BioAtla(BCAB) - 2021 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements BioAtla, Inc. reported a $18.7 million net loss for Q1 2021, significantly up from $1.6 million in Q1 2020, due to increased R&D and G&A expenses, with cash and equivalents at $221.2 million Condensed Consolidated Balance Sheets As of March 31, 2021, total assets decreased to $229.1 million from $244.9 million at year-end 2020, mainly due to reduced cash, with total liabilities at $33.2 million and equity at $195.9 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 (unaudited) | December 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $221,199 | $238,605 | | Total current assets | $224,582 | $240,681 | | Total assets | $229,087 | $244,937 | | Liabilities & Equity | | | | Total current liabilities | $30,530 | $32,261 | | Total liabilities | $33,171 | $34,963 | | Total stockholders' equity | $195,916 | $209,974 | Condensed Consolidated Statements of Operations and Comprehensive Loss For Q1 2021, the company reported no collaboration revenue and a $18.7 million net loss, or $0.56 per share, significantly higher than the $1.6 million loss in Q1 2020, driven by increased operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Collaboration revenue | $0 | $89 | | Research and development expense | $10,423 | $1,661 | | General and administrative expense | $8,374 | $(463) | | Loss from operations | $(18,797) | $(1,109) | | Consolidated net loss | $(18,701) | $(1,604) | | Net loss per common share | $(0.56) | N/A | Condensed Consolidated Statement of Stockholders' Equity Total stockholders' equity decreased from $210.0 million at December 31, 2020, to $195.9 million at March 31, 2021, primarily due to a $18.7 million net loss, partially offset by $4.6 million in stock-based compensation - The net loss of $18.7 million was the primary driver for the reduction in stockholders' equity during the first quarter of 2021[14] - Stock-based compensation added $4.6 million to additional paid-in capital, partially offsetting the impact of the net loss[14] Condensed Consolidated Statements of Cash Flows Net cash used in operating activities for Q1 2021 increased to $15.0 million from $3.8 million in Q1 2020, resulting in a $17.4 million net decrease in cash and cash equivalents Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(14,994) | $(3,814) | | Net cash used in investing activities | $(501) | $(20) | | Net cash (used in) provided by financing activities | $(1,911) | $500 | | Net decrease in cash and cash equivalents | $(17,406) | $(3,334) | Notes to Condensed Consolidated Financial Statements The notes detail clinical development of CABs, confirm sufficient cash for at least one year, and disclose $19.8 million in deferred BeiGene collaboration revenue and a $1.0 million non-cash charge from a transition agreement - The company is in clinical development of its two lead CAB antibody drug conjugates (CAB ADC) targeting AXL and ROR2 receptors[19] - Management concluded there is not substantial doubt about the Company's ability to continue as a going concern, with cash sufficient to fund operations for at least one year from the financial statement issuance date[23] - As of March 31, 2021, the company had $19.8 million in deferred revenue from its BeiGene collaboration, expected to be recognized upon transfer of know-how and master cell bank within the next twelve months[76] - A Transition Agreement with co-founder Carolyn Anderson Short resulted in accelerated vesting of equity awards, leading to an incremental fair value of $7.0 million to be recognized over the transition period, with a $1.0 million non-cash charge recognized in Q1 2021[80] Management's Discussion and Analysis of Financial Condition and Results of Operations The clinical-stage biopharmaceutical company incurred a $18.7 million net loss for Q1 2021, with $221.2 million cash from its December 2020 IPO, expected to fund operations through 2022, despite increasing R&D and G&A expenses - The company is a clinical-stage biopharmaceutical company developing novel Conditionally Active Biologics (CABs) designed to selectively bind to targets in the acidic tumor microenvironment, aiming to reduce on-target, off-tumor toxicity[83] - Net loss for Q1 2021 was $18.7 million, and the accumulated deficit reached $109.6 million as of March 31, 2021. Losses are expected to continue due to ongoing R&D for product candidates like BA3011 and BA3021[86] - Following its December 2020 IPO, the company had cash and cash equivalents of $221.2 million as of March 31, 2021, which is expected to fund operations at least through the end of 2022[91][117] Results of Operations Collaboration revenue decreased to zero in Q1 2021, while R&D expenses surged by $8.8 million to $10.4 million and G&A expenses increased by $8.9 million to $8.4 million, widening the net loss to $18.7 million Comparison of Operations (in thousands) | Metric | Q1 2021 | Q1 2020 | Change | | :--- | :--- | :--- | :--- | | Collaboration revenue | $0 | $89 | $(89) | | Research and development | $10,423 | $1,661 | $8,762 | | General and administrative | $8,374 | $(463) | $8,837 | | Loss from operations | $(18,797) | $(1,109) | $(17,688) | | Consolidated net loss | $(18,701) | $(1,604) | $(17,097) | Research and Development Expense Breakdown (in thousands) | Category | Q1 2021 | Q1 2020 | Change | | :--- | :--- | :--- | :--- | | BA3011 (AXL-ADC) | $4,573 | $879 | $3,694 | | BA3021 (ROR2-ADC) | $1,328 | $924 | $404 | | Other CAB Programs | $1,720 | $632 | $1,088 | | Personnel and related | $1,233 | $1,150 | $83 | | Equity-based compensation | $954 | $(2,523) | $3,477 | | Total R&D Expenses | $10,423 | $1,661 | $8,762 | - The $8.9 million increase in G&A expenses was primarily driven by a $3.7 million increase in stock-based compensation, a $3.2 million increase related to 2020 fair value adjustments to the former profits interest plan, and increased insurance and professional fees[109] Liquidity and Capital Resources As of March 31, 2021, the company held $221.2 million in cash, deemed sufficient to fund operations through 2022, despite $15.0 million net cash used in operating activities for Q1 2021 - As of March 31, 2021, the company had cash and cash equivalents of $221.2 million and believes its current capital is sufficient to fund operations at least through the end of 2022[112][117] - In April 2020, the company received a $0.7 million loan under the Paycheck Protection Program (PPP) of the CARES Act, which matures in April 2022 and bears a 1% interest rate[114] Cash Flow Summary (in thousands) | Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net cash used in Operating activities | $(14,994) | $(3,814) | | Net cash used in Investing activities | $(501) | $(20) | | Net cash (used in) provided by Financing activities | $(1,911) | $500 | Quantitative and Qualitative Disclosures About Market Risk This section is not applicable as the company qualifies as a smaller reporting company - The company is a smaller reporting company and is therefore not required to provide these disclosures[127] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that as of March 31, 2021, the company's disclosure controls and procedures were effective at the reasonable assurance level[128] - No changes occurred during the quarter ended March 31, 2021, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[129] PART II. OTHER INFORMATION Legal Proceedings The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business or financial condition - The company reports that it is not currently involved in any material legal proceedings[130] Risk Factors The company faces extensive risks as a clinical-stage entity with a history of losses, requiring additional capital, and dependent on its CAB technology, regulatory approvals, and third-party reliance, with operational risks in China and from COVID-19 - The company is a clinical-stage entity with a history of significant losses and expects to continue incurring losses, making its future viability difficult to assess[133][134] - Substantial additional capital is required to finance operations; failure to raise capital could force delays or elimination of research and development programs[136] - The company is substantially dependent on the success of its patented Conditionally Active Biologics (CAB) technology platform[143] - A portion of research and development occurs in China, exposing the company to risks from Chinese legal interpretation, trade wars, or political unrest[238] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales occurred; $217.4 million gross IPO proceeds from December 2020 remain unused as of March 31, 2021, with no change in planned use - The company's IPO in December 2020 generated gross proceeds of $217.4 million[338] - As of March 31, 2021, the company has not used any of the proceeds from its IPO, and the planned use of proceeds remains unchanged from what was described in the final prospectus[338] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[339] Mine Safety Disclosures Not applicable to the company - Not applicable[339] Other Information The company reports no other information for this item - None[339] Exhibits Exhibits include a Transition Agreement with Carolyn Anderson Short and CEO and CFO certifications - Exhibits filed include CEO and CFO certifications required by the Sarbanes-Oxley Act of 2002[342] - A Transition Agreement dated March 23, 2021, between the company and Carolyn Anderson Short is included as an exhibit[342]