BridgeBio Pharma, Inc. — Q1 2023 Form 10-Q Summary
Business context and reporting period
BridgeBio is a commercial-stage biopharmaceutical company developing medicines for genetically driven diseases and cancers through wholly owned and controlled subsidiaries. The filing covers the unaudited three months ended March 31, 2023, compared with the same period in 2022. The company reported 15 investigational new drug applications, two prior FDA-approved products, more than 20 disease areas, and more than 15 ongoing clinical trials.
BridgeBio stated that product-sale activities for approved products had been transferred or transitioned to partners and that it did not expect product-sales revenue for the remainder of 2023.
Financial performance and liquidity
| Metric | Q1 2023 | Q1 2022 | Change |
|---|---|---|---|
| Total revenue | $1.8 million | $1.7 million | +$0.1 million |
| License and services revenue | $1.8 million | $0.2 million | +$1.6 million |
| Product sales | $0 | $1.5 million | -$1.5 million |
| Research and development expense | $92.9 million | $107.6 million | -$14.8 million |
| SG&A expense | $31.1 million | $43.7 million | -$12.6 million |
| Restructuring, impairment and related charges | $3.4 million | $22.7 million | -$19.3 million |
| Loss from operations | $(126.2) million | $(173.7) million | Improved by $47.5 million |
| Net loss | $(142.7) million | $(201.3) million | Improved by $58.6 million |
| Net loss attributable to common stockholders | $(140.2) million | $(196.4) million | Improved by $56.2 million |
| Basic and diluted loss per share | $(0.92) | $(1.35) | Improved by $0.43 |
| Net cash used in operating activities | $(144.3) million | $(160.6) million | Improved by $16.3 million |
Revenue remained immaterial relative to expenses; reported operating and net margins were therefore deeply negative and not economically meaningful as percentage measures. Interest income increased to $4.2 million from $0.3 million, primarily because of higher interest rates, while interest expense was $20.1 million versus $20.3 million.
At March 31, 2023, cash and cash equivalents were $407.4 million, marketable securities were $34.1 million, restricted cash was $25.5 million, and equity investments were $49.8 million. Cash, cash equivalents and marketable securities totaled $441.5 million, compared with $428.3 million at December 31, 2022. Cash, cash equivalents and restricted cash increased by $18.2 million during the quarter to $435.1 million.
Financing cash inflows of $150.2 million were driven primarily by $143.0 million of net proceeds from a March 2023 follow-on offering of 8.8 million shares at $17.00 per share. The underwriters subsequently partially exercised their option, issuing 63,470 additional shares for $1.0 million of net proceeds on April 3, 2023.
Debt and capital structure
- Net carrying values at March 31, 2023 were $735.5 million for the 2.25% convertible notes due 2029, $542.1 million for the 2.50% convertible notes due 2027, and $435.8 million for the term loan.
- Principal amounts were $747.5 million, $550.0 million and approximately $448.6 million, respectively, for total outstanding debt of approximately $1.7 billion net of discounts, issuance costs and accretion.
- The term loan bears fixed interest of 9.0%, with up to 3.0% payable in kind through January 1, 2025. BridgeBio added $3.3 million of PIK interest to principal in Q1 2023, bringing cumulative PIK interest to $18.7 million.
- The term loan matures on November 17, 2026. Principal payments are scheduled to begin in January 2025, subject to an extension to January 2026 if the specified acoramidis milestone is achieved.
- The 2027 notes mature in March 2027 and the 2029 notes mature in February 2029. The convertible notes and term loan are subject to conversion, collateral, covenant, mandatory-prepayment and event-of-default provisions described in the filing.
Material changes versus the prior comparable period
- Net loss improved by $58.6 million, primarily because of lower R&D, SG&A, and restructuring charges, as well as more favorable investment-related results.
- R&D expense declined 13.7% to $92.9 million following program reprioritization and lower personnel and external costs. Spending increased for acoramidis, low-dose infigratinib, BBP-418, encaleret and the KRAS inhibitor portfolio, while other development and research programs declined.
- SG&A declined 28.8% to $31.1 million due mainly to restructuring-related cost streamlining.
- Restructuring charges fell to $3.4 million from $22.7 million. No long-lived-asset impairment was recorded in Q1 2023, versus $12.7 million in Q1 2022.
- License and services revenue increased because BridgeBio recognized $1.7 million of services revenue under the Navire-BMS agreement. Product sales ceased, reflecting the transition of commercialization activities to partners.
- Other expense, net improved to $0.6 million from $7.6 million. Q1 2023 included a $1.2 million loss from deconsolidating PellePharm and a $1.0 million net gain on equity investments; Q1 2022 included a $12.9 million investment loss, a $12.5 million Helsinn receivable gain and a $6.3 million loss on the sale of Origin assets.
- BridgeBio completed the $143.0 million net follow-on equity offering in March 2023, increasing shares outstanding and reducing near-term liquidity pressure but creating additional dilution.
Guidance, outlook, commentary and risks
Management expects continued operating and net losses for at least the next several years and does not expect product-sale revenue during the remainder of 2023. The company expects 2023 restructuring charges of approximately $6.0 million to $9.0 million, while noting that additional costs may arise.
Management stated that available cash, marketable securities, restricted cash and equity investments are expected to fund operations for at least the next 12 months from the filing date under current plans and forecasts. Additional financing could nevertheless be required sooner if spending, clinical timelines, market conditions, inflation, supply-chain conditions or other assumptions change.
- The FDA permanently discontinued distribution of TRUSELTIQ and discontinued associated clinical investigations. Helsinn-related close-out activities are expected to continue through 2023.
- The Navire-BMS agreement provides up to approximately $815 million of potential development, regulatory and commercial milestone payments plus royalties, but no additional milestones were included in the transaction price as of March 31, 2023.
- BridgeBio deconsolidated PellePharm during Q1 2023 after losing primary-beneficiary status and recognized a $1.2 million loss.
- Material risks include clinical and regulatory failure, dependence on third-party manufacturers and research organizations, intellectual-property claims, product acceptance and reimbursement, future financing availability, supply interruptions, inflation, interest rates, and financial-institution liquidity risks.
- The filing added risks associated with the March 2023 failure of Silicon Valley Bank and other bank failures, including potential loss or delayed access to deposits, credit facilities, letters of credit and cash-management arrangements. The company reported no credit losses on its financial institution balances through March 31, 2023.
- The company is exposed to volatility in its $49.8 million portfolio of publicly traded equity investments. Debt and term-loan interest rates are fixed, and no debt was subject to variable interest rates at quarter-end.
Important facts for investors to verify
- Whether the stated liquidity runway remains valid after considering the company’s approximately $144.3 million quarterly operating cash burn, debt maturities and clinical-development spending.
- Progress, cost requirements and financing implications for acoramidis, low-dose infigratinib, encaleret, BBP-418, BBP-631 and the KRAS inhibitor portfolio.
- The timing and probability of potential BMS, Helsinn, LianBio and other collaboration milestones and royalties; most potential payments remain contingent and are not recognized as current revenue.
- The company’s ability to manage approximately $1.7 billion of debt, including the 2027 maturity and the 2026 term-loan maturity, while continuing to fund development programs.
- The effect of the March 2023 equity offering and April 2023 option exercise on share dilution and future capital needs.
- Whether restructuring savings are recurring and whether actual 2023 restructuring costs remain within the $6.0 million to $9.0 million estimate.
- Restrictions on $25.5 million of restricted cash and the term-loan provisions requiring mandatory prepayments from certain asset sales, licensing or monetization transactions.