Biomea Fusion(BMEA) - 2025 Q1 - Quarterly Report

PART I—FINANCIAL INFORMATION Financial Statements (Unaudited) The unaudited condensed financial statements for the quarter ended March 31, 2025, show a net loss of $29.3 million and a significant decrease in cash and cash equivalents to $35.9 million from $58.3 million at year-end 2024. The company has an accumulated deficit of $416.5 million and management has expressed substantial doubt about its ability to continue as a going concern without raising additional capital Condensed Balance Sheets As of March 31, 2025, the company reported total assets of $55.1 million, a decrease from $79.9 million at December 31, 2024. This was primarily driven by a reduction in cash and cash equivalents. Total liabilities stood at $26.3 million, and total stockholders' equity was $28.7 million, down from $51.6 million at year-end Condensed Balance Sheet Data (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $35,864 | $58,279 | | Total current assets | $44,685 | $68,332 | | Total assets | $55,055 | $79,938 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $19,817 | $21,673 | | Total liabilities | $26,318 | $28,365 | | Total stockholders' equity | $28,737 | $51,573 | Condensed Statements of Operations and Comprehensive Loss For the three months ended March 31, 2025, the company reported a net loss of $29.3 million, or ($0.80) per share. This is an improvement from the net loss of $39.1 million, or ($1.09) per share, in the same period of 2024. The reduced loss was primarily due to a decrease in research and development expenses Condensed Statements of Operations (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $22,897 | $33,776 | | General and administrative | $6,815 | $7,283 | | Total operating expenses | $29,712 | $41,059 | | Loss from operations | ($29,712) | ($41,059) | | Net and comprehensive loss | ($29,262) | ($39,061) | | Net loss per common share | ($0.80) | ($1.09) | Condensed Statements of Stockholders' Equity Stockholders' equity decreased from $51.6 million at December 31, 2024, to $28.7 million at March 31, 2025. The decrease was primarily driven by the net loss of $29.3 million, partially offset by $3.3 million in net proceeds from the issuance of common stock under the ATM program and $3.2 million in stock-based compensation expense - During Q1 2025, the company issued 1,261,537 shares of common stock under its 'at the market' (ATM) equity offering program, raising net proceeds of $3.257 million[23] Condensed Statements of Cash Flows For the first quarter of 2025, net cash used in operating activities was $25.7 million. The company generated $3.3 million from financing activities, primarily from its ATM program. This resulted in a net decrease in cash, cash equivalents, and restricted cash of $22.4 million, ending the period with a total of $36.2 million Summary of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($25,667) | ($32,030) | | Net cash used in investing activities | $0 | ($35) | | Net cash provided by financing activities | $3,252 | $116 | | Net decrease in cash, cash equivalents, and restricted cash | ($22,415) | ($31,949) | Notes to Unaudited Condensed Financial Statements Key notes to the financial statements highlight the company's status as a clinical-stage biopharmaceutical firm with no revenue and a history of net losses. Crucially, Note 1 states there is substantial doubt about the company's ability to continue as a going concern, as existing financial resources are insufficient to fund operations for at least one year. Note 5 details the capital structure, including the ATM offering program. Note 9 provides a breakdown of R&D expenses by clinical trial and activity - The company has incurred net operating losses since inception, with an accumulated deficit of $416.5 million as of March 31, 2025. Management has concluded there is substantial doubt about the company's ability to continue as a going concern[33] - As of March 31, 2025, the company has received net proceeds of $3.3 million from its 2022 ATM Offering Program by issuing 1,261,537 shares of common stock[49] Research and Development Expenses Breakdown (in thousands) | Expense Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | COVALENT - 111 | $2,242 | $7,760 | | Other clinical related expenses | $2,487 | $3,903 | | Preclinical activities related expenses | $1,956 | $2,965 | | Personnel-related expenses | $7,827 | $9,507 | | Total R&D Expenses | $22,897 | $33,776 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's strategic shift to focus on diabetes and obesity, leveraging its FUSION™ platform. The lead candidate, icovamenib, is in clinical trials for type 1 and type 2 diabetes. The company reported a net loss of $29.3 million for Q1 2025, a decrease from $39.1 million in Q1 2024, mainly due to lower R&D spending on clinical activities. The company's cash of $36.2 million is not sufficient to fund operations beyond the fourth quarter of 2025, raising substantial doubt about its ability to continue as a going concern without additional financing - The company has strategically focused on becoming a diabetes and obesity medicines company, planning to conclude studies of icovamenib in oncology and seek partnerships for its oncology assets (like BMF-500) to concentrate resources on metabolic disorders[66] - The company nominated BMF-650, an oral small molecule GLP-1 RA, which is advancing through IND-enabling studies, with the goal of providing a best-in-class therapeutic option for diabetes and obesity[67] - R&D expenses decreased by $10.9 million in Q1 2025 compared to Q1 2024, primarily due to a $7.3 million decrease in clinical activities, a $1.8 million decrease in manufacturing costs, and a $1.7 million decrease in personnel-related expenses[86][87] - As of March 31, 2025, the company had $36.2 million in cash, cash equivalents, and restricted cash. Management states these funds will only be sufficient to fund operations into the fourth quarter of 2025, creating substantial doubt about its ability to continue as a going concern[92] Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk exposure is to interest rate sensitivities on its cash and cash equivalents, which consist of money market funds. Due to the short-term nature of these investments, management believes that a 10% relative change in interest rates would not have a material effect on their fair market value - The company's primary market risk is interest rate sensitivity. As of March 31, 2025, it held $36.2 million in cash, cash equivalents, and restricted cash, primarily in money market funds. A 10% change in interest rates is not expected to have a material impact[106] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025. There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[107] - There were no material changes to the company's internal control over financial reporting during the first quarter of 2025[108] PART II—OTHER INFORMATION Legal Proceedings The company is not currently a party to any material legal proceedings. It acknowledges that litigation can arise in the ordinary course of business and could have an adverse impact regardless of the outcome - As of the filing date, the company is not a party to any material legal proceedings[112] Risk Factors The company outlines extensive risks to its business, categorized into several key areas. These include risks related to its limited operating history, financial condition, and need for capital, such as its history of losses and the substantial doubt about its ability to continue as a going concern. It also details risks in product development, including the novel and unproven nature of its covalent small molecule approach. Other significant risks involve the lengthy and unpredictable regulatory process, reliance on third parties for manufacturing and clinical trials, protection of intellectual property, and the volatility of its common stock Risks Related to Financial Condition and Need for Capital This section highlights the company's vulnerability due to its limited operating history, lack of revenue, and significant net losses ($416.5 million accumulated deficit). It emphasizes the urgent need for substantial additional capital to continue operations, stating that current cash will not be sufficient for another year, which raises substantial doubt about its ability to continue as a going concern. The company's strategic focus on diabetes and obesity is presented as a risk if this new direction is unsuccessful - The company has a limited operating history, no approved products, and has never generated revenue, making it difficult to evaluate its prospects[114][115] - The company will require substantial additional capital. Existing cash of $36.2 million as of March 31, 2025, is not sufficient to continue as a going concern for at least one year, raising substantial doubt about its viability[130][131][134] - The company's strategic decision to focus on metabolic disorders (diabetes, obesity) and seek partners for its oncology assets is a risk. If this focus does not lead to success, the business could be materially harmed[125][128][129] Risks Related to Product Development The company's product development risks stem from its novel and unproven approach using covalent small molecules and the FUSION™ System. There is substantial dependency on its lead candidates, icovamenib and BMF-500. The report warns that preclinical and early clinical results may not predict success in later, larger trials. The company also faces intense competition from established pharmaceutical companies with greater resources and acknowledges that its product candidates could cause significant adverse events - The company's approach of developing novel covalent small molecule therapies is unproven and may not lead to marketable products[145][149] - The business is substantially dependent on the success of its lead product candidates, icovamenib and BMF-500. Failure to advance these through clinical development and obtain regulatory approval would materially harm the company[153] - Preclinical and early clinical trial results are not predictive of success in later-stage trials. Product candidates may fail to demonstrate sufficient safety and efficacy[164] - The company faces substantial competition from major pharmaceutical and biotech companies with significantly greater financial, technical, and marketing resources[178][179] Risks Related to Regulatory Process and Legal Compliance This section details the lengthy, expensive, and unpredictable nature of the FDA and foreign regulatory approval processes. The company notes that obtaining special designations like Orphan Drug, Breakthrough Therapy, or Fast Track does not guarantee a faster review or approval. It also highlights risks from ongoing regulatory obligations post-approval, potential healthcare reform impacting pricing and reimbursement, and strict enforcement against off-label promotion - The regulatory approval process is lengthy, time-consuming, and unpredictable. Delays or failure to obtain approval for product candidates would materially impair the ability to generate revenue[209][210] - A clinical hold was previously placed on the INDs for icovamenib in type 1 and type 2 diabetes from June 2024 to September 2024, illustrating the risk of trial delays[212] - Even if granted, special designations like Breakthrough Therapy or Fast Track do not guarantee a faster development or approval process, nor do they increase the likelihood of approval[219][220] - The company is subject to extensive healthcare laws, including anti-kickback and false claims statutes, which could expose it to significant penalties if its operations are found to be in violation[241] Risks Related to Reliance on Third Parties The company heavily relies on third parties, such as CROs and CMOs, for conducting clinical trials and manufacturing its product candidates. This reliance creates risks, as the company has limited control over these third parties' performance, quality, and compliance with regulations like GCP and cGMP. Any failure by these partners could lead to significant delays, increased costs, and jeopardize regulatory approval. The company also notes its dependence on single-source suppliers for certain materials, which poses a supply chain risk - The company depends on third-party CROs and medical institutions to conduct its clinical trials. If these parties fail to perform their duties properly, regulatory approval could be delayed or prevented[270][272] - The company relies on third-party manufacturers (CMOs) for its product candidates and does not own its own manufacturing facility. These CMOs must be approved by the FDA, and any failure to comply with cGMP could halt production and development[276][277][278] - The company depends on single-source suppliers for some ingredients and materials, creating a risk of supply disruption, price increases, or delays that could materially harm the business[282] Risks Related to Intellectual Property The company's success is highly dependent on its ability to obtain, maintain, and enforce its intellectual property rights. This section outlines the uncertainty and complexity of patent law in the biopharmaceutical field. Risks include pending patent applications not being issued, issued patents being challenged and invalidated, and competitors designing around their claims. The company also faces the risk of litigation from third parties claiming infringement of their IP, which would be costly and time-consuming to defend - The company's success depends on its ability to obtain and maintain patent protection for its technology and product candidates, but the issuance, scope, and validity of such patents are highly uncertain[293][294][295] - Issued patents can be challenged and invalidated. If the company's patents are found to be invalid or unenforceable, it could have a material adverse impact on the business[301][302][312] - The company may be subject to lawsuits from third parties alleging infringement of their intellectual property rights, which could be expensive to defend and result in substantial damages or injunctions[332][334][335] Risks Related to Our Common Stock This section details risks for investors, highlighting that the stock price has been and is likely to remain highly volatile. Future capital raises may cause significant dilution to existing stockholders. A significant portion of shares is held by a small number of principal stockholders and management, who can exert significant influence. The company does not intend to pay dividends, and provisions in its charter and Delaware law could discourage or prevent a change in control - The trading price of the company's common stock has been and is likely to continue to be highly volatile due to factors like clinical trial results, regulatory decisions, and market conditions[350] - Future fundraising through equity offerings will cause dilution to existing stockholders. The company has an active ATM program and a shelf registration statement for future sales[355][359] - Executive officers, directors, and their affiliates beneficially own approximately 18% of the company's stock, allowing them to exert significant influence over stockholder matters[362] - The company is not in compliance with Nasdaq's audit committee composition rule and must regain compliance within a specified cure period to avoid potential delisting[361] General Risk Factors This section covers a range of general business risks. These include the potential for securities litigation due to stock price volatility, the significant costs of operating as a public company, and the risk of failing to maintain effective internal controls over financial reporting. The company also notes risks from cybersecurity threats, geopolitical events, changes in tax laws, and increasing scrutiny over Environmental, Social, and Governance (ESG) matters - The company is an 'emerging growth company' and takes advantage of reduced reporting requirements, which may make its stock less attractive to some investors[392] - The company is exposed to cybersecurity risks. A compromise of its information technology or data could result in program disruptions, regulatory actions, and financial loss[401][402] - Geopolitical events, such as global conflicts and trade tensions (e.g., tariffs), could disrupt the supply chain and adversely affect the business[412][413] Unregistered Sales of Equity Securities, Use of Proceeds. and Issuer Purchases of Equity Securities The company reported no unregistered sales of equity securities, no use of proceeds from such sales, and no issuer purchases of equity securities during the period - None[418] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[419] Mine Safety Disclosures This item is not applicable to the company - None[420] Other Information The company disclosed that during the quarter ended March 31, 2025, none of its directors or officers adopted, modified, or terminated a Rule 10b5-1 trading plan or any other non-Rule 10b5-1 trading arrangement - During Q1 2025, no directors or officers adopted, modified, or terminated a Rule 10b5-1 trading plan[421] Exhibits This section lists the exhibits filed with the Form 10-Q, including the CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and XBRL data files - The report includes standard exhibits such as officer certifications under Sarbanes-Oxley Sections 302 and 906, and Inline XBRL documents[422] Signatures - The report was signed on May 5, 2025, by Michael J.M. Hitchcock as Interim Chief Executive Officer and Rainer Erdtmann as Chief Operating Officer (acting as Principal Financial and Accounting Officer)[426]