IDEAYA Biosciences(IDYA) - 2024 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION Financial Statements (Unaudited) The unaudited financial statements for the period ended June 30, 2024, show a significant increase in total assets to $973.7 million from $649.3 million at year-end 2023, primarily driven by cash from financing activities, with a net loss of $92.3 million for the first six months of 2024 due to increased R&D expenses and absence of collaboration revenue Condensed Balance Sheets As of June 30, 2024, total assets increased to $973.7 million from $649.3 million at December 31, 2023, primarily fueled by a rise in cash, cash equivalents, and marketable securities, with total stockholders' equity growing to $931.7 million Condensed Balance Sheet Summary (in thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $183,049 | $157,018 | | Marketable securities (Short & Long-term) | $769,680 | $475,588 | | Total current assets | $713,179 | $532,632 | | Total assets | $973,663 | $649,316 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $40,742 | $27,101 | | Total liabilities | $42,005 | $28,226 | | Total stockholders' equity | $931,658 | $621,090 | | Total liabilities and stockholders' equity | $973,663 | $649,316 | Condensed Statements of Operations and Comprehensive Loss For the three and six months ended June 30, 2024, the company reported no collaboration revenue, resulting in a widened net loss of $52.8 million for Q2 2024 and $92.3 million for the six-month period, driven by increased operating expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2024 | Q2 2023 | 6 Months 2024 | 6 Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Collaboration Revenue | $0 | $3,544 | $0 | $11,424 | | Research and development | $54,533 | $29,178 | $97,338 | $57,037 | | General and administrative | $10,394 | $7,075 | $18,606 | $13,375 | | Loss from operations | ($64,927) | ($32,709) | ($115,944) | ($58,988) | | Net loss | ($52,772) | ($27,926) | ($92,344) | ($51,566) | | Net loss per share | ($0.68) | ($0.50) | ($1.21) | ($0.99) | Condensed Statements of Cash Flows For the six months ended June 30, 2024, net cash used in operating activities was $76.7 million, net cash used in investing activities was $285.4 million, and net cash provided by financing activities was a significant $388.3 million, leading to a net increase in cash of $26.2 million Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($76,695) | ($61,302) | | Net cash used in investing activities | ($285,414) | ($97,860) | | Net cash provided by financing activities | $388,294 | $193,989 | | Net increase in cash, cash equivalents and restricted cash | $26,185 | $34,827 | - The primary source of financing in the first six months of 2024 was $380.0 million in net proceeds from at-the-market offerings, compared to $153.8 million from a public offering in the same period of 2023[15][206] Notes to Condensed Financial Statements (Unaudited) The notes detail significant capital raised through at-the-market offerings, with $952.7 million in cash, cash equivalents, and marketable securities as of June 30, 2024, deemed sufficient for future operations, alongside outlining collaboration agreements and a subsequent follow-on offering - The company had cash, cash equivalents, and marketable securities of $952.7 million as of June 30, 2024, and management asserts this is sufficient to fund planned operations for at least the next 12 months[23] - In Q2 2024, the company sold 922,000 shares through its at-the-market (ATM) program, generating net proceeds of $36.5 million; as of June 30, 2024, $182.1 million remained available under the program[19] - Subsequent to the quarter's end, in July 2024, the company completed a follow-on offering with net proceeds of approximately $283.8 million and entered into a new option and license agreement with Biocytogen for a BsADC program[106][107] - All performance obligations related to the upfront payment from the GSK Collaboration Agreement were completed as of December 31, 2023; consequently, no collaboration revenue was recognized in the first half of 2024, with future revenue dependent on earning milestones[96][102] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's focus as a precision medicine oncology firm with four clinical-stage candidates, noting significant progress in clinical trials, a 71% rise in R&D expenses, and a strengthened financial position with $952.7 million in cash, cash equivalents, and marketable securities - The company's clinical pipeline features four potential first-in-class candidates: darovasertib (PKC), IDE397 (MAT2A), IDE161 (PARG), and GSK101 (Pol Theta Helicase)[110] - As of June 30, 2024, the company held $952.7 million in cash, cash equivalents, and marketable securities, which is believed to be sufficient to fund operations for at least the next 12 months[156][159] - R&D expenses for the six months ended June 30, 2024, increased by 71% year-over-year to $97.3 million, reflecting the advancement of lead product candidates[177] - No collaboration revenue was recognized in H1 2024, as performance obligations under the GSK agreement's upfront payment were completed by year-end 2023; future revenue is contingent on milestones[176] Overview of Pipeline The company is advancing a robust pipeline in precision oncology, with darovasertib in Phase 2/3 trials, IDE397 and IDE161 in Phase 1/2 trials, GSK101 in a GSK-sponsored Phase 1 trial, and a WRN inhibitor program targeting an IND submission in H2 2024, alongside a new option agreement with Biocytogen - Darovasertib (PKC Inhibitor): In a potential registration-enabling Phase 2/3 trial for first-line HLA-A2(-) MUM; also being evaluated as a neoadjuvant/adjuvant therapy in primary UM, with interim data showing a 75% eye preservation rate in one study[111][112][114] - IDE397 (MAT2A Inhibitor): Phase 1/2 monotherapy expansion is ongoing in MTAP-deletion tumors (e.g., NSCLC, urothelial), with interim data showing a ~39% overall response rate; a combination trial with Amgen's AMG 193 is also underway[129][131][132] - IDE161 (PARG Inhibitor): Phase 1/2 trial is progressing for patients with HRD tumors, with a focus on ER+/Her2- breast cancer; a combination study with Merck's KEYTRUDA in endometrial cancer is planned for H2 2024[136][137][141] - GSK101 (Pol Theta Inhibitor): A GSK-sponsored Phase 1 trial is evaluating GSK101 in combination with niraparib for tumors with HRD; IDEAYA is eligible for significant milestones and royalties[142][143] - WRN Helicase Inhibitor: In collaboration with GSK, an IND submission is targeted for H2 2024 to evaluate the DC in patients with high MSI tumors; IDEAYA shares 20% of R&D costs and is entitled to 50% of U.S. profits and ex-U.S. royalties[145][147] Results of Operations The analysis of operations shows a key driver for increased net loss in Q2 2024 and the first six months of 2024 was the significant ramp-up in R&D spending for clinical trials and the absence of collaboration revenue, with R&D expenses growing 27% quarter-over-quarter and 71% year-over-year Comparison of Three Months Ended June 30, 2024 and March 31, 2024 (in thousands) | Account | Q2 2024 | Q1 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $54,533 | $42,805 | $11,728 | 27% | | General and administrative | $10,394 | $8,212 | $2,182 | 27% | | Net loss | ($52,772) | ($39,572) | ($13,200) | 33% | Comparison of Six Months Ended June 30, 2024 and 2023 (in thousands) | Account | 6 Months 2024 | 6 Months 2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Collaboration revenue | $0 | $11,424 | ($11,424) | (100%) | | Research and development | $97,338 | $57,037 | $40,301 | 71% | | General and administrative | $18,606 | $13,375 | $5,231 | 39% | | Net loss | ($92,344) | ($51,566) | ($40,778) | 79% | - The 71% YoY increase in R&D expenses for the six-month period was primarily due to a $29.6 million increase in fees to CROs/CMOs for advancing lead candidates and an $8.3 million increase in personnel-related costs[177] Liquidity and Capital Resources; Plan of Operations The company has funded its operations through stock issuances and payments from GSK, holding $952.7 million in cash, cash equivalents, and marketable securities as of June 30, 2024, which management believes are sufficient for at least the next 12 months, while also outlining significant future financial commitments - The company's primary sources of liquidity have been the sale of common stock and payments from its GSK collaboration[179] - As of June 30, 2024, the company had an accumulated deficit of $440.7 million and expects to incur substantial additional losses[180] - Key contractual obligations include a 20% share of global R&D costs for the WRN program with GSK, potential milestone payments up to $29 million and royalties to Novartis for darovasertib, and a 50% share of external costs for the IDE397/AMG 193 combination trial with Amgen[188][190][197] Quantitative and Qualitative Disclosures About Market Risk The company's market risk is primarily related to interest rate sensitivity on its $952.7 million portfolio of cash, cash equivalents, and marketable securities, but due to the short-term nature of investments and capital preservation objective, exposure to interest rate risk is not considered significant - The company holds $952.7 million in cash, cash equivalents, and marketable securities, consisting of bank deposits, money market funds, U.S. government securities, commercial paper, and corporate bonds[209] - The primary investment objective is capital preservation; due to the short-term nature of investments, exposure to interest rate risk is considered not significant[210] Controls and Procedures Management concluded that as of June 30, 2024, the company's disclosure controls and procedures were effective at a reasonable assurance level, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of June 30, 2024, the company's disclosure controls and procedures were effective at the reasonable assurance level[212] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[213] PART II—OTHER INFORMATION Legal Proceedings The company is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business - As of the report date, the company is not involved in any litigation or legal proceedings that management believes would likely have a material adverse effect on the business[214] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K filed on February 20, 2024 - The company states that there have been no material changes to the risk factors disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023[215] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - There were no unregistered sales of equity securities in the reported period[217]