Erasca(ERAS) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Erasca, Inc. reported a net loss of $31.0 million in Q1 2025, a decrease from $35.0 million in Q1 2024, maintaining $411.1 million in liquidity Condensed Consolidated Balance Sheets Total assets decreased to $471.2 million as of March 31, 2025, from $502.5 million at year-end 2024, while total liabilities and stockholders' equity also saw reductions Condensed Consolidated Balance Sheets (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $70,482 | $67,739 | | Short-term marketable securities | $234,103 | $230,570 | | Total current assets | $314,617 | $308,793 | | Long-term marketable securities | $106,492 | $142,164 | | Total assets | $471,244 | $502,526 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $25,471 | $31,395 | | Total liabilities | $71,742 | $79,027 | | Total stockholders' equity | $399,502 | $423,499 | Condensed Consolidated Statements of Operations and Comprehensive Loss The company reported a net loss of $31.0 million for Q1 2025, a reduction from $35.0 million in Q1 2024, primarily due to lower operating expenses Statements of Operations Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Research and development | $25,969 | $28,574 | | General and administrative | $9,661 | $10,277 | | Total operating expenses | $35,630 | $38,851 | | Loss from operations | ($35,630) | ($38,851) | | Interest income | $4,740 | $3,900 | | Net loss | ($30,966) | ($35,017) | | Net loss per share, basic and diluted | ($0.11) | ($0.23) | Condensed Consolidated Statements of Stockholders' Equity Total stockholders' equity decreased to $399.5 million by March 31, 2025, mainly due to the net loss, partially offset by stock-based compensation expense - The primary drivers of change in stockholders' equity for Q1 2025 were the net loss of $30,966 thousand and stock-based compensation expense of $6,713 thousand[15] Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $31.6 million in Q1 2025, offset by $34.3 million from investing activities, resulting in a net increase of $2.7 million in cash Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($31,555) | ($33,251) | | Net cash provided by investing activities | $34,265 | $9,971 | | Net cash provided by financing activities | $33 | $6,931 | | Net increase (decrease) in cash | $2,743 | ($16,349) | Notes to Condensed Consolidated Financial Statements Notes detail the company's oncology focus, liquidity assessment, significant license agreements, stock option repricing, and sublease activities, operating as a single segment - The company is a clinical-stage precision oncology company focused on therapies for RAS/MAPK pathway-driven cancers. It believes its cash, cash equivalents, and marketable securities as of March 31, 2025, are sufficient to fund operations for at least one year[21][23] - The company has multiple license agreements (Novartis, Joyo, Medshine, NiKang) and an asset acquisition (Asana) that require potential future milestone payments totaling hundreds of millions of dollars, contingent on development, regulatory, and sales achievements. As of March 31, 2025, no such milestone payments were accrued[55][58][67] - In May 2024, the company repriced 7,478,918 outstanding stock options for eligible employees (excluding Section 16 officers and directors) to an exercise price of $2.35 per share. This resulted in $1.1 million of incremental stock-based compensation cost[72][74] - The company has entered into multiple agreements to sublease portions of its corporate headquarters in San Diego. In June 2024, this led to a noncash impairment charge of $4.7 million related to the operating lease assets and property of the first floor[84][86] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses its strategy for RAS/MAPK pathway-driven cancers, prioritizing the RAS-targeting franchise and evaluating alternatives for naporafenib, with a reduced Q1 2025 net loss and sufficient liquidity into H2 2028 - The company is singularly focused on discovering, developing, and commercializing therapies for patients with RAS/MAPK pathway-driven cancers[96] - In May 2025, a strategic review led to the decision to prioritize the RAS-targeting franchise (ERAS-0015 and ERAS-4001) and to evaluate strategic alternatives, including partnerships, for the Stage 2 portion of the naporafenib Phase 3 trial[108] - The company believes its cash, cash equivalents, and marketable securities of $411.1 million as of March 31, 2025, will be sufficient to fund operations into the second half of 2028[118][145] R&D Expense Breakdown (in thousands) | Program | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | ERAS-0015 | $6,544 | $— | | Naporafenib | $10,597 | $12,970 | | Other clinical programs | $— | $7,047 | | Other discovery and preclinical programs | $8,828 | $8,557 | | Total R&D Expenses | $25,969 | $28,574 | Quantitative and Qualitative Disclosures About Market Risk As of March 31, 2025, the company reported no material changes to its market risk profile, including interest rate, foreign currency, and inflation risks, since its 2024 Annual Report - There have been no material changes surrounding the company's market risk from the discussion provided in its Annual Report on Form 10-K for the year ended December 31, 2024[160] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to 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 effective at the reasonable assurance level[162] - There have been no changes in internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[163] PART II. OTHER INFORMATION Legal Proceedings The company is not currently a party to any material legal proceedings, acknowledging the possibility of future claims in the ordinary course of business - The company is not currently a party to any material proceedings[165] Risk Factors No material changes to previously disclosed risk factors were reported, except for a new risk concerning potential negative effects from changes to US tariff and import/export regulations - A new risk factor was added regarding potential negative effects from changes to United States tariff and import/export regulations, which could disrupt international trade and adversely affect the business[167] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities for the period covered by the report - None[168] Defaults Upon Senior Securities This item is not applicable to the company - Not applicable[169] Mine Safety Disclosures This item is not applicable to the company - Not applicable[170] Other Information During Q1 2025, no officers or directors adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - During the three months ended March 31, 2025, no officers or directors adopted, materially modified or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement[171] Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, CEO/CFO certifications, and Inline XBRL documents - The exhibits filed with the report include corporate governance documents, CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906, and interactive data files (XBRL)[174] Signatures