Business Context and Reporting Period
Precision BioSciences, Inc. (DTIL) is a clinical-stage gene editing company focused on developing in vivo therapies for genetic and infectious diseases using its proprietary ARCUS platform. This Form 10-Q covers the quarterly period ended September 30, 2025. The company operates as a single segment and is classified as a smaller reporting company. As of the filing date, the company had 13,256,751 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 |
|---|---|---|---|---|
| Revenue | $13,000 | $576,000 | $60,000 | $68,058,000 |
| Net Loss | $(21,772,000) | $(16,425,000) | $(65,857,000) | $24,912,000 (Income) |
| Operating Expenses | $20,680,000 | $21,851,000 | $64,716,000 | $69,374,000 |
| Cash & Equivalents | $44,870,000 | $85,899,000 | $44,870,000 | $85,899,000 |
| Restricted Cash | $26,342,000 | $22,569,000 | $26,342,000 | $22,569,000 |
| Total Liquidity | $71,212,000 | $108,468,000 | $71,212,000 | $108,468,000 |
| Debt (Term Loan) | $22,374,000 | $22,321,000 | $22,374,000 | $22,321,000 |
| Accumulated Deficit | $(548,321,000) | $(464,719,000) | $(548,321,000) | $(464,719,000) |
Material Changes vs. Prior Period
- Revenue Collapse: Revenue for the nine months ended September 30, 2025, dropped to $60,000 from $68.1 million in the prior year. This decrease is primarily due to the conclusion of the Prevail Therapeutics agreement (which generated $52.7 million in 2024) and reduced billable work under the Novartis agreement.
- Net Loss vs. Income: The company reported a net loss of $65.9 million for the nine months ended September 30, 2025, compared to net income of $24.9 million in the same period in 2024. The 2024 income was significantly boosted by a $21.8 million gain on the change in fair value of warrant liabilities, which turned into a $1.2 million loss in 2025.
- Expense Management: Total operating expenses decreased by $4.7 million year-over-year for the nine-month period. This reduction was driven by cost-cutting initiatives implemented in Q3 2025, including employment-related reductions and a pause in the PBGENE-3243 program.
- Liquidity Decline: Total cash, cash equivalents, and restricted cash decreased by approximately $37.3 million during the nine-month period, driven by net cash used in operating activities of $54.6 million.
Guidance, Outlook, and Risks
- Cash Runway: Management believes existing cash resources, combined with expected operational receipts and ATM facility availability, are sufficient to fund operations into the second half of 2027.
- Clinical Priorities: The company is prioritizing the ELIMINATE-B trial for PBGENE-HBV (Hepatitis B) and preparing for an IND filing for PBGENE-DMD (Duchenne Muscular Dystrophy) by the end of 2025. Development of PBGENE-3243 has been paused.
- Subsequent Events:
- On October 31, 2025, the company received an $8.0 million milestone payment from Imugene ($3.0 million cash, $5.0 million stock).
- On October 31, 2025, Novartis notified the company of its termination of the Collaboration and License Agreement, effective January 30, 2026. All options and licenses revert to Precision.
- Key Risks:
- Funding Needs: The company has incurred significant losses since inception and expects to continue doing so. It will require substantial additional capital to advance programs.
- Debt Covenants: The company maintains a $22.5 million term loan with Banc of California, requiring a cash security account balance equal to the outstanding principal.
- Development Uncertainty: Success depends on the novel ARCUS technology, which faces regulatory, manufacturing, and clinical trial risks.
Investor Verification Checklist
- Novartis Termination Impact: Verify the financial impact of the Novartis agreement termination effective January 2026 and the status of the returned sickle cell disease and beta thalassemia programs.
- Cash Burn Rate: Confirm the sustainability of the "second half of 2027" cash runway given the $54.6 million cash burn in the first nine months of 2025.
- Imugene Milestone: Assess the valuation and liquidity of the $5.0 million Imugene stock component of the recent milestone payment.
- Debt Obligations: Review the terms of the $22.5 million term loan and the requirement to maintain restricted cash balances.
- Warrant Liability: Monitor the fair value adjustments of the warrant liability, which caused significant volatility in net income/loss between 2024 and 2025.