Day One Biopharmaceuticals pany(US:DAWN)2025-05-06 20:05PART I. FINANCIAL INFORMATION Interim Condensed Financial Statements (Unaudited) Day One Biopharmaceuticals achieved its first product revenues in Q1 2025, significantly reducing its net loss while maintaining a solid financial position Condensed Balance Sheets The company's total assets decreased as of March 31, 2025, primarily due to reduced cash, while total liabilities also decreased and stockholders' equity remained substantial Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $33,358 | $124,968 | | Short-term investments | $439,662 | $406,752 | | Total current assets | $508,651 | $562,330 | | Total assets | $534,356 | $582,788 | | Liabilities & Equity | | | | Total current liabilities | $47,879 | $73,451 | | Total liabilities | $54,844 | $80,037 | | Total stockholders' equity | $479,512 | $502,751 | Condensed Statements of Operations For the three months ended March 31, 2025, the company generated its first product revenue, significantly narrowing its net loss compared to the prior-year period Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Product revenue, net | $30,503 | $0 | | Total revenues | $30,761 | $0 | | Research and development | $39,619 | $40,210 | | Selling, general and administrative | $29,325 | $26,557 | | Loss from operations | ($41,067) | ($66,767) | | Net loss | ($35,996) | ($62,412) | | Net loss per share - basic & diluted | ($0.35) | ($0.72) | Condensed Statements of Cash Flows Net cash used in operating activities increased in Q1 2025, primarily due to the purchase of short-term investments, resulting in a net decrease in cash and cash equivalents Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($58,997) | ($49,729) | | Net cash (used in) provided by investing activities | ($32,613) | $89,288 | | Cash provided by financing activities | $0 | $48 | | Net (decrease) increase in cash and cash equivalents | ($91,610) | $39,607 | | Cash and cash equivalents, end of period | $33,358 | $270,391 | Notes to Condensed Financial Statements The notes detail the company's accounting policies, financial instruments, and significant agreements, including revenue concentration, milestone payments, and purchase commitments - For the three months ended March 31, 2025, two individual customers accounted for 98.4% of total net product revenue and 96.2% of the accounts receivable balance39 - In March 2025, the company paid a $4.0 million milestone to XOMA following the European Medicines Agency's validation of the Marketing Authorization Application for tovorafenib64 - The company has a manufacturing and supply agreement with Quotient Sciences that includes minimum purchase obligations of approximately $12.6 million over the next five years94 - The company has an at-the-market (ATM) offering program for up to $250.0 million, but no shares had been sold under this agreement as of March 31, 2025105 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's transition to a commercial-stage entity following the FDA approval of OJEMDA™, detailing its commercial launch, ongoing clinical trials, strategic collaborations, and financial performance Overview Day One is a commercial-stage company focused on developing medicines for childhood and adult diseases, with its first product OJEMDA™ approved by the FDA in April 2024 - The FDA approved OJEMDA™ (tovorafenib) on April 23, 2024, for patients 6 months and older with relapsed or refractory pLGG harboring a BRAF fusion/rearrangement or BRAF V600 mutation128 - The pivotal Phase 3 FIREFLY-2 trial is evaluating tovorafenib as a front-line therapy in pLGG, with enrollment expected to be complete in the first half of 2026135 - The company licensed exclusive rights to commercialize tovorafenib outside the U.S. to Ipsen in July 2024136 - The pipeline includes DAY301, a novel ADC targeting PTK7, which cleared its first cohort in a Phase 1a/b trial in January 2025, and a preclinical VRK1 inhibitor program140141 Results of Operations The company's financial performance improved significantly in Q1 2025 due to the launch of OJEMDA, with net product revenue of $30.5 million and a reduced loss from operations Comparison of Results of Operations (in thousands) | Account | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $30,761 | $0 | $30,761 | N/A | | Research and development | $39,619 | $40,210 | ($591) | (1.5)% | | Selling, general and administrative | $29,325 | $26,557 | $2,768 | 10.4% | | Loss from operations | ($41,067) | ($66,767) | $25,700 | (38.5)% | | Net loss | ($35,996) | ($62,412) | $26,416 | (42.3)% | - The slight decrease in R&D expenses was mainly due to a $4.0 million milestone payment in Q1 2025 compared to a larger $5.0 million amendment payment in Q1 2024, partially offset by increased clinical trial costs for DAY301188 Liquidity and Capital Resources As of March 31, 2025, the company had $473.0 million in cash and investments, which management believes is sufficient to cover capital requirements for at least the next twelve months - As of March 31, 2025, the company had an accumulated deficit of $590.1 million and $473.0 million in cash, cash equivalents and short-term investments195 - The company believes its current cash position is sufficient to fund operations for at least twelve months from the filing date of this report195206 - Net cash used in operating activities was $59.0 million for the three months ended March 31, 2025201 Quantitative and Qualitative Disclosures About Market Risk The company states that there were no material changes to its market risks from those previously disclosed in its 2024 Form 10-K - There were no material changes to the company's market risks from those described in the 2024 Form 10-K218 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2025, the Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective219 - No changes occurred in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls220 PART II. OTHER INFORMATION Legal Proceedings The company is not currently a party to any legal proceedings that management believes would have a material adverse effect on its business - The company is not presently a party to any legal proceedings that, in the opinion of management, would have a material adverse effect on its business223 Risk Factors The company outlines significant risks to its business, operations, and financial condition, including limited operating history, dependence on OJEMDA, ongoing net losses, and the need for additional capital Risks Related to Financial Position The company faces risks due to its limited operating history as a commercial entity, a history of significant net losses, and its high dependence on OJEMDA for near-term revenue - The company is a commercial-stage entity with a limited operating history, making it difficult for investors to evaluate its business and prospects226 - The company has a history of significant net losses ($36.0 million for Q1 2025) and an accumulated deficit of $590.1 million as of March 31, 2025, with losses expected to continue230 - Near-term revenues are highly dependent on the successful commercialization of OJEMDA, its only approved product234 Risks Related to Development and Commercialization This section details risks associated with product development and commercialization, including the high cost and uncertain outcomes of clinical trials, intense competition, and challenges in market acceptance and reimbursement - Clinical trials are expensive, time-consuming, and have uncertain outcomes, with a high risk of failure for product candidates250261 - The company faces intense competition from major pharmaceutical companies like Novartis, Pfizer, and BeiGene, which have approved or developing products targeting similar pathways281282285 - Market acceptance of OJEMDA and future products is not guaranteed and depends on factors like efficacy, safety, cost-effectiveness, and physician willingness to prescribe305 - Achieving and maintaining adequate coverage and reimbursement from third-party payors, including a fragmented mix of Medicaid and private insurers for pediatric products, is a significant challenge307311 Risks Related to Government Regulation The company is subject to extensive and evolving government regulation, facing risks from potential failures in marketing authorization, withdrawal of expedited approvals, and the impact of healthcare legislation like the Inflation Reduction Act - The development and commercialization of pharmaceutical products are subject to extensive, lengthy, and uncertain regulation by the FDA and other global authorities320 - Products granted accelerated approval, like OJEMDA, require post-marketing confirmatory studies, and failure to complete these or confirm clinical benefit could lead to withdrawal of approval336362 - Healthcare reform measures, such as the Inflation Reduction Act (IRA), could increase pricing pressure, introduce government price negotiation, and negatively impact revenue375381 - The company's business is subject to anti-kickback, fraud and abuse, and other healthcare laws, violations of which can lead to significant penalties370373 Risks Related to Reliance on Third Parties The company's business model relies heavily on third parties for clinical trials, manufacturing, and ex-U.S. commercialization, creating significant risks related to performance, supply chain, and geopolitical issues - The company depends on third-party CROs to conduct clinical trials and is responsible for ensuring their compliance with GCP regulations409410 - The company relies on third-party manufacturers, some located in China, for the supply of OJEMDA and its product candidates, creating risks related to geopolitical issues, tariffs, and supply chain disruptions414415 - The license agreement with Ipsen is crucial for ex-U.S. commercialization of tovorafenib, and failure by Ipsen to perform its obligations or termination of the agreement would materially harm the business428430431 - A substantial portion of revenue comes from a limited number of customers, with two customers accounting for 98.4% of net product revenue in Q1 2025436 Risks Related to Intellectual Property The company's success is highly dependent on its ability to obtain, maintain, and defend its intellectual property, facing risks from uncertain patent issuance, potential infringement claims, and reliance on third-party licenses - The company's commercial success depends on its ability to obtain and maintain patent protection for its products and technology, which is an uncertain and complex process483484 - The company may face claims that it infringes on third-party patents, which could result in costly litigation, liability for damages, or prevent commercialization500 - The company relies on licenses from third parties (e.g., Viracta/XOMA, Takeda, MabCare) for its product candidates, and the termination or breach of these agreements would materially harm the business508511 - Patent protection may not be available or enforceable in all countries, and changes in patent law in the U.S. and abroad could diminish the value of the company's intellectual property534542 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 registered securities, and no issuer purchases of equity securities during the reporting period - There were no unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities in the quarter594595596 Defaults Upon Senior Securities The company reported no defaults upon senior securities - None597 Mine Safety Disclosures This item is not applicable to the company - Not applicable598 Other Information The company disclosed that its Chief Commercial Officer entered into a pre-arranged Rule 10b5-1 stock trading plan on February 28, 2025 - On February 28, 2025, Chief Commercial Officer Lauren Merendino adopted a Rule 10b5-1 trading plan for the potential sale of approximately 120,021 shares of common stock601 Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including required certifications and Inline XBRL data files - The report includes required certifications from the CEO and CFO under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL financial data604