CRISPR Therapeutics AG — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. The company is a gene-editing biotechnology business with no product sales; it is investing in clinical and preclinical programs and expects continued operating losses.
Key financial metrics
Amounts are in U.S. dollars; millions unless otherwise noted.
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | $0.9 | $0.5 |
| Research and development expense | $118.2 | $70.6 |
| General and administrative expense | $28.0 | $24.5 |
| Collaboration expense, net | $30.6 | $19.9 |
| Operating loss | $176.0 | $114.5 |
| Net loss | $179.2; $2.32 per share | $113.2; $1.51 per share |
| Cash used in operating activities | $135.2 | $100.7 |
| Cash, cash equivalents and marketable securities | $2,221.3 at March 31, 2022 | $2,379.1 at December 31, 2021 |
Operating margin is not a meaningful measure given the company’s minimal revenue and substantial development spending. Comprehensive loss was $191.0 million, including an $11.8 million unrealized loss on marketable securities. Total assets were $2,606.2 million and shareholders’ equity was $2,244.9 million at quarter-end. No conventional borrowings are reported; operating lease liabilities totaled approximately $239.0 million.
Material changes versus the prior comparable period
- Net loss increased $66.1 million year over year as operating expenses rose $61.8 million. R&D expense increased $47.6 million, principally from drug-product production and clinical trial costs, facility costs, headcount and licensing fees.
- Net collaboration expense increased $10.7 million, reflecting higher Vertex pre-commercial and manufacturing costs, partly offset by lower other costs.
- Operating cash use rose $34.6 million. Investing cash use was $114.5 million, while financing provided $10.6 million; Q1 2021 financing had included $222.1 million of net ATM proceeds.
- Cash and equivalents declined from $923.0 million at year-end to $683.9 million, while marketable securities increased from $1,456.1 million to $1,537.4 million. The investment portfolio recorded a higher unrealized loss amid market-value declines.
Outlook, management commentary and risks
- Management expects existing cash resources to fund operating expenses and capital expenditures for at least 24 months from the filing’s outlook, excluding potential Vertex payments and future financing. This estimate depends on assumptions and actual cash use could be faster.
- The company expects losses and R&D and G&A expenses to continue increasing. No revenue or profitability guidance is provided.
- Key programs include CTX001 for sickle cell disease and transfusion-dependent beta thalassemia, being developed with Vertex; CTX110, CTX120 and CTX130 in early-stage oncology trials; and VCTX210 for type 1 diabetes with ViaCyte. The two adult CTX001 Phase 3 trials were fully enrolled; additional pediatric Phase 3 trials had been initiated.
- Under the amended Vertex CTX001 arrangement, Vertex leads decisions and receives 60% of program net profits or bears 60% of net losses, with CRISPR Therapeutics allocated 40%. The company may also receive milestone payments, including a $200 million payment upon first marketing approval of the initial product candidate. Remaining milestones were constrained from revenue recognition at quarter-end.
- Principal risks include clinical and regulatory uncertainty, manufacturing scale-up, intellectual-property disputes, financing and dilution risk, and possible COVID-19-related trial, staffing or supply disruptions. The filing reports no pending legal claims management considered likely to have a material adverse effect and no material changes to previously disclosed risk factors.
- Restricted cash of $16.9 million secured letters of credit for leased facilities. The company also disclosed potential milestone and royalty obligations under research, license and manufacturing agreements.
Important facts for investors to verify
- Latest CTX001 clinical safety and efficacy results, trial progress and regulatory timelines.
- Quarterly cash burn, capital spending and whether the stated 24-month runway remains achievable.
- Vertex program cost-sharing, commercialization economics and conditions for milestone payments.
- Progress and spending on the company’s expanding facilities and manufacturing capabilities.
- Market-value and credit developments affecting the sizable marketable-securities portfolio, as well as any changes in litigation or intellectual-property proceedings.