Repare Therapeutics(RPTX) - 2024 Q4 - Annual Report

Part I Business Repare Therapeutics is a clinical-stage precision oncology company focused on developing synthetic lethality therapeutics via its SNIPRx® platform Overview and Strategy Repare Therapeutics, a clinical-stage precision oncology company, restructured in January 2025 to focus on Phase 1 programs RP-3467 and RP-1664 - The company is a clinical-stage precision oncology firm using its proprietary SNIPRx® platform to develop novel therapeutics based on synthetic lethality[19] - In January 2025, the company announced a strategic re-prioritization to focus on its Phase 1 programs, RP-3467 and RP-1664[20] - As part of the restructuring, the company reduced its workforce by approximately 75% on February 24, 2025, to focus on advancing RP-3467 and RP-1664[20] - The company plans to seek partnerships for its other clinical assets, lunresertib and camonsertib, before initiating pivotal development[20] Development Programs The company's pipeline focuses on Phase 1 trials for RP-3467 and RP-1664, with other candidates paused pending partnerships - RP-3467 (Polθ inhibitor): A potential best-in-class inhibitor for HRD tumors. A Phase 1 trial (POLAR) was initiated in Q4 2024, with the first patient dosed in combination with olaparib. Topline safety and early efficacy data are expected in Q3 2025[22][23] - RP-1664 (PLK4 inhibitor): A potential first-in-class oral inhibitor for tumors with TRIM37 amplification. A Phase 1 trial (LIONS) in adults began in February 2024. A Phase 1/2 expansion in pediatric neuroblastoma is planned for Q3 2025, with initial LIONS data expected in Q4 2025[23] - Lunresertib (PKMYT1 inhibitor) and Camonsertib (ATR inhibitor): Further development of these candidates is paused, pending a partnership. An ongoing combination study of lunresertib with Debiopharm's Debio 0123 will continue[24][26][27] Intellectual Property The company protects its proprietary technologies and product candidates through patents, trade secrets, and confidentiality agreements Expected Patent Expiry Dates for Key Programs | Programs | Expected expiry dates | | :--- | :--- | | Polθ inhibitors, including RP-3467 | 2042-2044 | | PLK4 inhibitors, including RP-1664 | 2043 | | CCNE1-SL inhibitors, including lunresertib | 2041-2044 | | ATR inhibitors, including camonsertib | 2039-2044 | - The company's IP strategy involves seeking and maintaining patent rights, defending them, and protecting trade secrets and know-how through confidentiality and invention assignment agreements[28][31] - Patent terms are generally 20 years from the earliest non-provisional filing date, with potential for extensions to compensate for FDA regulatory review delays[29] Collaborations and License Agreements Key agreements include the expired BMS collaboration with ongoing royalties and a NYU license for Polθ patents with milestone payments - Bristol-Myers Squibb (BMS) Agreement: The collaboration term for research and target identification expired in November 2023. BMS exercised options for five druggable and one undruggable target. Repare is eligible for up to $301.0 million in milestones per program and tiered royalties[33][35][36][39] - New York University (NYU) Agreement: Repare holds an exclusive, worldwide license for Polθ patents. The agreement requires milestone payments (up to $6.7 million in aggregate for a product) and low single-digit royalties on net sales. A $0.1 million milestone was triggered in October 2024[40][43][45] Competition The company faces intense competition in precision oncology from major pharmaceutical and biotech firms, including specific rivals for its lead programs - The company faces substantial competition from large pharmaceutical companies and other biotechs with greater resources in R&D, manufacturing, and marketing[54] - Competitors in the precision oncology space include Loxo Oncology, Blueprint Medicines, and Tango Therapeutics. Competitors in the synthetic lethality space include AstraZeneca, GlaxoSmithKline, and IDEAYA Biosciences[55] - Specific competitors for Repare's pipeline include: - Polθ (RP-3467): Artios Pharma, IDEAYA Biosciences, MOMA Therapeutics - PLK4 (RP-1664): Exelixis, Oric Pharmaceuticals, Treadwell Therapeutics - PKMYT1 (lunresertib): Acrivon Therapeutics, Exelixis, Schrodinger[57][58] Government Regulation The company's operations are subject to extensive FDA regulation for drug development and approval, alongside various healthcare laws and pricing reforms - The FDA drug approval process is lengthy and resource-intensive, requiring preclinical studies (GLP) and three phases of human clinical trials (GCP) before submitting a New Drug Application (NDA)[61][62][65][70] - The FDA offers expedited review programs such as Fast Track, Breakthrough Therapy, Accelerated Approval, and Priority Review for drugs treating serious conditions and addressing unmet medical needs[71] - The company is subject to numerous healthcare laws, including the federal Anti-Kickback Statute, the False Claims Act (FCA), and HIPAA, which regulate interactions with healthcare providers and protect patient information[98][100][101] - Healthcare reform measures, such as the Affordable Care Act (ACA) and the Inflation Reduction Act of 2022 (IRA), impact drug pricing, reimbursement, and market access, creating significant uncertainty[112][114][116] Employees and Human Capital Resources The company reduced its workforce by 75% in February 2025, focusing on core values and competitive compensation to attract and retain talent - On February 24, 2025, the company reduced its workforce by approximately 75%. Prior to this, as of February 10, 2025, it had 129 full-time employees[121] - The company's core values are: Patients come first; Respect and trust are core; We are empathetic; We are open, direct, and authentic; We embrace risk and thrive[123] - Repare offers competitive compensation packages including base salaries, annual equity and cash incentive plans, healthcare benefits, and an employee share purchase plan to attract and retain talent[125] Risk Factors Investing in Repare Therapeutics involves significant financial, development, operational, commercial, and IP risks, including those from recent restructuring and regulatory changes - Financial Risks: The company has a limited operating history, has incurred significant losses since inception, and will require substantial additional funding to continue operations, which may not be available on acceptable terms[136][139][144] - Development and Regulatory Risks: The success of the business depends on advancing early-stage product candidates through uncertain clinical development and regulatory approval processes. The company's SNIPRx® platform is novel and may not prove effective[150][155][172] - Operational Risks: The company relies on third parties for manufacturing (CMOs) and clinical trials (CROs), and its recent corporate restructuring and 75% headcount reduction could disrupt business and employee retention[133][253][260] - Commercial and IP Risks: The company faces substantial competition, may not achieve market acceptance for its products if approved, and its success depends on its ability to obtain and protect its intellectual property rights[211][205][270] Unresolved Staff Comments The company reports no unresolved staff comments from the Securities and Exchange Commission - None[379] Cybersecurity Repare Therapeutics manages cybersecurity through a formal risk management program, overseen by its audit committee, focusing on threat identification, mitigation, and vendor risk - The company has processes to identify, assess, and manage material cybersecurity risks, utilizing methods like automated scanning, third-party audits, and external intelligence[380][381] - Cybersecurity governance is handled by the board of directors' audit committee, which oversees the risk management processes implemented by company management[387] - Management, including the EVP & CFO and VP of IT, is responsible for implementing the cybersecurity program and escalating significant incidents to the audit committee as per the incident response policy[388][390] Properties Repare Therapeutics leases headquarters in Montréal and U.S. operations in Cambridge, and is exploring lease options due to recent strategic realignment - Headquarters in Montréal, Québec consists of 24,039 sq. ft. of leased lab and office space, with the lease expiring in August 2025[392] - U.S. operations are based in a leased 11,312 sq. ft. office space in Cambridge, Massachusetts, with the lease expiring in January 2026[392] - The company is currently exploring its lease options due to the recent realignment of resources and strategic reprioritization[392] Legal Proceedings The company is not currently a party to any material legal proceedings or aware of any threatened legal actions - The company is not currently a party to any material legal proceedings[393] Mine Safety Disclosures This item is not applicable to the company - Not applicable[394] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Repare Therapeutics' common shares trade on Nasdaq under "RPTX"; the company has never paid dividends and issued a warrant in November 2024 - The company's common shares trade on The Nasdaq Global Select Market under the symbol "RPTX"[397] - The company has never declared or paid cash dividends and does not plan to in the foreseeable future[399] - In November 2024, the company issued a warrant to a service provider to purchase 35,000 common shares at an exercise price of $3.61 per share[400] Management's Discussion and Analysis of Financial Condition and Results of Operations The company reported a net loss of $84.7 million in 2024, with $152.8 million cash expected to fund operations into late 2027 post-restructuring Results of Operations For 2024, revenue increased to $53.5 million due to a Roche milestone, while R&D and G&A expenses decreased, resulting in a net loss of $84.7 million Comparison of Results of Operations (2024 vs. 2023) | Financial Metric | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | Key Driver(s) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $53,477 | $51,133 | $2,344 | Increase from Roche milestone, offset by decreases from expired BMS and Ono agreements | | R&D Expenses | $115,941 | $133,593 | ($17,652) | Decrease in camonsertib program costs and discovery costs | | G&A Expenses | $29,680 | $33,764 | ($4,084) | Decrease in personnel costs and D&O insurance premiums | | Restructuring Expenses | $1,379 | $0 | $1,379 | Costs from August 2024 strategic refocus | | Loss from Operations | ($93,523) | ($116,224) | $22,701 | Lower operating expenses | | Net Loss | ($84,689) | ($93,796) | $9,107 | Lower operating loss and changes in income tax benefit/expense | Liquidity and Capital Resources As of December 31, 2024, Repare had $152.8 million in cash, expected to fund operations into late 2027 after recent restructuring and cost-saving measures - As of December 31, 2024, the company had $152.8 million in cash, cash equivalents, and marketable securities[464] - The current cash position is expected to fund operating and capital expenditure requirements into late-2027, factoring in recent cost-saving measures[464][465] - The company has an active at-the-market (ATM) sales agreement to sell up to $100.0 million in common shares, but did not sell any shares under this program in 2024 or 2023[460] - In early 2025, the company implemented a significant realignment, including a 75% workforce reduction, to extend its cash runway and focus on its Phase 1 programs, RP-3467 and RP-1664[461] Critical Accounting Estimates Key accounting estimates include Revenue Recognition, Accrued and Prepaid R&D Expenses, and Share-Based Compensation, all requiring significant judgment - Revenue Recognition: Involves significant judgment in identifying performance obligations, determining the transaction price (including variable consideration like milestones), and allocating it based on relative stand-alone selling prices in complex collaboration agreements[481][482][483] - Accrued and Prepaid Research and Development Expenses: Requires estimating costs for services performed by third-party vendors (e.g., CROs) that have not yet been invoiced, based on contract terms and the level of service completed[491][492] - Share-Based Compensation: The fair value of stock options is estimated using the Black-Scholes model, which requires subjective assumptions for expected volatility, expected term, risk-free interest rate, and dividend yield[494][496] Quantitative and Qualitative Disclosures About Market Risk As a "smaller reporting company," Repare Therapeutics is not required to provide market risk disclosures - As a "smaller reporting company," Repare Therapeutics is not required to provide quantitative and qualitative disclosures about market risk[499] Financial Statements and Supplementary Data The consolidated financial statements, audited by Ernst & Young LLP, show a net loss of $84.7 million in 2024 and total assets of $176.5 million Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash, cash equivalents, and marketable securities | $152,791 | $223,627 | | Total Assets | $176,506 | $253,901 | | Total Liabilities | $25,375 | $41,819 | | Total Shareholders' Equity | $151,131 | $212,082 | Consolidated Statement of Operations Data (in thousands) | | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Revenue | $53,477 | $51,133 | | Research and development expenses | $115,941 | $133,593 | | General and administrative expenses | $29,680 | $33,764 | | Net Loss | ($84,689) | ($93,796) | | Net Loss Per Share | ($2.00) | ($2.23) | Consolidated Statement of Cash Flows Data (in thousands) | | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($76,445) | ($127,158) | | Net cash provided by investing activities | $49,468 | $78,041 | | Net cash provided by financing activities | $542 | $842 | - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the financial statements and identified 'Accrued and Prepaid Research and Development Expenses' as a critical audit matter due to the significant judgment and estimates involved[506][510][511] Changes in and Disagreements With Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting or financial disclosure matters - None[704] Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with no material changes - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[706] - Management's assessment concluded that the company's internal control over financial reporting was effective as of December 31, 2024, based on the COSO 2013 framework[708] - The company is exempt from the requirement for an auditor's attestation report on internal control over financial reporting because it is a smaller reporting company[709] Other Information No directors or officers adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q4 2024 - No director or officer adopted, terminated, or modified a Rule 10b5-1 trading plan or other non-Rule 10b5-1 trading arrangement during the fourth quarter of 2024[712] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - None[713] Part III Directors, Executive Officers and Corporate Governance Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Annual Meeting proxy statement - The information required by this item is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders[715] Executive Compensation Executive and director compensation information is incorporated by reference from the 2025 Annual Meeting proxy statement - The information required by this item is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders[717] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security ownership and equity compensation plan information is incorporated by reference from the 2025 Annual Meeting proxy statement - The information required by this item is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders[718] Certain Relationships and Related Transactions, and Director Independence Information on related party transactions and director independence is incorporated by reference from the 2025 Annual Meeting proxy statement - The information required by this item is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders[719] Principal Accounting Fees and Services Information on principal accounting fees and services is incorporated by reference from the 2025 Annual Meeting proxy statement - The information required by this item is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders[720] Part IV Exhibits and Financial Statement Schedules This section lists documents filed as part of the Annual Report, including consolidated financial statements and an index of exhibits - The company's Consolidated Financial Statements are filed under Part II, Item 8 of the report[723] - All financial statement schedules have been omitted because the information is not applicable or is already included in the financial statements or notes[723] - A detailed index of exhibits filed with or incorporated by reference into the Form 10-K is provided[725] Form 10-K Summary The company has not provided a summary for this item - None[732]