Dyne Therapeutics, Inc. — Q1 2023 Form 10-Q
Business context and reporting period: Clinical-stage biotechnology company developing muscle-disease therapeutics using its FORCE platform. This unaudited report covers the three months ended March 31, 2023; comparisons are with Q1 2022. Dyne had no approved products and generated no revenue.
Financial performance and position
| Metric | Q1 2023 | Q1 2022 / comparator |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $37.5 million | $28.2 million |
| General and administrative expense | $7.9 million | $7.5 million |
| Total operating expenses | $45.5 million | $35.8 million |
| Net loss | $44.2 million | $35.6 million |
| Net loss per share, basic and diluted | $0.78 | $0.69 |
| Net cash used in operating activities | $46.9 million | $50.7 million |
| Cash, cash equivalents and marketable securities | $238.2 million at March 31, 2023 | $256.0 million at December 31, 2022 |
Cash, cash equivalents and restricted cash totaled $183.4 million at quarter-end. Marketable securities were $57.1 million. Current assets were $249.2 million versus current liabilities of $21.6 million. Total liabilities were $46.7 million, principally lease liabilities; the filing reports no debt financing. Operating margin is not meaningful because the company had no revenue and incurred operating losses.
Material changes versus the prior comparable period
- Net loss increased $8.6 million year over year as operating expenses rose $9.7 million, partly offset by $1.1 million higher net other income, primarily increased interest income.
- R&D expense increased $9.3 million. DYNE-251 spending rose $4.6 million with increased DELIVER trial activity and manufacturing; personnel-related R&D costs rose $3.2 million. DYNE-101 spending was broadly unchanged.
- Operating cash use improved by $3.8 million year over year. Financing provided $28.8 million in Q1 2023, mainly from the at-the-market (ATM) stock offering; investing activities provided $27.1 million, primarily through marketable-security maturities.
- Dyne sold 2.34 million shares under its ATM program during Q1 for $28.2 million net proceeds at a weighted-average price of $12.48. After quarter-end, it sold 2.17 million additional shares for $24.2 million net proceeds at $11.50 per share.
Outlook, management commentary and risks
- Management expects available cash, cash equivalents and marketable securities to fund operating and capital requirements through 2024 and to support proof-of-concept data readouts for DYNE-101 and DYNE-251. The company cautions that estimates rely on assumptions and additional financing will be needed to continue development.
- Dyne expected initial safety, tolerability and biomarker-related data from the Phase 1/2 ACHIEVE trial of DYNE-101 for myotonic dystrophy type 1, and initial safety, tolerability and dystrophin data from the DELIVER trial of DYNE-251 for Duchenne muscular dystrophy, in the second half of 2023. DYNE-251 had FDA Fast Track designation and received orphan drug and rare pediatric disease designations in March 2023.
- Dyne deferred the planned IND submission for DYNE-301 for facioscapulohumeral muscular dystrophy and planned to update on the program by the end of 2023, prioritizing resources on DYNE-101 and DYNE-251.
- Management expects losses and expenses to increase as clinical trials and research advance. Key risks include clinical and regulatory failure or delay, uncertain safety and efficacy of the unproven platform, dependence on third-party manufacturers and suppliers, additional capital needs and potential dilution, intellectual-property and licensing risks, and competition.
- The company reported its disclosure controls and procedures were effective at the reasonable-assurance level as of March 31, 2023, with no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Whether DYNE-101 and DYNE-251 trial readouts met their stated timing and demonstrate safety, tolerability and relevant biological effects.
- Whether the stated cash runway through 2024 remains achievable as trial, manufacturing and other expenses evolve.
- Remaining ATM capacity, subsequent share issuance and resulting dilution; confirm the impact of the disclosed post-quarter-end sales.
- Progress and timing of DYNE-301, including the promised program update, and whether resources remain concentrated on the lead clinical programs.
- Manufacturing and supply continuity, regulatory requirements, and any material clinical, intellectual-property or financing developments.