IDEAYA Biosciences(IDYA) - 2021 Q3 - Quarterly Report

PART I Financial Statements (Unaudited) The unaudited financial statements show increased assets and equity from public offerings, continued net losses, and strong financing inflows supporting liquidity Condensed Balance Sheets The balance sheet reflects significant growth in total assets and stockholders' equity, primarily from capital raises, while liabilities decreased Condensed Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 (in thousands) | Dec 31, 2020 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Assets | | | | | Cash and cash equivalents | $108,428 | $72,037 | +$36,391 | | Marketable securities (Short & Long-term) | $277,340 | $211,548 | +$65,792 | | Total Assets | $399,444 | $298,269 | +$101,175 | | Liabilities | | | | | Contract liability (Current & Long-term) | $62,183 | $83,773 | -$21,590 | | Total Liabilities | $81,815 | $99,995 | -$18,180 | | Stockholders' Equity | | | | | Total Stockholders' Equity | $317,629 | $198,274 | +$119,355 | - The significant increase in stockholders' equity was primarily driven by capital raised from a follow-on public offering and an at-the-market (ATM) offering program during the first nine months of 2021[23] Condensed Statements of Operations and Comprehensive Loss The statement of operations shows increased collaboration revenue but also higher R&D and G&A expenses, leading to an increased net loss Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2021 (in thousands) | Three Months Ended Sep 30, 2020 (in thousands) | Nine Months Ended Sep 30, 2021 (in thousands) | Nine Months Ended Sep 30, 2020 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Collaboration revenue | $8,976 | $8,967 | $24,979 | $8,967 | | Research and development | $15,503 | $10,025 | $42,048 | $27,647 | | General and administrative | $5,186 | $3,938 | $14,830 | $11,384 | | Loss from operations | ($11,713) | ($4,996) | ($31,899) | ($30,064) | | Net loss | ($11,582) | ($4,926) | ($31,550) | ($29,360) | | Net loss per share | ($0.31) | ($0.17) | ($0.92) | ($1.26) | - The year-over-year increase in R&D and G&A expenses reflects the company's growth and the advancement of its clinical programs[17] - The significant increase in collaboration revenue for the nine-month period is due to the timing of the GSK agreement, which became effective in July 2020[17][93] Condensed Statements of Cash Flows Cash flows highlight substantial financing inflows from equity offerings, offsetting cash used in operating and investing activities Cash Flow Summary for the Nine Months Ended September 30 (in thousands) | Cash Flow Activity | 2021 (in thousands) | 2020 (in thousands) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($39,122) | $67,059 | | Net cash used in investing activities | ($69,253) | ($141,689) | | Net cash provided by financing activities | $144,766 | $121,801 | | Net increase in cash, cash equivalents and restricted cash | $36,391 | $47,171 | - Financing activities were the primary source of cash in the first nine months of 2021, with $86.0 million from a public offering and $57.3 million from an at-the-market program[26][29][30] - The cash provided by operations in 2020 was mainly due to the $100 million upfront payment from GSK[26][94] Notes to Condensed Financial Statements Notes detail the company's liquidity position, revenue sources from the GSK collaboration, and allocation of transaction price - As of September 30, 2021, the company had cash, cash equivalents, and marketable securities of $385.8 million and believes these funds are sufficient to support planned operations for at least the next 12 months[32] - The company's revenue is derived entirely from its collaboration agreement with GlaxoSmithKline (GSK) for its MAT2A, Pol Theta, and WRN synthetic lethality programs[93][109] - The agreement, effective July 2020, included a $100 million upfront payment[94] Collaboration Revenue by Program (in thousands) | Program | Three Months Ended Sep 30, 2021 (in thousands) | Nine Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | | MAT2A | $2,802 | $6,032 | | Pol Theta | $4,679 | $13,288 | | WRN | $1,495 | $5,659 | | Total | $8,976 | $24,979 | - As of September 30, 2021, the company had $65.2 million in transaction price allocated to remaining performance obligations under the GSK agreement, including R&D services and material rights for the MAT2A, Pol Theta, and WRN programs[118] - The company has a clinical trial collaboration with Pfizer to evaluate darovasertib in combination with Pfizer's binimetinib (MEK inhibitor) and crizotinib (cMET inhibitor)[107] - Pfizer supplies these compounds at no cost[107] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses pipeline advancements, increased R&D and G&A expenses, and a strong liquidity position bolstered by recent equity financing Business Overview and Pipeline Update This section details progress in clinical trials for IDE397 and darovasertib, preclinical pipeline advancements, and COVID-19 impact - IDE397 (MAT2A Inhibitor): The company is actively enrolling patients in the fifth dose escalation cohort of its Phase 1 trial for solid tumors with MTAP deletions[122] - The drug has been generally well-tolerated, and preliminary clinical activity, including tumor shrinkage, has been observed[126][127] - The company targets cohort expansion in H1 2022 and submission of an option data package to GSK in H1 2022, which could trigger a $50 million payment[134] - Darovasertib (PKC Inhibitor): The company is evaluating darovasertib in a Phase 1/2 trial for tumors with GNAQ/GNA11 mutations, including metastatic uveal melanoma (MUM)[172] - Clinical development includes monotherapy and combinations with Pfizer's binimetinib and crizotinib[174] - A clinical data update is targeted for Q4 2021, with plans to seek FDA guidance on a potential registration-enabling trial in H1 2022[176][201] - Preclinical Pipeline: The company is advancing several preclinical synthetic lethality programs[144] - PARG: A potential development candidate has been selected, with IND-enabling studies planned[149] - Pol Theta (with GSK): A development candidate is planned for selection in December 2021[154] - Werner Helicase (WRN) (with GSK): The program has demonstrated in vivo efficacy and PD response[159] - COVID-19 Impact: The company continues to monitor the pandemic's impact on its clinical trials[209] - While logistical constraints exist, the pandemic has not materially affected the company's supply chain or development schedule to date[213] Results of Operations Results show increased collaboration revenue, significant rises in R&D and G&A expenses, and a slight increase in net loss Comparison of Nine Months Ended September 30 (in thousands) | Metric | 2021 (in thousands) | 2020 (in thousands) | Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Collaboration revenue | $24,979 | $8,967 | +$16,012 | +179% | | Research and development | $42,048 | $27,647 | +$14,401 | +52% | | General and administrative | $14,830 | $11,384 | +$3,446 | +30% | | Net loss | ($31,550) | ($29,360) | ($2,190) | (7%) | - The 52% increase in R&D expenses for the nine months ended Sep 30, 2021, compared to the same period in 2020, was primarily driven by higher payroll costs from increased headcount, increased fees to CROs/CMOs for advancing lead candidates, and higher clinical trial costs for IDE397 and darovasertib[247] - The 30% increase in G&A expenses was mainly due to higher stock-based compensation, increased payroll expenses from headcount growth, and higher facility and software costs[249] Liquidity and Capital Resources The company maintains a strong liquidity position with substantial cash and marketable securities, bolstered by recent public and ATM offerings - As of September 30, 2021, the company had $385.8 million in cash, cash equivalents, and marketable securities[226][251] - The company raised net proceeds of $86.0 million from a follow-on public offering in July 2021 and $57.3 million from its at-the-market (ATM) facility during the first nine months of 2021[29][30][219] - Management believes that existing cash, cash equivalents, and marketable securities are sufficient to fund planned operations for at least 12 months from the financial statement issuance date[226] Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate sensitivity on its cash and investments, which is not expected to be material due to their short-term nature - The company's main market risk is potential loss from adverse changes in interest rates affecting its $385.5 million in cash equivalents and marketable securities[272] - Due to the short-term and low-risk nature of the investment portfolio (money market funds, U.S. government securities, commercial paper, corporate bonds), a 10% change in interest rates is not expected to materially impact the fair value of these financial instruments[272] Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[275] - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, such controls[276] PART II—OTHER INFORMATION Legal Proceedings The company is not currently involved in any legal proceedings deemed to have a material adverse effect on its business - As of the filing date, the company is not involved in any material legal proceedings[278] Risk Factors Key risks include early-stage development, dependence on product candidate success, reliance on collaborations, need for financing, and competition - Financial and Operational Risks: The company is an early-stage entity with a limited operating history, no approved products, and has incurred significant losses since inception, which are expected to continue[281][282] - It will require substantial additional financing to achieve its goals[287] - Development and Regulatory Risks: The business is highly dependent on the successful development and regulatory approval of its product candidates, a lengthy and uncertain process[281] - The company has never completed a clinical trial and has limited experience with regulatory submissions[306][316] - Collaboration Risks: The company's collaboration with GSK is critical[281] - Potential revenue is significantly dependent on GSK exercising its option for the MAT2A program and continuing development of other partnered programs[299] - Termination or non-exercise by GSK would materially harm the business[299] - Pandemic Risk: The COVID-19 pandemic may materially and adversely affect business operations, including the pace of enrollment in and conduct of current or future clinical trials[284][389] Other Part II Information This section confirms no unregistered equity sales, notes non-applicable disclosures, and lists filed exhibits including certifications - Item 2: There were no unregistered sales of equity securities during the quarter[550] - Items 3, 4, and 5 (Defaults Upon Senior Securities, Mine Safety Disclosures, Other Information) were not applicable[553][554][555] - Item 6 lists the exhibits filed with the Form 10-Q, including amendments to agreements and required CEO/CFO certifications[557]