Repare Therapeutics(RPTX) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section provides the company's unaudited financial information for the reporting period Item 1. Financial Statements (Unaudited) Presents the company's unaudited condensed consolidated financial statements, detailing financial position, operations, and cash flows Condensed Consolidated Balance Sheets Provides a snapshot of the company's assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $305,136 | $334,427 | | Total current assets | $319,228 | $351,414 | | Total Assets | $337,149 | $368,715 | | Total current liabilities | $34,083 | $35,089 | | Total Liabilities | $78,489 | $80,294 | | Total Shareholders' Equity | $258,660 | $288,421 | Condensed Consolidated Statements of Operations and Comprehensive Loss Details the company's revenues, expenses, and net loss over the reporting period Condensed Consolidated Statement of Operations Highlights (in thousands, except per share data) | Account | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Revenue | $408 | $166 | | Research and development, net | $26,458 | $16,509 | | General and administrative | $8,779 | $5,237 | | Loss from operations | $(34,829) | $(21,580) | | Net loss and comprehensive loss | $(34,757) | $(21,417) | | Net loss per share — basic and diluted | $(0.83) | $(0.58) | Condensed Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(30,006) | $(14,227) | | Net cash provided by (used in) investing activities | $403 | $(772) | | Net cash provided by financing activities | $241 | $183 | | Net Decrease In Cash And Cash Equivalents | $(29,291) | $(14,782) | | Cash and cash equivalents at end of period | $305,136 | $311,614 | Notes to Unaudited Condensed Consolidated Financial Statements Offers detailed explanations of accounting policies and specific line items within the financial statements - The company recognized $0.4 million in revenue for the three months ended March 31, 2022, related to research activities performed under the Bristol Myers Squibb (BMS) Agreement[41] - As of March 31, 2022, deferred revenue related to the BMS Agreement was $42.2 million[43] Share-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Research and development | $2,311 | $987 | | General and administrative | $2,444 | $1,070 | | Total | $4,755 | $2,057 | - As of March 31, 2022, there was $53.1 million of unrecognized share-based compensation expense related to unvested stock options, to be recognized over a weighted average period of 2.4 years[55] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's perspective on the company's financial performance, liquidity, and capital resources for the quarter - The company is a clinical-stage precision oncology company using its proprietary SNIPRx platform to develop novel therapeutics, with lead candidates RP-3500 and RP-6306 in Phase 1/2 clinical trials[58] - As of March 31, 2022, the company had $311.7 million in cash, cash equivalents, and marketable securities[59] - Updated clinical data from the Phase 1/2 TRESR trial of camonsertib (RP-3500) showed a 43% overall clinical benefit rate (CBR), with a 75% CBR in patients with advanced ovarian cancer[66] Results of Operations Analyzes the company's revenues and expenses, explaining the drivers behind changes in operating results Comparison of Results for the Three Months Ended March 31 (in thousands) | Account | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Revenue | $408 | $166 | $242 | | Research and development, net | $26,458 | $16,509 | $9,949 | | General and administrative | $8,779 | $5,237 | $3,542 | | Net loss | $(34,757) | $(21,417) | $(13,340) | - R&D expenses increased by $10.0 million year-over-year, primarily due to a $5.5 million increase in direct external costs for advancing the RP-3500 and RP-6306 programs and a $4.1 million increase in personnel-related costs from increased headcount[94] - General and administrative expenses increased by $3.6 million year-over-year, driven by a $2.0 million increase in personnel costs and a $0.9 million increase in professional costs related to transitioning from emerging growth company status[94] Liquidity and Capital Resources Discusses the company's cash position, funding needs, and ability to meet its financial obligations - As of March 31, 2022, the company had $311.7 million in cash, cash equivalents, and marketable securities[101] - Existing cash is expected to be sufficient to fund operating and capital expenditure requirements into 2024[101] - Net cash used in operating activities increased to $30.0 million in Q1 2022 from $14.2 million in Q1 2021, primarily due to higher R&D and G&A expenses related to advancing clinical programs[105][106][107] - The Tax Cuts and Jobs Act of 2017, requiring capitalization and amortization of US-based R&D expenditures over five years starting in 2022, is expected to materially reduce cash flows and increase cash tax payments in 2022 compared to 2021[100] Item 3. Quantitative and Qualitative Disclosures About Market Risk Assesses the company's exposure to market risks, primarily foreign currency and interest rate fluctuations - The company's main market risk is foreign currency exchange risk, as a portion of its expenses are in Canadian dollars, where a 10% depreciation of the USD against the CAD would increase net loss by about $0.1 million[117] - Interest rate risk is considered limited due to the short-term nature of the company's cash and marketable securities investments[115] Item 4. Controls and Procedures Details the effectiveness of the company's disclosure controls and internal control over financial reporting - As of March 31, 2022, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[120] - 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[121] PART II. OTHER INFORMATION Contains additional information not covered in the financial statements, including legal, risk, and equity matters Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings - The company is not currently a party to any material legal proceedings[124] Item 1A. Risk Factors Identifies and elaborates on significant risks that could materially affect the company's business or financial results - Financial Risks: The company has a limited operating history, has incurred significant losses since inception ($245.0 million accumulated deficit as of March 31, 2022), and will require substantial additional funding to continue operations[126][130][134] - Development Risks: The business heavily depends on the success of its SNIPRx platform and lead candidates, RP-3500 and RP-6306, with development of targeted therapeutics being highly uncertain and early trial success not predicting later results[143][154][163] - Operational Risks: The COVID-19 pandemic could adversely impact business operations, including preclinical studies and clinical trials, by causing delays in patient enrollment, clinical site initiation, and supply chain interruptions[146][152] - Competition and Commercialization Risks: The company faces substantial competition from major pharmaceutical and biotechnology companies, and even if approved, products may not gain market acceptance, with market opportunities potentially smaller than estimated[212][205][209] - Intellectual Property Risks: Success depends on obtaining and maintaining patent and trade secret protection for proprietary technologies and product candidates, which is a difficult and costly process[276] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Reports on unregistered equity sales and confirms no material change in IPO proceeds usage - There were no unregistered sales of equity securities in the quarter[380] - There has been no material change in the use of proceeds from the company's IPO[382] Item 3. Defaults Upon Senior Securities None - None[384] Item 4. Mine Safety Disclosures Not applicable - Not applicable[385] Item 5. Other Information None - None[386] Item 6. Exhibits Lists exhibits filed with the report, including CEO and CFO certifications and XBRL data files - Lists exhibits filed with the report, including CEO and CFO certifications and XBRL data files[390]