Intellia Therapeutics, Inc. — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021. Unaudited results. Intellia is a clinical-stage CRISPR/Cas9 genome-editing company developing in vivo and ex vivo therapies. It has not generated product-sales revenue; reported revenue is from collaborations.
Financial performance
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Collaboration revenue | $7.2m | $22.2m | $20.2m | $51.4m |
| Research and development expense | $60.5m | $39.8m | $158.6m | $112.2m |
| General and administrative expense | $18.7m | $10.6m | $49.0m | $33.4m |
| Operating loss | $72.0m | $28.1m | $187.4m | $94.2m |
| Net loss | $71.6m | $27.8m | $186.7m | $92.0m |
| Net loss per share, basic and diluted | $0.97 | $0.47 | $2.68 | $1.70 |
| Operating cash flow | Not stated for quarter | Not stated for quarter | $(170.4)m | $(9.7)m |
Margins: Not a meaningful indicator for this pre-commercial company; collaboration revenue does not cover operating expenses. Gross margin is not separately reported.
Liquidity and capital: At September 30, cash and cash equivalents were $334.7m and marketable securities were $814.0m, totaling approximately $1,148.7m. Current assets were $814.8m and current liabilities $97.6m. The balance sheet reports no borrowings; it does report operating lease liabilities of $76.0m in total. Stockholders’ equity was $1,107.1m. A July follow-on offering generated $648.3m net proceeds; first-half at-the-market sales added $45.3m. Shares outstanding increased to 74.3m from 66.2m at year-end 2020.
Changes versus prior comparable periods
- Q3 collaboration revenue fell $15.0m year over year, mainly because the prior-year quarter included $15.3m from transfer of the hemophilia A Factor VIII target license. Nine-month revenue declined $31.2m, also reflecting prior-year one-time revenue adjustments and a $5.0m Novartis milestone.
- Q3 net loss widened by $43.8m; nine-month net loss widened by $94.6m. Higher R&D spending, including workforce, clinical-program, facility and stock-compensation costs, was the primary expense driver. G&A also increased.
- Nine-month operating cash use rose to $170.4m from $9.7m. The prior-year period benefited from substantial collaboration receipts, including Regeneron upfront and other payments.
- Marketable securities increased substantially, while the July equity raise materially strengthened liquidity and diluted existing shareholders.
Outlook, developments and risks
- Management expected September 30 cash, cash equivalents and marketable securities to fund operating expenses and capital needs beyond 24 months, excluding potential collaboration milestones or strategic uses of capital. The liquidity note separately says at least 12 months; the MD&A provides the longer outlook and cautions that assumptions may prove wrong. Management expected R&D expense to increase as trials and development programs advance.
- NTLA-2001: Phase 1 interim results in six patients showed mean serum TTR reductions of 52% at 0.1 mg/kg and 87% at 0.3 mg/kg at day 28; no serious adverse events were reported in those patients by day 28. Dose escalation continued, and the company planned further data and an expansion cohort in Q1 2022. These are early, limited interim results, not proof of efficacy or approval.
- NTLA-5001 received FDA IND acceptance in September 2021; patient screening was planned by year-end. NTLA-2002 received trial authorizations reported in October 2021, with first-patient enrollment planned by year-end. These are subsequent developments relative to the quarter-end.
- NewCo, formed with Cellex and Blackstone Life Sciences, gave Intellia a 33.33% equity interest valued at $62.9m in exchange for an exclusive license. The investment is accounted for under the equity method; the license consideration is recognized as revenue over a two-year support period, subject to elimination of Intellia’s share of intra-entity profit. The carrying value was $62.8m at quarter-end. Intellia may pay $30m to exercise an option for a second co-development program.
- A one-time $10.0m payment to Novartis was recorded as R&D expense following a June amendment to its collaboration. The Caribou arbitration was settled through a leaseback agreement: Intellia recorded $1.0m collaboration revenue in Q2 and received the payment in Q3; future milestones and single-digit royalties may be payable.
- In October 2021, Intellia announced a SparingVision collaboration, including a 10% equity stake and potential milestones of up to approximately $200m per product, plus royalties. This is a subsequent event, not Q3 recognized revenue.
- Key risks include the early and unproven nature of CRISPR therapeutics, clinical and manufacturing uncertainty, potential safety and regulatory setbacks, dependence on collaborators and third-party manufacturers, COVID-19 disruption, and extensive intellectual-property disputes. The filing describes CRISPR patent interferences and other challenges. The Caribou arbitration is settled, but broader IP risks remain.
- Management reported effective disclosure controls as of September 30, 2021 and no material change in internal control over financial reporting during the nine months.
Most important facts for investors to verify
- Progress, safety, durability and regulatory plans for NTLA-2001, and whether the early six-patient results are confirmed in larger cohorts.
- Enrollment and trial-start timing for NTLA-2002 and NTLA-5001, along with any subsequent safety or manufacturing developments.
- Cash burn and the assumptions behind management’s beyond-24-month runway estimate, including the difference from the liquidity note’s at-least-12-month statement.
- Collaboration revenue composition and timing, NewCo revenue recognition and equity-method results, and any milestone, royalty or funding terms that become payable or collectible.
- Potential dilution from future equity financing and the remaining capacity under the at-the-market program; the filing reports $47.4m of shares still eligible for sale.
- Developments in CRISPR patent proceedings, licensed-IP rights, and the financial or program consequences of any adverse outcome.