Blueprint Medicines Corporation (NASDAQ:BPMC) Q4 2020 Results Conference Call February 17, 2021 8:30 AM ET Company Participants Kristin Hodous - Senior Manager, IR Jeff Albers - CEO Christy Rossi - Chief Commercial Officer Fouad Namouni - President, Research and Development Mike Landsittel - CFO Conference Call Participants Marc Frahm - Cowen and Company Dane Leone - Raymond James Charles Zhu - Guggenheim David Lebowitz - Morgan Stanley Peter Lawson - Barclays Arlinda Lee - Canaccord Eun Yang - Jefferies Mi ...

Drug Development and Commercialization - The company has two approved precision therapies, AYVAKIT/AYVAKYT and GAVRETO, with ongoing commercial launches in the U.S. and Europe[314]. - Marketing applications for avapritinib and pralsetinib for additional indications are currently under review or planned in the U.S. and globally[314]. - The company is focused on establishing relationships with healthcare providers and obtaining adequate pricing and reimbursement for its drugs[314]. - The commercial success of AYVAKIT/AYVAKYT and GAVRETO will depend on market acceptance by physicians, patients, and third-party payors[315]. - The company is developing fisogatinib for advanced HCC, which will face competition from immune checkpoint inhibitors and multi-kinase inhibitors[335]. - The company is also developing drug candidates for treatment-resistant EGFR-mutated NSCLC, facing competition from established drugs and other candidates in development[336]. - The company is focused on expanding its pipeline of drug candidates through a novel target discovery engine aimed at identifying kinases that drive diseases in genomically defined patient populations[402]. - The company may pursue opportunities to acquire or in-license additional businesses, technologies, or drugs to complement its existing business[404]. - The company has not generated substantial revenue from drug sales to date, and its ability to do so depends on successful clinical trials and obtaining marketing approvals for drug candidates like avapritinib and pralsetinib[453]. Competition and Market Risks - The company faces substantial competition from major pharmaceutical and biotechnology companies in the development and commercialization of its drugs[330]. - AYVAKIT/AYVAKYT may face competition from drug candidates in development for PDGFRA-driven GIST, including those from various pharmaceutical companies[333]. - Competitors may develop safer and more effective drugs, potentially establishing a strong market position before the company can enter[338]. - The company may face competition from foreign therapies due to price controls in other countries, which could adversely affect future revenues[428]. Regulatory Challenges - Regulatory approvals for drug candidates are critical; delays could materially harm the company's business[368]. - The FDA has granted orphan drug designation to avapritinib for the treatment of GIST and mastocytosis, and to pralsetinib for RET-rearranged NSCLC, JAK1/2-positive NSCLC, or TRKC-positive NSCLC[394]. - The FDA's breakthrough therapy designation has been granted to avapritinib for advanced SM and moderate to severe indolent SM, and to AYVAKIT and GAVRETO for certain patients with GIST and RET-altered cancers, respectively[391]. - Regulatory approval processes for drug candidates are expensive and may take many years, with potential delays due to changes in policies or the need for additional clinical trials[371]. - The FDA may require extensive pre-clinical and clinical data to establish the safety and efficacy of drug candidates, which could lead to delays or rejection of applications[370]. - Undesirable side effects from drug candidates could lead to delays in regulatory approval or limit the commercial profile of approved drugs[383]. - The FDA postponed most inspections of manufacturing facilities due to the COVID-19 pandemic, which could delay the approval process for drug candidates[483]. Financial Performance and Projections - The company has incurred significant operating losses since inception, with an accumulated deficit of $631.4 million as of December 31, 2020[451]. - The company generated $313.9 million in net income for the year ended December 31, 2020, primarily due to collaboration revenue from Roche[451]. - The company anticipates significant increases in research and development expenses due to ongoing and new clinical trials[452]. - The company expects to continue incurring significant operating losses over the next few years, impacting stockholders' equity and working capital[452]. - Significant sales and marketing costs are expected as the company commercializes AYVAKIT/AYVAKYT and GAVRETO, which may impact profitability[454]. - Future capital requirements may increase significantly based on the success of commercialization efforts and market acceptance of AYVAKIT/AYVAKYT and GAVRETO[458]. - The company may seek additional funding to support its operations and drug development programs, which could lead to dilution of stockholder equity[461]. Operational Risks - The company relies on third-party suppliers for manufacturing, which may not meet demand or production requirements[352]. - The company does not own manufacturing facilities and relies on third parties for drug production, which poses risks related to supply and quality[480]. - The company is completely dependent on contract manufacturers for compliance with cGMPs, which could significantly impact the ability to develop and market drug candidates if manufacturers fail to meet specifications or regulatory requirements[481]. - Current reliance on single-source suppliers for API and drug products poses a risk; any disruption could significantly affect the supply chain and financial condition[490]. - The company has sufficient supply plans to meet anticipated global commercial and clinical development needs through 2022, but COVID-19 could disrupt these plans[491]. - Disruptions in China, where some manufacturing and clinical trials occur, could materially affect the company's operations and drug development[494]. Legal and Compliance Issues - Product liability lawsuits could lead to substantial liabilities and limit the commercialization of approved drugs[339]. - Regulatory compliance is critical, as failure to meet requirements could lead to penalties or withdrawal of marketing approvals[409]. - The company is subject to numerous healthcare laws and regulations that could expose it to penalties and affect its operations[431]. - The company may face challenges in maintaining collaborations, which could adversely affect its financial position and market potential for its drugs[471].

Table of Contents _____________________________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 _____________________________ FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-37359 _____________________________ BLUEPRINT MEDICINES CORPORATION (Exact Name of ...

Blueprint Medicines Corporation (NASDAQ:BPMC) Q3 2020 Earnings Conference Call October 29, 2020 8:30 AM ET Company Participants Kristin Hodous - Senior Manager, IR Jeff Albers - CEO Christy Rossi - COO Mike Landsittel - CFO Conference Call Participants Marc Frahm - Cowen and Company Reni Benjamin - JMP Securities Andrew Berens - SVB Leerink Peter Lawson - Barclays David Lebowitz - Morgan Stanley Nicole Gabreski - Piper Sandler Dane Leone - Raymond James Arlinda Lee - Canaccord Genuity Inc Michael Schmidt - ...

```markdown PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2020, along with notes detailing significant transactions and subsequent events [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $288,678 | $113,938 | | Total current assets | $568,312 | $516,786 | | **Total assets** | **$817,457** | **$707,694** | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $105,086 | $106,482 | | **Total liabilities** | **$236,090** | **$243,335** | | **Total stockholders' equity** | **$581,367** | **$464,359** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Product revenue, net | $5,680 | $— | $9,138 | $— | | Collaboration revenue | $2,663 | $5,110 | $5,372 | $5,840 | | **Total revenues** | **$8,343** | **$5,110** | **$14,510** | **$5,840** | | Research and development | $91,079 | $87,101 | $175,225 | $161,351 | | Selling, general and administrative | $42,174 | $21,923 | $77,829 | $38,476 | | **Net loss** | **$(123,474)** | **$(99,681)** | **$(234,428)** | **$(187,088)** | | **Net loss per share** | **$(2.28)** | **$(2.04)** | **$(4.39)** | **$(4.03)** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(210,492) | $(161,416) | | Net cash provided by (used in) investing activities | $71,421 | $(158,739) | | Net cash provided by financing activities | $313,325 | $334,309 | | **Net increase in cash, cash equivalents, and restricted cash** | **$174,254** | **$14,154** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company's first commercial product, **AYVAKIT™ (avapritinib)**, was approved by the FDA for the treatment of adults with unresectable or metastatic GIST harboring a PDGFRA exon 18 mutation[34](index=34&type=chunk) - As of June 30, 2020, the company had **$650.3 million** in cash, cash equivalents, and investments, which management believes is sufficient to fund operations for at least the next twelve months[35](index=35&type=chunk) Product Revenue from AYVAKIT (in thousands) | Period | Net Product Revenue | | :--- | :--- | | Three months ended June 30, 2020 | $5,700 | | Six months ended June 30, 2020 | $9,100 | - Subsequent to the quarter end, in July 2020, the company entered into a major collaboration with Roche for pralsetinib, receiving an upfront cash payment of **$675.0 million**. Roche also made a related equity investment of approximately **$94.0 million**[138](index=138&type=chunk)[139](index=139&type=chunk)[143](index=143&type=chunk) - In July 2020, the company received a **$20.0 million** cash milestone payment under its license agreement with Clementia[146](index=146&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's business strategy, clinical pipeline progress, and financial performance, emphasizing the commercial launch of AYVAKIT, regulatory advancements, increased revenues, rising operating expenses, and enhanced liquidity [Overview](index=43&type=section&id=Overview) - The company is advancing multiple investigational medicines, including avapritinib for systemic mastocytosis (SM), with plans to submit a supplemental NDA in **Q4 2020**[149](index=149&type=chunk)[152](index=152&type=chunk) - For pralsetinib, an NDA for RET fusion-positive NSCLC was accepted by the FDA with a PDUFA action date of **November 23, 2020**. A separate NDA was submitted for RET-mutant MTC and RET fusion-positive thyroid cancers[158](index=158&type=chunk) - In July 2020, the company entered into a collaboration with Roche to co-develop and co-commercialize pralsetinib in the U.S. and for Roche to commercialize it exclusively outside the U.S. (excluding Greater China)[172](index=172&type=chunk) - The company acknowledges potential temporary delays or disruptions to clinical trials due to the COVID-19 pandemic but states it has sufficient supply to meet anticipated global commercial and clinical needs through **2021**[177](index=177&type=chunk) [Results of Operations](index=63&type=section&id=Results%20of%20Operations) Comparison of Three Months Ended June 30, 2020 and 2019 (in thousands) | Account | Q2 2020 | Q2 2019 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $8,343 | $5,110 | $3,233 | 63% | | Research and development | $91,079 | $87,101 | $3,978 | 5% | | Selling, general and administrative | $42,174 | $21,923 | $20,251 | 92% | | **Net loss** | **$(123,474)** | **$(99,681)** | **$(23,793)** | **24%** | - The increase in total revenues for Q2 2020 was driven by **$5.7 million** in net product revenue from the launch of AYVAKIT[225](index=225&type=chunk) - The **92% increase** in SG&A expense for Q2 2020 was primarily due to building the commercial infrastructure for AYVAKIT and preparing for the potential commercialization of pralsetinib[231](index=231&type=chunk) [Liquidity and Capital Resources](index=67&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2020, the company had cash, cash equivalents, and investments of **$650.3 million**[248](index=248&type=chunk) - In July 2020, the company's cash position was significantly enhanced by receiving **$769.0 million** from its pralsetinib collaboration with Roche and a **$20.0 million** milestone payment from Clementia[247](index=247&type=chunk) - Management anticipates that existing cash, combined with the Roche upfront payments and future product revenues, will be sufficient to achieve a self-sustainable financial profile[253](index=253&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures are interest rate sensitivity on its cash and investment portfolio and foreign currency exchange rate fluctuations. Management believes a 10% change in interest rates would not materially affect the portfolio's fair value. The company does not currently hedge its foreign currency risk - The company's primary market risk is interest rate sensitivity related to its **$650.3 million** in cash, cash equivalents, and investments as of June 30, 2020[266](index=266&type=chunk) - Due to the short-term duration and low-risk profile of its investments, the company believes an immediate **10% change** in interest rates would not have a material effect on the portfolio's fair market value[267](index=267&type=chunk) [Item 4. Controls and Procedures](index=75&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of June 30, 2020, the company's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective. There were no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of **June 30, 2020**[272](index=272&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[273](index=273&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=76&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any material legal proceedings - As of the filing date, the company is not a party to any material legal proceedings[276](index=276&type=chunk) [Item 1A. Risk Factors](index=76&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant business risks, including historical operating losses, the impact of the COVID-19 pandemic, capital needs, drug development uncertainties, commercialization challenges, and reliance on third-party operations - The company has a limited operating history and has incurred significant operating losses since inception, with a net loss of **$234.4 million** for the six months ended June 30, 2020[278](index=278&type=chunk)[281](index=281&type=chunk) - The COVID-19 pandemic poses a risk to business operations, including potential delays or disruptions to clinical trials, supply chains, and commercial activities[287](index=287&type=chunk)[289](index=289&type=chunk) - The company faces substantial competition. For pralsetinib, it will compete with Eli Lilly's selpercatinib, which was approved by the FDA in **May 2020** for similar indications[393](index=393&type=chunk) - The company relies on single-source third-party suppliers for the API, drug substance, and drug product of avapritinib and pralsetinib, which poses a significant risk to supply continuity[476](index=476&type=chunk)[477](index=477&type=chunk) [Item 5. Other Information](index=166&type=section&id=Item%205.%20Other%20Information) This section discloses a key corporate action taken after the quarter's end. On July 30, 2020, the company established an "at-the-market" (ATM) offering agreement with Cowen and Company, LLC, enabling it to sell up to $250.0 million of its common stock - On **July 30, 2020**, the company entered into a sales agreement with Cowen and Company, LLC, for an "at-the-market" offering, allowing it to sell up to **$250.0 million** of its common stock from time to time[588](index=588&type=chunk) [Item 6. Exhibits](index=168&type=section&id=Item%206.%20Exhibits) This section provides an index of the exhibits filed with the Form 10-Q. Notable exhibits include the sales agreement for the at-the-market offering, the collaboration agreement with Roche, and certifications by the Principal Executive Officer and Principal Financial Officer - Key exhibits filed with this report include the Sales Agreement with Cowen and the Collaboration Agreement with F. Hoffmann-La Roche Ltd and Genentech, Inc[595](index=595&type=chunk) ```

Financial Data and Key Metrics Changes - Blueprint Medicines reported $5.7 million in net sales for AYVAKIT in Q2 2020, totaling $9.1 million since its launch, indicating strong execution against launch strategies [20][27] - Total operating expenses increased slightly compared to the prior quarter, driven by rising stock-based compensation expenses [28] - The company holds over $1.4 billion in cash, positioning it in the strongest financial state in its history [29] Business Line Data and Key Metrics Changes - AYVAKIT's launch for treating PDGFRA alpha exon 18 mutant GIST has been successful, with broad access and high refill rates, suggesting real-world duration may exceed clinical study results [21][22] - The systemic mastocytosis program is highlighted as the largest opportunity in the clinical stage portfolio, with significant medical need and a differentiated approach [12][13] Market Data and Key Metrics Changes - The company received a positive CHMP opinion for avapritinib for treating PDGFRA alpha D842V mutant GIST, setting the stage for a marketing authorization decision by the end of Q3 2020 [10][11] - The anticipated launch of pralsetinib in the U.S. and avapritinib in Europe is expected to enhance the company's market presence [19] Company Strategy and Development Direction - The company aims to establish a commercial foundation with AYVAKIT, prioritize systemic mastocytosis, and leverage its discovery platform for future pipeline opportunities [8][9] - The collaboration with Roche is expected to stabilize expenses while allowing for increased R&D investment in systemic mastocytosis and discovery portfolio [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for systemic mastocytosis treatments and the ongoing enrollment of patients despite the pandemic [46][47] - The company is focused on building a best-in-class commercial organization to deliver multiple precision therapies to patients [25][84] Other Important Information - The company plans to report top-line data from the EXPLORER and PATHFINDER trials of avapritinib in advanced systemic mastocytosis later in the quarter [14] - The company is on track to nominate up to three new development candidates by the end of the year, with BLU-945 being the first [17][82] Q&A Session Summary Question: Timing for patient screening enrollment for Part 2 of the PIONEER study - Management indicated that enthusiasm from sites is high, but specific timing for readouts has not been guided due to variability in site operations during COVID [33] Question: Cadence of hiring for AYVAKIT launch in the U.S. and EU - The U.S. team is already in place and focused on launching pralsetinib, while a small team in Europe is prepared for the initial AYVAKIT launch [34][35] Question: Feedback from physicians on CR rates and safety profiles - Management noted encouraging feedback regarding deep and durable responses, with a predictable safety profile being a significant factor for physician comfort [39][41] Question: Status of the advanced SM pivotal data set - Management confirmed that the data set shows high response rates and that they are blending data from multiple trials for regulatory submission [66][70] Question: Patient demographics receiving AYVAKIT - Management indicated that patients are a mix of those treated in frontline settings and those receiving standard-of-care before AYVAKIT [75] Question: Update on BLU-263 - The first human health volunteer study for BLU-263 has started and is progressing as expected [55]

Blueprint Medicines Corporation (NASDAQ:BPMC) Q1 2020 Earnings Conference Call May 6, 2020 8:30 AM ET Company Participants Kristin Hodous - Senior Manager, IR Jeff Albers - CEO Christy Rossi - Chief Commercial Officer Mike Landsittel - CFO Andy Boral - Chief Medical Officer Conference Call Participants Dane Leone - Raymond James Joseph Thome - Cowen and Company Konstantinos Aprilakis - Deutsche Bank Reni Benjamin - JMP Securities Eun Yang - Jefferies Peter Lawson - Barclays Operator Ladies and gentlemen, th ...

[PART I – FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for the quarter ended March 31, 2020, show the company's financial position, results of operations, changes in stockholders' equity, and cash flows [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2020, total assets increased to $913.6 million from $707.7 million, primarily due to a public offering, while total liabilities slightly decreased and stockholders' equity grew Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $375,168 | $113,938 | | Total current assets | $704,683 | $516,786 | | **Total assets** | **$913,623** | **$707,694** | | **Liabilities & Equity** | | | | Total current liabilities | $98,288 | $106,482 | | **Total liabilities** | **$230,692** | **$243,335** | | **Total stockholders' equity** | **$682,931** | **$464,359** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended March 31, 2020, total revenues reached $6.2 million, including the first product revenue from AYVAKIT, while net loss increased to $111.0 million due to higher operating expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Product revenue, net | $3,458 | $— | | Collaboration revenue | $2,709 | $730 | | **Total revenues** | **$6,167** | **$730** | | Research and development | $84,146 | $74,250 | | Selling, general and administrative | $35,655 | $16,553 | | **Total cost and operating expenses** | **$119,825** | **$90,803** | | **Net loss** | **$(110,955)** | **$(87,407)** | | **Net loss per share** | **$(2.11)** | **$(1.98)** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first three months of 2020, net cash used in operating activities was $109.3 million, offset by $310.2 million from financing activities, resulting in a $260.7 million net increase in cash Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(109,328) | $(80,188) | | Net cash provided by investing activities | $59,860 | $89,314 | | Net cash provided by financing activities | $310,150 | $2,011 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business, accounting policies, and financial statement components, highlighting the FDA approval of AYVAKIT, a $308.4 million follow-on offering, and sufficient capital for the next twelve months - On January 9, 2020, the company's product AYVAKIT™ (avapritinib) was approved by the FDA for treating adults with unresectable or metastatic GIST harboring a PDGFRA exon 18 mutation[30](index=30&type=chunk) - In January 2020, the company closed a follow-on public offering, receiving net proceeds of **$308.4 million**[32](index=32&type=chunk) - As of March 31, 2020, the company had cash, cash equivalents, and investments of **$750.4 million**, which is believed to be sufficient to fund operations for at least the next twelve months[33](index=33&type=chunk) - Total net product revenue for AYVAKIT was **$3.5 million** for the three months ended March 31, 2020, with associated reserves for chargebacks, rebates, and returns totaling **$0.5 million**[72](index=72&type=chunk) - Under the CStone agreement, the company recognized **$2.0 million** in license milestone revenue during the three months ended March 31, 2020[101](index=101&type=chunk)[102](index=102&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's business overview, recent developments, financial results, and liquidity, highlighting AYVAKIT's launch, clinical program progress, and sufficient capital into H2 2022 [Overview](index=44&type=section&id=Overview) The company is a precision therapy company with one FDA-approved product, AYVAKIT, and active development programs for avapritinib, pralsetinib, and fisogatinib, while noting potential COVID-19 impacts - AYVAKIT (avapritinib) was approved by the FDA in January 2020 for adults with unresectable or metastatic GIST with a PDGFRA exon 18 mutation[162](index=162&type=chunk) - The company plans to submit a supplemental NDA to the FDA for avapritinib for advanced systemic mastocytosis (SM) in the second half of 2020[150](index=150&type=chunk) - Completed the submission of a rolling NDA to the FDA for pralsetinib for RET fusion-positive NSCLC in Q1 2020 and submitted an MAA to the EMA[157](index=157&type=chunk) - The Phase 3 VOYAGER trial for avapritinib in third-line GIST did not meet its primary endpoint, leading the company to discontinue development for GIST indications beyond PDGFRA exon 18 mutant GIST[163](index=163&type=chunk) [Results of Operations](index=62&type=section&id=Results%20of%20Operations) For Q1 2020, total revenues increased to $6.2 million due to AYVAKIT sales and a CStone milestone, while R&D and SG&A expenses rose, resulting in a net loss of $111.0 million Comparison of Operations (in thousands) | Item | Q1 2020 | Q1 2019 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $6,167 | $730 | $5,437 | 745% | | Research and development | $84,146 | $74,250 | $9,896 | 13% | | Selling, general and administrative | $35,655 | $16,553 | $19,102 | 115% | | Net loss | $(110,955) | $(87,407) | $(23,548) | 27% | - The increase in R&D expense was primarily due to a **$6.9 million** increase in personnel expense and a **$3.7 million** increase in external clinical activities for pralsetinib[223](index=223&type=chunk) - The increase in SG&A expense was mainly due to increased costs and personnel expenses associated with building the commercial infrastructure for AYVAKIT[225](index=225&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2020, the company held $750.4 million in cash and investments, bolstered by a January 2020 public offering, and expects sufficient capital to fund operations into the second half of 2022 - As of March 31, 2020, the company had cash, cash equivalents and investments of **$750.4 million**[233](index=233&type=chunk) - Net cash provided by financing activities increased by **$308.1 million** in Q1 2020 compared to Q1 2019, primarily due to the January 2020 follow-on public offering[236](index=236&type=chunk) - The company believes its existing cash, cash equivalents, and investments will be sufficient to fund operations into the second half of 2022[238](index=238&type=chunk) - As of March 31, 2020, the company has minimum purchase obligations of approximately **$16.2 million** under commercial manufacturing agreements[248](index=248&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate sensitivity and foreign currency exchange rates, with minimal material effect expected from a 10% interest rate change due to its short-term investment portfolio - The company's primary market risk is interest rate sensitivity on its **$750.4 million** portfolio of cash, cash equivalents, and investments[251](index=251&type=chunk) - Due to the short-term nature of its investments, a **10% change** in interest rates is not expected to have a material effect on the portfolio's fair market value[252](index=252&type=chunk) - The company has exposure to foreign currency exchange rate risk from contracts with vendors in Asia and Europe, but this risk is currently considered minimal[253](index=253&type=chunk) [Controls and Procedures](index=69&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2020, with no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that as of March 31, 2020, the company's disclosure controls and procedures were effective at the reasonable assurance level[258](index=258&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[259](index=259&type=chunk) [PART II – OTHER INFORMATION](index=72&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section covers legal proceedings, key risk factors, and other significant corporate information [Legal Proceedings](index=72&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any material legal proceedings - The company is not currently a party to any material legal proceedings[262](index=262&type=chunk) [Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks that could adversely affect the company's business, including operating losses, COVID-19 impacts, drug development challenges, commercialization difficulties, reliance on third parties, intellectual property issues, and competition - The company has a history of significant operating losses (**$111.0 million** for Q1 2020) and expects to incur continued losses, requiring additional funding to sustain operations[264](index=264&type=chunk)[267](index=267&type=chunk)[272](index=272&type=chunk) - The COVID-19 pandemic poses a significant risk, with potential to delay clinical trials, disrupt supply chains, and adversely impact commercial activities[285](index=285&type=chunk)[286](index=286&type=chunk)[289](index=289&type=chunk) - Clinical drug development is a lengthy, expensive, and uncertain process. The recent failure of the Phase 3 VOYAGER trial to meet its primary endpoint is cited as an example of this risk[298](index=298&type=chunk)[299](index=299&type=chunk) - The company relies on single-source third-party suppliers for the manufacture of AYVAKIT and its clinical-stage candidates, which increases the risk of supply disruptions[376](index=376&type=chunk)[461](index=461&type=chunk)[469](index=469&type=chunk) - The company faces substantial competition from major pharmaceutical and biotechnology companies with greater financial resources and expertise[381](index=381&type=chunk)[382](index=382&type=chunk)[387](index=387&type=chunk) [Other Information](index=165&type=section&id=Item%205.%20Other%20Information) On April 30, 2020, the company amended its collaboration agreement with Roche and its bylaws to establish exclusive forum provisions for certain legal claims - On April 30, 2020, the company entered into an eighth amendment to its collaboration and license agreement with Roche[582](index=582&type=chunk) - On April 30, 2020, the company's board of directors amended its bylaws to designate exclusive forums for certain legal actions to be the Court of Chancery of the State of Delaware and the United States District Court for the District of Massachusetts[584](index=584&type=chunk) [Exhibits](index=166&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amended bylaws, the Roche collaboration agreement amendment, and officer certifications - Key exhibits filed include the Amended and Restated Bylaws, the Eighth Amendment to the Collaboration and License Agreement with Roche, and officer certifications[588](index=588&type=chunk) [Signatures](index=167&type=section&id=Signatures) The report is duly signed and authorized by Jeffrey W. Albers, President and Chief Executive Officer, and Michael Landsittel, Chief Financial Officer, on May 6, 2020 - The Form 10-Q was signed on May 6, 2020, by Jeffrey W. Albers (Principal Executive Officer) and Michael Landsittel (Principal Financial Officer)[598](index=598&type=chunk)[599](index=599&type=chunk)[600](index=600&type=chunk)

Financial Performance - Collaboration revenue for 2019 was $66,512,000, an increase from $44,521,000 in 2018, representing a growth of 49%[639] - Total operating expenses for 2019 were $427,838,000, up from $291,549,000 in 2018, indicating a rise of 47%[639] - Net loss applicable to common stockholders for 2019 was $(347,694,000), compared to $(236,642,000) in 2018, reflecting an increase in losses of 47%[639] - Cash and cash equivalents as of December 31, 2019, were $113,938,000, compared to $68,064,000 in 2018, showing a growth of 67%[639] - Total assets as of December 31, 2019, were $707,694,000, an increase from $540,124,000 in 2018, representing a growth of 31%[639] - The company reported net losses of $347.6 million, $236.6 million, and $148.1 million for the years ended December 31, 2019, 2018, and 2017, respectively, with an accumulated deficit of $945.2 million as of December 31, 2019[670] - Net loss for the year ended December 31, 2019, was $347.7 million, an increase of $111.1 million or 47% from a net loss of $236.6 million in 2018[725] - Total operating expenses increased by $136.3 million from $291.5 million in 2018 to $427.8 million in 2019, reflecting a 47% increase[725] Research and Development - The company is advancing multiple investigational medicines in clinical development, including avapritinib for systemic mastocytosis and pralsetinib for RET-altered cancers[644] - The FDA granted breakthrough therapy designation to avapritinib for the treatment of advanced systemic mastocytosis, indicating significant potential for the drug[647] - The company plans to submit a supplemental new drug application for avapritinib in the second half of 2020, focusing on data from ongoing clinical trials[647] - Pralsetinib is currently in a Phase 1/2 clinical trial for RET-altered non-small cell lung cancer, with top-line data expected to be reported in 2020[651] - The FDA has granted orphan drug designation to pralsetinib for RET-rearranged non-small cell lung cancer, highlighting its importance in treating rare cancers[653] - Avapritinib is being developed for third-line and later GIST, with a Phase 3 VOYAGER trial currently ongoing, and top-line data expected to be submitted to the FDA by early Q2 2020[657] - The FDA has granted breakthrough therapy designation and orphan drug designation to avapritinib for treating unresectable or metastatic GIST with the PDGFRA D842V mutation[659] - Fisogatinib is under development for advanced hepatocellular carcinoma (HCC) and is currently in a Phase 1 clinical trial, with collaboration ongoing with CStone Pharmaceuticals[660] - The company plans to nominate up to two additional development candidates by the end of 2020, expanding its pipeline of drug candidates targeting resistant EGFR-positive NSCLC[661] - Research and development expenses are anticipated to increase significantly as the company advances its clinical development activities for avapritinib, pralsetinib, fisogatinib, and BLU-263[670] Expenses and Costs - Total research and development expenses increased to $331,450,000 in 2019 from $243,621,000 in 2018, representing a 36% increase[684] - Avapritinib external expenses were $98,146,000 in 2019, up from $83,417,000 in 2018, a 17% increase[684] - Pralsetinib external expenses rose to $78,689,000 in 2019, compared to $44,099,000 in 2018, marking a 78% increase[684] - Internal research and development expenses increased to $75,406,000 in 2019 from $49,230,000 in 2018, a 53% increase[684] - General and administrative expenses are expected to rise to support additional research and commercialization activities, including hiring and compliance costs[686] - Future research and development expenses are anticipated to increase due to expanded clinical trials and regulatory filings[684] - The company is expanding its operations in the U.S. and internationally, which will contribute to increased general and administrative expenses[686] - The company has incurred additional costs associated with operating as a public company and expanding its operational scope[686] - The company expects to incur costs related to collaborations with Roche and CStone, as well as for companion diagnostic tests[684] Revenue and Financing - Revenue generation is expected from the sales of AYVAKIT, which was approved by the FDA in January 2020 for treating adults with unresectable or metastatic GIST harboring a PDGFRA exon 18 mutation[674] - As of December 31, 2019, the company has raised an aggregate of $1.5 billion through various financing methods, including $1.2 billion from public offerings[669] - Collaboration revenue increased by $22.0 million from $44.5 million in 2018 to $66.5 million in 2019, primarily due to agreements with CStone, Roche, and Clementia[726] - The company recorded $46.2 million in revenue under the Clementia license agreement in 2019, including a $25.0 million upfront payment[726] - Interest income increased by $3.2 million from $10.6 million in 2018 to $13.7 million in 2019, attributed to higher average investment balances and returns[731] - Net cash provided by financing activities increased by $336.2 million in 2019, primarily due to a $327.5 million increase in net proceeds from the April 2019 follow-on public offering[752] Cash and Investments - As of December 31, 2019, the company had cash, cash equivalents, and investments totaling $548.0 million, with an additional $308.2 million in estimated net proceeds from a January 2020 follow-on public offering[744][757] - Net cash used in operating activities for the year ended December 31, 2019, was $(278.0) million, an increase of $103.0 million compared to $(175.0) million in 2018[748] - The company has no outstanding principal and interest under its loan and security agreement as of December 31, 2019[754] - As of December 31, 2019, the company had cash, cash equivalents, and investments totaling $548.0 million, an increase from $494.0 million in 2018[769] Market Risks - The company’s primary market risk exposure is interest rate sensitivity, with a belief that a 10% change in interest rates would not materially affect the fair market value of its investment portfolio[770] - The company is exposed to foreign currency exchange rate risk due to contracts with vendors in Asia and Europe, but currently does not hedge these risks[771] - As of December 31, 2019, the company had total operating lease obligations of $137.6 million, with $11.9 million due within one year[771] - Inflation has generally increased costs related to labor, clinical trials, and manufacturing, but it did not have a material effect on the company’s financial condition or results of operations in 2019 and 2018[773]

Financial Data and Key Metrics Changes - The company ended 2019 with $548 million in cash and closed a public offering in January 2020, resulting in net proceeds of approximately $308 million, providing sufficient capital to fund operations into the second half of 2022 [32][33] - Collaboration revenues increased in Q4 to $66.5 million, primarily due to a license agreement with Clementia Pharmaceuticals, including a $25 million upfront payment and an additional $20 million payment due in Q3 2020 [33] - Total operating expenses increased in Q4 2019 compared to the prior quarter due to investments in global commercial infrastructure and acceleration of clinical development activities [34] Business Line Data and Key Metrics Changes - The company highlighted the initial launch of AYVAKIT for PDGFRalpha Exon 18 mutant GIST, with strong initial reception from healthcare providers and payers [21][26] - AYVAKIT is the first precision medicine for GIST and the only effective treatment for patients with PDGFRalpha mutation, with a well-prepared commercial launch strategy [8][25] - The company plans to continue avapritinib towards regulatory filings for advanced systemic mastocytosis in the second half of 2020 and indolent SM in 2021 [10][12] Market Data and Key Metrics Changes - The company is focusing on systemic mastocytosis and other KIT-driven mass cell disorders, with a potential patient population of up to 75,000 in major markets [9] - AYVAKIT has been added to the NCCN clinical practice guidelines for soft tissue sarcoma, indicating broad consensus for its use in treatment [28] Company Strategy and Development Direction - The company aims to create substantial therapeutic value through the commercialization of avapritinib and pralsetinib, with potential commercial launches occurring as frequently as once per quarter over the next year and a half [13] - The company is strengthening its early-stage research pipeline, with plans to nominate up to three new development candidates in 2020 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the strong topline data from the Phase 1/2 ARROW trial of pralsetinib in patients with RET fusion-positive non-small cell lung cancer, indicating a sense of urgency to deliver pralsetinib to patients quickly [14][19] - The company anticipates a decision from the FDA on the NDA for avapritinib for fourth-line GIST in the second quarter, with a PDUFA date extension allowing for additional data submission [20][90] Other Important Information - The company is initiating a Phase 1 healthy volunteer trial for BLU-263, a next-generation KIT inhibitor, aiming to reach more patients with indolent SM and other KIT-driven disorders [11] - The company is focused on ensuring that PDGFRalpha mutations are reflex tested every time KIT is negative, aiming to improve diagnostic testing and treatment outcomes [78] Q&A Session Summary Question: Insights on AAAAI meeting data and AYVAKIT launch feedback - Management indicated that the purpose of Part 1 of the PIONEER study is to guide registration enabling Part 2, focusing on dose selection and sample size [38] - Initial feedback from prescribing physicians on AYVAKIT has been positive, with excitement about having an effective treatment available for the first time in years [41] Question: Update on BLU-263 study and pralsetinib filing - The healthy volunteer study for BLU-263 is set to start this year, with no specific timing provided yet [45] - The rolling submission for pralsetinib in RET-driven non-small cell lung cancer is on track to be completed this quarter [52] Question: Clarification on VOYAGER study and FDA review - The FDA is looking for topline results from the VOYAGER study, which includes a mix of third and fourth-line patients, primarily focusing on PFS assessment [90] Question: Discussion on avapritinib and accelerated approval scenarios - Management clarified that multiple accelerated approvals can occur simultaneously, and this should not affect the approval process for avapritinib [96]