SpringWorks Therapeutics(SWTX) - 2023 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and related management discussion for the period ended June 30, 2023 Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for the period ended June 30, 2023, highlighting a decrease in total assets to $517.3 million and a net loss of $151.3 million Condensed Consolidated Balance Sheets This table presents the company's financial position, including assets, liabilities, and equity, as of June 30, 2023, and December 31, 2022 Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $115,001 | $67,490 | | Marketable securities | $361,706 | $524,722 | | Total Assets | $517,329 | $630,242 | | Total Liabilities | $65,888 | $72,050 | | Total Stockholders' Equity | $451,441 | $558,192 | Condensed Consolidated Statements of Operations This table summarizes the company's revenues, expenses, and net loss for the three and six months ended June 30, 2023 and 2022 Statement of Operations Summary (in thousands, except per-share data) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $35,858 | $38,024 | $69,382 | $72,127 | | General and administrative | $46,994 | $30,987 | $91,169 | $58,353 | | Total operating expenses | $82,852 | $69,011 | $160,551 | $130,480 | | Net loss | $(77,925) | $(69,050) | $(151,345) | $(130,851) | | Net loss per share | $(1.25) | $(1.41) | $(2.43) | $(2.67) | Condensed Consolidated Statements of Cash Flows This table details the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2023 and 2022 Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(109,629) | $(87,759) | | Net cash provided by investing activities | $159,360 | $53,181 | | Net cash (used in) provided by financing activities | $(2,190) | $173 | | Net increase (decrease) in cash | $47,541 | $(34,405) | Notes to Condensed Consolidated Financial Statements This section provides additional details and context for the financial statements, including business overview, significant accounting policies, and financial position - The company is a clinical-stage biopharmaceutical firm with two late-stage product candidates: nirogacestat and mirdametinib. An NDA for nirogacestat for desmoid tumors was submitted and accepted for priority review by the FDA[30] - The PDUFA target action date for the nirogacestat NDA was extended by three months to November 27, 2023, to allow the FDA more time to review additional data analyses[30] - The company has a history of losses, with an accumulated deficit of $721.3 million as of June 30, 2023. However, management believes its cash, cash equivalents, and marketable securities of $476.7 million are sufficient to fund operations for at least the next twelve months[31][32] - Stock-based compensation expense for the six months ended June 30, 2023, was $46.4 million, an increase from $35.5 million in the same period of 2022[70] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's business overview, financial results, and liquidity, focusing on clinical progress, increased General & Administrative expenses, and sufficient capital for the next year Overview This section provides a strategic overview of the company's clinical development programs and commercialization plans for its lead product candidates - The company's most advanced product candidate, nirogacestat, is under priority review by the FDA for the treatment of desmoid tumors, with an updated PDUFA target action date of November 27, 2023[75] - The second lead product candidate, mirdametinib, is in a potentially registrational Phase 2b trial for NF1-PN. Topline data is expected in Q4 2023, with a planned NDA submission in the first half of 2024 if data is positive[78] - The company is actively preparing for the commercial launch of nirogacestat in the U.S., if approved, and plans to file for marketing authorization in the European Union in 2024[76] Results of Operations This section analyzes the company's operating expenses, highlighting changes in research and development and general and administrative costs Comparison of Operating Expenses (in thousands) | Expense Category | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $35,858 | $38,024 | $69,382 | $72,127 | | General and administrative | $46,994 | $30,987 | $91,169 | $58,353 | - General and administrative expenses increased by 52% for Q2 2023 and 56% for H1 2023 compared to the same periods in 2022. This increase was primarily driven by commercial readiness activities for the potential U.S. launch of nirogacestat, including hiring for sales, marketing, and commercial functions[94][95][101] - Research and development expenses decreased by 6% for Q2 2023 and 4% for H1 2023 compared to the prior year periods, mainly due to lower external costs for drug manufacturing and clinical trials[92][93][99] Liquidity and Capital Resources This section discusses the company's financial position, cash flows, and ability to fund future operations - The company had an accumulated deficit of $721.3 million as of June 30, 2023. Management estimates that its current cash, cash equivalents, and marketable securities are sufficient to fund operating expenses for at least the next twelve months[104] - Net cash used in operating activities increased to $109.6 million for the first six months of 2023, compared to $87.8 million for the same period in 2022, driven by a higher net loss and changes in operating assets and liabilities[105][106] - Net cash provided by investing activities was $159.4 million for the first six months of 2023, primarily from the net sale and maturity of marketable securities[107] Item 3. Quantitative and Qualitative Disclosure About Market Risk The company reports that there have been no material changes to its market risks from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 - There were no material changes to the company's market risks from those described in the 2022 Form 10-K[122] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2023, with no changes to internal control over financial reporting during the quarter - Management evaluated disclosure controls and procedures and found them to be effective as of the end of the reporting period[123][124] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[125] PART II – OTHER INFORMATION This section covers legal proceedings, updated risk factors, and other standard disclosures Item 1. Legal Proceedings As of the report date, the company is not currently involved in any material legal proceedings - The company is not currently involved in any material legal proceedings[127] Item 1A. Risk Factors This section updates the company's risk factors, highlighting a new risk factor related to the financial services industry and its potential adverse impacts - A new risk factor has been added concerning adverse developments in the financial services industry, prompted by recent events like the failure of Silicon Valley Bank (SVB)[129] - Potential impacts from financial institution failures include delayed or lost access to deposits, termination of cash management services, and impaired ability to secure financing[131][132] - The instability could also affect customers and suppliers, potentially leading to payment defaults or disruptions that would materially harm the company's business[133] Other Items (Items 2-6) This section covers several standard disclosure items, reporting no activity for most, and listing the index of exhibits filed with the Form 10-Q - The company reported no activity under Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), or Item 5 (Other Information)[134][135][136][137] - Item 6 provides an index of exhibits filed with the report, including required certifications from the CEO and CFO[139]