Intellia Therapeutics, Inc. — FY 2018 Form 10-K
Reporting period: Fiscal year ended December 31, 2018. This is an annual filing, not a standalone fourth-quarter report; quarterly figures below are unaudited. Intellia is a preclinical genome-editing biotechnology company. It had no approved products and all reported revenue came from collaborations.
Financial performance and liquidity
| Metric | FY 2018 | FY 2017 |
|---|---|---|
| Collaboration revenue | $30.4 million | $26.1 million |
| Research and development expense | $89.1 million | $67.6 million |
| General and administrative expense | $32.2 million | $28.0 million |
| Operating loss | $90.9 million | $69.6 million |
| Interest income | $5.5 million | $2.0 million |
| Net loss | $85.3 million | $67.5 million |
| Net loss per share | $1.98 | $1.88 |
- Revenue increased $4.3 million, primarily from higher Regeneron ATTR research and development services and the December 2018 Novartis amendment. Operating expenses rose $25.6 million, driven mainly by R&D investment, personnel, and laboratory costs. Net loss widened $17.8 million.
- Fourth-quarter 2018 collaboration revenue was $7.9 million and net loss was $19.1 million, compared with $6.7 million and $24.0 million, respectively, in fourth-quarter 2017.
- At year-end, cash, cash equivalents and marketable securities totaled $314.1 million, versus $340.7 million a year earlier; working capital was $284.4 million. The 2018 investing cash outflow primarily reflects purchases of marketable securities, not operating expenditure.
- Operating cash use was $61.3 million; investing cash use was $260.8 million; financing provided $40.2 million. Financing included $28.5 million of net proceeds from an at-the-market stock offering. No borrowings are identified in the presented balance-sheet liabilities.
- Total liabilities were $69.4 million, principally deferred collaboration revenue; stockholders’ equity was $277.9 million. The company reported an accumulated deficit of $201.0 million.
- Management estimated that year-end resources, together with expected collaboration and cost-reimbursement funding, would fund operations into the first half of 2021. This estimate excludes potential milestones and depends on assumptions that could prove incorrect.
Programs, outlook and material developments
- Intellia’s pipeline spans in vivo CRISPR/Cas9 editing and ex vivo engineered cell therapies. Lead in vivo programs target ATTR, alpha-1 antitrypsin deficiency and primary hyperoxaluria type 1; partnered ex vivo research includes CAR-T, hematopoietic stem-cell and ocular stem-cell applications.
- For ATTR, the company reported greater than 95% TTR protein reduction in nonhuman primates after a single dose, with editing and protein reduction observed for more than six months. These are preclinical results, not evidence of human safety or efficacy. An IND submission was stated to be on track for 2020.
- Management expected R&D expense to increase in 2019 as the company expanded research and advanced ATTR toward clinical development. It also expected to nominate its first wholly owned ex vivo AML development candidate by the end of 2019.
- In December 2018, Novartis added ocular stem-cell research to its collaboration for a $10.0 million payment and broadened Intellia’s rights to Novartis LNP technology. The Novartis research term was scheduled to end in December 2019; Novartis has an option to internalize the platform for $50.0 million, subject to agreement terms.
- Under the Regeneron ATTR co-development and co-promotion arrangement, Intellia is clinical and commercial lead; the parties generally share development costs and profits equally if Regeneron funds half of defined costs.
- Intellia began arbitration against Caribou in October 2018 over whether two guide-RNA patent families fall within Intellia’s exclusive human-therapeutics license. Caribou disputes that interpretation. The outcome and any financial impact are uncertain.
- Adoption of ASC 606 reduced reported 2018 collaboration revenue and increased the reported net loss by $1.4 million versus amounts calculated without the new standard. The company also reported effective disclosure controls and effective internal control over financial reporting; the auditor issued unqualified opinions on the financial statements and internal controls.
Key risks and investor verification points
- Confirm current clinical-development status and whether the stated ATTR IND and ex vivo candidate timelines were achieved; all programs described in this filing were preclinical.
- Assess the durability, safety, off-target editing and immune-response evidence behind animal results, and whether later studies reproduce them.
- Review the assumptions supporting the first-half 2021 cash-runway estimate, subsequent operating cash use, collaboration funding, and remaining at-the-market capacity. The runway is not guaranteed.
- Track the Caribou arbitration and broader CRISPR patent ownership, licensing and freedom-to-operate disputes; these could affect platform rights or development.
- Evaluate reliance on Novartis and Regeneron, including partner selection, funding, performance, termination rights, and the economics of milestones, royalties and co-development.
- Consider ongoing losses, increasing R&D costs, potential future dilution, manufacturing and regulatory hurdles, and uncertain coverage and reimbursement for potential gene-editing products.
- Verify that comparisons across years account for the 2018 ASC 606 adoption; the filing notes that 2018 and prior-year collaboration revenue may not be directly comparable.