Bolt Biotherapeutics, Inc. — Q2 2021 Form 10-Q
Reporting period: Three and six months ended June 30, 2021. The unaudited statements are prepared under U.S. GAAP. Bolt is a clinical-stage immuno-oncology company with no product sales.
Financial performance and position
- Revenue: $0 in Q2 and the first half of 2021, compared with $67,000 and $231,000, respectively, in 2020. The company reported no product-sales revenue.
- Operating expenses: Q2 expenses were $23.8 million, up from $11.2 million; first-half expenses were $42.2 million, up from $20.1 million. R&D was $19.7 million for Q2 and $33.8 million for the half; G&A was $4.1 million and $8.4 million, respectively.
- Loss: Q2 net loss was $23.6 million versus $11.1 million; first-half net loss was $48.0 million versus $19.7 million. First-half 2021 includes a $6.1 million noncash expense from remeasuring the preferred-stock purchase-right liability. Net loss per share was $0.64 for Q2 and $1.65 for the first half.
- Cash flow: First-half operating cash use was $20.5 million, compared with $21.9 million in 2020. Investing cash use was $237.1 million, mainly reflecting purchases of marketable securities; financing provided $310.4 million, primarily from the IPO, Series C-2 financing and Genmab stock sale.
- Liquidity: At June 30, cash and cash equivalents were $58.3 million, short-term investments $186.7 million and long-term investments $65.9 million—$310.9 million combined. Total current assets were $248.2 million and current liabilities $19.3 million.
- Debt and equity: The company reported no outstanding debt. Total liabilities were $51.2 million; operating lease liabilities were $25.5 million. Stockholders’ equity was $295.9 million, versus a $104.9 million deficit at year-end 2020, following the IPO and conversion of preferred stock. Accumulated deficit was $156.4 million.
Material changes versus the prior comparable period
- Operating expenses rose substantially, chiefly due to higher manufacturing costs for BDC-1001 and BDC-2034, increased headcount and facility costs, and higher clinical-trial expenses.
- February’s IPO raised approximately $242.0 million net, and the company converted all outstanding preferred stock into common stock. Cash and investments increased markedly from year-end 2020.
- In May, Bolt entered a Genmab collaboration and a related stock purchase. Genmab paid $10.0 million upfront and separately invested $15.0 million for 821,045 common shares. No collaboration revenue was recognized in the first half because services had not yet been performed; $11.4 million was recorded as deferred revenue.
Outlook, risks and unusual items
- Management expects existing cash, cash equivalents and marketable securities to fund operations for at least the next 12 months, but cautions that actual spending and runway may differ from estimates.
- Bolt expected to move BDC-1001 into Phase 2 dose-expansion cohorts in 2021, advance BDC-2034 into clinical development in 2022, and designate another clinical candidate in the second half of 2021. These are forward-looking expectations, not assured outcomes.
- Genmab may fund research and development through initial clinical proof of concept. Bolt is eligible for potential milestone payments of up to $285 million per exclusively developed and commercialized therapeutic candidate, plus tiered royalties; these amounts are contingent, not guaranteed.
- Key risks include clinical and regulatory uncertainty, the need for additional capital, reliance on single-source manufacturers and suppliers, and possible COVID-19-related disruption. Management said the pandemic had not materially affected the reported interim financial statements.
- Management identified a material weakness in internal controls over financial reporting, citing insufficient accounting personnel and inadequate formal policies and controls. Remediation had begun, but the weakness was not considered remediated as of the filing. No material change in risk factors from the 2020 Form 10-K was reported.
- Commitments include up to $2.0 million in potential supply-agreement milestone payments and Stanford license milestones and royalties if applicable. The filing reported no material pending legal proceedings or material indemnification claims.
Most important facts for investors to verify
- Progress, safety and efficacy data from the BDC-1001 Phase 1/2 trial, and whether planned dose expansion and other development milestones were achieved.
- Actual operating cash burn and the durability of the stated 12-month-plus runway as clinical and manufacturing spending increases.
- Timing and performance requirements for recognizing Genmab and Toray deferred revenue, and whether collaboration programs advance or generate contingent payments.
- Progress in remediating the material weakness and whether controls are later tested and found effective.
- Manufacturing and supplier continuity, lease obligations, and the potential effect of future financing needs on existing shareholders.