IDEAYA Biosciences, Inc. — Q3 2023 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2023. IDEAYA is a clinical-stage precision oncology company with no approved products and no product-sales revenue. Its reported revenue is entirely from its GSK collaboration.
Financial performance and position
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Collaboration revenue | $8.0m | $29.7m | $19.5m | $46.9m |
| Research and development | $33.7m | $22.4m | $90.7m | $64.8m |
| General and administrative | $7.9m | $6.7m | $21.2m | $18.1m |
| Operating income (loss) | $(33.5)m | $0.7m | $(92.5)m | $(36.1)m |
| Net income (loss) | $(27.4)m | $1.6m | $(79.0)m | $(34.5)m |
| Interest and other income, net | $6.1m | $1.0m | $13.5m | $1.6m |
At September 30, 2023, cash and cash equivalents were $151.9m and marketable securities totaled $359.3m, for combined cash, cash equivalents and marketable securities of $511.1m. Total assets were $532.9m; total liabilities were $24.9m, including current operating lease liabilities. The filing reports no borrowings or financial debt. Gross profit and gross margins are not presented; revenue is collaboration revenue rather than product sales.
For the first nine months, operating cash use was $91.5m, versus $63.8m in 2022. Investing activities used $46.5m, principally reflecting purchases of marketable securities net of maturities; financing provided $221.8m, primarily from equity and warrant offerings. Cash, cash equivalents and restricted cash rose $83.8m to $152.6m. Accumulated deficit was $314.4m. Management believes available cash, cash equivalents and marketable securities will fund planned operations for at least 12 months from issuance of the filing.
Changes versus comparable periods
- Q3 collaboration revenue fell 73% year over year; the nine-month total fell 59%. The comparison is affected by $17.4m of revenue recognized in 2022 when GSK waived its MAT2A option. IDEAYA says remaining GSK contract liabilities relate to WRN research services and expects revenue from those obligations to vary and decline over the following 12 months.
- Nine-month R&D spending rose 40%, reflecting higher personnel costs and CRO, CMO and consultant costs as programs advanced. G&A rose 17%.
- Nine-month net loss more than doubled year over year, despite substantially higher interest income, which the company attributed to higher rates and a larger investment balance.
- Funding strengthened through the April 2023 follow-on offering, ATM sales and pre-funded warrants. Common shares outstanding increased to 58.6m from 48.2m at year-end 2022; 2.0m pre-funded warrants remained outstanding at September 30.
Outlook, programs and key risks
- Pipeline and expected milestones: IDEAYA is advancing darovasertib in uveal melanoma, IDE397 in MTAP-deleted tumors and IDE161 in HRD tumors. The FDA cleared GSK101’s IND in August 2023; GSK planned to begin first-in-human studies in Q4 2023 and leads development and bears Pol Theta R&D costs. IDEAYA and GSK are targeting an IND for the Werner helicase program in 2024. The company is targeting an IND for one or more earlier-stage programs in 2025. These are forward-looking plans, not guaranteed outcomes.
- Darovasertib: The company had initiated and was recruiting for a potential registration-enabling Phase 2/3 study of darovasertib plus crizotinib in HLA-A2-negative metastatic uveal melanoma. It also reported preliminary, investigator-reviewed Phase 2 data, including a 45% response rate and approximately seven-month median PFS in 20 evaluable first-line patients. These small, preliminary datasets are not confirmatory evidence; the filing describes an open-label design and planned progression-free and overall-survival endpoints.
- Other clinical updates: IDE397 was in Phase 2 monotherapy expansion, with reported early tumor responses; an Amgen-sponsored IDE397/AMG 193 combination study had dosed its first patient. IDE161 was in Phase 1 expansion and received FDA Fast Track designation for specified ovarian and breast cancer populations. Reported clinical observations are preliminary and may change with additional data.
- Collaboration and subsequent events: IDEAYA earned a $7.0m GSK milestone upon FDA acceptance of the GSK101 IND; payment was received in October 2023. It also reported a $3.0m Werner-program milestone receivable in October. On October 27, 2023, after quarter-end, it completed an offering with approximately $134.7m net proceeds, increasing liquidity but diluting shareholders.
- Spending and commitments: Management expects operating losses and R&D expenses to increase as clinical programs advance; the company has no product revenue and may need additional capital. A new laboratory and office lease is expected to commence in June 2024, with $36.8m of aggregate base rent over its initial ten-year term. Existing leases were expected to require $2.2m through July 2024.
- Principal risks: Clinical and regulatory outcomes are uncertain, earlier-stage results may not predict later trials, and enrollment, manufacturing, companion diagnostics and third-party performance may delay development. The company depends on GSK for partnered programs and shares external IDE397 combination-study costs with Amgen. Additional equity financing may dilute holders. Management cited macroeconomic, geopolitical, supply-chain, intellectual-property and competition risks. It reported no litigation expected to have a material adverse effect and no material change in disclosure controls.
Financial outlook: No specific revenue or earnings guidance is provided. Management expects continued, potentially increasing losses and states that current liquidity is expected to fund planned operations for at least 12 months from the filing’s issuance date.
Important facts for investors to verify
- Trial enrollment, endpoint timing and subsequent clinical data—especially for the darovasertib Phase 2/3 study—and whether preliminary findings are confirmed.
- Cash consumption relative to the stated runway, future R&D commitments and the timing and terms of any further financing.
- Share-count dilution from the April and October offerings, ATM sales, pre-funded warrants and employee equity awards.
- GSK and Amgen program progress, milestone conditions and collaboration economics, including IDEAYA’s WRN cost share and potential future payments.
- Execution and financial impact of the new ten-year facility lease, and the extent to which clinical, regulatory, manufacturing or diagnostic setbacks alter spending plans.