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Bicycle Therapeutics(BCYC) - 2024 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Presents the company's unaudited financial statements and management's analysis for the quarter Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2024, including Balance Sheets, Statements of Operations and Comprehensive Loss, Statements of Shareholders' Equity, and Statements of Cash Flows Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $456,997 | $526,423 | | Total current assets | $515,962 | $561,868 | | Total assets | $547,143 | $595,344 | | Total current liabilities | $49,510 | $69,537 | | Total liabilities | $191,095 | $224,412 | | Total shareholders' equity | $356,048 | $370,932 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Account | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Collaboration revenues | $19,530 | $4,896 | | Research and development | $34,864 | $32,211 | | General and administrative | $16,382 | $14,488 | | Loss from operations | $(31,716) | $(41,803) | | Net loss | $(26,563) | $(39,064) | | Net loss per share, basic and diluted | $(0.62) | $(1.30) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(70,869) | $(46,411) | | Net cash used in investing activities | $(12) | $(2,099) | | Net cash provided by financing activities | $1,871 | $2,718 | | Net decrease in cash | $(69,426) | $(45,339) | Notes to Condensed Consolidated Financial Statements The notes detail the company's business, liquidity position, accounting policies, and significant agreements - The company is a clinical-stage biopharmaceutical firm developing 'Bicycle® molecules' with key programs including BT8009, BT5528, and BT7480. As of March 31, 2024, it had cash and cash equivalents of $457.0 million and believes this is sufficient to fund operations for at least the next twelve months252630 - The company benefits from the UK's R&D tax relief program. In Q1 2024, this resulted in a $15.3 million reduction to R&D expenses, which included a $9.7 million benefit from a retroactive increase in the reimbursement rate enacted in February 20243941 Collaboration Revenue Breakdown (in thousands) | Partner | Q1 2024 Revenue | Q1 2023 Revenue | | :--- | :--- | :--- | | Bayer | $818 | $0 | | Novartis | $1,247 | $0 | | Ionis | $5,854 | $2,784 | | Genentech | $11,611 | $2,112 | | Total | $19,530 | $4,896 | - In January 2024, a decision was made with Genentech to discontinue research on Collaboration Program 3. This led to the recognition of $10.4 million in revenue during Q1 2024, including $7.5 million from the expiration of related material rights163 - The company has $30.0 million in borrowings outstanding under a loan agreement with Hercules Capital, with interest-only payments until April 1, 202554 - The company has contingent future milestone payment obligations to Cancer Research UK and other third parties totaling $111.2 million and $105.1 million, respectively. These are not recorded on the balance sheet as they are not considered probable203 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's business strategy, clinical program progress, and financial results, highlighting increased collaboration revenue and a reduced net loss Overview The company is a clinical-stage biopharmaceutical firm developing novel Bicycle® molecules, with a pipeline focused on oncology and key candidates BT8009 and BT7480 - The company's lead product candidate, BT8009, is being evaluated in an ongoing Phase I/II trial and a new Phase II/III registrational trial called Duravelo-2, which began recruiting patients in Q1 2024215219 - The FDA granted Fast Track Designation to BT8009 for previously treated locally advanced or metastatic urothelial cancer in January 2023216 - The company's discovery pipeline includes next-generation BTCs, Bicycle radionuclide conjugates (BRCs™), and Bicycle TICA molecules215 Results of Operations For Q1 2024, collaboration revenue significantly increased, leading to an improved net loss despite rising R&D and G&A expenses Comparison of Operations (in thousands) | Account | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Collaboration revenues | $19,530 | $4,896 | $14,634 | | Research and development | $34,864 | $32,211 | $2,653 | | General and administrative | $16,382 | $14,488 | $1,894 | | Net loss | $(26,563) | $(39,064) | $12,501 | - The $14.6 million increase in collaboration revenue was primarily driven by a $9.5 million increase from the Genentech agreement (due to discontinuation of a program) and a $3.1 million increase from the Ionis agreement260263 - R&D expenses increased by $2.7 million. This was mainly due to a $12.4 million increase in costs for the BT8009 program's new Phase II/III trial, offset by an $8.2 million increase in UK R&D tax incentives265 Liquidity and Capital Resources As of March 31, 2024, the company had $457.0 million in cash and cash equivalents, deemed sufficient for at least the next 12 months of operations - The company had cash and cash equivalents of $457.0 million as of March 31, 2024, which is expected to fund operations for at least 12 months from the filing date229285 - Net cash used in operating activities increased to $70.9 million in Q1 2024 from $46.4 million in Q1 2023, primarily due to increased operational activities, including upfront payments for the Phase II/III Duravelo-2 registrational trial, and changes in working capital272 - The company has an outstanding loan of $30.0 million with Hercules and may draw up to an additional $45.0 million. It also has an at-the-market (ATM) equity offering program, though no sales were made under it in Q1 2024276277 Quantitative and Qualitative Disclosure About Market Risk The company's primary market risks are interest rate sensitivity on cash and debt, and foreign currency exchange risk from UK operations - The company is exposed to interest rate risk on its $457.0 million of cash and cash equivalents and its $30.0 million of variable-rate debt. The debt's interest rate is capped at 9.05%294296 - The company is exposed to foreign currency risk as its UK subsidiaries use GBP as their functional currency, while the consolidated financial statements are presented in USD. Exchange rate fluctuations can impact reported results297299 Controls and Procedures The company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of March 31, 2024300 - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, internal controls301 PART II - OTHER INFORMATION Details legal proceedings, risk factors, and other required disclosures for the reporting period Legal Proceedings The company states that it is not currently subject to any material legal proceedings - The company is not currently a party to any material legal proceedings303 Risk Factors This section outlines significant risks that could adversely affect the company's business, including financial, operational, and intellectual property challenges - The company has a history of significant operating losses, with an accumulated deficit of $538.3 million as of March 31, 2024, and expects to incur increasing losses for the foreseeable future305317 - The business is substantially dependent on the success of its BTC® and TICA® programs, which represent a new category of medicines and may face heightened regulatory scrutiny306352 - The company relies on third parties for manufacturing its product candidates and for conducting clinical trials, which introduces risks related to supply, quality, and regulatory compliance314533541 - The company faces risks related to protecting its intellectual property, including the potential for patents to be found invalid and the possibility of costly infringement lawsuits315558590 Unregistered Sales of Equity Securities and Use of Proceeds This item is marked as 'Not Applicable' in the report - Not Applicable664 Defaults Upon Senior Securities This item is marked as 'Not Applicable' in the report - Not Applicable666 Mine Safety Disclosures This item is marked as 'Not Applicable' in the report - Not Applicable666 Other Information The company reports that none of its directors or officers adopted or terminated any Rule 10b5-1 trading plans during the last fiscal quarter - During the last fiscal quarter, no directors or officers adopted or terminated any contracts, instructions, or written plans for the purchase or sale of the company's securities666 Exhibits This section lists the exhibits filed with the quarterly report, including an amendment to the collaboration agreement with Ionis Pharmaceuticals, CEO and CFO certifications, and XBRL data files - The report includes several exhibits, such as Amendment No. 4 to the Collaboration and License Agreement with Ionis Pharmaceuticals, Inc., and certifications by the Principal Executive Officer and Principal Financial Officer668