Relay Therapeutics (RLAY): Pioneering the Convergence of Computation and Experimentation for Transformative Therapies

Published on March 08, 2025 | Ticker: RLAY

Company Overview

Relay Therapeutics, Inc. (RLAY) is a clinical-stage precision medicine company that is revolutionizing the drug discovery process by seamlessly integrating leading-edge computational and experimental technologies. Founded in 2015, the company's mission is to bring life-changing therapies to patients by harnessing the power of this unique approach.

Relay Therapeutics was incorporated in Delaware in May 2015 and is headquartered in Cambridge, Massachusetts. The company's initial focus has been on enhancing small molecule therapeutic discovery in targeted oncology and genetic disease indications. In August 2016, Relay Therapeutics entered into a Collaboration and License Agreement with D.E. Shaw Research to develop various protein models and make predictions about how molecules might move. This early collaboration was an important part of building Relay Therapeutics' Dynamo drug discovery platform, which integrates computational and experimental approaches.

Corporate Development

In April 2021, Relay Therapeutics acquired ZebiAI Therapeutics, Inc. in a transaction that included an upfront payment of approximately $20 million in cash and the issuance of 1.91 million shares of Relay Therapeutics common stock. This acquisition was intended to further strengthen Relay Therapeutics' computational and experimental drug discovery capabilities. In December 2020, Relay Therapeutics entered into a global collaboration and license agreement with Genentech for the development and commercialization of RLY-1971 (now referred to as migoprotafib). Under this agreement, Relay Therapeutics received $75 million in an upfront payment as well as $45 million in milestone payments as of September 30, 2024. However, in July 2024, Genentech notified Relay Therapeutics that it was terminating the collaboration, which became effective 180 days after the notice.

Throughout its history, Relay Therapeutics has faced the typical challenges of a clinical-stage biopharmaceutical company, including the need to raise significant capital to fund its research and development activities, as well as the inherent risks and uncertainties associated with drug development. The company has relied on private placements, public offerings, and collaborations to secure the funding necessary to advance its pipeline of product candidates.

Technology and Pipeline

At the heart of Relay Therapeutics' success is its relentless focus on precision. The company's pipeline is anchored by a series of product candidates that target specific genetic and molecular drivers of disease, with the goal of achieving superior efficacy and safety profiles compared to conventional therapies. This precision-driven approach is exemplified by the company's lead assets, RLY-2608 and lirafugratinib (RLY-4008), which have demonstrated promising results in clinical trials for oncology indications.

RLY-2608, Relay Therapeutics' lead product candidate, is an allosteric, pan-mutant and isoform-selective phosphoinositide 3-kinase alpha (PI3Kα) inhibitor. In the ReDiscover Trial, RLY-2608 in combination with fulvestrant has shown a median progression-free survival (PFS) of 11.4 months and an objective response rate (ORR) of 53% in patients with PI3Kα-mutated, hormone receptor-positive (HR+), human epidermal growth factor receptor 2-negative (HER2-) metastatic breast cancer. These results underscore the potential of RLY-2608 to redefine the treatment landscape for this patient population. In December 2021, Relay dosed the first patient in a first-in-human clinical trial for RLY-2608, evaluating the candidate in patients with HR, HER2-, PI3Kα-mutated, locally advanced or metastatic breast cancer. In September 2024, interim clinical data for RLY-2608 showed a median progression-free survival of 9.2 months and an objective response rate of 33% across all mutations and 53% in patients with kinase mutations, when dosed at 600 mg twice daily in combination with fulvestrant. The interim data also showed that RLY-2608 in combination with fulvestrant was generally well-tolerated.

Lirafugratinib (RLY-4008), Relay Therapeutics' second lead candidate, is a potent, selective, and oral small molecule inhibitor of fibroblast growth factor receptor 2 (FGFR2). In the ReFocus Trial, lirafugratinib has demonstrated durable responses in patients with FGFR2-altered solid tumors, including cholangiocarcinoma. The company's decision to seek a global commercialization partner for lirafugratinib reflects its commitment to prioritize resources and focus on the advancement of its broader pipeline. In the third quarter of 2020, Relay initiated a first-in-human clinical trial for lirafugratinib, evaluating the candidate in patients with FGFR2-altered tumors. In October 2024, Relay presented updated interim FGFR2 fusion tumor agnostic clinical data for lirafugratinib, which showed interim efficacy signals in the cholangiocarcinoma (CCA) pan-FGFR, treatment-naïve, FGFR2-fusion CCA cohort and non-CCA solid tumor expansion cohorts. The safety analysis for the interim data was also generally consistent, with most treatment-emergent adverse events being expected, low-grade, monitorable and manageable.

Beyond its clinical-stage assets, Relay Therapeutics has a robust preclinical portfolio, including programs targeting vascular malformations, Fabry disease, and NRAS-driven cancers. In June 2024, Relay announced three discovery stage programs, including two novel programs from its genetic disease portfolio targeting vascular malformations and Fabry disease, as well as an NRAS-selective inhibitor program. The company also has five additional active discovery stage programs across both precision oncology and genetic diseases. The company's ability to rapidly identify and validate novel targets using its Dynamo platform underscores its potential to continue expanding its pipeline and addressing unmet medical needs across various therapeutic areas.

Financials

Relay Therapeutics' financial position is bolstered by a strong cash, cash equivalents, and investments balance of approximately $780 million as of the end of the fourth quarter of 2024. This substantial cash runway will enable the company to fully fund the execution of the pivotal ReDiscover-2 Phase 3 trial for RLY-2608, as well as support the advancement of its broader pipeline.

For the most recent quarter, Relay Therapeutics reported no revenue and a net loss of $76,004,000. The company's operating cash flow (OCF) and free cash flow (FCF) for the quarter were both negative $57,868,000. As of September 30, 2024, Relay had $839.6 million in cash, cash equivalents and investments, which it believes will enable it to fund its operating expenses and capital expenditure requirements into the second half of 2027.

Relay reported a net loss of $261.7 million and $258.5 million for the nine months ended September 30, 2024 and 2023, respectively. The company's research and development expenses were $251.0 million and $252.5 million for the nine months ended September 30, 2024 and 2023, respectively, reflecting its focus on advancing its pipeline of product candidates. General and administrative expenses were $59.7 million and $58.2 million for the same respective periods, supporting its overall operations as a public, clinical-stage biopharmaceutical company.

Liquidity

Relay Therapeutics maintains a strong liquidity position with $152.36 million in cash as of the most recent quarter. The company's current ratio and quick ratio both stand at 15.95, indicating a robust ability to meet short-term obligations. This financial stability allows Relay to continue investing in its research and development efforts without immediate liquidity concerns.

The company's commitment to innovation has not gone unnoticed, as Relay Therapeutics has garnered significant attention from the investment community. In a recent analyst report, Barclays initiated coverage on the stock with a $17 price target, highlighting the company's AI-driven approach to cancer treatment development.

Challenges and Opportunities

However, Relay Therapeutics is not without its challenges. The company operates in a highly competitive and rapidly evolving landscape, with ongoing risks related to clinical development, regulatory approvals, and commercialization. The company's reliance on third-party collaborations and partnerships, such as its DESRES Agreement, also introduces potential uncertainties.

Despite these risks, Relay Therapeutics' unique value proposition, robust pipeline, and strong financial position position the company as a compelling investment opportunity in the precision medicine space. As the company continues to execute on its strategic initiatives and deliver on its clinical milestones, investors will eagerly watch for the potential of Relay Therapeutics to transform the way we approach drug discovery and development.

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