BridgeBio Pharma, Inc. — 2021 Q1 Form 10-Q Summary
Business context and reporting period
BridgeBio is a clinical-stage biopharmaceutical company developing medicines for genetically driven diseases and cancers. Its pipeline included more than 30 programs ranging from discovery through late-stage development. The filing covers the three months ended March 31, 2021 and was filed May 6, 2021. BridgeBio had no approved products or product-sales revenue and remained dependent on equity, convertible debt, borrowings and licensing transactions.
Key financial metrics
| Metric | Q1 2021 | Q1 2020 |
|---|---|---|
| License revenue | $0.5 million | None |
| Research and development expense | $122.6 million | $68.2 million |
| General and administrative expense | $45.4 million | $34.3 million |
| Loss from operations | $(167.5) million | $(102.5) million |
| Net loss | $(171.1) million | $(104.1) million |
| Net loss attributable to BridgeBio common stockholders | $(163.1) million | $(91.9) million |
| Basic and diluted loss per share | $(1.18) | $(0.78) |
| Net cash used in operating activities | $(150.8) million | $(83.9) million |
Gross margin and operating margin are not meaningful because the company had minimal license revenue and no product sales. Stock-based compensation was $33.6 million in operating cash flow adjustments, including $22.4 million in research and development and $12.4 million in general and administrative expense.
- Cash and cash equivalents were $471.2 million at March 31, 2021.
- Short- and long-term marketable securities totaled $530.1 million, resulting in cash, cash equivalents and marketable securities of $1.001 billion.
- Total cash, cash equivalents and restricted cash at March 31, 2021 was $473.8 million.
- Outstanding debt was reported at $1.365 billion net of discounts, issuance costs and accretion. This included $747.5 million principal of 2029 convertible notes, $550.0 million principal of 2027 convertible notes and approximately $92.5 million of variable-rate term debt.
- Total liabilities were $1.481 billion, compared with $595.7 million at December 31, 2020. Total stockholders’ equity was negative $389.4 million.
Material changes versus the prior comparable period
- Research and development expense increased $54.3 million, or approximately 80%, primarily from increased personnel, external development and manufacturing costs, milestone payments and stock-based compensation. Key program spending included infigratinib of $25.5 million, acoramidis of $21.2 million, BBP-631 of $22.2 million and fosdenopterin of $13.3 million.
- General and administrative expense increased $11.1 million, reflecting organizational growth, commercial launch-readiness activities and accelerated stock-based compensation associated with the Eidos merger.
- Net loss attributable to common stockholders increased $71.2 million, while loss per share increased from $0.78 to $1.18 despite higher weighted-average shares.
- Operating cash use increased $66.8 million to $150.8 million.
- BridgeBio completed the acquisition of the remaining Eidos shares on January 26, 2021 for aggregate consideration of approximately $1.652 billion, consisting of $21.3 million in cash and approximately 26.2 million BridgeBio shares. Eidos became wholly owned.
- BridgeBio issued $747.5 million principal amount of 2.25% convertible senior notes due 2029 and received approximately $731.4 million of net proceeds. It used approximately $61.3 million for capped calls and $50.0 million to repurchase 759,993 shares at $65.79 per share.
- Marketable securities increased substantially because BridgeBio purchased $379.3 million of securities during the quarter, partly offset by $99.2 million of maturities.
- BridgeBio early adopted ASU 2020-06, recording its 2027 Notes wholly as debt and reducing opening accumulated deficit by $14.3 million while removing the previously recorded equity component and deferred tax liability.
- The LEO call option liability of $5.6 million was derecognized after LEO provided notice of termination. The resulting income was included in other income.
Guidance, outlook, commentary, risks and unusual items
- Management expects continued net losses for the next several years as clinical development, discovery and commercial launch-readiness expenses continue. The filing does not provide earnings or revenue guidance.
- Management stated that existing cash, cash equivalents and marketable securities were expected to fund operations for at least the next 12 months based on current plans and forecasts, but additional financing may be required sooner if plans change or COVID-19 adversely affects development activities.
- COVID-19 caused delays or temporary suspensions in clinical-trial enrollment and could delay clinical trials, preclinical experiments and regulatory-enabling studies. Management expected initial data from the Phase 2 infigratinib achondroplasia study by the end of 2021.
- On March 29, 2021, QED entered into a collaboration with Helsinn for infigratinib outside Greater China and for specified indications. The agreement became effective April 16, 2021 and could provide up to approximately $2.45 billion in payments, including more than $100 million in upfront, regulatory and launch milestones, plus tiered royalties. No related accounting term had commenced at March 31, 2021.
- Potential performance-based milestone compensation commitments totaled up to $266.1 million, of which $20.5 million had been accrued as probable at March 31, 2021. These awards may be settled in cash, stock or at BridgeBio’s election.
- BridgeBio had an additional $5.7 million undiscounted commitment for a facility lease expected to commence in mid-2021 and $4.0 million payable related to a dedicated manufacturing suite.
- On April 13, 2021, BridgeBio amended its Hercules facility, receiving a $25.0 million advance, extending the interest-only period to June 2024 and maturity to May 2025, subject to further extensions and conditions. A portion of the advance was used to prepay Eidos’ $17.5 million loan, which was paid in full in April 2021.
- The company reported no material legal proceedings and no material changes to the risk factors in its 2020 Form 10-K. Principal risks include clinical and regulatory failure, delays, dependence on financing, dilution and conversion of debt, milestone obligations, COVID-19 disruption and the absence of product revenue.
Most important facts for an investor to verify
- Whether cash burn and the $1.001 billion liquidity balance remain consistent with the stated 12-month funding expectation.
- Development, regulatory and commercial progress for the major programs, particularly infigratinib, acoramidis, fosdenopterin and BBP-631.
- The financial and ownership effects of the Eidos merger, including share dilution, integration costs and debt obligations.
- Potential dilution from the 2027 and 2029 convertible notes, options, restricted awards and milestone compensation arrangements.
- The timing and probability of Helsinn upfront, regulatory, launch and commercial milestone payments, and the related royalty and profit-sharing economics.
- COVID-19 effects on clinical enrollment, trial timelines, manufacturing and regulatory submissions.
- Availability and conditions of additional Hercules debt tranches and the company’s future financing requirements.