IDEAYA Biosciences, Inc. — 2019 Form 10-K
Reporting period: Fiscal year ended December 31, 2019. The filing also provides unaudited fourth-quarter results. IDEAYA is a clinical-stage oncology precision-medicine company with no approved products and no product revenue.
Financial performance and liquidity
| Metric | FY 2019 | FY 2018 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $34.3 million | $31.7 million |
| General and administrative expense | $10.0 million | $4.7 million |
| Total operating expenses / operating loss | $44.3 million | $36.4 million |
| Net loss | $42.0 million | $34.3 million |
| Net loss per share, basic and diluted | $3.36 | $35.92 |
| Net cash used in operating activities | $39.3 million | $27.6 million |
| Cash, cash equivalents and marketable securities at year-end | $100.5 million | $90.0 million |
| Working capital at year-end | $94.7 million | $85.3 million |
| Total liabilities at year-end | $12.6 million | $7.1 million |
FY 2019 net loss increased 22% year over year. R&D expense rose 8%, principally reflecting clinical and preclinical work, while G&A more than doubled as the company expanded and incurred public-company costs. Interest income was $2.3 million. Operating margins are not meaningful because the company had no revenue.
Fourth-quarter 2019 operating expenses were $11.3 million and net loss was $10.8 million, compared with $9.1 million and $8.6 million, respectively, in fourth-quarter 2018. Quarterly loss per share was $0.53 versus $8.11; the comparison is affected by the substantial increase in shares after the 2019 IPO.
IDEAYA raised approximately $50.2 million net in its May 2019 IPO. Year-end cash and marketable securities were $100.5 million; management stated these resources were expected to fund planned operations for at least 12 months from the financial-statement issuance date. No conventional borrowing or debt balance is reported; recorded liabilities include lease obligations. Operating lease liabilities totaled $6.8 million at year-end.
Business progress and material changes
- IDE196: The lead PKC inhibitor is in a Phase 1/2 basket trial for tumors with GNAQ or GNA11 hotspot mutations, including metastatic uveal melanoma (MUM). By March 15, 2020, 53 patients had enrolled, including 49 with MUM. The company completed Phase 1 dose-escalation enrollment and selected 400 mg twice daily as its Phase 2 monotherapy dose.
- IDE196 was generally well tolerated in the company’s dose-escalation experience; one Grade 3 fatigue event was attributed to treatment, and no other drug-related events at or above Grade 3 were reported in that cohort. These are early, limited clinical observations, not evidence of established efficacy.
- The FDA indicated in a late-2019 end-of-Phase 1 meeting that a proposed single-arm Phase 2 study might support an accelerated-approval NDA for MUM, potentially targeting 60 evaluable patients. This was preliminary regulatory feedback, not an approval or agreed final development plan.
- In March 2020, IDEAYA entered a trial collaboration with Pfizer: IDEAYA will sponsor and fund the combination study and Pfizer will supply binimetinib at no cost. The company targeted initiation of the IDE196/binimetinib combination arm in mid-2020.
- Pipeline: The lead synthetic-lethality program targets MAT2A in MTAP-deleted tumors. IDEAYA targeted a development-candidate selection in Q2 2020 and an IND submission in Q4 2020, subject to supporting studies. It also targeted Pol-theta candidate designation in the second half of 2020; WRN and PARG remained preclinical programs.
Outlook, risks and unusual items
- Management expected substantial continuing losses and rising R&D spending; profitability depends on successful development, regulatory approval and commercialization, none of which is assured. Additional capital may be needed, and financing could dilute shareholders or require restrictive terms or licensing arrangements.
- Key risks include clinical-trial safety, efficacy, enrollment and timing; uncertainty of biomarker-based patient selection and basket-trial regulatory pathways; dependence on CROs, contract manufacturers and suppliers; IP and licensing risks; competition; and future reimbursement and pricing constraints.
- The filing discusses the emerging COVID-19 outbreak and a San Mateo County shelter-in-place order issued after year-end. Management warned that research, suppliers and clinical activity could be delayed or interrupted; the eventual financial impact was uncertain.
- IDEAYA suspended preclinical plans for IDE196 in PKC-fusion tumors, EGFR-mutant TKI-resistant NSCLC, and non-hotspot GNAQ/GNA11 mutations because available evidence did not support clinical development. It continued preclinical work in Sturge-Weber syndrome.
- FY 2018 R&D included a one-time $6.3 million Novartis license-related expense, contributing to period-to-period expense comparisons. IDEAYA’s Novartis license also entails up to $29 million in development and sales milestones and mid-to-high-single-digit royalties on licensed-product sales.
- There was no material litigation reported. The company adopted lease accounting in 2019, recognizing right-of-use assets and lease liabilities; the change did not affect reported operating results or cash flows.
Investor verification priorities
- Check subsequent filings for actual cash runway, financing activity and operating cash burn relative to the stated 12-month expectation.
- Verify IDE196 trial progress, mature efficacy and safety data, and whether the FDA’s preliminary accelerated-approval feedback translated into an agreed registrational plan.
- Confirm whether the planned combination study and MAT2A IND milestones were achieved, and review any resulting trial data.
- Assess the impact of COVID-19, clinical enrollment and third-party supply or manufacturing interruptions.
- Review dilution exposure from outstanding options and future capital needs, as well as milestone and royalty obligations under the Novartis license.