Biomea Fusion, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Biomea Fusion is a clinical-stage biopharmaceutical company developing covalent small-molecule therapies for genetically defined cancers and metabolic diseases. It has no approved products and has not generated revenue.
Financial and operating performance
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $24.4 million | $11.4 million |
| General and administrative expense | $5.6 million | $5.1 million |
| Total operating expenses | $30.0 million | $16.4 million |
| Net loss | $29.1 million | $16.4 million |
| Net loss per share, basic and diluted | $0.98 | $0.56 |
| Cash used in operating activities | $24.0 million | $10.0 million |
At March 31, 2023, cash and cash equivalents were $86.3 million, restricted cash was $0.4 million, and short-term investments were zero; total cash, restricted cash and investments were $86.7 million. Total assets were $112.6 million, total liabilities $29.5 million, and accumulated deficit $160.6 million. The company reported no interest-bearing debt. It had $18.9 million in undiscounted future operating lease payments, with lease liabilities of $13.3 million.
Material changes and liquidity
- R&D expense increased $13.0 million year over year, primarily from higher clinical and preclinical activity, manufacturing costs, and personnel. G&A rose $0.6 million, mainly from higher personnel-related costs.
- Operating cash use increased $14.1 million year over year. Investing activities used $1.8 million in Q1 2023, primarily for property and equipment, versus $20.4 million of cash provided in Q1 2022, primarily from investment maturities.
- After quarter-end, on April 3, 2023, Biomea sold 5.75 million shares at $30 per share, raising approximately $161.8 million net of offering costs. The company stated that cash and investments, including these proceeds, should fund planned operations for at least one year past the financial statements’ issuance date.
Pipeline, outlook and risks
- BMF-219 is being studied in early clinical trials for hematologic malignancies, KRAS-mutated solid tumors, and type 2 diabetes. The company reported preliminary four-week type 2 diabetes results: median HbA1c change was -1.0% in the 100 mg without-food cohort (8 of 9 responders) and -0.3% in the with-food cohort (7 of 10 responders). The filing describes the treatment as generally well tolerated in these cohorts, with no serious or severe adverse events reported. These small-cohort, short-duration results are preliminary and do not establish efficacy or durability.
- Management expects losses and expenses to continue and increase as it advances clinical and preclinical programs. R&D expense is expected to rise as trials progress; the filing provides no quantified financial guidance.
- The company said it expected to nominate a third development candidate in the first half of 2023. Subsequent to quarter-end, it announced FDA clearance of the BMF-500 IND in May 2023; this was not a Q1-period event.
- Key risks include clinical and regulatory uncertainty, reliance on third-party manufacturers and research organizations, need for additional capital over time, potential dilution from equity issuance, competition, and the possibility that preliminary clinical findings will not hold in larger or later-stage studies. Management reported effective disclosure controls and no material change in internal control over financial reporting during the quarter. It reported no material legal proceedings.
Important facts for investors to verify
- Updated cash runway assumptions and expected spending following the April 2023 equity offering.
- Subsequent, complete clinical data for BMF-219, including durability, safety, and results in larger patient groups.
- Enrollment, timing, and outcomes of BMF-219 trials, and the development schedule for BMF-500 and other pipeline candidates.
- Future R&D spending, cash burn, and potential financing needs, including possible dilution.
- Manufacturing and clinical-trial execution risks, and whether regulatory authorities require additional studies or evidence.