Biomea Fusion, Inc. — Q2 2021 Form 10-Q
Reporting period: Three and six months ended June 30, 2021. Biomea Fusion is a preclinical-stage biopharmaceutical company developing irreversible small molecules for genetically defined cancers. It has not generated revenue and has no products approved for sale.
Key financial metrics
| Metric | Q2 2021 / June 30, 2021 | Comparable period / prior year-end |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $5.2 million for Q2; $9.0 million for six months | $0.2 million and $0.6 million, respectively, in 2020 |
| General and administrative expense | $3.2 million for Q2; $5.3 million for six months | $0.1 million and $0.1 million, respectively, in 2020 |
| Net loss | $8.4 million for Q2; $14.3 million for six months | $0.3 million and $0.7 million, respectively, in 2020 |
| Net loss per share, basic and diluted | $0.33 for Q2; $0.77 for six months | $0.03 and $0.07, respectively, in 2020 |
| Cash flow from operations | $(10.6) million for six months | $(0.6) million for six months in 2020 |
| Cash, cash equivalents, restricted cash and investments | $203.0 million | $61.7 million cash and cash equivalents at December 31, 2020 |
| Total assets / liabilities | $209.5 million / $7.5 million | $62.5 million / $1.6 million at December 31, 2020 |
| Debt | No interest-bearing liabilities; PPP loan repaid in Q2 | PPP loan of approximately $36,000 at December 31, 2020 |
Margins are not meaningful because the company has no revenue. Cash used in investing activities was $37.8 million for the six months, primarily from purchases of investments and property and equipment. Financing provided $152.9 million, mainly from the IPO.
Material changes versus prior comparable period
- Operating expenses rose substantially as Biomea expanded personnel and advanced BMF-219 IND-enabling work. Management attributed R&D growth primarily to personnel, preclinical development, manufacturing and external consulting; G&A growth to personnel and public-company costs.
- Net loss increased to $14.3 million for the first half from $0.7 million in 2020. The company reported an accumulated deficit of $22.4 million at June 30, 2021.
- The April 2021 IPO generated approximately $152.8 million in net proceeds. Preferred shares converted into common shares at the IPO; common shares issued and outstanding increased materially.
- Investment purchases shifted a substantial portion of liquid funds into short- and long-term investments. Property and equipment and lease obligations also increased, including a five-year lab lease that commenced May 1, 2021.
Outlook, commentary and risks
- Management said existing cash and cash equivalents were expected to fund working capital and capital expenditures for at least 12 months following the filing date. The filing also states the company will need substantial additional capital; financing may be unavailable or dilutive, and management’s runway estimate depends on assumptions.
- The company expected to file an IND for lead candidate BMF-219 in the second half of 2021, report preclinical work on menin inhibition in type 2 diabetes in Q1 2022, and nominate a second development candidate in the first half of 2022. These are forward-looking plans, not guaranteed outcomes.
- Management expects losses and expenses to increase as the company advances preclinical and clinical development, hires staff and operates as a public company. No specific revenue or earnings guidance was provided.
- Key risks include BMF-219’s preclinical status and lack of human data, uncertain clinical and regulatory outcomes, dependence on third-party research and manufacturing providers, competition in menin-targeted therapies, financing needs, intellectual-property protection and potential COVID-19-related disruption. The company reported no development delays from COVID-19 to date but said future effects remained uncertain.
- The company reported no material legal proceedings and no subsequent events as of the filing. Management concluded disclosure controls and procedures were effective at a reasonable assurance level; a new stock-administration tool prompted control updates during the quarter.
Important facts for investors to verify
- Whether the planned BMF-219 IND submission and other development milestones occurred on schedule, and what subsequent clinical or regulatory evidence shows.
- Whether the stated cash runway remains valid in light of actual spending, investment balances and the pace of clinical development.
- Share-count disclosures: the balance sheet reports 28,990,180 common shares outstanding at June 30, while the stock note reports 29,635,249 including unvested restricted shares; the cover page reports 28,998,352 shares outstanding as of August 5. Confirm the relevant definitions and dates.
- How much cash is available for operations versus held in investments, and the maturity, liquidity and valuation profile of those investments.
- Potential dilution from outstanding options and equity plans, and the ownership and voting influence of large stockholders.