Business context and reporting period
Voyager Therapeutics, Inc. is a clinical-stage gene therapy company focused on severe neurological diseases. This unaudited Form 10-Q covers the three months ended March 31, 2020; comparisons are with the three months ended March 31, 2019, unless noted. Voyager had no approved products and generated no product-sale revenue.
Financial performance and liquidity
| Metric | Q1 2020 | Q1 2019 / prior date |
|---|---|---|
| Collaboration revenue | $18.1 million | $5.2 million |
| Research and development expense | $32.3 million | $24.8 million |
| General and administrative expense | $10.2 million | $9.7 million |
| Total operating expenses | $42.5 million | $34.5 million |
| Operating loss | $24.4 million | $29.3 million |
| Net loss | $24.3 million | $27.2 million |
| Net loss per share, basic and diluted | $0.66 | $0.81 |
| Cash used in operating activities | $28.8 million | Cash provided: $125.2 million |
Revenue came from collaborations: $14.5 million from Neurocrine, $2.4 million from AbbVie’s tau program, and $1.2 million from AbbVie’s alpha-synuclein program. The filing reports no product revenue. Profit margins are not meaningful given the company’s operating losses and lack of product sales.
At March 31, 2020, cash and cash equivalents were $165.2 million and marketable securities were $87.1 million, including $85.7 million of current U.S. Treasury notes and $1.4 million of equity securities. Cash, cash equivalents, and marketable debt securities totaled approximately $250.9 million. Total current assets were $272.5 million; current liabilities were $72.5 million. The filing identifies no conventional borrowings; liabilities include deferred collaboration revenue and operating lease obligations. Total lease liabilities were $33.4 million.
Management expected available cash, cash equivalents, marketable debt securities, and anticipated Neurocrine cost reimbursements to fund planned operating expenses and capital expenditures into mid-2022. This is a management estimate, not a guarantee.
Material changes versus the prior comparable period
- Collaboration revenue rose $12.9 million, principally reflecting the expanded contribution from Neurocrine and the start of the AbbVie alpha-synuclein collaboration in 2019.
- R&D expense increased $7.5 million, including higher employee and contractor costs, facilities costs, and clinical and manufacturing activity. G&A expense rose $0.5 million.
- Net loss improved by $2.9 million, despite higher operating expenses, as collaboration revenue increased. Other income fell to $0.2 million from $2.1 million; Q1 2020 included $0.8 million of other expense.
- Operating cash flow shifted from $125.2 million provided to $28.8 million used. Q1 2019 cash flow had benefited from a $148.6 million increase in deferred revenue associated with collaboration upfront payments; Q1 2020 included an $8.3 million decrease in deferred revenue.
- Cash and cash equivalents increased to $165.2 million from $86.0 million at December 31, 2019, while current marketable securities declined to $85.7 million from $195.5 million, primarily reflecting maturities and cash-management activity. Total assets fell to $322.6 million from $354.8 million.
Outlook, management commentary, risks, and unusual items
- Management expected expenses and operating losses to increase as programs advance, clinical and preclinical work continues, and manufacturing and operating capabilities expand. The filing provides no formal revenue or earnings guidance.
- RESTORE-1, a Phase 2 trial of VY-AADC for Parkinson’s disease conducted with Neurocrine, had screening temporarily paused amid COVID-19 and implementation of protocol amendments. The planned enrollment increased from 42 to approximately 85 patients, with 2:1 randomization to treatment or placebo surgery. Enrollment changes were expected to lengthen the trial; management anticipated an update to the enrollment timeline.
- Voyager anticipated initiating the RESTORE-2 Phase 3 trial in the second half of 2020. Trial timing and results remain uncertain; the FDA had advised that two adequate and well-controlled trials are suggested for Parkinson’s disease.
- COVID-19 had reduced on-site laboratory activity, delayed or ended some non-critical preclinical experiments, and slowed RESTORE-1 enrollment. Further disruption could delay trials, collaboration reimbursements, regulatory plans, and development timelines.
- Voyager was reviewing preclinical studies for Huntington’s candidate VY-HTT01 and planned to provide a program update in mid-2020. It intended to seek a partner for its preclinical SOD1 ALS program and no longer expected to file an IND for that program before partnering. VY-FXN01 remained in preclinical development with Neurocrine.
- In March 2020, Voyager agreed to lease additional laboratory and office space at 75 Hayden Avenue through October 2030. The expected contractual payments are approximately $25.6 million, excluded from the lease-payment schedule because control of the space had not yet transferred. Management expected occupancy in late 2020.
- Collaboration funding and reimbursements are important to the runway estimate. Neurocrine cost-reimbursement estimates were revised to $367.7 million from $431.1 million at inception. These estimates and future partner option exercises, milestones, or royalties are subject to uncertainty.
- No material legal proceedings were reported. Management concluded disclosure controls were effective as of March 31, 2020; no material changes in internal control over financial reporting were reported.
Important facts for investors to verify
- RESTORE-1 screening and enrollment status, the impact of COVID-19, and whether the amended trial can support the expected regulatory path.
- Progress toward RESTORE-2 initiation and the basis for management’s mid-2022 liquidity runway estimate, including Neurocrine reimbursements and spending assumptions.
- Changes in collaboration revenue, deferred revenue, reimbursement estimates, and any partner option decisions or termination risks.
- Clinical and preclinical updates for VY-AADC, VY-HTT01, VY-FXN01, and the partnering plan for VY-SOD102.
- Manufacturing comparability and supply for the baculovirus/Sf9-produced VY-AADC, and availability of delivery devices and third-party support.
- The financial and operational effects of the new Hayden Avenue lease and other future facility commitments.