BridgeBio Pharma, Inc. — Form 10-Q Summary
Business context and reporting period
BridgeBio Pharma is a commercial-stage biopharmaceutical company developing medicines for genetically driven diseases and cancers. Its portfolio included more than 15 ongoing clinical trials across over 20 disease states as of the filing. This report covers the three and six months ended June 30, 2022, compared with the corresponding 2021 periods. The financial statements are unaudited and presented in accordance with U.S. GAAP.
Financial performance and position
Amounts below are in thousands unless otherwise stated.
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Total revenue | $73,746 | $54,024 | $75,440 | $54,486 |
| Research and development | $108,400 | $101,960 | $216,049 | $224,519 |
| SG&A | $36,426 | $45,970 | $80,139 | $91,377 |
| Restructuring and impairment charges | $8,396 | — | $31,058 | — |
| Loss from operations | $(80,176) | $(94,015) | $(253,854) | $(261,519) |
| Net loss attributable to common stockholders | $(9,856) | $(96,348) | $(206,253) | $(259,427) |
| Loss per share | $(0.07) | $(0.66) | $(1.41) | $(1.82) |
- Revenue mix: Q2 license and services revenue was $73.7 million, including $73.4 million recognized under the Navire-BMS license agreement. Product sales were zero in Q2 2022 and $1.5 million for the first six months, compared with $1.0 million in the 2021 periods.
- Margins: Approximate operating margins were negative 108.7% in Q2 2022 and negative 336.6% for the first six months. Net loss margins were approximately negative 3.5% and negative 270.2%, respectively, reflecting the $107.9 million net gain on the priority review voucher sale.
- Cash flow: Six-month operating cash use was $191.1 million, compared with $242.5 million in 2021. Investing activities provided $288.3 million, primarily from marketable-security maturities, the $110.0 million priority review voucher sale and the $10.0 million Sentynl transaction. Financing activities used $21.0 million, mainly for a $20.5 million mandatory term-loan prepayment.
- Liquidity: At June 30, 2022, cash and cash equivalents were $470.1 million, marketable securities were $218.5 million and equity securities were $27.1 million. Cash, cash equivalents and marketable securities totaled $688.6 million, compared with $787.5 million at December 31, 2021.
- Debt: Net carrying amounts were $734.0 million for the 2029 Notes, $540.8 million for the 2027 Notes and $418.4 million for the term loan, or approximately $1.7 billion in total. The term loan bears fixed interest at 9.0%, with up to 3.0% eligible for payment-in-kind interest, and matures in November 2026. The 2027 and 2029 convertible notes mature in 2027 and 2029, respectively.
- Balance sheet: Total assets were $862.2 million and total liabilities were $1.877 billion. BridgeBio reported a total stockholders’ deficit of $1.014 billion and an accumulated deficit of $1.643 billion.
Material changes versus the prior comparable period
- Revenue increased $19.7 million, or approximately 36%, in Q2 and $21.0 million, or approximately 38%, for the first six months, driven primarily by the BMS transaction.
- Operating loss narrowed by $13.8 million in Q2 and $7.7 million for the first six months, despite new restructuring charges, due to higher revenue and lower SG&A. Six-month R&D expense declined $8.5 million, while Q2 R&D expense increased $6.4 million.
- Net loss attributable to common stockholders improved substantially, primarily because of the $107.9 million gain from selling the priority review voucher. This was partly offset by $23.2 million of investment losses, a $6.3 million loss on the Sentynl asset sale and higher interest expense.
- Interest expense increased to $20.3 million in Q2 and $40.6 million for the first six months, compared with $10.8 million and $20.6 million, respectively, reflecting higher debt balances.
- Investment in equity securities declined from $49.1 million at year-end 2021 to $27.1 million at June 30, 2022, including $23.2 million of realized and unrealized losses during the first six months.
- The company amended its term-loan agreement in May 2022, reducing the undrawn tranche from $300.0 million to $100.0 million, permitting priority review voucher dispositions and changing principal repayment terms.
Guidance, outlook, commentary and risks
- Management did not provide numerical revenue, earnings or cash-burn guidance. It stated that product sales were not expected for the remainder of 2022 because selling activities for approved products had been transferred or transitioned to partners.
- BridgeBio expects to continue incurring operating and net losses for at least the next several years while funding research, development and later-stage clinical programs.
- Management expects existing cash, marketable securities and equity securities to fund operations for at least the next 12 months based on current plans and forecasts, but additional financing could be required sooner if plans change or COVID-19, inflation or development costs adversely affect cash usage.
- The January 2022 restructuring includes facility consolidation, program reprioritization and workforce reductions. Management estimated total 2022 charges of approximately $31.0 million to $33.0 million; $31.1 million had been recorded through June 30, 2022, with $11.2 million of restructuring liabilities remaining.
- The Navire-BMS agreement provided a $90.0 million upfront payment and potential future development, regulatory and commercial payments of approximately $815.0 million, plus tiered royalties. Future milestone payments were fully constrained from revenue recognition as of June 30, 2022.
- Material risks include clinical and regulatory failure, delays in patient enrollment and development activities, dependence on partners, substantial debt and mandatory prepayment provisions, continued operating losses, equity-price volatility, potential dilution from convertible notes and equity awards, inflation, supply-chain and manufacturing disruption, and the continuing effects of COVID-19.
- The filing reported no material legal proceedings, no defaults upon senior securities and no material changes to the risk factors disclosed in the 2021 Form 10-K.
Most important facts for investors to verify
- Whether the company’s $688.6 million of cash and marketable securities, together with equity investments, remains sufficient relative to quarterly operating cash use and approximately $1.7 billion of debt.
- The timing and conditions for repayment or refinancing of the 2027 Notes, 2029 Notes and 9.0% term loan, including mandatory prepayments triggered by licensing or asset-monetization transactions.
- Progress, clinical results and regulatory milestones for acoramidis, infigratinib, encaleret, BBP-631, BBP-454 and other prioritized programs.
- The sustainability of revenue following the nonrecurring BMS upfront recognition and the absence of expected product sales for the remainder of 2022.
- Actual restructuring costs, workforce and program reductions, and any additional impairment or termination charges beyond the estimated $31.0 million to $33.0 million range.
- The amount and timing of future BMS, Helsinn and other collaboration milestones, royalties and reimbursements, which remain subject to clinical, regulatory and commercial outcomes.