BIODESIX INC [BDSX] Filings

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10-Q 1 bdsx-20230930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39659

BIODESIX, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	20-3986492
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2970 Wilderness Place, Suite 100 Boulder, Colorado 80301	80301
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (303) 417-0500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

BDSX

The NASDAQ Global Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of November 1, 2023, the Registrant had 90,476,295 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Balance Sheets as of September 30, 2023 and December 31, 2022	1
	Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022	2
	Condensed Statements Stockholders' (Deficit) Equity for the Three and Nine Months Ended September 30, 2023 and 2022	3
	Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022	5
	Notes to Condensed Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39

PART II.	OTHER INFORMATION	40
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
	Signature	42

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties, including but not limited to those set forth under the caption “Special Note Regarding Forward-Looking Statements” and Item 1A “Risk Factors” of Part II of this Quarterly Report on Form 10-Q and those discussed in our other filings with the Securities and Exchange Commission (SEC), including the risks described in Item 1A “Risk Factors” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed on March 6, 2023. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future financial condition, results of operations, business strategy and plans, and objectives of management for future operations, as well as statements regarding industry trends, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “should,” “will” or the negative of these terms or other similar expressions.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, factors, and assumptions described under the section titled “Risk Factors” in this Report and in the section entitled “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2022, regarding, among other things:

•

our inability to achieve or sustain profitability;

•

our unaudited financial statements include a statement that there is a substantial doubt about our ability to continue as a going concern, and a continuation of negative financial trends could result in our inability to continue as a going concern;

•

our ability to attain significant market acceptance among payers, providers, clinics, patients, and biopharmaceutical companies for our diagnostic tests;

•

difficulties managing our growth, which could disrupt our operations;

•

failure to retain sales and marketing personnel, and failure to increase our sales and marketing capabilities or develop broad awareness of our diagnostic tests to generate revenue growth;

•

failure to maintain our current relationships, or enter into new relationships, with biopharmaceutical companies;

•

significant fluctuation in our operating results, causing our operating results to fall below expectations or any guidance we provide;

•

product performance and reliability to maintain and grow our business;

•

third-party suppliers, including courier services, contract manufacturers and single source suppliers, making us vulnerable to supply problems and price fluctuations;

•

the impact of a pandemic, epidemic, or outbreak of an infectious disease in the United States (U.S.) or worldwide, including the COVID-19 pandemic on our business;

•

natural or man-made disasters and other similar events negatively impacting our business, financial condition, and results of operations;

•

failure to offer high-quality support for our diagnostic tests, which may adversely affect our relationships with providers and negatively impact our reputation among patients and providers;

•

our inability to continue to innovate and improve our diagnostic tests and services we offer;

•

security or data privacy breaches or other unauthorized or improper access;

•

significant disruptions in our information technology systems;

•

the incurrence of substantial liabilities and limiting or halting the marketing and sale of our diagnostic tests due to product liability lawsuits;

•

our inability to compete successfully with competition from many sources, including larger companies;

•

performance issues, service interruptions or price increases by our shipping carriers and warehousing providers;

•

cost-containment efforts of our customers, purchasing groups and integrated delivery networks having a material adverse effect on our sales and profitability;

•

potential effects of litigation and other proceedings;

•

general economic and financial market conditions;

•

our ability to attract and retain key personnel;

•

current and future debt financing placing restrictions on our operating and financial flexibility;

•

our need to raise additional capital to fund our existing operations, develop our platform, commercialize new diagnostic tests, or expand our operations;

•

the acquisition of other businesses, which could require significant management attention;

•

the uncertainty of the insurance coverage and reimbursement status of newly approved diagnostic tests;

•

future healthcare reform measures that could hinder or prevent the commercial success of our diagnostic tests;

•

compliance with anti-corruption, anti-bribery, anti-money laundering and similar laws;

•

compliance with healthcare fraud and abuse laws;

•

our ability to develop, receive regulatory clearance or approval or certification for, and introduce new diagnostic tests or enhancements to existing diagnostic tests that will be accepted by the market in a timely manner;

•

failure to comply with ongoing FDA or other domestic and foreign regulatory authority requirements, or unanticipated problems with our diagnostic tests, causing them to be subject to restrictions or withdrawal from the market;

•

future product recalls;

•

legal proceedings initiated by third parties alleging that we are infringing, misappropriating, or otherwise violating their intellectual property rights, the outcome of which would be uncertain;

•

the volatility of the trading price of our common stock;

•

inaccurate estimates or judgments relating to our critical accounting policies, which could cause our operating results to fall below the expectations of securities analysts and investors; and

•

other risks, uncertainties and factors, including those set forth under "Risk Factors".

These risks are not exhaustive. Other sections of this Quarterly Report on Form 10-Q may include additional factors that could harm our business and financial performance. New risk factors may emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q or to conform these statements to actual results or to changes in our expectations.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference and have filed as exhibits with the understanding that our actual future results, levels of activity, performance and achievements may be different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

BIODESIX, INC.

Condensed Balance Sheets

(in thousands, except share data)



	September 30, 2023			December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	19,841		$	43,088
Accounts receivable, net of allowance for doubtful accounts of $57 and $118		5,777			5,065
Other current assets		3,268			5,181
Total current assets		28,886			53,334
Non‑current assets
Property and equipment, net		25,395			5,848
Intangible assets, net		8,416			9,797
Operating lease right-of-use assets		2,093			2,973
Goodwill		15,031			15,031
Other long-term assets		6,965			5,923
Total non‑current assets		57,900			39,572
Total assets	$	86,786		$	92,906

Liabilities and Stockholders' (Deficit) Equity
Current liabilities
Accounts payable	$	2,904		$	1,685
Accrued liabilities		6,946			8,218
Deferred revenue		659			962
Current portion of operating lease liabilities		1,113			1,543
Current portion of contingent consideration		19,307			10,341
Current portion of notes payable		50			49
Other current liabilities		1,670			41
Total current liabilities		32,649			22,839
Non‑current liabilities
Long‑term notes payable, net of current portion		24,950			25,004
Long-term operating lease liabilities		24,636			5,254
Contingent consideration		5,182			18,645
Other long-term liabilities		815			558
Total non‑current liabilities		55,583			49,461
Total liabilities		88,232			72,300
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.001 par value, 5,000,000 authorized; 0 (2023 and 2022) issued and outstanding		—			—
Common stock, $0.001 par value, 200,000,000 authorized; 88,315,802 (2023) and 77,614,358 (2022) shares issued and outstanding		88			78
Additional paid‑in capital		408,893			387,948
Accumulated deficit		(410,427	)		(367,420	)
Total stockholders' (deficit) equity		(1,446	)		20,606
Total liabilities and stockholders' (deficit) equity	$	86,786		$	92,906

The accompanying Notes are an integral part of these unaudited condensed financial statements.

BIODESIX, INC.

Condensed Statements of Operations

(in thousands, except per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenues	$	13,491		$	11,107		$	34,419		$	28,605
Operating expenses:
Direct costs and expenses		3,229			3,633			9,636			10,848
Research and development		1,938			2,970			8,099			9,537
Sales, marketing, general and administrative		15,496			15,114			51,136			44,836
Impairment loss on intangible assets		—			—			20			81
Total operating expenses		20,663			21,717			68,891			65,302
Loss from operations		(7,172	)		(10,610	)		(34,472	)		(36,697	)
Other (expense) income:
Interest expense		(2,386	)		(3,039	)		(7,207	)		(5,522	)
Loss on extinguishment of liabilities, net		—			(52	)		—			(3,004	)
Change in fair value of warrant liability, net		(1,393	)		—			(1,332	)		—
Other income, net		2			2			4			114
Total other expense		(3,777	)		(3,089	)		(8,535	)		(8,412	)

Net loss	$	(10,949	)	$	(13,699	)	$	(43,007	)	$	(45,109	)
Net loss per share, basic and diluted	$	(0.14	)	$	(0.34	)	$	(0.55	)	$	(1.22	)
Weighted-average shares outstanding, basic and diluted		79,709			40,448			78,672			36,953

The accompanying Notes are an integral part of these unaudited condensed financial statements.

BIODESIX, INC.

Condensed Statements of Stockholders' (Deficit) Equity

(in thousands)


	Common Stock				Additional Paid‑In			Accumulated			Total Stockholders' (Deficit)
	Shares		Amount		Capital			Deficit			Equity
Balance ‑ December 31, 2022		77,614	$	78	$	387,948		$	(367,420	)	$	20,606
Issuance of common stock, net		—		—		(61	)		—			(61	)
Issuance of common stock under employee stock purchase plan		270		—		420			—			420
Exercise of stock options		9		—		6			—			6
Release of restricted stock units		86		—		—			—			—
Share‑based compensation		—		—		2,281			—			2,281
Net loss		—		—		—			(18,702	)		(18,702	)
Balance ‑ March 31, 2023		77,979		78		390,594			(386,122	)		4,550
Exercise of stock options		107		—		81			—			81
Release of restricted stock units		525		1		—			—			1
Issuance of warrants		—		—		674			—			674
Share‑based compensation		—		—		1,057			—			1,057
Net loss		—		—		—			(13,356	)		(13,356	)
Balance - June 30, 2023		78,611		79		392,406			(399,478	)		(6,993	)
Issuance of common stock, net		9,455		9		15,307			—			15,316
Issuance of common stock under employee stock purchase plan		167		—		223			—			223
Exercise of stock options		6		—		3			—			3
Release of restricted stock units		77		—		—			—			—
Share‑based compensation		—		—		954			—			954
Net loss		—		—		—			(10,949	)		(10,949	)
Balance - September 30, 2023		88,316	$	88	$	408,893		$	(410,427	)	$	(1,446	)

The accompanying Notes are an integral part of these unaudited condensed financial statements.


	Common Stock				Additional Paid‑In		Accumulated			Total Stockholders' (Deficit)
	Shares		Amount		Capital		Deficit			Equity
Balance ‑ December 31, 2021		30,790	$	31	$	321,669	$	(301,973	)	$	19,727
Issuance of common stock, net		709		1		1,416		—			1,417
Issuance of common stock under employee stock purchase plan		99		—		202		—			202
Issuance of common stock for deferred offering costs		184		—		600		—			600
Exercise of stock options		107		—		75		—			75
Share‑based compensation		—		—		1,346		—			1,346
Net loss		—		—		—		(15,586	)		(15,586	)
Balance - March 31, 2022		31,889		32		325,308		(317,559	)		7,781
Issuance of common stock, net		7,928		8		14,321		—			14,329
Exercise of stock options		24		—		17		—			17
Release of restricted stock units		138		—		—		—			—
Share‑based compensation		—		—		1,368		—			1,368
Net loss		—		—		—		(15,824	)		(15,824	)
Balance ‑ June 30, 2022		39,979		40		341,014		(333,383	)		7,671
Issuance of common stock under employee stock purchase plan		95		—		153		—			153
Issuance of common stock, net		924		1		1,744		—			1,745
Exercise of stock options		93		—		57		—			57
Release of restricted stock units		95		—		—		—			—
Share‑based compensation		—		—		1,170		—			1,170
Net loss		—		—		—		(13,699	)		(13,699	)
Balance ‑ September 30, 2022		41,186	$	41	$	344,138	$	(347,082	)	$	(2,903	)

The accompanying Notes are an integral part of these unaudited condensed financial statements.

BIODESIX, INC.

Condensed Statements of Cash Flows

(in thousands)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities
Net loss	$	(43,007	)	$	(45,109	)
Adjustments to reconcile net loss to net cash, cash equivalents, and restricted cash used in operating activities
Depreciation and amortization		2,351			2,699
Amortization of lease right-of-use assets		1,851			1,499
Loss on extinguishment of liabilities, net		—			3,004
Share‑based compensation expense		4,292			3,884
Change in fair value of warrant liability, net		1,332			—
Provision for doubtful accounts		467			(27	)
Accrued interest, amortization of debt issuance costs and other		3,954			5,011
Inventory excess and obsolescence		115			837
Impairment loss on intangible assets		20			81
Changes in operating assets and liabilities:
Accounts receivable		(1,178	)		(765	)
Other current assets		1,798			1,868
Other long-term assets		(26	)		(3,645	)
Accounts payable and other accrued liabilities		(247	)		(646	)
Deferred revenue		(395	)		(985	)
Tenant improvement allowances received		18,323			—
Current and long-term operating lease liabilities		(237	)		(730	)
Net cash and cash equivalents and restricted cash used in operating activities		(10,587	)		(33,024	)

Cash flows from investing activities
Purchase of property and equipment		(19,935	)		(1,368	)
Patent costs and intangible asset acquisition, net		(126	)		(179

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