Intellia Therapeutics, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Unaudited results. Intellia is a clinical-stage genome-editing company developing CRISPR/Cas9-based in vivo and ex vivo therapies. It has no approved products, and all revenue to date has come from collaborations.
Financial performance and position
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Collaboration revenue | $12.6 million | $11.3 million |
| Research and development expense | $97.1 million | $133.1 million |
| General and administrative expense | $27.4 million | $22.4 million |
| Operating loss | $112.0 million | $144.2 million |
| Net loss | $103.1 million | $146.9 million |
| Net loss per share, basic and diluted | $1.17 | $1.96 |
| Net cash used in operating activities | $109.3 million | $79.8 million |
Gross margin is not presented; operating margins are not especially informative for this development-stage business. Interest income was $12.0 million, versus $0.5 million a year earlier, helping reduce the net loss. At March 31, cash and cash equivalents were $294.2 million and marketable securities totaled $864.4 million, or $1,158.6 million combined. Cash, cash equivalents and restricted cash equivalents were $306.1 million. The balance sheet reports $126.1 million in operating lease liabilities; it reports no borrowings. Current assets were $963.7 million and current liabilities $103.4 million.
Changes versus the prior-year quarter
- Revenue rose $1.4 million, primarily from the Kyverna and SparingVision collaborations.
- R&D expense fell $36.0 million, largely because Q1 2022 included a $56.0 million Rewrite in-process R&D charge. Excluding that charge, R&D expense increased year over year; employee, facility and stock-based compensation costs rose.
- G&A expense increased $5.0 million, mainly due to employee-related costs and higher stock-based compensation.
- Operating cash use increased $29.5 million. Management attributed it primarily to increased R&D spending; lower accrued expenses and deferred revenue also affected cash flow.
- Cash and marketable securities combined declined about $103.4 million from December 31, 2022. Net loss narrowed by $43.7 million, reflecting the prior-year Rewrite charge and higher interest income, among other items.
Outlook, programs and risks
- Liquidity: Management estimates cash, cash equivalents and marketable securities, together with collaboration research and cost-reimbursement funding, will cover operating expenses and capital needs for beyond 24 months from March 31, 2023. The estimate excludes potential collaboration milestones and strategic uses of capital and depends on assumptions that may prove incorrect. The financial-statement note separately states resources are expected to cover at least 12 months.
- NTLA-2001: The company planned to submit an IND for the ATTR cardiomyopathy arm in mid-2023 and, subject to regulatory feedback, start a global pivotal trial by year-end. It completed planned dose-expansion enrollment in the ATTR polyneuropathy arm and expected further clinical data in 2023.
- NTLA-2002: The FDA cleared the Phase 2 IND in March and granted RMAT designation; the U.K. granted Innovation Passport status in January. After quarter-end, the company reported the first Phase 2 patient dosed on May 4 and expected to complete enrollment in the second half of 2023.
- Other programs: The company planned to submit an IND or equivalent for NTLA-3001 in the second half of 2023 and complete ongoing IND-enabling work for NTLA-2003 by year-end. It continued to wind down NTLA-5001 as it reprioritized ex vivo programs.
- Funding and execution: The company expects 2023 expenses to increase as it expands R&D, advances clinical programs and develops additional programs. Additional equity or collaboration funding may be needed; equity issuance could dilute shareholders, while collaborations could require granting rights on unfavorable terms. There are no other committed external funding sources beyond collaboration rights and reimbursements.
- Key risks: Clinical and regulatory outcomes for CRISPR-based therapies remain uncertain, including safety, efficacy, durability, manufacturing and enrollment. Other material risks include competition, reliance on collaborators and contract manufacturers, financing needs, cybersecurity and extensive patent disputes. The filing describes ongoing CRISPR intellectual-property proceedings, including a pending Federal Circuit appeal and cross-appeal concerning patent priority. No material change to outstanding litigation was reported since year-end.
- Unusual item: A Rewrite research milestone was settled in February with $0.9 million cash and 567,045 common shares, valued at approximately $24.1 million. The cash portion was recorded as R&D expense.
- Controls: Management concluded disclosure controls were effective at the reasonable-assurance level as of March 31, 2023; no material change in internal control over financial reporting was reported.
Investor verification priorities
- Reconcile the liquidity statements: the note cites at least 12 months of runway, while MD&A estimates beyond 24 months, with collaboration reimbursements included in the latter.
- Track NTLA-2001 and NTLA-2002 trial enrollment, safety, durability and regulatory milestones against the stated timelines.
- Assess operating cash use and the underlying R&D trend, distinguishing recurring program spending from the prior-year Rewrite charge.
- Review CRISPR-related patent proceedings and potential impacts on licensed intellectual property and freedom to operate.
- Monitor collaboration funding and obligations, potential future dilution under the remaining at-the-market program, and lease commitments, including the planned 840 Winter facility lease commencement in 2024.