Relay Therapeutics, Inc. (RLAY)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 was operationally steady with no revenue and a narrower net loss; EPS of $-0.45 beat external consensus proxies (e.g., Seeking Alpha at $-0.55; TipRanks at $-0.56), driven by lower R&D versus prior year and interest income, alongside a stable cash runway into H2’27 .
• Phase 3 ReDiscover-2 design for RLY-2608 + fulvestrant finalized post End-of-Phase 2 meeting; initiation targeted mid-2025, with 540-patient enrollment and capivasertib + fulvestrant as comparator; Phase 3 dose set at 400mg BID fed after positive food effect .
• Updated interim doublet data (SABCS) showed median PFS of 11.4 months in 2L patients and a differentiated safety profile (Grade 3 hyperglycemia ~3%), reinforcing confidence in a superiority design vs capivasertib (5.5-month PFS benchmark) .
• Corporate mix-shift and portfolio focus continued: Elevar licensing of lirafugratinib adds non-dilutive milestones/royalties while management prioritizes capital to fully fund Phase 3 execution; cash/cash equivalents/investments ended Q4 at $781.3M .
• Shares fell ~13% around the Q4 print, highlighting investor sensitivity to timelines and clinical execution; catalysts ahead include Phase 3 initiation, vascular malformations study start, and full Phase 1/2 doublet dataset in 2025 .

What Went Well and What Went Wrong

What Went Well

• Management locked the ReDiscover-2 Phase 3 design (randomized, open-label, capivasertib comparator; 540 patients; PFS primary endpoint with hierarchical testing), with Phase 3 initiation anticipated mid-2025: “a team with proven development experience” and capital to execute .
• Positive SABCS update: RLY-2608 + fulvestrant demonstrated 11.4-month median PFS in true 2L patients, 39% confirmed ORR overall (67% in kinase-mutant subgroup), and 67% CBR, supporting a superiority trial posture vs capivasertib .
• Strengthened capital position and runway: $781.3M at 12/31/24; runway sufficient into H2’27, enabling full funding of the pivotal program without near-term financings .

Selected quotes:

• CEO: “With a strong capital position that supports the execution of that pivotal trial… I am confident in our abilities to meaningfully advance these programs” .
• R&D: “We see a median PFS of 11.4 months… more than double… capivasertib at 5.5 months” .

What Went Wrong

• No quarterly revenue; continued GAAP net loss: Q4’24 net loss $76.0M; EPS $-0.45; biotech model remains dependent on milestones/partnerships and investment income .
• R&D still heavy (Q4’24 $68.1M) despite prioritization; G&A was roughly flat year on year; investors may question opex cadence until Phase 3 enrollment progresses materially .
• Earnings call transcript specific to Q4’24 was not available in filings; instead, company held a SABCS data call; investors lacked a traditional earnings Q&A cadence tied directly to quarterly financials .

Financial Results

Note: S&P Global (Capital IQ) consensus was unavailable due to access limits at the time of retrieval; external sources are cited above.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategic priority: “Top priority to continue advancing our clinical programs, including the initiation of the RLY-2608 + fulvestrant Phase 3 trial… With a strong capital position… I am confident…” — Sanjiv Patel, CEO .
• Efficacy differentiation: “In true second-line-only patients, we see… 11.4 months… double that… capivasertib… 5.5 months” — Sanjiv Patel .
• Safety profile: “Only two patients (3%) experienced Grade 3 hyperglycemia… low rates of diarrhea, rash, stomatitis” — R&D .
• Phase 3 design: Hierarchical PFS testing (kinase-only then all mutations) hedges label optionality and ensures robustness — Management Q&A .

Q&A Highlights

• Hyperglycemia management: Clinicians comfortable at low grades; manageable with metformin/diet; Grade 3 hyperglycemia ~3% vs ≥20% typical for non-selective agents; one Grade 3 case triggered by switch to insulin while benefiting on drug .
• PFS robustness: 11.4-month 2L median supported as censored patients were ongoing; expectation of consistent superiority in Phase 3 .
• Phase 3 eligibility/inclusions: CDK4/6-experienced (adjuvant or metastatic), HbA1c ≤7%, FPG ≤140 mg/dL; excluding prior PI3K inhibitor exposure; design biased to more 2L patients (akin to CAPItello-291 mix) .
• Dose selection: Positive food effect supports 400mg BID fed, equivalent exposure to 600mg BID fasted; reduces upper GI AEs; accepted after FDA discussion .

Estimates Context

• S&P Global consensus was unavailable at time of retrieval. External proxies indicated Q4’24 EPS consensus around $-0.55 to $-0.56 and revenue ~$5.5–$6.1M; actual EPS was $-0.45 (beat) and revenue was $0.0 (miss) .
• Given a zero-revenue quarter and reduced R&D vs prior year, Street models likely need downward revenue adjustments and modest upward EPS revisions to reflect cost prioritization and interest income .

Key Takeaways for Investors

• The pivotal program is de-risking: finalized Phase 3 design, clear comparator, dosing optimization, and capital runway through top-line — favoring a superiority setup on PFS vs capivasertib .
• Clinical momentum: 2L data maturity improved (11.4m median PFS), with differentiated safety; this underpins potential label breadth (kinase and non-kinase) and supports hierarchy-based Phase 3 testing .
• Portfolio focus and monetization: Lirafugratinib out-licensed to Elevar adds contingent cash flows and reduces burn risk while maintaining oncology/genetic disease focus .
• Near-term catalysts: Mid-2025 Phase 3 start, vascular malformations study initiation (Q1’25), and comprehensive Phase 1/2 doublet dataset in 2025 — each can drive estimate and narrative shifts .
• Trading lens: EPS beat vs proxies and strong clinical narrative were offset by lack of revenue; share reaction around earnings (~-13%) suggests the stock remains highly sensitive to execution timelines — watch enrollment pace and any interim Phase 3 updates .
• Medium-term thesis: If Phase 3 reads positive, RLY-2608 could become a backbone therapy for PI3Kα-mutated HR+/HER2- breast cancer across lines, with a safety profile enabling combinations — widening addressable market beyond 2L .
• Risk checks: Zero revenue cadence, trial execution risks, comparator dynamics, and evolving ER/CDK landscape; maintain focus on safety continuity (hyperglycemia, GI), inclusion criteria, and operational scale-up to hit mid-2025 initiation .