BridgeBio Pharma, Inc. — FY2021 Form 10-K Summary
Business context and reporting period
BridgeBio is a biotechnology company focused on developing medicines for genetically driven diseases and cancers. Its portfolio included more than 30 development programs, two approved therapies, and more than 20 ongoing clinical trials across multiple therapeutic areas. This Form 10-K covers the fiscal year ended December 31, 2021; the filing does not present a separate fourth-quarter income statement summary.
Approved products were NULIBRY (fosdenopterin) for MoCD Type A and TRUSELTIQ (infigratinib) for previously treated, unresectable or metastatic cholangiocarcinoma with specified FGFR2 alterations. Key clinical programs included acoramidis, encaleret, low-dose infigratinib, BBP-631, BBP-418, BBP-398 and other oncology, rare-disease and gene-therapy candidates.
Key financial metrics
| Metric | FY2021 | FY2020 | Change |
|---|---|---|---|
| Total revenue | $69.7 million | $8.2 million | +$61.5 million |
| License revenue | $65.9 million | $8.2 million | +$57.7 million |
| Product sales | $3.8 million | — | +$3.8 million |
| Research and development expense | $451.0 million | $337.0 million | +$114.0 million |
| Selling, general and administrative expense | $192.2 million | $145.7 million | +$46.5 million |
| Loss from operations | $(576.6) million | $(474.5) million | $(102.2) million |
| Net loss | $(586.5) million | $(505.5) million | $(81.0) million |
| Net loss attributable to BridgeBio common stockholders | $(562.5) million | $(448.7) million | $(113.8) million |
| Basic and diluted loss per share | $(3.90) | $(3.80) | $(0.10) |
| Net cash used in operating activities | $(497.9) million | $(399.7) million | $(98.2) million |
| Cash, cash equivalents and marketable securities | $787.5 million | $607.1 million | +$180.4 million |
| Investment in equity securities | $49.1 million | — | +$49.1 million |
Operating margin was approximately negative 826% in 2021 versus approximately negative 5,752% in 2020, reflecting the increase in revenue but substantially higher development and commercial costs. Gross margin was approximately 15% on reported product sales before considering license revenue; the filing does not present a consolidated gross margin measure that includes all revenue categories.
Operating cash burn increased as the company expanded clinical development, manufacturing and commercial-launch activities. Net cash provided by financing activities was $736.4 million, primarily from the 2029 convertible notes and term-loan proceeds, partially offset by share repurchases, debt repayments and capped-call purchases.
Liquidity, debt and capital structure
- Year-end cash, cash equivalents and marketable securities were $787.5 million, with an additional $49.1 million of equity securities available as a potential liquidity source.
- Working capital was $753.8 million. Management stated that available cash, marketable securities and equity securities were expected to fund operations for at least the next 12 months from the filing date, based on current plans.
- Total consolidated indebtedness was approximately $1.7 billion, consisting principally of $747.5 million principal amount of 2.25% convertible senior notes due 2029, $550.0 million of 2.50% convertible senior notes due 2027, and $450.0 million drawn under a secured term-loan facility.
- The term-loan facility permits an additional $300.0 million tranche through December 31, 2022, subject to specified clinical milestones. It carries a fixed interest rate of 9.0%, of which 3.0% may be paid in kind.
- The term-loan facility is secured by substantially all assets of BridgeBio and certain guarantor subsidiaries and includes restrictions on additional debt, asset dispositions, liens, dividends, investments and other transactions.
- BridgeBio repurchased approximately $150.0 million of common stock under its 2021 share-repurchase program and repurchased approximately $200.0 million of common stock in total during 2021, including transactions associated with the 2029 notes.
Material changes versus the prior comparable period
- Revenue increased primarily because of $56.0 million recognized from the QED-Helsinn infigratinib collaboration and $8.5 million of regulatory milestone revenue from LianBio. Product sales began with TRUSELTIQ commercialization.
- R&D expense rose 34% to $451.0 million, driven by higher personnel, stock-based compensation, clinical development and manufacturing costs. Helsinn reimbursed or shared $38.4 million of specified infigratinib R&D costs.
- SG&A increased 32% to $192.2 million due to organizational growth and commercial-launch readiness. Helsinn’s share of a $8.9 million TRUSELTIQ co-commercialization loss reduced reported SG&A.
- BridgeBio completed the Eidos merger in January 2021, acquiring the remaining Eidos shares through $21.3 million of cash and approximately 26.2 million BridgeBio shares. The transaction increased ownership of Eidos but reduced equity through transaction accounting and costs.
- BridgeBio issued the 2029 convertible notes, entered into the $750.0 million term-loan facility, prepaid prior Hercules and Silicon Valley Bank-related borrowings, and increased interest expense to $46.8 million from $36.7 million.
- Acquisition of remaining Eidos interests, debt financing and stock repurchases materially changed the capital structure. Total BridgeBio stockholders’ equity declined to a deficit of $870.4 million at year-end, compared with positive equity of $57.9 million at year-end 2020.
- Investment-related results included a $68.5 million gain when the LianBio investment converted from equity-method accounting to fair-value accounting, partially offset by $37.7 million of subsequent unrealized losses.
Clinical, commercial and management outlook
- Acoramidis’ Phase 3 ATTRibute-CM Part A did not meet its Month 12 primary endpoint. The reported p-value was 0.76, and mean six-minute walking-distance declines were 9 meters for acoramidis and 7 meters for placebo. Management stated that Part B would continue to the 30-month mortality and cardiovascular-hospitalization endpoint, with top-line data anticipated in mid-2023.
- Management reported favorable changes on certain secondary or exploratory acoramidis measures, including KCCQ-OS, NT-proBNP and serum TTR, but continued follow-up was required to determine clinical benefit.
- Encaleret Phase 2b data in 13 participants showed normalization of mean blood calcium and 24-hour urine calcium, increased PTH and decreased phosphate over the short treatment periods. Complete results were anticipated in 2022, with a Phase 3 study planned for 2022.
- Initial data from low-dose infigratinib in pediatric achondroplasia were anticipated in the second half of 2022. The company also planned additional studies for BBP-418, BBP-631, BBP-812, BBP-398 and other programs.
- TRUSELTIQ received FDA approval in May 2021, conditional approval in Canada in September 2021 and provisional Australian registration in November 2021. An EMA application was under review at year-end.
- Beginning in January 2022, Helsinn became the principal selling party for remaining transitional TRUSELTIQ supply; BridgeBio expected to continue sharing profits and losses under the collaboration agreement.
- Management expected continuing operating and net losses for the next several years and stated that additional financing could be required earlier than anticipated if operating plans or forecasts changed.
Principal risks, contingencies and unusual items
- The company remains loss-making, has an accumulated deficit of approximately $1.4 billion and has not generated significant product revenue relative to operating needs.
- Clinical and regulatory risk is substantial, including the failed Month 12 acoramidis endpoint, uncertain later-stage trial outcomes, patient-enrollment challenges, possible clinical holds and changing regulatory requirements.
- COVID-19 caused or could cause delays in clinical enrollment, site operations, regulatory inspections, manufacturing and supply chains.
- BridgeBio relies heavily on third-party CROs and CMOs and does not own manufacturing facilities. Manufacturing failures, quality issues, supply interruptions or limited single-source capacity could delay development or commercialization.
- The secured term loan creates significant fixed payment obligations, restrictive covenants, collateral requirements and potential mandatory prepayments from certain licensing, monetization or asset-disposition proceeds.
- Convertible notes may require cash settlement or repurchase following specified conversion or fundamental-change events and could create dilution if settled in shares.
- Future financing may dilute shareholders, add debt covenants or require licensing or commercialization rights to be relinquished.
- The filing identifies material risks involving intellectual property validity and enforcement, licensed-rights termination, competition, reimbursement, healthcare regulation, data privacy, cybersecurity, key-person dependence and product liability.
- The company reported no material legal proceedings as of the filing date, although it disclosed that litigation associated with the Eidos merger could arise and could be costly.
- Deloitte & Touche issued unqualified opinions on the consolidated financial statements and internal control over financial reporting. Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2021.
Important facts for investors to verify
- Whether the 30-month ATTRibute-CM results support acoramidis approval and commercialization after the failed Month 12 endpoint.
- The timing, terms and milestone conditions for drawing the remaining $300.0 million term-loan tranche and the effect on liquidity and leverage.
- TRUSELTIQ product demand, net sales, reimbursement, commercial losses and the ongoing 50:50 profit-and-loss arrangement with Helsinn.
- Actual cash burn and the period for which unrestricted and subsidiary-held liquidity can fund operations, including restrictions on access to subsidiary cash.
- Debt maturities, covenant compliance, conversion exposure and potential mandatory prepayments under the secured term-loan facility.
- Clinical enrollment, safety and efficacy updates for encaleret, low-dose infigratinib, BBP-631, BBP-398 and other priority programs.
- Potential dilution from convertible notes, equity awards, performance-based milestone awards and future capital raises.
- The magnitude and timing of contingent license, regulatory, sales, royalty and milestone obligations, including obligations to Novartis, Alexion, Stanford and Foundation Medicine.
- The impact of changing drug-pricing, reimbursement, privacy, healthcare and gene-therapy regulations on commercialization prospects.