UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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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, 2024, the registrant had
Table of Contents
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Page |
PART I. |
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FINANCIAL INFORMATION |
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Item 1. |
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Financial Statements (Unaudited) |
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3 |
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4 |
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5 |
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6 |
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8 |
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10 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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47 |
Item 3. |
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60 |
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Item 4. |
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60 |
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PART II. |
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Item 1. |
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61 |
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Item 1A. |
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Item 2. |
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63 |
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Item 3. |
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63 |
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Item 4. |
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63 |
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Item 5. |
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63 |
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Item 6. |
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64 |
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66 |
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2
BRIDGEBIO PHARMA, INC.
Condensed Consolidated Balance Sheets
(in thousands, except shares and per share amounts)
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June 30, |
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December 31, |
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2024 |
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2023 |
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(Unaudited) |
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(1) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Investments in equity securities |
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Receivables from licensing and collaboration agreements |
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Restricted cash |
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Prepaid expenses and other current assets |
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Total current assets |
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Investment in nonconsolidated entity |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Intangible assets, net |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities, Redeemable Convertible Noncontrolling Interests and Stockholders’ Deficit |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued compensation and benefits |
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Accrued research and development liabilities |
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Operating lease liabilities, current portion |
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Deferred revenue, current portion |
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Accrued professional and other accrued liabilities |
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Total current liabilities |
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2029 Notes, net |
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2027 Notes, net |
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Term loan, net |
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Operating lease liabilities, net of current portion |
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Deferred revenue, net of current portion |
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Other long-term liabilities |
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Total liabilities |
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Redeemable convertible noncontrolling interests |
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Stockholders’ deficit: |
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Undesignated preferred stock, $ |
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Common stock, $ |
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Treasury stock, at cost; |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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( |
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Accumulated deficit |
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( |
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Total BridgeBio stockholders’ deficit |
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( |
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Noncontrolling interests |
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Total stockholders’ deficit |
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( |
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Total liabilities, redeemable convertible noncontrolling interests and |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
BRIDGEBIO PHARMA, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except shares and per share amounts)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Operating costs and expenses: |
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Cost of revenue |
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Research and development |
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Selling, general and administrative |
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Restructuring, impairment and related charges |
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Total operating costs and expenses |
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Loss from operations |
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Other income (expense), net: |
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Interest income |
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Interest expense |
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( |
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Gain on deconsolidation of a subsidiary |
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Loss on extinguishment of debt |
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Net loss from equity method investment |
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Other income (expense), net |
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Total other income (expense), net |
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Net loss |
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Net loss attributable to redeemable convertible |
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Net loss attributable to common stockholders |
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$ |
( |
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$ |
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$ |
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$ |
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Net loss per share attributable to common stockholders |
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$ |
( |
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$ |
( |
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$ |
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$ |
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Weighted-average shares used in computing net loss per share attributable to common stockholders of BridgeBio, basic and diluted |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
BRIDGEBIO PHARMA, INC.
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
(in thousands)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Other comprehensive loss: |
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Unrealized gains (losses) on available-for-sale securities |
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( |
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Comprehensive loss |
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( |
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( |
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( |
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Comprehensive loss attributable to redeemable convertible |
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Comprehensive loss attributable to common stockholders |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
BRIDGEBIO PHARMA, INC.
Condensed Consolidated Statements of Redeemable Convertible Noncontrolling Interests and Stockholders’ Deficit
(Unaudited)
(in thousands, except shares and per share amounts)
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Six Months Ended June 30, 2024 |
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Redeemable |
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Accumulated |
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Total |
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Convertible |
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Additional |
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Other |
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BridgeBio |
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Non- |
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Total |
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Noncontrolling |
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Common Stock |
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Treasury Stock |
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Paid-In |
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Comprehensive |
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Accumulated |
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Stockholders’ |
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controlling |
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Stockholders’ |
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Interests |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Income (Loss) |
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Deficit |
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Deficit |
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Interests |
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Deficit |
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Balances as of December 31, 2023 (2) |
$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Issuance of shares under equity |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock under ESPP |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Repurchase of RSU shares to satisfy tax withholding |
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— |
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( |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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— |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock under public |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of noncontrolling interests |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Transfers from (to) noncontrolling |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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Unrealized loss on available-for-sale |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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— |
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( |
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Net income (loss) |
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( |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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( |
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Balances as of March 31, 2024 |
$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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$ |
( |
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Issuance of shares under equity |
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— |
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— |
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— |
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— |
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— |
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— |
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Repurchase of RSU shares to satisfy tax withholding |
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— |
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( |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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— |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of noncontrolling interests |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Transfers from (to) noncontrolling |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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( |
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( |
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Deconsolidation of a subsidiary |
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— |
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— |
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— |
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— |
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— |
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— |
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Unrealized gain on available-for-sale |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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— |
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( |
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Net loss |
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( |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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( |
) |
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( |
) |
Balances as of June 30, 2024 |
$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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6
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Six Months Ended June 30, 2023 |
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Redeemable |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|||||||||||
|
Convertible |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
|
|
|
BridgeBio |
|
|
Non- |
|
|
Total |
|
|||||||||||
|
Noncontrolling |
|
|
|
Common Stock |
|
|
Treasury Stock |
|
|
Paid-In |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Stockholders’ |
|
|
controlling |
|
|
Stockholders’ |
|
|||||||||||||||||
|
Interests |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Loss |
|
|
Deficit |
|
|
Deficit |
|
|
Interests |
|
|
Deficit |
|
|||||||||||
Balances as of December 31, 2022 (2) |
$ |
( |
) |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||||
Issuance of shares under equity |
|
— |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||||
Issuance of common stock under ESPP |
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Repurchase of RSU shares to satisfy tax withholding |
|
— |
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of common stock under public |
|
— |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||||
Issuance of noncontrolling interests |
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Transfers from (to) noncontrolling |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Deconsolidation of a subsidiary |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized gain on available-for-sale |
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Net loss |
|
( |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balances as of March 31, 2023 |
$ |
( |
) |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||||
Issuance of shares under equity |
|
— |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||||
Repurchase of RSU shares to satisfy tax withholding |
|
— |
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of common stock under public |
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Issuance of noncontrolling interests |
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Transfers from (to) noncontrolling |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Unrealized losses on available-for-sale |
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Net loss |
|
( |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balances as of June 30, 2023 |
$ |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
BRIDGEBIO PHARMA, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
|
|
Six Months Ended June 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Loss on extinguishment of debt |
|
|
|
|
|
|
||
Accretion of debt |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Noncash lease expense |
|
|
|
|
|
|
||
Accrual of payment-in-kind interest on term loan |
|
|
|
|
|
|
||
Net loss from equity method investment |
|
|
|
|
|
|
||
Loss (gain) on deconsolidation of subsidiaries |
|
|
( |
) |
|
|
|
|
Gain from investment in equity securities, net |
|
|
( |
) |
|
|
( |
) |
Fair value adjustment of warrants |
|
|
|
|
|
( |
) |
|
Other noncash adjustments |
|
|
( |
) |
|
|
( |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Receivables from licensing and collaboration agreements |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
|
|
Other assets |
|
|
|
|
|
|
||
Accounts payable |
|
|
|
|
|
( |
) |
|
Accrued compensation and benefits |
|
|
( |
) |
|
|
( |
) |
Accrued research and development liabilities |
|
|
|
|
|
( |
) |
|
Operating lease liabilities |
|
|
( |
) |
|
|
( |
) |
Deferred revenue |
|
|
|
|
|
( |
) |
|
Accrued professional and other liabilities |
|
|
( |
) |
|
|
|
|
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Investing activities: |
|
|
|
|
|
|
||
Purchases of marketable securities |
|
|
( |
) |
|
|
( |
) |
Maturities of marketable securities |
|
|
|
|
|
|
||
Purchases of investments in equity securities |
|
|
( |
) |
|
|
( |
) |
Proceeds from sales of investments in equity securities |
|
|
|
|
|
|
||
Proceeds from special cash dividends received from investments in equity securities |
|
|
|
|
|
|
||
Payment for an intangible asset |
|
|
( |
) |
|
|
|
|
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Decrease in cash and cash equivalents resulting from deconsolidation of subsidiaries |
|
|
( |
) |
|
|
( |
) |
Net cash provided by investing activities |
|
|
|
|
|
|
||
Financing activities: |
|
|
|
|
|
|
||
Proceeds from term loan under Financing Agreement |
|
|
|
|
|
|
||
Issuance costs and discounts associated with term loan under Financing Agreement |
|
|
( |
) |
|
|
|
|
Repayment of term loan under Loan and Security Agreement |
|
|
( |
) |
|
|
|
|
Proceeds from issuance of common stock through public offerings, net |
|
|
|
|
|
|
||
Proceeds from BridgeBio common stock issuances under ESPP |
|
|
|
|
|
|
||
Proceeds from stock option exercises, net of repurchases |
|
|
|
|
|
|
||
Repurchase of RSU shares to satisfy tax withholding |
|
|
( |
) |
|
|
( |
) |
Other financing activities |
|
|
|
|
|
|
||
Net cash provided by financing activities |
|
|
|
|
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
|
|
|
( |
) |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash at end of period |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
BRIDGEBIO PHARMA, INC.
Condensed Consolidated Statements of Cash Flows
(Continued)
(Unaudited)
(in thousands)
|
|
Six Months Ended June 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Supplemental Disclosure of Cash Flow Information: |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Supplemental Disclosures of Noncash Investing and Financing Information: |
|
|
|
|
|
|
||
Unpaid public offering issuance costs |
|
$ |
|
|
$ |
|
||
Deferred and unpaid issuance costs recorded to "Accrued professional and other accrued liabilities" |
|
$ |
|
|
$ |
|
||
Unpaid property and equipment |
|
$ |
|
|
$ |
|
||
Transfers to noncontrolling interests |
|
$ |
( |
) |
|
$ |
( |
) |
Reconciliation of Cash, Cash Equivalents and Restricted Cash: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
||
Restricted cash — Included in “Other assets” |
|
|
|
|
|
|
||
Total cash, cash equivalents and restricted cash at end of periods shown in the |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
9
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
BridgeBio Pharma, Inc. (“BridgeBio” or the “Company”) is a commercial-stage biopharmaceutical company founded to discover, create, test and deliver transformative medicines to treat patients who suffer from genetic diseases. BridgeBio’s pipeline of development programs ranges from early science to advanced clinical trials. BridgeBio was founded in 2015 and its team of experienced drug discoverers, developers and innovators are committed to applying advances in genetic medicine to help patients as quickly as possible.
Basis of Presentation and Principles of Consolidation
The condensed consolidated financial statements include the accounts of BridgeBio Pharma, Inc. and its wholly-owned subsidiaries and controlled entities, substantially all of which are denominated in U.S. dollars. All intercompany balances and transactions have been eliminated in consolidation. For consolidated entities where we own or are exposed to less than 100% of the economics, we record “Net loss attributable to redeemable convertible noncontrolling interests and noncontrolling interests” in our condensed consolidated statements of operations equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties.
In determining whether an entity is considered a controlled entity, we applied the VIE and Voting Interest Entity (“VOE”) models. We assess whether we are the primary beneficiary of a VIE based on our power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities that do not qualify as a VIE are assessed for consolidation under the VOE model. Under the VOE model, BridgeBio consolidates the entity if it determines that it has a controlling financial interest in the entity through its ownership of greater than
The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC.
The condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of our financial position, our results of operations and comprehensive loss, stockholders’ deficit and our cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other future annual or interim periods.
Cash, Cash Equivalents and Marketable Securities
We consider all highly liquid investments purchased with original maturities of
10
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Our marketable securities consist of high investment grade fixed income securities that are primarily invested in U.S. treasury bills. We classify our marketable securities as available-for-sale securities and report them at fair value in “Cash and cash equivalents” or “Marketable securities” on the condensed consolidated balance sheets with related unrealized gains and losses included as a component of stockholders’ deficit. We classify our marketable securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity which is included in “Interest income” on the condensed consolidated statements of operations. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in “Other income (expense), net.” The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income.
Our cash, cash equivalents and marketable securities are exposed to credit risk in the event of default by the third parties that hold or issue such assets. Our cash, cash equivalents and marketable securities are held by financial institutions that management believes are of high credit quality. Our investment policy limits investments to fixed income securities denominated and payable in U.S. dollars such as commercial paper, U.S. government obligations, treasury bills, and money market funds, and places restrictions on maturities and concentrations by type and issuer.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the total amounts shown on the condensed consolidated statements of cash flows:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
|
|
(in thousands) |
|
|||||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
||
Restricted cash, non-current — included in “” |
|
|
|
|
|
|
||
Total cash, cash equivalents and restricted cash |
|
$ |
|
|
$ |
|
||
Restricted Cash
Restricted cash primarily represents funds in a controlled account that was established in connection with the Company’s Term Loans described in Note 9.
Under the terms of the Financing Agreement (as defined in Note 9), the Company is required to deposit
As of December 31, 2023, the use of such non-interest-bearing cash was restricted per the terms of the underlying amended Loan and Security Agreement and was to be used solely for certain research and development expenses directly attributable to the performance of obligations associated with the Navire-BMS License Agreement, which is further described in Note 11. As of December 31, 2023, restricted cash related to this agreement was $
Additionally, under certain lease agreements and letters of credit, we have pledged cash and cash equivalents as collateral. As of June 30, 2024, restricted cash related to such agreements was $
11
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Equity Method and Other Equity Investments
We use the equity method to account for any of our investments under the scope of ASC 323 Investments — Equity Method and Joint Ventures, where we may not be the primary beneficiary, but may still exercise significant influence over operating activities of the investee. Our consolidated net loss includes our Company's proportionate share of the net income or loss from equity method investment and amortization of any in-process research and development (“IPR&D asset”). Our judgment regarding the level of influence over each equity method investee includes considering key factors such as our ownership interest, representation on the board of directors, participation in policy-making decisions, and other material transactions.
Since inception through April 29, 2024, TheRas, Inc. (“TheRas”) has been a majority-owned subsidiary of the Company that had been consolidated. On April 30, 2024, the Company completed a $
As of December 31, 2020, we had an equity method and equity security investments in PellePharm. The equity security investments in PellePharm were without a readily determinable fair value and were carried at cost less impairment plus or minus observable price changes. PellePharm became a consolidated VIE in April 2021 under ASC 810, Consolidation. On January 16, 2023, PellePharm’s board of directors authorized the assignment of all PellePharm’s assets to PellePharm ABC, LLC for liquidation and distribution under the General Assignment for the Benefit of Creditors (“ABC”). As part of the ABC proceedings, PellePharm’s board of directors resigned effective March 6, 2023. The date the board of directors resigned was determined to be a VIE reconsideration event. Based on the changes to PellePharm’s governance structure and composition of the board of directors as a result of the ABC, BridgeBio was no longer the primary beneficiary, as it no longer had the power over key decisions that significantly impact PellePharm’s economic performance. Accordingly, BridgeBio deconsolidated PellePharm effective during the three months ended March 31, 2023.
Refer to Note 6 for further discussion on the TheRas and PellePharm investments.
Accrued Professional and Other Accrued Liabilities
Accrued professional and other accrued liabilities consisted of the following balances:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
|
|
(in thousands) |
|
|||||
Accrued professional services |
|
$ |
|
|
$ |
|
||
Accrued interest |
|
|
|
|
|
|
||
Milestone liability |
|
|
|
|
|
|
||
Other accrued liabilities |
|
|
|
|
|
|
||
Accrued professional and other accrued liabilities |
|
$ |
|
|
$ |
|
||
Concentration of Credit Risk and Other Risks and Uncertainties
Financial instruments that subject us to significant concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities, receivables from license and collaboration agreements, and restricted cash. Substantially all of our cash, cash equivalents, marketable securities and restricted cash are held in financial institutions in the United States. Amounts on deposit may at times exceed federally insured limits. Although management currently believes that the financial institutions with whom it does business will be able to fulfill their commitments to the Company, there is no assurance that those institutions will be able to continue to do so. The Company has not experienced or recorded any credit losses associated with its balances as of June 30, 2024 and December 31, 2023, and for the three and six months ended June 30, 2024 and 2023.
12
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
We are subject to credit risk from receivables from license and collaboration agreements. We have not experienced any material losses related to receivables from individual customers or groups of customers. We also do not require any collateral. Receivables from license and collaboration agreements are recorded net of allowance for credit losses, if any.
We are subject to certain risks and uncertainties and we believe that changes in any of the following areas could have a material adverse effect on future financial position or results of operations: ability to obtain future financing, regulatory approval and market acceptance of, and reimbursement for, product candidates, performance of third-party contract research organizations and manufacturers upon which we rely, development of sales channels, protection of our intellectual property, litigation or claims against us based on intellectual property, patent, product, regulatory, clinical or other factors, and our ability to attract and retain employees necessary to support our growth.
We are dependent on third-party manufacturers to supply products for research and development activities in our programs. In particular, we rely and expect to continue to rely on a small number of manufacturers to supply us with our requirements for the active pharmaceutical ingredients and formulated drugs related to these programs. These programs could be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients and formulated drugs.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to:
We base our estimates on historical experience and on various other assumptions that we believe are reasonable. Actual results may differ from those estimates or assumptions.
13
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation:
|
|
June 30, 2024 |
|
|||||||||||||
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Treasury bills |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Agency discount notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Treasury bills |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total marketable securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total financial assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Liability |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Embedded derivative |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
December 31, 2023 |
|
|||||||||||||
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Treasury bills |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments in equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
LianBio Warrant |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total financial assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Liability |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Embedded derivative |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
There were
There are uncertainties on the fair value measurement of the instrument classified under Level 3 due to the use of unobservable inputs and interrelationships between these unobservable inputs, which could result in higher or lower fair value measurements.
Marketable Securities
The fair value of our marketable securities classified within Level 2 is based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.
Investments in Equity Securities
We have investments in equity securities of publicly held companies and we do not have restrictions on our ability to sell these securities. We have classified our investments in equity securities within Level 1, as the fair value of these equity securities are derived from observable inputs such as quoted prices in active markets. Our investments in equity securities, which only consisted of an investment in LianBio, had an aggregate fair value of
Total realized and unrealized gains and losses associated with investments in equity securities during the periods presented consisted of the following:
14
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Net realized gains recognized on investments in equity securities sold |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net unrealized losses recognized on investments in equity securities held as of the end of the period |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Total net gains included in “Other income (expense), net” |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
LianBio Warrant
As of December 31, 2023 our subsidiary, QED Therapeutics, Inc. (“QED”), held a warrant which entitles QED to purchase shares of LianBio (the “LianBio Warrant”, refer to Note 6). We had classified the LianBio Warrant, which pertains to an equity security of a publicly held company, within Level 1 as the fair value of this equity security is derived from observable inputs such as quoted prices in an active market. In February 2024, we fully exercised the LianBio Warrant and purchased
Notes
The fair values of our
Term Loan
The fair value of our outstanding term loan (refer to Note 9) is estimated using the net present value of the payments, discounted at an interest rate that is consistent with a market interest rate, which is a Level 2 input. The estimated fair value of our outstanding term loan under the Financing Agreement (as defined in Note 9 below) as of June 30, 2024 was $
Cash equivalents consist primarily of amounts invested in money market instruments, such as money market funds and U.S. treasury bills. Our marketable securities consist of high investment grade fixed income securities that are invested in U.S. treasury bills.
Cash equivalents and marketable securities classified as available-for-sale consisted of the following:
|
|
June 30, 2024 |
|
|||||||||||||
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Estimated Fair |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Treasury bills |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Agency discount notes |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Treasury bills |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total marketable securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total cash equivalents and marketable securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
15
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
|
|
December 31, 2023 |
|
|||||||||||||
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Estimated Fair |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Treasury bills |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
There have been
As of June 30, 2024 and December 31, 2023, we had both redeemable convertible noncontrolling interests and noncontrolling interests in consolidated partially-owned entities, for which BridgeBio is the primary beneficiary under the VIE model. These balances are reported as separate components outside stockholders’ deficit in “Redeemable convertible noncontrolling interests” and as part of stockholders’ deficit in “Noncontrolling interests” on the condensed consolidated balance sheets.
We adjust the carrying value of noncontrolling interests to reflect the book value attributable to noncontrolling stockholders of consolidated partially-owned entities when there is a change in the ownership during the respective reporting period and such adjustments are recorded to “Additional paid-in capital.” For the three and six months ended June 30, 2024, the adjustments in the aggregate amounted to $(
TheRas
On April 30, 2024, TheRas, Inc., doing business as BridgeBio Oncology Therapeutics (“BBOT”), a majority-owned subsidiary of the Company, completed a $
As part of the private equity financing transaction, BBOT’s Certificate of Incorporation and Investors’ Rights Agreement were amended and restated to reflect a change to BBOT’s governance structure and composition of the board of directors, which was determined to be a VIE reconsideration event. Based on the VIE reconsideration assessment, BBOT was deemed a VIE. As a result of the change in governance structure and composition of the board of directors, BridgeBio is no longer the primary beneficiary of BBOT, as it no longer has the power over key decisions that significantly impact BBOT’s economic performance. Accordingly, BridgeBio deconsolidated BBOT on April 30, 2024. During the three months ended June 30, 2024, we recognized a $
Upon the deconsolidation of BBOT, BridgeBio accounted for its retained investment in BBOT, for which it has significant influence through its ownership interest, using the equity method of accounting under ASC 323 - Investments — Equity Method and Joint Ventures. BBOT was also deemed a related party. BridgeBio’s equity investment in BBOT, valued at $
For the period from May 1, 2024 through June 30, 2024, we recognized a net loss from equity method investment of $
16
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
In addition, on April 30, 2024, the Company and BBOT entered into an 18-month transition service agreement (the “Transition Service Agreement”) for the provision of certain transitionary consulting services to be provided by the Company and BBOT. Under the Transition Service Agreement, the Company recognized $
LianBio
In October 2019, our subsidiary, BridgeBio Pharma LLC (“BBP LLC”), entered into an exclusivity agreement with LianBio, an exempt company organized under the laws of the Cayman Islands (together with its subsidiaries, “LianBio”), pursuant to which BBP LLC received equity in LianBio (the “LianBio Exclusivity Agreement”). We account for BBP LLC’s equity interest in LianBio under ASC 321 Investments - Equity Securities as an investment in equity securities. For the three months ended June 30, 2024 and 2023, we recorded an unrealized gain of and $
As of December 31, 2023, QED also held warrants which entitled QED to purchase
In February 2024, QED exercised the
PellePharm
As of April 15, 2021, BridgeBio had been the primary beneficiary of PellePharm as it had power over key decisions that significantly impact PellePharm’s economic performance. BridgeBio also had the obligation to absorb losses or the right to receive benefits from PellePharm that could potentially be significant to PellePharm through its common and preferred stock interest in PellePharm. Accordingly, BridgeBio had consolidated PellePharm during the period April 15, 2021 through December 31, 2022.
On January 16, 2023, PellePharm’s board of directors authorized the assignment of all PellePharm’s assets to PellePharm ABC, LLC for liquidation and distribution under the General Assignment for the Benefit of Creditors (“ABC”).
As part of the ABC proceedings, PellePharm’s board of directors resigned effective March 6, 2023. The date the board of directors resigned was determined to be a VIE reconsideration event. Based on the changes to PellePharm’s governance structure and composition of the board of directors as a result of the ABC, BridgeBio was no longer the primary beneficiary, as it no longer had the power over key decisions that significantly impact PellePharm’s economic performance. Accordingly, during the three months ended March 31, 2023, BridgeBio deconsolidated PellePharm and recognized a loss of $
The following table summarizes our recognized intangible assets as a result of the arrangements described in the following sections:
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||||||
|
Weighted-average |
|
Amount |
|
|
Weighted-average |
|
Amount |
|
||
|
|
|
(in thousands) |
|
|
|
|
(in thousands) |
|
||
Gross amount |
|
$ |
|
|
|
$ |
|
||||
Less: accumulated amortization |
|
|
|
( |
) |
|
|
|
|
( |
) |
Total |
|
|
$ |
|
|
|
|
$ |
|
||
17
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Amortization expense, recorded as part of “Cost of revenue” for the three months ended June 30, 2024 and 2023, was $
Novartis License Agreement
In January 2018, QED entered into a License Agreement with Novartis International Pharmaceutical, Inc. or Novartis, pursuant to which QED acquired certain intellectual property rights, including patents and know-how, related to infigratinib for the treatment of patients with fibroblast growth factor receptor (“FGFR”) driven diseases. QED accounted for the transaction as an asset acquisition as substantially all of the estimated fair value of the gross assets acquired was concentrated in a single identified asset, in-process research and development (“IPR&D”), thus satisfying the requirements of the screen test in ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business. The assets acquired and liabilities assumed in the transaction were measured based on their fair values. The fair value of the IPR&D acquired was charged to research and development expense as it had no alternative future use at the time of the acquisition.
If certain substantial milestones are met, QED could be required to pay up to $
Asset Purchase Agreement with Alexion
In June 2018, our subsidiary Origin Biosciences, Inc. (“Origin”), entered into an Asset Purchase Agreement with Alexion Pharma Holding Unlimited Company (“Alexion”), to acquire intellectual property rights, including patent rights, know-how, and contracts, related to the ALXN1101 molecule. Origin accounted for the transaction as an asset acquisition as substantially all of the estimated fair value of the gross assets acquired was concentrated in a single identified asset, or IPR&D, thus satisfying the requirements of the screen test in ASU 2017-01. The assets acquired and liabilities assumed in the transaction were measured based on their fair values. The fair value of the IPR&D acquired was charged to research and development expense as it had no alternative future use at the time of the acquisition.
Pursuant to the Asset Purchase Agreement, Origin was required to pay $
In connection with the Asset Purchase Agreement entered between Origin and Sentynl Therapeutics, Inc. (“Sentynl”), in March 2022, or the Origin-Sentynl APA (refer to Note 11), Sentynl assumed the obligation to pay sales-based milestone payments and royalties to Alexion that occur subsequent to the closing of the Origin-Sentynl APA when they become due. Origin will continue to be responsible for a regulatory-based milestone payment upon first pricing approval in a European Medicines Agency country of up to $
Diagnostics Agreement with Foundation Medicine
In November 2018, QED and Foundation Medicine, Inc. (“FMI”), entered into a companion diagnostics agreement relating to QED’s drug discovery and development initiatives. Pursuant to the agreement, QED could be required to pay $
18
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
consolidated balance sheets as $
Milestone Compensation Arrangements
We have performance-based milestone compensation arrangements with certain employees and consultants, whose vesting is contingent upon meeting various milestones, with fixed monetary amounts known at inception that can be settled in the form of cash or equity at our sole discretion. We also have performance-based milestone compensation arrangements with certain employees and consultants as part of the 2020 Stock and Equity Award Exchange Program (the “Exchange Program”, refer to Note 15). The compensation arrangements under the Exchange Program are to be settled in the form of equity only. Performance-based milestone awards that are settled in the form of equity are satisfied in the form of fully-vested restricted stock awards (“RSAs”). We accrue for such contingent compensation when the related milestone is probable of achievement and is recorded in “Accrued compensation and benefits” for the current portion and in “Other long-term liabilities” for the noncurrent portion on the condensed consolidated balance sheets. There is
|
|
Potential Fixed Monetary |
|
|
Accrued |
|
||
Settlement Type |
|
(in thousands) |
|
|||||
Cash |
|
$ |
|
|
$ |
|
||
Stock (2) |
|
|
|
|
|
|
||
Cash or stock at our sole discretion |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Other Research and Development and Commercial Agreements
We may also enter into contracts in the normal course of business with contract research organizations for clinical trials, with contract manufacturing organizations for clinical supplies, and with other vendors for preclinical studies, supplies, and other services and products for commercial and operating purposes. These contracts generally provide for termination on notice with potential termination charges. As of June 30, 2024 and December 31, 2023, there were
Indemnification
In the ordinary course of business, we may provide indemnifications of varying scope and terms to vendors, lessors, business partners, board members, officers, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by us, our negligence or willful misconduct, violations of law, or intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No material demands have been made upon us to provide indemnification under such agreements, and thus, there are no claims that we are aware of that could have a material effect on our condensed consolidated financial statements.
We also maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors. To date, we have not incurred any material costs and have not accrued any material liabilities on the condensed consolidated financial statements as a result of these provisions.
19
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Contingencies
From time to time, we may become involved in legal proceedings arising in the ordinary course of business. We are not currently a party to any material legal proceedings.
Notes
2029 Notes, net
On January 28, 2021, we issued an aggregate of $
We received net proceeds from the 2021 Note Offering of approximately $
A holder of 2029 Notes may convert all or any portion of its 2029 Notes at its option at any time prior to the close of business on the business day immediately preceding November 1, 2028 in multiples of $
On or after November 1, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2029 Notes at any time, regardless of the foregoing.
The conversion rate will initially be
20
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2029 Notes in connection with such a corporate event. The maximum number of shares issuable should there be an increase in the conversion rate is
We may not redeem the 2029 Notes prior to February 6, 2026. We may redeem for cash all or any portion of the 2029 Notes, at our option, on a redemption date occurring on or after February 6, 2026 and on or before the 41st scheduled trading day immediately before the maturity date, under certain circumstances. No sinking fund is provided for the Notes. If we undergo a fundamental change (as defined in the 2029 Notes Indenture), holders may require us to repurchase for cash all or any portion of their 2029 Notes at a fundamental change repurchase price equal to
In connection with the issuance of the 2029 Notes, we incurred approximately $
2027 Notes, net
On March 9, 2020, we issued an aggregate principal amount of $
We received net proceeds from the 2020 Note Offering of approximately $
A holder of 2027 Notes may convert all or any portion of its 2027 Notes at its option at any time prior to the close of business on the business day immediately preceding December 15, 2026 in multiples of $
21
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
On or after December 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2027 Notes at any time, regardless of the foregoing.
The conversion rate will initially be
The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2027 Notes in connection with such a corporate event. The maximum number of shares issuable should there be an increase in the conversion rate is
We may not redeem the 2027 Notes prior to the maturity date, and no sinking fund is provided for the 2027 Notes. If we undergo a fundamental change (as defined in the 2027 Notes Indenture), holders may require us to repurchase for cash all or any portion of their 2027 Notes at a fundamental change repurchase price equal to
In accounting for the issuance of the 2027 Notes in 2020 under ASC 470-20, Debt: Debt with Conversion and Other Options, we separately accounted for the liability and equity components of the 2027 Notes by allocating the proceeds between the liability component and the embedded conversion options, or equity component, due to our ability to settle the 2027 Notes in cash, BridgeBio’s common stock, or a combination of cash and BridgeBio’s common stock at our option. Effective January 1, 2021, we early adopted Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), and, as a result, we no longer separately account for the liability and equity components of the 2027 Notes, and, instead, account for our 2027 Notes wholly as debt.
In connection with the issuance of the 2027 Notes, we incurred approximately $
Additional Information Related to the Notes
The outstanding Notes’ balances consisted of the following:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||||||||||
|
|
2029 Notes |
|
|
2027 Notes |
|
|
2029 Notes |
|
|
2027 Notes |
|
||||
|
|
(in thousands) |
|
|
(in thousands) |
|
||||||||||
Principal |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Unamortized debt discount and issuance costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net carrying amount |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
22
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table sets forth the total interest expense recognized and effective interest rates related to the Notes for the periods presented:
|
|
Three Months Ended June 30, 2024 |
|
|
Six Months Ended June 30, 2024 |
|
||||||||||||||||||
|
|
2029 Notes |
|
|
2027 Notes |
|
|
Total |
|
|
2029 Notes |
|
|
2027 Notes |
|
|
Total |
|
||||||
|
|
(in thousands) |
|
|
|
|
|
(in thousands) |
|
|
|
|
||||||||||||
Contractual interest expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Amortization of debt discount and issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total interest and amortization expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Effective interest rate |
|
|
% |
|
|
% |
|
|
|
|
|
% |
|
|
% |
|
|
|
||||||
|
|
Three Months Ended June 30, 2023 |
|
|
Six Months Ended June 30, 2023 |
|
||||||||||||||||||
|
|
2029 Notes |
|
|
2027 Notes |
|
|
Total |
|
|
2029 Notes |
|
|
2027 Notes |
|
|
Total |
|
||||||
|
|
(in thousands) |
|
|
|
|
|
(in thousands) |
|
|
|
|
||||||||||||
Contractual interest expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Amortization of debt discount and issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total interest and amortization expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Effective interest rate |
|
|
% |
|
|
% |
|
|
|
|
|
% |
|
|
% |
|
|
|
||||||
As of June 30, 2024, interest payable on the 2029 and 2027 Notes amounted to $
Future minimum payments under the Notes as of June 30, 2024 are as follows:
|
|
2029 Notes |
|
|
2027 Notes |
|
|
Total |
|
|||
|
|
(in thousands) |
|
|||||||||
Remainder of 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Year ending December 31: |
|
|
|
|
|
|
|
|
|
|||
2025 |
|
|
|
|
|
|
|
|
|
|||
2026 |
|
|
|
|
|
|
|
|
|
|||
2027 |
|
|
|
|
|
|
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|
|||
2028 |
|
|
|
|
|
— |
|
|
|
|
||
Thereafter |
|
|
|
|
|
— |
|
|
|
|
||
Total future payments |
|
|
|
|
|
|
|
|
|
|||
Less amounts representing interest |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total principal amount |
|
$ |
|
|
$ |
|
|
$ |
|
|||
23
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Capped Call and Share Repurchase Transactions with Respect to the Notes
On each of January 25, 2021 and March 4, 2020, concurrently with the pricing of the 2029 Notes and 2027 Notes, respectively, we entered into separate privately negotiated capped call transactions (the “2021 Capped Call Transactions” and the “2020 Capped Call Transactions”, respectively), or, together, the Capped Call Transactions, with certain financial institutions, or the Capped Call Counterparties. We used approximately $
These Capped Call instruments meet the conditions outlined in ASC 815-40, Derivatives and Hedging, to be classified in stockholders’ equity and are not subsequently remeasured as long as the conditions for equity classification continue to be met. We recorded a reduction to additional paid-in capital of approximately $
Additionally, we used approximately $
Term Loan, net
Loan and Security Agreement
In November 2021, we entered into a Loan and Security Agreement (the “Loan Agreement,” and as amended by the First Amendment (as defined below) and the Second Amendment (as defined below), the “Amended Loan Agreement”), by and among (i) U.S. Bank National Association, in its capacity as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent (in such capacity, the “Collateral Agent”), (ii) certain lenders (the “Lenders”), (iii) BridgeBio, as a borrower, and (iv) certain subsidiaries of BridgeBio, as guarantors (the “Guarantors”). In May 2022, we entered into the First Amendment to the Loan Agreement (the “First Amendment”) and in November 2022, we entered into the Second Amendment to the Loan Agreement (the “Second Amendment”), as further described below. In January 2024, we fully repaid the term loan under the Loan Agreement as further described below.
Pursuant to the original terms and conditions of the Loan Agreement, the Lenders agreed to extend term loans to us in an aggregate principal amount of up to $
24
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
As security for our obligations under the Loan Agreement, each of BridgeBio and the Guarantors granted the Collateral Agent, for the benefit of the Lenders, a continuing security interest in substantially all of the assets of BridgeBio and the Guarantors (including all equity interests owned or hereafter acquired by BridgeBio and the Guarantors), subject to certain customary exceptions. Upon exceeding certain investment and disposition thresholds, additional subsidiaries of BridgeBio will be required to join as guarantors.
Any outstanding principal on the Term Loan Advances will accrue interest at a fixed rate equal to
We may prepay the outstanding principal amount of the Term Loan Advances at any time (in whole, but not in part), plus accrued and unpaid interest and a prepayment premium ranging from
At the Lenders’ election, we were also required to make mandatory prepayments upon the occurrence of certain prepayment events related to the repurchase or redemption of pledged collateral, entry into certain royalty transactions, disposition of other assets or subsidiaries, and entry into licensing and other monetization transactions (all such events are referred to as prepayment events), which could be
Subject to the mandatory prepayment requirements for certain prepayment events, the Loan Agreement contains customary affirmative and limited negative covenants which, among other things, limit our ability to (i) incur additional indebtedness, (ii) pay dividends or make certain distributions, (iii) dispose of our assets, grant liens, license or encumber our assets or (iv) fundamentally alter the nature of our business. BridgeBio and the Guarantors have broad ability to license our intellectual property, dispose of other assets and enter into monetization and royalty transactions, subject in each case to the requirement to make a mandatory prepayment described above. The Loan Agreement provides that BridgeBio and the Guarantors may, subject to certain limitations, (x) repurchase BridgeBio’s equity interest and the equity interest of any of its subsidiaries, (y) enter into any joint ventures or similar investments, and (z) make other investments and acquisitions. Subject to the mandatory prepayment requirement described above, portfolio companies owned by BridgeBio that are not parties to the Loan Agreement are, subject to certain exceptions, not subject to any covenants or limitations under the Loan Agreement.
The Loan Agreement also contains customary events of default, including among other things, our failure to make any principal or interest payments when due, the occurrence of certain bankruptcy or insolvency events or the breach of the covenants under the Loan Agreement. Upon the occurrence of an event of default, the Lenders may, among other things, accelerate our obligations under the Loan Agreement.
We received net proceeds from the Tranche 1 Advance of $
In May 2022, we entered into the First Amendment, which, among other things:
25
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
In June 2022, the receipt of an upfront payment under the license development and commercialization agreement that our subsidiary, Navire Pharma, Inc. (“Navire”), entered into with Bristol-Myers Squibb Company (“BMS”), which is further described in Note 11, triggered certain mandatory prepayment provisions of the Amended Loan Agreement. As a result, we paid $
Pursuant to the terms of the Loan Agreement, we exercised our option to convert $
In November 2022, we entered into the Second Amendment, which, among other things:
The balances of our borrowing under the Amended Loan Agreement consisted of the following:
|
|
December 31, 2023 |
|
|
|
|
(in thousands) |
|
|
Principal value of term loan |
|
$ |
|
|
PIK added to principal |
|
|
|
|
Debt discount, issuance costs and exit fee accretion |
|
|
( |
) |
Term loan, net |
|
$ |
|
|
On January 17, 2024, the Company fully repaid the Amended Loan Agreement for $
Financing Agreement
On January 17, 2024, the Company and each of the guarantors entered into a Financing Agreement, which was amended on February 12, 2024 (the “Financing Agreement”), with the lenders party thereto (the “Lenders”) and Blue Owl Capital Corporation, as administrative agent for the Lenders (the “Administrative Agent”).
Pursuant to the terms and conditions of the Financing Agreement, the Lenders have agreed to extend a senior secured credit facility to the Company in an aggregate principal amount of up to $
The obligations of the Company under the Financing Agreement are and will be guaranteed by certain of the Company’s existing and future direct and indirect subsidiaries, subject to certain exceptions (such subsidiaries, collectively, the “Guarantors”). As
26
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
security for the obligations of the Company and the Guarantors, each of the Company and the Guarantors are required to grant to the Administrative Agent, for the benefit of the Lenders and secured parties, a continuing first priority security interest in substantially all of the assets of the Company and the Guarantors (including all equity interests owned or hereafter acquired by the Company and the Guarantors), subject to certain customary exceptions.
Any outstanding principal on the Term Loans will initially bear interest at a rate per annum equal to (A) in the case of Term Loans bearing interest based on the base rate defined in the Financing Agreement (and which base rate will not be less than
The Company will be required to make principal payments of $
The Company may prepay the Term Loans at any time (in whole or in part) or be required to make mandatory prepayments upon the occurrence of certain customary prepayment events. The mandatory prepayment events include certain permitted asset sales transactions (which include certain sales, leases, assignments, conveyances, transfers, licenses or exchanges of property) that occur prior to the date the FDA approves a first NDA for acoramidis, which would require the Company to deposit
We have entered into asset sales transactions that occurred during the three months ended March 31, 2024 for the exclusive license agreements with Bayer Consumer Care AG and Kyowa Kirin Co., Ltd, for which the Company is required to deposit
The completion of the $
The Financing Agreement contains affirmative covenants and negative covenants applicable to the Company and its subsidiaries that are customary for financings of this type. Such covenants, among other items, limit the Company’s and its subsidiaries’ ability to (i) incur additional permitted indebtedness, (ii) pay dividends or make certain distributions, (iii) dispose of its and their assets, grant liens and license or permit other encumbrances on its and their assets, (iv) fundamentally alter the nature of their businesses and (v) enter into certain transactions with affiliates. The Company and the Guarantors are also required to maintain a minimum qualified cash balance of $
27
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
On June 20, 2024, the Company and each of the guarantors entered into the Second Amendment to the Financing Agreement (the Financing Agreement, as amended by the Second Amendment, the “Amended Financing Agreement”). Under the Amended Financing Agreement, between June 20, 2024 and through the earlier of the date the FDA approves a first NDA for acoramidis and November 30, 2024, the Company is able to request a release of funds in an aggregate amount not to exceed
We received net proceeds from the Initial Term Loan of $
The balances of our borrowing under the Amended Financing Agreement consisted of the following:
|
|
June 30, 2024 |
|
|
|
|
(in thousands) |
|
|
Principal value of term loan |
|
$ |
|
|
Debt discount, issuance costs and exit fee accretion |
|
|
( |
) |
Term loan, net |
|
$ |
|
|
For the three and six months ended June 30, 2024, we recognized interest expense related to the Amended Financing Agreement of $
Future minimum payments under the Amended Financing Agreement as of June 30, 2024 are as follows:
|
|
Amount |
|
|
|
|
(in thousands) |
|
|
Remainder of 2024 |
|
$ |
|
|
Year Ending December 31: |
|
|
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Total future payments |
|
|
|
|
Less amounts representing interest |
|
|
( |
) |
Total principal amount of term loan payments |
|
$ |
|
|
The amounts in the table above do not take into account any changes due to mandatory payments under the terms of the Amended Financing Agreement.
On January 17, 2024, the Company and its subsidiaries, Eidos Therapeutics, Inc., BridgeBio Europe B.V. and BridgeBio International GmbH (collectively, the “Seller Parties”), entered into a Funding Agreement (the “Funding Agreement”) with LSI Financing 1 Designated Activity Company and CPPIB Credit Europe S.à r.l. (together, the “Purchasers”), and Alter Domus (US) LLC, as the collateral agent.
Pursuant to the Funding Agreement, the Purchasers agreed to pay to the Company $
In return, the Company granted the Purchasers the right to receive payments (the “Royalty Interest Payments”) equal to
28
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
basis after the Funding Date. In addition, the Seller Parties granted the collateral agent, for the benefit of the Purchasers, a security interest in specific assets related to acoramidis.
The Purchasers’ rights to the Royalty Interest Payments and ownership interest in Net Sales will terminate upon the earlier of the Purchasers’ receipt of (a) Royalty Interest Payments equal to $
The Funding Agreement will terminate upon customary events, and also in the event the Funding Date does not occur on or prior to May 15, 2025 (in which case either party may terminate the Funding Agreement at no charge and without premium or penalty).
Under the Funding Agreement, the Seller Parties are required to comply with various covenants, including using commercially reasonable efforts to obtain regulatory approval for and commercialize acoramidis, providing the Purchasers with certain clinical, commercial, regulatory and intellectual property updates and certain financial statements, and providing notices upon the occurrence of certain events, each as agreed under the Funding Agreement. The Funding Agreement also contains certain representations and warranties, indemnification obligations, put-option events and other provisions that are customary for transactions of this nature.
As of June 30, 2024, the Company has not received proceeds under the Funding Agreement. As of June 30, 2024, we recognized deferred issuance costs of $
Bayer Exclusive License
On March 1, 2024, certain subsidiaries of the Company, including Eidos Therapeutics, Inc., BridgeBio International GmbH and BridgeBio Europe B.V., (collectively the “Seller Parties”), entered into an exclusive license agreement (the “Bayer Agreement”) with Bayer Consumer Care AG, a wholly-owned subsidiary of Bayer AG (“Bayer”), to develop and commercialize acoramidis as a treatment for transthyretin amyloidosis in the European Union and all member and extension states of the European Patent Organization (the “Licensed Territory”).
Under the terms of the Bayer Agreement, the Seller Parties granted Bayer an exclusive license, effective upon the date that certain antitrust clearances have been obtained, or March 26, 2024, to certain of the Seller Parties’ intellectual property rights to develop, manufacture and commercialize acoramidis (previously known as AG10) in the Licensed Territory. In consideration for the license grant, the Seller Parties are entitled to receive an upfront payment of $
Unless earlier terminated, the Bayer Agreement will expire at the end of the royalty term for a licensed product, provided that the licenses granted to Bayer for such licensed product survive such expiration on a non-exclusive basis. Either party may terminate the Agreement in the event of a material breach or insolvency of the other party or in the event merger control proceedings are started and clearances are not obtained. Additionally, Bayer may terminate the Bayer Agreement for convenience upon at least
We determined that the Bayer Agreement falls within the scope of ASC 606 as Bayer is a customer in this arrangement, and we identified the following performance obligations in the agreement:
29
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
We determined that the performance obligations outlined above are capable of being distinct and distinct with the context of the contract given such rights and activities are independent of each other. The license can be used by Bayer without the development services. Similarly, those services provide a distinct benefit to Bayer within the context of the contract, separate from the license, as the services could be provided by Bayer or another third party without our assistance.
We determined the initial transaction price at inception of the Bayer Agreement to be $
We allocated the transaction price of $
The SSP for the license was determined using an approach that considered discounted, probability-weighted cash flows related to the license transferred. The SSP for the ongoing research and development services were based on estimates of the associated effort and cost of these services, adjusted for a reasonable gross profit margin that would be expected to be realized under similar contracts.
We recognize revenue for each of the two performance obligations as follows:
As of June 30, 2024, there are
In addition, under the terms of the Financing Agreement, the Bayer Agreement represents an asset sale transaction that requires the Company to deposit
In June 2024, BridgeBio Europe B.V. (“BridgeBio B.V.”) entered into a commercial supply agreement with Bayer (“Bayer Supply Agreement”) with an initial 30-month term ending in December 2026, for which BridgeBio B.V. will manufacture and supply to Bayer the commercial product ordered by Bayer solely for the use in the commercialization in the Licensed Territory under the Bayer Agreement. Under the Bayer Supply Agreement, Bayer shall pay to BridgeBio B.V. a commercial product per unit price equal to the applicable fully burdened manufacturing cost per unit of product, which shall include the cost of the active pharmaceutical ingredient (“API”) used to manufacture the product and the packaging price. As of June 30, 2024, there have been
30
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Kyowa Kirin Exclusive License
On February 7, 2024, the Company’s subsidiary, QED, and Kyowa Kirin Co., Ltd (“Kyowa Kirin” or “KKC”) entered into a partnership wherein QED granted Kyowa Kirin an exclusive license to develop, manufacture, and commercialize infigratinib for achondroplasia, hypochondroplasia, and other skeletal dysplasias in Japan, in accordance with the terms therein (the “KKC Agreement”). In exchange, QED received an upfront payment of $
Unless earlier terminated, the KKC Agreement will expire at the end of the royalty term for a licensed product, provided that the licenses granted to Kyowa Kirin for such licensed product survive such expiration on a non-exclusive basis. Either party may terminate the KKC Agreement in the event of a material breach or insolvency of the other party. Additionally, Kyowa Kirin may terminate the KKC Agreement for convenience upon at least
We determined that the KKC Agreement falls within the scope of ASC 606 as Kyowa Kirin is a customer in this arrangement, and we identified the following performance obligations in the agreement:
We determined that the performance obligations outlined above are capable of being distinct and distinct with the context of the contract given such rights and activities are independent of each other. The license can be used by Kyowa Kirin without any development activities. Similarly, those services provide a distinct benefit to Kyowa Kirin within the context of the contract, separate from the license, as the services could be provided by Kyowa Kirin or another third party without our assistance.
We determined the initial transaction price at inception of the KKC Agreement to be $
We allocated the transaction price of $
The SSP for the license was determined using an approach that considered discounted, probability-weighted cash flows related to the license transferred. The SSP for the ongoing research and development services were based on estimates of the associated effort and cost of these services, adjusted for a reasonable gross profit margin that would be expected to be realized under similar contracts.
We recognize revenue for each of the two performance obligations as follows:
31
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
As of June 30, 2024, there are
In addition, under the terms of the Financing Agreement, the KKC Agreement represents an asset sale transaction that requires the Company to deposit
License, Development and Commercialization Agreement with BMS
On May 12, 2022, BridgeBio and our subsidiary, Navire, entered into an exclusive license, development and commercialization agreement with BMS (the “Navire-BMS License Agreement”), pursuant to which Navire granted BMS exclusive rights to develop and commercialize Navire’s product candidate, BBP-398, in all indications worldwide, except for the People’s Republic of China, Macau, Hong Kong, Taiwan, Thailand, Singapore, and South Korea (the “Asia Region”). The development and commercialization of BBP-398 within the Asia Region is governed under the Navire-LianBio License Agreement (as discussed below). The Navire-BMS License Agreement expands an earlier agreement between Navire and BMS that was executed in July 2021 to study BBP-398 in a combination therapy trial to treat advanced solid tumors with KRAS mutations (the “2021 Navire-BMS Agreement”). The Navire-BMS License Agreement does not alter the terms of the 2021 Navire-BMS Agreement.
Under the terms of the Navire-BMS License Agreement, Navire was entitled to receive a non-refundable, upfront payment of $
In March 2024, we received written notice from BMS for the termination of the Navire-BMS License Agreement effective June 2024, and all rights and obligations thereunder. In April 2024, Navire and BMS entered into a Clinical Collaboration Termination Agreement which terminated the 2021 Navire-BMS Agreement. Navire and BMS agreed to pursue reasonable efforts to wind down activities under both the Navire-BMS License Agreement and the 2021 Navire-BMS Agreement. As a result of the termination, Navire is no longer entitled to any future unearned development, regulatory or sales-based milestone and royalty payments. However, we may in the future be eligible to receive earned payments for any milestones already achieved prior to termination and for achieving any milestones while closing out the remaining services.
We determined that the Navire-BMS License Agreement falls within the scope of ASC 606 as BMS is a customer in this arrangement, and we identified the following performance obligations in the agreement:
We determined that the performance obligations outlined above are capable of being distinct and distinct with the context of the contract given such rights and activities are independent of each other. The license can be used by BMS without the research and development services. Similarly, those services provide a distinct benefit to BMS within the context of the contract, separate from the license, as the services could be provided by BMS or another third party without our assistance. We may enter into clinical and commercial supply agreements for the licensed territory. We determined that the optional right to future products under these supply agreements does not represent a material right. In March 2023, Navire and BMS entered into a clinical supply agreement for the supply of clinical quantities of the licensed product. Navire has supplied insignificant amounts to BMS as part of the clinical supply agreement for the three and six months ended June 30, 2024 and 2023.
32
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
We determined the initial transaction price at inception of the Navire-BMS License Agreement to be $
We allocated the transaction price of $
The SSP for the license was determined using an approach that considered discounted, probability-weighted cash flows related to the license transferred. The SSP for the ongoing research and development services were based on estimates of the associated effort and cost of these services, adjusted for a reasonable gross profit margin that would be expected to be realized under similar contracts.
We recognize revenue for each of the two performance obligations as follows:
For the three and six months ended June 30, 2024, we have recognized
License and Collaboration Agreement with Helsinn
On March 29, 2021, QED entered into a license and collaboration agreement with Helsinn Healthcare S.A. (“HHC”) and Helsinn Therapeutics (U.S.), Inc. (“HTU”, and collectively with HHC, “Helsinn”) (the “QED-Helsinn License and Collaboration Agreement”), pursuant to which QED granted to HHC exclusive licenses to develop, manufacture and commercialize QED’s product candidate, infigratinib, in oncology and all other indications except achondroplasia or any other skeletal dysplasias, worldwide, except for the People’s Republic of China, Hong Kong and Macau (“Greater China”), and under which QED received a co-exclusive license to co-commercialize infigratinib in the United States in the licensed indications. The QED-Helsinn License and Collaboration Agreement became effective on April 16, 2021. Upon approval by the FDA in May 2021, QED and HTU co-commercialized infigratinib in the licensed indications in the United States and shared profits and losses on a
33
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
On February 28, 2022, QED and Helsinn amended the QED-Helsinn License and Collaboration Agreement (the “Amended QED-Helsinn License and Collaboration Agreement”) effective on March 1, 2022. Under the terms of the Amended QED-Helsinn License and Collaboration Agreement, Helsinn had an exclusive license to commercialize infigratinib in the United States and was responsible for solely developing, manufacturing and commercializing infigratinib in oncology indications except for achondroplasia or any other skeletal dysplasias worldwide, outside of Greater China. QED retains all rights to develop, manufacture and commercialize infigratinib in skeletal dysplasia, including achondroplasia.
The Amended QED-Helsinn License and Collaboration Agreement also provided for a transitional period, which extended from the effective date through August 31, 2022, for which QED was contracted to assist in research and development and commercialization activities. The costs related to QED’s contracted activities incurred during the transitional period were fully reimbursable by Helsinn and were due to QED subsequent to the transitional period. Helsinn also agreed to reimburse QED’s obligation to FMI described in Note 7 as part of the Amended QED-Helsinn License and Collaboration Agreement. In recording this transaction, we recognized a corresponding gain as part of “Other income (expense), net” for the three months ended September 30, 2022.
Effective December 21, 2022, QED and Helsinn (the “Helsinn Parties”), entered into a Mutual Termination Agreement (“MTA”), which terminates the Amended QED-Helsinn License and Collaboration Agreement and all rights and obligations thereunder. The Helsinn Parties agreed to perform certain close-out services to enable QED to pursue the development, manufacture and commercialization of infigratinib as a potential treatment of non-oncology indications, such as in achondroplasia worldwide, excluding China, Hong Kong, and Macau. As a result of the termination, QED is no longer entitled to any future regulatory or sales-based milestone payments. QED was subject to royalties on net sales of TRUSELTIQTM through March 31, 2023, at which date Helsinn no longer sold the licensed product. Helsinn permanently discontinued the distribution of TRUSELTIQTM and the FDA announced the withdrawal of the NDA approval in May 2023, additionally, all clinical investigations under the associated IND are discontinued. Helsinn completed sales of the licensed product during the three months ended March 31, 2023, and the associated revenue recognized was immaterial. The Helsinn Parties developed a Close-Out Plan, as defined within the MTA. Activities within the Close-Out Plan are to be shared equally subsequent to the lower of the first $
Upon the effective date of the MTA, outstanding obligations of $
The QED-Helsinn License and Collaboration Agreement, the Amended QED-Helsinn License Collaboration Agreement, and the MTA are considered to be within the scope of ASC 808 as the parties are active participants and are exposed to the significant risks and rewards of the collaborative activity. The QED-Helsinn License and Collaboration Agreement and the Amended QED-Helsinn License and Collaboration Agreement are also partially within the scope of ASC 606 for the units of account where Helsinn is identified as a customer. For the units of account in the collaboration arrangement that do not represent a vendor-customer relationship, including the performance of collaborative research and development and commercialization services, we determined that ASC 606 is not appropriate to apply by analogy and applied a reasonable and rational accounting policy election that faithfully depicts the transfer of services to the collaboration partner over the estimated performance period. Reimbursement payments from Helsinn associated with the collaborative research and development and commercialization services are recognized as the related expense is incurred and classified as an offset to the underlying expense and excluded from the transaction price.
34
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
We evaluated the terms of the QED-Helsinn License and Collaboration Agreement and identified Helsinn as a customer with the following two distinct performance obligations: (1) exclusive licenses to develop, manufacture, and commercialize the underlying product, and (2) transfer of inventory within the transitional supply period. The Amended QED-Helsinn License and Collaboration Agreement did not give rise to any additional performance obligations. All of the license revenue relating to these units of account accounted for under ASC 606 were recognized in the year ended December 31, 2021.
For the unit of account that is within the scope of ASC 808 relating to collaborative research and development services, pursuant to the QED-Helsinn License and Collaboration Agreement, the Amended QED-Helsinn License Collaboration Agreement, and the MTA, we have recognized an immaterial amount of Helsinn’s share of research and development expenses for the three and six months ended June 30, 2024 as a reduction to restructuring, impairment and related charges. We have recognized Helsinn’s share of research and development expenses of $
License Agreement with LianBio
Navire
In August 2020, Navire entered into an exclusive license agreement with LianBio (“the Navire-LianBio License Agreement”). Pursuant to the Navire-LianBio License Agreement, Navire granted to LianBio an exclusive, sublicensable license under the licensed patent rights and know-how to develop, manufacture and commercialize SHP2 inhibitor BBP-398, or BBP-398, for tumors driven by RAS and receptor tyrosine kinase mutations. Under the terms of the Navire-LianBio License Agreement, LianBio will receive commercial rights in China and selected Asian markets and participate in clinical development activities for BBP-398. In consideration for the rights granted to LianBio, we received a nonrefundable $
We accounted for the Navire-LianBio License Agreement under ASC 606 and identified the exclusive license as a distinct performance obligation since LianBio can benefit from the license on its own by developing and commercializing the underlying product using its own resources. In addition, we may enter into clinical and commercial supply agreements for the licensed territory. We determined that the optional right to future products under these supply agreements does not represent a material right. In July 2022, Navire and LianBio entered into a clinical supply agreement for the manufacture and supply of clinical quantities of the licensed product. During the three and six months ended June 30, 2024 and 2023, Navire has not provided any clinical supply to LianBio.
QED
In October 2019, QED entered into an exclusive license agreement with LianBio (the “QED-LianBio License Agreement”). Pursuant to the QED-LianBio License Agreement, QED granted to LianBio an exclusive, sublicensable license under the licensed patent rights and know-how to develop, manufacture and commercialize infigratinib for any and all human prophylactic and therapeutic uses in all cancer indications (including in combination with other therapies) in certain territories outside the United States. Under the QED-LianBio License Agreement, QED received a nonrefundable upfront payment of $
We accounted for the QED-LianBio License Agreement and the LianBio Exclusivity Agreement as a single transaction under ASC 606 and identified the exclusive license as a distinct performance obligation since LianBio can benefit from the license on its own by developing and commercializing the underlying product using its own resources. In addition, we may enter into clinical and commercial supply agreements for the licensed territory. We determined that LianBio’s optional right to future products under these supply agreements is not considered to represent a material right. A clinical supply agreement was entered into in November 2021. QED has not provided any clinical supplies to LianBio during the three and six months ended June 30, 2024. QED provided insignificant amounts of clinical supplies to LianBio during the three and six months ended June 30, 2023 and has recorded such amounts within “Revenue” in our condensed consolidated statement of operations.
License Agreement with Alexion
In September 2019, Eidos Therapeutics, Inc. (“Eidos”), entered into an exclusive license agreement with Alexion Pharma International Operations Unlimited Company, a subsidiary of Alexion Pharmaceuticals, Inc., or together Alexion (the “Eidos-Alexion License Agreement”), to develop, manufacture, and commercialize in Japan the compound known as acoramidis (previously known as AG10) and any of its various chemical forms and any pharmaceutical products containing acoramidis. Under the Eidos-Alexion
35
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
License Agreement, Eidos received an upfront nonrefundable payment of $
Eidos also entered into a stock purchase agreement with Alexion, under which Eidos sold to Alexion
Eidos accounted for the Eidos-Alexion License Agreement under ASC 606 and identified the exclusive license as a distinct performance obligation since Alexion can benefit from the license on its own by developing and commercializing the underlying product using its own resources. Eidos recognized the $
Receivables from Licensing and Collaboration Agreements
Receivables from licensing and collaboration agreements represent valid claims against our partners, customers, biopharmaceutical companies including unbilled receivables and royalty payments due from third parties for licensing the Company’s technologies. Unbilled receivables include balances due from our biopharmaceutical customers related to development services and transition-related receivables that are recognized upon incurrence of the costs for the partnered programs but prior to the achievement of contractual billing rights. As of June 30, 2024 and December 31, 2023, the Company had unbilled receivables of $
The Company evaluates the collectability of its receivables from licensing and collaboration agreements based on historical collection trends, the financial condition of payment partners, and external market factors and provides for an allowance for potential credit losses based on management’s best estimate of the amount of probable credit losses. As of June 30, 2024 and December 31, 2023, the Company did
Stanford License Agreement
In April 2016, Eidos entered into a license agreement with the Board of Trustees of the Leland Stanford Junior University, (“Stanford University”), relating to Eidos’ drug discovery and development initiatives. Under this agreement and its amendments, Eidos has been granted certain worldwide exclusive licenses to make, use, and sell products that are covered by licensed patent rights. In March 2017, Eidos paid a license fee of $
Additionally, under the license agreement with Stanford University, we will pay Stanford University a portion of all nonroyalty sublicensing consideration attributable to the sublicense of the licensed compounds. For the six months ended June 30, 2024, we
36
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
incurred and paid $
Diagnostics Agreement with Foundation Medicine
As discussed in Note 7, QED and FMI entered into a diagnostics agreement relating to QED’s drug discovery and development initiatives. For the three and six months ended June 30, 2024 and 2023, the research and development expenses QED recognized were
Resilience Development and Manufacturing Service Agreements
In September 2023, Aspa Therapeutics, Inc. (“Aspa”) and Adrenas Therapeutics Inc. (“Adrenas”), each entered into a Development and Manufacturing Services Agreement (collectively the “Resilience DMSAs”) and a Project Agreement (collectively the “Resilience PAs”), (collectively the “Resilience Agreements”) with Resilience US, Inc. (“Resilience”), for Resilience to provide contract development, manufacturing, testing and related services with respect to therapeutic and pharmaceutical products for the clinical development applications of BBP-812 and BBP-631, respectively. BBP-812 is an intravenous AAV9 investigational drug product intended for the treatment of children with Canavan Disease, under the age of
For the three and six months ended June 30, 2024, $
Other License and Collaboration Agreements
In addition to the agreements described above, we have also entered into other license and collaboration agreements with various institutions and business entities on terms similar to those described above, none of which are material individually or in the aggregate.
We have operating leases for our corporate headquarters, office spaces and laboratory facilities. One of our office space leases has a finance lease component representing lessor provided furniture and office equipment. Our finance lease, which is presented as part of “Property and equipment, net” in our condensed consolidated balance sheets, is not material.
Certain leases include renewal options at our election and we include the renewal options when we are reasonably certain that the renewal option will be exercised. The lease liabilities were measured using a weighted-average discount rate based on the most recent borrowing rate as of the calculation of the respective lease liability, adjusted for the remaining lease term and aggregate amount of the lease.
The components of lease cost are as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(in thousands) |
|
|
(in thousands) |
|
||||||||||
Straight line operating lease costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Finance lease costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Variable lease costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
37
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Supplemental cash flow information related to leases are as follows:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(in thousands) |
|
|||||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
||
Operating cash flows for operating leases |
|
$ |
|
|
$ |
|
||
Operating cash flows for finance lease |
|
|
|
|
|
|
||
Operating lease right-of-use assets obtained in exchange |
|
|
|
|
|
|
||
Supplemental information related to the remaining lease term and discount rate are as follows:
|
|
June 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Weighted-average remaining lease term (in years) |
|
|
|
|
|
|
||
Operating leases |
|
|
|
|
|
|
||
Finance lease |
|
|
|
|
|
|
||
Weighted-average discount rate |
|
|
|
|
|
|
||
Operating leases |
|
|
% |
|
|
% |
||
Finance lease |
|
|
% |
|
|
% |
||
As of June 30, 2024, future minimum lease payments for our noncancelable operating leases are as follows. Future minimum lease payments under our finance lease are not material.
|
|
Amount |
|
|
|
|
(in thousands) |
|
|
Remainder of 2024 |
|
$ |
|
|
Year ending December 31: |
|
|
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
Thereafter |
|
|
|
|
Total future minimum lease payments |
|
|
|
|
Imputed interest |
|
|
( |
) |
Total |
|
$ |
|
|
|
|
|
|
|
Reported as of June 30, 2024 |
|
|
|
|
Operating lease liabilities, current portion |
|
$ |
|
|
Operating lease liabilities, net of current portion |
|
|
|
|
Total operating lease liabilities |
|
$ |
|
|
The impairment loss recognized was
2023 Follow-on Offering
In March 2023, we entered into an Underwriting Agreement (the “2023 Follow-on Agreement”) with Goldman Sachs & Co. LLC, Evercore Group L.L.C., Morgan Stanley & Co. LLC and KKR Capital Markets LLC (“KCM”), as representatives of several underwriters (collectively, the “Underwriters”), relating to an underwritten public offering (the “2023 Follow-on offering”) of
38
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
underwriting discounts and commissions, up to an additional
2023 Shelf Registration Statement and ATM Agreement
In May 2023, we filed a shelf registration statement on Form S-3 (the “2023 Shelf”) with the SEC in relation to the registration of common stock, preferred stock, debt securities, warrants and units or any combination thereof. We also concurrently entered into an Equity Distribution Agreement (the “ATM Agreement”) with Goldman Sachs & Co. LLC and SVB Securities LLC (collectively, the “ATM Sales Agents”), with respect to an “at-the-market” offering program under which we may issue and sell, from time to time at our sole discretion and pursuant to a prospectus supplement, shares of our common stock, par value $
2024 Follow-on Offering
In March 2024, we entered into an Underwriting Agreement (the “2024 Follow-on Agreement”) with J.P. Morgan Securities LLC, Cantor Fitzgerald & Co. and Mizuho Securities USA LLC, as representatives of several underwriters (collectively, the “2024 Underwriters”), relating to an underwritten public offering (the “2024 Follow-on offering”) of
Under each of the legal entity’s equity plans, we recorded stock-based compensation in the following expense categories in our condensed consolidated statements of operations for employees and non-employees:
|
|
Three Months Ended June 30, 2024 |
|
|
Six Months Ended June 30, 2024 |
|
||||||||||||||||||
|
|
BridgeBio |
|
|
Other |
|
|
Total |
|
|
BridgeBio |
|
|
Other |
|
|
Total |
|
||||||
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|||||||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Restructuring, impairment and related charges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total stock-based compensation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
39
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
|
|
Three Months Ended June 30, 2023 |
|
|
Six Months Ended June 30, 2023 |
|
||||||||||||||||||
|
|
BridgeBio |
|
|
Other |
|
|
Total |
|
|
BridgeBio |
|
|
Other |
|
|
Total |
|
||||||
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|||||||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total stock-based compensation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
We recorded
Equity-Based Awards of BridgeBio
In December 2023, the 2019 Inducement Equity Plan was amended and restated to increase the number of shares authorized for issuance from
2020 Stock and Equity Award Exchange Program (Exchange Program)
On April 22, 2020, we completed our 2020 Stock and Equity Award Exchange Program (the “Exchange Program”) for certain subsidiaries, which was an opportunity for eligible controlled entities’ employees and consultants to exchange their subsidiary equity (including common stock, vested and unvested stock options and RSAs) for BridgeBio equity (including common stock, vested and unvested stock options and RSAs) and/or performance-based milestone awards tied to the achievement of certain development and regulatory milestones. The Exchange Program aligns our incentive compensation structure for employees and consultants across the BridgeBio group of companies to be consistent with the achievement of our overall corporate goals. In connection with the Exchange Program, we issued awards of BridgeBio equity under the then 2019 Amended and Restated Stock Option and Incentive Plan (the “2019 A&R Plan”), which was amended and restated in December 2021 into the 2021 A&R Plan and further amended and restated in June 2024, as mentioned above, to
On November 18, 2020, we completed a stock and equity award under our Exchange Program for a subsidiary. We issued awards of BridgeBio equity under the then 2019 A&R Plan to
We evaluated the exchange of the controlled entities’ outstanding common stock and equity awards for BridgeBio awards as a modification under ASC 718, Share Based Payments. Under ASC 718, a modification is a change in the terms or conditions of a stock-based compensation award. In assessing the accounting treatment, we consider the fair value, vesting conditions and classification as an equity or liability award of the controlled entity equity before the exchange, compared to the BridgeBio equity received as part of the exchange to determine whether modification accounting must be applied. When applying modification accounting, we considered the type of modification to determine the appropriate stock-based compensation cost to be recognized on April 22 and November 18, 2020, (each the “Modification Date”), and subsequent to the Modification Date.
40
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
We considered the total shares of common stock and equity awards, whether vested or unvested, held by each participant in each controlled entity as the unit of account. The controlled entity’s common stock and equity awards in each unit of account was exchanged for a combination of BridgeBio’s common stock, time-based vesting equity awards and/or performance-based milestone awards. Other than the exchange of the controlled entity equity awards for performance-based milestone awards, all other exchanged BridgeBio equity awards retained the original vesting conditions. As a result, there was no incremental stock-based compensation expense resulting from the exchange of time-based equity awards.
At the completion of the Exchange Program, we determined $
For the three and six months ended June 30, 2024 we recognized reversals of $
Performance-based Milestone Awards
Apart from the Exchange Program discussed above, we have performance-based milestone compensation arrangements with certain employees and consultants whose vesting is contingent upon meeting various regulatory and development milestones, with fixed monetary amounts known at inception that can be settled in the form of cash or equity at our sole discretion, upon achievement of each contingent milestone. Upon achievement of a contingent milestone and if such performance-based milestone awards are settled in the form of equity, these are satisfied in the form of fully-vested RSAs. We recognize such contingent stock-based compensation expense when the milestone is probable of achievement. For the three and six months ended June 30, 2024, we recognized $(
41
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Stock Option Grants of BridgeBio
The following table summarizes BridgeBio’s stock option activity under the Plans for the six months ended June 30, 2024:
|
|
Options |
|
|
Weighted- |
|
|
Weighted- |
|
|
Aggregate |
|
||||||||
Outstanding as of December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Regular equity program |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Eidos Awards Exchange |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Exchange Program |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Regular equity program |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|||||
Exercised |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Regular equity program |
|
|
( |
) |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Eidos Awards Exchange |
|
|
( |
) |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Cancelled |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Eidos Awards Exchange |
|
|
( |
) |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Outstanding as of June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Regular equity program |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Eidos Awards Exchange |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Exchange Program |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Exercisable as of June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Regular equity program |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Eidos Awards Exchange |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Exchange Program |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
The options granted to employees and non-employees are exercisable at the price of BridgeBio’s common stock at the respective grant dates. The options granted have a service condition and generally vest over a period of to
The weighted-average grant date fair value of options granted during the six months ended June 30, 2024 was $
The aggregate intrinsic value of options outstanding and exercisable as of June 30, 2024 in the table above are calculated based on the difference between the exercise price and the current fair value of BridgeBio’s common stock. The total intrinsic value of options exercised for the six months ended June 30, 2024 was $
For the three and six months ended June 30, 2024, we recognized stock-based compensation expense of $
Restricted Stock Units (RSUs) of BridgeBio
The following table summarizes BridgeBio’s RSU activity under the Plans for the six months ended June 30, 2024:
|
|
Unvested |
|
|
Weighted- |
|
||
Balance as of December 31, 2023 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Vested |
|
|
( |
) |
|
$ |
|
|
Cancelled |
|
|
( |
) |
|
$ |
|
|
Balance as of June 30, 2024 |
|
|
|
|
$ |
|
||
42
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
For the three and six months ended June 30, 2024, we recognized stock-based compensation expense of $
Market-Based RSUs of BridgeBio
In December 2023, the Company approved and granted performance restricted stock units under the 2021 A&R Plan to certain employees with vesting based on achievement of market capitalization targets (“market-based RSUs”), which are subject to the continued service of the employees through the vest date and are subject to accelerated vesting upon a change in control event. The achievement of the market capitalization targets will be measured based on BridgeBio market capitalization data (available on the Nasdaq.com website) meeting the targets for
The respective grant-date fair value of the market-based RSUs, which aggregated to $
As of June 30, 2024,
Restricted Stock Awards (RSAs) of BridgeBio
The following table summarizes our RSA activity under the Plans for the six months ended June 30, 2024:
|
|
Unvested |
|
|
Weighted- |
|
||
Balance as of December 31, 2023 |
|
|
|
|
$ |
|
||
Granted — Exchange Program |
|
|
|
|
$ |
|
||
Vested — Exchange Program |
|
|
( |
) |
|
$ |
|
|
Vested — Regular equity program |
|
|
( |
) |
|
$ |
|
|
Balance as of June 30, 2024 |
|
|
|
|
$ |
|
||
For the three and six months ended June 30, 2024 and 2023, we recognized stock-based compensation expense related to RSAs under the Plans as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Exchange Program |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other RSAs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total stock-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
As of June 30, 2024, there was
43
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
2019 Employee Stock Purchase Plan (ESPP) of BridgeBio
On June 22, 2019, we adopted the 2019 ESPP, which became effective on June 25, 2019 and was amended and restated effective as of December 12, 2019. The ESPP initially reserves and authorizes the issuance of up to a total of
Under the ESPP, eligible employees may purchase shares of BridgeBio’s common stock through payroll deductions at a price equal to
For the three and six months ended June 30, 2024, stock-based compensation expense related to our ESPP was $
Valuation Assumptions
We used the Black-Scholes model to estimate the fair value of stock options and stock purchase rights under the ESPP. For the six months ended June 30, 2024, we used the following weighted-average assumptions in the Black-Scholes calculations:
|
|
Stock Options |
|
|
ESPP |
|
||
Expected term (in years) |
|
|
|
|
|
|||
Expected volatility |
|
|
|
|
||||
Risk-free interest rate |
|
|
|
|
||||
Dividend yield |
|
|
|
|
|
|
||
Weighted-average fair value of stock-based awards granted |
|
$ |
|
|
$ |
|
||
Equity Awards of Eidos
Prior to the Eidos Merger Transactions in 2021, Eidos issued its own equity-based awards under the Eidos 2016 Equity Incentive Plan and the Eidos 2018 Stock Option and Incentive Plan (collectively, the “Eidos Plans”). Upon closing of the Eidos Merger Transactions, we issued
In January 2022, we committed to a restructuring initiative designed to drive operational changes in our business processes, efficiencies and cost savings to advance our corporate strategy and development programs. The restructuring initiative included, among other components, consolidation and rationalization of our facilities, reprioritization of development programs and the reduction in our workforce.
In March 2024, upon entering into the Bayer Agreement and termination of the Navire-BMS License Agreement (refer to Note 11 for details regarding these transactions), we have committed to additional restructuring plans to reprioritize and advance our corporate strategy and development programs. We estimate that we will incur a remaining $
44
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
“Restructuring, impairment and related charges” included in our condensed consolidated statements of operations for the three and six months ended June 30, 2024 and 2023 consisted of the following:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Long-lived assets impairments and write-offs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Severance and employee-related costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Winding down, exit and other related costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table summarizes the activity related to the restructuring liabilities associated with our restructuring initiatives for the six months ended June 30, 2024 and 2023:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(in thousands) |
|
|||||
Beginning balance |
|
$ |
|
|
$ |
|
||
Restructuring, impairment and related charges |
|
|
|
|
|
|
||
Cash payments |
|
|
( |
) |
|
|
( |
) |
Noncash activities |
|
|
( |
) |
|
|
|
|
Ending balance |
|
$ |
|
|
$ |
|
||
Restructuring liabilities are presented in our condensed consolidated balance sheets as follows:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
|
|
(in thousands) |
|
|||||
Accounts payable |
|
$ |
|
|
$ |
|
||
Accrued compensation and benefits |
|
|
|
|
|
|
||
Accrued research and development liabilities |
|
|
|
|
|
|
||
Accrued professional and other accrued liabilities |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
BridgeBio is subject to U.S. federal, state and foreign income taxes as a corporation. BridgeBio’s tax provision and the resulting effective tax rate for interim periods is determined based upon its estimated annual effective tax rate adjusted for the effect of discrete items arising in that quarter. There was
Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. Due to the uncertainty surrounding the realization of the favorable tax attributes in future tax returns, we have recorded a full valuation allowance against our otherwise recognizable net deferred tax assets.
Our policy is to recognize interest and penalties associated with uncertain tax benefits as part of the income tax provision and include accrued interest and penalties with the related income tax liability on the condensed consolidated balance sheets. To date, we have not recognized any interest and penalties in our condensed consolidated statements of operations, nor have we accrued for or made payments for interest and penalties. Our unrecognized gross tax benefits would not reduce the estimated annual effective tax rate if recognized because we have recorded a full valuation allowance on its deferred tax assets.
45
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Basic net loss per share attributable to common stockholders of BridgeBio is computed by dividing net loss attributable to common stockholders of BridgeBio by the weighted-average number of shares of common stock outstanding. Diluted net loss per share attributable to common stockholders of BridgeBio is computed by dividing net loss by the weighted-average number of shares of common stock outstanding, plus all additional common shares that would have been outstanding, assuming dilutive potential common shares had been issued for other dilutive securities. For the three and six months ended June 30, 2024 and 2023, diluted and basic net loss per share attributable to common stockholders of BridgeBio were identical since potential common shares were excluded from the calculation, as their effect was anti-dilutive.
The following table summarizes the common stock equivalents that were anti-dilutive:
|
As of June 30, |
|
|||||
|
2024 |
|
|
2023 |
|
||
Unvested RSAs |
|
|
|
|
|
||
Unvested RSUs |
|
|
|
|
|
||
Unvested performance-based RSUs |
|
|
|
|
|
||
Unvested market-based RSUs |
|
|
|
|
|
||
Common stock options issued and outstanding |
|
|
|
|
|
||
Estimated shares issuable under performance-based milestone |
|
|
|
|
|
||
Estimated shares issuable under the ESPP |
|
|
|
|
|
||
Assumed conversion of 2027 Notes |
|
|
|
|
|
||
Assumed conversion of 2029 Notes |
|
|
|
|
|
||
|
|
|
|
|
|
||
Our 2029 Notes and 2027 Notes are convertible, based on the applicable conversion rate, into cash, shares of our common stock or a combination thereof, at our election.
As discussed in Notes 8 and 15, we have performance-based milestone compensation arrangements, whose vesting is contingent upon meeting various regulatory and development milestones, with fixed monetary amounts known at inception that can be settled in the form of cash or equity at our sole election, upon achievement of each contingent milestone. The common stock equivalents of such arrangements were estimated as if the contingent milestones were achieved as of the reporting date and the arrangements were all settled in equity.
46
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 22, 2024.
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify these statements by forward-looking words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “should,” “estimate,” or “continue,” and similar expressions or variations. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as updated by the information, if any, in Part II, Item 1A, “Risk Factors” included in this Quarterly Report on Form 10-Q. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. Except as may be required by law, we assume no obligation to update these forward-looking statements or the reasons that results could differ from these forward-looking statements. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.
Overview
BridgeBio Pharma, Inc. (“we” or the “Company”) is a commercial-stage biopharmaceutical company founded to discover, create, test and deliver transformative medicines to treat patients who suffer from genetic diseases. BridgeBio’s pipeline of development programs ranges from early science to advanced clinical trials. BridgeBio was founded in 2015 and its team of experienced drug discoverers, developers and innovators are committed to applying advances in genetic medicine to help patients as quickly as possible. Since inception, BridgeBio has created 17 Investigational New Drug applications, or INDs, and had two products approved by the U.S. Food and Drug Administration. We worked across over 20 disease states at various stages of development. Several of our programs target indications that we believe present the potential for our product candidates, if approved, to target portions of market opportunities of at least $1.0 billion in annual sales.
We focus on genetic diseases because they exist at the intersection of high unmet patient need and tractable biology. Our approach is to translate research pioneered at academic laboratories and leading medical institutions into products that we hope will ultimately reach patients. We are able to realize this opportunity through a confluence of scientific advances: (i) identification of the genetic underpinnings of disease as more cost-efficient genome and exome sequencing becomes available; (ii) progress in molecular biology; and (iii) the development and maturation of longitudinal data and retrospective studies that enable the linkage of genes to diseases. We believe that this early-stage innovation represents one of the greatest practical sources for new drug creation.
Since our inception in 2015, we have focused substantially all of our efforts and financial resources on acquiring and developing product and technology rights, building our intellectual property portfolio and conducting research and development activities for our product candidates within our wholly-owned subsidiaries and controlled entities, including partially-owned subsidiaries and subsidiaries we consolidate based on our deemed majority control of such entities as determined using either the variable interest entity, or VIE model, or the voting interest entity, or VOE model. To support these activities, we and our wholly-owned subsidiary, BridgeBio Services, Inc., (i) identify and secure new programs, (ii) set up new wholly-owned subsidiaries or controlled entities, (iii) recruit key management team members, (iv) raise and allocate capital across the portfolio and (v) provide certain shared services, including accounting, legal, information technology, administrative, and human resources, as well as workspaces. We have not generated any significant revenue from product sales. To date, we have funded our operations with proceeds from the sale of our equity securities, issuance of convertible notes, debt borrowings, sale of certain assets and, to a lesser extent, upfront and milestone payments from licensing arrangements.
We have incurred significant operating losses since our inception. For the six months ended June 30, 2024 and 2023, we incurred net losses of $111.7 million and $303.4 million, respectively. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our product candidates at our wholly-owned subsidiaries and controlled entities. While we have undertaken activities in preparation for commercial launch readiness for our late-stage programs and a restructuring initiative to drive operational change in business processes, efficiencies and cost savings, we expect to continue to incur significant operating and net losses for at least the next several years. In addition, we have very limited experience with commercialization, and we may not be able to generate significant revenues from product sales, if any, even if any of our product candidates are approved for commercial sale. Further, we may not realize the anticipated efficiencies and
47
other benefits of our past and any future restructuring initiatives. Additionally, failure to secure FDA approval for acoramidis will result in our inability to receive a $500.0 million milestone payment pursuant to the Funding Agreement, which would significantly harm our business, prospects, financial condition and results of operations.
In June 2024, BridgeBio Europe B.V. (“BridgeBio B.V.”) entered into a commercial supply agreement with Bayer (“Bayer Supply Agreement”) with an initial 30-month term ending in December 2026, for which BridgeBio B.V. will manufacture and supply to Bayer the commercial product ordered by Bayer solely for the use in the commercialization in the Licensed Territory under the Bayer Agreement. Under the Bayer Supply Agreement, Bayer shall pay to BridgeBio B.V. a commercial product per unit price equal to the applicable fully burdened manufacturing cost per unit of product, which shall include the cost of the API used to manufacture the product and the packaging price. As of June 30, 2024 there have been no commercial product supply sales to Bayer.
On April 30, 2024, TheRas, Inc., doing business as BridgeBio Oncology Therapeutics (BBOT), a majority-owned subsidiary of the Company, completed a $200.0 million private equity financing with external investors to accelerate the development of its oncology portfolio. As part of the private equity financing transaction, BBOT’s Certificate of Incorporation and Investors’ Rights Agreement were amended and restated to reflect a change in BBOT’s governance structure and composition of the board of directors, which was determined to be a VIE reconsideration event. Based on the VIE reconsideration assessment, BBOT was deemed a VIE. As a result of the change in the governance structure and composition of the board of directors, BridgeBio is no longer the primary beneficiary of BBOT, as it no longer has the power over key decisions that significantly impact BBOT’s economic performance. Accordingly, BridgeBio deconsolidated BBOT on April 30, 2024. During the three months ended June 30, 2024, we recognized a $126.3 million net gain from deconsolidation of a subsidiary which is presented on the condensed consolidated statements of operations for the three and six months ended June 30, 2024. Upon the deconsolidation of BBOT, BridgeBio accounted for its retained investments in BBOT, for which it has significant influence through its ownership interest, using the equity method of accounting. BBOT was also deemed a related party. For the period May 1, 2024 through June 30, 2024, we recognized a net loss from equity method investment of $7.9 million. As of June 30, 2024, the aggregate carrying amount of our equity method investment in BBOT is $117.0 million and is presented as “Investment in nonconsolidated entity” on our condensed consolidated balance sheets.
On March 1, 2024, certain subsidiaries of the Company, including Eidos Therapeutics, Inc., BridgeBio International GmbH and BridgeBio Europe B.V. (collectively “the Seller Parties”), entered into an exclusive license agreement (the “Bayer Agreement”) with Bayer Consumer Care AG, a wholly-owned subsidiary of Bayer AG (“Bayer”), to develop and commercialize acoramidis as a treatment for transthyretin amyloidosis in the European Union and all member states of the European Patent Organization (the “Licensed Territory”). Under the terms of the Bayer Agreement, the Seller Parties granted Bayer an exclusive license, effective upon the date that certain antitrust clearances have been obtained, to certain of the Seller Parties’ intellectual property rights to develop, manufacture and commercialize acoramidis (previously known as AG10) in the Licensed Territory. In consideration for the license grant, the Seller Parties are entitled to receive an upfront payment of $135.0 million and will be eligible to receive up to $175.0 million in regulatory and sales milestone payments through 2026, and additional payments up to $450.0 million subject to the achievement of certain sales milestones. In addition, the Seller Parties are entitled to receive royalties according to a tiered structure starting in the low-thirties percent on net sales by Bayer of acoramidis in the Licensed Territory, subject to reduction under certain circumstances as provided in the Bayer Agreement.
On February 7, 2024, our subsidiary, QED, and Kyowa Kirin Co., Ltd (“Kyowa Kirin” or “KKC”) entered into a partnership wherein QED granted Kyowa Kirin an exclusive license to develop, manufacture, and commercialize infigratinib for achondroplasia, hypochondroplasia, and other skeletal dysplasias in Japan in accordance with the terms therein (“KKC Agreement”). In exchange, QED will receive an upfront payment of $100.0 million and will be eligible to receive royalties up to the mid-twenties percent on sales of infigratinib in Japan, with the potential to receive up to $81.4 million in development and sales-based milestone payments.
On January 17, 2024, the Company and each of the guarantors entered into a Financing Agreement, which was amended on February 12, 2024 (the “Financing Agreement”) and June 20, 2024 (the Financing Agreement, as amended by the Second Amendment, the “Amended Financing Agreement”), with the lenders party thereto (the “Lenders”) and Blue Owl Capital Corporation, as administrative agent for the Lenders (the “Administrative Agent”). Pursuant to the terms and conditions of the Amended Financing Agreement, the Lenders have agreed to extend a senior secured credit facility to the Company in an aggregate principal amount of up to $750.0 million comprised of (i) an initial term loan in an aggregate principal amount of $450.0 million (the “Initial Term Loan”) and (ii) one or more incremental term loans in an aggregate amount not to exceed $300.0 million (collectively, the “Incremental Term Loan,” and together with the Initial Term Loan, collectively, the “Term Loans”), subject to the satisfaction of certain terms and conditions set forth in the Amended Financing Agreement. The Initial Term Loan was funded on January 17, 2024. Incremental Term Loans are available at the Company’s and the Lenders’ mutual consent from time to time after January 17, 2024. Refer to “Liquidity and Capital Resources” section for additional details regarding this agreement.
On January 17, 2024, we and our subsidiaries entered into a Funding Agreement with LSI Financing 1 Designated Activity Company and CPPIB Credit Europe S.à r.l. together, the (“Purchasers”). Pursuant to the Funding Agreement, the Purchasers agreed to pay to the Company $500.0 million (net of certain transaction expenses) upon the first FDA approval of acoramidis, subject to certain conditions relating to the FDA approval and other customary conditions (such date of payment, “Funding Date”). In return, we granted the Purchasers the right to receive payments (the “Royalty Interest Payments”) equal to 5% of the global net sales of acoramidis (“Net Sales”), which under certain conditions may adjust to a maximum rate of 10% in 2027. Each Royalty Interest Payment will become
48
payable to the Purchasers on a quarterly basis after the Funding Date. In addition, the Seller Parties granted the collateral agent, for the benefit of the Purchasers, a security interest in specific assets related to acoramidis. The Funding Agreement will terminate upon customary events, and also in the event the Funding Date does not occur on or prior to May 15, 2025 (in which case either party may terminate the Funding Agreement at no charge and without premium or penalty). As of June 30, 2024, the Company has not received proceeds under the Funding Agreement. Refer to “Liquidity and Capital Resources” section for additional details regarding this agreement.
Due to the inherently unpredictable nature of preclinical and clinical development, and given our novel therapeutic approaches and the stage of development of our product candidates, we cannot determine and are unable to estimate with certainty the timelines we will require and the costs we will incur for the development of our product candidates. Clinical and preclinical development timelines and costs, and the potential of development success, can differ materially from expectations due to a variety of factors.
In January 2022, we committed to a restructuring initiative designed to drive operational changes in our business processes, efficiencies and cost savings to advance our corporate strategy and development programs. The restructuring initiative included, among other components, consolidation and rationalization of our facilities, reprioritization of development programs and the reduction in our workforce. In March 2024, upon entering into the Bayer Agreement and termination of the Navire-BMS License Agreement (refer to Note 11 for details regarding these transactions), we have committed to additional restructuring plans to reprioritize and advance our corporate strategy and development programs. We estimate that we will incur a remaining $12.0 million to $16.0 million in restructuring charges, consisting primarily of winding down costs, exit and other related costs, and severance and employee-related costs. Our estimate of the costs is subject to certain assumptions and actual results may differ from those estimates or assumptions. We may also incur additional costs that are not currently foreseeable as we continue to evaluate our restructuring alternatives to drive operational changes in business processes, efficiencies and cost savings. During the six months ended June 30, 2024 and 2023, our restructuring, impairment and related charges amounted to $6.3 million and $6.9 million, respectively, which consisted primarily of winding down costs, exit and other related costs, impairments and write-offs of long-lived assets, and severance and employee-related costs.
Results of Operations
The following table summarizes the results of our operations for the periods indicated:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Revenue |
|
$ |
2,168 |
|
|
$ |
1,641 |
|
|
$ |
213,288 |
|
|
$ |
3,467 |
|
Cost of revenue |
|
|
598 |
|
|
|
599 |
|
|
|
1,196 |
|
|
|
1,250 |
|
Research and development |
|
|
114,695 |
|
|
|
107,488 |
|
|
|
255,667 |
|
|
|
200,349 |
|
Selling, general and administrative |
|
|
59,523 |
|
|
|
36,122 |
|
|
|
125,330 |
|
|
|
67,230 |
|
Restructuring, impairment and related charges |
|
|
2,891 |
|
|
|
3,531 |
|
|
|
6,291 |
|
|
|
6,900 |
|
Loss from operations |
|
|
(175,539 |
) |
|
|
(146,099 |
) |
|
|
(175,196 |
) |
|
|
(272,262 |
) |
Interest income |
|
|
5,195 |
|
|
|
4,514 |
|
|
|
9,270 |
|
|
|
8,667 |
|
Interest expense |
|
|
(22,937 |
) |
|
|
(20,594 |
) |
|
|
(46,408 |
) |
|
|
(40,715 |
) |
Gain on deconsolidation of a subsidiary |
|
|
126,294 |
|
|
|
— |
|
|
|
126,294 |
|
|
|
— |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(26,590 |
) |
|
|
— |
|
Net loss from equity method investment |
|
|
(7,925 |
) |
|
|
— |
|
|
|
(7,925 |
) |
|
|
— |
|
Other income (expense), net |
|
|
(632 |
) |
|
|
1,476 |
|
|
|
8,851 |
|
|
|
875 |
|
Net loss |
|
|
(75,544 |
) |
|
|
(160,703 |
) |
|
|
(111,704 |
) |
|
|
(303,435 |
) |
Net loss attributable to redeemable convertible noncontrolling |
|
|
2,088 |
|
|
|
2,804 |
|
|
|
3,032 |
|
|
|
5,380 |
|
Net loss attributable to common stockholders of BridgeBio |
|
|
(73,456 |
) |
|
|
(157,899 |
) |
|
|
(108,672 |
) |
|
|
(298,055 |
) |
|
|
|
|
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
|
|
|
|
|
|
(in thousands) |
|
|||||
Cash, cash equivalents and marketable securities |
|
|
|
|
|
$ |
447,771 |
|
|
$ |
375,935 |
|
Restricted cash |
|
|
|
|
|
|
139,409 |
|
|
|
16,653 |
|
Investments in equity securities |
|
|
|
|
|
|
— |
|
|
|
58,949 |
|
49
Cash, Cash Equivalents, Marketable Securities, Restricted Cash and Investments in Equity Securities
As of June 30, 2024, we had cash, cash equivalents and marketable securities of $447.8 million and restricted cash of $139.4 million, compared to cash, cash equivalents and marketable securities of $375.9 million, restricted cash of $16.7 million and investments in equity securities of $58.9 million as of December 31, 2023. Under the terms of the Amended Financing Agreement, the Company is required to deposit 75% of proceeds, net of certain permitted costs, received from certain asset sale transactions into an escrow account to be controlled by the Administrative Agent. During the three months ended June 30, 2024, we received $235.0 million in aggregate from Bayer and Kyowa Kirin, and deposited net proceeds of $159.3 million into the escrow accounts, which was classified as “restricted cash” on the condensed consolidated balance sheet as of June 30, 2024. Furthermore, under the terms of Amended Financing Agreement, between June 20, 2024 and through the earlier of the FDA approval date and November 30, 2024, the Company is able to request a release of funds in an aggregate amount not to exceed 50% of the original net cash proceeds received from asset sale transactions. As of June 30, 2024, $20.0 million was released from the escrow accounts and classified as cash on the condensed consolidated balance sheet, with a remaining balance of $139.3 million in the escrow accounts classified as restricted cash. Refer to Note 9 and Note 11 for further details regarding the Amended Financing Agreement, the Bayer Agreement and KKC Agreement. Restricted cash as of December 31, 2023 primarily represents funds in a controlled account that was established in connection with the Loan and Security Agreement (“Amended Loan Agreement”) that is described in Note 9. The use of such non-interest-bearing cash was restricted per the terms of the underlying amended loan agreement and was to be used solely for certain research and development expenses directly attributable to the performance of obligations associated with the Navire-BMS License Agreement, which is further described in Note 11. Upon the termination of the Amended Loan Agreement and full repayment of the term loan in January 2024 (refer to Note 9 for details), the non-interest-bearing cash was no longer restricted.
Revenue
The following table summarizes our revenue for the following periods:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Revenue |
|
$ |
2,168 |
|
|
$ |
1,641 |
|
|
$ |
527 |
|
|
$ |
213,288 |
|
|
$ |
3,467 |
|
|
$ |
209,821 |
|
Revenue for the three months ended June 30, 2024 consists mainly of the recognition of services revenue under the Bayer Agreement and the KKC Agreement. Revenue for the three months ended June 30, 2023 was primarily related to the recognition of services revenue under the Navire-BMS License Agreement.
Revenue for the six months ended June 30, 2024 consists mainly of $202.9 million from the recognition of the upfront license fee and services revenue under the Bayer Agreement and the KKC Agreement. An additional $9.9 million of revenue was attributable to the remaining services revenue in connection with the Navire-BMS License Agreement as a result of the termination of the agreement. Revenue for the six months ended June 30, 2023 was primarily related to the recognition of services revenue under the Navire-BMS License Agreement.
The level of revenue, including license and service revenue, that we recognize depends in part upon the estimated recognition period of the upfront payments allocated to continuing performance obligations, the achievement of milestones and other contingent events, the level of effort incurred for research and development contracted services, and the impact of entering into new licensing and collaboration agreements, if any.
Operating Costs and Expenses
Research and Development Expenses
The following table summarizes our research and development expenses for the following periods:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Research and development |
|
$ |
114,695 |
|
|
$ |
107,488 |
|
|
$ |
7,207 |
|
|
$ |
255,667 |
|
|
$ |
200,349 |
|
|
$ |
55,318 |
|
Research and development expenses increased by $7.2 million for the three months ended June 30, 2024, compared to the same period in 2023. This change was primarily due to an increase in personnel costs of $11.9 million and external costs of $2.4 million to support the advancement of research and development for our key programs, an increase in licensing fees of $1.3 million, which was offset by a decrease in stock-based compensation of $8.3 million.
50
Research and development expenses increased by $55.3 million for the six months ended June 30, 2024, compared to the same period in 2023. This change was primarily due to an increase in personnel costs of $28.4 million and external costs of $24.1 million to support the advancement of research and development for our key programs, an increase in licensing fees of $10.1 million, which was offset by a decrease in stock-based compensation of $7.3 million.
Research and development costs consist primarily of external costs, such as fees paid to consultants, contractors, contract manufacturing organizations (“CMOs”), and contract research organizations, or CROs, purchase of active pharmaceutical ingredients, or APIs, in connection with our preclinical, contract manufacturing and clinical development activities and are tracked on a program-by-program basis. License fees and other costs incurred after a product candidate has been designated and that are directly related to the product candidate are included in the specific program expense. License fees and other costs incurred prior to designating a product candidate are included in early-stage research programs.
The following table summarizes our research and development expenses by program incurred for the following periods:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
ATTR Amyloidosis - TTR stabilizer (acoramidis) |
|
$ |
36,798 |
|
|
$ |
26,218 |
|
|
$ |
76,540 |
|
|
$ |
47,549 |
|
Achondroplasia - low-dose FGFRi (infigratinib) |
|
|
17,927 |
|
|
|
11,096 |
|
|
|
36,358 |
|
|
|
23,453 |
|
LGMD2I/R9 - Glycosylation substrate (BBP-418) |
|
|
10,773 |
|
|
|
9,043 |
|
|
|
20,791 |
|
|
|
15,377 |
|
ADH1 - CaSR antagonist (encaleret) |
|
|
10,608 |
|
|
|
11,650 |
|
|
|
23,152 |
|
|
|
21,062 |
|
Other development programs |
|
|
13,864 |
|
|
|
22,106 |
|
|
|
48,902 |
|
|
|
41,745 |
|
Other research programs |
|
|
24,725 |
|
|
|
27,375 |
|
|
|
49,924 |
|
|
|
51,163 |
|
Total |
|
$ |
114,695 |
|
|
$ |
107,488 |
|
|
$ |
255,667 |
|
|
$ |
200,349 |
|
Selling, General and Administrative Expenses
The following table summarizes our selling, general and administrative expenses for the following periods:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Selling, general and administrative |
|
$ |
59,523 |
|
|
$ |
36,122 |
|
|
$ |
23,401 |
|
|
$ |
125,330 |
|
|
$ |
67,230 |
|
|
$ |
58,100 |
|
Selling, general and administrative expenses increased by $23.4 million for the three months ended June 30, 2024, compared to the same period in 2023, mainly due to an increase in external costs of $10.9 million and personnel related expense of $10.0 million to support commercialization readiness efforts, and an increase in stock-based compensation expense of $2.5 million.
Selling, general and administrative expenses increased by $58.1 million for the six months ended June 30, 2024, compared to the same period in 2023, mainly due to an increase in external costs of $19.5 million and personnel related expense of $17.7 million to support commercialization readiness efforts, nonrecurring deal-related expenses of $14.0 million, and an increase in stock-based compensation expense of $6.9 million.
Restructuring, Impairment and Related Charges
The following table summarizes our restructuring, impairment and related charges during the periods indicated:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Restructuring, impairment and related charges |
|
$ |
2,891 |
|
|
$ |
3,531 |
|
|
$ |
(640 |
) |
|
$ |
6,291 |
|
|
$ |
6,900 |
|
|
$ |
(609 |
) |
51
As discussed in Note 16 to our condensed consolidated financial statements, in January 2022, we committed to a restructuring initiative designed to drive operational changes in our business processes, efficiencies and cost savings to advance our corporate strategy and development programs. The restructuring initiative included, among other components, consolidation and rationalization of our facilities, reprioritization of development programs and the reduction in our workforce. In March 2024, upon entering into the Bayer Agreement and termination of the Navire-BMS License Agreement (refer to Note 11 for details regarding these transactions), we have committed to additional restructuring plans to reprioritize and advance our corporate strategy and development programs. We estimate that we will incur a remaining $12.0 million to $16.0 million in restructuring charges, consisting primarily of winding down costs, exit and other related costs, and severance and employee-related costs. Our estimate of the costs is subject to certain assumptions and actual results may differ from those estimates or assumptions. We may also incur additional costs that are not currently foreseeable as we continue to evaluate our restructuring alternatives to drive operational changes in business processes, efficiencies and cost savings.
Other Income (Expense), Net
Interest Income
The following table summarizes our interest income during the periods indicated:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Interest income |
|
$ |
5,195 |
|
|
$ |
4,514 |
|
|
$ |
681 |
|
|
$ |
9,270 |
|
|
$ |
8,667 |
|
|
$ |
603 |
|
Interest income consists of interest income earned on our cash equivalents and marketable securities. The amount of interest income during the three and six months ended June 30, 2024 as compared to the same period in 2023 was generally consistent. Generally, increases and decreases in interest income are attributable to changes in the interest-bearing average balances of our cash equivalents and marketable securities and fluctuations in interest rates.
Interest Expense
The following table summarizes our interest expense during the periods indicated:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Interest expense |
|
$ |
(22,937 |
) |
|
$ |
(20,594 |
) |
|
$ |
(2,343 |
) |
|
$ |
(46,408 |
) |
|
$ |
(40,715 |
) |
|
$ |
(5,693 |
) |
Interest expense consists primarily of interest expense incurred under our 2029 Notes issued in January 2021, our 2027 Notes issued in March 2020, our term loan under the Amended Financing Agreement and our term loan under the Amended Loan Agreement.
Our outstanding term loan principal balance under our Amended Loan Agreement was fully repaid on January 17, 2024 upon receiving proceeds from the Financing Agreement plus additional cash from our operations, for which we were extended a senior secured credit facility of $450.0 million in an aggregate principal amount for the Initial Term Loan, which is subject to variable interest rates (refer to the Liquidity and Capital Resources section below and Notes 9 for details regarding the Term Loan and the Amended Financing Agreement). As a result of the variable interest rates under our Amended Financing Agreement we expect our interest expense will continue to fluctuate in the future.
Gain on Deconsolidation of a Subsidiary
The following table summarizes our gain on deconsolidation of a subsidiary during the periods indicated:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Gain on deconsolidation of a subsidiary |
|
$ |
126,294 |
|
|
$ |
— |
|
|
$ |
126,294 |
|
|
$ |
126,294 |
|
|
$ |
— |
|
|
$ |
126,294 |
|
On April 30, 2024, BBOT, a majority-owned subsidiary of the Company, completed a $200.0 million private equity financing with external investors. As a result of the private equity financing transaction, BridgeBio deconsolidated BBOT on April 30, 2024 and recognized a net gain from deconsolidation of $126.3 million for the three and six months ended June 30, 2024. Refer to Note 6 for further details regarding the BBOT private equity financing transaction.
52
Loss on Extinguishment of Debt
The following table summarizes our loss on extinguishment of debt during the periods indicated:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Loss on extinguishment of debt |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(26,590 |
) |
|
$ |
— |
|
|
$ |
(26,590 |
) |
On January 17, 2024, upon receiving proceeds from the Financing Agreement, we fully repaid the term loan under the Amended Loan Agreement and recognized a loss on extinguishment of debt of $26.6 million in our condensed consolidated statements of operations. Refer to Note 9 to our condensed consolidated financial statements.
Net Loss from Equity Method Investment
The following table summarizes our share in net loss of equity method investment during the periods indicated:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Net loss from equity method investment |
|
$ |
(7,925 |
) |
|
$ |
— |
|
|
$ |
(7,925 |
) |
|
$ |
(7,925 |
) |
|
$ |
— |
|
|
$ |
(7,925 |
) |
Upon the deconsolidation of BBOT, BridgeBio accounted for its retained investment in BBOT using the equity method of accounting. For the period May 1, 2024 through June 30, 2024, we recorded a net loss from equity method investment of $7.9 million.
Other Income (Expense), Net
The following table summarizes our other income (expense), net during the periods indicated:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Other income (expense), net |
|
$ |
(632 |
) |
|
$ |
1,476 |
|
|
$ |
(2,108 |
) |
|
$ |
8,851 |
|
|
$ |
875 |
|
|
$ |
7,976 |
|
Other income (expense), net for the three months ended June 30, 2024 consists mainly of a $1.1 million disposition fee incurred under the Amended Financing Agreement in relation to the BBOT private equity financing transaction, partially offset by $0.8 million in other income recognized under the Transition Service Agreement with BBOT. Other income (expense), net for the three months ended June 30, 2023 consists mainly of the net realized and unrealized gains from changes in fair value of our equity security investments of $1.4 million.
Other income (expense), net for the six months ended June 30, 2024 consists mainly of the net realized gain of $8.1 million from our investments in equity securities. Other income (expense), net for the six months ended June 30, 2023 consists mainly of the net realized and unrealized gains from changes in fair value of our investments in equity securities of $2.4 million, partially offset by a $1.2 million loss from the deconsolidation of PellePharm.
Net Loss Attributable to Redeemable Convertible Noncontrolling Interests and Noncontrolling Interests
The following table summarizes our net loss attributable to redeemable convertible noncontrolling interests and noncontrolling interests during the periods indicated:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Net loss attributable to redeemable convertible noncontrolling interests and noncontrolling interests |
|
$ |
2,088 |
|
|
$ |
2,804 |
|
|
$ |
(716 |
) |
|
$ |
3,032 |
|
|
$ |
5,380 |
|
|
$ |
(2,348 |
) |
Net loss attributable to redeemable convertible noncontrolling interests and noncontrolling interests in our condensed consolidated statements of operations consists of the portion of the net loss of those consolidated entities that is not allocated to us. Changes in the amount of net loss attributable to noncontrolling interests are directly impacted by changes in the net loss of our consolidated entities and are the result of ownership percentage changes. Refer to Note 5 to our condensed consolidated financial statements.
53
Liquidity and Capital Resources
We have historically financed our operations primarily through the sale of our equity securities, issuance of convertible notes, debt borrowings, and revenue from certain licensing and collaboration agreements and sales of certain assets. As of June 30, 2024, we had cash, cash equivalents and marketable securities of $447.8 million and restricted cash of $139.4 million, including funds held by our wholly-owned subsidiaries and controlled entities, which are available only for specific entity usage. As of June 30, 2024, our outstanding debt was $1.7 billion, net of debt discounts and issuance costs and accretion.
Since inception, we have incurred significant operating losses. For the six months ended June 30, 2024, we incurred net losses of $111.7 million. We had an accumulated deficit as of June 30, 2024 of $2.7 billion. While we have undertaken activities in preparation for commercial launch readiness for our late-stage programs and a restructuring initiative to drive operational change in business processes, efficiencies and cost savings, we expect to continue to incur significant operating and net losses over the next several years as we continue to fund our drug development and discovery efforts. In particular, to the extent we advance our programs into and through later-stage clinical trials without a partner, we will incur substantial expenses. In addition, we have very limited experience with commercialization, and we may not be able to generate significant revenues from product sales, if any, even if any of our product candidates are approved for commercial sale. Further, we may not realize the anticipated efficiencies and other benefits of our past and any future restructuring initiatives. Our current business plan is also subject to significant uncertainties and risks as a result of, among other factors, our ability to generate product sales sufficient to achieve profitability, which will depend heavily on the successful development and eventual commercialization of product candidates at our consolidated entities as well as our ability to partner in the development of certain clinical programs, as well as the levels of our operating expenses. Additionally, failure to secure FDA approval for acoramidis will result in our inability to receive a $500.0 million milestone payment pursuant to the Funding Agreement, which would significantly harm our business, prospects, financial condition and results of operations.
Our short-term and long-term liquidity requirements include contractual payments related to our 2029 Notes, 2027 Notes and term loan (refer to Note 9 to our condensed consolidated financial statements), obligations under our real estate leases (refer to Note 13 to our condensed consolidated financial statements), accounts payable, accrued liabilities and the remaining liabilities under our restructuring initiative (refer to Note 16 to our condensed consolidated financial statements).
We also have performance-based milestone compensation arrangements with certain employees and consultants, whose vesting is contingent upon meeting various regulatory and development milestones, with fixed monetary amounts known at inception that can be settled in the form of cash or equity at our sole election, upon achievement of each contingent milestone (refer to Note 8 to our condensed consolidated financial statements).
Additionally, we have certain contingent payment obligations under various license and collaboration agreements in which we are required to make milestone payments upon successful completion and achievement of certain intellectual property, clinical, regulatory and sales milestones. We also enter into agreements in the normal course of business with CROs and other vendors for clinical trials and with vendors for preclinical studies and other services and products for operating purposes, which are generally cancelable upon written notice with potential termination charges.
We expect our cash and cash equivalents, marketable securities and restricted cash will fund our operations for at least the next 12 months from the date of filing of this Quarterly Report on Form 10-Q based on current operating plans and financial forecasts. If our current operating plans or financial forecasts change, including as a result of general market and economic conditions, inflationary pressures, supply chain issues on our research and development activities, we may require additional funding sooner in the form of public or private equity offerings, debt financings or additional collaborations and licensing arrangements. However, future financing may not be available in amounts or on terms acceptable to us, if at all.
In addition, we are closely monitoring macroeconomic events, including inflationary pressures and supply chain issues, which may negatively impact our financial and operating results. We will continue to assess our operating costs and expenses and our cash and cash equivalents and, if circumstances warrant, we will make appropriate adjustments to our operating plan.
Sources of Liquidity
Receivables from licensing and collaboration agreements.
On March 1, 2024, certain subsidiaries of the Company, including Eidos Therapeutics, Inc., BridgeBio International GmbH and BridgeBio Europe B.V. (collectively “the Seller Parties”), entered into an exclusive license agreement (the “Bayer Agreement”) with Bayer Consumer Care AG, a wholly-owned subsidiary of Bayer AG (“Bayer”), to develop and commercialize acoramidis as a treatment for transthyretin amyloidosis in the European Union and all member states of the European Patent Organization (the “Licensed Territory”). Under the terms of the Bayer Agreement, the Seller Parties granted Bayer an exclusive license, effective upon the date that certain antitrust clearances have been obtained, to certain of the Seller Parties’ intellectual property rights to develop, manufacture and commercialize acoramidis (previously known as AG10) in the Licensed Territory. In consideration for the license grant, the Seller Parties are entitled to receive an upfront payment of $135.0 million and will be eligible to receive up to $175.0 million in regulatory and sales milestone payments through 2026, and additional payments up to $450.0 million subject to the
54
achievement of certain sales milestones. In addition, the Seller Parties are entitled to receive royalties according to a tiered structure starting in the low-thirties percent on net sales by Bayer of acoramidis in the Licensed Territory, subject to reduction under certain circumstances as provided in the Bayer Agreement.
On February 7, 2024, our subsidiary, QED, and Kyowa Kirin Co., Ltd (“Kyowa Kirin” or “KKC”) entered into a partnership wherein QED granted Kyowa Kirin an exclusive license to develop, manufacture, and commercialize infigratinib for achondroplasia, hypochondroplasia, and other skeletal dysplasias in Japan in accordance with the terms therein (“KKC Agreement”). In exchange, QED will receive an upfront payment of $100.0 million and will be eligible to receive royalties up to the mid-twenties percent on sales of infigratinib in Japan, with the potential to receive up to $81.4 million in development and sales-based milestone payments.
Furthermore, under the terms of the Amended Financing Agreement, the Company is required to deposit 75% of proceeds, net of certain permitted costs, received from certain asset sale transactions into an escrow account to be controlled by the Administrative Agent. The Bayer and KKC agreements meet the requirements of asset sale transactions under the terms of the Amended Financing Agreement. During the three months ended June 30, 2024, we received $235.0 million in aggregate from Bayer and KKC, and deposited net proceeds of $159.3 million into the escrow accounts, which was classified as “restricted cash” on the condensed consolidated balance sheet as of June 30, 2024. Refer to the “Term Loan, net” section below for details regarding the escrow accounts deposits required for asset sales transactions under the Amended Financing Agreement.
Public offerings
In March 2024, we entered into an Underwriting Agreement (the “2024 Follow-on Agreement”) with J.P. Morgan Securities LLC, Cantor Fitzgerald & Co. and Mizuho Securities USA LLC, as representatives of several underwriters (collectively, the “2024 Underwriters”), relating to an underwritten public offering (the “2024 Follow-on offering”) of 8,620,690 shares of the Company’s common stock, $0.001 par value per share, at a public offering price of $29.00 per share. The Company also granted the 2024 Underwriters a 30-day option to purchase, at the public offering price less underwriting discounts and commissions, up to an additional 1,293,103 shares of Common Stock, which the 2024 Underwriters exercised in full on the closing of the 2024 Follow-on offering. The Company paid the Underwriters a commission of 3.6% of the aggregate gross proceeds received from all sales of the common stock under the Follow-on Agreement. In March 2024, 9,913,793 shares (including the 1,293,103 shares issued upon exercise of the 2024 Underwriters’ option to purchase additional shares) were issued under the 2024 Follow-on Agreement, for net proceeds of $276.6 million, after deducting underwriting fees and commissions of $10.3 million and deferred offering costs of $0.6 million.
In May 2023, we filed a shelf registration statement on Form S-3ASR, or the 2023 Shelf, with the SEC in relation to the registration of common stock, preferred stock, debt securities, warrants and units or any combination thereof. We also concurrently entered into the 2023 ATM Agreement, with Goldman Sachs & Co. LLC and SVB Securities LLC or collectively, the ATM Sales Agents, with respect to an “at-the-market” offering program under which we may issue and sell, from time to time at our sole discretion and pursuant to a prospectus supplement, shares of our common stock, par value $0.001 per share, having an aggregate offering price of up to $450.0 million through the ATM Sales Agents. We will pay the ATM Sales Agents a commission of up to 3.0% of the aggregate gross proceeds received from all sales of the common stock under the 2023 ATM Agreement. During the three and six months ended June 30, 2024, 1,061,991 shares were issued under the ATM Agreement, for net proceeds of $38.1 million, after deducting sales agent fees and commissions of $0.6 million. As of June 30, 2024, we are still eligible to sell up to $345.3 million of our common stock pursuant to the ATM Agreement under the 2023 Shelf.
Debt
As of June 30, 2024, we have borrowings under the 2029 Notes, the 2027 Notes and the Term Loan under the Amended Financing Agreement, which are discussed below.
2029 Notes, net
In January and February 2021, we issued an aggregate principal amount of $747.5 million of our 2029 Notes, pursuant to an Indenture dated January 28, 2021, or the 2029 Notes Indenture, between us and U.S. Bank National Association, as trustee, or the 2029 Notes Trustee, in a private offering to qualified institutional buyers, or the 2021 Note Offering, pursuant to Rule 144A under the Securities Act.
The 2029 Notes accrue interest payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2021, at a rate of 2.25% per year. The 2029 Notes will mature on February 1, 2029, unless earlier converted, redeemed or repurchased. The 2029 Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.
We received net proceeds from the 2021 Note Offering of approximately $731.4 million, after deducting the 2029 Notes Initial Purchasers’ discount. There were no direct offering expenses borne by us for the 2029 Notes. We used approximately $61.3 million of the net proceeds from the 2021 Note Offering to pay for the cost of the 2021 Capped Call Transactions and approximately $50.0 million to pay for the repurchase of shares of our common stock.
55
A holder of 2029 Notes may convert all or any portion of its 2029 Notes at its option at any time prior to the close of business on the business day immediately preceding November 1, 2028 only under certain circumstances.
On or after November 1, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2029 Notes at any time.
We may not redeem the 2029 Notes prior to February 6, 2026. We may redeem for cash all or any portion of the 2029 Notes, at our option, on a redemption date occurring on or after February 6, 2026 and on or before the 41st scheduled trading day immediately before the maturity date, under certain circumstances. No sinking fund is provided for the 2029 Notes. If we undergo a fundamental change (as defined in the 2029 Notes Indenture), holders may require us to repurchase for cash all or any portion of their 2029 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2029 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The 2029 Notes Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the 2029 Notes Trustee or the holders of not less than 25% in aggregate principal amount of the 2029 Notes then outstanding may declare the entire principal amount of all the Notes plus accrued special interest, if any, to be immediately due and payable. The 2029 Notes are our general unsecured obligations and rank senior in right of payment to all of our indebtedness that is expressly subordinated in right of payment to the 2029 Notes; equal in right of payment with all of our liabilities that are not so subordinated, including our 2027 Notes; effectively junior to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries.
Refer to Note 9 in our condensed consolidated financial statements for other details, including our future minimum payments under the 2029 Notes.
2027 Notes, net
In March 2020, we issued an aggregate principal amount of $550.0 million of our 2027 Notes, pursuant to an Indenture dated March 9, 2020, or the Indenture, between BridgeBio and U.S. Bank National Association, as trustee, or the Trustee, in a private offering to qualified institutional buyers, or the 2020 Note Offering, pursuant to Rule 144A under the Securities Act.
The 2027 Notes are senior, unsecured obligations of BridgeBio and accrue interest payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2020, at a rate of 2.50% per year. The 2027 Notes will mature on March 15, 2027, unless earlier converted or repurchased. Upon conversion, the 2027 Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.
We received net proceeds from the 2020 Note Offering of approximately $537.0 million, after deducting the Initial Purchasers’ discount and offering expenses. We used approximately $49.3 million of the net proceeds from the 2020 Note Offering to pay for the cost of the Capped Call Transactions, and approximately $75.0 million to pay for the repurchases of shares of our common stock in connection with the 2020 Note Offering.
A holder of 2027 Notes may convert all or any portion of its 2027 Notes at its option at any time prior to the close of business on the business day immediately preceding December 15, 2026 only under certain circumstances.
On or after December 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2027 Notes at any time.
We may not redeem the 2027 Notes prior to the maturity date, and no sinking fund is provided for the 2027 Notes. If we undergo a fundamental change (as defined in the Indenture), holders may require us to repurchase for cash all or any portion of their 2027 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2027 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the 2027 Notes then outstanding may declare the entire principal amount of all the Notes plus accrued special interest, if any, to be immediately due and payable. The 2027 Notes are our general unsecured obligations and rank senior in right of payment to all of our indebtedness that is expressly subordinated in right of payment to the 2027 Notes; equal in right of payment with all of our liabilities that are not so subordinated; effectively junior to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries.
Refer to Note 9 in our condensed consolidated financial statements for other details, including our future minimum payments under the 2027 Notes.
Term Loan, net
On January 17, 2024, we entered into the Financing Agreement with certain of our subsidiaries party thereto as guarantors, the Lenders and the Administrative Agent, which was amended on February 12, 2024.
56
Pursuant to the terms and conditions of the Financing Agreement, the Lenders have agreed to extend a senior secured credit facility to the Company in an aggregate principal amount of up to $750.0 million, comprised of (i) an Initial Term Loan in an aggregate principal amount of $450.0 million and (ii) one or more Incremental Term Loans in an aggregate amount not to exceed $300.0 million, subject to the satisfaction of certain terms and conditions set forth in the Financing Agreement. The Initial Term Loan was funded on January 17, 2024. Incremental Term Loans are available at the Company’s and the Lenders’ mutual consent from time to time after January 17, 2024.
The obligations of the Company under the Financing Agreement are and will be guaranteed by certain of the Company’s existing and future direct and indirect subsidiaries, subject to certain exceptions (such subsidiaries, collectively, the “Guarantors”). As security for the obligations of the Company and the Guarantors, each of the Company and the Guarantors are required to grant to the Administrative Agent, for the benefit of the Lenders and secured parties, a continuing first priority security interest in substantially all of the assets of the Company and the Guarantors (including all equity interests owned or hereafter acquired by the Company and the Guarantors), subject to certain customary exceptions.
Any outstanding principal on the Term Loans will initially bear interest at a rate per annum equal to (A) in the case of Term Loans bearing interest based on the base rate defined in the Financing Agreement (and which base rate will not be less than 2.00%), the sum of (i) the base rate plus (ii) 5.75% and (B) in the case of Term Loans bearing interest based on the three-month forward-looking term secured overnight financing rate administered by the Federal Reserve Bank of New York (“Term SOFR”), the sum of (i) three-month Term SOFR (subject to 1.00% per annum floor), plus (ii) 6.75%. Accrued interest is payable quarterly following the funding of the Initial Term Loan on the Closing Date, on any date of prepayment or repayment of the Term Loans and at maturity.
The Company may prepay the Term Loans at any time (in whole or in part) or be required to make mandatory prepayments upon the occurrence of certain customary prepayment events. The mandatory prepayment events include certain permitted asset sales transactions (which include certain sales, leases, assignments, conveyances, transfers, licenses or exchanges of property) that occur prior to the date the FDA approves a first NDA for acoramidis, which would require the Company to deposit 75% of net cash received from such transactions into an escrow account controlled by the Administrative Agent, and the Company may also be subject to a specified disposition fee per transaction for certain asset sale transactions. In certain instances and during certain time periods, prepayments will be subject to customary prepayment fees. The amount of any prepayment fee may vary, but the maximum amount that may be due with any such prepayment would be an amount equal to 3.00% of the Term Loans being prepaid at such time, plus a customary make whole amount.
We have entered into asset sales transactions that occurred during the three months ended March 31, 2024 for the exclusive license agreements with Bayer Consumer Care AG and Kyowa Kirin Co., Ltd, for which the Company is required to deposit 75% of the proceeds, net of certain permitted costs, upon receipt of the upfront payments from Bayer Consumer Care AG and Kyowa Kirin Co., Ltd, into the escrow accounts. During the three months ended June 30, 2024, we received $235.0 million in aggregate from Bayer Consumer Care AG and Kyowa Kirin Co., Ltd, and deposited net proceeds of $159.3 million into the escrow accounts. Refer to Note 11 for further details regarding the exclusive license agreements with Bayer Consumer Care AG and Kyowa Kirin Co., Ltd.
The completion of the $200.0 million private equity financing with external investors of BBOT. was considered an asset sale transaction that was subject to a disposition fee under the Financing Agreement. Accordingly, we paid a disposition fee of $1.1 million to the Administrative Agent during the three months ended June 30, 2024. Refer to Note 6 for further details regarding the BBOT private equity financing transaction.
The Financing Agreement contains affirmative covenants and negative covenants applicable to the Company and its subsidiaries that are customary for financings of this type. Such covenants, among other items, limit the Company’s and its subsidiaries’ ability to (i) incur additional permitted indebtedness, (ii) pay dividends or make certain distributions, (iii) dispose of its and their assets, grant liens and license or permit other encumbrances on its and their assets, (iv) fundamentally alter the nature of their businesses and (v) enter into certain transactions with affiliates. The Company and the Guarantors are also required to maintain a minimum unrestricted cash balance of $70.0 million at all times. The Company and its subsidiaries are permitted to license their intellectual property, dispose of other assets and enter into monetization and royalty transactions, in each case, subject to satisfaction of certain terms and conditions. The Financing Agreement also includes representations, warranties, indemnities and events of default that are customary for financings of this type, including an event of default relating to a change of control of the Company. Upon the occurrence of an event of default, the Lenders may, among other things, accelerate the Company’s obligations under the Financing Agreement.
On June 20, 2024, the Company and each of the guarantors entered into the Second Amendment to the Financing Agreement. Under the Amended Financing Agreement, between June 20, 2024 and through the earlier of the FDA approval date and November 30, 2024, the Company is able to request a release of funds in an aggregate amount not to exceed 50% of the original net cash proceeds received from asset sale transactions. As of June 30, 2024, $20.0 million was released from the escrow accounts and classified as cash, with a remaining balance of $139.3 million in the escrow accounts classified as “restricted cash” on the condensed consolidated balance sheet. Furthermore, under the Amended Financing Agreement, the minimum qualified cash balance was amended from $70.0 million to $70.0 million plus 40% of any cash released by the Company from the escrow accounts, at all times. As of June 30, 2024, the minimum unrestricted qualified cash balance was $78.0 million.
57
Cash Flows
The following table summarizes our cash flows during the periods indicated:
|
Six Months Ended June 30, |
|
|
|
|
||||||
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
|
|
|
|
(in thousands) |
|
|
|
|
|||
Net cash used in operating activities |
$ |
(144,834 |
) |
|
$ |
(257,675 |
) |
|
$ |
112,841 |
|
Net cash provided by investing activities |
|
25,792 |
|
|
|
16,417 |
|
|
|
9,375 |
|
Net cash provided by financing activities |
|
273,819 |
|
|
|
149,018 |
|
|
|
124,801 |
|
Net increase (decrease) in cash, cash equivalents and |
$ |
154,777 |
|
|
$ |
(92,240 |
) |
|
$ |
247,017 |
|
Net Cash Flows Used in Operating Activities
Net cash used in operating activities was $144.8 million for the six months ended June 30, 2024, consisting primarily of our net loss of $111.7 million, adjusted for non-cash items totaling $54.4 million, which primarily includes a $126.3 million net gain on the deconsolidation of a subsidiary, $8.1 million net realized gain from investment in equity securities, offset by $38.5 million in stock-based compensation expense, $26.6 million in loss on extinguishment of debt from the repayment of the term loan under the Amended Loan Agreement, net loss from equity method investment of $7.9 million, and $3.7 million in accretion of debt; and $21.3 million in net cash inflow related to changes in operating assets and liabilities. The $21.3 million net cash inflow related to changes in operating assets and liabilities was attributed mainly to an increase in deferred revenue of $22.2 million primarily related to the Bayer Agreement and KKC Agreement, an increase of $8.9 million in accounts payable, and an increase of $7.1 million in accrued research and development liabilities, partially offset by a decrease of $8.4 million in accrued compensation and benefits and a decrease in prepaid expenses and other current assets of $6.5 million, which are primarily due to timing of payments.
Net cash used in operating activities was $257.7 million for the six months ended June 30, 2023, consisting primarily of our net loss of $303.4 million, adjusted for non-cash items totaling $64.0 million, which primarily includes $49.1 million in stock-based compensation expense, $6.7 million in accrued payment-in-kind interest, and $4.6 million in accretion of debt, as well as $18.2 million net cash outflow related to changes in operating assets and liabilities. The $18.2 million net cash outflow related to changes in operating assets and liabilities was attributed mainly to a decrease of $11.3 million in accrued research and development liabilities and a decrease of $11.1 million in accrued compensation and benefits mainly due to timing of payments, a decrease of $4.1 million in accounts payable due to timing of payments, partially offset by a decrease of $8.5 million from licensing and collaboration agreements receivables primarily due to collections.
Net Cash Flows Provided by Investing Activities
Net cash provided by investing activities was $25.8 million for the six months ended June 30, 2024, attributable primarily to $63.2 million in proceeds from the sale of equity securities, $55.0 million in proceeds from the maturities of marketable securities, $25.7 million in special cash dividends received from equity securities, partially offset by purchases of marketable securities of $93.8 million and purchases of investments in equity securities of $20.3 million.
Net cash provided by investing activities was $16.4 million for the six months ended June 30, 2023, attributable primarily to $67.1 million in proceeds from the sale of equity securities, $41.6 million in maturities of marketable securities, partially offset by purchases of investment in equity securities of $71.5 million and purchases of marketable securities of $19.8 million.
Net Cash Flows Provided by Financing Activities
Net cash provided by financing activities was $273.8 million for the six months ended June 30, 2024, consisting primarily of $450.0 million in proceeds from the term loan under the Financing Agreement, $314.8 million in net proceeds from the issuance of common stock through public offerings, and partially offset by $473.4 million repayment of the term loan under the Amended Loan Agreement, and $16.0 million in issuance costs and discounts associated with the Amended Financing Agreement.
Net cash provided by financing activities was $149.0 million for the six months ended June 30, 2023, consisting primarily of $144.0 million in net proceeds from the issuance of common stock through the Follow-on offering.
58
Critical Accounting Policies
Our management’s discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as revenues, if any, and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There have been no significant changes in our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in the section titled “Management’s Discussion and Analysis of Financial Condition and Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC, except for certain updates to our accounting policy as discussed in Note 2 in our condensed consolidated financial statements as of and for the six months ended June 30, 2024.
Recent Accounting Pronouncements
There have been no significant changes in recently adopted or issued accounting pronouncements from those disclosed in the section titled “Financial Statements and Supplementary Data” included in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC.
59
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of June 30, 2024, we held cash, cash equivalents, marketable securities and restricted cash (current) of $587.2 million. Our cash equivalents consist of amounts invested in money market funds; agency discount notes; and high investment grade fixed income securities that are primarily invested in commercial paper, U.S. government securities and treasury bills. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. We have not been exposed nor do we anticipate being exposed to material risks due to changes in interest rates. We do not believe that our cash and cash equivalents have a significant risk of default or illiquidity.
As of June 30, 2024, our 2029 Notes and 2027 Notes had principal balances of $747.5 million and $550.0 million, respectively, which bear fixed interest rates that are not subject to variability as a result of changes in interest rates. However, as of June 30, 2024, our term loan under the Amended Financing Agreement had a principal balance of $450.0 million, which bears variable interest rates that are subject to variability as a result of changes in interest rates. The effect of a hypothetical 10% increase in interest rates applicable to the Amended Financing Agreement would increase our interest expense on our term loan by $0.2 million and $0.7 million for the three and six months ended June 30, 2024, respectively.
Inflation has decreased during the period covered by this Quarterly Report on Form 10-Q, and is expected to continue to decrease for the near future. Inflationary factors, such as increases in the cost of our raw materials, clinical supplies, interest rates and overhead costs may adversely affect our operating results. We do not believe that inflation has had a material impact on our financial position or results of operations to date. Significant adverse changes in inflation and prices in the future could result in material losses.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file under the Securities Exchange Act of 1934, as amended, or the Exchange Act, with the U.S. Securities and Exchange Commission, or the SEC, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2024 and concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of that date. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
60
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
As of the date of this Quarterly Report on Form 10-Q, we were not party to any material legal proceedings. In the future, we may become party to legal proceedings and claims arising in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we do not believe we are party to any claim or litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse impact on our financial position, results of operations or cash flows. Regardless of the outcome, litigation can have an adverse effect on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk Factors
In addition to the other information set forth in this Form 10-Q, including under the heading “Special Note Regarding Forward-Looking Statements”, the risks and uncertainties that we believe are most important for you to consider are discussed below and in “Part I, Item 1A—Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC, which could adversely affect our business, financial condition, or results of operations. The risks described below and in our Annual Report on Form 10-K for the year ended December 31, 2023 are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial condition, or results of operations. Other than the risk factors listed below, there are no material changes to the Risk Factors described in our Annual Report on Form 10-K for the year ended December 31, 2023.
If we are unable to obtain regulatory approval in one or more jurisdictions for any product candidates that we may identify and develop, our business will be substantially harmed.
We cannot commercialize a product until the appropriate regulatory authorities have reviewed and approved the product candidate. Approval by the FDA and comparable foreign regulatory authorities is lengthy and unpredictable, and depends upon numerous factors, including substantial discretion of the regulatory authorities. Approval policies, regulations or the type and amount of nonclinical or clinical data necessary to gain approval may change during the course of a product candidate’s development and may vary among jurisdictions, which may cause delays in the approval or the decision not to approve an application. It is possible that our current product candidates and any other product candidates which we may seek to develop in the future will not ever obtain regulatory approval. We cannot be certain that any of our product candidates will receive regulatory approval or that if approved, any of our product candidates, will be successfully commercialized.
Obtaining marketing approval is an extensive, lengthy, expensive and inherently uncertain process, and regulatory authorities may delay, limit or deny approval of our product candidates for many reasons, including, but not limited to:
• the inability to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that the applicable product candidate is safe and effective as a treatment for our targeted indications;
• the FDA or comparable foreign regulatory authorities may disagree with the design, endpoints or implementation of our clinical trials;
• the population studied in the clinical program may not be sufficiently broad or representative to assure safety or efficacy in the full population for which we seek approval;
• the FDA or comparable foreign regulatory authorities may require additional preclinical studies or clinical trials beyond those that we currently anticipate;
• the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical trials;
• the data collected from clinical trials of product candidates that we may identify and pursue may not be sufficient to support the submission of a new drug application, or NDA, biologics license application, or BLA, or other submission for regulatory approval in the United States or elsewhere;
• we may be unable to demonstrate to the FDA or comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable;
61
• the FDA or comparable foreign regulatory authorities may identify deficiencies in the manufacturing processes, test procedures and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and the approval policies or regulations of the FDA or comparable foreign regulatory authorities may change in a manner that renders the clinical trial design or data insufficient for approval.
In addition, even if an NDA, BLA, or other submission for regulatory approval, is filed and accepted for review, the FDA or comparable regulatory authorities may delay their review or approval process or may decline to grant regulatory approval for a variety of reasons. For example, on December 5, 2023 we submitted an application for approval with the FDA for acoramidis but cannot predict when, or if, we will receive a decision on approval from the FDA. The lengthy approval process, as well as the unpredictability of the results of clinical trials and evolving regulatory requirements, may result in our failure to obtain regulatory approval to market product candidates that we may pursue in the United States or elsewhere, which would significantly harm our business, prospects, financial condition and results of operations. Additionally, failure to secure FDA approval for acoramidis will result in our inability to receive a $500.0 million milestone payment pursuant to the Funding Agreement, which would significantly harm our business, prospects, financial condition and results of operations.
We have incurred indebtedness under our convertible senior notes and are party to a financing agreement that contains operating and financial covenants that may restrict our business and financing activities.
In March 2020, we issued the 2027 Notes, pursuant to which we pay interest semiannually in arrears at a rate of 2.50% per year. The 2027 Notes will mature on March 15, 2027 unless earlier converted or repurchased, at which time we will settle any conversions of the 2027 Notes in cash, shares of our common stock or a combination thereof, at our election. In January and February 2021, we issued the 2029 Notes, pursuant to which we pay interest semiannually in arrears at a rate of 2.25% per year. The 2029 Notes will mature on February 1, 2029 unless earlier converted or repurchased, at which time we will settle any conversions of the 2029 Notes in cash, shares of our common stock or a combination thereof, at our election. Under certain circumstances, the holders of the 2027 Notes and the 2029 Notes, or collectively, the Notes, may require us to repay all or a portion of the principal and interest outstanding under the Notes in cash prior to their respective maturity dates, which could have an adverse effect on our financial results.
In January 2024, we entered into the Financing Agreement, pursuant to which the lenders thereunder agreed to extend a senior secured credit facility to us in an aggregate principal amount of up to $750.0 million, comprised of (i) an initial term loan of $450.0 million, or the Initial Term Loan, and (ii) subject to the satisfaction of certain terms and conditions set forth in the Financing Agreement, one or more incremental term loans in an aggregate principal amount not to exceed $300.0 million. The Initial Term Loan was funded on January 17, 2024. We are required to make principal payments of $22.5 million on the outstanding balance of the term loans commencing on June 30, 2027 in quarterly installments in amounts and subject to conditions as set forth in the Financing Agreement, including variable interest rates and additional quarterly installments of $10.0 million if our market capitalization is at any time after January 17, 2024 less than $1.5 billion. The stated maturity date of the term loans is January 17, 2029, with two springing earlier maturity dates at 91 days prior to the stated maturity dates of the 2027 Notes and the 2029 Notes, respectively, in each case to the extent there is an aggregate outstanding amount of such notes of more than $50 million on such dates. The Financing Agreement restricts our ability, among other things and subject to certain limited exceptions, to:
• sell, transfer or otherwise dispose of any of our business or property;
• make material changes to our business;
• enter into transactions resulting in significant changes to the voting control of our stock;
• make certain changes to our organizational structure;
• consolidate or merge with other entities or acquire other entities;
• incur additional indebtedness or create encumbrances on our assets;
• pay dividends, or make distributions on or repurchase our stock;
• enter into transactions with our affiliates;
• make payments in respect of subordinated indebtedness or royalty monetization transactions; or
• make certain investments.
62
For example, the license agreements that we recently entered into with Bayer Consumer Care AG and Kyowa Kirin Co. are considered permitted asset sale transactions under the Financing Agreement, which requires us to deposit approximately 75% of the proceeds from such transactions, net of certain permitted costs, into an escrow account to be controlled by the Administrative Agent. Furthermore, under the Amended Financing Agreement, between June 20, 2024 and through the earlier of the FDA approval date of a first NDA for acoramidis and November 30, 2024, the Company is able to request a release of funds in an aggregate amount not to exceed 50% of the original net cash proceeds received from asset sale transactions.
In addition, we are required to maintain, under the Amended Financing Agreement, a minimum unrestricted qualified cash balance of $70.0 million plus 40% of any cash released by the Company from the escrow account, at all times, and to comply with various operating covenants and default clauses that may restrict our ability to finance our operations, engage in business activities or expand or fully pursue our business strategies. As of June 30, 2024, the minimum unrestricted qualified cash balance was $78.0 million. As security for the obligations under the Amended Financing Agreement, we and our subsidiaries that are party to the Amended Financing Agreement as guarantors are required to grant to the Administrative Agent, for the benefit of the lenders and secured parties, a continuing first priority security interest in substantially all of our assets and the assets of our subsidiaries that are party to the Amended Financing Agreement as guarantors (including all equity interests owned or hereafter acquired by us or such subsidiaries), subject to certain exceptions. A breach of any of these covenants or clauses could result in a default under the Amended Financing Agreement, which could cause all of the outstanding indebtedness under the facility to become immediately due and payable and cause us to incur additional fees related to an early repayment, or result in a material adverse effect on our business, financial condition and operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) Sales of Unregistered Securities
None.
(b) Use of Proceeds from Public Offering of Common Stock
None.
(c) Issuer Purchases of Company Equity Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
a) Information Required to be Reported on Form 8-K
None.
(b) Material Changes to Nomination Procedures
None.
(c) Director and Officer Trading Plans and Arrangements
None.
63
Item 6. Exhibits
Exhibit Number |
|
Exhibit Title |
|
Form |
|
File No. |
|
Exhibit |
|
Filing Date |
|
|
|
|
|
|
|
|
|
|
|
2.1 |
|
|
8-K |
|
001-38959 |
|
2.01 |
|
January 26, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
3.1 |
|
Amended and Restated Certificate of Incorporation of the Registrant, as currently in effect. |
|
8-K |
|
001-38959 |
|
3.1 |
|
July 3, 2019 |
|
|
|
|
|
|
|
|
|
|
|
3.2 |
|
Amended and Restated Bylaws of the Registrant, as currently in effect. |
|
S-4 |
|
333-249944 |
|
3.2 |
|
November 6, 2020 |
|
|
|
|
|
|
|
|
|
|
|
4.1 |
|
|
S-1 |
|
333-231759 |
|
4.1 |
|
June 24, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
4.2 |
|
|
S-1 |
|
333-231759 |
|
4.3 |
|
June 24, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
4.3 |
|
|
8-K |
|
001-38959 |
|
4.1 |
|
March 10, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
4.4 |
|
Form of Global Note, representing BridgeBio Pharma, Inc.’s 2.50% Convertible Senior Notes due 2027 (included as Exhibit A to the Indenture filed as Exhibit 4.1). |
|
8-K |
|
001-38959 |
|
4.2 |
|
March 10, 2020 |
|
|
|
|
|
|
|
|
|
|
|
4.5 |
|
|
8-K |
|
001-38959 |
|
4.1 |
|
January 29, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
4.6 |
|
Form of Global Note, representing BridgeBio Pharma, Inc.’s 2.25% Convertible Senior Notes due 2029 (included as Exhibit A to the Indenture filed as Exhibit 4.1) |
|
8-K |
|
001-38959 |
|
4.2 |
|
January 29, 2021 |
|
|
|
|
|
|
|
|
|
|
|
4.7 |
|
|
8-K |
|
001-38959 |
|
10.1 |
|
September 25, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
4.8† |
|
|
8-K |
|
001-38959 |
|
10.2 |
|
September 25, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
10.1† |
|
|
— |
|
— |
|
— |
|
Filed herewith |
|
|
|
|
|
|
|
|
|
|
|
|
10.2# |
|
|
— |
|
— |
|
— |
|
Filed herewith |
|
|
|
|
|
|
|
|
|
|
|
|
31.1 |
|
|
— |
|
— |
|
— |
|
Filed herewith |
|
|
|
|
|
|
|
|
|
|
|
|
31.2 |
|
|
— |
|
— |
|
— |
|
Filed herewith |
|
|
|
|
|
|
|
|
|
|
|
|
64
32.1* |
|
|
— |
|
— |
|
— |
|
Filed herewith |
|
|
|
|
|
|
|
|
|
|
|
|
32.2* |
|
|
— |
|
— |
|
— |
|
Filed herewith |
|
|
|
|
|
|
|
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document |
|
— |
|
— |
|
— |
|
Filed herewith |
|
|
|
|
|
|
|
|
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
|
— |
|
— |
|
— |
|
Filed herewith |
|
|
|
|
|
|
|
|
|
|
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
— |
|
— |
|
— |
|
Filed herewith |
|
|
|
|
|
|
|
|
|
|
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
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Filed herewith |
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101.LAB |
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Inline XBRL Taxonomy Extension Label Linkbase Document |
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Filed herewith |
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101.PRE |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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Filed herewith |
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104 |
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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
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Filed herewith |
* This certification will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically incorporated by reference into such filing.
# Indicates a management contract or any compensatory plan, contract or arrangement.
† Certain confidential portions (indicated by brackets and asterisks) have been omitted from this exhibit in accordance with the rules of the Securities and Exchange Commission because such information (i) is not material and (ii) is the type that the registrant treats as private or confidential.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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BridgeBio Pharma, Inc. |
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Date: August 1, 2024 |
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By: |
/s/ Neil Kumar |
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Neil Kumar, Ph.D. |
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Chief Executive Officer, Director |
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(Principal Executive Officer) |
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Date: August 1, 2024 |
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By: |
/s/ Brian Stephenson |
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Brian Stephenson, Ph.D., CFA |
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Chief Financial Officer |
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(Principal Financial Officer and Principal Accounting Officer) |
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