Bolt Biotherapeutics, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022; balance-sheet comparisons are to December 31, 2021. Bolt is an early-stage immuno-oncology company developing antibody-based therapies. It has no product-sales revenue and is primarily funding research and development.
Financial performance and position
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Collaboration revenue | $0.8 million | None |
| Research and development expense | $18.4 million | $14.1 million |
| General and administrative expense | $6.3 million | $4.3 million |
| Operating loss | $23.9 million | $18.4 million |
| Net loss | $23.7 million | $24.5 million |
| Basic and diluted loss per share | $0.64 | $1.14 |
| Net cash used in operating activities | $24.3 million | $16.6 million |
Cash and cash equivalents were $44.0 million and marketable securities were $201.2 million at March 31, 2022. Including $1.6 million of restricted cash, these resources totaled approximately $246.8 million. Total current assets were $196.1 million versus current liabilities of $19.3 million. Total liabilities were $54.4 million, including operating lease liabilities; the filing reports no outstanding debt. Accumulated deficit was $230.7 million. The company reported a $1.1 million unrealized loss on marketable securities in comprehensive loss.
No product gross margin is reported; the filing does not provide a clear product-margin measure. Operating expenses substantially exceed collaboration revenue.
Material changes and operating developments
- Revenue rose from zero to $0.8 million, recognized for services under the Genmab and Innovent collaborations.
- R&D expense increased $4.3 million, reflecting BDC-2034 IND-enabling work, continued BDC-1001 clinical development, higher contract and consulting, personnel and facility costs; lower manufacturing expense partly offset the increase.
- G&A expense increased $2.0 million, primarily from higher personnel and office-related costs.
- Operating cash use increased $7.8 million year over year. Investing activities provided $40.8 million, mainly from maturities of marketable securities; financing provided $0.1 million. Q1 2021 cash flows included IPO and preferred-stock financing proceeds.
- BDC-1001 is in a Phase 1/2 trial; the company said BDC-2034 was expected to enter the clinic later in 2022. The BDC-1001 combination trial with BMS’s nivolumab began in Q4 2021.
- A March 2022 shelf registration permits up to $250 million of securities; its ATM program permits up to $75 million of common-stock sales, with a 3% sales commission. No ATM shares had been sold by March 31, 2022.
Outlook, risks and contingencies
Management expected existing cash, cash equivalents and marketable securities to fund operations for at least 12 months after the filing’s issuance date. Bolt anticipates continuing losses and rising expenses as it advances clinical trials, research, manufacturing and public-company operations. It expects to need additional capital; financing may be unavailable or dilutive, and collaborations could require relinquishing valuable rights.
Management said the COVID-19 pandemic had not materially adversely affected productivity or business to date, but warned that future effects could disrupt trials, suppliers and operations. The company relies on single-source manufacturers and suppliers. Other key risks include clinical and regulatory uncertainty, capital needs, competition and intellectual-property risks.
The Toray research plan was under reevaluation, which may affect the scope and timing of services. Potential future supply-agreement milestone payments were up to $2.0 million. Operating lease liabilities were $23.4 million; scheduled minimum lease payments were $36.7 million before imputed interest, partially offset by $1.1 million of scheduled sublease income. No material pending legal claims or material indemnification claims were reported.
A material weakness in internal control over financial reporting remained: insufficient accounting personnel and inadequate formal policies and controls, including over reconciliations and journal entries. Management reported remediation efforts but said the weakness would not be considered remediated until controls operate effectively for a sufficient period and testing supports that conclusion. No material changes to previously disclosed risk factors were reported.
Important facts for investors to verify
- Whether BDC-1001 and BDC-2034 clinical progress, trial timing and development costs align with management’s expectations.
- Whether the stated 12-month liquidity runway remains supported by current spending, investment values and future obligations.
- Any subsequent ATM sales, other capital raises, dilution or changes in financing needs.
- Progress and economics of the Genmab, Innovent and Toray collaborations, including Toray’s research-plan reevaluation and potential contingent payments.
- Whether the material weakness is remediated and internal controls have been tested and shown to operate effectively.