Voyager Therapeutics, Inc. — Q3 2020 Form 10-Q
Reporting period: Three and nine months ended September 30, 2020. Unaudited financial statements. Voyager is a clinical-stage AAV gene-therapy company and has no product-sales revenue; collaboration payments and reimbursements are its reported revenue sources.
Financial performance
| Metric | Q3 2020 | Q3 2019 | Nine months 2020 | Nine months 2019 |
|---|---|---|---|---|
| Collaboration revenue | $117.8M | $20.4M | $164.6M | $71.7M |
| Research and development expense | $25.0M | $29.8M | $86.8M | $83.2M |
| General and administrative expense | $8.3M | $8.5M | $26.7M | $26.4M |
| Operating income (loss) | $84.5M | $(17.8)M | $51.1M | $(37.9)M |
| Net income (loss) | $85.6M | $(15.0)M | $52.7M | $(31.0)M |
| Diluted earnings (loss) per share | $2.27 | $(0.41) | $1.40 | $(0.87) |
The reported income chiefly reflects recognition of previously deferred AbbVie collaboration revenue after AbbVie terminated its tau and alpha-synuclein agreements in August 2020 and Voyager’s remaining performance obligations ended. The filing attributes $46.3M and $58.9M of Q3 revenue, respectively, to release of deferred revenue from those agreements. This is not product revenue and should not be treated as a recurring operating run rate. No product gross margin is reported.
Cash, liquidity and obligations
- At September 30, 2020, cash and cash equivalents were $147.4M; marketable debt securities were $52.6M. Together these totaled approximately $200.0M, excluding $2.2M of equity securities. Total current assets were $216.3M and current liabilities $42.1M.
- Cash, cash equivalents and restricted cash rose $62.4M from year-end 2019 to $149.2M. Nine-month operating cash flow was negative $74.7M, versus positive $72.0M in 2019; the 2020 outflow was primarily associated with the $148.8M decrease in deferred revenue. Investing activities provided $134.5M, principally from marketable-security maturities; financing activities provided $2.7M.
- The company reported no material conventional borrowings. Lease liabilities totaled $31.8M. A new Lexington facility lease carries approximately $25.6M of expected payments over ten years, excluded from the lease-obligation table because Voyager did not yet control the space at quarter-end.
- Management expected available cash, cash equivalents and marketable debt securities, together with anticipated Neurocrine development-cost reimbursements, to fund planned operations and capital expenditures into mid-2022. This runway depends in part on expected reimbursements and operating assumptions; additional financing may be needed.
Material changes and business developments
- AbbVie collaborations ended: Both tau and alpha-synuclein agreements terminated effective August 3, 2020. Voyager retained certain rights to pursue programs but lost eligibility for future option, milestone and royalty payments under those agreements, and was relieved of future R&D obligations. Voyager is assessing whether to advance the programs itself or with other partners.
- VY-HTT01 clinical hold: Voyager filed an IND for its Huntington’s disease candidate in September. In October, after quarter-end, FDA placed the IND on clinical hold pending additional chemistry, manufacturing and controls information, including drug-device compatibility and product characterization. Trial initiation is subject to resolving the hold and IND clearance.
- RESTORE-1 pause: In November, after quarter-end, the DSMB requested additional patient-level information and recommended pausing patient dosing in the VY-AADC Parkinson’s Phase 2 trial pending review. Voyager and Neurocrine delayed resumption of screening until the review is complete. Sites had already paused screening in April amid COVID-19 impacts.
- Pipeline and partner concentration: Neurocrine remains the principal active collaboration, supporting VY-AADC, Friedreich’s ataxia and two discovery programs. VY-SOD102 for ALS was deprioritized for internal IND filing; Voyager intends to seek a partner. The company has no approved products and has incurred losses historically; accumulated deficit was $260.0M at quarter-end.
Outlook, risks and other items
- Voyager and Neurocrine expected to start the RESTORE-2 Phase 3 Parkinson’s trial in the first half of 2021, subject to delays arising from the RESTORE-1 pause and resumption of trial activity. The filing gives no financial guidance or revenue forecast.
- COVID-19 reduced on-site laboratory activity, delayed or ended some noncritical preclinical experiments, and slowed RESTORE-1 enrollment. Further effects on trials, collaborators, manufacturing, timelines and reimbursements remain uncertain.
- Key risks include clinical efficacy and safety, regulatory uncertainty, manufacturing scale-up and comparability of the baculovirus/Sf9 process with the earlier HEK293 process, neurosurgical delivery risks, reliance on Neurocrine and third-party suppliers, and the need for additional capital. The filing notes that early Parkinson’s trial results may not predict pivotal-trial results.
- Operating lease commitments were $41.4M in the disclosed schedule, in addition to the separate $25.6M Hayden Avenue lease commitment. Voyager reported no material legal proceedings or off-balance-sheet arrangements. Disclosure controls were assessed as effective as of September 30, 2020.
Investor facts to verify
- Track the FDA’s resolution of the VY-HTT01 clinical hold and the timing of any Phase 1b trial start.
- Confirm the DSMB’s conclusions and any restart, enrollment progress or safety disclosures for RESTORE-1; reassess the contingent RESTORE-2 timeline.
- Separate one-time AbbVie deferred-revenue recognition from recurring Neurocrine revenue and cash reimbursements when assessing results and runway.
- Monitor actual cash burn, Neurocrine reimbursements, capital needs and the assumptions supporting the mid-2022 runway estimate.
- Review the economics and retained rights following AbbVie terminations, and whether Voyager secures partners or funding to advance tau, alpha-synuclein and ALS programs.