Day One Biopharmaceuticals pany(DAWN) - 2021 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Interim Consolidated Financial Statements (Unaudited) Presents unaudited consolidated financial statements: balance sheets, operations, cash flows, and key notes Condensed Consolidated Balance Sheets Balance Sheets reflect significant asset growth from IPO proceeds, increased liabilities, and a positive equity shift | Assets/Liabilities (in thousands) | September 30, 2021 | December 31, 2020 | | :-------------------------------- | :----------------- | :---------------- | | Cash and cash equivalents | $297,160 | $43,728 | | Total current assets | $303,311 | $45,071 | | Total assets | $303,783 | $45,661 | | Total current liabilities | $6,046 | $1,996 | | Total liabilities | $6,111 | $2,200 | | Accumulated deficit | $(105,548) | $(56,842) | | Total stockholders' equity/(deficit) | $297,672 | $(54,205) | - Cash and cash equivalents increased significantly from $43.7 million at December 31, 2020, to $297.2 million at September 30, 2021, primarily due to financing activities[13][35] - Total stockholders' equity shifted from a deficit of $54.2 million at December 31, 2020, to a positive equity of $297.7 million at September 30, 2021[14] Condensed Consolidated Statements of Operations and Comprehensive Loss The company reported increased net losses for both periods, driven by substantial increases in R&D and G&A expenses | (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :------------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Research and development | $9,849 | $2,537 | $32,395 | $4,935 | | General and administrative | $9,392 | $1,024 | $18,373 | $2,703 | | Total operating expenses | $19,241 | $3,561 | $50,768 | $7,638 | | Net loss and comprehensive loss | $(19,240) | $(3,842) | $(50,816) | $(8,243) | | Net loss attributable to common stockholders | $(19,240) | $(2,824) | $(148,701) | $(6,130) | | Net loss per share, basic and diluted | $(0.33) | $(0.50) | $(4.98) | $(1.12) | - Research and development expenses increased by 288% for the three months and 556.4% for the nine months ended September 30, 2021, reflecting increased clinical trial and product development activities[17][154][160] - General and administrative expenses surged by 817% for the three months and 579.7% for the nine months ended September 30, 2021, primarily due to headcount growth and public company operating costs[17][157][162] - Net loss attributable to common stockholders significantly increased to $(148.7) million for the nine months ended September 30, 2021, from $(6.1) million in the prior year, largely due to a $99.99 million deemed dividend[17][164] Condensed Consolidated Statements of Redeemable Convertible Preferred Shares, Redeemable Noncontrolling Interest and Stockholders' Equity/ Members' (Deficit) This statement details equity changes, highlighting preferred share conversion and noncontrolling interest extinguishment post-IPO - All outstanding redeemable convertible preferred shares (32,489,398 shares) were converted into common stock upon the completion of the IPO on June 1, 2021[86] - The redeemable noncontrolling interest was extinguished on May 26, 2021, resulting in a $100.0 million extinguishment loss recognized as a deemed dividend[119] - Additional paid-in capital increased significantly from $0 at December 31, 2020, to $403.2 million at September 30, 2021, reflecting IPO proceeds and share conversions[14] Condensed Consolidated Statements of Cash Flows The company saw a substantial net increase in cash from financing activities, despite higher operating and investing cash usage | (in thousands) | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :---------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(35,370) | $(7,551) | | Cash used in investing activities | $(8,000) | $(93) | | Net cash provided by financing activities | $296,802 | $0 | | Net increase (decrease) in cash | $253,432 | $(7,644) | | Cash and cash equivalents, end of period | $297,160 | $19,688 | - Net cash used in operating activities increased from $7.6 million in 2020 to $35.4 million in 2021, reflecting higher net loss and changes in operating assets and liabilities[21][169][170] - Net cash provided by financing activities was $296.8 million for the nine months ended September 30, 2021, primarily from $167.0 million in IPO proceeds and $129.8 million from Series B preferred shares[21][172] Notes to the Condensed Consolidated Financial Statements These notes explain the company's business, accounting policies, fair value measurements, and significant agreements 1. DESCRIPTION OF BUSINESS, ORGANIZATION AND LIQUIDITY Day One Biopharmaceuticals is a clinical-stage biopharmaceutical company focused on genomically-defined cancers, particularly in pediatric patients - Day One Biopharmaceuticals, Inc. is a clinical-stage biopharmaceutical company focused on developing targeted therapies for genomically-defined cancers, with a lead product candidate, DAY101, for pediatric low-grade glioma (pLGG)[26][122] - The company completed its IPO on June 1, 2021, selling 11,500,000 shares of common stock at $16.00 per share, generating $167.0 million in net proceeds[28][165] - As of September 30, 2021, the company had an accumulated deficit of $105.5 million and expects to fund operations into 2023 with its $297.2 million in cash and cash equivalents[35][128][165] 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This section outlines the company's significant accounting policies, including basis of presentation, estimates, and recent ASU adoptions - The unaudited condensed consolidated financial statements are prepared in conformity with U.S. GAAP and SEC interim reporting requirements, with certain notes condensed or omitted[40] - Significant estimates include fair values of redeemable convertible preferred shares, common shares, derivative tranche liability, share-based awards, deferred tax assets, and R&D accruals[42] - The company adopted ASU 2016-13 (Financial Instruments-Credit Losses) effective January 1, 2021, with no material impact, and is evaluating ASU 2019-12 and ASU 2020-06[52](index