non-current, were valued at $241.819 million as of June 30, 2023[74]. - Total marketable securities as of June 30, 2023, amounted to $307.361 million, with gross unrealized losses of $4.141 million[104]. Research and Development - The company is focused on advancing its TORPEDO platform for developing small-molecule medicines targeting protein degradation[40]. - Research and development expenses for the first half of 2023 were $58.968 million, slightly up from $57.526 million in the same period of 2022[57]. - The company expects research and development expenses to continue to increase substantially in connection with planned preclinical and clinical development activities[103]. - The company has commenced clinical trials for three advanced product candidates: CFT7455, CFT8634, and CFT1946, initiated in June 2021, May 2022, and December 2022, respectively[215]. Collaboration Agreements - The company has a collaboration agreement with Roche, which includes potential milestone payments ranging from $260 million to $275 million for product development achievements[78]. - The Company entered into a collaboration and license agreement with Betta Pharma, receiving an upfront cash payment of $10.0 million and potential milestone payments of up to $357.0 million[81]. - Revenue from collaboration agreements for Q2 2023 was $2.664 million, a decrease of 80.7% compared to $13.834 million in Q2 2022[57]. - Revenue from the Biogen Agreement was $2.504 million for the three months ended June 30, 2023, down from $9.534 million in the same period of 2022, indicating a decline of about 73.8%[117]. Risks and Challenges - The company is subject to risks typical of early-stage life science companies, including the uncertainty of raising additional financing and the market acceptance of products[68]. - The company acknowledges the high risk of failure in product development, particularly for early-stage candidates[209]. - The company may need substantial additional funding to continue operations and pursue business objectives[203]. - The company faces significant risks in clinical development, including potential harmful side effects and market acceptance issues, which could hinder revenue generation[217]. Intellectual Property - Patent protection is crucial for competitive positioning; failure to secure patents could impair commercialization efforts[229]. - The company may become involved in expensive and time-consuming lawsuits to protect its intellectual property, which could adversely affect its financial condition[263]. - The company may need to license intellectual property from third parties, which may not be available on commercially reasonable terms, potentially adversely affecting its business and financial condition[265]. - The company filed a petition with the USPTO on May 1, 2023, seeking a post-grant review of U.S. patent number 11,414,416, which relates to compounds for the treatment of BRD9-related disorders[266]. Regulatory Environment - The FDA's approval process for product candidates is lengthy and unpredictable, potentially harming the company's business if marketing approval is not obtained[272]. - The company plans to seek Orphan Drug Designations for its product candidates, which could provide exclusivity but may not guarantee marketing rights if broader indications are pursued[278]. - The company must comply with extensive regulatory requirements for marketing, labeling, and promotion, with potential penalties for non-compliance[275]. - The company may face claims from third parties regarding intellectual property misappropriation, which could lead to litigation and loss of valuable rights[269]. Market and Commercialization - The market acceptance of the company's product candidates will depend on factors such as efficacy, side effects, pricing, and insurance coverage[224]. - The company may need to establish strategic partnerships to enhance its product development efforts, but faces competition and complexity in negotiations[223]. - The company’s ability to commercialize products may be affected by unfavorable pricing regulations and reimbursement practices in various countries[257]. - The successful commercialization of product candidates depends on third-party payors providing coverage and adequate reimbursement levels[281]. Financial Strategy - The company may raise additional capital in the future through the sale of shares or convertible securities, which could lead to stockholder dilution[293]. - There is uncertainty regarding the sustainability of an active trading market for the company's common stock, which may affect liquidity[293]. - The trading price of the company's common stock may be influenced by the research and reports published by industry or securities analysts[293]. - The company has broad discretion in the use of the capital raised, which may not be utilized effectively[295].

Financial Performance - Net cash used in operating activities for the three months ended March 31, 2023, was $(33,125) thousand, compared to $(26,596) thousand for the same period in 2022, indicating an increase in cash outflow [87] - Total net change in cash, cash equivalents, and restricted cash for the three months ended March 31, 2023, was $19,722 thousand, a significant improvement from $(30,120) thousand in the prior year [87] Marketable Securities - As of March 31, 2023, the company had marketable securities totaling $255.6 million, consisting of corporate debt securities, U.S. government debt securities, and U.S. Treasury securities [208] - The weighted-average maturity date of the company's marketable securities is 0.6 years, indicating a short-term investment strategy [208] Research and Development - The company is currently engaged in research and development programs, with ongoing clinical trials and preclinical studies, although specific timelines and results were not disclosed [86] - Future agreements with third parties for the manufacturing, development, and commercialization of product candidates are anticipated, contingent on regulatory approvals [86] - The company is focused on expanding its product candidates to address additional disease indications, although specific candidates were not mentioned [86] - The company is actively working on its TORPEDO technology platform, which is aimed at optimizing protein degradation [86] Risks and Challenges - The company faces risks related to the ongoing COVID-19 pandemic, which may impact its business operations and clinical trials [86] - The company acknowledges potential pricing and reimbursement challenges for its product candidates if they receive regulatory approval, particularly under the Inflation Reduction Act of 2022 [86]

C4 Therapeutics' Strategy and Pipeline - C4 Therapeutics' mission is to deliver on the promise of targeted protein degradation science to create a new generation of medicines that transform patients' lives[20, 114] - The company is focused on progressing multiple small molecule oncology degrader programs in the clinic to improve upon the standard of care[12, 40] - C4 Therapeutics is expanding the application of the TORPEDO platform through existing and new collaboration partners[13, 40] - C4 Therapeutics has a robust clinical pipeline with 4 oncology degraders against targets of high unmet need[20, 114] - An additional program is expected to enter the clinic by the end of 2023[21] CFT7455 (IKZF1/3 Degrader) - The approved IKZF1/3 degrader market is valued at $13 billion[30] - CFT7455 has the potential to become a backbone therapy for multiple myeloma due to its class-leading catalytic activity, selectivity, and high binding affinity[4, 45] - Phase 1 dose escalation data from the Phase 1/2 trials of CFT7455 is expected to be presented in the second half of 2023[40, 115] CFT8634 (BRD9 Degrader) - CFT8634 targets BRD9 for Synovial Sarcoma & SMARCB1-Null Solid Tumors[26, 60] - Phase 1 dose escalation data from the Phase 1/2 trials of CFT8634 is expected in the second half of 2023[40, 88, 115] - In front-line Synovial Sarcoma setting, Progression Free Survival (PFS) is ~7 months, and in relapsed refractory setting, PFS is ~5 months[61] CFT1946 (BRAF V600 Degrader) - CFT1946 targets BRAF-V600 Melanoma, Colorectal (CRC) & Non-Small Cell Lung Cancer (NSCLC)[26, 100] - The approved BRAF inhibitor market is approximately $2 billion[102] - Approximately 70-90% of BRAF mutations are V600[109] - C4 Therapeutics will advance the dose escalation portion of the Phase 1/2 trial and present new preclinical data in the first half of 2023[40, 115] CFT8919 (EGFR L858R Degrader) - CFT8919 targets EGFR L858R for Non-Small Cell Lung Cancer (NSCLC)[26, 111] - The approved EGFR inhibitor market is approximately $6 billion[112] - Osimertinib provides a PFS of 14.4 months for L858R mutations[73, 112] - C4 Therapeutics plans to submit an IND application for CFT8919 in the first half of 2023[113, 115]

Regulatory Compliance - The company is subject to various healthcare laws and regulations that may impact its business operations and financial arrangements, including the federal Anti-Kickback Statute and the False Claims Act [187]. - The company may face significant civil, criminal, and administrative penalties if found in violation of healthcare laws, which could include exclusion from government-funded healthcare programs [191]. - The company must ensure compliance with various state and federal consumer protection laws, which regulate marketplace activities and may impact its operations [189]. - The company may be subject to increased scrutiny from federal and state enforcement bodies regarding its interactions with healthcare providers [189]. Clinical Trials and Research - The Drug Administration Law of the PRC has adopted an implied approval system for clinical trials, allowing trials to proceed if no objections are received within 60 business days [186]. - The company is required to register and publish clinical trials conducted in China, ensuring transparency in its research activities [186]. - The NMPA's guidelines encourage the development of innovative oncology drugs, which may influence the company's research and development strategies [186]. Market Access and Pricing - The company must navigate complex reimbursement landscapes in both the U.S. and foreign jurisdictions, which may affect its product pricing and market access strategies [192]. - The centralized procedure for marketing authorization in the EU is mandatory for certain medicinal products, impacting the company's product launch strategies in Europe [185]. - Individual states in the U.S. are implementing regulations to control pharmaceutical pricing, which may affect competition and pricing strategies [1]. - Pricing negotiations for patented medicines in Canada are undergoing significant changes that may impact profitability for companies selling products there [2]. - Regional healthcare authorities are increasingly using bidding procedures to determine pharmaceutical product inclusion, potentially reducing demand for product candidates [1]. Legislative Changes - Legislative changes, such as the Affordable Care Act, have expanded Medicaid eligibility, potentially increasing the company's Medicaid rebate liability [193]. - The Inflation Reduction Act of 2022 (IRA) includes provisions that reduce the out-of-pocket cap for Medicare Part D beneficiaries to $2,000 starting in 2025 [1]. - The IRA allows the U.S. government to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without generic or biosimilar competition [1]. - The removal of safe harbor protections for price reductions from pharmaceutical manufacturers under Part D has been delayed until January 1, 2027 [1]. - Legislation allowing drug reimportation could decrease prices received for developed products, adversely affecting future revenues [1]. Communication and Reporting - The company will make its Annual Report and other filings available on its website and intends to use various platforms for disclosing material non-public information [3].

Summary of C4 Therapeutics (CCCC) FY Conference Call - January 09, 2023 Company Overview - C4 Therapeutics is a leader in targeted protein degradation, aiming to create transformative medicines for patients [1][2] - The company has a world-class degrader platform that focuses on designing orally bioavailable and chemically efficient degraders [2][4] Core Strategies and Achievements - The strategy is built on three pillars: advancing the oncology portfolio, investing in discovery, and expanding the platform's applicability beyond cancer [5][6] - In 2022, C4 initiated work on seven new targets and has four programs in the clinic, with three currently in clinical trials and one expected to enter this year [5][7] Clinical Programs 1. **CFT7455**: Targets IKZF1 and IKZF3 for multiple myeloma and non-Hodgkin's lymphoma - Aims to be a backbone therapy, reducing off-target toxicity and overcoming resistance seen with existing treatments [12][13] - Phase I data showed a half-life of approximately 48 hours, leading to adjustments in dosing schedules [15][16] - Expected to share Phase I dose escalation data in the second half of 2023 [18] 2. **CFT8634**: Targets BRD9 for synovial sarcoma and SMARCB1 deleted tumors - Designed to be orally bioavailable and potent, with a Phase III study initiated in May 2022 [22][27] - Initial data shows promising pharmacokinetics and pharmacodynamics, with a 13-hour half-life [23][24] - Data readouts expected in the second half of 2023 [23] 3. **CFT1946**: Targets BRAF V600 mutations for melanoma, colorectal cancer, and non-small cell lung cancer - Aims to address resistance mutations associated with current BRAF inhibitors [29][30] - Clinical trial started in late 2022, with ongoing escalation expected throughout 2023 [31][32] 4. **CFT8919**: Targets EGFR L858R mutations for non-small cell lung cancer - Designed to bind to an allosteric site specific to the L858R mutation, allowing efficacy against resistance mutations [33][34] - IND submission planned for 2023 [36] Market Position and Competitive Landscape - C4 Therapeutics emphasizes the unique advantages of its degrader platform compared to existing therapies, particularly in terms of efficacy and safety profiles [54][56] - The company is aware of emerging competitors in the space and is focused on differentiating its products through superior clinical data [55][56] Financial Outlook - The company is funded through the end of 2024 to achieve its clinical milestones [37] Additional Insights - The company is exploring additional indications for BRD9 beyond the initial targets due to emerging biology [27] - The safety profile of the BRD9 program has been satisfactory, with no dose-limiting toxicities reported in early cohorts [41][44] - C4 Therapeutics is committed to optimizing patient enrollment strategies across its clinical trials [49] This summary encapsulates the key points from the conference call, highlighting the company's strategic focus, clinical advancements, and market positioning.

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) The company presents its unaudited condensed consolidated financial statements as of September 30, 2022 [Condensed Consolidated Financial Statements](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The company's net loss increased while cash and total assets decreased during the first nine months of 2022 Condensed Consolidated Balance Sheet Data (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $49,551 | $76,124 | | Marketable securities | $316,460 | $375,355 | | Total current assets | $325,456 | $325,689 | | Total assets | $461,439 | $506,765 | | Total current liabilities | $45,267 | $51,246 | | Total liabilities | $143,260 | $117,159 | | Total stockholders' equity | $318,179 | $389,606 | Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Revenue from collaboration agreements | $28,242 | $25,707 | | Research and development expense | $87,189 | $68,114 | | General and administrative expense | $32,294 | $24,472 | | Loss from operations | $(91,241) | $(66,879) | | Net loss | $(90,990) | $(68,234) | | Net loss per share | $(1.86) | $(1.51) | Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(76,811) | $(61,294) | | Net cash provided by (used in) investing activities | $49,138 | $(129,923) | | Net cash provided by financing activities | $1,100 | $170,934 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures detail the company's liquidity, collaboration revenues, debt, and confirmation of sufficient cash for future operations - The company is a clinical-stage biopharmaceutical firm with a **net loss of $91.0 million** for the nine months ended September 30, 2022[42](index=42&type=chunk)[43](index=43&type=chunk) - As of September 30, 2022, the company had **$366.0 million in cash, cash equivalents, and marketable securities**, which is expected to fund operations for at least the next twelve months[43](index=43&type=chunk) - The company has a **$12.5 million term loan outstanding** with an interest rate of 12.07% as of September 30, 2022[79](index=79&type=chunk) - Total stock-based compensation expense was **$23.1 million** for the nine months ended September 30, 2022, compared to $15.2 million for the same period in 2021[88](index=88&type=chunk) Revenue from Collaboration Agreements (in thousands) | Agreement | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Roche Agreement | $4,548 | $7,416 | | Biogen Agreement | $18,350 | $9,647 | | Calico Agreement | $5,344 | $8,644 | | **Total** | **$28,242** | **$25,707** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial results, clinical pipeline progress, rising expenses, and confirms a cash runway through the end of 2024 [Business Overview](index=27&type=section&id=Business%20Overview) The company provides updates on its clinical-stage pipeline, including progress on CFT7455, CFT8634, and CFT1946 - **CFT7455**, for multiple myeloma and non-Hodgkin lymphomas, is in an ongoing Phase 1/2 clinical trial[97](index=97&type=chunk) - **CFT8634**, for synovial sarcoma, dosed its first patient in a Phase 1/2 clinical trial in May 2022[97](index=97&type=chunk) - An IND was submitted for **CFT1946** for BRAF-V600 mutant solid tumors in August 2022, with a Phase 1/2 trial expected to begin by the end of 2022[97](index=97&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Revenue increased due to the Biogen agreement, while R&D and G&A expenses rose significantly from higher personnel and clinical trial costs Comparison of Results for the Nine Months Ended September 30 (in thousands) | Item | 2022 | 2021 | Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$28,242** | **$25,707** | **+$2,535** | **+$8.8M from Biogen agreement, offset by decreases from Calico (-$3.3M) and Roche (-$2.9M)** | | **R&D Expense** | **$87,189** | **$68,114** | **+$19,075** | **+$9.8M in personnel, +$5.1M in clinical expenses (CFT7455 & CFT8634), +$4.0M in facilities** | | **G&A Expense** | **$32,294** | **$24,472** | **+$7,822** | **+$6.4M in personnel expenses** | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds $366.0 million in cash and equivalents, sufficient to fund operations through the end of 2024 - As of September 30, 2022, the company had cash, cash equivalents and marketable securities of approximately **$366.0 million**[111](index=111&type=chunk) - Management believes that existing funds will be **sufficient to fund the company's operating plan through the end of 2024**[134](index=134&type=chunk) Summary of Cash Flows (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(76,811) | $(61,294) | | Net cash provided by (used in) investing activities | $49,138 | $(129,923) | | Net cash provided by financing activities | $1,100 | $170,934 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate changes affecting its marketable securities portfolio - The company is exposed to interest rate risk on its **marketable securities portfolio of $316.5 million** as of September 30, 2022[122](index=122&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the end of the quarter - The principal executive officer and principal financial officer concluded that the company's **disclosure controls and procedures were effective** as of September 30, 2022[125](index=125&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company was **not a party to any material legal proceedings** as of the date of the report[130](index=130&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to its financial losses, unproven platform, third-party reliance, and competition - The company is a clinical-stage biopharmaceutical company with a limited operating history, a **net loss of $91.0 million** for the nine months ended September 30, 2022, and an **accumulated deficit of $358.7 million**[132](index=132&type=chunk) - The company's **TORPEDO platform is an unproven approach**, making it difficult to predict the time, cost, and likelihood of success[146](index=146&type=chunk) - The company **relies on third parties (CMOs and CROs)** for manufacturing and conducting clinical trials, which increases risks related to supply, quality, and timelines[169](index=169&type=chunk)[170](index=170&type=chunk) - The company faces **substantial competition** from other biotechnology and pharmaceutical companies[158](index=158&type=chunk)[159](index=159&type=chunk) - The company's Credit Agreement contains **restrictive covenants that limit operational flexibility**, including restrictions on asset sales, acquisitions, and incurring additional debt[143](index=143&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities and no material change in the use of IPO proceeds - There has been **no material change in the planned use of proceeds** from the company's initial public offering[243](index=243&type=chunk) [Other Items (Items 3, 4, 5, 6)](index=80&type=section&id=Other%20Items%20(Items%203,%204,%205,%206)) The company reports no defaults, mine safety issues, or other material events for the period - The company reported **no defaults upon senior securities, no mine safety disclosures, and no other information** for the period[244](index=244&type=chunk)[245](index=245&type=chunk)

© 2022 C4 Therapeutics, Inc. | Delivering on the Promise of Targeted Protein Degradation August, 2022 Forward-looking Statements and Intellectual Property Forward-looking Statements The following presentation contains forward-looking statements. All statements other than statements of historical fact are forward-looking statements, which are often indicated by terms such as "anticipate," "believe," "could," "estimate," "expect," "goal," "intend," "look forward to," "may," "plan," "potential," "predict," "pr ...

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) C4 Therapeutics' unaudited financial statements as of June 30, 2022, reflect a decrease in total assets to **$492.5 million**, an increase in total liabilities to **$147.9 million**, and a widened net loss of **$59.0 million** for the six months, primarily due to higher R&D and G&A expenses despite increased collaboration revenue [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2022, the company's total assets decreased to **$492.5 million**, total liabilities increased to **$147.9 million** due to higher operating lease liabilities, and total stockholders' equity decreased to **$344.6 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $57,296 | $76,124 | | Marketable securities (current & non-current) | $340,541 | $375,355 | | Total assets | $492,475 | $506,765 | | **Liabilities & Equity** | | | | Total current liabilities | $46,148 | $51,246 | | Total liabilities | $147,882 | $117,159 | | Total stockholders' equity | $344,593 | $389,606 | | Total liabilities and stockholders' equity | $492,475 | $506,765 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the six months ended June 30, 2022, collaboration revenue increased to **$21.5 million**, while the net loss widened to **$59.0 million** due to higher R&D and G&A expenses, resulting in a net loss per share of **$(1.21)** Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenue from collaboration agreements | $13,834 | $9,781 | $21,488 | $17,207 | | Research and development expense | $31,323 | $23,286 | $57,526 | $43,812 | | General and administrative expense | $9,895 | $8,611 | $22,715 | $16,020 | | Loss from operations | $(27,384) | $(22,116) | $(58,753) | $(42,625) | | Net loss | $(27,412) | $(22,580) | $(59,032) | $(43,551) | | Net loss per share | $(0.56) | $(0.51) | $(1.21) | $(1.00) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2022, net cash used in operating activities increased to **$48.8 million**, while investing activities provided **$29.2 million**, and financing activities provided **$0.7 million**, a significant decrease from the prior year's **$170.4 million** Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(48,791) | $(42,936) | | Net cash provided by (used in) investing activities | $29,224 | $(29,296) | | Net cash provided by financing activities | $739 | $170,350 | | Net change in cash, cash equivalents and restricted cash | $(18,828) | $98,118 | | Cash, cash equivalents and restricted cash at end of period | $60,575 | $282,422 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail the company's clinical-stage biopharmaceutical business, confirming sufficient cash for the next twelve months, outlining collaboration revenue sources, a **$12.5 million** term loan, and **$17.1 million** in stock-based compensation expense - The company is a clinical-stage biopharmaceutical firm focused on targeted protein degradation using its proprietary TORPEDO platform[44](index=44&type=chunk) - Management expects that its cash, cash equivalents, and marketable securities of **$397.8 million** as of June 30, 2022, will be sufficient to fund operations for at least the next twelve months[45](index=45&type=chunk) Revenue from Collaboration Agreements (Six Months Ended June 30, in thousands) | Agreement | 2022 | 2021 | | :--- | :--- | :--- | | Roche Agreement | $3,673 | $5,086 | | Biogen Agreement | $14,250 | $4,820 | | Calico Agreement | $3,565 | $7,301 | | **Total** | **$21,488** | **$17,207** | - The company has an outstanding **$12.5 million** term loan with Perceptive, bearing a variable interest rate (**11.25%** as of June 30, 2022) and maturing in June 2024[84](index=84&type=chunk) - Stock-based compensation expense totaled **$17.1 million** for the six months ended June 30, 2022, a significant increase from **$9.1 million** in the same period of 2021[93](index=93&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's TORPEDO platform and clinical pipeline, highlighting a **$4.3 million** increase in collaboration revenue for the first half of 2022, alongside significant increases in R&D and G&A expenses, confirming **$397.8 million** in funds are expected to last through 2024 [Business Overview](index=28&type=section&id=Business%20Overview) C4 Therapeutics is a clinical-stage biopharmaceutical company leveraging its TORPEDO platform to develop small-molecule medicines, with lead candidates CFT7455 and CFT8634 in Phase 1/2 trials and additional IND submissions planned - The company's most advanced product candidate, CFT7455, is in a Phase 1/2 clinical trial for multiple myeloma (MM) and non-Hodgkin lymphomas (NHLs)[101](index=101&type=chunk) - The first patient was dosed in a Phase 1/2 clinical trial for CFT8634, a degrader targeting BRD9 for synovial sarcoma, in May 2022[101](index=101&type=chunk) - An Investigational New Drug (IND) application for CFT1946, targeting BRAF V600X mutant cancers, is expected in the second half of 2022[101](index=101&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) For the six months ended June 30, 2022, revenue increased by **$4.3 million** due to the Biogen agreement, while R&D expenses rose by **$13.7 million** and G&A expenses by **$6.7 million**, primarily driven by increased personnel and stock-based compensation Comparison of Operating Results (Six Months Ended June 30, in thousands) | Item | 2022 | 2021 | Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $21,488 | $17,207 | +$4,281 | $9.4M increase from Biogen agreement, offset by decreases from Calico and Roche | | **R&D Expense** | $57,526 | $43,812 | +$13,714 | Increased personnel ($7.3M), facilities ($2.7M), and clinical expenses ($2.4M) | | **G&A Expense** | $22,715 | $16,020 | +$6,695 | Increased personnel costs ($5.8M), mainly from higher stock-based compensation | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2022, the company held **$397.8 million** in cash and equivalents, expected to fund operations through 2024, with **$48.8 million** net cash used in operating activities for the first half of 2022, anticipating substantial future expense increases - As of June 30, 2022, the company had cash, cash equivalents, and marketable securities of approximately **$397.8 million**[114](index=114&type=chunk) - The company believes its existing funds will be sufficient to fund its operating plan through the end of 2024[136](index=136&type=chunk) - Net cash used in operating activities was **$48.8 million** for the six months ended June 30, 2022, primarily due to the net loss of **$59.0 million**, offset by non-cash charges like stock-based compensation of **$17.1 million**[114](index=114&type=chunk)[115](index=115&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on its **$340.5 million** marketable securities portfolio, but a short weighted-average maturity of **1.0 year** mitigates significant impact from rate fluctuations - The company's primary market risk is related to changes in interest rates affecting its portfolio of marketable securities[125](index=125&type=chunk) - As of June 30, 2022, the company held **$340.5 million** in marketable securities with a short weighted-average maturity of **1.0 year**, which limits the impact of interest rate changes[125](index=125&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2022, and concluded they were effective at a reasonable assurance level, with no material changes in internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[127](index=127&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, internal controls[128](index=128&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) As of the filing date of this report, the company was not a party to any material legal proceedings or claims - The company reports that it was not a party to any material legal matters or claims as of the date of the Form 10-Q[132](index=132&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) The company outlines extensive risks including significant losses, funding needs, unproven platform, clinical trial failures, reliance on third parties, intense competition, IP challenges, and unpredictable regulatory and commercialization processes [Financial and Capital Risks](index=36&type=section&id=Risks%20related%20to%20our%20financial%20position%20and%20need%20for%20additional%20capital) The clinical-stage company faces financial risks from ongoing significant losses, the need for substantial additional funding, potential COVID-19 impacts, and restrictive covenants in its credit agreement - The company has a limited operating history and incurred a net loss of **$59.0 million** for the six months ended June 30, 2022, with an accumulated deficit of **$326.7 million**[134](index=134&type=chunk) - Substantial additional funding is needed to continue operations, and if unable to raise capital, the company may have to delay, limit, or terminate its research and development programs[136](index=136&type=chunk) - The ongoing COVID-19 pandemic poses a risk of adversely impacting business, including discovery programs, preclinical studies, clinical trials, and supply chain[139](index=139&type=chunk) [Discovery and Development Risks](index=41&type=section&id=Risks%20related%20to%20the%20discovery%20and%20development%20of%20our%20product%20candidates) The company's unproven TORPEDO platform and preclinical pipeline face high risks of clinical trial failure, unpredictable outcomes, and substantial competition from other protein degradation therapies - The company's TORPEDO platform for targeted protein degradation is an unproven approach, making it difficult to predict the time, cost, and likelihood of success[148](index=148&type=chunk) - Preclinical studies and clinical trials may fail to demonstrate adequate safety and efficacy, which would prevent or delay regulatory approval and commercialization[153](index=153&type=chunk) - The company faces substantial competition from numerous companies developing protein degradation therapies, including Arvinas, Kymera, and Nurix, as well as large pharmaceutical firms[160](index=160&type=chunk) [Third-Party Reliance Risks](index=51&type=section&id=Risks%20related%20to%20dependence%20on%20third%20parties) Reliance on third-party CROs and CMOs for clinical trials and manufacturing introduces risks of performance failures and non-compliance, while critical collaborations with Roche, Biogen, and Calico are essential for capitalizing on product potential - The company relies on CROs to conduct clinical trials and CMOs for manufacturing, which reduces control and introduces risks of delays, quality issues, and regulatory non-compliance[171](index=171&type=chunk)[172](index=172&type=chunk) - The company's collaborations with Roche, Biogen, and Calico are crucial; failure or termination of these agreements could prevent the company from receiving future payments and may require it to abandon or self-fund programs[175](index=175&type=chunk) [Commercialization Risks](index=54&type=section&id=Risks%20related%20to%20the%20commercialization%20of%20our%20product%20candidates) Commercialization risks include potential failure to achieve market acceptance, the absence of a sales organization, uncertainty in obtaining favorable pricing and reimbursement, and exposure to product liability lawsuits - Approved products may fail to gain market acceptance from physicians, patients, and third-party payors, which is necessary for commercial success[179](index=179&type=chunk) - The company has no marketing and sales organization and will need to build one or rely on third parties, which carries significant risks and costs[180](index=180&type=chunk) - Successful commercialization depends on obtaining adequate coverage and reimbursement from third-party payors, which is uncertain and subject to cost-containment pressures[182](index=182&type=chunk) [Intellectual Property Risks](index=57&type=section&id=Risks%20related%20to%20our%20intellectual%20property) The company's success hinges on obtaining and maintaining patent protection, facing risks from an uncertain patent landscape, potential infringement lawsuits, inability to protect trade secrets, and the need for third-party IP licenses - Failure to obtain and maintain sufficient patent protection could allow competitors to develop and commercialize similar or identical products, impairing the company's commercial success[187](index=187&type=chunk) - The company may become involved in expensive and time-consuming lawsuits to protect its patents or defend against infringement claims from third parties[189](index=189&type=chunk)[191](index=191&type=chunk) - The company relies on trade secrets, and if it is unable to protect their confidentiality, its business and competitive position would be harmed[200](index=200&type=chunk) [Regulatory Risks](index=64&type=section&id=Risks%20related%20to%20regulatory%20matters) The company faces lengthy, costly, and unpredictable regulatory approval processes, ongoing compliance obligations post-approval, and complex healthcare laws that could lead to substantial penalties for non-compliance - The process to obtain marketing approval from the FDA and foreign regulatory authorities is lengthy, time-consuming, and inherently unpredictable, and product candidates could fail to receive approval for many reasons[203](index=203&type=chunk) - Even if approved, products are subject to ongoing regulatory requirements for manufacturing, labeling, and marketing, and failure to comply can lead to significant penalties or withdrawal of approval[206](index=206&type=chunk) - The company is subject to numerous federal and state healthcare laws, including anti-kickback statutes and false claims acts, and non-compliance could result in significant civil and criminal penalties[213](index=213&type=chunk) [Operational and Personnel Risks](index=73&type=section&id=Risks%20related%20to%20employee%20matters,%20managing%20growth%20and%20operational%20matters) Operational risks include high dependence on key personnel, challenges in managing growth, vulnerability of internal systems to security breaches, and exposure to employee misconduct - The company is highly dependent on its key managerial, scientific, and medical personnel and faces intense competition in attracting and retaining qualified employees[225](index=225&type=chunk) - The company expects significant growth and may experience difficulties in managing it, which could disrupt operations and strain resources[226](index=226&type=chunk) - Internal computer systems are vulnerable to security breaches, which could result in a material disruption of product development programs and loss of proprietary information[227](index=227&type=chunk) [Common Stock Risks](index=75&type=section&id=Risks%20related%20to%20our%20common%20stock) Common stock risks include price volatility, potential dilution from future capital raises, difficulty in sustaining an active trading market, concentrated ownership influencing stockholder matters, and no anticipated dividends - The price of the company's common stock may be volatile and subject to wide fluctuations, and an active, liquid trading market may not be sustained[230](index=230&type=chunk)[232](index=232&type=chunk) - Executive officers, directors, and principal stockholders beneficially own a significant percentage of shares, giving them the ability to control matters submitted to stockholders for approval[234](index=234&type=chunk) - The company does not anticipate paying any cash dividends in the foreseeable future, so capital appreciation will be the sole source of gain for stockholders[239](index=239&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities, and no material change in the planned use of **$191.2 million** net proceeds from the October 2020 IPO - In October 2020, the company completed its IPO, selling **11,040,000** shares of common stock for aggregate net cash proceeds of **$191.2 million**[240](index=240&type=chunk)[241](index=241&type=chunk) - There has been no material change in the planned use of proceeds from the IPO as described in the final prospectus[241](index=241&type=chunk) [Defaults Upon Senior Securities](index=80&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports that there were no defaults upon senior securities - **Not applicable**[242](index=242&type=chunk) [Mine Safety Disclosures](index=80&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not applicable**[243](index=243&type=chunk) [Other Information](index=80&type=section&id=Item%205.%20Other%20Information) The company reports that there is no other information to disclose for this period - **None**[243](index=243&type=chunk) [Exhibits](index=81&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The report includes required certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits **31.1**, **31.2**, **32.1**, **32.2**) and XBRL data files[247](index=247&type=chunk)