Intellia Therapeutics, Inc. — FY2019 Form 10-K
Reporting period: Fiscal year ended December 31, 2019. The filing also reports unaudited fourth-quarter results. Intellia is a preclinical genome-editing company; all revenue to date came from collaborations, not product sales.
Financial performance and liquidity
| Metric | FY2019 | FY2018 | Change |
|---|---|---|---|
| Collaboration revenue | $43.1 million | $30.4 million | Up $12.7 million |
| Research and development expense | $108.4 million | $89.1 million | Up $19.3 million |
| General and administrative expense | $41.1 million | $32.2 million | Up $8.9 million |
| Operating loss | $(106.4) million | $(90.9) million | Loss widened |
| Net loss | $(99.5) million | $(85.3) million | Loss widened |
| Net loss per share | $(2.11) | $(1.98) | Loss per share increased |
| Cash used in operating activities | $(103.2) million | $(61.3) million | Use increased |
- At year-end, cash, cash equivalents and marketable securities totaled $284.5 million, down from $314.1 million; working capital was $253.8 million. Management expected these resources, together with Regeneron research and cost reimbursements, to fund operations at least through the end of 2021, subject to assumptions and excluding potential milestone payments.
- Financing activities provided $76.4 million in 2019, primarily from at-the-market equity sales. The company issued about 4.52 million shares through those offerings and reported 50.20 million shares outstanding at year-end.
- No conventional borrowings are shown in the balance sheet. Operating lease liabilities were $18.4 million. There is no meaningful product gross margin reported because the company had no product sales.
- Fourth-quarter 2019 revenue was $10.9 million and net loss was $28.3 million, compared with $7.9 million and $19.1 million, respectively, in fourth-quarter 2018.
Material changes and business developments
- Revenue increased, primarily reflecting higher Regeneron ATTR cost-sharing services; R&D and G&A spending also rose as the company advanced its pipeline, expanded headcount and incurred additional intellectual-property legal costs.
- In non-human primates, a single dose of the lead ATTR program reportedly maintained an average serum TTR reduction of more than 95% for one year. These are preclinical findings, not evidence of human safety or efficacy.
- Intellia nominated NTLA-5001, an engineered T-cell candidate targeting WT1 for AML. The filing described preclinical data and manufacturing work in preparation for clinical development.
- Novartis’s five-year research term ended in December 2019. Selected programs may continue under Novartis licenses, with potential future milestones and royalties; these payments are contingent, not assured.
Outlook, risks and unusual items
- As of the filing date, management expected to submit an IND for ATTR candidate NTLA-2001 in mid-2020 and dose the first patients in the second half of 2020; it expected an AML candidate IND in the first half of 2021 and an HAE development-candidate nomination in the first half of 2020. These are forward-looking plans, not achieved milestones.
- Regeneron notified Intellia that its share of ATTR development costs and commercial profits would fall from 50% to approximately 25%, effective June 2020. Intellia remains the program lead.
- The company had no approved products and continued to incur substantial losses. Management expected expenses to increase in 2020 as clinical development began; additional financing may be required, with potential dilution.
- Key risks include unproven genome-editing safety and efficacy, clinical and regulatory uncertainty, manufacturing and delivery challenges, dependence on collaborators and third-party suppliers, reimbursement uncertainty, and substantial intellectual-property disputes. A Caribou arbitration award could permit limited use of disputed modified guide RNAs in a CD19 CAR-T program; payment terms remained subject to negotiation or further proceedings. The filing also describes an ongoing U.S. patent interference involving the UC/Vienna/Charpentier and Broad portfolios.
- The auditor issued an unqualified opinion on the financial statements and reported effective internal control over financial reporting. Adoption of lease accounting standard ASC 842 resulted in recognition of lease assets and liabilities.
Important facts for investors to verify
- Whether NTLA-2001 and NTLA-5001 met the stated IND and clinical-start timelines, and what human safety and efficacy data subsequently showed.
- How the reduced Regeneron cost-sharing percentage affects Intellia’s ATTR spending, cash runway and potential economics.
- Current cash runway, operating cash burn, financing needs and dilution from equity issuance.
- Developments in the Caribou arbitration and CRISPR patent proceedings, including any effect on licensing rights, programs or collaboration agreements.
- Whether Novartis advances its selected programs and whether any contingent milestone or royalty payments are achieved.