Intellia Therapeutics, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021. Unaudited results; comparisons are with the three months ended March 31, 2020 unless noted. Intellia is a clinical-stage CRISPR/Cas9 genome-editing company and has not generated product-sales revenue.
Financial performance and liquidity
| Metric | Q1 2021 | Q1 2020 / comparison |
|---|---|---|
| Collaboration revenue | $6.4 million | $12.9 million; down $6.5 million (50%) |
| Research and development expense | $39.3 million | $34.7 million; up 13% |
| General and administrative expense | $13.6 million | $11.3 million; up $2.3 million |
| Total operating expenses | $52.9 million | $46.0 million |
| Operating loss | $46.4 million | $33.0 million |
| Interest income | $0.2 million | $1.2 million |
| Net loss / loss per share | $46.2 million / $0.69 | $31.8 million / $0.63 |
| Net cash used in operating activities | $52.4 million | $38.5 million |
At March 31, 2021, cash and cash equivalents were $141.5 million and marketable securities were $459.3 million, totaling $600.8 million. Stockholders’ equity was $545.9 million; accumulated deficit was $481.3 million. The filing reports no conventional borrowings or debt balance. Operating lease liabilities totaled $72.7 million, including current and long-term portions.
Financing provided $58.6 million in the quarter, including $45.3 million net proceeds from at-the-market share sales and $13.3 million from option exercises. The company used $25.5 million in investing activities, principally reflecting purchases and maturities of marketable securities and $2.4 million of property and equipment purchases.
Material changes and business developments
- Revenue declined mainly because Q1 2020 included a $5.0 million Novartis milestone for FDA acceptance of an IND for a sickle-cell-disease therapy; no comparable milestone was earned in Q1 2021.
- R&D expense increased despite lower NTLA-2001 external costs, reflecting higher spending on NTLA-2002 and NTLA-5001, workforce growth, research materials, and stock-based compensation.
- In Q1 2021, Intellia recognized a $40.4 million right-of-use asset and approximately $34.8 million lease liability for its new 281 Albany Street office and laboratory lease. The lease has an initial ten-year term after rent commencement.
- Shares outstanding increased to 67.9 million from 66.2 million at December 31, 2020, partly due to at-the-market sales and option exercises.
Outlook, risks, and contingencies
- Management expects R&D expense to rise during 2021 as it expands development activities, conducts the NTLA-2001 clinical trial, and advances NTLA-2002 and NTLA-5001. It anticipated interim NTLA-2001 Phase 1 data in mid-2021 and planned an IND or equivalent filing for NTLA-2002 in the second half of 2021 and NTLA-5001 in mid-2021.
- The filing gives two runway statements: the liquidity note says cash, equivalents, securities, and Regeneron research and cost-reimbursement funding support operations for at least 12 months after issuance; MD&A says the same resources are expected to fund operations and capital needs for at least 24 months from March 31, 2021. The 24-month estimate excludes potential collaboration milestones or extension fees and depends on assumptions that may prove wrong.
- Intellia remains dependent on collaboration funding and future financing while product candidates are early in development. Additional equity financing could dilute shareholders; collaboration financing could require granting rights on unfavorable terms. The company warns it may need to delay, reduce, or terminate programs if it cannot obtain funding.
- Key risks include unproven clinical safety and efficacy of genome editing, trial delays or failure, manufacturing and supply constraints, regulatory uncertainty, competition, COVID-19 disruption, and dependence on collaborators and third-party manufacturers.
- Intellia’s Caribou arbitration concerns modified guide-RNA intellectual property. The interim award was limited to a specific Caribou CD19 CAR-T program; terms, including future payments, remained subject to negotiation or further proceedings. Separate CRISPR patent interferences and challenges could affect intellectual-property rights.
- Management reported effective disclosure controls at the reasonable-assurance level and no material change in internal control over financial reporting during the quarter. No material change in contractual obligations was reported.
Most important facts for investors to verify
- Reconcile the filing’s 12-month liquidity statement with its 24-month MD&A runway estimate, including assumptions about Regeneron reimbursements and expected spending.
- Track NTLA-2001 clinical data and safety, and whether NTLA-2002 and NTLA-5001 meet the stated filing and development timelines.
- Monitor quarterly operating cash use, R&D growth, and future financing needs, including potential dilution from equity issuance.
- Review the status and financial implications of the Caribou arbitration and CRISPR patent proceedings.
- Assess collaboration dependence, manufacturing capacity, regulatory developments, and any COVID-19-related effects on trials or supply.