Biomea Fusion Inc

Note 1. Organization

Organization

Biomea Fusion, Inc., (the Company), was established in the state of Delaware in August 2017 as Biomea Fusion, LLC. In December 2020, all outstanding membership interests in Biomea Fusion, LLC were converted into equity interests in the Company. The capitalization information included in these unaudited condensed financial statements is consistently presented as if it is that of Biomea Fusion, Inc., even during the prior period when investors held their equity interests in Biomea Fusion, LLC.

The Company is a clinical-stage biopharmaceutical company dedicated to discovering and developing novel covalent small molecules to treat and improve the lives of patients with genetically defined cancers and metabolic diseases. Since its inception in 2017, the Company has built its proprietary FUSIONTM System platform to design and develop a pipeline of novel covalent product candidates.

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information required by GAAP for complete financial statements. These unaudited condensed financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments which are necessary for a fair statement of the Company’s financial information. The unaudited interim results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other interim period or for any other future year.

The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2024.

Liquidity and Capital Resources

The Company has incurred net operating losses and negative cash flows from operations since its inception and had an accumulated deficit of $287.9 million at March 31, 2024. As of March 31, 2024, the Company had cash, cash equivalents, and restricted cash of $145.3 million. Management believes that the existing financial resources are not sufficient to continue operating activities for at least one year past the issuance date of these unaudited condensed financial statements. The Company’s ability to continue as a going concern will require the Company to raise additional capital to fund the Company's operations through public or private equity offering, debt financings, collaborations and licensing arrangements or other sources. There can be no assurance that additional financing will be available to the Company or that such financing, if available, will be available on terms acceptable to the Company. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.

The Company has historically financed its operations primarily through the sale of convertible preferred stock and common stock and the issuance of unsecured promissory notes. To date, none of the Company’s product candidates have been approved for sale, and the Company has not generated any revenue since inception. Management expects operating losses to continue and increase for the foreseeable future, as the Company continues clinical development activities for its lead product candidate and advances the preclinical and clinical development of other product candidates. The Company’s prospects are subject to risks, expenses and uncertainties frequently encountered by companies in the biotechnology industry as discussed below. There can be no assurance that in the event the Company requires additional financing, such financing will be available on terms which are favorable or at all. Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending would have a material adverse effect on the Company’s ability to achieve its intended business objectives.

Note 2. Summary of Significant Accounting Policies

There have been no significant changes to the significant accounting policies during the three months ended March 31, 2024, as compared to those included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2024.

Recent Accounting Pronouncements - Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”) which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses, including for single reportable segment entities. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the disclosure requirements related to the new standard.

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes - Improvements to Income Tax Disclosures” requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company is currently evaluating the impact of the adoption of this standard on the Company’s financial statements and related disclosures.

Note 3. Fair Value Measurement

The Company measures and reports certain financial instruments as assets and liabilities at fair value on a recurring basis. The following tables set forth the fair value of the Company’s financial assets, which consist of cash equivalents and marketable securities measured and recognized at fair value (in thousands):

The Company evaluates transfers between levels at the end of each reporting period. There wereno transfers between Levels 1, 2 and 3 during thethree months ended March 31, 2024 and 2023. As of March 31, 2024 and December 31, 2023, there wereno financial instruments classified as Level 2 or Level 3. There have beenno realized gains or losses recognized for the periods presented. Unrealized gains and losses are included in accumulated other comprehensive loss within stockholders' equity on the balance sheet.

There wereno investments as of March 31, 2024 and December 31, 2023, as such, no allowance for credit losses has been recognized as of March 31, 2024. During thethree months ended March 31, 2024 and 2023, the Company didnot recognize any impairment losses related to investments.

Note 4. Balance Sheet Components

Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):

Depreciation expense for the three months ended March 31, 2024 was$0.4 million. Depreciation expense for the three months ended March 31, 2023 was$0.3 million.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

Note 5. Leases

Operating Leases

The Company leases its headquarters with its main offices and laboratory facilities in Redwood City and San Carlos, California, pursuant to leases which expire in 2025 and 2027, respectively. The San Carlos lease includes a renewal option for an additional five years until January 2032, which has been included in the determination of the right-of-use as of March 31, 2024.

In November 2023, the Company submitted a claim of approximately $1.5 million against tenant improvement allowance reimbursement in connection with its operating lease for lab space located at 1585 Industrial Road, San Carlos, California which was received in January 2024. Of the total reimbursement, approximately $0.4 million constitutes a loan required to be repaid in the form of additional lease payments over the remaining original lease term at an annual interest rate of 7%. Upon receipt of the reimbursement, the Company remeasured the lease liability and related right-of-use asset.

The following table summarizes the lease costs and cash paid for the Company’s leases (in thousands):

The maturities of lease liabilities as of March 31, 2024 were as follows (in thousands):

Supplemental balance sheet information related to leases was as follows:

Note 6. Capital Structure

Common Stock

The Company’s amended and restated certificate of incorporation authorizes the Company to issue up to 300,000,000 shares of common stock with a par value of $0.0001 per share and 10,000,000 shares of preferred stock with a par value of $0.0001 per share.

Common stockholders are entitled to dividends when and if declared by the Company’s Board of Directors and after any preferred share dividends are fully paid. The holder of each share of common stock is entitled to one vote. As of March 31, 2024, no dividends have been declared.

Public Offering

In April 2023, pursuant to a registration statement on Form S-3, the Company issued and sold 5,750,000 shares of common stock at a public offering price of $30.00 per share in an underwritten public offering. The net proceeds to the Company from the offering were approximately $161.8 million, after deducting underwriting discounts and commissions and offering costs of approximately $11.0 million.

Note 7. Stock-Based Compensation

Effective January 1, 2024, the number of shares of common stock available under the 2021 Equity Incentive (the “2021 Plan”) Plan increased by 1,798,926 shares pursuant to the evergreen provision. As of March 31, 2024,770,983 shares of common stock remained available for issuance under the 2021 Plan. Effective January 1, 2024, the number of shares of common stock available under the 2021 Employee Stock Purchase Plan (the "ESPP") increased by 359,785 shares pursuant to the evergreen provision of the ESPP. As of

March 31, 2024,811,671 shares of common stock remained available for issuance under the ESPP. As of March 31, 2024,1,993,000 shares of common stock remained available for issuance under the 2023 Inducement Equity Plan as adopted in November 2023.

Stock-Based Compensation Expense

Total stock-based compensation expense related to the Company’s equity incentive plan and employee stock purchase plan was recorded in the statements of operations and allocated as follows (in thousands):

As of March 31, 2024, there was$42.9 million of total unrecognized stock-based compensation expense which is expected to be recognized over a weighted-average period of 2.6 years.

Stock Options

The following table summarizes stock option activity:

Restricted Stock

The following table summarizes the restricted stock activity:

Note 8. Commitments and Contingencies

Legal Proceedings

The Company, from time to time, may be party to litigation arising in the ordinary course of business. The Company records a liability for such matters when it is probable that future losses will be incurred and that such losses can be reasonably estimated. Significant judgment by the Company is required to determine both probability and the estimated amount. Management is currently not aware of any legal matters that could have a material adverse effect on its financial position, results of operations or cash flows.

Indemnification

The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the fair value of these agreements is not material.

The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ insurance.

Note 9. Net Loss Per Share

Basic and diluted net loss per share is computed by dividing net loss by the weighted-average number of common stock outstanding for the period. For periods in which the Company generated a net loss, the Company does not include the potential impact of dilutive securities in diluted net loss per share, as the impact of these items is anti-dilutive.

The following equity instruments were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented: