C4 Therapeutics(US:CCCC)2022-05-05 12:16PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The company reported a $31.6 million net loss for Q1 2022, with $515.5 million in total assets and $421.7 million in cash and equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $46,004 | $76,124 | | Marketable securities | $375,648 | $375,355 | | Total assets | $515,485 | $506,765 | | Liabilities & Equity | | | | Total liabilities | $150,956 | $117,159 | | Total stockholders' equity | $364,529 | $389,606 | Condensed Consolidated Statement of Operations (in thousands) | Account | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Revenue from collaboration agreements | $7,654 | $7,426 | | Research and development | $26,203 | $20,526 | | General and administrative | $12,820 | $7,409 | | Net loss | ($31,620) | ($20,971) | | Net loss per share | ($0.65) | ($0.49) | Condensed Consolidated Statement of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($26,596) | ($24,934) | | Net cash used in investing activities | ($4,004) | ($61,730) | | Net cash provided by (used in) financing activities | $480 | ($151) | | Net change in cash, cash equivalents and restricted cash | ($30,120) | ($86,815) | - The company is a clinical-stage biopharmaceutical firm focused on targeted protein degradation using its proprietary TORPEDO platform. It has incurred recurring losses since inception, with a net loss of $31.6 million for Q1 2022 and an accumulated deficit of $299.3 million4849 - As of March 31, 2022, the company had $421.7 million in cash, cash equivalents, and marketable securities, which is expected to be sufficient to fund operations for at least the next twelve months from the issuance date of the financial statements49 Management's Discussion and Analysis of Financial Condition and Results of Operations Q1 2022 revenue increased to $7.7 million, with rising R&D and G&A expenses, and $421.7 million in cash expected to fund operations through 2024 - The company is advancing its pipeline, with CFT7455 in a Phase 1/2 trial for MM and NHLs, and CFT8634 expected to enter a Phase 1/2 trial in H1 2022 for synovial sarcoma. An IND for CFT1946 is planned for H2 2022101 Revenue from Collaboration Agreements (in thousands) | Agreement | Q1 2022 | Q1 2021 | Change | | :--- | :--- | :--- | :--- | | Roche Agreement | $1,123 | $2,193 | ($1,070) | | Biogen Agreement | $4,716 | $1,880 | $2,836 | | Calico Agreement | $1,815 | $3,353 | ($1,538) | | Total | $7,654 | $7,426 | $228 | - The increase in revenue was primarily driven by a $2.8 million increase from the Biogen Agreement due to increased effort on nominated targets. This was offset by a $1.5 million decrease from the Calico Agreement and a $1.1 million decrease from the Roche Agreement115116 Research & Development Expense Breakdown (in thousands) | Category | Q1 2022 | Q1 2021 | Change | | :--- | :--- | :--- | :--- | | Personnel expenses | $10,911 | $6,934 | $3,977 | | Preclinical and development | $10,195 | $9,389 | $806 | | Clinical expenses | $809 | $218 | $591 | | Total R&D | $26,203 | $20,526 | $5,677 | - The $5.7 million increase in R&D expense was primarily due to a $4.0 million increase in personnel-related costs, including a $2.4 million increase in stock-based compensation, reflecting the buildout of the clinical development team117 - The $5.4 million increase in G&A expense was driven by a $3.9 million increase in personnel costs (including $2.6 million in stock-based compensation) and a $1.6 million increase in facility expenses from a new lease that commenced in January 2022120 - As of March 31, 2022, the company had $421.7 million in cash, cash equivalents, and marketable securities, which it believes is sufficient to fund its operating plan through the end of 2024122146 Quantitative and Qualitative Disclosures About Market Risk The company faces low interest rate risk on its $375.6 million short-term marketable securities portfolio, with a weighted-average maturity of 0.8 years - The company's primary market risk is interest rate risk on its $375.6 million portfolio of marketable securities135 - The risk is considered low as the securities are short-term, with a weighted-average maturity of 0.8 years, and historical interest income fluctuations have not been significant135 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes in 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 March 31, 2022138 - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2022, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting139 PART II. OTHER INFORMATION Legal Proceedings The company is not currently involved in any material legal proceedings or claims - The company is not currently involved in any material legal proceedings143 Risk Factors The company faces significant risks including a history of losses, unproven technology, reliance on lead candidates, funding needs, and external dependencies - The company is a clinical-stage biopharmaceutical company with a limited operating history, significant losses since inception ($299.3M accumulated deficit as of March 31, 2022), and may never achieve profitability144 - The company's approach to drug discovery using its TORPEDO platform for targeted protein degradation is unproven, making it difficult to predict development time, cost, and likelihood of success156 - The company relies on third parties for manufacturing and conducting clinical trials, which increases risks related to supply sufficiency, quality, cost, and adherence to regulatory standards like cGMP and GCP180181 - The company faces substantial competition from other biotechnology and pharmaceutical companies developing protein degradation therapies, including Arvinas, Kymera Therapeutics, and Nurix Therapeutics, as well as large pharmaceutical firms169 - The ongoing COVID-19 pandemic could continue to adversely impact business operations, including preclinical studies, clinical trials, supply chain, and access to capital149 - The company's ability to use its net operating loss carryforwards ($152.2M federal, $216.8M state as of Dec 31, 2021) and R&D tax credits may be limited by ownership changes under Section 382 of the Code169 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity sales occurred, and the $191.2 million net proceeds from the October 2020 IPO remain unchanged in their planned use - There has been no material change in the planned use of proceeds from the company's October 2020 IPO, which generated net proceeds of $191.2 million249 Other Information No other information was disclosed under this item - No information was disclosed under this item251