Biomea Fusion, Inc. — Q3 2021 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2021. Unaudited financial statements; amounts below are in U.S. dollars unless otherwise stated.
Business context and reporting period
Biomea is a clinical-stage biopharmaceutical company developing irreversible small-molecule therapies for genetically defined cancers using its FUSION System platform. It has no approved products and has generated no revenue. In September 2021, the FDA cleared the IND for lead candidate BMF-219, enabling the company to begin its first Phase I trial in adults with relapsed or refractory acute leukemia.
Financial performance and position
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $7.9 million | $0.8 million | $16.9 million | $1.3 million |
| General and administrative expense | $4.8 million | $0.3 million | $10.0 million | $0.5 million |
| Total operating expenses | $12.6 million | $1.1 million | $26.9 million | $1.8 million |
| Net loss | $12.6 million | $1.1 million | $26.9 million | $1.8 million |
| Basic and diluted loss per share | $0.43 | $0.10 | $1.21 | $0.18 |
For the nine months, operating cash outflow was $19.5 million, investing cash outflow was $37.9 million, and financing cash inflow was $152.9 million, principally from the IPO. Cash, cash equivalents and restricted cash totaled $157.2 million at September 30; investments were $34.7 million. The company reported $191.9 million in cash, cash equivalents, restricted cash and investments combined. Current assets were $191.1 million and current liabilities $5.6 million. The $36,000 PPP loan was repaid in Q2; there was no interest-bearing debt at quarter-end. Operating lease liabilities totaled $3.0 million. Operating margins are not meaningful because the company had no revenue.
Accumulated deficit was $35.0 million. Net IPO proceeds were approximately $152.8 million. Common shares outstanding reported on the balance sheet were 29,041,708 at September 30; the filing separately reports 29,044,784 outstanding at October 26.
Material changes versus prior comparable periods
- Q3 net loss increased to $12.6 million from $1.1 million; nine-month net loss rose to $26.9 million from $1.8 million, mainly reflecting higher R&D and G&A spending.
- R&D increases were attributed primarily to personnel and BMF-219 IND-enabling work, including preclinical development, manufacturing and external consulting.
- G&A increases reflected expanded staffing and corporate costs, including legal and accounting expenses and costs of being a public company.
- The IPO substantially strengthened liquidity; the company also began investing cash in available-for-sale securities and expanded laboratory equipment and facilities.
Outlook, risks and contingencies
Management expects significant expenses and operating losses to continue and increase as clinical development advances. Based on its current plan, it believes available cash and investments will fund working capital and capital expenditure needs for at least 12 months following the filing date. It expects to need substantial additional capital over time; financing may be unavailable or dilutive, and could force delays, reductions or termination of programs.
- The company expected to report preclinical findings on menin-pathway work in type 2 diabetes in Q1 2022 and to nominate a second development candidate in the first half of 2022. These are forward-looking plans, not reported outcomes.
- Key risks include BMF-219’s early development stage, uncertain clinical safety and efficacy, regulatory approval and trial timing, reliance on CROs and CMOs, manufacturing and supply constraints, competition, intellectual-property protection, and dependence on additional financing.
- The company said it had not experienced COVID-19-related delays in discovery or development to date, but warned that future trial, supplier, enrollment or operational disruption remained possible.
- No material legal proceedings or subsequent events were reported. The company disclosed no off-balance-sheet arrangements. It reported disclosure controls effective at a reasonable assurance level and no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Clinical-trial start, enrollment, safety and efficacy updates for BMF-219, and progress toward the stated 2022 development milestones.
- Cash burn, investment balances and the assumptions supporting management’s at-least-12-month liquidity estimate; timing and terms of any future financing.
- Reconcile the share-count disclosures: 29,041,708 shares on the September 30 balance sheet versus 29,635,250 in a capital-structure note, which appears to include 593,542 unvested restricted shares subject to repurchase; also compare with the October 26 cover-page figure.
- Execution risks and costs associated with third-party manufacturing, clinical development, the new laboratory lease and public-company operations.