BridgeBio Pharma, Inc. — Form 10-Q Summary
Reporting period: Three and nine months ended September 30, 2021; filed November 4, 2021. BridgeBio is a biotechnology company developing medicines for genetically driven diseases and cancers. Its products NULIBRY and TRUSELTIQ received FDA approval in February and May 2021, respectively, and commercial sales began in the second quarter.
Key Financial Metrics
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Total revenue | $2.3 million | $8.1 million | $56.8 million | $8.1 million |
| Research and development expense | $104.3 million | $92.1 million | $328.8 million | $246.9 million |
| SG&A expense | $46.1 million | $36.0 million | $137.5 million | $108.2 million |
| Loss from operations | $(149.5) million | $(119.9) million | $(411.0) million | $(347.0) million |
| Net loss | $(161.0) million | $(130.2) million | $(434.2) million | $(370.5) million |
| Net loss attributable to BridgeBio common stockholders | $(155.9) million | $(115.9) million | $(415.4) million | $(328.7) million |
| Basic and diluted loss per share | $(1.06) | $(0.98) | $(2.88) | $(2.79) |
Product sales were $0.8 million in the quarter and $1.7 million year to date, against product costs of $1.5 million and $1.6 million, respectively. The filing does not provide a meaningful consolidated profitability margin; operations remained substantially loss-making.
Cash Flow, Liquidity and Debt
- Cash and cash equivalents were $180.3 million at September 30, 2021, compared with $356.1 million at December 31, 2020. Cash, cash equivalents and marketable securities totaled $599.6 million versus $607.1 million at year-end 2020.
- Operating cash use was $364.0 million for the first nine months, compared with $303.5 million in the prior-year period.
- Investing cash use was $222.6 million, primarily reflecting marketable-security purchases, $35.0 million of intangible-asset acquisitions, $24.0 million of equity-security purchases and $10.7 million of capital expenditures.
- Financing cash inflow was $411.1 million, principally from the 2029 Notes, partially offset by share repurchases, capped-call purchases, the Eidos noncontrolling-interest repurchase and debt repayment.
- Net cash, cash equivalents and restricted cash decreased by $175.6 million during the nine months.
- Debt carrying values were $732.7 million for the 2.25% convertible 2029 Notes, $539.5 million for the 2.50% convertible 2027 Notes and $103.1 million of term loans. Management reported approximately $1.4 billion of outstanding debt net of discounts, issuance costs and accretion.
- The Hercules term loan had a $100.0 million principal balance, a 7.65% rate at quarter-end, interest-only payments through June 2024 and maturity in May 2025, subject to extension conditions. Up to $185.0 million of additional facilities remained undrawn and subject to conditions.
Material Changes Versus the Prior Comparable Period
- Nine-month revenue increased by $48.7 million, primarily from $46.0 million recognized under the QED-Helsinn license and collaboration agreement and an $8.5 million Navire-LianBio regulatory milestone. Quarterly revenue declined by $5.8 million because the prior-year quarter included the LianBio upfront license revenue.
- Research and development expense increased $82.0 million year to date, driven by higher personnel, external development and manufacturing costs, as well as performance-based stock compensation.
- SG&A increased $29.2 million year to date due to organizational expansion and commercial-launch activities, partially offset by Helsinn cost and loss sharing.
- BridgeBio issued $747.5 million principal amount of 2029 Notes in January 2021, receiving approximately $731.4 million of net proceeds. It also entered into $61.3 million of capped calls and repurchased approximately $50.0 million of common stock in connection with the offering.
- BridgeBio completed the Eidos merger in January 2021, issuing approximately 26.2 million shares and paying $21.3 million in cash. Eidos became wholly owned.
- In May 2021, the company authorized a $150.0 million share-repurchase program and had completed the authorization by September 30, repurchasing approximately 3.0 million shares at an average price of $49.72.
- BridgeBio consolidated PellePharm beginning April 15, 2021 after LEO terminated its call option and BridgeBio became the primary beneficiary.
- The company early adopted ASU 2020-06 on January 1, 2021, resulting in the 2027 Notes being accounted for wholly as debt and a $153.8 million reduction to stockholders’ equity from the transition adjustments.
Outlook, Commentary and Risks
- Management expects continued net losses for the next several years as it funds discovery, clinical and preclinical development and commercial-launch activities.
- Management stated that available cash, cash equivalents and marketable securities are expected to fund operations for at least the next 12 months under current plans and forecasts. Additional financing could be required sooner if plans or forecasts change.
- Management expected to report initial data by the end of 2021 from the Phase 2 achondroplasia study of infigratinib in children.
- COVID-19 caused delays or temporary suspensions in clinical-trial enrollment and could continue to delay clinical trials, nonclinical studies, regulatory activities and commercial operations. The ultimate impact was described as uncertain.
- Material execution risks include clinical-trial failure or delay, regulatory uncertainty, limited commercial sales of recently approved products, dependence on partners, manufacturing and supply constraints, substantial milestone obligations and the need for future financing.
- Performance-based milestone arrangements had potential fixed monetary amounts of $240.9 million, of which $16.9 million was accrued as probable at September 30, 2021. The filing reports no material legal proceedings and no material changes to previously disclosed risk factors.
Important Facts to Verify
- Whether product sales of NULIBRY and TRUSELTIQ accelerate sufficiently to offset ongoing R&D, commercial and interest costs.
- The timing, results and regulatory implications of key clinical programs, particularly acoramidis and pediatric infigratinib.
- Actual cash-burn trends and whether the stated liquidity runway remains valid as development and launch spending evolves.
- Future conversion, refinancing or repayment requirements for the $1.3 billion principal amount of convertible notes and the Hercules term loan.
- The achievement and settlement method of the $240.9 million of potential milestone compensation and other contingent license, regulatory and sales milestones.
- The effect of COVID-19, partner performance, manufacturing capacity and regulatory decisions on development timelines and revenue.