Oric(ORIC) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This part presents the company's unaudited financial statements, management's analysis, and market risk disclosures Item 1. Financial Statements (Unaudited) Provides the unaudited balance sheets, statements of operations, stockholders' equity, and cash flows for the reporting period Balance Sheets Details the company's assets, liabilities, and stockholders' equity at the end of the reporting period Balance Sheet Summary | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change (2025 vs 2024) | Percentage Change | | :-------------------- | :------------ | :---------------- | :-------------------- | :------------------ | | Cash and cash equivalents | $75,864 | $59,406 | +$16,458 | +27.7% | | Short-term investments | $206,649 | $196,554 | +$10,095 | +5.1% | | Total current assets | $291,124 | $262,250 | +$28,874 | +11.0% | | Total assets | $346,857 | $274,142 | +$72,715 | +26.5% | | Total current liabilities | $18,050 | $24,846 | -$6,796 | -27.4% | | Total liabilities | $22,862 | $31,020 | -$8,158 | -26.3% | | Total stockholders' equity | $323,995 | $243,122 | +$80,873 | +33.3% | Statements of Operations and Comprehensive Loss Summarizes revenues, expenses, and the resulting net loss over the reporting periods Operating Results Summary | 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 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $30,549 | $28,940 | $55,189 | $50,900 | | General and administrative | $8,515 | $7,077 | $16,593 | $14,107 | | Total operating expenses | $39,064 | $36,017 | $71,782 | $65,007 | | Loss from operations | $(39,064) | $(36,017) | $(71,782) | $(65,007) | | Other income, net | $2,709 | $4,054 | $5,406 | $8,033 | | Net loss | $(36,355) | $(31,963) | $(66,376) | $(56,974) | | Net loss per share, basic and diluted | $(0.47) | $(0.45) | $(0.89) | $(0.83) | - Net loss increased by $4.392 million (13.7%) for the three months ended June 30, 2025, and by $9.402 million (16.5%) for the six months, primarily due to higher operating expenses and lower other income[19][92] Statements of Stockholders' Equity Outlines the changes in the company's equity accounts over the reporting period Stockholders' Equity Summary | Metric (in thousands, except shares) | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :----------------------------------- | :---------------- | :------------- | :------------ | | Common Stock Shares | 71,021,855 | 71,078,511 | 86,187,328 | | Common Stock Amount | $7 | $7 | $9 | | Additional Paid-in Capital | $805,510 | $812,317 | $952,949 | | Accumulated Deficit | $(562,774) | $(592,795) | $(629,150) | | Total Stockholders' Equity | $243,122 | $219,738 | $323,995 | - Total stockholders' equity increased to $323.995 million at June 30, 2025, primarily driven by the issuance of common stock and pre-funded warrants totaling $133.267 million[22] Statements of Cash Flows Details the sources and uses of cash from operating, investing, and financing activities Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(63,375) | $(55,811) | | Net cash used in investing activities | $(54,480) | $(43,588) | | Net cash provided by financing activities | $134,313 | $125,846 | | Net increase in cash, cash equivalents and restricted cash | $16,458 | $26,447 | - Net cash used in operating activities increased by $7.564 million YoY, while net cash from financing activities increased by $8.467 million YoY from private placements and ATM offerings[25][107][111] Notes to Unaudited Financial Statements Provides supplementary information and disclosures related to the company's financial statements 1. Description of the Business ORIC Pharmaceuticals is a clinical-stage biopharmaceutical company focused on overcoming cancer resistance - ORIC Pharmaceuticals, Inc is a clinical-stage biopharmaceutical company focused on overcoming resistance in cancer, operating as a single segment[28] - The company has an accumulated deficit of $629.2 million as of June 30, 2025, and has historically funded operations through stock issuances[30] - Management believes it has sufficient working capital to fund operations for at least the next twelve months from the financial statement issuance date[31] 2. Basis of Presentation and Summary of Significant Accounting Policies The financial statements are prepared in accordance with GAAP for interim reporting - The unaudited financial statements are prepared in accordance with GAAP for interim financial information and SEC Form 10-Q instructions[35] - The company operates as one segment, focusing on cancer research and development[38][39] - The company is currently evaluating the impact of ASU 2024-03, which requires enhanced expense disclosures effective after December 15, 2026[40] 3. License Agreements and Clinical Development Collaborations The company has entered into several key collaborations for its clinical programs - ORIC entered into clinical supply agreements with Johnson & Johnson to evaluate ORIC-114 and ORIC-944 in combination with their respective drugs[41][42] - A collaboration with Bayer was established to evaluate ORIC-944 in combination with Nubeqa® (darolutamide)[43] - The Voronoi License Agreement grants ORIC exclusive rights for ORIC-114 with potential milestone payments up to $336.0 million and royalties[44][46] - The Mirati License Agreement grants ORIC worldwide exclusive rights to ORIC-944 for an upfront payment of 588,235 shares of common stock[49][50][51] 4. Property and Equipment, net Details the composition and value of the company's property and equipment Property and Equipment Breakdown | Category (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Lab equipment | $7,709 | $7,386 | | Leasehold improvements | $2,065 | $2,043 | | Computer hardware and software | $287 | $274 | | Furniture and fixtures | $697 | $697 | | Total property and equipment, gross | $10,758 | $10,400 | | Less accumulated depreciation | $(7,996) | $(7,476) | | Total property and equipment, net | $2,762 | $2,924 | - Net property and equipment decreased by $162 thousand from December 31, 2024, to June 30, 2025, due to depreciation offsetting new acquisitions[54] 5. Accrued Liabilities Provides a breakdown of the company's short-term financial obligations Accrued Liabilities Breakdown | Category (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Accrued clinical and manufacturing costs | $5,365 | $11,808 | | Accrued compensation | $5,175 | $7,648 | | Operating lease liabilities - short-term | $3,273 | $3,183 | | Other accruals | $1,107 | $659 | | Total accrued liabilities | $14,920 | $23,298 | - Total accrued liabilities decreased by $8.378 million (36.0%) from December 31, 2024, mainly due to lower clinical, manufacturing, and compensation costs[55] 6. Investments Outlines the composition and fair value of the company's investment portfolio Investment Portfolio | Investment Type (in thousands) | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | | :----------------------------- | :------------------------- | :----------------------------- | | Short-term U.S. treasury securities | $206,649 | $196,554 | | Long-term U.S. treasury securities | $45,216 | — | | Total Investments | $251,865 | $196,554 | - The company's investments consist primarily of U.S. treasury securities, with no material declines in fair value due to credit-related factors[56][57] 7. Fair Value Measurements Details the methodology for measuring the fair value of financial assets Assets Measured at Fair Value | Asset Category (in thousands) | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | | :---------------------------- | :------------------------- | :----------------------------- | | Money market funds | $75,864 | $59,406 | | U.S. treasury securities | $251,865 | $196,554 | | Total | $327,729 | $255,960 | - All major categories of assets measured at fair value are classified as Level 1, indicating observable inputs such as quoted prices in active markets[59][63] 8. Stockholders' Equity and Stock-Based Compensation Discloses information on equity transactions and stock-based compensation expenses Stock-Based Compensation Expense | Stock-Based Compensation (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 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $2,919 | $2,131 | $5,811 | $4,276 | | General and administrative | $3,655 | $2,865 | $7,317 | $5,678 | | Total stock-based compensation expense | $6,574 | $4,996 | $13,128 | $9,954 | - Total stock-based compensation expense increased by 31.6% for the three months and 31.9% for the six months ended June 30, 2025, compared to 2024[62] - As of June 30, 2025, 14,249,525 stock options were outstanding with a weighted-average exercise price of $6.37[64][65] - In May 2025, the company completed a private placement, selling 14,130,313 shares of common stock and pre-funded warrants for 5,100,532 shares[67][68] 9. Subsequent Events Describes significant events that occurred after the balance sheet date - From July 1 to August 12, 2025, the company raised approximately $108.7 million in net proceeds through an At-the-Market (ATM) sales agreement[70] - On August 12, 2025, ORIC announced a strategic pipeline prioritization to focus on ORIC-944 and ORIC-114, resulting in an approximately 20% workforce reduction[71] - The workforce reduction is expected to incur a one-time cost of approximately $1.9 million, primarily for termination benefits in Q3 2025[71] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Provides management's perspective on the company's financial condition, operational results, and future outlook Overview The company is a clinical-stage biopharmaceutical firm focused on overcoming cancer resistance - ORIC Pharmaceuticals is a clinical-stage biopharmaceutical company focused on overcoming resistance in cancer through its specialized pipeline[74] - ORIC-944 showed a 59% PSA50 response rate in mCRPC patients, with updated data expected in H2 2025 and Phase 3 initiation in H1 2026[75] - ORIC-114 demonstrated systemic and intracranial activity in advanced solid tumors, with comprehensive data updates expected in H2 2025[75][76] - A strategic pipeline prioritization was announced on August 12, 2025, to focus resources on ORIC-944 and ORIC-114, leading to a 20% workforce reduction[77] - ORIC incurred a net loss of $66.4 million for the six months ended June 30, 2025, and had an accumulated deficit of $629.2 million[78] Components of Operating Results This section breaks down the key drivers of the company's operating expenses Research and Development Expenses R&D expenses consist of external and internal costs related to advancing the product pipeline - R&D expenses are a significant portion of operating costs, comprising external (CROs, CMOs) and internal (personnel) expenses[79][80][81] - R&D expenses are expected to increase substantially as ORIC-944 and ORIC-114 advance into later-stage clinical trials[83][85] - The August 2025 strategic prioritization will decrease preclinical research and incur a one-time cost of $1.9 million from a 20% workforce reduction[88] General and Administrative Expenses G&A expenses include costs for personnel, facilities, and professional services - G&A expenses primarily include personnel costs, allocated facilities, depreciation, and professional fees[89] - G&A expenses are expected to increase in the foreseeable future due to increased headcount supporting R&D and business growth[89] Other Income, Net Other income primarily consists of interest earned on cash and investments - Other income, net, primarily consists of interest income from interest-bearing money market accounts and investments[91] Results of Operations Compares the company's operating results for the current and prior-year periods Comparison of Operating Results | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------- | :------------------------------- | :------------------------------- | :----- | :----------------------------- | :----------------------------- | :----- | | Research and development | $30,549 | $28,940 | $1,609 | $55,189 | $50,900 | $4,289 | | General and administrative | $8,515 | $7,077 | $1,438 | $16,593 | $14,107 | $2,486 | | Total operating expenses | $39,064 | $36,017 | $3,047 | $71,782 | $65,007 | $6,775 | | Other income, net | $2,709 | $4,054 | $(1,345) | $5,406 | $8,033 | $(2,627) | | Net loss | $(36,355) | $(31,963) | $(4,392) | $(66,376) | $(56,974) | $(9,402) | - Research and development expenses increased by $4.3 million (8.4%) for H1 2025 YoY, driven by higher personnel costs and ORIC-114 advancement[93][94][95] - General and administrative expenses increased by $2.5 million (17.6%) for H1 2025 YoY, primarily due to higher personnel and professional services costs[96][97] Liquidity and Capital Resources Discusses the company's financial position, cash flows, and funding sources - On May 23, 2025, ORIC completed a private placement of common stock and pre-funded warrants, generating gross proceeds of $125.0 million[98] - The company raised approximately $8.9 million through an ATM offering as of June 30, 2025, with an additional $108.7 million raised through August 12, 2025[99] - As of June 30, 2025, ORIC had $327.7 million in cash, cash equivalents, and investments, projected to fund operations into the second half of 2028[143] Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(63,375) | $(55,811) | | Net cash used in investing activities | $(54,480) | $(43,588) | | Net cash provided by financing activities | $134,313 | $125,846 | | Net increase in cash, cash equivalents and restricted cash | $16,458 | $26,447 | Critical Accounting Policies and Significant Judgments and Estimates Outlines the accounting policies that require significant management judgment and estimation - The company's financial statements are prepared in accordance with US GAAP, with no significant changes to critical accounting policies since December 31, 2024[113] Emerging Growth Company and Smaller Reporting Company Status Describes the company's reporting status and its implications under securities laws - ORIC is an 'emerging growth company' and 'smaller reporting company,' electing not to use the extended transition period for new accounting standards[114][115] - The company will transition to 'large accelerated filer' status on December 31, 2025, requiring shorter filing deadlines and auditor attestation[116] Item 3. Quantitative and Qualitative Disclosures About Market Risk Discusses the company's exposure to market risks, primarily interest rate and inflation risk - The company's primary investment objective is to preserve principal and liquidity, investing in high-quality marketable debt instruments[117] - As of June 30, 2025, cash, cash equivalents, and investments totaled $327.7 million; a 100 basis point change in interest rates would not have a material effect[117] - The company does not believe inflation, interest rate changes, or exchange rate fluctuations significantly impacted results for the periods presented[118] Item 4. Controls and Procedures Details the evaluation of the company's disclosure controls and internal financial reporting controls - As of June 30, 2025, management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[119] - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected internal controls[120] PART II. OTHER INFORMATION This part contains other required disclosures, including legal proceedings, risk factors, and exhibits Item 1. Legal Proceedings States the company is not currently a party to any material litigation or legal proceedings - ORIC is not currently involved in any material litigation or legal proceedings expected to have a material adverse effect on its business[123] Item 1A. Risk Factors Outlines various risks that could materially harm the company's business and financial condition - Key risk categories include financial position, product development, regulatory compliance, intellectual property, and dependence on third parties[125][126][128][129][130][131] - The company has a limited operating history, has incurred significant net losses, and expects to continue incurring losses, requiring substantial additional capital[132][135][140] - Success is highly dependent on ORIC-944 and ORIC-114, which are subject to significant clinical, regulatory, and commercial uncertainties[147][148][155][188] - The company faces risks related to protecting its intellectual property and operating without infringing third-party rights[314][321][327] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds States there were no unregistered sales of equity securities during the reporting period - No unregistered sales of equity securities occurred during the period[440] - No proceeds from registered securities were used during the period[440] Item 3. Defaults Upon Senior Securities Confirms that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[441] Item 4. Mine Safety Disclosures States that there are no mine safety disclosures to report - No mine safety disclosures are applicable or required[442] Item 5. Other Information Details Rule 10b5-1 trading arrangements adopted by certain directors and executive officers - The CEO, Jacob M. Chacko, adopted a Rule 10b5-1 trading arrangement on June 21, 2025, for the sale of up to 251,000 shares[443] - The CFO, Dominic Piscitelli, adopted a Rule 10b5-1 trading arrangement on June 24, 2025, for the sale of up to 140,000 shares[444] - Board member Mardi C. Dier adopted a Rule 10b5-1 trading arrangement on June 27, 2025, for the sale of up to 114,383 shares[445] Item 6. Exhibits Lists the exhibits filed as part of the Form 10-Q report - Key exhibits include the Form of Pre-Funded Warrant, Securities Purchase Agreement, and certifications of the Principal Executive and Financial Officers[447] SIGNATURES Contains the required signatures from the registrant's authorized officers - The report is signed by Jacob M. Chacko, M.D., President and CEO, and Dominic Piscitelli, CFO, on August 12, 2025[451]