SEC Filing | Beam Therapeutics

View:

Download DOC

Download PDF

Download XLS

Download XBRL

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2023


☐	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 001-39208

Beam Therapeutics Inc.

(Exact name of Registrant as specified in its Charter)


Delaware	81-5238376
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

238 Main Street Cambridge, MA	02142
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (857) 327-8775

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, par value $0.01 per share

BEAM

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, 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.


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 ☒

The number of shares of registrant’s common stock outstanding as of May 3, 2023 was 76,217,463.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Such forward-looking statements reflect, among other things:

•

our current expectations and anticipated results of operations;

•

our expectations regarding the initiation, timing, progress and results of our clinical trials, including our Phase 1/2 clinical trial designed to assess the safety and efficacy of BEAM-101 for the treatment of sickle cell disease, which we refer to as our BEACON trial, and our anticipated Phase 1/2 clinical trial designed to assess the safety and efficacy of BEAM-201 for the treatment of relapsed, refractory T-cell acute lymphoblastic leukemia/T cell lymphoblastic lymphoma;

•

our expectations regarding the initiation, timing, progress and results of our research and development programs and preclinical studies, including our expectations that we will submit regulatory applications for BEAM-301 by late 2023 or in early 2024, and for BEAM-302 in early 2024;

•

our ability to develop and maintain a sustainable portfolio of product candidates;

•

our ability to develop life-long, curative, precision genetic medicines for patients through base editing;

•

our ability to create a hub for partnering with other companies;

•

our plans for preclinical studies for product candidates in our pipeline;

•

our ability to advance any product candidates that we may develop and successfully complete any clinical trials or preclinical studies, including the manufacture of any such product candidates;

•

our ability to pursue a broad suite of clinically validated delivery modalities;

•

our expectations regarding our ability to generate additional novel lipid nanoparticles that we believe could accelerate novel nonviral delivery of gene editing or other nucleic acid payloads to tissues beyond the liver and our ability to expand the reach of our programs;

•

the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;

•

developments related to our competitors and our industry;

•

the expected timing, progress and success of our collaborations with third parties, including any future payments we may receive under our collaboration and license agreements, and our ability to identify and enter into future license agreements and collaborations;

•

developments related to base editing technologies;

•

our ability to successfully develop our delivery modalities and obtain and maintain approval for our product candidates;

•

our ability to successfully establish and maintain a commercial-scale current Good Manufacturing Practice, or cGMP, manufacturing facility and our expectations that we will initiate cGMP compliant operations in late 2023;

•

regulatory developments in the United States and foreign countries;

•

our ability to attract and retain key scientific and management personnel;

•

our expectations regarding the strategic and other potential benefits of any acquisition of additional technologies;

•

our estimates regarding the period over which we believe that our existing cash, cash equivalents and marketable securities, will be sufficient to fund our operating expenses and capital expenditure requirements; and

•

the impact on our business of macro-economic conditions, as well as the prevailing level of macro-economic, business, and operational uncertainty, including as a result of geopolitical events or other global or regional events such as the COVID-19 pandemic.

All of these statements are subject to known and unknown important risks, uncertainties and other factors that may cause our actual results, performance or achievements, market trends, or industry results to differ materially from those expressed or implied by such forward-looking statements. Therefore, any statements contained herein that are not statements of historical fact may be forward-looking statements and should be evaluated as such. Without limiting the foregoing, the words “anticipate,” “expect,” “suggest,” “plan,” “believe,” “intend,” “project,” “forecast,” “estimates,” “targets,” “projections,” “should,” “could,” “would,” “may,” “might,” “will,” and the negative thereof and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” in Part II, Item 1A of this report and “Risk Factors Summary” and “Risk Factors” in Part I, Item 1A. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, or the 2022 Form 10-K. Unless legally required, we assume no obligation to update any such forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information.

When we use the terms “Beam,” the “Company,” “we,” “us” or “our” in this Quarterly Report on Form 10-Q, we mean Beam Therapeutics Inc. and its subsidiaries on a consolidated basis, unless the context indicates otherwise.

Table of Contents


		Page
PART I	Financial Information
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Other Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	36

PART II	Other Information
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 6.	Exhibits	42
Signatures		44

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Beam Therapeutics Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share amounts)


	March 31, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	249,771		$	232,767
Marketable securities		809,700			845,367
Prepaid expenses and other current assets		23,560			14,762
Total current assets		1,083,031			1,092,896
Property and equipment, net		121,822			115,620
Restricted cash		9,802			12,754
Operating lease right-of-use assets		116,159			118,513
Other assets		1,538			1,931
Total assets	$	1,332,352		$	1,341,714
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	14,063		$	9,029
Accrued expenses and other current liabilities		37,847			48,059
Derivative liabilities		12,700			18,300
Current portion of deferred revenue		142,737			135,974
Current portion of lease liability		11,157			10,380
Current portion of equipment financing liability		1,421			1,853
Total current liabilities		219,925			223,595
Long-term lease liability		165,298			168,625
Long-term equipment financing liability		983			1,154
Contingent consideration liabilities		12,759			12,463
Long-term portion of deferred revenue		171,708			202,179
Other liabilities		173			224
Total liabilities		570,846			608,240
Commitments and contingencies (See Note 7, License agreements and Note 8, Collaboration and license agreements)
Stockholders’ equity:
Preferred stock, $0.01 par value; 25,000,000 shares authorized, and no shares issued or outstanding at March 31, 2023 and December 31, 2022, respectively		—			—
Common stock, $0.01 par value; 250,000,000 shares authorized, 74,435,392 and 71,277,339 issued and outstanding at March 31, 2023 and December 31, 2022, respectively		744			712
Additional paid-in capital		1,915,349			1,792,554
Accumulated other comprehensive (loss) income		(765	)		(2,430	)
Accumulated deficit		(1,153,822	)		(1,057,362	)
Total stockholders’ equity		761,506			733,474
Total liabilities and stockholders’ equity	$	1,332,352		$	1,341,714

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

Beam Therapeutics Inc.

Condensed Consolidated Statements of Operations and Other Comprehensive Loss

(Unaudited)

(in thousands, except share and per share amounts)


	Three Months Ended March 31,
	2023			2022
License and collaboration revenue	$	24,208		$	8,432
Operating expenses:
Research and development		99,646			65,410
General and administrative		23,490			19,247
Total operating expenses		123,136			84,657
Loss from operations		(98,928	)		(76,225	)
Other income (expense):
Change in fair value of derivative liabilities		5,600			13,600
Change in fair value of non-controlling equity investments		(12,797	)		(7,685	)
Change in fair value of contingent consideration liabilities		(296	)		452
Interest and other income (expense), net		9,961			644
Total other income (expense)		2,468			7,011
Net loss	$	(96,460	)	$	(69,214	)
Unrealized gain (loss) on marketable securities		1,665			(2,659	)
Comprehensive loss	$	(94,795	)	$	(71,873	)
Net loss per common share, basic and diluted	$	(1.33	)	$	(1.01	)
Weighted-average common shares outstanding, basic and diluted		72,273,829			68,703,864

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

Beam Therapeutics Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(in thousands, except share amounts)


	Common Stock				Additional Paid-in			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Income (Loss)			Deficit			Equity
Balance at December 31, 2021		68,389,425	$	684	$	1,594,378		$	(50	)	$	(768,274	)	$	826,738
Purchase of common stock under ESPP		28,990		—		1,412			—			—			1,412
Issuance of common stock from At-the-Market offering, net of issuance costs of $1.3 million		874,770		9		53,927			—			—			53,936
Vesting of restricted common stock		283,186		3		(3	)		—			—			—
Stock-based compensation		—		—		18,035			—			—			18,035
Exercise of common stock options		176,652		2		818			—			—			820
Other comprehensive income (loss)		—		—		—			(2,659	)		—			(2,659	)
Net loss		—		—		—			—			(69,214	)		(69,214	)
Balance at March 31, 2022		69,753,023	$	698	$	1,668,567		$	(2,709	)	$	(837,488	)	$	829,068

Beam Therapeutics Inc.

Condensed Consolidated Statements of Stockholders’ Equity - Continued

(Unaudited)

(in thousands, except share amounts)


	Common Stock				Additional Paid-in			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Income (Loss)			Deficit			Equity
Balance at December 31, 2022		71,277,339	$	712	$	1,792,554		$	(2,430	)	$	(1,057,362	)	$	733,474
Purchase of common stock under ESPP		65,620		1		1,707			—			—			1,708
Issuance of common stock from At-the-Market offering, net of issuance costs of $0.2 million		2,431,770		24		93,786			—			—			93,810
Vesting of restricted common stock		284,858		3		(3	)		—			—			—
Stock-based compensation		—		—		23,917			—			—			23,917
Exercise of common stock options		375,805		4		3,388			—			—			3,392
Other comprehensive income (loss)		—		—		—			1,665			—			1,665
Net loss		—		—		—			—			(96,460	)		(96,460	)
Balance at March 31, 2023		74,435,392	$	744	$	1,915,349		$	(765	)	$	(1,153,822	)	$	761,506

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

Beam Therapeutics Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Three Months Ended March 31,
	2023			2022
Operating activities
Net loss	$	(96,460	)	$	(69,214	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		4,647			3,312
Amortization of investment discount (premiums)		(6,932	)		(390	)
Stock-based compensation expense		23,917			18,035
Change in operating lease right-of-use assets		2,354			1,997
Change in fair value of derivative liabilities		(5,600	)		(13,600	)
Change in fair value of contingent consideration liabilities		296			(452	)
Change in fair value of non-controlling equity investments		12,797			7,685
Other		—			3
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(8,405	)		(9,185	)
Accounts payable		(231	)		(1,252	)
Accrued expenses and other liabilities		(9,888	)		(16,533	)
Operating lease liabilities		(2,550	)		(1,780	)
Collaboration receivable		—			300,000
Deferred revenue		(23,708	)		(8,432	)
Other long-term liabilities		(52	)		8,296
Net cash provided by (used in) operating activities		(109,815	)		218,490
Investing activities
Purchases of property and equipment		(6,017	)		(7,259	)
Purchases of marketable securities		(266,532	)		(690,390	)
Maturities of marketable securities		298,000			160,310
Net cash provided by (used in) investing activities		25,451			(537,339	)
Financing activities
Proceeds from issuance of common shares, net of commissions		93,981			54,003
Proceeds from issuances of stock under ESPP		1,708			1,412
Payment of equity offering costs		(62	)		(6	)
Repayment of equipment financings		(603	)		(553	)
Proceeds from exercise of stock options		3,392			820
Net cash provided by (used in) financing activities		98,416			55,676

Net change in cash, cash equivalents and restricted cash		14,052			(263,173	)
Cash, cash equivalents and restricted cash—beginning of period		245,521			572,740
Cash, cash equivalents and restricted cash—end of period	$	259,573		$	309,567

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

Beam Therapeutics Inc.

Condensed Consolidated Statements of Cash Flows - Continued

(Unaudited)

(in thousands)


	Three Months Ended March 31,
	2023		2022
Supplemental disclosure of cash flow information:
Cash paid for interest	$	62	$	113

Supplemental disclosure of noncash investing and financing activities:
Property and equipment additions in accounts payable and accrued expenses	$	10,675	$	15,306
Operating lease liabilities arising from obtaining right-of-use assets	$	—	$	4,822
Equity issuance costs in accounts payable and accrued expenses	$	109	$	67

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

Beam Therapeutics Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Nature of the business and basis of presentation

Organization

Beam Therapeutics Inc., which we refer to herein as the “Company” or “Beam,” is a biotechnology company committed to establishing the leading, fully integrated platform for precision genetic medicines. Beam’s vision is to provide life-long cures to patients suffering from genetic diseases. The Company was incorporated on January 25, 2017 as a Delaware corporation and began operations in July 2017. Its principal offices are in Cambridge, Massachusetts.

Liquidity and capital resources

Since its inception, the Company has devoted substantially all of its resources to building its base editing platform and advancing development of its portfolio of programs, establishing and protecting its intellectual property, conducting research and development activities, making arrangements to conduct manufacturing activities with contract manufacturing organizations, research and development costs including preclinical studies and IND-enabling studies, organizing and staffing the Company, maintaining its facilities and new facility build-outs, business planning, raising capital and providing general and administrative support for these operations. The Company is also in the process of developing internal manufacturing capabilities. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, technical risks associated with the successful research, development and manufacturing of product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Current and future programs will require significant research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

In April 2021, the Company entered into an at the market, or ATM, sales agreement, or the Sales Agreement, with Jefferies LLC, or Jefferies, pursuant to which the Company was entitled to offer and sell, from time to time at prevailing market prices, shares of the Company’s common stock having aggregate gross proceeds of up to $300.0 million. The Company agreed to pay Jefferies a commission of up to 3.0% of the aggregate gross sale proceeds of any shares sold by Jefferies under the Sales Agreement. Between April and July 2021, the Company sold 2,908,009 shares of its common stock under the Sales Agreement at an average price of $103.16 per share for aggregate gross proceeds of $300.0 million, before deducting commissions and offering expenses payable by the Company.

In July 2021, the Company and Jefferies entered into an amendment to the Sales Agreement to provide for an increase in the aggregate offering amount under the Sales Agreement, such that as of July 7, 2021, the Company may offer and sell shares of common stock having an aggregate offering price of an additional $500.0 million. As of March 31, 2023, the Company has sold 6,340,059 additional shares of its common stock under the amended Sales Agreement at an average price of $65.95 per share for aggregate gross proceeds of $418.1 million, before deducting commissions and offering expenses payable by the Company.

Since its inception, the Company has incurred substantial losses and had an accumulated deficit of $1.2 billion as of March 31, 2023. The Company expects to generate operating losses and negative operating cash flows for the foreseeable future.

The Company expects that its cash, cash equivalents, and marketable securities as of March 31, 2023 of $1.1 billion will be sufficient to fund its operations for at least the next 12 months from the date of issuance of these financial statements. The Company will need additional financing to support its continuing operations and pursue its growth strategy. Until such time as the Company can generate significant revenue from product sales, if ever, it expects to finance its operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. The Company may be unable to raise additional funds or enter into such other agreements when needed on favorable terms or at all. The inability to raise capital as and when needed would have a negative impact on the Company’s financial condition and its ability to pursue its business strategy. The Company will need to generate significant revenue to achieve profitability, and it may never do so.

COVID-19-related significant risks and uncertainties

While the COVID-19 pandemic did not significantly impact the Company’s business or results of operations during the three months ended March 31, 2023, the extent to which the COVID-19 pandemic or any other public health emergency impacts the Company’s business, its corporate development objectives, results of operations and financial condition in future periods will depend on developments that are uncertain. Disruptions to the global economy and supply chain, disruption of global healthcare systems, and other significant impacts of the COVID-19 pandemic or other health emergencies could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects.

2. Summary of significant accounting policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2022, and notes thereto, which are included in the Company’s Annual Report on Form 10-K that was filed with the Securities and Exchange Commission, or the SEC, on February 28, 2023, or the 2022 Form 10-K. Since the date of those financial statements, there have been no material changes to Beam’s significant accounting policies.

Basis of presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles, or GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification, or ASC, and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board.

Principles of consolidation

The accompanying condensed consolidated financial statements include the results of operations of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities as of and during the reporting period. The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, incremental borrowing rate used in the calculation of lease liabilities, research and development expenses, stock-based compensation, contingent consideration liabilities, success payments and certain judgments regarding revenue recognition. Actual results could differ from these estimates.

Cash, cash equivalents, and restricted cash

Cash and cash equivalents consist of standard checking accounts, money market accounts, and all highly liquid investments with a remaining maturity of three months or less at the date of purchase. Restricted cash represents collateral provided for letters of credit issued as security deposits in connection with the Company’s leases of its corporate and manufacturing facilities.

The following table reconciles cash, cash equivalents, and restricted cash reported within the Company’s condensed consolidated balance sheets to the total of the amounts shown in the condensed consolidated statements of cash flows (in thousands):


	March 31, 2023	March 31, 2022
Cash and cash equivalents	$