Business Overview and History
Relay Therapeutics, a clinical-stage precision medicine company, is transforming the drug discovery process by combining leading-edge computational and experimental technologies. As one of the pioneering biotechs at the intersection of these complementary techniques, Relay Therapeutics is making strides in bringing life-changing therapies to patients.
Relay Therapeutics was incorporated in Delaware in May 2015 and is headquartered in Cambridge, Massachusetts. The company was founded with the ambitious goal of revolutionizing the drug discovery process by combining leading-edge computational and experimental technologies. Its initial focus has been on enhancing small molecule therapeutic discovery in targeted oncology and genetic disease indications.
In April 2021, Relay Therapeutics acquired ZebiAI Therapeutics, Inc., a privately-held company focused on applying machine learning to drug discovery. This acquisition expanded Relay's computational platform and capabilities, further strengthening its position in the field of precision medicine.
At the core of Relay Therapeutics' strategy is its proprietary Dynamo platform, which seamlessly combines computational and experimental techniques to gain unprecedented insights into protein motion and dynamics. This innovative approach enables the company to identify and develop highly selective and potent small molecule therapeutics for challenging targets in oncology and genetic diseases.
Since its inception, Relay Therapeutics has steadily built a robust pipeline of product candidates, leveraging its Dynamo platform to address targets that have long been considered "undruggable." The company's lead programs, RLY-2608 and lirafugratinib (RLY-4008), are currently in clinical development, demonstrating the potential of Relay Therapeutics' unique approach.
To finance its operations, Relay Therapeutics has primarily relied on private placements of preferred stock and common stock, convertible debt, and proceeds from public offerings of its common stock. The company completed its initial public offering in July 2020, raising $309 million. In September 2024, Relay Therapeutics also completed a $200 million public offering of common stock, further strengthening its financial position.
Throughout its history, Relay Therapeutics has faced several challenges, including the difficulties inherent in developing new computational drug discovery approaches and progressing its product candidates through clinical trials. The company has also had to navigate the complex regulatory environment for new drug approvals. Despite these challenges, Relay Therapeutics has made significant progress in advancing its pipeline and establishing itself as a leader in precision medicine.
Financial Performance and Liquidity
Relay Therapeutics has consistently reported significant operating losses, a common occurrence for clinical-stage biotechnology companies. For the fiscal year 2023, the company reported revenue of $25.55 million and a net loss of $341.97 million, compared to a net loss of $290.51 million in 2022. This reflects the company's ongoing investments in research and development activities to advance its pipeline. The company's operating cash flow (OCF) for 2023 was -$300.32 million, while free cash flow (FCF) was -$304.44 million.
In the most recent quarter (Q3 2024), Relay Therapeutics reported no revenue and a net loss of $88.11 million. The company's OCF for the quarter was -$75.08 million, with FCF at -$75.31 million. Year-over-year growth could not be calculated due to the absence of revenue in Q3 2024.
As of September 30, 2024, Relay Therapeutics reported $839.60 million in cash, cash equivalents, and investments, providing the company with a strong financial foundation to support its operations. The company's cash runway is expected to extend into the second half of 2027, allowing it to continue its clinical development efforts and explore new opportunities.
Relay Therapeutics' financial ratios indicate a robust liquidity position. The company's current ratio and quick ratio are both 18.42, demonstrating its ability to meet short-term obligations. The debt-to-equity ratio of 0.00 suggests a conservative capital structure, with no significant long-term debt. These metrics underscore Relay Therapeutics' strong financial health and its capacity to fund ongoing research and development activities.
Pipeline Advancements and Milestones
Relay Therapeutics' lead product candidate, RLY-2608, is a potent, selective, and orally available small molecule inhibitor of the PI3Kα enzyme. In September 2024, the company reported encouraging interim data from the ongoing ReDiscover Trial, which is evaluating RLY-2608 in combination with fulvestrant (Faslodex) in patients with PI3Kα-mutated, HR+/HER2- metastatic breast cancer.
The interim data showed a median progression-free survival (mPFS) of 9.2 months and an objective response rate (ORR) of 33% across all mutations and 53% in patients with kinase mutations, at the recommended phase 2 dose of 600 mg twice daily. The safety profile of the RLY-2608 and fulvestrant combination was generally well-tolerated, with mostly low-grade treatment-related adverse events.
Based on these promising results, Relay Therapeutics plans to initiate a pivotal trial evaluating RLY-2608 in combination with fulvestrant as a second-line treatment for patients with PI3Kα-mutated, HR+/HER2- metastatic breast cancer in 2025.
The company's second lead candidate, lirafugratinib (RLY-4008), is a potent, selective, and orally available small molecule inhibitor of fibroblast growth factor receptor 2 (FGFR2). In October 2024, Relay Therapeutics presented updated interim data from the ReFocus Trial, which is evaluating lirafugratinib in patients with FGFR2-altered solid tumors.
The interim data demonstrated encouraging efficacy signals in the cholangiocarcinoma (CCA) pan-FGFR inhibitor treatment-naïve FGFR2-fusion CCA cohort and non-CCA solid tumor expansion cohorts. The safety profile of lirafugratinib has been generally consistent, with most treatment-emergent adverse events being expected FGFR2 on-target, low-grade, and largely reversible.
In September 2024, Relay Therapeutics announced its plan to seek a global commercialization partner for lirafugratinib to enable the company to maintain focus on the remainder of its portfolio, including the continued development of RLY-2608.
Regulatory Milestones and Collaborations
Relay Therapeutics has made progress on the regulatory front as well. In January 2022, the U.S. Food and Drug Administration (FDA) granted orphan drug designation to lirafugratinib for the treatment of cholangiocarcinoma. Additionally, in October 2022, the European Medicines Agency (EMA) adopted a positive opinion on the orphan designation application for lirafugratinib for the treatment of biliary tract cancer.
Furthermore, in December 2020, Relay Therapeutics entered into a global collaboration and license agreement with Genentech, a member of the Roche Group, for the development and commercialization of RLY-1971 (now referred to as migoprotafib or GDC-1971). However, in July 2024, Genentech notified Relay Therapeutics of its decision to terminate the agreement without cause, effective 180 days after the notice.
Risks and Challenges
As a clinical-stage biopharmaceutical company, Relay Therapeutics faces several risks and challenges inherent to the drug development process. The company's success is heavily dependent on the continued progress and successful development of its lead product candidates, RLY-2608 and lirafugratinib. Any setbacks or delays in the clinical trials or regulatory approval process for these programs could have a significant impact on the company's operations and financial performance.
Additionally, Relay Therapeutics operates in a highly competitive landscape, with other biotechnology and pharmaceutical companies also pursuing novel therapies in the oncology and genetic disease spaces. The ability of the company to differentiate its product candidates and maintain a competitive edge will be crucial for its long-term success.
Lastly, as a clinical-stage company, Relay Therapeutics is subject to the inherent risks associated with drug development, including the potential for unexpected safety or efficacy issues, difficulties in patient enrollment, and the challenges of navigating the complex regulatory environment.
Conclusion
Relay Therapeutics' unique approach to drug discovery, which seamlessly integrates computational and experimental technologies, has positioned the company at the forefront of the precision medicine revolution. With a robust pipeline, promising clinical data, and a strong financial foundation, Relay Therapeutics is well-positioned to continue its mission of transforming the lives of patients suffering from debilitating diseases.
As the company navigates the challenges of drug development and seeks to capitalize on the opportunities presented by its innovative platform, investors will closely monitor Relay Therapeutics' progress and ability to advance its lead programs through the clinical and regulatory landscape. The company's success in this endeavor could have far-reaching implications for the future of drug discovery and the treatment of complex diseases.