UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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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, 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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Emerging growth company |
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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 3, 2024, there were
Table of Contents
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PART I. |
3 |
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Item 1. |
3 |
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3 |
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Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) |
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5 |
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6 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
7 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
16 |
Item 3. |
28 |
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Item 4. |
29 |
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PART II. |
30 |
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Item 1. |
30 |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
31 |
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i
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future financial condition, future operations, research and development costs, plans and objectives of management, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “positioned,” “potential,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain.
The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:
Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, and involve known and unknown risks, uncertainties and other factors including, without limitation, risks, uncertainties and assumptions regarding the impact of the macroeconomic events on our business, operations, strategy, goals and anticipated timelines, our ongoing and planned preclinical activities, our ability to initiate, enroll, conduct or complete ongoing and planned clinical trials, our timelines for regulatory submissions and our financial position that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You are urged to carefully review the disclosures we make concerning these risks and other factors that may affect our business and operating results in this Quarterly Report on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Except as required by law, we do not intend, and undertake no obligation, to update any forward-looking information to reflect events or circumstances.
2
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Repare Therapeutics Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands of U.S. dollars, except share data)
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As of |
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As of |
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2024 |
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2023 |
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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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Income tax receivable |
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Other current receivables |
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Prepaid expenses |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Income tax receivable |
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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 AND SHAREHOLDERS’ EQUITY |
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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 expenses and other current liabilities |
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Operating lease liability, current portion |
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Deferred revenue, current portion |
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Total current liabilities |
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Operating lease liability, net of current portion |
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Deferred revenue, net of current portion |
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TOTAL LIABILITIES |
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SHAREHOLDERS’ EQUITY |
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Preferred shares, |
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Common shares, |
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Additional paid-in capital |
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Accumulated other comprehensive (loss) income |
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( |
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Accumulated deficit |
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( |
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( |
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Total shareholders’ equity |
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
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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
Repare Therapeutics Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(Amounts in thousands of U.S. dollars, except share and per share data)
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Three Months Ended |
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2024 |
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2023 |
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Revenue: |
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Collaboration agreements |
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$ |
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$ |
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Operating expenses: |
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Research and development, net of tax credits |
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General and administrative |
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Total operating expenses |
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Income (loss) from operations |
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( |
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Other income (expense), net |
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Realized and unrealized gain (loss) on foreign exchange |
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( |
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Interest income |
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Other expense |
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( |
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( |
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Total other income, net |
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Income (loss) before income taxes |
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( |
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Income tax expense |
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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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Other comprehensive (loss) income: |
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Unrealized (loss) gain on available-for-sale marketable securities |
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$ |
( |
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$ |
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Total other comprehensive (loss) income |
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( |
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Comprehensive income (loss) |
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$ |
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$ |
( |
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Net income (loss) per share attributable to common shareholders: |
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Basic |
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$ |
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$ |
( |
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Diluted |
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$ |
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$ |
( |
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Weighted-average common shares outstanding: |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
4
Repare Therapeutics Inc.
Condensed Consolidated Statements of Shareholders’ Equity
(Unaudited)
(Amounts in thousands of U.S. dollars, except share data)
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Common Shares |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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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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Equity |
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Balance, |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Share-based compensation |
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— |
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— |
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— |
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— |
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Exercise of stock options |
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( |
) |
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— |
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— |
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Issuance of common shares |
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( |
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— |
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— |
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Other comprehensive |
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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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Balance, March 31, 2023 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Balance, |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Share-based compensation |
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— |
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— |
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— |
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— |
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Exercise of stock options |
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( |
) |
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— |
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— |
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Issuance of common shares |
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( |
) |
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— |
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— |
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— |
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Issuance of common shares |
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( |
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— |
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— |
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Other comprehensive 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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Net income |
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— |
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— |
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— |
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— |
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Balance, 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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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
5
Repare Therapeutics Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in thousands of U.S. dollars)
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Three Months Ended |
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2024 |
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2023 |
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Cash Flows From Operating Activities: |
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Net income (loss) for the period |
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$ |
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$ |
( |
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
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Share-based compensation expense |
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Depreciation expense |
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Non-cash lease expense |
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Foreign exchange (gain) loss |
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( |
) |
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Net accretion of marketable securities |
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( |
) |
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( |
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Changes in operating assets and liabilities: |
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Prepaid expenses |
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Other current receivables |
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( |
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Other non-current assets |
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Accounts payable |
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Accrued expenses and other current liabilities |
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( |
) |
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( |
) |
Operating lease liability, current portion |
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( |
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Income taxes |
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Operating lease liability, net of current portion |
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( |
) |
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( |
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Deferred revenue |
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( |
) |
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( |
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Net cash provided by (used in) operating activities |
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( |
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Cash Flows From Investing Activities: |
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Purchases of property and equipment |
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( |
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Proceeds from maturities of marketable securities |
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Purchase of marketable securities |
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( |
) |
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( |
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Net cash used in investing activities |
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( |
) |
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( |
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Cash Flows From Financing Activities: |
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Proceeds from exercise of stock options |
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Proceeds from issuance of common stock under the 2020 Employee Share Purchase Plan |
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Net cash provided by financing activities |
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Effect of exchange rate fluctuations on cash held |
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( |
) |
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( |
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Net Decrease In Cash And Cash Equivalents |
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( |
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( |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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Supplemental Disclosure Of Cash Flow Information: |
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Property and equipment purchases incurred but not yet paid |
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$ |
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$ |
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Right-of-use asset obtained in exchange for new operating lease liability |
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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
6
REPARE THERAPEUTICS INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in U.S. dollars, unless otherwise specified)
1. Organization and Nature of Business
Repare Therapeutics Inc. (“Repare” or the “Company”) is a precision medicine oncology company focused on the development of synthetic lethality-based therapies for patients with cancer. The Company is governed by the Business Corporations Act (Québec). The Company’s common shares are listed on the Nasdaq Global Select Market under the ticker symbol “RPTX”.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).
The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements as of and for the year ended December 31, 2023, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s consolidated financial position as of March 31, 2024, the consolidated results of its operations for the three months ended March 31, 2024 and 2023, its statements of shareholders’ equity for the three months ended March 31, 2024 and 2023 and its consolidated cash flows for the three months ended March 31, 2024 and 2023.
These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2024 (the “Annual Report”). The condensed consolidated balance sheet data as of December 31, 2023 presented for comparative purposes was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. The results for the three months ended March 31, 2024 are not necessarily indicative of the operating results to be expected for the full year or for any other subsequent interim period.
The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2023 included in the Annual Report. There have been no changes to the Company's significant accounting policies since the date of the audited consolidated financial statements for the year ended December 31, 2023 included in the Annual Report.
Principles of Consolidation
These unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiary, Repare Therapeutics USA Inc. (“Repare USA”), which was incorporated under the laws of Delaware on June 1, 2017. The financial statements of Repare USA are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group transactions, balances, income, and expenses are eliminated in full upon consolidation.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in consolidated financial statements and accompanying notes. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued research and development expenses, share-based compensation and income taxes. The Company bases its estimates on historical experience and other market specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2023, the FASB amended the guidance in ASU 280, Segment Reporting, to require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Public entities with a single reportable segment
7
are required to provide the new disclosures and all the disclosures currently required under ASC 280. The new guidance is effective for public entities in fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently assessing the impact of this amendment on its consolidated financial statements.
In December 2023, the FASB amended the guidance in ASU 740, Income Taxes, to provide disaggregated income tax disclosures on the rate reconciliation and income taxes paid. The new guidance is effective for public entities in fiscal years beginning after 15 December 2024. Early adoption is permitted. The Company is currently assessing the impact of this amendment on its consolidated financial statements.
3. Cash and Cash Equivalents and Marketable Securities
Cash and cash equivalents and marketable securities were comprised of the following:
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Amortized Cost |
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Unrealized Gains |
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Unrealized Losses |
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Fair Value |
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(in thousands) |
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As of March 31, 2024 |
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Cash and cash equivalents: |
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Cash |
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$ |
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$ |
— |
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$ |
— |
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$ |
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Money market funds |
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Commercial paper |
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( |
) |
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Total cash and cash equivalents: |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Marketable securities: |
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Commercial paper |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Corporate debt securities |
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( |
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Total marketable securities |
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$ |
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$ |
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$ |
( |
) |
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$ |
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As of December 31, 2023 |
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Cash and cash equivalents: |
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|
|
|
|
||||
Cash |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Money market funds |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total cash and cash equivalents: |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury and government-sponsored enterprises |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Commercial paper |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total marketable securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
Interest receivable was $
The Company held available-for-sale marketable securities with an aggregate fair value of $
The Company recognized a net unrealized loss of $
The maturities of the Company’s marketable securities as of March 31, 2024 and December 31, 2023 are less than one year.
8
4. Fair Value Measurements
Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:
The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values:
Description |
|
Financial Assets |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
As of March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Commercial paper |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Corporate debt securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total marketable securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Total financial assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
As of December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Commercial paper |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury and government-sponsored enterprises |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Commercial paper |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total marketable securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Total financial assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
When developing fair value estimates, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. When available, the Company uses quoted market prices to measure the fair value. In determining the fair values at each date presented above, the Company relied on quoted prices for similar securities in active markets or using other inputs that are observable or can be corroborated by observable market data.
During the three months ended March 31, 2024, there were
9
5. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities as of March 31, 2024 and December 31, 2023 consisted of the following:
|
|
March 31, |
|
|
December 31, |
|
||
|
|
(in thousands) |
|
|||||
Accrued research and development expense |
|
$ |
|
|
$ |
|
||
Accrued compensation and benefits |
|
|
|
|
|
|
||
Accrued professional services |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accrued expenses and other current liabilities |
|
$ |
|
|
$ |
|
6. Collaborative Arrangements
Debiopharm Clinical Study and Collaboration Agreement
In January 2024, the Company entered into a clinical study and collaboration agreement with Debiopharm International S.A. (“Debiopharm”), a privately-owned, Swiss-based biopharmaceutical company, with the aim to explore the synergy between the Company’s compound, lunresertib, and Debiopharm’s compound, Debio 0123, a WEE1 inhibitor (the “Debio collaboration agreement”). The Company and Debiopharm are collaborating on the development of a combination therapy, with the Company sponsoring the global study, and will share all costs equally. The Company and Debiopharm are each supplying their respective drugs and retain all commercial rights to their respective compounds, including as monotherapy or as combination therapies. The activities associated with the collaboration are coordinated by a joint steering committee, which is comprised of an equal number of representatives from the Company and Debiopharm.
Based on the terms of the Debio collaboration agreement, the Company concluded that the Debio collaboration agreement meets the requirements of a collaboration within the guidance of ASC 808, Collaborative Arrangements, as both parties are active participants in the combination trial and are exposed to significant risks and rewards depending on the success of the combination trial. Accordingly, the net costs associated with the co-development are expensed as incurred and recognized within research and development expenses in the consolidated statement of operations and comprehensive income (loss).
During the three-month period ended March 31, 2024, the Company recognized $
7. Revenue recognition from Collaboration and License Agreements
The following table presents revenue from collaboration agreements:
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(in thousands) |
|
|||||
Roche Collaboration and License Agreement |
|
$ |
|
|
$ |
|
||
Bristol-Myers Squibb Collaboration and License Agreement |
|
|
|
|
|
|
||
Total revenue |
|
$ |
|
|
$ |
|
The Company’s revenue recognition accounting policy, as well as additional information on the Company’s collaboration and license agreements are disclosed in the audited consolidated financial statements for the year ended December 31, 2023 included in the Annual Report.
Roche Collaboration and License Agreement
In June 2022, the Company entered into a collaboration and license agreement (the “Roche Agreement”) with Hoffmann-La Roche Inc. and F. Hoffmann-La Roche Ltd (collectively, “Roche”) regarding the development and commercialization of the Company’s product candidate camonsertib (also known as RP-3500) and specified other Ataxia-Telangiectasia and Rad3-related protein kinase (“ATR”) inhibitors (the “Licensed Products”) which became effective July 13, 2022 (the “Effective Date”). Pursuant to the Roche Agreement, the Company granted Roche a worldwide, perpetual, exclusive, sublicensable license to develop, manufacture, and
10
commercialize the Licensed Products, as well as a non-exclusive, sublicensable license to certain related companion diagnostics. The Company agreed to complete specified ongoing clinical trials in accordance with the development plan in the Roche Agreement, as well as ongoing investigator sponsored trials (together, the “Continuing Trials”) at the Company’s expense. Roche assumed all subsequent development of camonsertib with the potential to expand development into additional tumors and multiple combination studies. The Company retained the right to conduct specified clinical trials (the “Repare Trials”) of camonsertib in combination with the Company’s PKMYT1 compound, lunresertib (also known as RP-6306). The Roche Agreement provided the Company, at its sole discretion, with the ability to opt-in to a 50/50 U.S. co-development and profit share arrangement, including participation in U.S. co-promotion if U.S. regulatory approval was received. If the Company chose to exercise its co-development and profit share option, it would continue to be eligible to receive certain clinical, regulatory, commercial and sales milestone payments, in addition to full ex-U.S. royalties.
On February 7, 2024, the Company received written notice from Roche of their election to terminate the Roche Agreement following a review of Roche’s pipeline and evolving external factors. The termination became effective May 7, 2024, at which time the Company regained global development and commercialization rights for camonsertib from Roche.
In March 2024, the Company received a payment of $
In February 2024, the Company further received a $
Deferred revenue pertaining to the Roche Agreement |
|
Completion of Continuing Trials |
|
|
|
|
(in thousands) |
|
|
Balance as of December 31, 2023 |
|
$ |
|
|
Increase in collaboration revenue |
|
|
|
|
Recognition as revenue, as the result of performance obligations satisfied |
|
|
( |
) |
Balance as of March 31, 2024 |
|
$ |
|
|
Classified as short-term |
|
$ |
|
The Company recognized $
As of March 31, 2024, there was $
Bristol-Myers Squibb Collaboration and License Agreement
In May 2020, the Company entered into a collaboration and license agreement (the “BMS Agreement”) with Bristol-Myers Squibb Company (“Bristol-Myers Squibb”), pursuant to which the Company and Bristol-Myers Squibb have agreed to collaborate in the research and development of potential new product candidates for the treatment of cancer. The Company provided Bristol-Myers Squibb access to a selected number of its existing screening campaigns and novel campaigns. The Company was responsible for carrying out early-stage research activities directed to identifying potential targets for potential licensing by Bristol-Myers Squibb, in accordance with a mutually agreed upon research plan, and was solely responsible for such costs. The collaboration consisted of programs directed to both druggable targets and to targets commonly considered undruggable to traditional small molecule approaches. Upon Bristol-Myers Squibb’s election to exercise its option to obtain exclusive worldwide licenses for the subsequent development, manufacturing and commercialization of a program, Bristol-Myers Squibb will then be solely responsible for all such worldwide activities and costs.
Although the collaboration term expired in , the BMS Agreement will not expire until, on a licensed product-by-licensed product and country-by-country basis, the expiration of the applicable royalty term and in its entirety upon expiration of the last royalty term. Either party may terminate earlier upon an uncured material breach of the agreement by the other party, or the
11
insolvency of the other party. Additionally, Bristol-Myers Squibb may terminate the BMS Agreement for any or no reason on a program-by-program basis upon specified written notice.
The Company is entitled to receive up to $
Deferred revenue pertaining to the BMS Agreement |
|
Options to license undruggable targets |
|
|
|
|
(in thousands) |
|
|
Balance as of December 31, 2023 |
|
$ |
|
|
Increase in collaboration revenue |
|
|
|
|
Recognition as revenue, as the result of performance obligations satisfied |
|
|
( |
) |
Balance as of March 31, 2024 |
|
$ |
|
In March 2024, Bristol-Myers Squibb exercised its one remaining option for an undruggable target. As a result, the Company recognized $
8. Leases
The Company has historically entered into lease arrangements for its facilities. As of March 31, 2024, the Company had
Operating Leases
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(in thousands) |
|
|||||
Operating Leases - Lease Costs |
|
|
|
|
|
|
||
Operating lease costs |
|
$ |
|
|
$ |
|
||
Short-term lease costs |
|
|
|
|
|
|
||
Variable lease costs |
|
|
|
|
|
|
||
Total lease costs |
|
$ |
|
|
$ |
|
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(in thousands, except as specified otherwise) |
|
|||||
Other Operating Lease Information |
|
|
|
|
|
|
||
Operating cash flows used for operating leases |
|
$ |
|
|
$ |
|
||
Right-of-use assets obtained in exchange for new operating lease liability |
|
$ |
|
|
$ |
|
||
Weighted-average remaining lease term (in years) |
|
|
|
|
|
|
||
Weighted-average discount rate |
|
|
% |
|
|
% |
9. Share-Based Compensation
2020 Employee Share Purchase Plan
In June 2020, the Company’s board of directors adopted, and the Company’s shareholders approved the 2020 Employee Share Purchase Plan (“ESPP”). The number of shares reserved and available for issuance under the ESPP will automatically increase each January 1, beginning on January 1, 2021 and each January 1 thereafter through January 31, 2030, by the lesser of (1)
12
smaller number of common shares as the Company’s board of directors may designate. As of March 31, 2024, the number of common shares that may be issued under the ESPP is
The ESPP enables eligible employees to purchase common shares of the Company at the end of each offering period at a price equal to
The Company issued
Option Plan and 2020 Plan
In December 2016, as further amended in December 2017 and September 2019, the Company adopted the Repare Therapeutics Inc. Option Plan (the “Option Plan”) for the issuance of stock options and other share-based awards to directors, officers, employees or consultants. The Option Plan authorized up to
In June 2020, the Company’s board of directors adopted, and the Company’s shareholders approved the 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan became effective on the effective date of the IPO, at which time the Company ceased making awards under the Option Plan. The 2020 Plan allows the Company’s compensation committee to make equity-based and cash-based incentive awards to the Company’s officers, employees, directors and consultants including but not limited to stock options and restricted share units. The aggregate number of common shares reserved and available for issuance under the 2020 Plan has automatically increased on January 1 of each year beginning on January 1, 2021 and will continue to increase on January 1 of each year through and including January 1, 2030, by
The exercise price per share of a stock option must be at least equal to the fair value of the common shares on the date of grant, as determined by the Company’s compensation committee or the Company’s board of directors. Stock options awarded under the 2020 Plan expire
Inducement Plan
In April 2024, the Company’s board of directors approved the adoption of the 2024 Inducement Plan (the “Inducement Plan”), to be used exclusively for grants of awards to individuals who were not previously employees or directors (or following a bona fide period of non-employment) as a material inducement to such individuals’ entry into employment with the Company, pursuant to Nasdaq Listing Rule 5635(c)(4). The terms and conditions of the Inducement Plan are substantially similar to those of the 2020 Plan.
Stock Options
The following table summarizes the Company’s stock options activity:
|
|
Number of |
|
|
Weighted |
|
||
Outstanding, January 1, 2024 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Exercised |
|
|
( |
) |
|
$ |
|
|
Cancelled or forfeited |
|
|
( |
) |
|
$ |
|
|
Outstanding, March 31, 2024 |
|
|
|
|
$ |
|
13
During the three months ended March 31, 2024, an aggregate of
The fair value of stock options, and the assumptions used in the Black Scholes option-pricing model to determine the grant date fair value of stock options granted to employees and non-employees were as follows, presented on a weighted average basis:
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
|
|
|
|
|
||
Fair value of stock options |
|
$ |
|
|
$ |
|
||
Risk-free interest rate |
|
|
% |
|
|
% |
||
Expected terms (in years) |
|
|
|
|
|
|
||
Expected volatility |
|
|
% |
|
|
% |
||
Expected dividend yield |
|
|
% |
|
|
% |
Restricted Share Units
The following table summarizes the Company’s restricted share unit activity:
|
|
Number of |
|
|
Weighted |
|
||
Outstanding, January 1, 2024 |
|
|
|
|
$ |
|
||
Awarded |
|
|
|
|
$ |
|
||
Vested and released |
|
|
( |
) |
|
$ |
|
|
Forfeited |
|
|
( |
) |
|
$ |
|
|
Outstanding, March 31, 2024 |
|
|
|
|
$ |
|
The fair value of each restricted share unit is estimated on the date of grant based on the fair value of our common shares on that same date.
Share-Based Compensation
Share-based compensation expense for all awards was allocated as follows:
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(in thousands) |
|
|||||
Research and development |
|
$ |
|
|
$ |
|
||
General and administrative |
|
|
|
|
|
|
||
Total share-based compensation expense |
|
$ |
|
|
$ |
|
Share-based compensation expense by type of award was as follows:
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(in thousands) |
|
|||||
Stock options |
|
$ |
|
|
$ |
|
||
Restricted share units |
|
|
|
|
|
|
||
ESPP |
|
|
|
|
|
|
||
Total share-based compensation expense |
|
$ |
|
|
$ |
|
As of March 31, 2024, there was $
14
11. Net Income (Loss) per Share
The following table summarizes the computation of basic and diluted net income (loss) per share attributable to common shareholders of the Company:
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|