Intellia Therapeutics, Inc. — Q3 2023 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2023. The financial statements are unaudited. Intellia is a clinical-stage genome-editing company; all revenue to date is collaboration revenue, with no product sales.
Key financial metrics
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Collaboration revenue | $12.0m | $13.3m | $38.2m | $38.5m |
| Research and development | $113.7m | $96.7m | $326.1m | $319.9m |
| General and administrative | $29.4m | $22.1m | $87.5m | $66.7m |
| Operating loss | $(131.1)m | $(105.5)m | $(375.4)m | $(348.1)m |
| Net loss | $(122.2)m | $(113.2)m | $(349.0)m | $(360.8)m |
| Net loss per share, diluted | $(1.38) | $(1.49) | $(3.96) | $(4.78) |
Revenue is small relative to operating costs, so the filing does not present a meaningful commercial operating margin. Higher interest income partly offset operating losses: nine-month interest income was $37.4m versus $3.2m a year earlier.
- Liquidity: Cash, cash equivalents and marketable securities totaled $992.5m at September 30, 2023, versus $1.2626bn at December 31, 2022. Total assets were $1.243bn; stockholders’ equity was $1.037bn.
- Cash flow: Operating activities used $301.0m in the first nine months, compared with $243.4m in the prior-year period. Investing activities used $77.3m, primarily reflecting net purchases of marketable securities and $12.5m of property and equipment. Financing provided $23.8m, including $16.2m of net ATM proceeds.
- Debt and obligations: The balance sheet reports no borrowing balance. Operating lease liabilities totaled $118.3m; these are lease obligations, not reported borrowings.
- Equity compensation and dilution: Nine-month equity-based compensation was $99.0m, up from $66.8m. Shares outstanding increased to 89.1m from 87.1m at year-end 2022. The 2022 ATM program had $188.2m remaining eligible for sale.
Changes versus the prior comparable period
- Q3 collaboration revenue fell $1.3m; nine-month revenue was nearly flat. Management attributed the quarterly decrease principally to Kyverna and AvenCell collaboration revenue having been substantially recognized earlier in 2023.
- Q3 R&D rose 18%, reflecting higher development spending on NTLA-2001, NTLA-2002 and NTLA-3001, partly offset by the NTLA-5001 wind-down. Nine-month R&D rose only 2%, in part because the 2022 period included $56.0m of Rewrite in-process R&D expense.
- G&A increased 33% for Q3 and 31% for the nine-month period, primarily due to personnel-related expense and stock compensation.
- Nine-month net loss narrowed by $11.7m, mainly because of higher interest income and lower contingent-consideration expense. Operating loss nevertheless widened by $27.3m.
- Operating cash use increased by $57.6m year over year. The company also settled a $25.0m Rewrite research milestone in February, with $0.9m paid in cash and 567,045 shares issued.
Outlook, developments and risks
- Runway and spending: Management said cash, cash equivalents, marketable securities and collaboration research/cost-reimbursement funding were expected to fund operations and capital needs beyond 24 months, based on current assumptions and excluding potential milestone payments, extension fees and strategic uses of capital. The liquidity note separately states that resources at the reporting date were expected to fund operations for at least 12 months after issuance. Management expected expenses to increase during the remainder of 2023. The runway estimate is not guaranteed.
- NTLA-2001: The October 2023 FDA clearance of its Phase 3 IND for ATTR cardiomyopathy was reported as a subsequent development. The MAGNITUDE study was expected to start by year-end 2023, with dosing early in 2024. In November, the company reported interim Phase 1 data: among 62 patients dosed at 0.3 mg/kg or higher, median serum TTR reduction was 91% at day 28; reported interim results do not establish approval or long-term benefit.
- NTLA-2002: Management planned to complete Phase 2 enrollment in Q4 2023 and to initiate a pivotal Phase 3 study as early as Q3 2024, subject to regulatory feedback. FDA-requested supplemental preclinical data relating to female patients of child-bearing potential were expected in the first half of 2024. In June, interim Phase 1 results showed a 95% mean reduction in monthly attack rate across ten patients; the filing cautions that interim clinical results may change and may not predict later outcomes.
- Other pipeline and partnerships: A CTA for NTLA-3001 was planned for Q1 2024. Intellia halted further IND-enabling work on NTLA-2003 to prioritize a research-stage AATD program using DNA-writing technology. In September, Intellia and Regeneron expanded research into neurological and muscular disease targets, with research costs shared equally. Regeneron’s October exercise of an extension option runs the technology collaboration through April 2026 and provides for a $30m nonrefundable payment due April 2024.
- Facilities and commitments: The 840 Winter Street manufacturing lease in Waltham is expected to commence in 2024 for an initial 12-year term; no related right-of-use asset or lease liability was recorded at September 30 because Intellia had not taken control of the premises. Construction costs beyond tenant-improvement allowances may be the company’s responsibility.
- Principal risks: Product candidates remain investigational, and CRISPR-based therapies have limited clinical validation. Risks include trial safety, efficacy, enrollment and regulatory delays; manufacturing and supply constraints; reliance on collaborators and third parties; potential future financing and dilution; and material intellectual-property disputes, including proceedings involving foundational CRISPR patents. The company reported no material change in litigation since year-end 2022. It also disclosed that disclosure controls were effective at the reasonable-assurance level.
Important facts for investors to verify
- Reconcile the “beyond 24 months” management runway outlook with the financial-statement note’s “at least 12 months” liquidity statement, and assess cash burn against the planned Phase 3 programs and manufacturing investment.
- Track NTLA-2001 and NTLA-2002 trial starts, enrollment, follow-up, safety findings, regulatory requirements and whether interim results are confirmed in later data.
- Confirm the timing and receipt of Regeneron’s $30m extension payment, collaboration reimbursements and any milestone-related cash flows.
- Assess future ATM or other financing needs, share issuance and equity-compensation dilution; the 2022 ATM program retained $188.2m of sale capacity at quarter-end.
- Monitor the 840 Winter facility’s construction, funding and lease commencement, as well as manufacturing readiness and third-party supply capacity.
- Follow CRISPR intellectual-property proceedings and any effects on Intellia’s licensed rights, freedom to operate or development plans.