IDEAYA Biosciences(IDYA) - 2021 Q1 - Quarterly Report

Forward-Looking Statements This section outlines forward-looking statements concerning future operations, financial results, and product development, subject to inherent risks and uncertainties - Forward-looking statements cover future operations, financial results, product development, and business strategy, subject to known and unknown risks and uncertainties where actual results may differ materially[5] - Key areas include progress and costs of product candidates like IDE397 and darovasertib, clinical and regulatory plans, COVID-19 impact, potential collaboration payments, and future financial performance[7][10] PART I—FINANCIAL INFORMATION This section provides the unaudited financial statements, management's discussion and analysis, market risk disclosures, and internal controls Financial Statements (Unaudited) This section presents the unaudited condensed financial statements for Q1 2021, including balance sheets, operations, equity, and cash flows, with explanatory notes Condensed Balance Sheets This subsection provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of March 31, 2021 Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $136,752 | $72,037 | | Marketable securities (Short & Long-term) | $173,649 | $211,548 | | Total Assets | $326,097 | $298,269 | | Contract liability (Current & Long-term) | $77,571 | $83,773 | | Total Liabilities | $92,971 | $99,995 | | Total Stockholders' Equity | $233,126 | $198,274 | Condensed Statements of Operations and Comprehensive Loss This subsection details the company's financial performance, including revenue, expenses, and net loss for the reported periods Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Collaboration revenue | $7,247 | $0 | | Research and development | $11,566 | $9,026 | | General and administrative | $4,816 | $3,452 | | Loss from operations | ($9,135) | ($12,478) | | Net loss | ($9,021) | ($12,043) | | Net loss per common share, basic and diluted | ($0.28) | ($0.59) | Condensed Statements of Cash Flows This subsection outlines the cash inflows and outflows from operating, investing, and financing activities for the reported periods Cash Flow Highlights (in thousands) | Activity | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($13,724) | ($9,545) | | Net cash provided by investing activities | $36,435 | $10,906 | | Net cash provided by financing activities | $42,004 | $34 | - Financing activities in Q1 2021 were primarily driven by $41.9 million in net proceeds from the at-the-market (ATM) offering program[24] Notes to Condensed Financial Statements (Unaudited) This subsection provides detailed explanations and additional information supporting the condensed financial statements - The company, a synthetic lethality precision medicine oncology firm, has incurred significant losses since inception, with an accumulated deficit of $136.0 million as of March 31, 2021[26][29] - The company raised $41.9 million in net proceeds from its ATM offering program in Q1 2021, with an additional $14.6 million gross proceeds raised from April 1 to May 9, 2021[27][28] - Management believes $310.4 million in cash, cash equivalents, and marketable securities as of March 31, 2021, are sufficient to fund planned operations for at least the next 12 months[30] - A significant Collaboration, Option and License Agreement was signed with GlaxoSmithKline (GSK) in June 2020 for MAT2A, Pol Theta, and WRN programs, including a $100.0 million upfront payment in July 2020[90][91] - For the GSK collaboration, six performance obligations were identified, recognizing $7.2 million in collaboration revenue in Q1 2021, disaggregated by program: MAT2A ($1.5M), Pol Theta ($3.5M), and WRN ($2.2M)[108][110] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition, operational results, and progress of key clinical programs, including IDE397 and darovasertib, alongside liquidity and COVID-19 impact Pipeline Overview This subsection details the progress and status of the company's key clinical and preclinical drug development programs - IDE397 (MAT2A Inhibitor): A Phase 1 clinical trial for solid tumors with MTAP deletions has initiated, with first patient dosed and cohort enrollment complete; preliminary PD data expected in H2 2021[122][125][126] - PARG Inhibitor: This preclinical program targets tumors with homologous recombination deficiencies (HRD), aiming to identify a development candidate in 2021[134][142] - Pol Theta (POLQ) Inhibitor: In collaboration with GSK, this program targets tumors with BRCA or other HRD mutations, with a development candidate selection targeted for 2021[143][148] - Darovasertib (IDE196 - PKC Inhibitor): Patient enrollment continues for combination therapy arms with binimetinib and crizotinib for metastatic uveal melanoma (MUM), with a clinical data update and FDA guidance for a potential registrational study anticipated in H2 2021[166][193] - Preliminary data for the darovasertib/crizotinib combination in MUM showed tumor reduction in 2 of 2 evaluable patients, including one unconfirmed partial response with a 54% tumor reduction[181] Results of Operations This subsection analyzes the company's financial performance, comparing key revenue and expense metrics across periods Comparison of Three Months Ended March 31, 2021 and 2020 (in thousands) | Metric | Q1 2021 | Q1 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Collaboration Revenue | $7,247 | $0 | $7,247 | 100% | | Research & Development | $11,566 | $9,026 | $2,540 | 28% | | General & Administrative | $4,816 | $3,452 | $1,364 | 40% | | Net Loss | ($9,021) | ($12,043) | $3,022 | 25% | - The YoY increase in R&D expenses was primarily due to a $1.3 million increase in payroll and stock-based compensation from higher headcount and a $1.0 million increase in external costs for the IDE397 Phase 1 trial[236] - The YoY increase in G&A expenses was mainly driven by a $1.0 million increase in payroll and stock-based compensation due to increased headcount supporting growth as a public company[237] Liquidity and Capital Resources This subsection assesses the company's ability to meet its short-term and long-term financial obligations and fund operations - As of March 31, 2021, the company held $310.4 million in cash, cash equivalents, and marketable securities[239] - Management believes existing cash, cash equivalents, and marketable securities will be sufficient to fund planned operations into 2025[240] Quantitative and Qualitative Disclosures About Market Risk This section addresses the company's market risk exposure, primarily interest rate risk on investments, deemed immaterial due to their short-term, low-risk nature - The company's primary market risk is interest rate sensitivity on its $310.1 million of cash equivalents and marketable securities, with a 10% interest rate change not expected to have a material effect due to short-term, low-risk investments[258] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of quarter-end[261] - No material changes to the company's internal control over financial reporting occurred during the quarter[262] PART II—OTHER INFORMATION This section covers legal proceedings, key risk factors, unregistered equity sales, and a list of filed exhibits Legal Proceedings The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business - The company is not currently a party to any legal proceedings deemed to have a material adverse effect on the business[264] Risk Factors This section details significant investment risks, including early-stage operations, historical losses, product development dependency, collaboration reliance, and COVID-19 impact - The company is an early-stage biopharmaceutical firm with limited operating history, significant losses since inception, and no approved products, making future viability assessment difficult[267][268] - Business highly depends on successful development of product candidates and companion diagnostics, a lengthy, expensive, and uncertain process[267][301] - Significant reliance on the GSK collaboration means potential revenue reduction if GSK does not exercise its MAT2A option or terminates other programs[267][284] - Risks include patient enrollment in rare disease clinical trials, competition from larger companies, and reliance on third parties for manufacturing[267][319][354][388] - The COVID-19 pandemic poses a risk that could materially and adversely affect business operations, including clinical trial enrollment and conduct[269][374] Unregistered Sales of Equity Securities and Use of Proceeds This section confirms no unregistered sales of equity securities occurred during the reported period - No unregistered sales of equity securities occurred in the reported period[533] Exhibits This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and an amendment to the Pfizer collaboration agreement - Key exhibits filed include CEO and CFO certifications and Amendment No. 2 to the Clinical Trial Collaboration and Supply Agreement with Pfizer Inc., dated April 8, 2021[540]