Black Diamond Therapeutics, Inc. — Q2 2022 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2022. Black Diamond is a clinical-stage precision oncology company developing mutation-targeted therapies using its MAP drug discovery platform. It had no approved products and generated no revenue.
Financial performance
Amounts below are in millions of dollars except per-share data. The company reported operating losses and negative operating cash flow; revenue and operating margins are not applicable.
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $16.2 | $26.7 | $34.0 | $49.5 |
| General and administrative expense | $7.0 | $8.0 | $14.9 | $15.9 |
| Total operating expenses | $23.2 | $34.7 | $48.9 | $65.4 |
| Net loss | $22.9 | $34.4 | $48.4 | $64.7 |
| Net loss per share | $0.63 | $0.95 | $1.33 | $1.79 |
| Operating cash used | Not provided for quarter | Not provided for quarter | $46.7 | $49.6 |
- At June 30, cash and cash equivalents were $55.9 million and investments were $105.0 million, totaling $160.9 million in cash, cash equivalents and investments. Total current assets were $168.6 million; current liabilities were $19.7 million.
- Six-month investing cash flow was positive $36.5 million, primarily from investment sales and maturities. Financing cash flow was positive $0.2 million. Cash, cash equivalents and restricted cash declined $10.0 million over the six months.
- Total liabilities were $46.5 million, including $28.8 million in operating lease liabilities. The filing reports no borrowings or other debt. Operating lease commitments totaled $36.1 million.
- Accumulated deficit was $292.3 million. Comprehensive loss for the six months was $50.3 million, including $1.9 million of unrealized investment losses.
Changes and business developments
- Q2 net loss improved by $11.4 million year over year; six-month net loss improved by $16.2 million. The main driver was lower R&D spending, partly offset by lower interest income.
- R&D expense fell $10.5 million in Q2 and $15.6 million for the six months. Management attributed most of the reduction to discontinuing BDTX-189 development in April 2022 and reducing spending on early discovery and platform work. BDTX-189 expense was down $4.8 million in Q2 and $10.4 million for the six months.
- BDTX-1535 was in Phase I dose escalation; BDTX-4933 was in IND-enabling studies. The company also described ongoing early-stage discovery efforts, including an FGFR program.
- Investment fair value fell from $144.0 million at year-end 2021 to $105.0 million at June 30, 2022, and accumulated other comprehensive loss increased to $2.3 million, primarily reflecting unrealized investment losses.
Outlook, risks and contingencies
- Management estimated that the $160.9 million of cash, cash equivalents and investments at June 30 would fund planned operations into the third quarter of 2024. It cautioned that this estimate depends on assumptions and capital could be depleted sooner. Separately, the financial statement note says resources were expected to fund planned operations for at least 12 months from the August 9 filing date.
- The company expects continued operating losses, higher expenses as it advances its programs, and a need for additional funding before product revenue, if any. Financing may dilute shareholders or require restrictive terms or surrender of valuable rights; adequate financing on acceptable terms is not assured.
- Key uncertainties include clinical and preclinical progress, trial enrollment and results, regulatory approvals, manufacturing, intellectual property, competition, and the ability to retain personnel and obtain financing. COVID-19-related disruptions, inflation, supply-chain issues and political or trade instability could affect costs and timelines.
- Contract research and other service agreements are generally cancellable, subject to payment for services and incurred obligations. License milestone and royalty payments are contingent and not reasonably estimable. The company reported no material legal proceedings and no accrued indemnification liabilities.
- Management concluded disclosure controls were effective as of June 30, 2022 and reported no material change in internal control over financial reporting during the quarter.
Investor facts to verify
- Progress, timelines and results for BDTX-1535 and BDTX-4933, and the status of the FGFR program.
- Whether the cash runway estimate remains on track and when additional financing may be needed.
- How the discontinuation of BDTX-189 and reduced discovery spending affect the pipeline and future R&D costs.
- Investment portfolio valuation and unrealized losses, plus the company’s ongoing lease and other contractual commitments.