Day One Biopharmaceuticals pany(DAWN) - 2025 Q3 - Quarterly Report

Product Development and Approvals - Tovorafenib, the first commercial product, received FDA approval for treating relapsed or refractory pediatric low-grade glioma (pLGG) in patients aged 6 months and older, based on a pivotal Phase 2 trial showing a 52.6% overall response rate (ORR) among evaluable patients[133][135] - The pivotal Phase 2 trial (FIREFLY-1) enrolled 137 patients, with 77 in the efficacy analysis arm, demonstrating a median duration of response of 18.0 months[134][135] - A pivotal Phase 3 trial (FIREFLY-2) for tovorafenib as a front-line therapy is ongoing, with expected enrollment completion in the first half of 2026[138] - The company has initiated a Phase 1a/b clinical trial for DAY301, a novel Antibody Drug Conjugate, with the first cohort cleared in January 2025[144] - OJEMDA received FDA approval on April 23, 2024, for treating patients with relapsed or refractory pLGG, leading to a $9.0 million milestone payment to Viracta[156] Licensing and Financial Agreements - The company entered into an exclusive licensing agreement with Ipsen for the commercialization of tovorafenib outside the U.S., receiving an upfront payment of $70.8 million and a $40.0 million investment for shares[140][141] - The Ipsen agreement includes potential additional milestone payments of up to $380.0 million and tiered royalty payments starting in the mid-teens percentage of annual net sales[141] - The company made an upfront payment of $55.0 million under the MabCare License Agreement in July 2024, with potential additional payments of $1,132.0 million based on milestones[170] - The Ipsen License Agreement, effective July 23, 2024, included an upfront license fee of $70.8 million and a private placement of $40.0 million for 2,341,495 shares[172] - The company is eligible for up to $380.0 million in additional commercial launch and sales-based milestone payments under the Ipsen License Agreement[173] Financial Performance - Product revenue, net increased by $18.4 million, from $20.1 million in Q3 2024 to $38.5 million in Q3 2025, driven by increased sales of OJEMDA in the United States[193] - Total revenues decreased by $53.966 million, from $93.761 million in Q3 2024 to $39.795 million in Q3 2025, a decline of 57.6%[192] - For the nine months ended September 30, 2025, product revenue, net increased by $74.3 million, from $28.3 million in 2024 to $102.6 million in 2025, a growth of 263.0%[201] - Total revenues for the nine months ended September 30, 2025 increased by $2.511 million, from $101.953 million in 2024 to $104.464 million in 2025, a rise of 2.5%[200] - Net loss for Q3 2025 was $19.726 million compared to a net income of $37.037 million in Q3 2024, representing a decrease of 153.3%[192] Research and Development Expenses - Research and development expenses are expected to increase as the company advances product candidates through clinical trials and expands R&D efforts[186] - Research and development expenses decreased by $2.2 million, from $33.6 million in Q3 2024 to $31.4 million in Q3 2025, a reduction of 6.4%[196] - Research and development expenses for the nine months ended September 30, 2025 decreased by $58.7 million, from $165.9 million in 2024 to $107.2 million in 2025, a decline of 35.4%[204] Cash Flow and Financial Position - As of September 30, 2025, the company reported an accumulated deficit of $640.1 million and $451.6 million in cash, cash equivalents, and short-term investments, expected to cover capital requirements for at least the next twelve months[211][223] - Net cash used in operating activities for the nine months ended September 30, 2025 was $89.6 million, compared to $48.1 million for the same period in 2024[216][218] - Cash provided by financing activities for the nine months ended September 30, 2024 was $201.4 million, primarily from the issuance of common stock and pre-funded warrants[222] - The company anticipates continued significant operating losses and expenses in the foreseeable future, impacting its ability to generate positive cash flow[223][228] - The company may need to finance its cash needs through equity offerings, debt financings, or collaborations if current cash reserves are insufficient[224] Patent and Exclusivity - The company has a co-owned U.S. patent for tovorafenib, providing protection through 2031, with additional patents expected to extend coverage into the 2040s[177] - OJEMDA has received 5 years of New Chemical Entity exclusivity and 7 years of Orphan Drug Exclusivity, expiring in April 2029 and April 2031, respectively[179] - The company plans to rely on data exclusivity and orphan drug designations to protect its proprietary technology and product candidates[176] Other Financial Metrics - Selling, general and administrative expenses decreased by $0.9 million, from $29.0 million in Q3 2024 to $28.1 million in Q3 2025, a decline of 2.8%[198] - Selling, general and administrative expenses increased by $0.7 million, from $85.7 million in the nine months ended September 30, 2024 to $86.4 million in 2025, an increase of 0.8%[206] - The company did not record an income tax provision for the nine months ended September 30, 2025 due to generated tax losses[207] - The company has an operating lease obligation of approximately $0.5 million due within 12 months as of September 30, 2025[213] - Net cash provided by investing activities for the nine months ended September 30, 2025 was $7.2 million, while for the same period in 2024, it was $38.6 million[219][220]