IDEAYA Biosciences, Inc. — Q2 2022 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2022. Unaudited financial statements; amounts below are in U.S. dollars unless noted. IDEAYA is a clinical-stage oncology biotechnology company with no approved products and no product-sales revenue.
Financial results and position
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Collaboration revenue | $5.9 million | $8.8 million | $17.2 million | $16.0 million |
| Research and development | $22.8 million | $15.0 million | $42.5 million | $26.5 million |
| General and administrative | $5.6 million | $4.8 million | $11.5 million | $9.6 million |
| Net loss | $22.1 million | $10.9 million | $36.1 million | $20.0 million |
| Basic and diluted loss per share | $0.57 | $0.33 | $0.93 | $0.62 |
| Comprehensive loss | $22.9 million | $11.0 million | $39.0 million | $20.0 million |
Q2 revenue declined about 33% year over year, while six-month revenue rose about 8%. Q2 operating expenses increased about 43% year over year, primarily reflecting higher R&D spending. Six-month R&D rose 60%, attributed to increased personnel, clinical activity, contract chemistry, consultants and other research costs. Six-month net loss widened 81%. Revenue is entirely collaboration revenue, principally from GSK; conventional product margins are not applicable at this stage.
At June 30, 2022, cash and cash equivalents were $49.1 million, short-term marketable securities $219.5 million and long-term marketable securities $55.2 million, totaling approximately $323.8 million. Total current assets were $272.2 million and current liabilities $58.1 million. Total liabilities were $68.7 million, including contract liabilities and operating lease liabilities; the filing reports no borrowings or debt. Accumulated deficit was $212.8 million and stockholders’ equity $269.3 million.
For the six months, operating cash use was $39.6 million, investing cash use $4.4 million and financing cash provided $1.1 million. Operating cash use increased from $26.7 million in the prior-year period. Capital expenditures were $2.3 million. Cash, cash equivalents and restricted cash decreased $42.9 million to $49.2 million; much of the investment cash activity reflected purchases and maturities of marketable securities.
Business developments, outlook and risks
- IDE397 (MAT2A): On August 12, 2022, after quarter-end, GSK waived its option to license IDE397. IDEAYA regained full worldwide rights and will bear the cost of further development. The company reported ongoing Phase 1/2 enrollment and preliminary dose-escalation findings, including pharmacodynamic activity and tumor reductions or stasis in some patients. Its July 2022 ctDNA analysis reported responses in 4 of 13 evaluable patients overall, 3 of 4 at higher doses, and 2 of 2 evaluable NSCLC patients. These are early, small-sample findings, not confirmatory efficacy evidence.
- Darovasertib (IDE196): The company continued clinical evaluation, including with crizotinib in metastatic uveal melanoma. Previously reported interim combination results included a 31% response rate among 13 patients with at least two post-baseline scans and a 100% disease-control rate among 16 evaluable patients; the filing cautions that interim data may change. FDA granted orphan-drug designation for metastatic uveal melanoma in April 2022. Any registration-enabling study remains subject to further data and FDA guidance.
- Collaborations and pipeline: In July 2022, IDEAYA and Amgen agreed to evaluate IDE397 with AMG 193 in a Phase 1/2 study, with each party paying half of third-party study costs. GSK continues to hold exclusive development and commercialization rights for POLQ and WRN programs, with IDEAYA eligible for milestones and royalties and responsible for 20% of WRN global R&D costs. IDEAYA targeted an IDE161 PARG-inhibitor IND submission in Q4 2022, subject to preclinical results; POLQ first-in-human combination evaluation in H1 2023; WRN candidate selection in 2023; and a darovasertib/crizotinib study in cMET-driven tumors in Q1 2023. These are management targets, not assured outcomes.
- Funding and dilution: Management expected existing cash, cash equivalents and marketable securities to fund planned operations for at least 12 months from the August 15, 2022 filing date. The company expects losses and R&D expenses to continue increasing and may need additional capital. It sold approximately $9.0 million net through its ATM program from July 1 to August 12, 2022; further equity financing could dilute shareholders.
- Principal risks: Candidates remain early-stage and may fail in clinical development or encounter regulatory, safety, enrollment, manufacturing or biomarker/diagnostic hurdles. IDEAYA depends on third parties and collaborators, including GSK, Pfizer, Amgen, CROs and manufacturers. COVID-19 and geopolitical or market disruptions may affect trials, suppliers and access to capital. Cash investments carry interest-rate and market-value exposure; the company recorded $2.9 million of six-month unrealized losses on marketable securities.
- The company reported no litigation expected to have a material adverse effect and no off-balance-sheet arrangements. Management stated disclosure controls were effective at June 30, 2022.
Most important facts for investors to verify
- Subsequent IDE397 clinical updates, trial enrollment, safety and efficacy, and the added development costs following GSK’s option waiver.
- Whether management’s stated cash runway remains supportable as spending rises and whether additional financing is required.
- Final, adequately powered clinical results for IDE397 and darovasertib, including whether preliminary responses translate into durable clinical benefit.
- Execution and cost-sharing terms of the Amgen study, and progress, funding and milestone conditions for GSK’s POLQ and WRN programs.
- Progress against stated IND and trial-start targets, FDA feedback and any changes to development plans or timelines.