Relay Therapeutics, Inc. (RLAY) - Q2 2024 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2024. Relay Therapeutics is a clinical-stage precision medicine company utilizing its Dynamo platform to discover small molecule therapeutics for oncology and genetic diseases. The company has no products approved for commercial sale and has not generated revenue from product sales. Its lead candidates include RLY-2608 (PI3Kα inhibitor) and lirafugratinib (RLY-4008, FGFR2 inhibitor).
Key Financial Metrics
| Metric | Q2 2024 (3 Months) | Q2 2023 (3 Months) | YTD 2024 (6 Months) | YTD 2023 (6 Months) |
|---|---|---|---|---|
| Total Revenue | $0 | $0.1 million | $10.0 million | $0.3 million |
| Net Loss | $(92.2) million | $(98.5) million | $(173.6) million | $(192.7) million |
| Net Loss Per Share | $(0.69) | $(0.81) | $(1.32) | $(1.59) |
| R&D Expenses | $92.0 million | $88.2 million | $174.4 million | $171.0 million |
| G&A Expenses | $20.1 million | $20.1 million | $39.9 million | $39.7 million |
| Cash & Investments | $688.4 million (as of June 30, 2024) | |||
| Accumulated Deficit | $1.57 billion (as of June 30, 2024) |
Material Changes vs. Prior Period
- Revenue: Q2 2024 revenue was $0 compared to $0.1 million in Q2 2023. However, YTD 2024 revenue increased significantly to $10.0 million (vs. $0.3 million YTD 2023) due to a $10.0 million milestone payment from Genentech recognized in the first half of 2024.
- Net Loss: Net loss improved by $6.3 million in Q2 2024 compared to Q2 2023, and by $19.1 million on a YTD basis. This improvement was primarily driven by a non-cash gain from the change in fair value of contingent consideration liability (related to the ZebiAI acquisition) which was reduced to $0.
- Operating Expenses: R&D expenses increased slightly YTD due to external costs for the ReDiscover Trial (RLY-2608), offset by a decrease in external costs for platform technologies.
- Contingent Liability: The contingent consideration liability from the ZebiAI acquisition was fully resolved and reduced to $0 during the quarter.
Guidance, Outlook, and Risks
- Liquidity: Management believes existing cash, cash equivalents, and investments of $688.4 million will fund operations into the second half of 2026.
- Collaboration Termination: On July 11, 2024 (subsequent to the period end), Genentech notified Relay of its intent to terminate the collaboration agreement for migoprotafib (RLY-1971) without cause. The termination becomes effective 180 days after notice. No further milestones or payments are expected after the termination date.
- Clinical Progress:
- RLY-2608: Dose expansion cohorts are ongoing. A new triplet combination arm with Pfizer's atirmociclib is planned.
- Lirafugratinib (RLY-4008): Enrollment for the ReFocus Trial has been closed to allow data maturation. Interim data showed efficacy signals in cholangiocarcinoma cohorts.
- Risks: The company faces standard biotech risks including clinical trial failure, regulatory delays, and the need for additional capital. Specific risks include reliance on third-party manufacturers and CROs, and the potential impact of the Genentech termination on future revenue streams.
Investor Verification Checklist
- Genentech Termination Impact: Verify the financial impact of the July 2024 Genentech termination notice and confirm no further milestone payments are expected.
- Cash Runway: Confirm the $688.4 million liquidity position and the validity of the "second half of 2026" funding estimate given ongoing burn rates.
- RLY-2608 Data: Monitor upcoming data readouts from the ReDiscover Trial dose expansion cohorts and the new Pfizer collaboration.
- RLY-4008 Data: Await final data analysis from the closed ReFocus Trial to determine next steps for development.
- Capital Raising: Assess the company's ability to raise additional capital if clinical timelines extend or if the Genentech termination accelerates cash burn.