SpringWorks Therapeutics(SWTX) - 2023 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Financial Statements (Unaudited) Unaudited Q3 2023 financial statements report a $79.4 million net loss, $467.7 million total assets, and $422.4 million liquidity Condensed Consolidated Balance Sheets Total assets decreased to $467.7 million by September 30, 2023, driven by reduced marketable securities, with the accumulated deficit reaching $800.7 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $98,895 | $67,490 | | Marketable securities | $323,524 | $529,516 | | Total current assets | $432,383 | $599,760 | | Total assets | $467,654 | $630,242 | | Liabilities & Equity | | | | Total current liabilities | $50,283 | $51,049 | | Total liabilities | $72,755 | $72,050 | | Accumulated deficit | ($800,712) | ($569,930) | | Total stockholders' equity | $394,899 | $558,192 | Condensed Consolidated Statements of Operations The company reported a Q3 2023 net loss of $79.4 million and a nine-month net loss of $230.8 million, primarily due to increased General and Administrative expenses Statement of Operations Summary (in thousands, except per-share data) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $37,453 | $36,067 | $106,835 | $108,194 | | General and administrative | $46,546 | $35,673 | $137,715 | $94,026 | | Total operating expenses | $83,999 | $71,740 | $244,550 | $202,220 | | Loss from operations | ($83,999) | ($71,740) | ($244,550) | ($202,220) | | Net loss | ($79,437) | ($72,388) | ($230,782) | ($203,239) | | Net loss per share | ($1.27) | ($1.37) | ($3.70) | ($4.04) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $160.1 million for the nine months ended September 30, 2023, offset by $194.0 million from investing activities Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($160,090) | ($107,363) | | Net cash provided by investing activities | $193,959 | $139,413 | | Net cash (used in) provided by financing activities | ($2,432) | $340,404 | | Net increase in cash and cash equivalents | $31,437 | $372,454 | Notes to Condensed Consolidated Financial Statements Notes detail clinical-stage progress, including FDA acceptance of nirogacestat's NDA, confirmed liquidity of $422.4 million, and $69.5 million in YTD stock-based compensation - The FDA accepted the NDA for nirogacestat for desmoid tumors and granted priority review, with an updated PDUFA target action date of November 27, 2023[30] - Management estimates that its cash, cash equivalents, and marketable securities of $422.4 million as of September 30, 2023, are sufficient to fund operating expenses for at least the next twelve months[32] Stock-Based Compensation Expense (in thousands) | Category | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $8,502 | $7,101 | $25,976 | $22,217 | | General and administrative | $14,597 | $11,417 | $43,491 | $31,824 | | Total | $23,099 | $18,518 | $69,467 | $54,041 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses clinical progress for nirogacestat and mirdametinib, increased net loss from G&A expenses, and a strong $422.4 million liquidity position Overview SpringWorks, a clinical-stage biopharmaceutical company, advances nirogacestat (FDA priority review, PDUFA November 27, 2023) and mirdametinib (Phase 2b data Q4 2023) - The FDA accepted the NDA for nirogacestat for adult desmoid tumors and set a PDUFA target action date of November 27, 2023[76] - The company expects to report topline data for the potentially registrational Phase 2b ReNeu trial of mirdametinib in NF1-PN in Q4 2023 and plans to submit an NDA in the first half of 2024 if data is positive[79] - The company nominated a TEAD inhibitor development candidate, SW-682, and plans to file an Investigational NDA in the fourth quarter of 2023[82] Results of Operations Q3 2023 R&D expenses rose 4% to $37.5 million, while G&A expenses increased 30% to $46.5 million, primarily due to commercial readiness activities for nirogacestat Comparison of Operating Expenses (in thousands) | Expense Category | Q3 2023 | Q3 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $37,453 | $36,067 | $1,386 | 4% | | General and administrative | $46,546 | $35,673 | $10,873 | 30% | - The increase in G&A expense was largely attributable to commercial readiness activities for nirogacestat, including a $8.0 million increase in internal employee costs and a $2.8 million increase in consulting services for Q3 2023[97] YTD Comparison of Operating Expenses (in thousands) | Expense Category | YTD 2023 | YTD 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $106,835 | $108,194 | ($1,359) | (1)% | | General and administrative | $137,715 | $94,026 | $43,689 | 46% | Liquidity and Capital Resources The company's accumulated deficit reached $800.7 million, but management confirms sufficient liquidity to fund operations for at least the next twelve months, despite $160.1 million net cash used in operations YTD - As of September 30, 2023, the company had an accumulated deficit of $800.7 million[106] - Management estimates its current liquidity will enable it to meet operating expenses through at least twelve months after the filing date of this report[106] Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($160,090) | ($107,363) | | Net cash provided by investing activities | $193,959 | $139,413 | | Net cash (used in) provided by financing activities | ($2,432) | $340,404 | Quantitative and Qualitative Disclosure About Market Risk No material changes to market risks were reported compared to the 2022 Annual Report on Form 10-K - There were no material changes to the company's market risks from those described in the 2022 Form 10-K[126] Controls and Procedures Management concluded that disclosure controls and procedures were effective, 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 September 30, 2023[127] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[128] PART II. OTHER INFORMATION 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[130] Risk Factors No material changes to risk factors were reported from previous disclosures in the 2022 Form 10-K and Q2 2023 Form 10-Q - There have been no material changes in the company's risk factors from those previously disclosed in its 2022 Form 10-K and Q2 2023 Form 10-Q[131] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities were reported during the period - None[132] Other Information No directors or officers adopted, modified, or terminated Rule 10b5-1 trading plans during Q3 2023 - No directors or officers adopted, modified, or terminated any Rule 10b5-1 trading plans during the covered period[135] Exhibits This section provides an index of exhibits filed with the Form 10-Q, including officer certifications