Biomea Fusion, Inc. — Q2 2023 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2023. Biomea Fusion is a clinical-stage biotechnology company developing covalent small-molecule medicines for genetically defined cancers and metabolic diseases. It has no approved products and has generated no revenue.
Key financial metrics
Amounts are in millions of dollars, except per-share data.
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $21.9 | $12.6 | $46.3 | $23.9 |
| General and administrative expense | $5.7 | $4.9 | $11.4 | $9.9 |
| Net loss | $(24.9) | $(17.3) | $(53.9) | $(33.6) |
| Net loss per share, basic and diluted | $(0.70) | $(0.59) | $(1.66) | $(1.15) |
| Net cash used in operating activities | Not provided for quarter | Not provided for quarter | $(49.9) | $(25.4) |
- At June 30, cash and cash equivalents were $222.9 million; restricted cash was $0.35 million. The company reported no investments at that date, for total cash, cash equivalents, restricted cash and investments of $223.3 million.
- Total current assets were $225.9 million and current liabilities were $14.4 million. Total liabilities were $24.4 million, including $12.7 million of operating lease liabilities. The company reported no interest-bearing liabilities.
- Accumulated deficit was $185.5 million. Management believes available resources will fund planned operations for at least one year past issuance of the financial statements.
- Cash from financing activities was $163.0 million for the six months, including $161.8 million net proceeds from an April public offering of 5.75 million shares at $30 per share. Outstanding common shares rose to 35.63 million at June 30 from 29.56 million at year-end 2022.
Changes versus the prior comparable period
- Q2 net loss increased by $7.6 million year over year; six-month net loss increased by $20.3 million. Operating expenses rose, primarily from higher R&D spending.
- Six-month R&D expense increased $22.4 million. Management attributed the increase mainly to clinical and manufacturing activity for BMF-219 and BMF-500, increased personnel, and expanded facilities. G&A increased $1.4 million for the six-month period, primarily from higher personnel-related costs.
- Six-month operating cash use nearly doubled year over year, from $25.4 million to $49.9 million. The public offering substantially increased cash and stockholders’ equity.
- Operating lease right-of-use assets increased to $12.5 million from $2.2 million at year-end 2022, reflecting new and expanded space leases commencing in 2023.
Outlook, programs and risks
- The company expects significant expenses and operating losses to continue and increase as it advances clinical programs, develops BMF-500 and pursues its pipeline. It provided no specific revenue, earnings or expense guidance.
- BMF-219 is being studied in clinical trials for hematologic and solid tumors and type 2 diabetes. In June, the company reported COVALENT-111 follow-up results: in the 100 mg without-food cohort, it reported a mean HbA1c reduction of 1.0% at Week 12, with 5 of 10 patients showing continued improvement; results were from small cohorts and remain subject to further evaluation. The filing also reported increased mild-to-moderate nausea in the 200 mg with-food cohort and said it would transition that cohort to 100 mg twice daily.
- After quarter-end, in July 2023, the company reported preliminary COVALENT-101 data showing 2 complete responses among 5 relapsed/refractory AML patients with menin-dependent mutations treated at Dose Level 4. Dose escalation continued. These are early, small-sample results, not established clinical benefit.
- The FDA cleared the BMF-500 IND in May 2023 for a Phase 1 study; the filing describes the program as entering clinical development.
- Key risks include clinical and regulatory uncertainty, possible safety or efficacy failures, dependence on third-party manufacturers and research organizations, competition, intellectual-property challenges, and the need for substantial additional capital. Further financing could dilute shareholders or require less favorable terms. Management’s runway estimate depends on assumptions and cash could be used faster than expected.
- No material legal proceedings were reported. Management concluded disclosure controls were effective at a reasonable-assurance level and reported no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Review updated cash burn, spending plans and the assumptions underlying management’s estimate that current resources fund operations for at least one year past issuance.
- Check complete and updated clinical data for BMF-219, including durability, dose and food effects, safety, patient denominators and whether preliminary findings are confirmed in larger studies.
- Track BMF-219 trial progress and BMF-500’s clinical initiation, enrollment, safety findings and timelines.
- Assess the impact of the April offering and potential future equity issuance, including dilution from outstanding options and other equity awards.
- Monitor reliance on external manufacturers and suppliers, lease commitments, and any changes in financing needs or material risks.