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Relay Therapeutics, Inc. (RLAY)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 revenue of $10.01M, driven by a $10.0M Genentech milestone; diluted EPS was -$0.62 and net loss was $81.4M .
  • Street tracked a large beat versus third-party consensus: EPS (-$0.62) vs -$0.70 and revenue ($10.01M) vs $0.12M; beat was primarily non-recurring milestone revenue rather than product sales .
  • Operating discipline continued: R&D down modestly YoY (-$0.4M) and G&A +$0.2M YoY; interest income up $2.0M YoY on higher rates .
  • Cash, cash equivalents and investments were $749.6M; runway maintained “into the second half of 2026,” supported by January private placement and ATM proceeds .

What Went Well and What Went Wrong

What Went Well

  • Milestone revenue recognition created a clear top-line beat: “Revenue was $10.0 million… primarily due to a payment… under the… Genentech… Agreement” .
  • Pipeline execution maintained: “We continue to progress a robust RLY-2608 development program… [and] look forward to disclosing at least one new program this year” .
  • Balance sheet strength with extended runway and interest income tailwind: cash $749.6M; runway into 2H26; interest income $9.0M in Q1 .

Management quote: “We have started 2024 with a focus on maintaining strong execution across our portfolio” – Sanjiv Patel, M.D., CEO .

What Went Wrong

  • Loss-making profile persists: net loss -$81.4M; loss from operations -$90.4M; cash from operations -$50.3M in Q1 2024 .
  • Revenue quality is non-recurring (milestone) rather than product sales, limiting visibility for subsequent quarters .
  • Continued high R&D spend despite prioritization initiatives; R&D still $82.4M with stock comp rising (R&D stock comp $15.7M; G&A stock comp $11.5M) .

Financial Results

P&L and Margins vs Prior Periods and Estimates

MetricQ3 2023Q4 2023Q1 2024
Revenues ($USD Millions)$25.20 $0.00 $10.01
Loss from Operations / EBIT ($USD Millions)-$73.58 -$92.20 -$90.36
Net Loss ($USD Millions)-$65.73 -$83.50 -$81.39
Diluted EPS - Continuing Operations ($)-$0.54 -$0.67 -$0.62
Net Income Margin %-260.7% (=-65.73/25.20) N/M (no revenue) -813.0% (=-81.39/10.01)
EBIT Margin %-291.8% (=-73.58/25.20) N/M (no revenue) -902.6% (=-90.36/10.01)

Notes: Net and EBIT margins computed from reported revenue and net loss/EBIT; Q4 2023 margins not meaningful due to no material revenue .

Actuals vs Third-Party Consensus (Estimates)

MetricConsensusActualBeat/Miss
Revenue ($USD Millions)$0.12 $10.01 +$9.89M (beat)
EPS ($)-$0.70 -$0.62 +$0.08 (beat)

Important: S&P Global consensus estimates were unavailable due to an SPGI access limit; third-party figures shown above with source citations. Anchor comparisons to SPGI when available.

Cash and Balance Sheet

MetricQ3 2023Q4 2023Q1 2024
Cash, Cash Equivalents and Investments ($USD Millions)$810.62 $750.09 $749.61
Working Capital ($USD Millions)$781.05 $739.83 $732.96
Total Assets ($USD Millions)$906.96 $843.98 $841.44
Total Liabilities ($USD Millions)$128.59 $91.98 $95.68
Total Equity ($USD Millions)$778.37 $752.00 $745.76

Cash Flow Highlights

MetricQ1 2023Q1 2024
Cash from Operations ($USD Millions)-$67.13 -$50.32
Net Increase in Cash, Cash Equivalents and Restricted Cash ($USD Millions)$9.48 $9.13
Financing Cash Flow ($USD Millions)$1.30 $48.92

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayOperating planInto 2H 2026 Into 2H 2026 Maintained
RLY-2608 + Fulvestrant Data Update20242H 2024 2H 2024 Maintained
RLY-2608 Triplet Initial Safety (fulvestrant + ribociclib)20242H 2024 2H 2024 Maintained
Lirafugratinib (RLY-4008) Tumor-Agnostic Data & Regulatory Update20242H 2024 2H 2024 Maintained
Pre-clinical Program Disclosure2024Disclose new program(s) in 2024 Disclose ≥1 new program in 2024 Maintained

Earnings Call Themes & Trends

Note: We were unable to locate a Q1 2024 earnings call transcript; searches of company and third-party sources did not return a call transcript for May 2024. References below synthesize quarter narratives from 8-Ks and the 10-Q.

TopicPrevious Mentions (Q3 2023)Previous Mentions (Q4 2023)Current Period (Q1 2024)Trend
RLY-2608 development (doublet/triplet)Planned triplet initiation; doublet progress Completed initial 600mg BID doublet enrollment; added 400/600mg cohorts; triplet initiated Continued doublet enrollment (600mg BID and 400mg BID) and triplet enrollment Steady execution; expansion cohorts progressing
Lirafugratinib (RLY-4008) strategyDurability across FGFR2-altered tumors; paused near-term CCA readiness Minimize 2024 resource allocation to mature data Continued minimized allocation in 2024; regulatory/data update planned 2H24 Focused to data maturity; decision gating in 2H24
Cash runway & financingCash $810.6M; runway into 2H26 Cash $750.1M; runway into 2H26 Cash $749.6M; runway into 2H26; added private placement & ATM proceeds Runway maintained; capital adds bolster flexibility
R&D prioritizationDeprioritized RLY-2139; focus on PI3Kα & FGFR2 Deprioritized RLY-5836; focus Dynamo platform programs R&D expenses edged down YoY; prioritization continues Discipline intact; spend mix shifting
External collaborationsGenentech milestone revenue in Q3; ongoing FY23 revenue tied to Genentech milestones $10.0M Genentech milestone recognized in Q1 Milestone flow supports non-dilutive revenue

Management Commentary

  • Strategic focus: “We continue to progress a robust RLY-2608 development program and expect to share additional data in the second half of the year.” – Sanjiv Patel, M.D., CEO .
  • Pipeline disclosure: “We… look forward to disclosing at least one new program this year, which is being designed to have first-in-class potential” .
  • Q4 context: “We are very pleased with the RLY-2608 data disclosed to-date… our clinical team is focused on advancing this program… [and] we look forward to sharing additional data in the second half of 2024” .
  • Q3 context: “We have made important progress… expanding… our potential to help… we presented data… demonstrating the potential of lirafugratinib… we are working to initiate RLY-2608 triplet combinations…” .

Q&A Highlights

  • A Q1 2024 earnings call transcript was not found across company IR and third-party sources; no Q&A summary available .

Estimates Context

  • Third-party tracked consensus suggested EPS -$0.70 and revenue $0.12M; Relay posted EPS -$0.62 and revenue $10.01M, a headline beat driven by recognition of a $10.0M Genentech milestone .
  • S&P Global (SPGI) consensus data were unavailable due to SPGI access limits at the time of retrieval; estimate comparisons above use cited third-party sources.
  • Implication: Models should adjust for non-recurring milestone revenue; forward run-rate revenue absent milestones remains limited, with losses funded by cash on hand.

Key Takeaways for Investors

  • The quarter’s revenue beat was non-recurring milestone income; prudent to strip it from run-rate and focus on OpEx trajectory and cash runway into 2H26 .
  • RLY-2608 remains the near-term value driver; watch 2H24 doublet update and initial triplet safety readout as potential catalysts .
  • Lirafugratinib strategy is data-maturity first; tumor-agnostic data and regulatory update in 2H24 could reframe optionality across FGFR2-driven tumors .
  • Operating discipline evident: modest YoY R&D decline and higher interest income; still substantial quarterly cash burn (-$50.3M CFO) requiring ongoing capital planning .
  • Balance sheet remains a strength, augmented by Q1 private placement and ATM; low leverage risk with no debt, supporting clinical execution through key 2024 milestones .
  • For trading: near-term stock moves likely hinge on 2H24 data disclosures (RLY-2608 updates, triplet safety, RLY-4008 tumor-agnostic/regulatory), not Q1 prints; narrative sensitivity to quality and durability of clinical signals .
  • Medium-term thesis: Execute on RLY-2608 combinations and define RLY-4008’s tumor-agnostic path; manage OpEx, maintain runway, and leverage collaboration milestones prudently .