Bicycle Therapeutics plc — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022; filed May 5, 2022. Bicycle is a clinical-stage biopharmaceutical company developing its synthetic Bicycle peptide medicines, with internal programs focused primarily on oncology. It had no approved products and generated no product-sales revenue.
Financial performance and liquidity
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Collaboration revenue | $3.9 million | $1.8 million; up $2.1 million |
| Research and development expense | $14.3 million | $9.7 million |
| General and administrative expense | $17.0 million | $8.1 million |
| Total operating expenses | $31.2 million | $17.8 million |
| Loss from operations | $(27.4) million | $(16.0) million |
| Net loss | $(27.6) million | $(16.2) million |
| Basic and diluted loss per share | $(0.93) | $(0.73) |
| Net cash used in operations | $(26.4) million | $(13.7) million |
| Capital expenditures | $4.8 million | $0.6 million |
Collaboration revenue growth primarily reflected $2.3 million recognized from Ionis, whose collaboration began in 2021; AstraZeneca revenue declined by $0.3 million. Revenue also included Genentech and the Dementia Discovery Fund. Gross margin is not meaningful to the business at this stage: the company has no product sales and reports collaboration revenue rather than product revenue.
Cash and cash equivalents were $407.4 million at March 31, 2022, down $31.3 million from $438.7 million at December 31, 2021. Financing provided $0.5 million in Q1 2022, versus $74.1 million in Q1 2021, which included an ATM offering and debt proceeds. Current assets were $429.8 million and current liabilities $35.4 million. Total liabilities were $129.3 million, including $30.0 million principal under the Hercules facility and $65.6 million deferred collaboration revenue.
Management said existing cash was expected to fund operating expenses and capital needs for at least 12 months from the filing date, while warning that spending is expected to rise and additional funding will be needed. The company reported an accumulated deficit of $245.9 million.
Material changes and notable items
- Operating expenses rose $13.4 million year over year. R&D expense increased with headcount, discovery and platform work, and facility costs. G&A growth was driven particularly by share-based compensation, which rose to $10.2 million overall from $3.8 million, including a $5.2 million increase in G&A share-based compensation.
- Property and equipment increased to $8.8 million from $3.1 million, alongside $4.8 million of quarterly purchases. Approximately $6.4 million of leasehold improvements and laboratory equipment at the new U.K. facility had not yet been placed in service.
- Collaboration deferred revenue was $65.6 million at quarter-end, down from $71.3 million at year-end, principally as performance obligations were fulfilled and currency translation changed balances.
- The $10 million additional Hercules term-loan commitment expired unexercised on March 15, 2022. The $30 million outstanding loan carries an 8.85% rate as of quarter-end; interest-only payments are extended through January 2024, with principal payments scheduled thereafter and maturity in October 2024. The loan is secured by substantially all assets other than intellectual property.
Outlook, management commentary and risks
- Clinical programs: BT5528, BT8009 and BT7480 were in company-sponsored Phase I/II trials; BT1718 was in a Cancer Research UK-sponsored and funded Phase I/IIa trial. Management reported signs of anti-tumor activity for BT5528 and BT8009 in earlier updates; an April 11, 2022 BT8009 update was also noted. BT7480 dose escalation was described as progressing on schedule. BT7455 remained in IND-enabling studies.
- The company expects increasing R&D and administrative costs as it advances clinical and preclinical programs, expands facilities and personnel, and supports public-company obligations. It did not provide quantified financial guidance.
- Management cited at least 12 months of expected cash runway from filing, but emphasized that estimates rely on assumptions and cash could be used faster than anticipated. Future financing may require equity, debt, collaborations, licensing or other transactions; none is assured on acceptable terms.
- Key risks include clinical and regulatory failure or delay, patient enrollment, safety or efficacy issues, dependence on third-party manufacturers and CROs, collaboration partner decisions, intellectual-property disputes, and access to additional capital. COVID-19 could disrupt trials, suppliers or operations; the Russia-Ukraine conflict and broader market disruption could affect supply chains and financing access.
- Potential contingent payments include up to $111.2 million in aggregate BT1718/BT7401 development, regulatory and commercial milestones under Cancer Research UK arrangements, and up to $92.4 million in contingent milestones under the Pepscan settlement and license agreement. These amounts depend on future events and were not included in the contractual-obligations table. The BT1718-related liability recorded was $3.4 million.
- AstraZeneca extended the research term for its fourth target in January 2022. A European patent opposition appeal involving Dyax Corp. was scheduled for November 15, 2022. The filing reported no other material legal proceedings.
Important facts for investors to verify
- Whether cash burn, capital spending and hiring continue at a pace consistent with management’s stated minimum 12-month runway.
- Clinical-trial enrollment, safety, efficacy and timing for BT5528, BT8009 and BT7480, and progress of BT1718 and BT7455.
- Whether collaboration partners exercise options, meet development milestones or terminate or change programs, and the timing and durability of collaboration revenue.
- The Hercules facility’s interest-rate exposure, repayment schedule and covenant or default provisions.
- The scale and timing of contingent milestone obligations, including Cancer Research UK and Pepscan, and the outcome of the scheduled patent appeal.