Black Diamond Therapeutics, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Black Diamond is a clinical-stage precision oncology company developing therapies using its Mutation-Allostery-Pharmacology (MAP) platform. It reported no product revenue and has no products approved for sale.
Financial results and liquidity
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $17.8 million | $22.8 million; down $5.0 million |
| General and administrative expense | $7.9 million | $7.9 million; unchanged |
| Total operating expenses | $25.7 million | $30.7 million; down $5.0 million |
| Net loss | $25.5 million | $30.3 million; loss narrowed $4.8 million |
| Net loss per share | $0.70 | $0.84 |
| Operating cash used | $28.6 million | $24.5 million |
| Cash, cash equivalents and investments | $179.7 million at March 31, 2022 | $209.8 million at December 31, 2021 |
Operating cash use exceeded net loss, partly reflecting working-capital movements; stock-based compensation was a $3.4 million noncash expense. Investing activities provided $16.7 million, primarily from investment sales and maturities. Financing activities provided $0.2 million. Cash, cash equivalents and restricted cash declined $11.7 million during the quarter. The company has no reported borrowings; liabilities include $28.2 million of operating lease liabilities. The filing does not provide a meaningful operating margin because the company has no revenue.
At March 31, total assets were $219.5 million, total liabilities $46.9 million, and stockholders’ equity $172.6 million. Accumulated deficit was $269.3 million. Unrealized investment losses increased accumulated other comprehensive loss to $1.8 million.
Changes and business developments
- R&D expense fell 22% year over year, mainly because BDTX-189 spending declined $5.6 million after the Phase 2 portion of its study was gated, and spending on other research and platform development declined $2.4 million. BDTX-1535 expense increased $0.8 million; personnel expense increased $1.3 million.
- In April 2022, after quarter-end, the company announced it would discontinue BDTX-189 development and focus on BDTX-1535, BDTX-4933 and discovery efforts.
- Cash, cash equivalents and investments declined about $30.1 million from December 31, 2021. The company reported $1.8 million of unrealized losses on investments at quarter-end, versus $0.5 million at year-end.
Outlook, risks and contingencies
- Management estimated that March 31 resources would fund operating expenses and capital requirements into the third quarter of 2024. It cautioned that this estimate depends on assumptions and resources could be exhausted sooner. The filing also states that resources were expected to cover at least 12 months from the May 11 issuance date.
- The company expects operating losses and expenses to increase as it advances BDTX-1535 clinical development, continues BDTX-4933 preclinical work and develops its pipeline. It expects to need additional capital before generating significant product revenue; financing may be unavailable or dilutive, and could require program delays, reductions or discontinuation.
- Development, regulatory approval, clinical enrollment, manufacturing, intellectual property protection, competition and future financing are material uncertainties. COVID-19-related disruption at the company or third-party providers could affect research and clinical timelines; the company reported no material pandemic-related business disruption or asset impairment to date.
- Operating lease commitments totaled $35.9 million in future minimum payments. Potential license milestone and royalty payments were not quantified because their occurrence and timing were uncertain. The company reported no material legal proceedings and no material accrued indemnification liabilities.
Most important facts for investors to verify
- Whether BDTX-1535 and BDTX-4933 meet development milestones, and the status and timing of clinical or regulatory updates.
- How discontinuing BDTX-189 affects future R&D costs, pipeline priorities and any related obligations.
- Whether cash burn and investment values support management’s stated runway into Q3 2024, and when additional financing may be needed.
- Potential dilution or other shareholder impacts from future equity, debt, collaboration or licensing financing.
- Future clinical, regulatory, vendor, lease and contingent license costs, including the timing and amount of any milestone or royalty payments.