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Relay Therapeutics, Inc. (RLAY)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 2024 was a pre-revenue quarter with net loss of $92.2M (EPS -$0.69), improving year-over-year from $98.5M (EPS -$0.81) on lower operating expenses and higher interest income; cash, cash equivalents and investments were $688.4M, with runway into 2H 2026 .
  • EPS beat consensus by $0.04 versus Wall Street’s -$0.73 estimate, while revenue came in at $0 vs ~$0.09M expected; S&P Global consensus was unavailable, so third-party snapshots are used here; revenue miss is immaterial given milestone-driven revenue cadence .
  • Strategic progress: disclosed three new programs (vascular malformations, Fabry disease, NRAS) and announced a Pfizer clinical collaboration to evaluate atirmociclib with RLY-2608 + fulvestrant; triplet initiation targeted by year-end 2024 .
  • Near-term catalysts: RLY-2608 + fulvestrant update in Q4 2024 (including ~100 patients safety database, ~60 at 600mg BID; ~40 with ≥6 months exposure), initial triplet safety data in Q4 2024, and tumor-agnostic data/regulatory update for lirafugratinib in 2H 2024 .
  • Risk item: Genentech terminated the migoprotafib collaboration; Relay will not continue development, increasing reliance on RLY-2608 and new programs .

What Went Well and What Went Wrong

What Went Well

  • “We made important progress continuing to advance our clinical programs…positioned us well for multiple data readouts later this year,” said CEO Sanjiv Patel, highlighting portfolio execution and impending catalysts .
  • Announced clinical trial collaboration with Pfizer to evaluate atirmociclib (selective CDK4) in a triplet with RLY-2608 + fulvestrant; “combining these two selective agents…will avoid key off-target toxicity” (Don Bergstrom, President of R&D) .
  • Balance sheet strength: $688.4M cash, cash equivalents and investments as of June 30, 2024; guidance maintained to fund operations into 2H 2026 .

What Went Wrong

  • Revenue was $0 in Q2 2024 (vs $119k in Q2 2023 and $10.0M in Q1 2024 from a Genentech milestone), underscoring the milestone-driven/non-recurring revenue profile .
  • Net loss remained sizable at $92.2M (EPS -$0.69); R&D expenses increased to $92.0M (+4% YoY) primarily due to additional external ReDiscover trial costs for RLY-2608 .
  • Collaboration risk crystallized: Genentech terminated migoprotafib (GDC-1971), and Relay will not continue development, removing a potential pipeline contributor .

Financial Results

P&L and EPS vs Prior Periods and Estimates

MetricQ4 2023Q1 2024Q2 2024Consensus (Q2 2024)
Revenue ($USD Millions)$0.00 $10.01 $0.00 ~$0.09
Net Loss ($USD Millions)$83.50 $81.39 $92.21 N/A
EPS ($USD)-$0.67 -$0.62 -$0.69 -$0.73
R&D Expense ($USD Millions)$77.50 $82.40 $92.00 N/A
G&A Expense ($USD Millions)$16.77 $19.80 $20.14 N/A

Notes:

  • EPS beat: Actual -$0.69 vs consensus -$0.73 (beat by $0.04). Revenue miss: $0.00 vs ~$0.09M; S&P Global consensus unavailable; third-party snapshots used .
  • Drivers: Lower total operating expenses YoY ($100.76M vs $106.17M) and higher interest income ($8.55M vs $7.55M), plus a favorable non-cash change in fair value of contingent consideration (-$11.37M vs -$2.15M) partially offset R&D increases .

Balance Sheet and Liquidity

MetricDec 31, 2023Mar 31, 2024Jun 30, 2024
Cash, Cash Equivalents and Investments ($USD Millions)$750.09 $749.61 $688.42
Working Capital ($USD Millions)$739.83 $732.96 $659.23
Total Assets ($USD Millions)$843.98 $841.44 $772.75
Total Liabilities ($USD Millions)$91.98 $95.68 $90.81
Stockholders’ Equity ($USD Millions)$752.00 $745.76 $681.74

KPIs (Operating)

KPIQ4 2023Q1 2024Q2 2024
License and Other Revenue ($USD Millions)$0.00 $10.01 $0.00
Total Operating Expenses ($USD Millions)$92.20 $100.37 $100.76
Interest Income ($USD Millions)$8.70 $8.98 $8.55

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash runwayThrough 2H 2026Fund operations into 2H 2026 (Q1 update) Fund operations into 2H 2026 (Q2 update) Maintained
RLY-2608 + fulvestrant data updateQ4 20242H 2024 Q4 2024; ~100 patients in safety, ~60 at 600mg BID, ~40 with ≥6 months exposure Narrowed timing / Enhanced detail
RLY-2608 triplet (ribociclib) initial safetyQ4 20242H 2024 Q4 2024 Maintained
RLY-2608 triplet (atirmociclib, Pfizer) clinical startBy end 2024Not previously disclosedBy end of 2024 New
RLY-2608 + fulvestrant potential Phase 3 initiation2025Not previously disclosed2025 New
Lirafugratinib tumor-agnostic data & regulatory update2H 20242H 2024 2H 2024 Maintained
Vascular malformations (RLY-2608) clinical startQ1 2025Not previously disclosedQ1 2025 New
Fabry disease non-inhibitory chaperone clinical start2H 2025Not previously disclosed2H 2025 New
NRAS-selective inhibitor clinical start2H 2025Not previously disclosed2H 2025 New

Earnings Call Themes & Trends

Note: An earnings call transcript for Q2 2024 could not be located in our document set or via public IR sources; analysis below reflects prepared remarks in press releases across quarters .

TopicPrevious Mentions (Q4 2023 and Q1 2024)Current Period (Q2 2024)Trend
RLY-2608 doublet (fulvestrant)Completed initial 600mg BID cohort; added 400mg and second 600mg cohorts; data update targeted 2H 2024 Q4 2024 update confirmed; enhanced detail on patient counts and exposure duration Advancing; dataset expanding
RLY-2608 tripletInitiated ribociclib triplet; initial safety data targeted 2H 2024 Added Pfizer atirmociclib collaboration; triplet clinical start by end 2024 Broadening triplet strategy
Lirafugratinib (RLY-4008)Resource allocation minimized in 2024 to allow data to mature; tumor-agnostic data/regulatory update in 2H 2024 2H 2024 update reiterated Awaiting next readouts
New programs (platform)Planned disclosure of at least one new program in 2024 Disclosed 3 programs: vascular malformations, Fabry disease, NRAS Platform expansion
CollaborationsGenentech milestone drove Q1 revenue; later termination of migoprotafib Pfizer clinical collaboration announced (CDK4 triplet) Shift from terminated asset to new partner
Cash runway~$750M cash; runway into 2H 2026 $688.4M cash; runway into 2H 2026 maintained Strong but declining balances

Management Commentary

  • “We made important progress continuing to advance our clinical programs…positioned us well for multiple data readouts later this year. Additionally, we look forward to expanding the RLY-2608 development program, with the initiation of a new triplet combination with Pfizer's novel investigative selective-CDK4 inhibitor atirmociclib by the end of the year.” — Sanjiv Patel, M.D., President & CEO .
  • “We are very enthusiastic to evaluate Pfizer's novel investigative selective-CDK4 inhibitor atirmociclib in combination with RLY-2608…combining these two selective agents…will avoid key off-target toxicity…which has historically significantly limited use of non-selective agents.” — Don Bergstrom, M.D., Ph.D., President of R&D .
  • On platform and growth: “We are very excited by the pre-clinical programs…including our first two genetic disease programs, which will be important in driving our continued growth and diversification.” — Sanjiv Patel .

Q&A Highlights

  • An earnings call transcript for Q2 2024 was not available in our sources. We searched IR site, press releases, and transcript aggregators but found no transcript; therefore, Q&A themes and clarifications cannot be extracted for this period .

Estimates Context

  • EPS: Actual -$0.69 vs consensus -$0.73 — bold beat driven by lower total operating expenses YoY and favorable non-cash contingent consideration adjustment, plus higher interest income .
  • Revenue: Actual $0.00M vs consensus ~$0.09M — modest miss; quarter-to-quarter variability reflects milestone timing (Q1 included a $10.0M Genentech milestone), not underlying product sales, given the pre-commercial stage .
  • S&P Global (Capital IQ) consensus data was unavailable due to system limits at the time of query; estimates above reference third-party published snapshots .

Key Takeaways for Investors

  • EPS beat consensus despite higher R&D, supported by lower total operating expenses YoY, a favorable contingent consideration fair value change, and interest income; expect continued earnings variability tied to investment pace and non-cash items .
  • Cash runway to 2H 2026 remains intact with $688.4M on hand, providing capacity to fund Phase 3 preparation for RLY-2608 and multiple new clinical starts across genetic disease and oncology .
  • Pipeline breadth is expanding: three new programs (vascular malformations, Fabry disease non-inhibitory chaperone, NRAS-selective inhibitor) diversify Relay beyond precision oncology; clinical starts slated across 2025 .
  • Pfizer triplet collaboration (atirmociclib) strengthens RLY-2608 combination strategies and could be a stock catalyst as the triplet initiates by year-end 2024 and initial safety data for the ribociclib triplet arrives in Q4 2024 .
  • Near-term catalysts: Q4 2024 RLY-2608 doublet update with expanded patient exposure, plus tumor-agnostic data/regulatory update for lirafugratinib; data quality and safety profile will be key to Phase 3 trajectory and potential investor re-rating .
  • Collaboration risk surfaced (migoprotafib termination); execution risk concentrates on RLY-2608 clinical outcomes and the success of newly disclosed programs; monitor regulatory interactions and any future partnering updates .
  • Trading setup: Pre-catalyst quarter; position sizing should reflect binary readouts in Q4 and early 2025, strong liquidity, and potential upside from triplet combinations; downside risk persists from trial outcomes and shifting collaboration landscape .