Black Diamond Therapeutics, Inc. — Q3 2023 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2023. Black Diamond is a clinical-stage oncology company with no approved products and no product revenue. It is developing BDTX-1535 and BDTX-4933.
Financial performance and liquidity
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development | $16.2 million | $15.8 million | $44.1 million | $49.8 million |
| General and administrative | $7.9 million | $6.3 million | $21.5 million | $21.1 million |
| Net loss | $23.0 million | $21.7 million | $63.0 million | $70.1 million |
| Basic and diluted loss per share | $0.45 | $0.60 | $1.54 | $1.93 |
| Net cash used in operating activities | — | $52.8 million | $63.1 million |
Margins are not meaningful because the company reported no revenue. At September 30, cash and cash equivalents were $58.0 million and investments were $86.3 million, totaling approximately $144.3 million. Current assets were $147.0 million and current liabilities $15.1 million. The company reported $38.1 million in total liabilities, including $26.0 million in operating lease liabilities; no financial borrowings are reported. Management expects available cash, cash equivalents and investments to fund planned operations into the first half of 2025, but notes this estimate depends on assumptions and additional capital will be needed.
Changes and significant items
- Q3 operating expenses rose $1.9 million year over year, and net loss widened by $1.4 million. Higher BDTX-1535 trial costs and G&A costs, including expenses related to the former CEO’s transition, were partly offset by lower early discovery and discontinued BDTX-189 spending.
- Nine-month operating expenses fell $5.4 million and net loss narrowed $7.1 million year over year. Reduced BDTX-189, early-program and personnel costs more than offset increased spending on BDTX-1535 and BDTX-4933 trials.
- The July 2023 follow-on offering issued 15.0 million shares at $5.00 per share. Net proceeds are described inconsistently in the filing as approximately $71.6 million to $71.9 million. Shares outstanding increased from 36.4 million at December 31, 2022 to 51.6 million at September 30, 2023.
- Cash from operations improved year over year, while financing cash flow included the follow-on offering. Accumulated deficit was $398.0 million at quarter end.
Outlook, programs and risks
- BDTX-1535 is in Phase 1, with NSCLC dose expansion and GBM dose escalation. The company expected initial results from the NSCLC expansion cohorts in 2024 and a GBM dose-escalation update in Q4 2023. It reported that a Phase 0/1 recurrent high-grade glioma study began enrolling in October 2023.
- At an October 2023 conference, the company reported dose-escalation results in 27 NSCLC patients: five of 13 evaluable patients with specified EGFR mutation groups had confirmed partial responses. These are company-reported interim findings, not confirmatory trial results; the filing reported no dose-limiting toxicities at 200 mg or below.
- BDTX-4933 entered Phase 1 dose escalation in Q2 2023. The company’s favorable efficacy and CNS-exposure claims cited in the filing are based on preclinical studies.
- The company expects continued losses and increased expenses as clinical development advances. Additional financing may be required; equity financing could dilute shareholders, and financing or partnerships may be unavailable or on unfavorable terms. Failure to obtain funding could delay, reduce or terminate programs.
- Newly highlighted risks include possible disruption to access to cash from banking-sector instability. The filing also notes market volatility, clinical and regulatory uncertainty, competition, manufacturing and intellectual-property risks. No material legal proceedings were reported; contingent license milestone and royalty payments are uncertain and not reasonably estimable.
Important facts for investors to verify
- Progress, enrollment, safety and subsequent data from BDTX-1535 and BDTX-4933 trials, including the timing and completeness of expected updates.
- Whether the stated runway into the first half of 2025 remains achievable as trial spending and other costs change.
- The precise net proceeds from the July offering, given the filing’s differing figures, and the resulting dilution and future financing needs.
- Whether interim clinical findings are confirmed in larger or later-stage studies and whether preclinical claims translate to clinical benefit.
- Lease obligations, contingent license payments and the accessibility and preservation of cash and investments amid financial-market risks.