IDEAYA Biosciences(IDYA) - 2022 Q1 - Quarterly Report

PART I—FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed financial statements for Q1 2022, reporting $11.4 million in collaboration revenue, a $14.0 million net loss, and total assets of $358.9 million Condensed Balance Sheet (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash, cash equivalents, and marketable securities | $346,227 | $368,063 | | Total current assets | $256,049 | $250,996 | | Total assets | $358,867 | $381,347 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $56,957 | $45,159 | | Total liabilities | $70,200 | $79,833 | | Total stockholders' equity | $288,667 | $301,514 | | Total liabilities and stockholders' equity | $358,867 | $381,347 | Condensed Statement of Operations (in thousands) | Account | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Collaboration revenue | $11,359 | $7,247 | | Research and development | $19,656 | $11,566 | | General and administrative | $5,923 | $4,816 | | Loss from operations | ($14,220) | ($9,135) | | Net loss | ($14,013) | ($9,021) | | Net loss per common share, basic and diluted | ($0.36) | ($0.28) | Condensed Statement of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($19,647) | ($13,724) | | Net cash (used in) provided by investing activities | ($17,761) | $36,435 | | Net cash provided by financing activities | $653 | $42,004 | | Net decrease in cash, cash equivalents and restricted cash | ($36,755) | $64,715 | Notes to Condensed Financial Statements (Unaudited) The notes detail accounting policies, liquidity, revenue recognition from GSK, and summaries of key collaboration agreements, including a subsequent Orphan Drug designation for darovasertib - As of March 31, 2022, the company had $346.2 million in cash, cash equivalents, and marketable securities, believed sufficient to fund planned operations for at least the next 12 months[29] - The company's primary revenue source is its collaboration agreement with GlaxoSmithKline (GSK) for the MAT2A, Pol Theta, and WRN synthetic lethality programs, totaling $11.4 million in Q1 2022[92][114] - On January 31, 2022, GSK waived its right to conduct the MAT2A Combination Trial, resulting in $2.4 million in recognized revenue related to the material right that no longer exists[121] - In March 2022, the company entered into two new Clinical Trial Collaboration and Supply Agreements with Pfizer to evaluate darovasertib in combination with crizotinib in Metastatic Uveal Melanoma (MUM) and other cMET-driven tumors[108][109] - On January 28, 2022, the company exercised its option for an exclusive worldwide license for a class of PARG inhibitors from Cancer Research Technology Ltd. (CRT) and the University of Manchester, paying a £250,000 exercise fee[111] - Subsequent to the quarter end, on April 27, 2022, the FDA granted Orphan Drug designation to darovasertib for the treatment of Metastatic Uveal Melanoma (MUM)[124] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's oncology pipeline progress, noting a 70% increase in R&D expenses and a 57% rise in collaboration revenue for Q1 2022, with $346.2 million in cash Overview and Pipeline Update The company is advancing its synthetic lethality pipeline, with IDE397 in Phase 1, IDE161 targeting Q4 2022 IND, and darovasertib progressing for MUM combination therapy - IDE397 (MAT2A): The Phase 1 trial continues to enroll patients, with 21 enrolled as of May 1, 2022, targeting monotherapy cohort expansion, initiation of combination cohorts, and delivery of an option data package to GSK around mid-2022[130][132][135] - PARG Program: The company is advancing its PARG inhibitor development candidate, IDE161, targeting an IND submission in Q4 2022, with preclinical data showing monotherapy efficacy and tumor regression in multiple models[140][141] - Pol Theta & Werner Helicase Programs: In collaboration with GSK, the company targets selection of a Pol Theta development candidate in Q2 2022 and a Werner Helicase development candidate in 2023[147][151] - Darovasertib (PKC): The company is evaluating darovasertib in combination with crizotinib for MUM, with 72 patients enrolled in this arm as of May 1, 2022, and plans to present additional interim data and seek FDA guidance on a potential registrational trial design in mid-2022[160][165] - On April 27, 2022, the FDA granted Orphan Drug designation to darovasertib for MUM, potentially providing benefits such as tax credits, user fee exemptions, and seven years of marketing exclusivity upon approval[170] Results of Operations Q1 2022 financial results show increased collaboration revenue, driven by GSK progress and a one-time waiver, alongside higher operating expenses due to personnel and study activities Comparison of Three Months Ended March 31, 2022 and 2021 (in thousands) | Account | Q1 2022 | Q1 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Collaboration revenue | $11,359 | $7,247 | $4,112 | 57% | | Research and development | $19,656 | $11,566 | $8,090 | 70% | | General and administrative | $5,923 | $4,816 | $1,107 | 23% | | Net loss | ($14,013) | ($9,021) | ($4,992) | (55%) | - Collaboration revenue increased by $4.1 million (57%) year-over-year, partly due to recognizing $2.4 million from a GSK waiver related to the MAT2A Combination Trial[207] - Research and development expenses increased by $8.1 million (70%) year-over-year, driven by a $2.4 million increase in personnel-related expenses, a $1.0 million increase in CRO fees, and a $3.7 million increase in CMO and consultant fees[208] Liquidity and Capital Resources The company maintains a strong liquidity position with $346.2 million in cash, sufficient to fund operations for at least 12 months, and may seek additional capital for program advancement - As of March 31, 2022, the company had cash, cash equivalents, and marketable securities totaling $346.2 million[212] - Management believes existing cash is sufficient to fund planned operations for at least 12 months from the filing date of the report[213] Summary Statement of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($19,647) | ($13,724) | | Net cash used in/(provided by) investing activities | ($17,761) | $36,435 | | Net cash provided by financing activities | $653 | $42,004 | - Net cash used in operating activities was $19.6 million for Q1 2022, primarily due to the net loss of $14.0 million and a $10.8 million decrease in contract liabilities related to the GSK collaboration[227] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate sensitivity affecting its $346.2 million in cash equivalents and marketable securities, with no significant impact from inflation or interest rate changes - The company's main market risk is from potential adverse changes in interest rates affecting the fair value of its $346.2 million in cash equivalents and marketable securities[234] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2022[237] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[238] PART II—OTHER INFORMATION Item 1. 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 litigation or legal proceedings expected to have a material adverse effect on its business[239] Item 1A. Risk Factors This section outlines substantial investment risks, including the company's early-stage nature, dependence on product development and collaborations, clinical uncertainties, and reliance on third-party manufacturing - The company is an early-stage biopharmaceutical firm with a limited operating history, significant losses since inception ($190.8 million accumulated deficit as of March 31, 2022), and no products approved for sale, making future viability difficult to assess[243][244] - The business is highly dependent on its collaboration with GSK, and if GSK does not exercise its option for the MAT2A program or terminates any development program, potential revenue will be significantly reduced, materially harming the company's financial condition[264][265] - Preclinical and clinical drug development is a lengthy, expensive, and uncertain process, and the company may experience delays or be unable to complete the development and commercialization of its product candidates[282] - The company relies on third parties for manufacturing, preclinical studies, and clinical trials, which increases the risk of not having sufficient quantities of product candidates, potentially delaying or impairing development and commercialization efforts[371][373] - The company faces significant competition from larger, better-funded biopharmaceutical companies, which may develop more effective or less expensive drugs or obtain regulatory approval more rapidly[336][337] - The COVID-19 pandemic and other geopolitical events, such as the conflict in Ukraine, could materially and adversely affect business operations, including the pace of enrollment in clinical trials and access to capital markets[356][366] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - There were no unregistered sales of equity securities in the quarter[537] Item 3. Defaults Upon Senior Securities This item is not applicable as the company has no defaults upon senior securities - Not applicable[539] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[540] Item 5. Other Information This item is not applicable as there is no other information to report - Not applicable[541] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including new Pfizer agreements, a GSK collaboration amendment, and CEO/CFO certifications - Key exhibits filed include the Second and Third Pfizer Agreements (dated March 9, 2022) and an amendment to the GSK Collaboration Agreement (effective January 31, 2022)[543]