Executive Summary / Key Takeaways

• Day One Biopharmaceuticals is rapidly establishing OJEMDA as a foundational therapy in relapsed/refractory pediatric low-grade glioma (pLGG), demonstrating consistent double-digit revenue and prescription growth since its April 2024 launch.
• The company's differentiated brain-penetrant RAF kinase inhibitor technology for OJEMDA, supported by compelling 2-year FIREFLY-1 data showing durable responses and reversible growth velocity impacts, underpins its competitive positioning and growing physician confidence.
• Day One has raised its full-year 2025 net product revenue guidance for OJEMDA to $145 million to $150 million, reflecting strong market momentum, increasing prescriber depth, and robust patient persistence.
• A strong balance sheet with $451.6 million in cash and no debt provides significant flexibility to advance its pipeline, including the pivotal FIREFLY-2 trial for frontline pLGG and the novel DAY301 ADC program, without immediate reliance on external financing.
• Upcoming catalysts, including 3-year FIREFLY-1 data and Ipsen (IPSEY)'s anticipated mid-2026 EMA approval decision for OJEMDA, are poised to further enhance the investment thesis and expand market opportunities.

A New Dawn in Pediatric Oncology: Setting the Scene for Day One Biopharmaceuticals

Day One Biopharmaceuticals, Inc. (DAWN) is a commercial-stage biopharmaceutical company dedicated to developing and commercializing targeted therapies for life-threatening diseases across all age groups. Founded in November 2018, Day One has strategically built its pipeline through focused in-licensing, culminating in the FDA approval and subsequent commercialization of its flagship product, OJEMDA (tovorafenib). The company's overarching strategy is to identify, acquire, and develop potential first- or best-in-class programs, particularly in oncology, with a strong emphasis on addressing unmet needs in pediatric populations. This mission is deeply embedded in its operational approach, aiming to improve outcomes for patients from the "Day One" of their diagnosis.

The biopharmaceutical industry, particularly in oncology, is characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary and novel products. Day One operates within this dynamic landscape, distinguishing itself through a specialized focus on genetically defined cancers and a commitment to developing brain-penetrant therapies. This niche strategy positions Day One as an agile innovator, contrasting with the broader, more diversified portfolios of larger pharmaceutical companies.

Technological Edge: Brain-Penetrant Kinase Inhibition and Novel ADCs

Day One's core technological differentiation lies in its development of highly selective, brain-penetrant kinase inhibitors and novel Antibody Drug Conjugates (ADCs). OJEMDA (tovorafenib) exemplifies this, functioning as an oral, brain-penetrant, type II pan-rapidly accelerated fibrosarcoma (RAF) kinase inhibitor. This brain-penetrant property is a critical advantage for treating central nervous system tumors like pLGG, where many therapies struggle to cross the blood-brain barrier effectively.

The tangible benefits of OJEMDA's technology are evident in its clinical performance. The 2-year follow-up data from the pivotal FIREFLY-1 study, now included in OJEMDA's label, demonstrated a median duration of response of 18 months, an increase from 13 months previously reported. Crucially, this data also showed that growth velocity decreases, a common concern in pediatric treatments, were reversible, with nearly all patients demonstrating catch-up growth post-treatment. This specific evidence of durable efficacy combined with a manageable and reversible safety profile, including once-weekly dosing, provides a compelling value proposition for physicians and patients. The "so what" for investors is clear: this differentiated profile supports strong physician confidence, drives patient persistence on therapy, and helps establish a competitive moat in a specialized, underserved market.

Beyond OJEMDA, Day One is advancing DAY301, a novel Antibody Drug Conjugate (ADC) targeting protein-tyrosine kinase 7 (PTK7). This program utilizes a polysarcosine linker with exatecan as a payload, featuring a drug-antibody ratio of eight. Management believes DAY301 represents a "first and best-in-class opportunity" in the PTK7 ADC space, building on prior proof-of-principle for PTK7 as a viable oncology target. The strategic intent behind DAY301 is to leverage its innovative linker-payload combination to achieve a superior therapeutic index compared to earlier PTK7-targeted agents, which faced limitations despite demonstrating efficacy. This technological pursuit aims to expand Day One's portfolio into adult solid tumors with high PTK7 expression, diversifying its revenue streams and long-term growth potential.

Competitive Landscape and Strategic Positioning

Day One operates in a highly competitive biopharmaceutical market. Its direct competitors include companies like Blueprint Medicines (BPMC), Eli Lilly (LLY), Pfizer (PFE), and Novartis (NVS), all of whom have oncology portfolios that include targeted therapies. While larger players like Eli Lilly, Pfizer, and Novartis possess significantly greater financial resources, broader pipelines, and established global distribution networks, Day One carves out its niche through specialized innovation and a focused approach.

Day One's primary competitive advantage stems from OJEMDA's unique profile in pLGG. OJEMDA is the only FDA-approved systemic therapy for relapsed/refractory BRAF-altered pLGG, offering once-weekly dosing. This differentiates it from existing therapies, including off-label uses of MEK inhibitors or first-generation BRAF inhibitors like dabrafenib and trametinib (Novartis), which are approved for BRAF V600E pLGG (a subset of 10-20% of BRAF-altered pLGG patients). While dabrafenib/trametinib are approved for BRAF V600E pLGG, there is no clear standard of care in the second-line setting for the broader 75-80% of BRAF fusion pLGG patients, where OJEMDA aims to establish itself. The conservative nature of pediatric oncologists, who carefully weigh long-term effects, further underscores the importance of OJEMDA's demonstrated durable efficacy and reversible growth velocity impacts in building prescriber confidence.

In the ADC space, DAY301 faces competition from other PTK7-targeted ADCs, such as Sichuan Kelun Pharmaceutical Research Institute's SKB51 and Eli Lilly's LY4175408, both with topoisomerase-1 payloads. Notably, Profound Bio (acquired by Genmab AS (GMAB)) discontinued its PTK7-targeted ADC, PRO1107, in September 2025 due to benefit-risk balance, potentially validating Day One's thesis for a superior therapeutic index with DAY301's specific design. Day One's exclusive worldwide rights (excluding Greater China) to DAY301 provide a strong foundation for its development and commercialization.

Financial Performance and Operational Momentum

Day One Biopharmaceuticals has demonstrated robust commercial execution since the launch of OJEMDA. For the third quarter of 2025, the company reported net product revenue of $38.5 million, marking a significant 15% quarter-over-quarter increase and its strongest quarter for both total revenue and sequential growth. Year-to-date net product revenue for OJEMDA reached $102.6 million, an 89% increase over full-year 2024. This performance was driven by an 18% quarter-over-quarter increase in total prescriptions to over 1,200, and new patient starts accelerating by almost 20%.

For the first time in Q3 2025, OJEMDA revenue surpassed the combined cost of sales and selling, general, and administrative (SG&A) expenses, highlighting the scalability of its operating model.

The company's financial discipline is evident in its operating expenses. Total operating expenses for Q3 2025 were $59.6 million, including $9.6 million in noncash stock-based compensation, representing a 9% decrease from Q2 2025. This reflects a strategic approach to capital allocation, prioritizing high-return investments. Research and development expenses decreased by $58.7 million for the nine months ended September 30, 2025, primarily due to lower license-related payments ($4 million milestone for XOMA (XOMA) in 2025 versus $55 million upfront for MabCare and $5 million amendment for Viracta in 2024). Selling, general, and administrative expenses saw a modest increase of $0.7 million over the same period, driven by commercial launch activities.

Liquidity remains a significant strength. Day One ended Q3 2025 with $451.6 million in cash, cash equivalents, and short-term investments, with no debt. Management believes this capital is sufficient to fund operations for at least twelve months from the 10-Q filing date (November 4, 2025), reducing reliance on external financing.

Net cash used in operating activities for the nine months ended September 30, 2025, was $89.6 million, indicating a burn rate that is being managed effectively.

Outlook and Strategic Initiatives

Day One has raised the low end of its full-year 2025 net product revenue guidance for OJEMDA to a new range of $145 million to $150 million. This revised guidance signals management's confidence in the launch trajectory and the durability of OJEMDA's growth, assuming continued double-digit sequential growth in Q4. Key assumptions underpinning this outlook include sustained patient persistence on therapy, a steady pace of new patient starts, and consistent payer coverage, with approximately 90% of pLGG patients receiving initial approval. The company anticipates some relief on gross-to-net deductions in Q4 2025, following a temporary increase in Q3 due to a July price adjustment and the favorable CMS pediatric designation.

Strategic initiatives are well underway to expand OJEMDA's market and advance the pipeline. The global Phase III FIREFLY-2 trial, evaluating tovorafenib as a front-line therapy in pLGG, remains on track for full enrollment in the first half of 2026. This trial is critical for potentially expanding OJEMDA's indication beyond the relapsed/refractory setting into an earlier treatment line in the U.S. Internationally, Day One's partner, Ipsen, received EMA acceptance for its Marketing Authorization Application for tovorafenib in March 2025, with an anticipated approval decision in mid-2026, opening significant market opportunities in Europe.

For DAY301, dose escalation is ongoing in the Phase Ia trial, with the first dose cohort cleared in January 2025. The company plans to backfill patients into dose cohorts and then move to dose expansion, employing diagnostics to define PTK7 expression. This methodical approach aims to de-risk the program and identify optimal histologies for further development. Day One also maintains an active business development strategy, seeking to in-license or acquire additional high-value programs that complement its expertise and financial strength.

Risks and Challenges

Despite strong momentum, Day One faces several inherent risks. As a commercial-stage biopharmaceutical company with a limited operating history, its near-term revenues are highly dependent on OJEMDA's commercial success. Clinical trial uncertainty remains, as results from earlier studies may not predict later-stage outcomes, and the FIREFLY-2 trial, while progressing, still carries the risk of not meeting its endpoints. The conservative nature of pediatric oncologists means that widespread adoption, particularly in earlier lines of therapy, will take time and continued education.

Manufacturing and supply chain complexities, including potential impacts from U.S. tariffs on goods from China (where some third-party manufacturers are located) and the proposed BioSecure Act, could increase costs and disrupt supply. Regulatory scrutiny of the accelerated approval pathway, under which OJEMDA was approved, and the recent reversal of the Chevron doctrine by the U.S. Supreme Court, could lead to increased challenges to FDA decisions and potentially impact future regulatory processes. Furthermore, the company's reliance on third parties for clinical trials and manufacturing introduces operational dependencies that could lead to delays or increased costs if not managed effectively.

Conclusion

Day One Biopharmaceuticals is demonstrating compelling progress, driven by the successful commercialization of OJEMDA and a strategically advancing pipeline. The company's core investment thesis is firmly rooted in its ability to deliver differentiated, targeted therapies for underserved patient populations, particularly in pediatric oncology. OJEMDA's strong launch performance, supported by robust clinical data and effective commercial execution, is generating significant revenue and providing a solid financial foundation. The raised 2025 revenue guidance underscores this positive trajectory and the growing confidence in OJEMDA's market penetration and patient persistence.

Looking ahead, the potential expansion of OJEMDA into frontline pLGG through the FIREFLY-2 trial and its anticipated EMA approval in Europe represent substantial catalysts for future growth. Concurrently, the methodical advancement of the DAY301 ADC program highlights Day One's commitment to leveraging its technological expertise for broader oncology indications. While risks associated with clinical development, regulatory scrutiny, and competitive dynamics persist, Day One's strong cash position and disciplined capital allocation strategy provide the necessary resilience to pursue its ambitious goals. For investors, Day One offers a compelling narrative of a focused biotech company translating innovative science into meaningful patient impact and sustainable value creation, with several key milestones on the horizon.