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Avidity Biosciences, Inc. (RNA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025: Collaboration revenue was $1.57M and EPS was -$0.90; operating expenses rose to $133.1M, reflecting scale-up across late-stage programs and commercial build .
  • Versus consensus, revenue missed ($1.57M vs $2.62M*) and EPS was slightly below ($-0.90 vs $-0.88*); miss driven by timing/level of collaboration revenue recognition (Lilly revenues recognized prior year, none this year) .
  • Guidance/operational outlook: del-zota BLA remains on track for year-end 2025; del-brax accelerated approval pathway updates targeted for Q2, with topline dose-escalation data subsequently positive in June; HARBOR (DM1) enrollment completion targeted mid-2025 .
  • Liquidity: ~$1.38B cash, cash equivalents and marketable securities supports runway into mid-2027 and commercial preparations for potential first U.S. launch in 2026 .

Note: Wall Street consensus values from S&P Global Capital IQ. (*Values retrieved from S&P Global)

What Went Well and What Went Wrong

What Went Well

  • Selected consistent dose for del-zota (5 mg/kg q6w) supported by Phase 1/2 EXPLORE44 topline data showing ~25% of normal dystrophin, ~40% exon 44 skipping, and >80% reduction in CK; aligns with FDA’s accelerated approval interactions .
  • Regulatory momentum: accelerated approval pathway discussions for del-brax and Phase 3 FORWARD design; June updates confirmed U.S. accelerated pathway open and Phase 3 initiation .
  • Strong balance sheet with ~$1.4B enabling execution across three late-stage programs and commercialization build; runway into mid-2027 .

What Went Wrong

  • Revenue declined YoY ($1.57M vs $3.54M) as prior-year collaboration revenues from Lilly did not recur; this contributed to the top-line miss vs consensus .
  • Operating expenses increased (R&D $99.5M; G&A $33.6M) due to advancement of del-desiran, del-brax, del-zota and expansion of research/commercial capabilities, driving larger net loss (-$115.8M) .
  • No Q1 2025 earnings-call transcript filed; reliance on other forums (e.g., BofA conference) for live commentary limited visibility into typical call Q&A dynamics .

Financial Results

Sequential trend: Q3 2024 → Q4 2024 → Q1 2025

MetricQ3 2024Q4 2024Q1 2025
Collaboration Revenue ($USD Millions)$2.34 $2.97 $1.57
Total Operating Expenses ($USD Millions)$100.47 $123.96 $133.09
Net Loss ($USD Millions)$(80.40) $(102.26) $(115.77)
EPS (Basic & Diluted) ($USD)$(0.65) $(0.80) $(0.90)
R&D Expense ($USD Millions)$77.20 $95.63 $99.49
G&A Expense ($USD Millions)$23.27 $28.34 $33.60

YoY comparison: Q1 2024 vs Q1 2025

MetricQ1 2024Q1 2025
Collaboration Revenue ($USD Millions)$3.54 $1.57
Total Operating Expenses ($USD Millions)$80.73 $133.09
Net Loss ($USD Millions)$(68.86) $(115.77)
EPS (Basic & Diluted) ($USD)$(0.79) $(0.90)

Balance Sheet and KPIs

KPIQ3 2024Q4 2024Q1 2025
Cash, Cash Equivalents & Marketable Securities ($USD Billions)$1.589 $1.501 $1.380
Deferred Revenue – Current ($USD Millions)$19.66 $20.99 $13.98
Weighted-average Shares (Millions)123.38 128.50 129.23

Note: Segment breakdown not applicable; revenue primarily collaboration-based .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
del-zota BLA submissionYear-end 2025Plan to submit by YE 2025 On track for YE 2025 Maintained
del-brax regulatory pathwayQ2 2025Pursue potential accelerated approval; Q2 alignment expected Plan to share key U.S. accelerated path updates; initiate Phase 3; topline dose escalation cohorts in Q2 Clarified/Advanced
del-brax accelerated approval (U.S.)2025–2026N/AConfirmed accelerated approval pathway open; BLA planned H2 2026 New/Raised
HARBOR (DM1) enrollmentMid-2025On track for mid-2025 completion On track for mid-2025 Maintained
Cash runwayThrough mid-2027N/ARunway into mid-2027 New/Extended
Commercial launch prep2026 (U.S. first launch)Preparing for launches starting 2026 On track for first U.S. launch in 2026 Maintained

Earnings Call Themes & Trends

Note: No Q1 2025 earnings-call transcript filed; management commentary derived from Q1 press materials and May BofA conference .

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Regulatory/Accelerated ApprovalDel-brax accelerated path being pursued; Phase 3 design alignment targeted Q2 Del-brax accelerated path updates in Q2; subsequently confirmed path open; FORWARD Phase 3 initiated Strengthening
DM1 (del-desiran) Phase 3 HARBOREnrollment ongoing; BTD; global alignment achieved Enrollment on track for mid-2025; Japan ODD granted Advancing
DMD44 (del-zota) efficacyPositive 5 mg/kg data; OLE enrollment progressing Topline Phase 1/2 data with consistent dystrophin/CK improvements; dose selected 5 mg/kg q6w; BLA YE25 De-risked
Supply chain/manufacturingN/AStrategy to manufacture regionally (U.S./EU/Asia), avoid China; redundancy in CDMO network Building capabilities
Technology innovationsNext-gen delivery; precision cardiology expansion Continued platform reproducibility across programs Sustained focus
Macro/FDA interactionsN/AStable division interactions; timely reviews noted; advocacy for FDA’s gold standard Neutral-to-positive

Management Commentary

  • “With a strong balance sheet and a cash balance of approximately $1.4 billion at the end of the first quarter, we are well positioned to execute across all of our late-stage clinical trials as we begin to set the stage for our planned first commercial launch in 2026.” — Mike MacLean, CFO .
  • “We look forward to delivering on multiple milestones this year and remain on track to share several key regulatory updates for del-brax in the second quarter… We are also planning to share topline del-brax data from the FORTITUDE dose escalation cohorts in the second quarter.” — Sarah Boyce, CEO .
  • “Del-zota… demonstrated consistent, statistically significant improvements… Based on our interactions with FDA on accelerated approval, we believe dystrophin data from EXPLORE44 combined with safety from EXPLORE44-OLE will support our planned BLA submission at the end of this year.” — Sarah Boyce .
  • “We have seen no changes to the people we have worked with [at FDA]… they have consistently hit every timeline.” — Sarah Boyce (BofA conference) .
  • “We do manufacture a lot of drug in the U.S. We do not manufacture in China… long-term strategy… manufacture drug in the U.S. for the U.S., Europe for Europe, and Asia via an Asian hub.” — Sarah Boyce (BofA conference) .

Q&A Highlights

  • FDA interactions and regulatory climate: Management reports stable, collaborative interactions in Division 1; advocacy for maintaining FDA’s gold standard despite macro staffing changes .
  • FSHD program detail: Dose selection of del-brax at 2 mg/kg q6w based on circulating biomarker/CK equivalence at 2 and 4 mg/kg and need to keep DUX4 suppressed; favorable safety with no serious or severe AEs and no discontinuations .
  • Accelerated approval for FSHD: Two-part process with FDA covering full-approval Phase 3 design and a detailed accelerated path discussion; confidence unchanged or increased as discussions progressed .
  • DM1 Phase 3 HARBOR: Rapid functional improvements (vHOT significant by 6 weeks; QMT by 6 months) and durability in OLE support full approval strategy; study designed with payer input for reimbursement alignment .
  • Supply chain strategy: Regional manufacturing for risk mitigation and scalability; no China manufacturing; established CDMOs for antibody/siRNA conjugation .

Estimates Context

MetricConsensus (Q1 2025)Actual (Q1 2025)Surprise
Revenue ($USD)$2.62M*$1.57M Miss*
EPS ($USD)$(0.88)*$(0.90) Slight miss*
EPS – # of Estimates11*N/A—
Revenue – # of Estimates8*N/A—

Driver: Collaboration revenues primarily from BMS; prior-year revenues included Lilly which did not recur, contributing to the miss .
Note: Wall Street consensus values from S&P Global Capital IQ. (*Values retrieved from S&P Global)

Key Takeaways for Investors

  • Near-term catalysts: Formal Q2 del-brax regulatory alignment updates and FORTITUDE dose-escalation topline (now positive); plus YE25 del-zota BLA — material stock drivers on regulatory clarity and efficacy durability .
  • Execution de-risking: Platform reproducibility across DMD44, DM1, FSHD; clear dose selections and aligned registrational paths increase probability of regulatory success .
  • Liquidity sufficiency: ~$1.38B cash/marketables and runway into mid-2027 support multi-program Phase 3s and commercial build without near-term financing risk .
  • Revenue volatility: Collaboration revenue timing can cause quarter-to-quarter variability; investors should focus on clinical/regulatory milestones rather than near-term P&L revenue .
  • FSHD thesis: Confirmed U.S. accelerated pathway and Phase 3 FORWARD initiation position del-brax as potential first approved therapy; biomarker strategy (KHDC1L) central to accelerated package .
  • DM1 thesis: HARBOR design aligned globally; rapid and durable functional improvements seen in earlier studies increase confidence in 2026 approval potential .
  • Commercial readiness: 2026 first U.S. launch preparations ongoing; regional manufacturing and global build-out underpin scalability .

Additional Source Documents Read:

  • Q1 2025 8-K/Press Release with full financials and highlights .
  • Prior quarters: Q4 2024 8-K/Press Release ; Q3 2024 8-K/Press Release .
  • Relevant Q1-period releases: del-zota topline (Mar 17) ; DM1 Japan ODD (Apr 8) .
  • Subsequent confirmation of del-brax accelerated pathway and Phase 3 initiation (Jun 9) .