Relay Therapeutics, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual filing; it does not provide a clear standalone Q4 financial result. Relay is a clinical-stage precision-medicine company with no approved products and no product-sales revenue.
Financial performance and position
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $1.4 million | $3.0 million |
| Research and development expense | $246.4 million | $172.7 million |
| General and administrative expense | $66.0 million | $57.4 million |
| Net loss | $290.5 million | $363.9 million |
| Net loss per share, basic and diluted | $2.59 | $3.82 |
| Cash used in operating activities | $229.5 million | $74.4 million |
Revenue primarily reflects the Genentech collaboration; it is not recurring product revenue. The company reported no product sales. Gross margin and operating margin are not meaningful measures for its current business. FY2022 operating expenses were $300.7 million, down from $367.7 million in FY2021, largely because FY2021 included $123.0 million of acquired in-process R&D expense and an $11.9 million acquisition-related loss. Excluding those unusual FY2021 items, R&D and G&A increased in 2022 as clinical activity, platform work, and staffing expanded.
At year-end, cash and cash equivalents were $151.8 million and investments were $847.1 million, totaling $998.9 million. Current assets were $1.02 billion and current liabilities $63.7 million. The company had no debt outstanding. Accumulated deficit was $1.06 billion. Cash, cash equivalents, and investments declined from $958.1 million at year-end 2021 to $998.9 million at year-end 2022, reflecting financing proceeds and investment balances; operating cash use increased substantially. An unrealized investment loss of $9.3 million was recorded in other comprehensive loss, attributed to interest-rate movements, not credit losses.
Material changes and financing
- R&D expense rose $73.7 million, including higher clinical-trial costs for RLY-4008 and RLY-2608, increased personnel costs, and platform/preclinical spending.
- Net loss narrowed by $73.4 million, primarily because FY2021 contained the ZebiAI acquisition charges and FY2022 recorded an $11.7 million decrease in the fair value of contingent milestone consideration.
- Operating cash use increased by $155.1 million year over year. FY2021 operating cash flow benefited from substantial changes in operating assets and liabilities, including collection of Genentech-related receivables.
- The September 2022 public offering generated $284.7 million in net proceeds from 11.3 million shares. Shares issued and outstanding rose to 121.1 million from 108.2 million. No shares had been sold under the $300 million at-the-market program through year-end.
Pipeline, outlook, and risks
- RLY-4008: In an August 1, 2022 interim data cut, the reported interim response rate was 88% among 17 efficacy-evaluable, FGFR-inhibitor-naïve FGFR2-fusion cholangiocarcinoma patients treated at 70 mg once daily; the rate was 63% among 38 evaluable patients across doses and schedules. These are interim results from a small, early-stage trial, not confirmatory evidence. The FDA-discussed development plan uses a single-arm cohort that could potentially support accelerated approval. The FDA granted orphan drug designation for cholangiocarcinoma; the EMA adopted a positive opinion on orphan designation for biliary tract cancer.
- RLY-2608: First patient was dosed in December 2021; a dose-escalation arm combining it with fulvestrant began in April 2022. The filing describes preclinical findings, not clinical efficacy results.
- GDC-1971: Relay completed enrollment in its Phase 1a monotherapy trial in 2022. Genentech leads further development and began Phase 1b combination trials with a KRAS G12C inhibitor and atezolizumab.
- Management expected existing cash, cash equivalents, and investments to fund operations into 2025, while the financial-statement note says these resources are expected to cover at least one year from issuance. The company expects continued significant expenses and losses and says additional funding will be needed over time; no specific revenue or earnings guidance is provided.
- Key risks include clinical and regulatory failure or delay, patient-enrollment challenges, dependence on third-party manufacturers and trial operators, reliance on D. E. Shaw Research and its Anton 2 supercomputer, and the need for future capital. Management also cited inflation, rising interest rates, geopolitical uncertainty, and possible COVID-19-related disruption.
- The ZebiAI acquisition-related contingent consideration is subject to significant valuation estimates. At year-end, total contingent consideration liabilities were $32.4 million, including a $27.4 million milestone liability and a $5.0 million earnout amount. A further $25.0 million Genentech milestone liability is recorded as current because it may be repayable if Relay opts into the U.S. profit/cost share.
Most important facts for investors to verify
- Whether subsequent RLY-4008 data confirm the interim response rates, durability, safety profile, and feasibility of the proposed registration-enabling study.
- Clinical progress and dose selection for RLY-2608, including whether its preclinical selectivity and tolerability translate to patients.
- Cash burn against the stated runway, future clinical and platform spending, and timing and terms of any additional financing.
- Genentech collaboration economics and the decision on whether to opt into the U.S. profit/cost share, including potential repayment of milestone payments.
- Changes in the ZebiAI contingent consideration estimate and the potential share dilution from milestone payments; at year-end, full achievement of outstanding milestones would have represented approximately 5.0 million shares under the filing’s assumptions.
The company reported effective disclosure controls and internal control over financial reporting; the auditor issued unqualified opinions on the financial statements and internal controls.