10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40335

 

Biomea Fusion, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

82-2520134

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

900 Middlefield Road, 4th Floor

Redwood City, California

94063

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (650) 980-9099

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value

 

BMEA

 

The Nasdaq Global Select Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

As of July 25, 2022, the registrant had 29,290,593 shares of common stock, $0.0001 par value per share, outstanding.

 

 


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Balance Sheets

1

 

Condensed Statements of Operations and Comprehensive Loss

2

 

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity

3

 

Condensed Statements of Cash Flows

4

 

Notes to Unaudited Condensed Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

25

Item 4.

Controls and Procedures

25

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

26

Item 1A.

Risk Factors

26

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

74

Item 3.

Defaults Upon Senior Securities

74

Item 4.

Mine Safety Disclosures

75

Item 5.

Other Information

75

Item 6.

Exhibits

76

Signatures

77

 

i


 

Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

our financial performance;
the sufficiency of our existing cash, cash equivalents and investments to fund our future operating expenses and capital expenditure requirements;
our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
our anticipated use of our existing cash, cash equivalents and investments;
the implementation of our strategic plans for our business and product candidates;
the size of the market opportunity for our product candidates and our ability to maximize those opportunities;
the initiation, timing, progress and results of our research and development programs, preclinical studies, clinical trials and investigational new drug (IND) applications and other regulatory submissions;
the beneficial characteristics, safety, efficacy and therapeutic effects of BMF-219, BMF-500 and any other product candidates that we may identify and pursue;
the timing, progress and focus of our ongoing and future clinical trials, including our ongoing Phase 1 clinical trial of BMF-219 (COVALENT-101) and the reporting of data from those trials;
the ability of our clinical trials to demonstrate safety and efficacy of our product candidates, and other favorable results;
our plans relating to the clinical development of our product candidates, including the disease areas to be evaluated;
our ability to obtain and maintain regulatory approval of our product candidates;
our plans relating to commercializing our product candidates, if approved;
our estimates of the patient populations addressable by our product candidates, including BMF-219 and BMF-500, if approved, and the number of participants that will enroll in our ongoing and planned clinical trials;
the expected benefits of potential future strategic collaborations with third parties and our ability to attract collaborators with development, regulatory and commercialization expertise;
the success of competing therapies that are or may become available;
the timing or likelihood of regulatory filings and approvals, including our expectation to seek special designations, such as orphan drug designation, for our product candidates;
our plans relating to the further development and manufacturing of our product candidates, including for additional indications that we may pursue;
existing regulations and regulatory developments in the United States and other jurisdictions;
our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available;
our plan to rely on third parties to conduct and support preclinical and clinical development;
our ability to retain the continued service of our key personnel and to identify, hire and then retain additional qualified personnel;
the impact of the ongoing COVID-19 pandemic or other related disruptions on our business;
unfavorable global economic conditions, including inflationary pressures, market volatility, acts of war and civil and political unrest; and
our expectations regarding the period during which we will qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012, as amended.

ii


 

We have based these forward-looking statements largely on our current expectations, estimates, forecasts and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur at all. You should refer to the section titled “Risk Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. We qualify all of the forward-looking statements in this Quarterly Report on Form 10-Q by these cautionary statements.

 

Biomea Fusion, Inc., the Biomea logo and our other registered or common law trademarks, trade names or service marks appearing in this Quarterly Report on Form 10-Q are owned by us. This Quarterly Report on Form 10-Q contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Quarterly Report on Form 10-Q, including logos, artwork and other visual displays, generally appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

Summary Risk Factors

 

The following is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address every aspect of our risk factors, all of the risks that we face, or other factors not presently known to us or that we currently believe are immaterial. Additional discussion of the risks summarized in these summary risk factors, and other risks that we face, can be found under the heading “Risk Factors” in this Quarterly Report on Form 10-Q and should be carefully considered, together with other information in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission, or SEC, before making investment decisions regarding our common stock.

We have a limited operating history, have not completed any clinical trials, have no products approved for commercial sale, and have not generated any revenue, which may make it difficult for you to evaluate our current business and likelihood of success and viability.
We will require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and product development programs or future commercialization efforts.
Our discovery and preclinical development is focused on the development of novel covalent small-molecule therapies to treat patients with genetically-defined cancers and metabolic diseases, and the approach we are taking to discover and develop such binders is novel, may never lead to marketable products and may not ultimately represent a significant market.
Our novel approach to the discovery and development of our current and future product candidates is unproven, and we may not be successful in our efforts to use and expand our FUSIONTM System to build a pipeline of product candidates with commercial value.
We are very early in our development efforts and are substantially dependent on our lead product candidate, BMF-219. If we are unable to advance BMF-219 or any of our future product candidates through clinical development, obtain regulatory approval and ultimately commercialize BMF-219 or any of our future product candidates, or experience significant delays in doing so, our business, financial condition and results of operations will be materially adversely affected.
Preclinical and clinical drug development is a lengthy and expensive process, with an uncertain outcome. Our preclinical and clinical programs may experience delays or may never be initiated or completed, which would adversely affect our ability to obtain regulatory approvals or commercialize our product candidates on a timely basis or at all, which could have an adverse effect on our business.
The results of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA or other comparable foreign regulatory authorities. Successful preclinical studies and clinical trials cannot provide assurance of successful commercialization.
We have no experience as a company in conducting clinical trials.
The ongoing COVID-19 pandemic and adverse global economic conditions, including supply chain issues and inflationary pressures, could materially adversely impact our business, results of operations, and financial condition, including our preclinical studies and clinical trials.

iii


 

The regulatory approval processes of the FDA and other comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable. If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals for our product candidates, we will not be able to commercialize, or will be delayed in commercializing, our product candidates, and our ability to generate revenue will be materially impaired.
The price of our stock may be volatile, and you may not be able to resell shares of our common stock at or above the price you paid.

iv


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Biomea Fusion, Inc.

Condensed Balance Sheets

(Unaudited)

(in thousands, except share and per share amounts)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

148,481

 

 

$

145,736

 

Short-term investments

 

 

1,152

 

 

 

27,780

 

Prepaid expenses and other current assets

 

 

4,505

 

 

 

3,045

 

Total current assets

 

 

154,138

 

 

 

176,561

 

Long-term investments

 

 

186

 

 

 

1,876

 

Property and equipment, net

 

 

2,997

 

 

 

2,965

 

Operating lease right-of-use assets

 

 

2,440

 

 

 

2,722

 

Restricted cash

 

 

351

 

 

 

351

 

Other assets

 

 

1,624

 

 

 

1,230

 

Total assets

 

$

161,736

 

 

$

185,705

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,410

 

 

$

1,329

 

Accrued expenses and other current liabilities

 

 

6,361

 

 

 

2,743

 

Short-term operating lease liabilities

 

 

591

 

 

 

565

 

Total current liabilities

 

 

9,362

 

 

 

4,637

 

Long-term operating lease liabilities

 

 

1,984

 

 

 

2,285

 

Total liabilities

 

 

11,346

 

 

 

6,922

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of
   June 30, 2022 and December 31, 2021;
0 shares issued and
   outstanding as of June 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, $0.0001 par value; 300,000,000 shares authorized as of
   June 30, 2022 and December 31, 2021;
29,280,131 and 29,115,421 
   shares issued and outstanding as of June 30, 2022 and
   December 31, 2021, respectively

 

 

3

 

 

 

3

 

Additional paid-in capital

 

 

233,770

 

 

 

228,532

 

Accumulated other comprehensive income (loss)

 

 

(17

)

 

 

(10

)

Accumulated deficit

 

 

(83,366

)

 

 

(49,742

)

Total stockholders' equity

 

 

150,390

 

 

 

178,783

 

Total liabilities and stockholders' equity

 

$

161,736

 

 

$

185,705

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

1


 

Biomea Fusion, Inc.

Condensed Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share amounts)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

12,582

 

 

$

5,224

 

 

$

23,932

 

 

$

9,022

 

General and administrative

 

 

4,892

 

 

 

3,211

 

 

 

9,942

 

 

 

5,270

 

Total operating expenses

 

 

17,474

 

 

 

8,435

 

 

 

33,874

 

 

 

14,292

 

Loss from operations

 

 

(17,474

)

 

 

(8,435

)

 

 

(33,874

)

 

 

(14,292

)

Interest and other income (expense), net

 

 

216

 

 

 

36

 

 

 

250

 

 

 

41

 

Net loss

 

$

(17,258

)

 

$

(8,399

)

 

$

(33,624

)

 

$

(14,251

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on investments, net

 

 

6

 

 

 

17

 

 

 

(7

)

 

 

2

 

Comprehensive loss

 

$

(17,252

)

 

$

(8,382

)

 

$

(33,631

)

 

$

(14,249

)

Net loss per common share, basic and diluted

 

$

(0.59

)

 

$

(0.33

)

 

$

(1.15

)

 

$

(0.77

)

Weighted-average number of common shares used to
   compute basic and diluted net loss per common share

 

 

29,196,398

 

 

 

25,161,038

 

 

 

29,161,437

 

 

 

18,598,521

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

2


 

Biomea Fusion, Inc.

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity

(Unaudited)

(in thousands, except share amounts)

 

 

 

Series A Convertible
Preferred Stock

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2021

 

 

 

 

$

 

 

 

 

29,115,421

 

 

$

3

 

 

$

228,532

 

 

$

(10

)

 

$

(49,742

)

 

$

178,783

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

6,044

 

 

 

 

 

 

31

 

 

 

 

 

 

 

 

 

31

 

Issuance of restricted stock

 

 

 

 

 

 

 

 

 

47,216

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,330

 

 

 

 

 

 

 

 

 

2,330

 

Unrealized gain (loss) on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13

)

 

 

 

 

 

(13

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,366

)

 

 

(16,366

)

Balance at March 31, 2022

 

 

 

 

 

 

 

 

 

29,168,681

 

 

$

3

 

 

$

230,893

 

 

$

(23

)

 

$

(66,108

)

 

$

164,765

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

9,366

 

 

 

 

 

 

62

 

 

 

 

 

 

 

 

 

62

 

Issuance of restricted stock

 

 

 

 

 

 

 

 

 

47,216

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases under employee stock purchase plan

 

 

 

 

 

 

 

 

 

54,868

 

 

 

 

 

 

256

 

 

 

 

 

 

 

 

 

256

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,559

 

 

 

 

 

 

 

 

 

2,559

 

Unrealized gain (loss) on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

 

 

 

6

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,258

)

 

 

(17,258

)

Balance at June 30, 2022

 

 

 

 

 

 

 

 

 

29,280,131

 

 

$

3

 

 

$

233,770

 

 

$

(17

)

 

$

(83,366

)

 

$

150,390

 

 

 

 

Series A Convertible
Preferred Stock

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2020

 

 

7,064,925

 

 

$

55,738

 

 

 

 

11,953,107

 

 

$

1

 

 

$

13,343

 

 

$

 

 

$

(8,175

)

 

$

5,169

 

Series A financing costs

 

 

 

 

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of restricted stock

 

 

 

 

 

 

 

 

 

51,526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

919

 

 

 

 

 

 

 

 

 

919

 

Unrealized loss on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15

)

 

 

 

 

 

(15

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,852

)

 

 

(5,852

)

Balance at March 31, 2021

 

 

7,064,925

 

 

 

55,735

 

 

 

 

12,004,633

 

 

$

1

 

 

$

14,262

 

 

$

(15

)

 

$

(14,027

)

 

$

221

 

Issuance of common stock
   from initial public
   offering, net of offering
   costs

 

 

 

 

 

 

 

 

 

9,823,532

 

 

 

1

 

 

 

152,753

 

 

 

 

 

 

 

 

 

152,754

 

Conversion of preferred
   stock to common stock

 

 

(7,064,925

)

 

 

(55,735

)

 

 

 

7,064,925

 

 

 

1

 

 

 

55,734

 

 

 

 

 

 

 

 

 

55,735

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

43,850

 

 

 

 

 

 

225

 

 

 

 

 

 

 

 

 

225

 

Issuance of restricted stock

 

 

 

 

 

 

 

 

 

53,240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,463

 

 

 

 

 

 

 

 

 

1,463

 

Unrealized gain on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

17

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,399

)

 

 

(8,399

)

Balance at June 30, 2021

 

 

 

 

 

 

 

 

 

28,990,180

 

 

$

3

 

 

$

224,437

 

 

$

2

 

 

$

(22,426

)

 

$

202,016

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

3


 

Biomea Fusion, Inc.

Condensed Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2022

 

 

2021

 

Operating Activities

 

 

 

 

 

 

Net loss

 

$

(33,624

)

 

$

(14,251

)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

Depreciation expense

 

 

336

 

 

 

34

 

Non-cash operating lease expense

 

 

282

 

 

 

381

 

Stock-based compensation expense

 

 

4,889

 

 

 

2,382

 

Net amortization of premiums and accretion of discounts on investments

 

 

126

 

 

 

204

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(1,460

)

 

 

(1,421

)

Other assets

 

 

(394

)

 

 

12

 

Accounts payable

 

 

1,081

 

 

 

237

 

Accrued expenses and other current liabilities

 

 

3,618

 

 

 

2,259

 

Operating lease liabilities

 

 

(275

)

 

 

(388

)

Net cash used in operating activities

 

 

(25,421

)

 

 

(10,551

)

Investing Activities

 

 

 

 

 

 

Purchase of property and equipment

 

 

(368

)

 

 

(838

)

Purchase of investments

 

 

 

 

 

(38,492

)

Maturities of investments

 

 

28,185

 

 

 

1,500

 

Net cash provided by (used in) investing activities

 

 

27,817

 

 

 

(37,830

)

Financing Activities

 

 

 

 

 

 

Proceeds from stock option exercise and purchases under the employee stock purchase plan

 

 

349