Atea Pharmaceuticals(AVIR) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Unaudited Q1 2024 financials report a net loss of $63.2 million, with $541.5 million in cash and equivalents Condensed Consolidated Balance Sheets | Account | March 31, 2024 ($ thousands) | December 31, 2023 ($ thousands) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 160,910 | 143,823 | | Marketable securities | 380,581 | 434,283 | | Total current assets | 548,764 | 590,455 | | Total assets | 553,029 | 594,968 | | Liabilities & Equity | | | | Total current liabilities | 41,311 | 32,376 | | Total liabilities | 48,658 | 39,776 | | Total stockholders' equity | 504,371 | 555,192 | Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :--- | :--- | :--- | | Research and development | 57,575 | 28,954 | | General and administrative | 12,231 | 12,615 | | Total operating expenses | 69,806 | 41,569 | | Loss from operations | (69,806) | (41,569) | | Interest income and other, net | 6,868 | 6,299 | | Net loss | (63,169) | (35,467) | | Net loss per share - basic and diluted | $(0.75) | $(0.43) | Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (39,865) | (29,850) | | Net cash provided by investing activities | 56,802 | 24,480 | | Net cash provided by financing activities | 150 | 165 | | Net increase (decrease) in cash | 17,087 | (5,205) | | Cash at end of period | 160,910 | 183,453 | Notes to Condensed Consolidated Financial Statements - The company is a clinical-stage biopharmaceutical firm focused on antiviral therapeutics, currently conducting a Phase 3 trial (SUNRISE-3) for bemnifosbuvir for COVID-19 and a Phase 2 trial for a bemnifosbuvir/ruzasvir combination for Hepatitis C (HCV)[26] - As of March 31, 2024, the company had $541.5 million in cash, cash equivalents, and marketable securities, which is believed to be sufficient to fund operations for at least the next twelve months[27] - Under a license agreement with Merck, Atea is developing ruzasvir in combination with bemnifosbuvir for HCV. The company is obligated to pay future milestone payments, with the first potential milestone of $5.0 million payable upon commencing a Phase 3 trial[63] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses bemnifosbuvir development, noting increased R&D expenses and $541.5 million cash expected to fund operations into 2027 - The company is conducting the SUNRISE-3 Phase 3 trial for bemnifosbuvir in high-risk COVID-19 outpatients, with enrollment completed in March 2024 and results expected in the second half of 2024[72] - For HCV, a Phase 2 trial of bemnifosbuvir combined with ruzasvir is ongoing. The lead-in cohort showed a 98% SVR4 rate, meeting the efficacy criteria to continue the study. Final SVR12 results are anticipated in the second half of 2024, with a potential Phase 3 start in the same period[73] Expense Category | Expense Category | Q1 2024 ($ thousands) | Q1 2023 ($ thousands) | Change ($ thousands) | | :--- | :--- | :--- | :--- | | Research and development | 57,575 | 28,954 | 28,621 | | General and administrative | 12,231 | 12,615 | (384) | | Total operating expenses | 69,806 | 41,569 | 28,237 | - The $28.6 million increase in R&D expenses was primarily driven by higher external spending on the Phase 3 COVID-19 SUNRISE-3 trial and the Phase 2 HCV combination trial[87] Item 3. Quantitative and Qualitative Disclosures About Market Risk Market risk is interest rate sensitivity on $541.5 million cash, with no material impact from a 10% rate change - As of March 31, 2024, the company held $541.5 million in cash, cash equivalents, and marketable securities, primarily in interest-bearing money market funds[101] - The company does not believe that inflation, interest rate changes, or foreign currency fluctuations have had a material impact on its results of operations[101] Item 4. Controls and Procedures Management concluded disclosure controls effective March 31, 2024, with no material changes in internal control - The principal executive officer and principal financial officer concluded that as of March 31, 2024, the company's disclosure controls and procedures were effective[103] - 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 controls[104] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently subject to any material legal proceedings - The company is not subject to any material legal proceedings[105] Item 1A. Risk Factors The company faces significant risks including clinical trial uncertainties, competition, regulatory hurdles, manufacturing, intellectual property, and financing - COVID-19 Development Risks: There is significant uncertainty around the development of bemnifosbuvir for COVID-19, which faces substantial competition from approved oral antivirals like Pfizer's Paxlovid™ and Merck's Lagevrio™[107][109] - Financial Risks: The company has a history of significant operating expenses ($69.8 million for Q1 2024) and an accumulated deficit of $259.0 million. It will require substantial additional financing to continue its development and commercialization efforts[114][116] - Clinical and Regulatory Risks: The business is highly dependent on the success of its most advanced product candidates. The regulatory approval process is lengthy, expensive, and unpredictable, and there is no guarantee of success for its COVID-19 or HCV programs[120] - Intellectual Property Risks: The company faces a patent challenge from Gilead Sciences, which was issued a patent ('361 patent) in May 2023 with a claim that purports to cover bemnifosbuvir. While the company believes the claim is invalid, an adverse legal outcome could require obtaining a license from Gilead, which may not be available on reasonable terms[172] - Third-Party Reliance Risks: The company relies on third parties for manufacturing (CMOs) and conducting clinical trials (CROs). This dependency creates risks related to supply chain disruptions, quality control, and adherence to regulatory standards like cGMP and GCP[162][164] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity sales reported; $317.6 million net IPO proceeds invested with no material change - The company completed its IPO on November 3, 2020, raising net proceeds of approximately $317.6 million[203] - There has been no material change in the expected use of the net proceeds from the IPO[204] Item 5. Other Information CEO Jean-Pierre Sommadossi adopted a Rule 10b5-1 trading plan for selling up to 1.2M shares until June 2025 - On March 4, 2024, CEO Jean-Pierre Sommadossi adopted a Rule 10b5-1 trading plan for the sale of up to 1,200,000 shares of common stock, valid until June 4, 2025[205] Item 6. Exhibits This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL