Bicycle Therapeutics plc — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; filed May 2, 2024. Unaudited results. Bicycle is a clinical-stage biopharmaceutical company developing Bicycle peptide medicines, primarily for oncology. It has no approved products and generated no product sales; revenue is from collaborations.
Financial performance and liquidity
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Collaboration revenue | $19.5 million | $4.9 million |
| Research and development expense | $34.9 million | $32.2 million |
| General and administrative expense | $16.4 million | $14.5 million |
| Operating loss | $31.7 million | $41.8 million |
| Net loss | $26.6 million; $0.62 per share | $39.1 million; $1.30 per share |
| Operating cash used | $70.9 million | $46.4 million |
- Cash and cash equivalents were $457.0 million at March 31, 2024, down from $526.4 million at December 31, 2023. Including restricted cash, quarter-end cash was $457.5 million.
- Cash used in investing activities was $0.01 million; financing provided $1.9 million. Cash, cash equivalents and restricted cash declined $69.4 million during the quarter.
- At March 31, total liabilities were $191.1 million and shareholders’ equity was $356.0 million. Current assets were $516.0 million versus current liabilities of $49.5 million.
- Debt principal was $30.0 million; the balance-sheet carrying value, net of discount and including the end-of-term charge, was $30.8 million. Interest is capped at 9.05%; payments are interest-only through April 1, 2025, with scheduled maturity July 1, 2025. Up to $45.0 million of additional borrowing is available subject to conditions.
- No product gross margin is reported; the company has no product sales. Collaboration revenue is not a measure of recurring product demand.
Changes and notable items
- Revenue increased $14.6 million year over year, largely reflecting collaboration activity and recognition associated with Genentech, Ionis, Novartis and Bayer.
- Genentech’s joint research committee discontinued Program #3 in January 2024. Bicycle recognized $10.4 million upon completion of related obligations, including $7.5 million from expiration of material rights. Programs #1 and #4 remained ongoing at quarter-end.
- Ionis revenue included a $3.3 million increase from a revised estimate of external costs used to measure progress. The filing also reports $5.9 million of total Q1 Ionis revenue.
- R&D expense rose $2.7 million. BT8009 program expense increased $12.4 million, reflecting ongoing Phase I/II expansion and the Phase II/III Duravelo-2 trial; increases were partly offset by lower TICA and BT5528 expenses and higher U.K. R&D incentives.
- U.K. R&D incentives reduced R&D expense by $15.3 million, compared with $7.2 million in the prior-year quarter. The 2024 amount includes $9.7 million associated with reimbursement-rate changes enacted in February 2024.
- Net loss narrowed, but operating cash use increased by $24.5 million. The company attributes the cash-flow change principally to operating asset and liability movements, including deferred revenue, R&D incentive receivables and prepaids, as well as costs associated with initiating Duravelo-2.
Outlook, risks and contingencies
- Management expects existing cash to fund operating expenses and capital expenditure requirements for at least 12 months from the filing date. It cautions that this estimate depends on assumptions and that additional funding will be required for continuing operations.
- The company expects operating losses and expenses to increase as it advances clinical and preclinical programs, especially BT8009, BT5528, BT7480, BT1718 and BT7455. No specific revenue, earnings or cash-burn guidance was provided.
- Duravelo-2, a Phase II/III registrational trial of BT8009, began recruiting in Q1 2024. The company also reports ongoing Phase I/II trials for BT8009, BT5528 and BT7480; BT1718 is in a Cancer Research UK-sponsored and funded Phase I/IIa trial.
- Key risks include clinical efficacy, safety and enrollment uncertainty; regulatory review of a novel therapeutic modality; dependence on collaborators, CROs and third-party manufacturers; potential additional financing needs and dilution; and foreign-exchange, geopolitical, inflation and interest-rate exposure.
- Potential future milestone payments include $111.2 million under Cancer Research UK arrangements and $105.1 million under other third-party agreements. These are contingent on future events, were not considered probable at quarter-end, and their timing and likelihood could not be estimated. No material legal proceedings were reported.
- Disclosure controls and procedures were assessed as effective at the reasonable-assurance level; no material change in internal control over financial reporting was reported for the quarter.
Important facts for investors to verify
- Clinical progress, enrollment, safety and regulatory milestones for BT8009, including Duravelo-2, and the other development programs.
- Whether the stated cash runway remains achievable as trial spending grows and operating cash use continues.
- The sustainability and eligibility of U.K. R&D incentives, including the effects of the revised U.K. tax-credit regime and restrictions applying to subcontracted R&D.
- Future collaboration revenue and deferred-revenue recognition, including any partner option exercises, program discontinuations or changes in research commitments.
- Debt repayment and interest obligations, and whether the company draws any of the additional Hercules facility or raises further capital.
- Potential dilution and voting changes: as of April 29, 2024, 38,073,148 ordinary shares and 4,705,882 non-voting ordinary shares were outstanding; certain non-voting shares may be redesignated subject to ownership limits.