Enliven Therapeutics(ELVN) - 2024 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) The company reported a net loss of $19.95 million for Q2 2024 and $42.69 million for H1 2024, with total assets of $327.0 million and cash of $312.4 million Condensed Consolidated Balance Sheets As of June 30, 2024, total assets increased to $327.0 million from $271.9 million, driven by marketable securities, while total liabilities slightly decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $96,871 | $100,141 | | Marketable securities | $215,519 | $153,007 | | Total current assets | $318,127 | $266,151 | | Total assets | $327,043 | $271,867 | | Liabilities & Equity | | | | Total current liabilities | $22,105 | $25,894 | | Total liabilities | $22,111 | $25,961 | | Total stockholders' equity | $304,932 | $245,906 | Condensed Consolidated Statements of Operations and Comprehensive Loss Net loss increased to $19.95 million in Q2 2024 and $42.69 million for H1 2024, primarily due to higher operating expenses, especially Research and Development Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $18,826 | $15,183 | $38,796 | $27,063 | | General and administrative | $5,777 | $4,951 | $11,794 | $9,489 | | Loss from operations | $(24,603) | $(20,134) | $(50,590) | $(36,552) | | Net loss | $(19,950) | $(16,721) | $(42,688) | $(31,445) | | Net loss per share | $(0.41) | $(0.41) | $(0.95) | $(1.05) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $43.8 million for H1 2024, with a net decrease in cash of $3.3 million, ending with $96.9 million in cash - Financing activities in H1 2024 were driven by $89.7 million in net proceeds from a Private Placement, while H1 2023 financing was driven by $161.4 million from the Financing Transaction and $73.1 million in net cash acquired from the reverse recapitalization[15] Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(43,796) | $(32,893) | | Net cash used in investing activities | $(51,550) | $(151,549) | | Net cash provided by financing activities | $92,076 | $234,621 | | Net (decrease) increase in cash | $(3,270) | $50,179 | | Cash at end of period | $96,925 | $125,769 | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail the company's business as a clinical-stage biopharmaceutical firm, its February 2023 merger, March 2024 private placement, and sufficient cash to fund operations for at least 12 months - The company is a clinical-stage biopharmaceutical company focused on discovering and developing small molecule inhibitors for cancer[17] - As of June 30, 2024, the company's cash, cash equivalents, and marketable securities of $312.4 million are expected to be sufficient to fund operations for at least the next 12 months[28] - In March 2024, the company raised $90.0 million in gross proceeds from a private placement of common stock and pre-funded warrants[84] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's focus on lead product candidates, increased R&D and G&A expenses, and sufficient cash to fund operations for at least 12 months Overview Enliven Therapeutics is a clinical-stage biopharmaceutical company developing small molecule inhibitors for cancer, with two lead candidates and sufficient capital to fund operations for at least 12 months - The company is advancing two parallel lead product candidates, ELVN-001 (BCR-ABL inhibitor) and ELVN-002 (HER2 inhibitor)[109][110] - The company relies on third parties for manufacturing and does not own or operate manufacturing facilities[111] - As of June 30, 2024, the company had cash, cash equivalents, and marketable securities of $312.4 million, which is expected to fund operations for at least the next 12 months[113] Results of Operations For H1 2024, R&D expenses rose to $38.8 million and G&A expenses to $11.8 million, driven by clinical trials, manufacturing, and stock-based compensation Operating Expenses Comparison for the Six Months Ended June 30 (in millions) | Expense Category | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Research & Development | $38.8 | $27.1 | +$11.7 | | General & Administrative | $11.8 | $9.5 | +$2.3 | - The increase in R&D expenses for H1 2024 was primarily driven by a $5.5 million increase in clinical trial expenses and a $2.6 million increase in contract manufacturing expenses[138] - The increase in G&A expenses for H1 2024 was mainly due to a $2.4 million increase in stock-based compensation related to higher valuations on equity grants[139] Liquidity and Capital Resources The company has historically funded operations through equity financing, including a $90.0 million private placement in March 2024, with $312.4 million in cash and marketable securities - The company secured $90.0 million in gross proceeds from a Private Placement in March 2024[141] - The company has an effective shelf registration statement for up to $400.0 million and an at-the-market (ATM) sales agreement for up to $200.0 million, with no sales made under the agreement as of June 30, 2024[142] - Future capital requirements are substantial and will be used to advance the BCR-ABL and HER2 programs through clinical development, expand the pipeline, and support operations as a public company[144] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate sensitivity on its cash and marketable securities, with limited exposure to foreign currency exchange risk - The company's primary market risk is interest rate sensitivity on its cash and marketable securities, but due to their short-term nature, the impact of a 100 basis point change is considered immaterial[160] - Foreign currency exchange risk is limited to a small number of vendor contracts and is not currently hedged[161] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2024[162] - No material changes to the internal control over financial reporting occurred during the quarter ended June 30, 2024[163] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings and does not expect any current matters to have a material adverse effect - As of the report date, the company is not a party to any material litigation or legal proceedings[165] Item 1A. Risk Factors The company identifies numerous risks related to its early stage, dependence on lead product candidates, history of losses, and need for substantial additional funding - The company is substantially dependent on the success of its two lead product candidates, ELVN-001 and ELVN-002, and failure to advance them would materially harm the business[167][177] - The company has a history of significant net losses ($197.1 million accumulated deficit as of June 30, 2024) and expects to incur losses for the foreseeable future[167][172] - Substantial additional funding will be required to complete the development of product candidates, and failure to obtain it could force the company to delay or reduce its programs[167][414] Risks Related to Financial Position and Need for Capital The company is an early-stage biopharmaceutical firm with a limited operating history, no revenue, and significant net losses, making future viability uncertain - The company is an early-stage biopharmaceutical company with a limited operating history, having commenced operations in June 2019, and has never generated any revenue[168][169] - The company has incurred significant net losses, with a net loss of $42.7 million for the six months ended June 30, 2024, and an accumulated deficit of $197.1 million[172] Risks Related to Product Development and Commercialization The company's success relies heavily on its lead candidates, facing risks from clinical trial outcomes, intense competition, and reliance on third-party manufacturers - The company is substantially dependent on its two lead product candidates, ELVN-001 and ELVN-002, and its business will be materially harmed if they cannot be successfully developed and commercialized[177] - The company faces substantial competition from large pharmaceutical companies with greater resources, including six FDA-approved BCR-ABL TKIs for CML and several approved and investigational therapies for HER2-altered cancers[219][222][224] - Difficulties in enrolling patients in clinical trials, due to factors like small patient populations and competition from other trials and approved drugs, could cause significant delays and increase development costs[215] Risks Related to Regulatory Approval and Legal Compliance The company faces extensive regulatory hurdles, including lengthy approval processes, potential need for companion diagnostics, and compliance with healthcare and data privacy laws - The regulatory approval process is lengthy, time-consuming, and unpredictable, and the FDA or other authorities may not approve the company's product candidates[197] - The company may be required to obtain approval for a companion diagnostic test, and failure or delay in doing so could prevent commercialization of the therapeutic product[203] - Business activities are subject to numerous healthcare laws (Anti-Kickback, False Claims Act) and data privacy laws (GDPR, CCPA), and violations could lead to significant penalties and reputational harm[285][286][290] Risks Related to Our Common Stock The market price of the company's common stock is subject to high volatility, future equity financings will cause dilution, and a large percentage of voting stock is concentrated - The market price of the company's common stock is likely to be volatile due to clinical trial outcomes, competitor actions, and market conditions[410][411] - The company will need substantial additional funding, and future equity financings will dilute the interests of existing securityholders414[422] - As of June 30, 2024, executive officers, directors, and 5%+ stockholders beneficially owned approximately 74.0% of the company's voting stock, enabling them to control or significantly influence stockholder matters[437] Item 5. Other Information No officers or directors adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the last fiscal quarter - No officers or directors adopted or terminated a Rule 10b5-1 trading arrangement during the last fiscal quarter[444] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including the company's Restated Certificate of Incorporation and certifications by the Principal Executive and Financial Officers - Key exhibits filed include the Restated Certificate of Incorporation, the Amended and Restated 2020 Equity Incentive Plan, and CEO/CFO certifications[445]