Black Diamond Therapeutics(BDTX) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Presents unaudited financial statements and management's discussion of financial condition and operations Item 1. Condensed Consolidated Financial Statements (Unaudited) Presents unaudited financial statements, showing increased net income and cash from license revenue Condensed Consolidated Balance Sheets Details the company's financial position, including assets, liabilities, and stockholders' equity | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $29,993 | $36,437 | | Investments | $112,836 | $62,138 | | Total current assets | $146,726 | $101,176 | | Total assets | $166,385 | $122,640 | | Total current liabilities | $16,805 | $20,573 | | Total liabilities | $33,775 | $39,355 | | Total stockholders' equity | $132,610 | $83,285 | | Accumulated deficit | $(441,126) | $(487,107) | - Total assets increased by $43.7 million, from $122.6 million at December 31, 2024, to $166.4 million at June 30, 2025, primarily due to a significant increase in investments[18] - Total stockholders' equity increased by $49.3 million, from $83.3 million at December 31, 2024, to $132.6 million at June 30, 2025, driven by net income and additional paid-in capital[18] Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Reports financial performance, showing net income from license revenue and reduced operating expenses | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | License revenue | $0 | $0 | $70,000 | $0 | | R&D expenses | $9,319 | $12,556 | $19,825 | $26,101 | | G&A expenses | $4,101 | $9,574 | $9,065 | $16,275 | | Total operating expenses| $13,420 | $22,130 | $28,890 | $42,376 | | Income (loss) from operations | $(13,420) | $(22,130) | $41,110 | $(42,376) | | Net income (loss) | $(10,561) | $(19,909) | $45,981 | $(38,134) | | Net income (loss) per share - basic | $(0.19) | $(0.36) | $0.81 | $(0.71) | - For the six months ended June 30, 2025, the Company reported a net income of $46.0 million, a significant improvement from a net loss of $38.1 million in the prior year, primarily due to $70.0 million in license revenue[19] - Operating expenses decreased for both the three and six months ended June 30, 2025, driven by reductions in R&D and G&A expenses due to workforce efficiencies and the outlicensing of BDTX-4933[19] Condensed Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $44,251 | $(35,925) | | Net cash provided by (used in) investing activities | $(50,606) | $(12,994) | | Net cash provided by (used in) financing activities | $(84) | $25,508 | | Net (decrease) increase in cash and cash equivalents | $(6,439) | $(23,411) | | Cash, cash equivalents and restricted cash, end of period | $30,817 | $33,633 | - Operating activities generated $44.3 million in cash for the six months ended June 30, 2025, a substantial improvement from a $35.9 million cash usage in the prior year, primarily due to the upfront license payment[21][123] - Cash used in investing activities increased to $50.6 million for the six months ended June 30, 2025, mainly due to purchases of investments exceeding sales and maturities[21][125] Condensed Consolidated Statements of Stockholders' Equity Details changes in stockholders' equity, including common stock, paid-in capital, and accumulated deficit | Metric (in thousands, except shares) | December 31, 2024 | June 30, 2025 | | :----------------------------------- | :---------------- | :------------ | | Common stock shares | 56,644,655 | 56,886,939 |\ | Additional paid-in capital | $570,361 | $573,754 |\ | Accumulated deficit | $(487,107) | $(441,126) |\ | Total stockholders' equity | $83,285 | $132,610 | - Total stockholders' equity increased by $49.3 million from December 31, 2024, to June 30, 2025, primarily due to net income and stock-based compensation, partially offset by shares surrendered for taxes[24] Notes to Unaudited Condensed Consolidated Financial Statements Provides detailed explanations and disclosures supporting the condensed consolidated financial statements - Black Diamond Therapeutics is a clinical-stage oncology company focused on MasterKey therapies for oncogenic mutations in cancer, utilizing its Mutation-Allostery-Pharmacology (MAP) drug discovery engine[26] - The Company entered into a global licensing agreement with Servier Pharmaceuticals LLC for BDTX-4933 in March 2025, receiving an upfront payment of $70.0 million and eligible for up to $710.0 million in development and commercial sales milestones, plus tiered royalties[28][75] - As of August 7, 2025, the Company expects its cash, cash equivalents, and investments to fund planned operations for at least the next 12 months from the filing date[30] - Revenue recognition for the Servier Agreement's $70.0 million upfront payment was recognized upon transfer of control of the license at a point in time upon contract execution in March 2025[77][80] - The Company operates as a single reporting segment, focused on developing MasterKey therapies for oncogenic mutations in cancer[72] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Discusses financial condition, operations, and liquidity, highlighting the Servier agreement and funding Overview Introduces the company's oncology focus, lead product silevertinib, and the Servier licensing agreement - Black Diamond Therapeutics is a clinical-stage oncology company developing MasterKey therapies targeting oncogenic mutations in cancer, with a focus on brain-penetrant compounds[83] - Silevertinib (formerly BDTX-1535) is the lead clinical-stage program, a fourth-generation EGFR MasterKey inhibitor for EGFRm NSCLC and glioblastoma (GBM), with Phase 2 clinical trials ongoing[83][84] - Enrollment for frontline EGFRm NSCLC patients (cohort 3) in the Phase 2 trial was completed in July 2025, with initial results expected in Q4 2025. The Company plans to seek FDA feedback on a potential registrational path in H1 2026[85] - In March 2025, the Company entered a global licensing agreement with Servier for BDTX-4933, receiving an upfront payment of $70.0 million. Servier will lead development and commercialization of BDTX-4933 for RAF/RAS-mutant solid tumors[83][88] - The Company reported net income of $46.0 million for the six months ended June 30, 2025, compared to a net loss of $38.1 million for the same period in 2024, primarily due to the Servier upfront payment[90] Components of our results of operations Explains the key revenue and expense categories impacting the company's financial results - The Company has not generated product revenue since inception and expects future revenue from product sales or collaboration/license agreements[96] - Research and development expenses are expensed as incurred, including costs for preclinical studies, clinical trials, CROs, CMOs, and employee-related expenses[97][99] - General and administrative expenses include salaries, benefits, stock-based compensation for executive, business development, finance, HR, legal, IT, pre-commercial, and support personnel, as well as facility costs and professional fees[103] - Other income (expense) primarily consists of interest income from cash and investments, sublease income, and foreign currency transaction gains/losses[106] Results of operations Compares financial performance for the three and six months, detailing revenue and expense changes Three Months Ended June 30, 2025 vs. 2024 | Metric (in thousands) | 2025 | 2024 | Change | | :-------------------- | :---------- | :---------- | :---------- | | R&D expenses | $9,319 | $12,556 | $(3,237) | | G&A expenses | $4,101 | $9,574 | $(5,473) | | Net loss | $(10,561) | $(19,909) | $9,348 | - Research and development expenses decreased by $3.2 million for the three months ended June 30, 2025, primarily due to workforce efficiencies and a $1.6 million decrease in BDTX-4933 spend following its outlicensing[108][109] - General and administrative expenses decreased by $5.5 million for the three months ended June 30, 2025, mainly due to operational and workforce efficiencies from a corporate restructuring[110] Six Months Ended June 30, 2025 vs. 2024 | Metric (in thousands) | 2025 | 2024 | Change | | :-------------------- | :---------- | :---------- | :---------- | | License revenue | $70,000 | $0 | $70,000 | | R&D expenses | $19,825 | $26,101 | $(6,276) | | G&A expenses | $9,065 | $16,275 | $(7,210) | | Net income (loss) | $45,981 | $(38,134) | $84,115 | - License revenue of $70.0 million was recorded for the six months ended June 30, 2025, resulting from the upfront payment from the Servier Agreement[113] - Research and development expenses decreased by $6.3 million for the six months ended June 30, 2025, driven by operational efficiencies for silevertinib and a $2.1 million decrease in BDTX-4933 spend due to its licensing[114] Liquidity and capital resources Discusses funding sources, cash position, and future capital requirements for operations - The Company has funded operations primarily through common and preferred stock sales, and the $70.0 million upfront payment from the Servier Agreement[117][120] - As of June 30, 2025, cash, cash equivalents, and investments totaled $142.8 million[121] - The Company believes its existing cash, cash equivalents, and investments will fund operating expenses and capital expenditure requirements into the fourth quarter of 2027[94][129] - Future funding requirements are expected to increase substantially with the advancement of silevertinib's clinical trials and potential commercialization activities[128][130] Contractual Obligations as of June 30, 2025 (in thousands) | Type of Obligation | Less than 1 Year | 1 to 3 Years | 3 to 5 Years | More than 5 Years | Total | | :----------------- | :--------------- | :----------- | :----------- | :---------------- | :---- | | Property leases | $4,538 | $9,448 | $4,819 | $5,026 | $23,831 | Critical accounting policies and significant judgments and use of estimates Outlines key accounting policies and the significant estimates and judgments involved - The Company's critical accounting policies, including revenue recognition under ASC 606, involve significant estimates and judgments that affect reported financial amounts[137][138] Recently issued accounting pronouncements Addresses the impact of new accounting standards on the company's financial statements - The Company will evaluate the impact of ASU 2024-03 (Expense Disaggregation Disclosures) effective for fiscal years beginning after December 15, 2026, and ASU 2023-09 (Improvements to Income Tax Disclosures) effective for annual periods beginning after December 15, 2024, on its financial statements[43][44] Emerging growth company and smaller reporting company status Clarifies the company's regulatory classifications and associated disclosure obligations - The Company is an "emerging growth company" and has elected not to opt out of the extended transition period for new accounting standards[140] - The Company also qualifies as a "smaller reporting company," allowing for reduced disclosure obligations[141] - Effective December 31, 2025, the Company will no longer qualify as an "emerging growth company"[142] Item 3. Quantitative and Qualitative Disclosures about Market Risk States that as a smaller reporting company, market risk disclosures are not required - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[143] Item 4. Controls and Procedures Confirms the effectiveness of disclosure controls and procedures, with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[144] - No material changes in internal control over financial reporting occurred during the period covered by this Quarterly Report[145] PART II - OTHER INFORMATION Presents other required information, including legal proceedings, risk factors, and equity security disclosures Item 1. Legal Proceedings Confirms no material legal proceedings or claims are currently impacting the company's business - The Company is not currently party to any material legal proceedings and is not aware of any claims that would have a material adverse effect on its business[147] Item 1A. Risk Factors Updates risks related to government funding, geopolitical disruptions, collaborations, and healthcare legislation - Inadequate funding or disruptions at the FDA and other government agencies could delay product development and approvals, negatively impacting the business[149][151] - Broad business, economic, or geopolitical disruptions, including high inflation, rising interest rates, and international tariffs, could harm development efforts and increase costs[152][154] - Collaborations, such as the Servier Agreement for BDTX-4933, carry risks including partners not meeting obligations, insufficient effort, or disputes, which could adversely affect the Company's business[157][159] - Healthcare legislative measures, including the Inflation Reduction Act of 2022 (IRA) and the One Big Beautiful Bill Act of 2025 (OBBBA), could impact drug pricing, Medicare negotiation, and orphan drug exemptions, potentially affecting revenue prospects and profitability[171] - Changes in U.S. federal tax law, such as those introduced by the OBBBA regarding R&D expense capitalization and amortization, could adversely affect the Company's business and financial condition[182] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Reports no unregistered sales or issuer purchases of equity securities during the period - No unregistered sales of equity securities occurred[183] - No issuer purchases of equity securities occurred[184] Item 3. Defaults Upon Senior Securities Confirms no defaults occurred on senior securities during the reporting period - There were no defaults upon senior securities[185] Item 4. Mine Safety Disclosures States that mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable[186] Item 5. Other Information Reports no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements by directors or officers - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the three months ended June 30, 2025[187] Item 6. Exhibits Lists certifications, XBRL documents, and other exhibits filed with the Quarterly Report - Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer, as well as Inline XBRL documents for financial data[189]