Cogent Biosciences(US:COGT)2025-08-05 12:46Forward-Looking Statements This report contains forward-looking statements reflecting current views on operations and financial performance, subject to risks that may cause actual results to differ materially - This report contains forward-looking statements reflecting current views on operations and financial performance, subject to known and unknown risks and uncertainties that may cause actual results to differ materially7 - Key factors causing actual results to differ include impacts of raising additional capital, product development success, clinical trial duration, regulatory approval for bezuclastinib, and funding availability810 PART I—FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, providing a snapshot of financial position and performance Condensed Consolidated Balance Sheets | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $274,817 | $327,898 | | Total Liabilities | $119,781 | $71,612 | | Total Stockholders' Equity | $155,036 | $256,286 | | Cash and cash equivalents | $127,598 | $98,165 | | Short-term marketable securities | $110,250 | $188,912 | | Long-term debt, net | $43,949 | $— | Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Research and development | $62,203 | $54,294 | $125,232 | $106,999 | | General and administrative | $13,379 | $10,093 | $25,283 | $19,792 | | Total operating expenses | $75,582 | $64,387 | $150,515 | $126,791 | | Net loss | $(73,529) | $(58,950) | $(145,515) | $(117,298) | | Net loss per share, common stock (basic and diluted) | $(0.53) | $(0.43) | $(1.05) | $(0.91) | Condensed Consolidated Statements of Stockholders' Equity - Total stockholders' equity decreased from $256.3 million at December 31, 2024, to $155.0 million at June 30, 20251620 - Issuance of common stock under the ATM program generated net proceeds of $24.25 million for the six months ended June 30, 202520 - Stock-based compensation expense was $19.724 million for the six months ended June 30, 2025, and $19.405 million for the six months ended June 30, 2024202162 Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(121,053) | $(95,230) | | Net cash provided by (used in) investing activities | $78,289 | $(83,581) | | Net cash provided by financing activities | $72,197 | $213,801 | | Net increase in cash, cash equivalents and restricted cash | $29,433 | $34,990 | Notes to Unaudited Condensed Consolidated Financial Statements Note 1. Nature of the Business and Basis of Presentation - Cogent Biosciences is a clinical-stage biotechnology company developing precision therapies for genetically defined diseases, with bezuclastinib as its most advanced program2587 - The company has incurred recurring losses since inception, with a net loss of $145.5 million for the six months ended June 30, 2025, and an accumulated deficit of $1,005.0 million27 - Current cash, cash equivalents, and marketable securities are expected to fund operations for at least the next 12 months, but additional funding will be required through equity offerings, debt financings, or collaborations2728 Note 2. Summary of Significant Accounting Policies - Financial statements are prepared in conformity with GAAP, with management making estimates and assumptions, particularly for research and development expenses and stock-based awards2932 - Marketable securities are classified as available-for-sale and carried at fair value, with unrealized gains and losses included in other comprehensive income33 - The company is evaluating the impact of new FASB ASUs on income tax disclosures (ASU 2023-09, effective after December 15, 2024) and income statement expense disaggregation (ASU 2024-03, effective after December 15, 2026)3435 Note 3. Marketable Securities and Fair Value of Financial Assets and Liabilities | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Amortized Cost | $110,237 | $188,465 | | Fair Value | $110,250 | $188,912 | | Gross Unrealized Gains | $30 | $451 | | Gross Unrealized Losses | $(17) | $(4) | - As of June 30, 2025, the company held nine securities in an unrealized loss position for less than twelve months, totaling $68.3 million in fair value, with no impairments recorded due to intent and ability to hold until recovery37 - Cash equivalents (money market funds) are classified as Level 1, and marketable securities (U.S. Treasury bills and notes) are classified as Level 2 in the fair value hierarchy38 Note 4. Accrued Expenses and Other Current Liabilities | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Accrued employee compensation and benefits | $8,130 | $12,259 | | Accrued external research and development expense | $19,011 | $19,957 | | Accrued external manufacturing costs | $6,629 | $6,548 | | Accrued professional and consulting services | $5,096 | $2,995 | | Other | $1,273 | $373 | | Total | $40,139 | $42,132 | Note 5. Preferred Stock, Series A and Series B Non-Voting Convertible Preferred Stock and Common Stock - As of June 30, 2025, 67,414 shares of Series A Preferred Stock (convertible into 16,853,500 common shares) and 6,868 shares of Series B Preferred Stock (convertible into 6,868,000 common shares) remain outstanding48149 - The company sold 2,587,992 common shares under its ATM program for net proceeds of approximately $24.3 million as of June 30, 202551144 - A private placement in February 2024 generated approximately $213.3 million in net proceeds from the sale of common stock and Series B Preferred Stock4553146 Note 6. Stock-Based Compensation | Type of Award | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Time-based stock options | $7,374 | $7,586 | $15,065 | $14,944 | | Employee stock purchase plan | $149 | $161 | $298 | $322 | | Time-based restricted stock units | $57 | $57 | $113 | $96 | | Performance-based restricted stock units | $2,136 | $2,208 | $4,248 | $4,043 | | Total | $9,716 | $10,012 | $19,724 | $19,405 | - Total unrecognized compensation cost for unvested time-based stock options and restricted stock units was $63.8 million and $0.1 million, respectively, as of June 30, 202562 - Unrecognized compensation cost for Executive PSUs was $6.2 million (based on maximum achievement), expected to be recognized over a weighted average period of 0.6 years63 Note 7. Commitments and Contingencies - Under the Plexxikon License Agreement for bezuclastinib, the company is obligated to pay up to $7.5 million in clinical milestones and $25.0 million in regulatory milestones, plus tiered royalties on net sales6465 - $5.0 million in regulatory milestone payments may become payable within the next twelve months64 - The company is not currently party to any material legal proceedings and has not incurred any material costs from indemnification agreements6768 Note 8. Net Loss per Share - Net loss per common share (basic and diluted) was $(0.53) for the three months ended June 30, 2025, and $(1.05) for the six months ended June 30, 2025187072 - Potential dilutive securities (stock options, performance-based restricted stock units, time-based restricted stock units) were excluded from diluted net loss per share computation due to their anti-dilutive effect72 - Outstanding pre-funded warrants are included in the computation of basic and diluted net loss per share due to their negligible exercise price and immediate exercisability72 Note 9. Retirement Plan - The company's 401(k) Plan allows for discretionary matching contributions of 100% of the first 4% of elective contributions, which vest immediately73 | Period | Contributions (in thousands) | | :------------------------------- | :--------------------------- | | Three months ended June 30, 2025 | $0.4 | | Three months ended June 30, 2024 | $0.4 | | Six months ended June 30, 2025 | $1.2 | | Six months ended June 30, 2024 | $0.9 | Note 10. Segment Information - Cogent Biosciences manages operations as a single operating segment, with the CEO evaluating performance based on consolidated net loss74 - All of the company's tangible assets are held in the United States74 | Period | Segment Net Loss (in thousands) | | :------------------------------- | :------------------------------ | | Three months ended June 30, 2025 | $73,529 | | Three months ended June 30, 2024 | $58,950 | | Six months ended June 30, 2025 | $145,515 | | Six months ended June 30, 2024 | $117,298 | Note 11. Debt - On June 11, 2025, the company entered into a $400.0 million non-dilutive term loan facility, with a first tranche of $50.0 million fully funded on the closing date77 - Future tranches are subject to milestones: $25.0 million for positive SUMMIT data (available July 2025), $75.0 million for positive PEAK data, $50.0 million for $85.0 million net product revenue by June 30, 2027, and $200.0 million by mutual agreement77 - The Credit Facility matures on June 1, 2030, bears interest at 4.75% plus the greater of one-month SOFR or 4.15%, and requires interest-only payments until June 1, 2028 (potentially deferred to June 1, 2029)78 | Metric | June 30, 2025 (in thousands) | | :-------------------------------- | :--------------------------- | | Principal amount | $50,000 | | Unamortized debt discount and issuance costs | $(6,051) | | Long-term debt, net | $43,949 | Note 12. Subsequent Events - On July 10, 2025, the company completed an underwritten public offering of 25,555,556 common shares at $9.00 per share, generating approximately $215.8 million in net proceeds84148 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on financial condition and results, covering business overview, performance analysis, liquidity, capital resources, critical accounting estimates, and future funding requirements Overview (Business Description & Pipeline) - Bezuclastinib (CGT9486) is the most advanced program, a highly selective KIT inhibitor for Systemic Mastocytosis (SM) and GIST, with Orphan Drug Designation from FDA and EMA8791104 - Positive top-line results from the SUMMIT Phase 2 trial for Non-AdvSM were announced in July 2025, showing statistically significant improvements in TSS and serum tryptase reduction, with plans for NDA submission by the end of 20259495 - The APEX Phase 2 trial for AdvSM completed enrollment in Q1 2025, with top-line results expected in H2 2025; Part 1 data showed a 52% ORR and 82% PFS rate at 24 months9799 - The PEAK Phase 3 trial for GIST (bezuclastinib + sunitinib) completed enrollment in Q3 2024, with top-line results expected in H2 2025; lead-in data showed a median PFS of 19.4 months in second-line GIST patients104105 - The company is advancing CGT4859 (FGFR2/3 inhibitor) in Phase 1, and preclinical programs for ErbB2, PI3Kα, and KRAS inhibitors, with IND submissions planned for ErbB2 and PI3Kα in 2025108109110111112 Financial Operations Overview - Since inception in 2014, the company has focused significant resources on intellectual property, R&D, manufacturing, staffing, and capital raising, with no approved products or product sales revenue to date113 - Net losses were $145.5 million for the six months ended June 30, 2025, compared to $117.3 million for the same period in 2024, with an accumulated deficit of $1,005.0 million113 - Significant increases in expenses and capital requirements are expected due to advancing clinical trials, developing new product candidates, expanding intellectual property, hiring personnel, establishing manufacturing, and seeking regulatory approvals113 Results of Operations (Comparison of the Three Months Ended June 30, 2025 and 2024) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------- | | Research and development | $62,203 | $54,294 | $7,909 | | General and administrative | $13,379 | $10,093 | $3,286 | | Total operating expenses | $75,582 | $64,387 | $11,195 | | Net loss | $(73,529) | $(58,950) | $(14,579) | | Interest income | $2,373 | $5,393 | $(3,020) | | Interest expense | $(314) | $— | $(314) | - The increase in R&D expenses was driven by the continued development of bezuclastinib and progression of early-stage programs, along with higher personnel costs132 - General and administrative expenses increased due to organizational growth and commercial readiness activities133 Results of Operations (Comparison of the Six Months Ended June 30, 2025 and 2024) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Research and development | $125,232 | $106,999 | $18,233 | | General and administrative | $25,283 | $19,792 | $5,491 | | Total operating expenses | $150,515 | $126,791 | $23,724 | | Net loss | $(145,515) | $(117,298) | $(28,217) | | Interest income | $5,325 | $9,450 | $(4,125) | | Interest expense | $(314) | $— | $(314) | - R&D expenses increased by $18.2 million, primarily due to early-stage programs and higher personnel costs, while bezuclastinib-related direct external R&D expenses slightly decreased138 - General and administrative expenses rose by $5.5 million due to organizational growth and commercial readiness activities139 Liquidity and Capital Resources - The company has historically funded operations through public offerings, private placements, debt issuance, and collaborative agreements, having incurred significant operating losses and limited revenue143 - As of June 30, 2025, cash, cash equivalents, and marketable securities totaled $237.8 million150 - Recent financing activities include $24.3 million net from ATM sales (as of June 30, 2025), $213.3 million net from a February 2024 private placement, and a $50.0 million first tranche from a $400.0 million term loan facility in June 2025144146147 - A subsequent public offering in July 2025 generated approximately $215.8 million in net proceeds148 Cash Flows | Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(121,053) | $(95,230) | | Net cash provided by (used in) investing activities | $78,289 | $(83,581) | | Net cash provided by financing activities | $72,197 | $213,801 | | Net increase in cash, cash equivalents and restricted cash | $29,433 | $34,990 | - Operating activities used $121.1 million in cash in H1 2025, primarily due to net loss, partially offset by non-cash charges and changes in operating assets/liabilities152 - Investing activities provided $78.3 million in cash in H1 2025, mainly from marketable securities maturities/sales, a shift from H1 2024 which used $83.6 million154155 - Financing activities provided $72.2 million in cash in H1 2025, primarily from the Credit Facility and ATM common stock issuance, compared to $213.8 million in H1 2024 from the private placement156157 Funding Requirements - Existing cash, cash equivalents, marketable securities, and July 2025 public offering proceeds are expected to fund operating expenses and capital expenditures into 2027, including potential FDA approval for Non-AdvSM and early commercial launch activities158 - Additional funding will be required to complete ongoing R&D programs, likely through equity offerings, debt financings (including the Credit Facility), collaborations, or licensing arrangements159 - Failure to raise additional funds could lead to delays, reductions, or termination of research, product development, or future commercialization efforts, or granting rights to drug candidates the company would prefer to develop and market itself159 Critical Accounting Estimates - No material changes in critical accounting policies occurred during the three months ended June 30, 2025, compared to those described in the Annual Report on Form 10-K160 Off-Balance Sheet Arrangements - The company did not have, and does not currently have, any off-balance sheet arrangements as defined by SEC rules161 Contractual Obligations and Commitments - Material cash requirements, including capital expenditure commitments, are described in Note 7 (Commitments and Contingencies) and Note 11 (Debt) to the condensed consolidated financial statements163 Recently Issued Accounting Pronouncements - Information on recently issued accounting pronouncements impacting the company's financial position and results of operations is disclosed in Note 2 to the condensed consolidated financial statements164 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the company's exposure to market risks, specifically interest rate risk related to its new term loan facility - The company's $50.0 million outstanding debt under the Loan and Security Agreement (as of June 30, 2025) exposes it to interest rate risk, as the interest rate is tied to the one-month term Secured Overnight Financing Rate (SOFR)167 - For every 100 basis point increase in interest rates, the company would incur approximately $0.5 million of additional annual interest expense based on the amount outstanding as of June 30, 2025167 - The company does not currently engage in hedging transactions to manage its exposure to interest rate risk, but higher interest expense would be partially offset by higher earnings on cash and marketable securities167 Item 4. Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025169 - No change in internal control over financial reporting occurred during the three months ended June 30, 2025, that materially affected, or is reasonably likely to materially affect, internal control over financial reporting170 PART II—OTHER INFORMATION Item 1. Legal Proceedings The company is not currently subject to any material legal proceedings, though it may face various claims in the ordinary course of business - The company is not currently subject to any material legal proceedings173 Item 1A. Risk Factors This section updates risk factors from the Annual Report on Form 10-K, detailing risks associated with the new Loan and Security Agreement, including covenants, milestone-dependent borrowing, and default impacts - The Loan and Security Agreement requires the company to meet certain operating and financial covenants and places restrictions on its operating and financial flexibility175176 - The amount the company may borrow under the Loan and Security Agreement is subject to the achievement of certain clinical, regulatory, and financial milestones, which may not be achieved177 - An event of default under the Loan and Security Agreement could accelerate the repayment of outstanding indebtedness, potentially harming the business and financial condition if sufficient cash or assets are unavailable179 Item 2. Recent Sales of Unregistered Securities and Use of Proceeds No recent sales of unregistered securities were reported in this section - No recent sales of unregistered securities were reported181 Item 3. Defaults Upon Senior Securities This section is not applicable to the company's current financial reporting - This item is not applicable182 Item 4. Mine Safety Disclosures This section is not applicable to the company's operations or disclosures - This item is not applicable183 Item 5. Other Information No director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025 - No director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025184 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including the Fourth Restated Certificate of Incorporation, Loan and Security Agreement, and various certifications - The report includes exhibits such as the Fourth Restated Certificate of Incorporation, the Loan and Security Agreement, and certifications from the Principal Executive and Financial Officers185 Signatures This section contains the signatures of the President, Chief Executive Officer, and Chief Financial Officer, certifying the report - The report is signed by Andrew Robbins, President and Chief Executive Officer, and John Green, Chief Financial Officer, on August 5, 2025192