UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
|
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2020
OR
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 001-38959
BridgeBio Pharma, Inc.
(Exact Name of Registrant as Specified in its Charter)
|
Delaware |
|
84-1850815 |
|
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
|
421 Kipling Street Palo Alto, CA |
|
94301 |
|
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (650) 391-9740
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
|
Common Stock |
|
BBIO |
|
The Nasdaq Global Select Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer |
☐ |
|
Accelerated filer |
☐ |
|
Non-accelerated filer |
☒ |
|
Smaller reporting company |
☐ |
|
Emerging growth company |
☒ |
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 8, 2020 the registrant had 121,369,992 shares of common stock, $0.001 par value per share, outstanding.
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Page |
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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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7 |
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8 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
37 |
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Item 3. |
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46 |
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Item 4. |
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46 |
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PART II. |
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Item 1. |
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|
48 |
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Item 1A. |
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48 |
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Item 2. |
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102 |
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Item 3. |
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102 |
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Item 4. |
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102 |
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Item 5. |
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102 |
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Item 6. |
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103 |
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105 |
|||
2
Condensed Consolidated Balance Sheets
(in thousands, except shares and per share amounts)
|
|
|
March 31, |
|
|
December 31, |
|
||
|
|
|
2020 |
|
|
2019 |
|
||
|
|
|
(Unaudited) |
|
|
(1) |
|
||
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
757,049 |
|
|
$ |
363,773 |
|
|
Short-term marketable securities |
|
|
148,126 |
|
|
|
182,220 |
|
|
Prepaid expenses and other current assets |
|
|
19,782 |
|
|
|
22,629 |
|
|
Total current assets |
|
|
924,957 |
|
|
|
568,622 |
|
|
Property and equipment, net |
|
|
15,755 |
|
|
|
5,625 |
|
|
Operating lease right-of-use assets, net |
|
|
8,855 |
|
|
|
— |
|
|
Long-term marketable securities |
|
|
23,210 |
|
|
|
31,144 |
|
|
Other assets |
|
|
17,022 |
|
|
|
26,288 |
|
|
Total assets |
|
$ |
989,799 |
|
|
$ |
631,679 |
|
|
Liabilities, Redeemable Convertible Noncontrolling Interests and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
13,086 |
|
|
$ |
8,852 |
|
|
Accrued compensation and benefits |
|
|
5,647 |
|
|
|
13,317 |
|
|
Accrued research and development liabilities |
|
|
29,522 |
|
|
|
20,896 |
|
|
Accrued professional services |
|
|
3,145 |
|
|
|
2,222 |
|
|
LEO call option liability |
|
|
3,539 |
|
|
|
4,078 |
|
|
Build-to-suit lease obligation |
|
|
— |
|
|
|
8,000 |
|
|
Operating lease liabilities, current portion |
|
|
2,510 |
|
|
|
— |
|
|
Other accrued liabilities |
|
|
7,465 |
|
|
|
3,020 |
|
|
Total current liabilities |
|
|
64,914 |
|
|
|
60,385 |
|
|
Term loans, noncurrent |
|
|
92,416 |
|
|
|
91,791 |
|
|
2027 Notes |
|
|
368,923 |
|
|
|
— |
|
|
Operating lease liabilities, net of current portion |
|
|
8,678 |
|
|
|
— |
|
|
Other liabilities |
|
|
2,797 |
|
|
|
3,527 |
|
|
Total liabilities |
|
|
537,728 |
|
|
|
155,703 |
|
|
Commitments and contingencies (Note 8) |
|
|
|
|
|
|
|
|
|
Redeemable convertible noncontrolling interests |
|
|
3,053 |
|
|
|
2,243 |
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
Undesignated preferred stock, $0.001 par value; 25,000,000 shares authorized; no shares issued and outstanding |
|
|
— |
|
|
|
— |
|
|
Common stock, $0.001 par value; 500,000,000 shares authorized; 123,774,536 shares issued and 121,359,855 shares outstanding as of March 31, 2020, 123,658,287 shares issued and outstanding as of December 31, 2019 |
|
|
124 |
|
|
|
124 |
|
|
Treasury stock, at cost; 2,414,681 shares as of March 31, 2020 |
|
|
(75,000 |
) |
|
|
— |
|
|
Additional paid-in capital |
|
|
986,746 |
|
|
|
848,107 |
|
|
Accumulated other comprehensive income |
|
|
726 |
|
|
|
254 |
|
|
Accumulated deficit |
|
|
(531,881 |
) |
|
|
(440,031 |
) |
|
Total BridgeBio stockholders' equity |
|
|
380,715 |
|
|
|
408,454 |
|
|
Noncontrolling interests |
|
|
68,303 |
|
|
|
65,279 |
|
|
Total stockholders' equity |
|
|
449,018 |
|
|
|
473,733 |
|
|
Total liabilities, redeemable convertible noncontrolling interests and stockholders’ equity |
|
$ |
989,799 |
|
|
$ |
631,679 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
|
(1) |
The condensed consolidated balance sheet as of December 31, 2019 is derived from the audited consolidated financial statements as of that date. |
3
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except shares and per share amounts)
|
|
|
Three Months Ended March 31, |
|
|||||
|
|
|
2020 |
|
|
2019 |
|
||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
68,225 |
|
|
$ |
44,853 |
|
|
General and administrative |
|
|
34,262 |
|
|
|
18,899 |
|
|
Total operating expenses |
|
|
102,487 |
|
|
|
63,752 |
|
|
Loss from operations |
|
|
(102,487 |
) |
|
|
(63,752 |
) |
|
Other income (expense), net: |
|
|
|
|
|
|
|
|
|
Interest income |
|
|
1,941 |
|
|
|
2,107 |
|
|
Interest expense |
|
|
(4,010 |
) |
|
|
(1,671 |
) |
|
Share in net loss of an equity method investment |
|
|
— |
|
|
|
(4,599 |
) |
|
Other income (expense) |
|
|
474 |
|
|
|
(1,521 |
) |
|
Total other income (expense), net |
|
|
(1,595 |
) |
|
|
(5,684 |
) |
|
Net loss |
|
|
(104,082 |
) |
|
|
(69,436 |
) |
|
Net loss attributable to redeemable convertible noncontrolling interests and noncontrolling interests |
|
|
12,232 |
|
|
|
8,251 |
|
|
Net loss attributable to common stockholders of BridgeBio |
|
$ |
(91,850 |
) |
|
$ |
(61,185 |
) |
|
Net loss per share, basic and diluted |
|
$ |
(0.78 |
) |
|
$ |
(0.66 |
) |
|
Weighted-average shares used in computing net loss per share, basic and diluted (2) |
|
|
117,803,438 |
|
|
|
92,330,072 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
|
(2) |
The weighted-average shares used in computing net loss per share, basic and diluted for the three months ended March 31, 2019 were retroactively adjusted as a result of the 2019 Reorganization. See Note 13 to the condensed consolidated financial statements for additional details. |
4
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
(in thousands)
|
|
|
Three Months Ended March 31, |
|
|||||
|
|
|
2020 |
|
|
2019 |
|
||
|
Net loss |
|
$ |
(104,082 |
) |
|
$ |
(69,436 |
) |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
Unrealized gain on available-for-sale securities |
|
|
472 |
|
|
|
— |
|
|
Comprehensive loss |
|
|
(103,610 |
) |
|
|
(69,436 |
) |
|
Comprehensive loss attributable to redeemable convertible noncontrolling interests and noncontrolling interests |
|
|
12,232 |
|
|
|
8,251 |
|
|
Comprehensive loss attributable to common stockholders of BridgeBio |
|
$ |
(91,378 |
) |
|
$ |
(61,185 |
) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
Condensed Consolidated Statements of Redeemable Convertible Noncontrolling Interests and Stockholders’ Equity
(Unaudited)
(in thousands, except shares and per share amounts)
|
|
|
Three Months Ended March 31, 2020 |
|
||||||||||||||||||||||||||||||||||||||||||
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Redeemable |
|
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|
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|
|
|
|
|
|
|
|
|
|
|
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Accumulated |
|
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|
|
|
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Total |
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|||
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|
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Convertible |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
|
|
|
|
BridgeBio |
|
|
Noncontro- |
|
|
Total |
|
||||||
|
|
|
Noncontrolling |
|
|
|
Common Stock |
|
|
Treasury Stock |
|
|
Paid-In |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Stockholders' |
|
|
lling |
|
|
Stockholders’ |
|
|||||||||||||||||
|
|
|
Interests |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income |
|
|
Deficit |
|
|
Equity |
|
|
Interests |
|
|
Equity |
|
|||||||||||
|
Balances as of December 31, 2019 (3) |
|
$ |
2,243 |
|
|
|
|
123,658,287 |
|
|
$ |
124 |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
848,107 |
|
|
$ |
254 |
|
|
$ |
(440,031 |
) |
|
$ |
408,454 |
|
|
$ |
65,279 |
|
|
$ |
473,733 |
|
|
Issuance of shares under equity compensation plans |
|
|
— |
|
|
|
|
116,249 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
529 |
|
|
|
— |
|
|
|
— |
|
|
|
529 |
|
|
|
— |
|
|
|
529 |
|
|
Stock-based compensation |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,063 |
|
|
|
— |
|
|
|
— |
|
|
|
8,063 |
|
|
|
— |
|
|
|
8,063 |
|
|
Equity component of 2027 Notes, net of issuance costs and deferred tax liability |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
167,726 |
|
|
|
— |
|
|
|
— |
|
|
|
167,726 |
|
|
|
— |
|
|
|
167,726 |
|
|
Purchase of capped calls |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(49,280 |
) |
|
|
— |
|
|
|
— |
|
|
|
(49,280 |
) |
|
|
— |
|
|
|
(49,280 |
) |
|
Repurchase of common stock |
|
|
— |
|
|
|
|
(2,414,681 |
) |
|
|
— |
|
|
|
2,414,681 |
|
|
|
(75,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(75,000 |
) |
|
|
— |
|
|
|
(75,000 |
) |
|
Issuance of noncontrolling interest |
|
|
1,102 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26,565 |
|
|
|
26,565 |
|
|
Transfers from (to) noncontrolling interest |
|
|
574 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11,601 |
|
|
|
— |
|
|
|
— |
|
|
|
11,601 |
|
|
|
(12,175 |
) |
|
|
(574 |
) |
|
Unrealized gains on available-for-sale securities |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
472 |
|
|
|
— |
|
|
|
472 |
|
|
|
— |
|
|
|
472 |
|
|
Net loss |
|
|
(866 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(91,850 |
) |
|
|
(91,850 |
) |
|
|
(11,366 |
) |
|
|
(103,216 |
) |
|
Balances as of March 31, 2020 |
|
$ |
3,053 |
|
|
|
|
121,359,855 |
|
|
$ |
124 |
|
|
|
2,414,681 |
|
|
$ |
(75,000 |
) |
|
$ |
986,746 |
|
|
$ |
726 |
|
|
$ |
(531,881 |
) |
|
$ |
380,715 |
|
|
$ |
68,303 |
|
|
$ |
449,018 |
|
|
|
|
Three Months Ended March 31, 2019 |
|
||||||||||||||||||||||||||||||
|
|
|
Redeemable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
||
|
|
|
Convertible |
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
BridgeBio |
|
|
Noncontro- |
|
|
Total |
|
||||||||||
|
|
|
Noncontrolling |
|
|
|
Common Stock |
|
|
Paid-In |
|
|
Accumulated |
|
|
Stockholders' |
|
|
lling |
|
|
Stockholders’ |
|
|||||||||||
|
|
|
Interests |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Equity |
|
|
Interests |
|
|
Equity |
|
||||||||
|
Balances as of December 31, 2018 (3) |
|
$ |
122 |
|
|
|
|
92,057,704 |
|
|
$ |
92 |
|
|
$ |
494,231 |
|
|
$ |
(179,444 |
) |
|
$ |
314,879 |
|
|
$ |
62,361 |
|
|
$ |
377,240 |
|
|
Issuance of shares under equity compensation plans |
|
|
— |
|
|
|
|
518,511 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock-based compensation |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
1,236 |
|
|
|
— |
|
|
|
1,236 |
|
|
|
— |
|
|
|
1,236 |
|
|
Repayment of nonrecourse notes |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
179 |
|
|
|
— |
|
|
|
179 |
|
|
|
— |
|
|
|
179 |
|
|
Issuance of noncontrolling interest |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,320 |
|
|
|
1,320 |
|
|
Transfers from (to) noncontrolling interest |
|
|
870 |
|
|
|
|
— |
|
|
|
— |
|
|
|
(2,968 |
) |
|
|
— |
|
|
|
(2,968 |
) |
|
|
2,098 |
|
|
|
(870 |
) |
|
Net loss |
|
|
(790 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(61,185 |
) |
|
|
(61,185 |
) |
|
|
(7,461 |
) |
|
|
(68,646 |
) |
|
Balances as of March 31, 2019 |
|
$ |
202 |
|
|
|
|
92,576,215 |
|
|
$ |
92 |
|
|
$ |
492,678 |
|
|
$ |
(240,629 |
) |
|
$ |
252,141 |
|
|
$ |
58,318 |
|
|
$ |
310,459 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
|
(3) |
The consolidated balances as of December 31, 2019 and 2018 are derived from the audited consolidated financial statements as of that date. The consolidated balances as of December 31, 2018 were retroactively adjusted, including shares and per share amounts, as a result of the 2019 Reorganization. See Note 13 to the condensed consolidated financial statements for additional details. |
6
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
|
|
|
Three Months Ended March 31, |
|
|||||
|
Operating activities: |
|
2020 |
|
|
2019 |
|
||
|
Net loss |
|
$ |
(104,082 |
) |
|
$ |
(69,436 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
10,222 |
|
|
|
2,232 |
|
|
Share in net loss of equity method investments |
|
|
— |
|
|
|
4,599 |
|
|
Accretion of 2027 Notes and term loans |
|
|
1,761 |
|
|
|
354 |
|
|
Acquired in-process research and development assets |
|
|
— |
|
|
|
2,000 |
|
|
LEO call option expense (income) |
|
|
(539 |
) |
|
|
1,514 |
|
|
Other noncash adjustments |
|
|
1,034 |
|
|
|
339 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
2,846 |
|
|
|
(309 |
) |
|
Other assets |
|
|
(734 |
) |
|
|
(1,852 |
) |
|
Accounts payable |
|
|
4,234 |
|
|
|
(1,952 |
) |
|
Accrued compensation and benefits |
|
|
(7,670 |
) |
|
|
(432 |
) |
|
Accrued research and development liabilities |
|
|
8,626 |
|
|
|
1,710 |
|
|
Accrued professional services |
|
|
923 |
|
|
|
1,370 |
|
|
Operating lease liabilities |
|
|
(556 |
) |
|
|
— |
|
|
Other accrued and other liabilities |
|
|
15 |
|
|
|
723 |
|
|
Net cash used in operating activities |
|
|
(83,920 |
) |
|
|
(59,140 |
) |
|
Investing activities |
|
|
|
|
|
|
|
|
|
Maturities of marketable securities |
|
|
42,500 |
|
|
|
— |
|
|
Cash paid for in-process research and development assets acquired |
|
|
— |
|
|
|
(2,000 |
) |
|
Purchases of property and equipment |
|
|
(4,477 |
) |
|
|
(427 |
) |
|
Net cash provided by (used in) investing activities |
|
|
38,023 |
|
|
|
(2,427 |
) |
|
Financing activities |
|
|
|
|
|
|
|
|
|
Proceeds from issuance of 2027 Notes |
|
|
550,000 |
|
|
|
— |
|
|
Issuance costs and discounts associated with issuance of 2027 Notes |
|
|
(12,375 |
) |
|
|
— |
|
|
Purchase of capped calls |
|
|
(49,280 |
) |
|
|
— |
|
|
Repurchase of common stock |
|
|
(75,000 |
) |
|
|
— |
|
|
Proceeds from repayment of nonrecourse notes |
|
|
— |
|
|
|
179 |
|
|
Proceeds from at-the-market issuance of noncontrolling interest by Eidos, net |
|
|
24,094 |
|
|
|
— |
|
|
Proceeds from issuance of redeemable convertible noncontrolling interests to third-party investors |
|
|
1,000 |
|
|
|
— |
|
|
MyoKardia distributions |
|
|
— |
|
|
|
(997 |
) |
|
Payment of deferred offering costs |
|
|
— |
|
|
|
(936 |
) |
|
Proceeds from stock option exercises, net of repurchases |
|
|
734 |
|
|
|
103 |
|
|
Net cash provided by (used in) financing activities |
|
|
439,173 |
|
|
|
(1,651 |
) |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
393,276 |
|
|
|
(63,218 |
) |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
364,197 |
|
|
|
436,245 |
|
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
757,473 |
|
|
$ |
373,027 |
|
|
Supplemental Disclosures of Cash Flow Information: |
|
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
2,054 |
|
|
$ |
1,176 |
|
|
Supplemental Disclosures of Non-Cash Investing and Financing Information: |
|
|
|
|
|
|
|
|
|
Issuance costs associated with issuance of 2027 Notes included in other accrued and other liabilities |
|
$ |
664 |
|
|
$ |
— |
|
|
Recognition of property and equipment previously classified in other assets |
|
$ |
10,000 |
|
|
$ |
— |
|
|
Operating lease right-of-use assets obtained in exchange for operating lease obligations |
|
$ |
9,395 |
|
|
$ |
— |
|
|
Transfers from (to) noncontrolling interest (Note 6) |
|
$ |
11,601 |
|
|
$ |
(2,968 |
) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
Notes to Condensed Consolidated Financial Statements
(Unaudited)
BridgeBio Pharma, Inc. (“BridgeBio”) was established to identify and advance transformative medicines to treat patients who suffer from Mendelian diseases, which are diseases that arise from defects in a single gene, and cancers with clear genetic drivers. BridgeBio’s pipeline of programs spans early discovery to late-stage development.
On July 1, 2019, BridgeBio completed the 2019 Reorganization and closed the Initial Public Offering (“IPO”) of its common stock (see Note 13). Since inception, BridgeBio has either created wholly-owned subsidiaries or has made investments in certain controlled entities, including partially-owned subsidiaries for which BridgeBio has a majority voting interest, and variable interest entities (“VIEs”) for which BridgeBio is the primary beneficiary (collectively, “we”, “our”, “us”). Our condensed consolidated financial statements include the accounts of our majority-owned affiliate, Eidos Therapeutics, Inc. (“Eidos”), which completed an IPO in June 2018. BridgeBio is headquartered in Palo Alto, California.
The results of operations and cash flows prior to the IPO closing on July 1, 2019 relate to BridgeBio Pharma LLC (“BBP LLC”), its subsidiaries and controlled entities. Subsequent to the IPO closing, the information relates to BridgeBio, its subsidiaries and controlled entities. All share and per share amounts in these condensed consolidated financial statements and related notes have been retroactively adjusted, where applicable, for the comparable periods presented to give effect to the exchange ratio applied in connection with the 2019 Reorganization.
2.Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The condensed consolidated financial statements include the accounts of BridgeBio Pharma, Inc., its wholly owned subsidiaries and controlled entities, all of which are denominated in U.S. dollars. All intercompany balances and transactions have been eliminated in consolidation.
The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of 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, 2019 filed with the Securities and Exchange Commission (“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, and our cash flows for the periods presented. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other future annual or interim periods.
The condensed consolidated balance sheet as of March 31, 2020, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss, the condensed consolidated statements of redeemable convertible noncontrolling interests and stockholders’ equity and the condensed consolidated statements of cash flows for the three months ended March 31, 2020 and 2019 are unaudited. The financial data and the other financial information contained in these notes to the condensed consolidated financial statements related to the three-month periods are also unaudited.
Variable Interest Entities and Voting Interest Entities
BridgeBio consolidates those entities in which it has a direct or indirect controlling financial interest based on either the VIE model or the Voting Interest Entity (“VOE”) model.
8
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
At the VIE’s inception, BridgeBio determines whether it is the primary beneficiary and if the VIE should be consolidated based on the facts and circumstances. BridgeBio then performs on-going reassessments of the VIE based on reconsideration events and reevaluates whether a change to the consolidation conclusion is required each reporting period. Refer to Note 6.
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, directly or indirectly, has greater than 50% of the voting shares and that other equity holders do not have substantive voting, participating or liquidation rights. Refer to Note 6.
We have either created or made investments in entities that are either wholly or partially-owned subsidiaries and VIEs. The following are the VIEs as of March 31, 2020 and December 31, 2019:
|
Variable Interest Entities |
|
Relationship as of March 31, 2020 |
|
Date Control First Acquired |
|
Ownership % as of March 31, 2020 |
|
|
Ownership % as of December 31, 2019 |
|
||
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
||
|
Fortify Therapeutics, Inc. (“Fortify”) |
|
Controlled VIE |
|
June 2018 |
|
|
99.7 |
% |
|
|
99.7 |
% |
|
Calcilytix Therapeutics, Inc. (“Calcilytix”) |
|
Controlled VIE |
|
December 2018 |
|
|
98.9 |
% |
|
|
98.9 |
% |
|
Audition Therapeutics, Inc. (“Audition”) |
|
Controlled VIE |
|
May 2019 |
|
|
64.5 |
% |
|
|
64.5 |
% |
|
Molecular Skin Therapeutics, Inc. (“MOST”) |
|
Controlled VIE |
|
July 2016 |
|
|
64.1 |
% |
|
|
64.8 |
% |
|
TheRas, Inc. (“Theras”) |
|
Controlled VIE |
|
August 2016 |
|
|
99.6 |
% |
|
|
99.6 |
% |
|
Quartz Therapeutics, Inc. (“Quartz”) |
|
Controlled VIE |
|
October 2016 |
|
|
89.0 |
% |
|
|
89.0 |
% |
|
PellePharm, Inc. (“PellePharm”)(1) |
|
VIE |
|
December 2016 |
|
|
43.3 |
% |
|
|
43.3 |
% |
|
Navire Pharma, Inc. (“Navire”) |
|
Controlled VIE |
|
February 2017 |
|
|
78.1 |
% |
|
|
78.6 |
% |
|
CoA Therapeutics, Inc. (“CoA”) |
|
Controlled VIE |
|
February 2017 |
|
|
98.8 |
% |
|
|
99.5 |
% |
|
Dermecular Therapeutics, Inc. (“Dermecular”) |
|
Controlled VIE |
|
April 2017 |
|
|
87.6 |
% |
|
|
87.6 |
% |
|
Phoenix Tissue Repair, Inc. (“PTR”) |
|
Controlled VIE |
|
July 2017 |
|
|
65.3 |
% |
|
|
65.5 |
% |
|
QED Therapeutics, Inc. (“QED”) |
|
Controlled VIE |
|
January 2018 |
|
|
98.0 |
% |
|
|
97.8 |
% |
|
Adrenas Therapeutics, Inc. (“Adrenas”) |
|
Controlled VIE |
|
January 2018 |
|
|
90.7 |
% |
|
|
90.1 |
% |
|
Orfan Biotech, Inc. (“Orfan”) |
|
Controlled VIE |
|
January 2018 |
|
|
91.7 |
% |
|
|
91.7 |
% |
|
Ferro Therapeutics, Inc. (“Ferro”) |
|
Controlled VIE |
|
March 2018 |
|
|
90.6 |
% |
|
|
90.9 |
% |
|
Origin Biosciences, Inc. (“Origin”) |
|
Controlled VIE |
|
April 2018 |
|
|
99.7 |
% |
|
|
99.6 |
% |
|
Venthera, Inc. (“Venthera”) |
|
Controlled VIE |
|
April 2018 |
|
|
86.9 |
% |
|
|
83.2 |
% |
|
Aspa Therapeutics, Inc. (“Aspa”) |
|
Controlled VIE |
|
June 2018 |
|
|
93.0 |
% |
|
|
91.0 |
% |
|
ML Bio Solutions, Inc. (“ML Bio”) |
|
Controlled VIE |
|
July 2019 |
|
|
63.3 |
% |
|
|
50.6 |
% |
|
Shift Therapeutics, Inc. (“Shift”) (2) |
|
Controlled VIE |
|
January 2019 |
|
|
83.1 |
% |
|
|
— |
|
|
(1) |
Subsequent to the execution of a series of agreements (the “LEO Agreement”) with LEO Pharma A/S and LEO Spiny Merger Sub, Inc. (“LEO”) in November 2018, BridgeBio determined that it is no longer the primary beneficiary of PellePharm and deconsolidated PellePharm. Refer to Note 8. |
|
(2) |
Shift had no shares issued and outstanding from the date of incorporation through December 31, 2019. |
Not included in the above list is Eidos, which is a partially-owned subsidiary that we consolidate under the VOE model.
Risks and Uncertainties
In light of recent developments relating to the global outbreak of SARS-CoV-2, the novel strain of coronavirus that causes Coronavirus disease 19 (COVID-19), the focus of healthcare providers and hospitals on fighting the virus, and consistent with the U.S. Food and Drug Administration’s updated industry guidance for conducting clinical trials issued on March 18, 2020, we are experiencing delays in or temporary suspension of the enrollment of patients in our subsidiaries’ ongoing clinical trials. We additionally expect to experience delays in certain ongoing key program activities, including commencement of planned clinical trials, as well as non-clinical experiments and investigational new drug application-enabling good laboratory practice toxicology studies. The exact timing of delays and overall impact is currently unknown.
9
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Cash, Cash Equivalents and Restricted Cash
We consider all highly liquid investments purchased with original maturities of 90 days or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market instruments, such as money market funds and repurchase agreements collateralized with securities issued by the U.S. government or its agencies.
Our restricted cash balance relates to cash and cash equivalents that we have pledged as collateral under certain lease agreements and letters of credit.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the amounts shown in the condensed consolidated statements of cash flows:
|
|
|
March 31, 2020 |
|
|
March 31, 2019 |
|
||
|
|
|
(in thousands) |
|
|||||
|
Cash and cash equivalents |
|
$ |
757,049 |
|
|
$ |
373,027 |
|
|
Restricted cash |
|
|
424 |
|
|
|
— |
|
|
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows |
|
$ |
757,473 |
|
|
$ |
373,027 |
|
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 assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to, fair value of the liability component of our 2.50% convertible senior notes due 2027 (the “2027 Notes”, see Note 9), the fair value of the LEO Call Option liability (see Note 7), the present value of lease payments of our leases on lease commencement date, the valuation of our stock-based awards, accruals for certain employees’ performance-based milestones, accruals for research and development activities, accruals for contingent milestone payments in our license agreements and income tax uncertainties. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable. Actual results may differ from those estimates or assumptions.
Capped Call Transactions
In March 2020, in connection with the issuance of the 2027 Notes (see Note 9), BridgeBio entered into Capped Call Transactions. The Capped Call Transactions are expected generally to reduce the potential dilution to the holders of BridgeBio’s common stock upon any conversion of the 2027 Notes and/or offset any cash payments BridgeBio is required to make in excess of the principal amount of converted 2027 Notes, with such reduction and/or offset subject to a cap based on the cap price (see Note 9). The capped calls meet the conditions outlined in Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging, to be classified in stockholders’ equity as a reduction to additional paid-in capital and are not subsequently remeasured as long as the conditions for equity classification continue to be met.
Debt Issuance Costs
Debt issuance costs are amortized to interest expense over the estimated life of the related debt based on the effective interest method. In accordance with ASC 835, Interest, we present debt issuance costs on the condensed consolidated balance sheet as a direct deduction from the associated debt. A portion of debt issuance costs incurred in connection with the 2027 Notes issued in March 2020 was deemed to relate to the equity component and was recorded as a reduction to additional paid in capital and is not amortized to interest expense over the estimated life of the related debt. The 2027 Notes are more fully described in Note 9.
10
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Repurchased treasury stock is recorded at cost, including any commissions and fees.
Leases
Our lease portfolio as of January 1, 2020 and March 31, 2020 includes leases for our headquarters, office spaces and laboratory facility. We determine if an arrangement is a lease at the inception of the contract. The asset component of our operating leases is recorded as operating lease right-of-use assets, and the liability component is recorded as current portion of operating lease liabilities and operating lease liabilities, net of current portion in our condensed consolidated balance sheet. As of March 31, 2020, we have not recorded any finance leases.