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Day One Biopharmaceuticals, Inc. (DAWN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net product revenue reached $29.0M, up 44% sequentially; total revenue was $29.2M, with license revenue of $0.2M. Non‑operating income was $6.2M; net loss was $65.7M. Cash ended at $531.7M .
  • CMS granted “Exclusively Pediatric” designation for OJEMDA in Q4, cutting minimum Medicaid/340B rebates from 23.1% to 17.1% and improving gross‑to‑net; management expects forward gross‑to‑net of ~12–15% absent payer‑mix shifts .
  • Commercial metrics strengthened: ~800 scripts in Q4; cumulative FY prescriptions 1,647; coverage approval remains high (95% on‑label approvals; >80% initial request approvals; <7 days script‑to‑fill), and covered lives published policies rose to ~76% .
  • 2025 setup: FIREFLY‑2 enrollment completion remains guided to 1H 2026; DAY301 cleared first dose cohort in Jan 2025; named‑patient program revenue (~$3M in 2024) will not recur in 2025—both revenue mix and gross‑to‑net dynamics should normalize as commercial execution scales .

What Went Well and What Went Wrong

What Went Well

  • Strong sequential revenue growth with Q4 net product revenue up 44% versus Q3, supported by double‑digit growth in new patient starts, high month‑to‑month continuations, and gross‑to‑net improvement. “Throughout the year, we observed consistent growth…Fourth quarter net product revenues were $29 million, which represents 44% growth versus Q3.” .
  • Access tailwinds: CMS pediatric designation reduced statutory rebates; management expects forward gross‑to‑net ~12–15%. “Reducing OJEMDA’s Medicaid and 340B minimum rebate…from 23.1% to 17.1%” and “forward‑looking gross to net will be approximately 12% to 15%” .
  • Broadening prescriber base and depth: ~800 Q4 scripts; >280 active patients on drug into 2025; near‑term focus is driving second‑line standard of care use. “Over 1,600 cumulative total prescriptions…we ended the year in a strong position with over 280 active patients on drug” .

What Went Wrong

  • Operating expense intensity: Q4 R&D rose to $61.8M (includes $20.0M DAY301 dose‑escalation milestone), SG&A to $29.8M; net loss widened to $65.7M in Q4 (vs. $54.5M Q4 2023) as the company invests behind launch and pipeline .
  • Revenue mix normalization risk: ~$3M named‑patient revenue recorded in 2024 will not recur in 2025, modestly lowering non‑commercial contributions; channel stock increases with demand can add quarter‑to‑quarter noise, although inventory is targeted at 2–4 weeks .
  • Estimates benchmarking unavailable via S&P Global API in our pull today, limiting formal beat/miss analysis; investors should note structural drivers (rebate reduction, payer coverage) behind revenue trajectory even absent street comparisons [functions.GetEstimates error].

Financial Results

Quarterly P&L and Cash

Metric ($USD Millions)Q2 2024Q3 2024Q4 2024
OJEMDA Net Revenue$8.2 $20.1 $29.0
License Revenue—$73.7 $0.2
Total Revenue$8.2 $93.8 $29.2
Cost of Product Revenue$0.7 $1.6 $3.0
Research & Development$92.1 $33.6 $61.8
Selling, General & Administrative$30.2 $29.0 $29.8
Total Cost & Operating Expenses$123.0 $64.1 $94.6
Non‑Operating Income$111.9 $6.5 $6.2
Income Tax (Benefit)/Expense$1.5 $0.9 (benefit) ($6.5)
Net Income (Loss)($4.4) $37.0 ($65.7)
Cash, Cash Equivalents & STI$361.9 $558.4 $531.7

Year-over-Year (Q4 2024 vs Q4 2023 select lines)

Metric ($USD Millions)Q4 2023Q4 2024
Research & Development$37.3 $61.8
Selling, General & Administrative$22.2 $29.8
Non‑Operating Income$5.0 $6.2
Net Loss($54.5) ($65.7)

Segment Breakout (Revenue)

Revenue ($USD Millions)Q3 2024Q4 2024
OJEMDA Net Product Revenue$20.1 $29.0
License Revenue (Ipsen ex‑US)$73.7 $0.2
Total Revenue$93.8 $29.2

Commercial KPIs

KPIQ3 2024Q4 2024
Quarterly Prescriptions (TRx)619 ~800
Cumulative Prescriptions Since Launch855 1,647 (FY 2024)
Covered Lives with Published Policies62% Commercial; 67% Medicaid ~76% overall covered (+12% vs Q3)
On‑Label Coverage Approval Rate~80% (all payers) ~95% approvals; >80% initial approvals; <7 days script‑to‑fill

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
OJEMDA Gross‑to‑Net %2025 forwardN/A~12%–15%Raised clarity; improved via CMS pediatric designation
CMS Rebate % (Medicaid/340B)Effective Q4 202423.1%17.1%Lowered statutory rebate (structural)
Cost of Sales (% of Net Product Revenue)Early 20259%–12% expected early next year9%–12% expected (unchanged)Maintained outlook
Named‑Patient Program Revenue2025~$3M booked in 2024$0 (Ipsen assumes program)Lowered/removed recurring revenue
FIREFLY‑2 Enrollment Completion1H 20261H 20261H 2026Maintained timeline

Earnings Call Themes & Trends

TopicQ2 2024 (Previous Mentions)Q3 2024 (Previous Mentions)Q4 2024 (Current Period)Trend
Product performance & new startsLaunch $8.2M; 157 patient starts (46% new, 54% EAP) $20.1M; 619 TRx; ~160% TRx growth; prescriber base nearly doubled $29.0M; ~800 TRx; 44% sequential growth; >280 active patients into 2025 Sustained growth; deepening adoption
Payer coverage & access>80% approvals despite limited published coverage Published coverage: 62% commercial, 67% Medicaid; ~80% approvals CMS pediatric designation improves rebates; ~95% on‑label approvals; >80% initial approvals; <7 days ship Structural improvement; faster access
R&D execution (FIREFLY‑2)>100 sites activated; frontline Phase 3 enrolling Enrollment globally continues Enrollment completion expected 1H 2026 Steady progress; durable timeline
DAY301 programIn‑licensed; IND cleared; dosing targeted Q4/Q1 Nearing clinic; plan to elicit monotherapy signal First dose cohort cleared Jan 2025; enrolling second dose Advancing dose‑escalation
Revenue mix & normalizationPRV sale $108M boosts non‑op income $73.7M license revenue from Ipsen; future $0.3–$0.5M/quarter recognized Named‑patient revenue (~$3M in 2024) not recurring in 2025 Normalizing non‑commercial items
Inventory/channel stockLaunch stocking split ($6.1M demand/$2.1M inventory) 2–4 weeks target channel stock Increased absolute channel stock with demand; maintain 2–4 weeks target Operational steady‑state

Management Commentary

  • CEO: “The approval of OJEMDA was the catalyst for our next stage of growth…With OJEMDA as our foundation and a strong balance sheet, we believe we are on a path to long‑term, durable growth.” .
  • CCO: “In Q4, OJEMDA net product revenues grew to $29 million…driven by over 1,600 cumulative total prescriptions…continued double‑digit growth in non‑EAP new patient starts…and high month‑to‑month continuations.” .
  • CFO: “CMS approved our request to designate OJEMDA exclusively for pediatric indications…reducing Medicaid and 340B minimum rebate percentage 600 basis points…we believe forward‑looking gross to net will be approximately 12% to 15%.” .
  • CFO on inventory: “We…did increase the volume associated with channel stock…we’ve targeted…two to four weeks of inventory on hand…and we anticipate that going forward.” .
  • CEO on pipeline priorities: “Continue driving OJEMDA revenue growth…advance enrollment in FIREFLY‑2…and dose escalation in the DAY301 Phase I trial.” .

Q&A Highlights

  • Depth of prescribing: Focus on converting Priority 2/3 accounts and broadening eligible patient types; late adopters respond to KOL peer experience—no “magic number” of interactions .
  • New patient cadence: Expect continued steady growth rather than a singular inflection, given disease progression dynamics in pLGG .
  • Second‑line urgency: Earlier second‑line use offers both near‑term pool expansion and potential longer durations—benefit is “a little of both” .
  • Channel stock/seasonality: Q4 saw increased absolute channel stock with demand; inventory target remains 2–4 weeks; no significant seasonality observed .
  • DAY301 disclosure gating: Public data awaits sufficient Phase 1a dose‑escalation and potentially dose‑expansion cohort data; timing not yet guided .
  • FIREFLY‑2 enrollment: Projection to complete in 1H 2026 is based on current sites and observed rates; off‑label frontline use in U.S. has been “very modest” .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 revenue/EPS was unavailable due to a data pull limit reached today; as a result, we cannot provide beat/miss determinations for the quarter at this time [functions.GetEstimates error].
  • Given structural changes (CMS rebate reduction, high coverage approvals), sell‑side models may need to reflect improved gross‑to‑net assumptions (~12–15%) and removal of named‑patient revenues from 2025 onward .

Key Takeaways for Investors

  • OJEMDA commercialization is scaling; Q4 net product revenue rose 44% sequentially with strengthening access and prescriber depth—momentum into 2025 appears intact .
  • Structural access improvement via CMS pediatric designation establishes a more favorable gross‑to‑net (~12–15%), enhancing revenue conversion and predictability absent payer‑mix shifts .
  • Expect revenue mix normalization in 2025: named‑patient revenue (~$3M in 2024) will not recur; watch quarter‑to‑quarter channel stock but inventory policy targets 2–4 weeks .
  • Operating investment remains elevated (R&D/SG&A) to support launch and pipeline (DAY301, FIREFLY‑2); near‑term losses persist even with solid top‑line growth—cash of $531.7M provides flexibility .
  • Near‑term catalysts: continued prescriber breadth/depth expansion, payer policy publication progression, FIREFLY‑2 enrollment updates, and DAY301 dose‑escalation progress (first cohort cleared) .
  • Without verified consensus today, focus on the qualitative drivers—coverage, rebate mechanics, patient continuations—and monitor sell‑side revisions as access clarity and sequential trends roll through models .
  • Medium‑term thesis: Establish OJEMDA as second‑line standard of care, expand to frontline upon FIREFLY‑2 success, and pursue DAY301 first/best‑in‑class potential to diversify revenue—execution against these pillars underpins durable growth .