Day One Biopharmaceuticals pany(US:DAWN)2022-05-11 16:00PART I. FINANCIAL INFORMATION Item 1. Interim Consolidated Financial Statements (Unaudited) The unaudited interim consolidated financial statements show a net loss of $27.7 million for Q1 2022 and a cash position of $262.7 million Condensed Consolidated Balance Sheets As of March 31, 2022, total assets were $267.8 million, a decrease driven by a reduction in cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $262,731 | $284,309 | | Total current assets | $267,368 | $289,368 | | Total assets | $267,779 | $289,821 | | Liabilities & Equity | | | | Total current liabilities | $8,176 | $8,657 | | Total liabilities | $8,176 | $8,673 | | Total stockholders' equity | $259,603 | $281,148 | Condensed Consolidated Statements of Operations and Comprehensive Loss The company reported a net loss of $27.7 million for Q1 2022, driven by a significant rise in R&D and G&A expenses Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Research and development | $15,003 | $12,632 | | General and administrative | $12,745 | $3,454 | | Total operating expenses | $27,748 | $16,086 | | Loss from operations | $(27,748) | $(16,086) | | Net loss | $(27,747) | $(16,101) | | Net loss per share, basic and diluted | $(0.48) | $(2.58) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $21.6 million for Q1 2022, a significant increase from the prior-year period Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(21,563) | $(9,743) | | Net cash used in investing activities | $(15) | $(8,000) | | Net cash provided by financing activities | $0 | $128,885 | | Net (decrease) increase in cash | $(21,578) | $111,142 | | Cash and cash equivalents, end of period | $262,731 | $154,870 | Notes to Condensed Consolidated Financial Statements The notes detail the company's clinical-stage focus, key licensing agreements, and significant events like its 2021 IPO - The company is a clinical-stage biopharmaceutical company focused on developing targeted therapies for genomically-defined cancers, with its lead product candidate being tovorafenib (DAY101)25 - In June 2021, the company closed its IPO, receiving net proceeds of $167.0 million after deducting underwriting discounts and offering costs26 - The company entered into a license agreement with Merck KGaA for pimasertib, making an $8.0 million upfront payment with potential future milestone payments up to $367.0 million44 Share-based Compensation Expense (in thousands) | Expense Category | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Research and development | $2,147 | $119 | | General and administrative | $4,055 | $419 | | Total | $6,202 | $538 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses its clinical development focus, Q1 2022 financial results, and its capital sufficiency into 2024 - The lead product candidate, tovorafenib (DAY101), is in a pivotal Phase 2 trial (FIREFLY-1) for pediatric low-grade glioma (pLGG), with initial data expected in June 2022 and a potential NDA filing in 202381 - The second product candidate, pimasertib, is being studied in combination with tovorafenib in the FIRELIGHT-1 Phase 1b/2 trial, which was initiated in March 202281 - As of March 31, 2022, the company had $262.7 million in cash and cash equivalents, which is believed to be sufficient to fund operations into 202485 Results of Operations Total operating expenses increased 72.5% to $27.7 million in Q1 2022, driven by higher clinical trial and personnel costs Comparison of Operating Expenses (in thousands) | Expense Category | Q1 2022 | Q1 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $15,003 | $12,632 | $2,371 | 18.8% | | General and administrative | $12,745 | $3,454 | $9,291 | 269.0% | | Total operating expenses | $27,748 | $16,086 | $11,662 | 72.5% | Breakdown of R&D Expenses (in thousands) | Expense Type | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Third-party CRO, CMO costs | $8,245 | $3,434 | | Acquired technology license costs | $0 | $8,000 | | Employee related expenses | $6,168 | $1,156 | | Other R&D costs | $590 | $42 | | Total R&D expenses | $15,003 | $12,632 | Liquidity and Capital Resources The company holds $262.7 million in cash, primarily from its 2021 IPO, which is expected to fund operations into 2024 - The company completed its IPO on June 1, 2021, raising net proceeds of $167.0 million107 - Cash and cash equivalents totaled $262.7 million as of March 31, 2022, which management believes is sufficient to fund operations into 2024107118 Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(21,563) | $(9,743) | | Net cash used in investing activities | $(15) | $(8,000) | | Net cash provided by financing activities | $0 | $128,885 | Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, this disclosure is not required - As a smaller reporting company, Day One Biopharmaceuticals is not required to provide quantitative and qualitative disclosures about market risk127 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of the quarter's end - Management concluded that as of March 31, 2022, the company's disclosure controls and procedures were effective at a reasonable assurance level128 - No material changes to the company's internal control over financial reporting occurred during the quarter ended March 31, 2022129 PART II. OTHER INFORMATION Legal Proceedings The company is not currently a party to any material legal proceedings - The company is not presently a party to any material legal proceedings132 Risk Factors The company faces significant risks related to its limited operating history, dependence on its lead product, and clinical trial uncertainties - The company has a limited operating history, has incurred significant net losses since inception, and may never achieve profitability135139 - The business is substantially dependent on the success of its lead product candidate, tovorafenib (DAY101), which has not yet completed a pivotal trial141 - The company will require substantial additional capital to finance operations and is exposed to risks if it is unable to raise capital when needed150 - The COVID-19 pandemic could adversely impact business operations, including clinical trials, due to delays in enrollment, site initiation, and potential supply chain disruptions185 Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity and no material change in the planned use of its IPO proceeds - The company received net proceeds of approximately $167.0 million from its IPO on June 1, 2021424 - There has been no material change in the planned use of proceeds from the IPO425 Defaults Upon Senior Securities The company reports no defaults upon senior securities - The company reports no defaults upon senior securities426 Mine Safety Disclosures This item is not applicable to the company - This item is not applicable to the company426 Other Information The company reports no other information for this item - The company reports no other information for this item426 Exhibits This section lists all exhibits filed with the quarterly report, including required officer certifications