Business Context and Reporting Period
Company: Precision BioSciences, Inc. (DTIL)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Precision BioSciences is a clinical-stage gene editing company utilizing its proprietary ARCUS platform to develop in vivo therapies for genetic and infectious diseases. The company focuses on two wholly-owned lead programs: PBGENE-HBV (chronic hepatitis B) and PBGENE-DMD (Duchenne muscular dystrophy). It also maintains partnered programs, including a collaboration with iECURE for OTC deficiency and licensing agreements for its CAR T platform (azer-cel) with Imugene and TG Therapeutics.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Revenue | $34.3 million | $68.7 million |
| Net Loss | $(45.7) million | $7.2 million (Net Income) |
| Operating Loss | $(52.1) million | $(26.2) million |
| Research & Development Expenses | $54.2 million | $59.6 million |
| General & Administrative Expenses | $32.2 million | $35.3 million |
| Cash, Cash Equivalents, and Restricted Cash | $137.2 million | $108.5 million |
| Accumulated Deficit | $(528.2) million | $(482.5) million |
| Debt (2024 Term Loan) | $22.5 million | $22.3 million |
Note: The 2024 net income was primarily driven by a $29.6 million non-cash gain on the change in fair value of warrant liability. The 2025 net loss reflects a reduced non-cash warrant gain of $11.1 million and increased operating losses.
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased by $34.4 million (50%) year-over-year. This was primarily due to the recognition of $52.7 million in 2024 related to the conclusion of the Prevail Therapeutics agreement, which had no counterpart in 2025. This decrease was partially offset by $19.9 million in revenue from the Novartis agreement (concluded in late 2025) and $8.0 million from the Imugene license agreement.
- Operating Loss Expansion: Operating loss widened from $26.2 million in 2024 to $52.1 million in 2025. While total operating expenses decreased slightly by $8.4 million, the significant drop in revenue drove the deterioration in operating performance.
- R&D Reallocation: R&D expenses shifted focus. Direct costs for PBGENE-HBV decreased by $9.0 million as the program transitioned to clinical trials, and PBGENE-3243 costs decreased by $6.7 million as development was paused. Conversely, PBGENE-DMD expenses increased by $14.1 million due to program acceleration.
- Non-Cash Items: The gain on the change in fair value of warrant liability decreased from $29.6 million in 2024 to $11.1 million in 2025, significantly impacting the bottom line.
Guidance, Outlook, and Risks
Outlook and Liquidity: Management believes that existing cash, cash equivalents, expected milestone proceeds (specifically from azer-cel), and the availability of its At-The-Market (ATM) facility are sufficient to fund operating expenses and capital expenditures through 2028. The company expects to continue incurring significant operating losses as it advances clinical trials.
Key Developments:
- PBGENE-HBV: Reported Phase 1 data showing safety and dose-dependent antiviral activity. Dosing in Cohorts 3, 4, and 5 is ongoing to optimize the therapeutic index.
- PBGENE-DMD: Received FDA IND clearance in February 2026 to initiate the FUNCTION-DMD Phase 1/2 trial. Initial data is expected by year-end 2026.
- Collaborations: Received an $8.0 million milestone from Imugene (October 2025) and a $7.5 million milestone from TG Therapeutics (March 2026). The Novartis collaboration was terminated effective January 30, 2026.
Risks and Contingencies:
- Capital Requirements: The company has a history of significant losses and requires substantial additional funding. Failure to raise capital could force delays or elimination of research programs.
- Regulatory and Clinical Risk: As a clinical-stage company, there is no assurance that product candidates will achieve regulatory approval or demonstrate efficacy in humans. ARCUS is a novel technology with inherent development risks.
- Debt Covenants: The company is subject to covenants under its $22.5 million term loan with Banc of California, including maintaining a specific cash security account balance.
- Intellectual Property: Success depends on maintaining patent protection for the ARCUS platform and defending against third-party claims.
Investor Verification Checklist
- Cash Runway Validation: Verify the sufficiency of the $137.2 million cash balance against projected burn rates, specifically confirming the timing and certainty of expected milestone payments from Imugene and TG Therapeutics.
- Revenue Sustainability: Assess the impact of the Novartis and Prevail Therapeutics agreement conclusions on future revenue streams, noting the lack of product sales revenue.
- Clinical Trial Progress: Monitor enrollment and safety data for the PBGENE-HBV ELIMINATE-B trial and the initiation of the PBGENE-DMD FUNCTION-DMD trial.
- Warrant Liability Volatility: Review the impact of stock price fluctuations on the warrant liability, which caused significant non-cash gains in prior periods and could result in future non-cash losses.
- Debt Compliance: Confirm ongoing compliance with the cash security account requirements of the Banc of California term loan.