IDEAYA Biosciences, Inc. annual report, FY2022

IDEAYA Biosciences, Inc. — 2022 Form 10-K

Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter report; quarterly financial results are not clearly provided in the filing text. IDEAYA is a clinical-stage oncology company with no products approved for sale and no product-sales revenue.

Financial and liquidity overview

Metric	2022	2021	Change
Collaboration revenue	$50.9 million	$27.9 million	Up 82%
Research and development expense	$89.5 million	$58.2 million	Up 54%
General and administrative expense	$23.9 million	$20.1 million	Up 19%
Operating loss	$62.5 million	$50.3 million	Loss increased
Net loss	$58.7 million	$49.8 million	Loss increased 18%
Basic and diluted loss per share	$1.42	$1.41	Greater loss per share
Net cash used in operating activities	$87.2 million	$55.8 million	Cash use increased

• Revenue was entirely collaboration revenue, principally under the GSK agreement; the company reported no product revenue. The 2022 figure included $17.4 million recognized when GSK waived its MAT2A option and $2.6 million recognized for a POLQ development milestone.
• Cash, cash equivalents and marketable securities totaled $373.1 million at year-end, compared with $368.1 million at December 31, 2021. Cash and cash equivalents alone were $68.6 million; most liquidity was held in marketable securities.
• Management expected available cash and securities to fund planned operations for at least 12 months from the March 7, 2023 financial-statement issuance date. The company expects continued operating losses and will require additional capital over time.
• No funded debt is identified in the provided balance-sheet disclosures. Total liabilities were $38.5 million, including $13.8 million of current and long-term collaboration contract liabilities and $3.5 million of operating lease liabilities. The South San Francisco lease had $3.7 million of remaining payments through July 2024.
• There is no meaningful product gross margin to assess because IDEAYA has no commercial product sales. Interest income and other income rose to $3.8 million from $0.5 million, primarily due to higher investment interest rates.

Business and pipeline developments

• The company reported three clinical-stage candidates: darovasertib (IDE196), IDE397 and IDE161. Its pipeline focuses on precision-medicine oncology and synthetic lethality, with patient selection linked to tumor biomarkers.
• Darovasertib: Evaluated with Pfizer’s crizotinib in a Phase 2 metastatic uveal melanoma (MUM) trial, and as monotherapy in a Phase 2 trial for primary uveal melanoma. In September 2022 interim data from 35 efficacy-evaluable combination patients showed a 31% overall response rate in any-line MUM and 50% in first-line MUM (4 of 8 patients). These were preliminary results with limited follow-up, not confirmatory trial results. The FDA granted orphan drug designation in April 2022 and Fast Track designation for the combination in November 2022.
• IDE397: In a Phase 1/2 study for MTAP-deleted tumors. IDEAYA prioritized a planned Amgen-sponsored combination study with AMG 193 and discontinued enrollment in its chemotherapy-combination cohorts. Amgen and IDEAYA are to share external study costs equally; each retains commercial rights to its own compound. GSK waived its option to license the MAT2A program, leaving IDEAYA responsible for further development costs while retaining worldwide commercial rights.
• IDE161: The FDA authorized clinical evaluation in the fourth quarter of 2022. First-patient dosing was planned for the first quarter of 2023 in a Phase 1/2 study focused on HRD tumors. IDEAYA’s rights are subject to license-related milestone and royalty obligations to Cancer Research UK and the University of Manchester.
• Partnered preclinical programs: IDEAYA and GSK advanced a Pol Theta development candidate, with a $3.0 million milestone received in October 2022; an IND submission was targeted for the second quarter of 2023. The Werner Helicase program remained preclinical, with candidate nomination targeted for 2023.

Material changes, outlook and risks

• R&D expense increased $31.4 million, driven mainly by higher external CRO, CMO and consultant costs, increased headcount and research-support costs. G&A expense rose $3.8 million.
• Operating cash use exceeded net loss, in part because contract liabilities declined as previously received GSK consideration was recognized as revenue. Financing provided $97.2 million, including $86.1 million net proceeds from a September 2022 public offering and $8.8 million from ATM sales.
• Common shares outstanding increased from 38.5 million at year-end 2021 to 48.2 million at year-end 2022. The company also sold 142,160 shares through its ATM for $2.5 million net proceeds from January 1 through March 3, 2023.
• Management’s plans include advancing clinical programs, pursuing the proposed potentially registration-enabling darovasertib/crizotinib trial subject to FDA feedback, and continuing biomarker and preclinical research. These are plans, not assured outcomes; the filing gives no product-sales or earnings guidance.
• Key risks include early-stage clinical and regulatory uncertainty, patient enrollment and trial execution, reliance on third-party manufacturers and CROs, companion-diagnostic availability, competition, intellectual-property protection, collaboration-partner decisions, and future financing needs. COVID-19 and geopolitical or supply-chain disruptions could also affect operations.
• The darovasertib/crizotinib interim safety disclosure reported predominantly Grade 1 or 2 drug-related adverse events and no Grade 4 or 5 drug-related events in the initial data set. A Grade 5 serious adverse event occurred in a patient enrolled after that data cutoff; investigators considered disease progression the most likely cause, while the treating investigator considered a relationship to study therapy possible. The trial remained ongoing.
• The company reported no litigation likely to have a material adverse effect. Management concluded disclosure controls and internal control over financial reporting were effective; the auditor did not provide an ICFR attestation because IDEAYA qualified for the emerging-growth-company exemption.

Important facts for investors to verify

• Whether subsequent, more mature darovasertib trial data confirm the preliminary response and durability signals, and what FDA feedback requires for a registrational study.
• Whether the planned IDE397/AMG 193 study begins as expected, and how its development, enrollment, cost sharing and emerging data progress.
• IDE161 first-patient dosing and early safety, tolerability and pharmacodynamic results.
• Cash burn, collaboration revenue recognition and the stated cash runway, particularly as clinical spending increases and collaboration-related contract liabilities are drawn down.
• Further share issuance, including ATM use and equity compensation, and the resulting dilution.
• Potential milestone, royalty and other license obligations, as well as the continuing availability of partner-supplied clinical drugs and third-party manufacturing capacity.