Bicycle Therapeutics plc — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021; unaudited. Bicycle is a clinical-stage biotechnology company developing its Bicycle peptide platform and has no products approved for sale.
Financial performance and liquidity
| Metric | Q1 2021 | Q1 2020 |
|---|---|---|
| Collaboration revenue | $1.8 million | $1.1 million |
| Research and development expense | $9.7 million | $7.8 million |
| General and administrative expense | $8.1 million | $5.0 million |
| Operating loss | $16.0 million | $11.6 million |
| Net loss | $16.2 million | $11.3 million |
| Basic and diluted loss per share | $0.73 | $0.63 |
| Net cash from (used in) operating activities | $(13.7) million | $21.2 million |
At March 31, cash was $195.9 million, compared with $136.0 million at year-end 2020. Current assets were $215.4 million and current liabilities $20.8 million. Cash increased by $59.9 million, principally from $58.8 million net ATM proceeds and a $15.0 million debt draw, offset in part by operating and investing outflows. Q1 2020 operating cash inflow largely reflected the $30.0 million Genentech upfront payment recorded as deferred revenue.
Long-term debt, net of discount, was $29.5 million; gross Hercules borrowings were $30.0 million. The facility bears interest at the greater of 8.85% or prime plus 5.60%; its effective rate was 11.4% at quarter-end. Interest-only payments were extended through July 2023, with principal payments scheduled to begin August 2023; qualifying milestones could extend the interest-only period. Maturity is October 2024. The loan is secured by substantially all assets other than intellectual property and includes covenants and default provisions.
Changes and material developments
- Revenue rose $0.7 million, mainly reflecting Genentech collaboration revenue. Operating expenses increased $5.1 million: R&D rose $1.9 million, including higher BT8009 development, staffing and share-based compensation; G&A rose $3.1 million, including increased share-based compensation and an unfavorable foreign-exchange comparison.
- Net loss widened by $4.9 million. Interest expense was $0.5 million, versus none in Q1 2020, following the Hercules borrowing; interest income also declined.
- In March, the company drew the additional $15.0 million tranche under its Hercules facility. During Q1 it also issued ADSs for $58.8 million net proceeds. In April, it sold a further 482,299 ADSs for $14.0 million net, completing the $75.0 million ATM program.
- Genentech collaboration consideration increased by $2.0 million after specified research criteria were achieved; the company reported $28.4 million of related deferred revenue at March 31.
- The Cambridge lease was extended for five years, through December 2026, after management concluded exercise of the renewal option was reasonably certain.
Outlook, risks and contingencies
Management stated that available cash was expected to fund operating expenses and capital expenditures for at least 12 months from issuance of the interim financial statements. The company expects increasing expenses as it advances research and clinical programs and said additional funding will be needed; no profitability or product-revenue forecast was provided.
BT5528 and BT8009 were in company-sponsored Phase I/II trials; BT1718 was in a Cancer Research UK-sponsored Phase I/IIa trial. The company also described preclinical and discovery programs. COVID-19 had caused a temporary BT1718 enrollment pause in 2020, later lifted; management reported trials and laboratories operating but warned that renewed disruption could affect enrollment, timelines, supply, collaborators and access to capital. Clinical outcomes, regulatory approval, manufacturing capacity, third-party performance, financing needs, competition and intellectual-property protection remain significant uncertainties.
Notable items include a $2.8 million liability for Cancer Research UK costs associated with BT1718; contingent future Cancer Research UK milestones; and potential milestone obligations under the Pepscan settlement and license. The company reported no material legal proceedings beyond disclosed matters. A UK opposition decision dated April 1, 2021 restricted its TICA trademark application for most relevant goods and services, with potential parallel effects on related US and Japanese applications and its EU registration.
Management concluded disclosure controls were effective as of March 31, 2021 and reported no material change in internal control over financial reporting during the quarter.
Investor verification priorities
- Confirm cash runway assumptions, expected development spending and timing or terms of future financing.
- Track clinical enrollment, safety and efficacy updates for BT5528, BT8009 and BT1718, including any COVID-19 or supply-chain delays.
- Review Hercules facility terms, interest costs, repayment schedule, milestone conditions and covenant/default exposure.
- Assess collaboration revenue recognition, deferred-revenue conversion and partner decisions, especially Genentech and AstraZeneca program options and terminations.
- Monitor the TICA trademark dispute and the timing and potential amount of contingent milestone, royalty and other contractual obligations.