PMV Pharmaceuticals, Inc. — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021. Unaudited financial statements; dollar amounts below are in millions unless stated otherwise. PMV is a clinical-stage oncology company developing small-molecule therapies targeting p53 mutations. It has no approved products and has generated no revenue.
Financial performance and liquidity
| Metric | Q3 2021 | Q3 2020 | First 9 months 2021 | First 9 months 2020 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $9.2 | $6.0 | $24.3 | $17.8 |
| General and administrative expense | $5.9 | $2.7 | $15.5 | $6.7 |
| Total operating expenses | $15.1 | $8.7 | $39.8 | $24.4 |
| Net loss | $15.0 | $8.8 | $39.5 | $24.0 |
| Net loss per share | $0.33 | $1.46 | $0.88 | $5.93 |
Loss per share comparisons are affected by the much higher weighted-average share count in 2021 following the 2020 IPO; net loss increased in both comparison periods. Profit margins are not meaningful because the company has no revenue.
- Cash and liquidity at September 30: Cash and cash equivalents of $176.6 million, restricted cash of $0.8 million, and marketable securities of $149.6 million ($131.0 million current; $18.6 million noncurrent). Combined cash, restricted cash, and securities were about $327.1 million.
- Cash flow: Operating cash use was $34.5 million in the first nine months of 2021, versus $22.4 million in 2020. Investing activities used $151.1 million, largely reflecting purchases of marketable securities; financing activities provided $1.7 million, primarily from stock-option exercises.
- Balance sheet: Total assets were $344.2 million; total liabilities were $19.2 million, including $11.2 million of operating lease liabilities. The filing reports no borrowings or debt financing outstanding. Accumulated deficit was $149.4 million.
Material changes and operating developments
- Q3 R&D expense rose $3.2 million year over year, primarily as PC14586 advanced through its Phase 1/2 trial. Nine-month R&D expense increased $6.6 million, including higher development and discovery research costs.
- Q3 G&A expense rose $3.2 million year over year; the nine-month increase was $8.8 million. Drivers included higher staffing and public-company costs, directors’ and officers’ insurance, and costs related to the Princeton facility.
- In January 2021, PMV entered into a lease for a 50,581-square-foot Princeton office and laboratory facility, with a term through 2032. The company planned to relocate its headquarters there in early 2022. Lease incentives of $4.1 million were expected to be reimbursed in 2021 and 2022; none had been received by September 30.
- PMV adopted lease accounting guidance effective January 1, 2021, recording right-of-use assets and lease liabilities. Management reported no material effect on operating results or cash flows.
Outlook, risks, and contingencies
- Management expects substantial additional operating losses and higher R&D spending for the foreseeable future. It stated that cash, cash equivalents, and marketable securities at September 30 were expected to fund operations at least through 2023, while noting the estimate depends on assumptions and capital could be used sooner than expected. The notes also state liquidity is adequate for at least 12 months from issuance.
- PC14586 entered a Phase 1/2 trial in October 2020 and received FDA Fast Track Designation for locally advanced or metastatic solid tumors with a p53 Y220C mutation. The filing gives no numerical clinical or financial guidance.
- PMV expects to rely on equity or debt financing, collaborations, or other funding before product revenue, which may not arise for years, if ever. Equity issuance could dilute shareholders; collaborations may require relinquishing rights. An effective shelf registration statement filed in October 2021 permits potential future securities offerings.
- Key risks include clinical and regulatory uncertainty, funding needs, competition, reliance on third-party research and manufacturing providers, intellectual-property protection, healthcare pricing and reimbursement changes, and possible COVID-19-related operational disruption. The company said it was monitoring COVID-19 effects, which remained uncertain.
- No material litigation or third-party supplier purchase commitments were reported. Management concluded disclosure controls were effective as of September 30, 2021.
Most important facts for investors to verify
- Whether PC14586’s clinical progress, enrollment, safety, and efficacy support continued development; the filing provides no trial outcome data.
- Whether the projected runway through 2023 remains valid as trial and facility spending develops, and how management reconciles that estimate with its separate 12-month liquidity statement.
- The timing and amount of Princeton lease-incentive reimbursements, relocation costs, and ongoing lease obligations.
- Potential dilution from future financing, including use of the shelf registration statement, and the pace of operating cash use.
- Whether higher R&D and public-company costs continue to expand losses faster than anticipated.