IDEAYA Biosciences, Inc. — Q2 2023 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2023. IDEAYA is a clinical-stage precision-medicine oncology company with no approved products and no commercial product revenue. Reported revenue is from collaboration activities, principally with GSK.
Financial performance
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Collaboration revenue | $3.5 million | $5.9 million | $11.4 million | $17.2 million |
| Research and development expense | $29.2 million | $22.8 million | $57.0 million | $42.5 million |
| General and administrative expense | $7.1 million | $5.6 million | $13.4 million | $11.5 million |
| Net loss | $27.9 million | $22.1 million | $51.6 million | $36.1 million |
| Basic and diluted net loss per share | $0.50 | $0.57 | $0.99 | $0.93 |
Q2 collaboration revenue fell 39% year over year, while R&D expense rose 28% and net loss increased 27%. For the first half, revenue declined 34%, R&D expense increased 34%, and net loss widened 43%. Higher R&D spending reflected personnel and clinical-development costs; higher interest income partly offset operating losses. No gross margin is reported, and product margins are not applicable before commercialization.
At June 30, cash and cash equivalents were $102.8 million, with short- and long-term marketable securities of $407.3 million, for approximately $510.1 million in cash, cash equivalents and marketable securities. Total assets were $527.6 million; total liabilities were $25.9 million; and accumulated deficit was $287.0 million. The filing reports no financial borrowings; liabilities include operating leases and contract liabilities.
Six-month operating cash use was $61.3 million, investing cash use was $97.9 million, and financing provided $194.0 million. Financing included proceeds from the April public offering and pre-funded warrants. Cash, cash equivalents and restricted cash ended the period at $103.6 million. The company completed an April follow-on offering of common shares and pre-funded warrants, reporting approximately $188.7 million net proceeds. It also had a new $250 million ATM facility, with $249.8 million remaining at quarter-end.
Business developments and outlook
- Darovasertib (IDE196): The company reported preliminary Phase 2 combination data with crizotinib in metastatic uveal melanoma (MUM), including investigator-reviewed response rates of 45% in 20 evaluable first-line patients and 30% in 63 evaluable patients across treatment lines. Median progression-free survival was approximately seven months in both groups. These interim results are not confirmatory. The company had opened and was recruiting for a potential registration-enabling Phase 2/3 study in first-line HLA-A2-negative MUM, and a Phase 2 study of single-agent darovasertib in primary uveal melanoma.
- Safety disclosure: In the reported combination expansion cohort, 31% of patients had at least one Grade 3 adverse event; no Grade 4 events and one Grade 5 event were reported. The sponsor considered the Grade 5 event most likely due to disease progression and not likely related to study therapies; the treating investigator assessed it as possibly related.
- IDE397: The company reported preliminary monotherapy tumor-shrinkage observations in MTAP-deletion cancers and continued Phase 2 expansion enrollment. An Amgen-sponsored IDE397/AMG 193 combination study cleared its IND and dosed its first patient in August 2023, after quarter-end.
- IDE161: Phase 1 dose escalation continued for patients with tumors exhibiting homologous-recombination deficiency. The company reported an April 2023 obligation to pay CRT £750,000 in milestone payments.
- GSK programs: GSK leads clinical development and bears POLQ program R&D costs; IDEAYA shares 20% of global WRN R&D costs. IDEAYA anticipated potential FDA clearance of the GSK101 (IDE705) IND in Q3 2023 and WRN development-candidate selection in the second half of 2023. These were management expectations, not guaranteed outcomes.
Management expects operating losses to continue and increase as programs advance. It said existing cash, cash equivalents and marketable securities should fund planned operations for at least 12 months from issuance of the financial statements. No product-sales guidance was provided. Revenue from the GSK collaboration may fluctuate and is expected to decrease variably over the coming 12 months as remaining WRN research obligations are completed.
Liquidity, commitments and principal risks
- IDEAYA is dependent on external financing and collaboration payments; additional capital may be needed, and future equity financing could dilute shareholders. Management’s runway statement depends on its current plan and is not a guarantee.
- A new South San Francisco facility lease has a 10-year initial term beginning in 2024 and approximately $36.8 million in base-rent commitments over that term. Existing facility lease payments were expected to total $2.7 million through July 2024.
- Clinical and regulatory outcomes remain uncertain: trials may be delayed, fail to demonstrate benefit, encounter safety issues, or require additional studies. Patient recruitment, biomarker and companion-diagnostic availability, and third-party manufacturing and supply are material dependencies.
- GSK may terminate programs; that could reduce potential collaboration revenue and increase IDEAYA’s costs if it assumes development responsibilities. IDEAYA also relies on partners for study drugs, including crizotinib and AMG 193.
- The company disclosed no litigation it considers likely to have a material adverse effect and no material adverse effect from ordinary-course contingencies. It identified marketable-securities interest-rate sensitivity and uninsured deposits as financial risks.
- Management concluded disclosure controls were effective as of June 30, 2023, with no material change in internal control over financial reporting reported for the quarter. The company expected to become a large accelerated filer in 2024, bringing additional reporting and auditor-attestation requirements.
Important facts for investors to verify
- Whether darovasertib’s preliminary MUM efficacy and safety findings are confirmed in later analyses and the registration-enabling study, including the selected dose and endpoint.
- Progress, enrollment, safety and efficacy updates for IDE397, IDE161, and the IDE397/AMG 193 combination; distinguish post-quarter developments from Q2 results.
- Actual cash burn and collaboration revenue as WRN services progress and remaining contract liabilities are recognized.
- Potential dilution from the 2023 offering, pre-funded warrants, stock compensation and use of the $250 million ATM facility.
- Clinical, regulatory, manufacturing, diagnostic, collaboration and lease commitments, including whether management’s stated cash runway remains supportable as plans and costs evolve.