Biomea Fusion, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Unaudited financial statements; dollar amounts below are in millions unless otherwise stated.
Business context
Biomea Fusion is a clinical-stage biopharmaceutical company developing covalent small-molecule therapies for genetically defined cancers and metabolic diseases. It has no approved products and has generated no revenue. Its lead candidate, BMF-219, is an oral menin inhibitor; the first patient entered its Phase 1 COVALENT-101 trial in January 2022.
Financial performance and position
| Metric | Q1 2022 | Q1 2021 or prior balance |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $11.350 | $3.798 |
| General and administrative expense | $5.050 | $2.059 |
| Total operating expenses | $16.400 | $5.857 |
| Net loss | $16.366 | $5.852 |
| Basic and diluted loss per share | $0.56 | $0.49 |
| Net cash used in operating activities | $9.994 | $4.075 |
Gross margin is not applicable because the company has no revenue. Cash, cash equivalents, restricted cash and investments totaled $165.6 million at March 31, 2022, including $156.2 million of cash and cash equivalents and $9.0 million of investments. Total assets were $174.9 million; current assets were $167.0 million and current liabilities $8.0 million. Total liabilities were $10.1 million, including $2.7 million of operating lease liabilities. The company reported no interest-bearing liabilities.
Cash, cash equivalents and restricted cash increased $10.5 million during the quarter. Investing activities provided $20.4 million, primarily from investment maturities; financing activities provided $0.03 million. Accumulated deficit was $66.1 million. No operating margin is meaningful in the absence of revenue.
Changes versus the prior comparable period
Net loss increased by $10.5 million year over year. R&D expense rose $7.6 million, primarily due to BMF-219 clinical, preclinical and manufacturing work and increased headcount; G&A expense rose $3.0 million, reflecting personnel, public-company professional services and directors’ and officers’ insurance. Operating cash use increased $5.9 million. Cash and cash equivalents rose from $145.7 million at December 31, 2021 to $156.2 million, while investments declined from $29.7 million to $9.0 million, largely reflecting maturities and the movement of funds into cash.
Outlook, risks and other items
- Management expects operating losses and expenses to continue increasing as clinical development advances. It believes available cash, restricted cash and investments will fund planned operations for at least one year beyond the financial-statement issuance date; additional capital will be needed over time, with no assurance it will be available on acceptable terms.
- Stated development plans included additional BMF-219 solid-tumor studies in NSCLC, pancreatic cancer and colorectal cancer in Q4 2022, and a Phase 1/2 diabetes trial in the second half of 2022, subject to IND submission and clearance. The company expected to nominate a second development candidate in the first half of 2022 and provide a third-candidate update during 2022.
- Key risks include early-stage clinical uncertainty, potential safety or efficacy failures, regulatory and trial delays, reliance on third-party manufacturers and research organizations, competition, intellectual-property protection, and possible future financing and dilution. The filing said COVID-19 had not delayed discovery or development to date, but could affect trials, suppliers and timelines.
- A four-year lease for additional laboratory space is expected to commence in September 2022, with approximately $2.2 million of future rent; no lease asset or liability had been recorded for it at quarter-end. Management reported no material legal proceedings or material changes in contractual obligations from year-end.
- Disclosure controls and procedures were assessed as effective at a reasonable-assurance level; no material change in internal control over financial reporting was identified during the quarter.
Important facts for investors to verify
- Whether the stated cash runway assumptions remain valid as clinical programs and quarterly cash use expand.
- Actual BMF-219 trial progress, enrollment, safety findings and data timing, as well as the status of the planned additional indications and candidate nominations.
- How much of future spending is attributable to clinical execution, manufacturing, hiring and stock-based compensation, and whether additional financing is required.
- Whether planned studies proceed on the stated timelines and whether COVID-19, supply-chain or regulatory issues cause delays.
- Future lease and other contractual cash commitments, and the potential dilution or restrictions associated with any financing.