Intellia Therapeutics, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Intellia is a clinical-stage genome-editing company developing CRISPR/Cas9-based in vivo and ex vivo therapies. The company had no approved products and all revenue to date was collaboration revenue.
Financial and operating metrics
| Metric | Q1 2022 | Q1 2021 / comparator |
|---|---|---|
| Collaboration revenue | $11.3 million | $6.4 million |
| Research and development expense | $133.1 million | $39.3 million |
| General and administrative expense | $22.4 million | $13.6 million |
| Operating loss | $144.2 million | $46.4 million |
| Net loss | $146.9 million; $1.96 per share | $46.2 million; $0.69 per share |
| Net cash used in operating activities | $79.8 million | $52.4 million |
At March 31, 2022, cash and cash equivalents were $133.4 million and marketable securities totaled $861.4 million, or $994.7 million combined. Current assets were $875.4 million and current liabilities $126.1 million. The filing reports no borrowings; liabilities included operating leases and deferred revenue. Stockholders’ equity was $953.8 million. The company’s investments in marketable securities had $7.3 million of gross unrealized losses, recorded as temporary.
Investing activities provided $47.5 million, mainly from securities maturities, partly offset by $44.8 million in cash paid for the Rewrite acquisition and $1.4 million in property and equipment purchases. Financing activities provided $47.3 million, including $38.9 million net proceeds from at-the-market stock sales and $8.4 million from option exercises. No profit margin is meaningful as the company remained loss-making and had no product sales.
Changes versus the prior-year quarter and balance-sheet date
- Revenue rose $4.8 million, primarily reflecting the AvenCell collaboration.
- Operating expenses increased $102.6 million. R&D rose $93.8 million, including a $56.0 million nonrecurring in-process R&D charge for Rewrite, higher development and employee costs, and increased stock-based compensation. G&A rose $8.8 million.
- Net loss widened by $100.7 million, also reflecting a $2.7 million equity-method investment loss and a $0.4 million increase in contingent-consideration fair value expense.
- Compared with December 31, 2021, combined cash, cash equivalents and marketable securities increased from approximately $748.7 million to $994.7 million. Total assets declined to $1.203 billion from $1.294 billion, while stockholders’ equity declined to $953.8 million from $1.040 billion.
Outlook, management commentary and risks
- Management expected March 31 cash, cash equivalents and marketable securities, together with research and cost reimbursements from collaborators, to fund operations and capital expenditures beyond 24 months. This estimate excludes potential milestone payments and strategic uses of capital and depends on assumptions that could prove incorrect. The filing also notes that collaboration milestone timing and amounts are uncertain.
- Management expected expenses to increase in 2022 as clinical development and pipeline work expand. Intellia expects to continue funding operations through collaborations and, as needed, equity financing; it had a new $400 million at-the-market sales agreement, with no shares sold under it by quarter-end. Future equity issuance could dilute shareholders.
- Clinical progress described included NTLA-2001 interim Phase 1 results showing mean serum TTR reductions of 86% and 93% in the 0.7 mg/kg and 1.0 mg/kg cohorts, respectively; NTLA-5001’s first patient was dosed in its Phase 1/2a study. The company planned further clinical updates during 2022. These early results do not establish safety, efficacy, or eventual approval.
- On February 2, 2022, Intellia acquired Rewrite for approximately $45 million upfront and recorded $56.0 million of R&D expense. Former holders may receive up to $155 million in additional research and regulatory milestones, subject to achievement.
- Intellia entered leases for approximately 38,000 square feet of office and laboratory space and 140,000 square feet of manufacturing space, expected to commence in October 2022 and February 2024, respectively. Rent and operating costs will add future commitments.
- Key risks include the early and unproven nature of CRISPR-based therapies, clinical and manufacturing failure or delay, reliance on collaborators and contract manufacturers, financing and dilution risk, COVID-19-related disruption, and intellectual-property uncertainty. In February 2022, the PTAB found the Broad Institute had priority over UC/Vienna/Charpentier in an interference; UC/Vienna/Charpentier appealed in March 2022. Intellia’s licensed rights could be affected by the outcome.
Important facts for investors to verify
- Subsequent NTLA-2001 and other program data, including safety, durability, patient follow-up, and progress toward later-stage studies.
- Actual quarterly cash burn, collaborator reimbursements, and whether management’s stated runway assumptions remain valid as spending expands.
- Rewrite milestone achievement likelihood and potential cash, stock, and fair-value effects.
- Progress and financial commitments under the new facility leases and the planned manufacturing buildout.
- Developments in CRISPR patent proceedings, particularly the appeal of the PTAB decision and implications for licensed intellectual property.
- Potential dilution from at-the-market offerings, equity compensation, and future capital needs.