Biomea Fusion(US:BMEA)2023-05-01 16:00PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed financial statements for Q1 2023, reporting a net loss of $29.1 million and $86.7 million in cash and equivalents Key Financial Data (Q1 2023 vs Q1 2022) | Financial Metric | Three Months Ended March 31, 2023 (in millions, except per share data) | Three Months Ended March 31, 2022 (in millions, except per share data) | | :--- | :--- | :--- | | Research and development expense | $24.4 million | $11.4 million | | General and administrative expense | $5.6 million | $5.1 million | | Net loss | $(29.1) million | $(16.4) million | | Net loss per share | $(0.98) | $(0.56) | Balance Sheet Highlights (as of March 31, 2023) | Account | Amount (in thousands) | | :--- | :--- | | Cash, cash equivalents, and restricted cash | $86,651 | | Total assets | $112,638 | | Total liabilities | $29,509 | | Accumulated deficit | $(160,621) | | Total stockholders' equity | $83,129 | - The company believes its existing financial resources, including proceeds from an April 2023 public offering, are sufficient to fund operations for at least one year past the issuance date of the financial statements433 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's lead drug candidates, BMF-219 and BMF-500, significant R&D expense increases, and liquidity, noting $161.8 million from a recent offering will fund operations for at least one year - The company's lead product candidate, BMF-219, is a covalent inhibitor of menin being developed for menin-dependent diseases including acute leukemia, KRAS solid tumors, and type 2 diabetes mellitus (T2DM)495501 - The company's second development candidate, BMF-500, a covalent inhibitor of FLT3, received FDA clearance in May 2023 for a Phase 1 study in patients with relapsed or refractory acute leukemia498 Research and Development Expense Breakdown (in thousands) | Cost Category | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | External costs | $16,161 | $6,193 | | Personnel-related expenses | $6,377 | $3,817 | | Facilities and other | $1,857 | $1,340 | | Total R&D Expenses | $24,395 | $11,350 | - In April 2023, the company completed a public offering, selling 5,750,000 shares of common stock for net proceeds of approximately $161.8 million499521 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate sensitivity on its $86.7 million cash and investments, with foreign currency risk deemed immaterial - The company's primary market risk is interest rate sensitivity. As of March 31, 2023, it held $86.7 million in cash, cash equivalents, restricted cash, and investments533 - Due to the short-term maturities of its cash equivalents, management asserts that an immediate 10% relative change in interest rates would not have a material effect on their fair market value533 Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of March 31, 2023, the company's disclosure controls and procedures were effective at a reasonable assurance level170 - There were no material changes to the company's internal control over financial reporting during the first quarter of 2023171 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings, though litigation may arise in the ordinary course of business - As of the report date, the company is not a party to any material legal proceedings175 Item 1A. Risk Factors This section outlines key risks including limited operating history, need for capital, unproven drug development, dependence on BMF-219, lengthy regulatory pathways, reliance on third parties, intellectual property challenges, and common stock volatility Risks Related to Our Limited Operating History, Business, Financial Condition, Results of Operations, and Need for Additional Capital The company faces challenges from its limited operating history, lack of revenue, significant net losses, and the need for substantial additional capital, exacerbated by financial market instability - The company is a clinical-stage entity with a limited operating history, no products approved for sale, and has never generated revenue177178 - The company has incurred significant net losses since inception, totaling $160.6 million in accumulated deficit as of March 31, 2023, and expects these losses to continue and increase181184 - Substantial additional funding is required to continue operations. Failure to raise capital could force the company to delay, reduce, or eliminate development programs147148 - Adverse developments in the financial services industry, such as the failure of Silicon Valley Bank (SVB), could negatively affect access to funding and the financial stability of its partners and suppliers156157 Risks Related to Product Development The company's unproven covalent small molecule strategy, high dependence on BMF-219, lengthy and uncertain drug development, and competitive landscape pose significant product development risks - The company's approach of developing covalent small molecule therapies is novel and unproven, and may not lead to marketable products163164 - The business is substantially dependent on BMF-219. Failure to advance BMF-219 would materially harm the company197198 - Preclinical and clinical drug development is a lengthy, expensive, and uncertain process. Programs may experience delays or fail, which would adversely affect the ability to commercialize products35 - The company faces substantial competition from major pharmaceutical and biotechnology companies, including Kura Oncology and Syndax Pharmaceuticals, which are developing non-covalent menin inhibitors2729 - Product candidates may cause significant adverse events or toxicities, which could prevent regulatory approval or limit commercial potential3435 Risks Related to Regulatory Process and Other Legal Compliance Matters The company faces lengthy, unpredictable regulatory approval processes, extensive post-approval obligations, and complex healthcare compliance laws, including data privacy, with significant penalties for non-compliance - The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and inherently unpredictable, with no guarantee of success707173 - Even if regulatory approval is received, the company will be subject to extensive and ongoing regulatory obligations, including potential post-marketing studies and restrictions (REMS)94101 - The company's operations are subject to various healthcare laws and regulations, including anti-kickback, fraud and abuse, and false claims laws, which could expose it to significant penalties if violated113114 - The company is subject to stringent and changing laws related to data privacy and security, such as HIPAA and the CCPA, and failure to comply could result in significant fines and liability116117121 Risks Related to Reliance on Third Parties The company's heavy reliance on third-party CROs, CMOs, and single-source suppliers for preclinical, clinical, and manufacturing activities creates risks related to control, quality, compliance, and supply chain continuity - The company depends on third parties, such as CROs and medical institutions, to conduct and support its preclinical studies and clinical trials205206 - Reliance on third parties for manufacturing creates risks related to cGMP compliance, quality control, and supply chain continuity, as the company does not own its manufacturing facilities213214215 - The company depends on single-source suppliers for some ingredients and materials, exposing it to risks of supply disruptions, price increases, and delays220221223 - Future collaborations or strategic alliances are subject to numerous risks, including the partner not dedicating sufficient resources, potential disputes, and termination of agreements227230 Risks Related to Intellectual Property The company's commercial success hinges on obtaining and enforcing intellectual property rights, facing risks of patent challenges, infringement claims, and limited patent terms - The company's ability to successfully commercialize its products depends on its ability to obtain, maintain, and enforce patent protection, which is highly uncertain in the biotechnology field238239240 - Issued patents may be challenged, invalidated, or held unenforceable in court or before patent offices, potentially resulting in claims being narrowed244260261 - The company may become involved in expensive and time-consuming lawsuits to protect its patents or may be sued by third parties for infringing their intellectual property rights263282285 - Patent terms are limited and may expire before or shortly after a product is commercialized, opening the door to generic competition271 Risks Related to Employee Matters, Managing Our Growth and Other Risks Related to Our Business The company's success depends on retaining key personnel and managing growth, facing risks from business disruptions, limitations on NOL carryforwards, and geopolitical factors affecting its China operations - The company is highly dependent on its key personnel, including its CEO and COO128129 - As of March 31, 2023, the company had 86 full-time employees and expects to grow its organization, which will impose significant responsibilities on management132133 - The company's ability to use its net operating loss (NOL) carryforwards to offset future taxable income may be limited under Section 382 of the Internal Revenue Code if an "ownership change" occurs140141 - A portion of product development and manufacturing sourcing occurs in China, exposing the company to risks from trade wars, political unrest, or operational disruptions at third-party manufacturers203204 Risks Related to Our Common Stock The company's common stock faces high volatility, potential dilution from future offerings, significant influence from principal stockholders, and no anticipated dividends, limiting returns to stock appreciation - The trading price of the company's common stock has been and is likely to be highly volatile due to factors such as clinical trial results, regulatory decisions, and market conditions303309 - Raising additional capital through equity offerings will cause dilution to existing stockholders311315 - As of March 31, 2023, executive officers, directors, and their affiliates beneficially own approximately 30% of the company's voting stock, enabling them to exert significant influence over stockholder matters318 - The company has never paid dividends and does not anticipate doing so in the foreseeable future; any return to stockholders will be limited to stock value appreciation319321 General Risk Factors General risks include securities litigation, public company costs, internal control challenges, reduced reporting as an 'emerging growth company,' cybersecurity threats, and geopolitical instability - The company will continue to incur significant costs and management attention to comply with public company requirements under the Sarbanes-Oxley Act and SEC regulations340342 - As an "emerging growth company," the company takes advantage of certain exemptions from reporting requirements, which may make its stock less attractive to investors354388389 - The company is vulnerable to cybersecurity incidents which could compromise sensitive data, disrupt programs, and result in significant financial, legal, and reputational harm394395397 - Geopolitical risks, such as the military conflict between Russia and Ukraine, could adversely impact the company's business, financial condition, and clinical trials through market volatility and sanctions408409 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the period, and no material change in the planned use of IPO proceeds - There were no unregistered sales of equity securities in the period411 - There has been no material change in the planned use of proceeds from the company's IPO413 Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - None414 Item 4. Mine Safety Disclosures This item is not applicable to the company - None414 Item 5. Other Information The company reports no other information for this period - None415 Item 6. Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents and required CEO/CFO certifications - Lists exhibits filed with the report, including corporate governance documents and required CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906417418419