Beam Therapeutics(BEAM) - 2024 Q2 - Quarterly Report

PART I Financial Information Item 1. Financial Statements (Unaudited) Unaudited Q2 and H1 2024 financial statements show decreased assets, net losses, and $1.0 billion in cash and equivalents Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $292,763 | $435,895 | | Marketable securities | $715,402 | $753,981 | | Total Current Assets | $1,029,440 | $1,211,043 | | Total Assets | $1,261,266 | $1,459,714 | | Liabilities & Equity | | | | Total Current Liabilities | $177,333 | $205,565 | | Total Liabilities | $407,172 | $478,385 | | Total Stockholders' Equity | $854,094 | $981,329 | Condensed Consolidated Statements of Operations and Other Comprehensive Loss Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | License and collaboration revenue | $11,772 | $20,116 | $19,182 | $44,324 | | Research and development | $87,041 | $97,608 | $171,859 | $197,254 | | General and administrative | $29,626 | $24,656 | $56,350 | $48,146 | | Loss from operations | ($104,895) | ($102,148) | ($209,027) | ($201,076) | | Net loss | ($91,051) | ($82,776) | ($189,720) | ($179,236) | | Net loss per common share | ($1.11) | ($1.08) | ($2.31) | ($2.41) | Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($182,756) | ($194,484) | | Net cash provided by (used in) investing activities | $34,029 | ($16,029) | | Net cash provided by financing activities | $3,030 | $205,958 | | Net change in cash, cash equivalents and restricted cash | ($145,697) | ($4,555) | Notes to Condensed Consolidated Financial Statements - The company expects its cash, cash equivalents, and marketable securities of $1.0 billion as of June 30, 2024, will be sufficient to fund operations for at least the next 12 months[17] - On July 19, 2024, the company entered into a settlement agreement with a research institution, agreeing to an upfront payment of $15.0 million and future success payments. As of June 30, 2024, a liability of $20.2 million was accrued for this matter[35] - The company has accrued approximately $21.6 million of contingent obligations that may be due to licensors associated with payments received under the Lilly Agreement, with discussions ongoing[36] - Under agreements with Harvard and Broad Institute, the company may owe up to an additional $90.0 million each in success payments. As of June 30, 2024, the fair value of these liabilities was $3.9 million for Harvard and $4.3 million for Broad Institute[37][39] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses base editing technology, clinical program updates, H1 2024 net loss, and a 12-month cash runway Overview - Beam is a biotechnology company focused on creating precision genetic medicines using its proprietary base editing technology, which targets a single base in the genome without making a double-stranded DNA break[61] - The company is advancing a multi-wave strategy for hematological diseases, starting with ex vivo editing (BEAM-101), followed by improved non-genotoxic conditioning (ESCAPE program), and ultimately in vivo editing via HSC-targeted LNPs[62] - Key clinical program updates: - BEAM-101 (Sickle Cell): All three patients in the sentinel cohort of the BEACON trial have been dosed and achieved engraftment. Data from sentinel and expansion cohorts are expected in Q4 2024[64] - BEAM-302 (AATD): The first patient was dosed in the Phase 1/2 trial in June 2024, with initial clinical data expected in 2025[67] - BEAM-301 (GSD1a): Received FDA clearance for its IND in July 2024; patient dosing is expected to start in early 2025[68] - BEAM-201 (T-cell Leukemia): Multiple patients have been dosed in the Phase 1/2 trial, with an initial clinical dataset expected in Q4 2024[69] - The company's 100,000 sq. ft. cGMP manufacturing facility in North Carolina initiated operations in late 2023 to support clinical programs[70] Results of operations Comparison of Results of Operations (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | License and collaboration revenue | $11,772 | $20,116 | $19,182 | $44,324 | | Research and development | $87,041 | $97,608 | $171,859 | $197,254 | | General and administrative | $29,626 | $24,656 | $56,350 | $48,146 | | Net loss | ($91,051) | ($82,776) | ($189,720) | ($179,236) | - License and collaboration revenue decreased by $8.3 million for Q2 2024 and $25.1 million for H1 2024 compared to the same periods in 2023, primarily due to a lower level of research activities on collaboration programs[84][88] - Research and development expenses decreased by $10.6 million for Q2 2024 and $25.4 million for H1 2024 compared to the prior year periods. This was mainly driven by reduced external R&D expenses and employee costs following strategic reprioritization, partially offset by increased clinical activities for BEAM-101 and BEAM-302[85][90] - General and administrative expenses increased by $5.0 million for Q2 2024 and $8.2 million for H1 2024 compared to the prior year periods, primarily due to higher stock-based compensation, employee-related costs, and legal fees[87][90] Liquidity and capital resources - As of June 30, 2024, the company had $1.0 billion in cash, cash equivalents, and marketable securities[92] - The company believes its current cash position is sufficient to fund operating expenses and capital expenditures for at least the next 12 months from the financial statement issuance date[98] - The company utilizes an At-The-Market (ATM) sales agreement, which was amended to allow for the sale of up to an additional $800.0 million in common stock. As of June 30, 2024, the company has sold shares for aggregate gross proceeds of $564.0 million under the amended agreement[92] - In October 2023, the company received a $200.0 million upfront payment from Eli Lilly and sold $50.0 million of common stock to Lilly in a concurrent private placement[92] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate sensitivity on its $1.0 billion investment portfolio, with no material impact expected from rate changes - The company's primary market risk exposure is to interest rate changes on its $1.0 billion in cash, cash equivalents, and marketable securities[101] - Management believes an immediate 10% change in interest rates would not materially affect the fair market value of its investment portfolio due to its short-term duration[101] Item 4. Controls and Procedures Management concluded disclosure controls were effective as of June 30, 2024, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2024[102] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2024, that have materially affected, or are reasonably likely to materially affect, internal controls[103] PART II Other Information Item 1. Legal Proceedings The company is not currently subject to any material legal proceedings - As of the filing date, the company is not subject to any material legal proceedings[104] Item 1A. Risk Factors The report refers to the Risk Factors section in the company's 2023 Form 10-K for a detailed discussion of potential risks - The report refers to the Risk Factors section in the company's 2023 Form 10-K for a detailed discussion of potential risks[105] Item 5. Other Information The company announced a new Treasurer and principal accounting officer, and disclosed Rule 10b5-1 trading plans by its CEO and President - Bethany Cavanagh, SVP of Finance, was appointed as Treasurer and principal accounting officer, effective upon the resignation of CFO Terry-Ann Burrell on August 9, 2024[106] - CEO John Evans adopted a Rule 10b5-1 trading plan on June 14, 2024, for the potential sale of up to 200,000 shares[108] - President Giuseppe Ciaramella adopted a Rule 10b5-1 trading plan on June 28, 2024, for the potential sale of up to 102,220 shares[108] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including corporate governance documents, agreement amendments, and officer certifications