IDEAYA Biosciences, Inc. (IDYA) stock intrinsic value fair value estimate & owner earnings analysis

IDEAYA Biosciences is a clinical-stage cancer drug developer with no approved product. Its most advanced drug, darovasertib, is an oral pill that blocks a protein called PKC and is being developed, together with Pfizer's crizotinib, for metastatic uveal melanoma, a rare eye cancer. The company lists nine drug candidates in total, but only darovasertib has reached registration-stage data. What has happened. In April 2026 the company announced that its registrational OptimUM-02 trial (437 previously untreated patients whose tumours lack the HLA-A*02:01 marker) met its main goal of delaying disease progression. Presentations at the June 2026 ASCO meeting reported median progression-free survival of 6.9 months versus 3.1 months on the comparison treatment. The company says it plans to begin its FDA application in the second half of 2026 under the FDA's real-time review program, and its annual report says the FDA has indicated that progression-free survival data may support an accelerated-approval filing. The annual report also states that there are no FDA-approved therapies for this patient group. In August 2025 Servier paid $210.0 million up front for rights outside the United States and could pay up to $320.0 million in milestones plus royalties in the mid-teens to low-twenties percent of sales outside the United States. Why the numbers are not simply the cash balance. Owner earnings (operating cash flow, less working-capital swings, less stock compensation, less maintenance capital spending) have been negative in every year we could measure, 2019 to 2025, ranging from about minus $1.34 to minus $3.65 per share. Two years are distorted by one-time deals: 2025 was helped by Servier's $210.0 million up-front payment, and 2024 carried a $75.0 million up-front payment to Hengrui Pharma (a China-based drug company) for the rights to IDE849 outside Greater China. Because earnings are negative, we do not use a historical earnings level. Instead we start from the company's liquid assets and subtract the cost of running the business. At June 30, 2026 the company held about $1,242.9 million in cash and marketable securities against about $110.8 million of total liabilities, a net $1,132.1 million. In the first half of 2026 it used $163.4 million of operating cash and recorded $31.2 million of stock compensation, which annualizes to about $389 million a year. Stock compensation is counted as a real cost. Per-share figures use 96.4 million shares outstanding plus about 0.9 million pre-funded warrants (as of February 2026), or 97.25 million. Growth check. Owner earnings per share improved from minus $3.65 in 2024 to minus $1.37 in 2025, but that improvement came from the one-time Servier payment, not from lower spending. We assume no improvement in spending: year one of every case keeps the current annual cost of about $389 million. Bear case, $2.33 per share. Darovasertib does not reach the market in a commercially meaningful way. The company keeps spending at the current rate for two and a half years, through December 2028, while the FDA review, the adjuvant Phase 3 trial (OptimUM-11, planned to start in the first half of 2026) and other programs continue. That spending is worth about $905 million today, leaving about $227 million, or $2.33 per share. We credit no value for the other eight candidates, which are early stage. Base case, $3.36 per share. The same spending through 2028, but darovasertib is approved in the United States for first-line HLA-A*02:01-negative metastatic uveal melanoma with a launch in late 2027. The annual report estimates about 1,500 newly diagnosed US metastatic patients a year and that 60% to 65% are HLA-A*02:01 negative, so we use about 900 patients a year. We assume the drug reaches 15% of them in 2028, 25% in 2029 and 30% from 2030, with about eight months of treatment per patient (in line with the reported 6.9-month median progression-free survival) at a net price of $25,000 per month. The company has not disclosed a price; this and a 35% profit margin after selling costs are our assumptions. Earnings from the product are credited only through 2035, because the company's own patent applications for darovasertib would expire between 2035 and 2045 if granted, and nothing after 2035 is named and evidenced. This adds about $100 million of value today, for a total of about $326 million, or $3.36 per share. We do not credit Servier milestones or royalties in this case because approval outside the United States has not happened. Bull case, $5.19 per share. Approval on the announced timetable, plus stronger uptake: 20% of eligible US patients in 2028, 35% in 2029 and 45% from 2030, worth about $147 million today. We also credit the $100 million of development and regulatory milestones Servier could owe, received around 2028 (about $89 million today), and royalties of 15% on modest sales outside the United States (about $42 million today). Those royalties assume about 1,500 eligible patients a year outside the US. That comes from the low end of the company's worldwide estimate of 4,000 to 5,000 new metastatic patients a year, less about 1,500 in the US, which leaves 2,500, of whom we take 60% as HLA-A*02:01 negative. We assume uptake of 10% in 2029, 20% in 2030 and 30% from 2031 through 2035, at $150,000 of net revenue per patient. The 15% royalty rate and the per-patient revenue are our assumptions. Total is about $505 million, or $5.19 per share. Left out on purpose. The adjuvant and neoadjuvant darovasertib trials, the other eight drug candidates (including the DLL3-targeting antibody-drug conjugate IDE849, the MAT2A drug IDE397 and the PARG drug IDE161) and any milestones beyond $100 million are still in early or ongoing trials without results we can rely on, so they are worth zero here. This is why our values sit below the company's net cash of about $11.64 per share: the cash is being consumed by programs we cannot yet credit. The company guides that its cash lasts into 2030; we treat that as a fact about its spending plans, not as a value. What would make this wrong. The upside case is a much higher price or uptake than we assume, or approval of darovasertib in earlier or wider uses such as the adjuvant setting. The downside is an FDA delay or rejection, or a decision to spend more than $389 million a year. If management cut spending sharply, shareholders would keep more of the cash than our cases show. The share count rose from 87.8 million at the end of 2025 to 96.4 million at June 30, 2026, and further share sales would dilute per-share values. The trial results, the filing timetable and the cash-runway guidance come from company announcements made after the last annual report, and we use them only as evidence that events occurred. The annual report and the June 30, 2026 balance sheet supply everything else.