Caribou Biosciences, Inc. — Q2 2023 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2023. Caribou is a clinical-stage CRISPR genome-editing company developing allogeneic CAR-T and CAR-NK cell therapies. It has no approved products and generates no product-sales revenue; reported revenue is from licensing and collaborations.
Key financial metrics
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Licensing and collaboration revenue | $3.8 million | $4.2 million | $7.3 million | $6.9 million |
| Research and development expense | $26.5 million | $22.6 million | $52.2 million | $36.5 million |
| General and administrative expense | $10.1 million | $10.0 million | $19.0 million | $19.6 million |
| Net loss | $29.5 million | $26.7 million | $57.6 million | $45.8 million |
| Net loss per share, basic and diluted | $0.48 | $0.44 | $0.94 | $0.75 |
| Cash used in operating activities | Not separately stated for the quarter | $43.1 million | $43.5 million |
At June 30, cash, cash equivalents, and marketable securities totaled $292.5 million, down from $317.0 million at December 31, 2022. Total liabilities were $80.2 million and stockholders’ equity was $269.5 million. The filing reports no debt balance. Operating cash burn was partly offset by $19.2 million of financing cash inflows and $31.8 million of net investing cash inflows, primarily reflecting marketable-security maturities and purchases. The filing does not provide a meaningful gross margin; the business has no product sales.
Management said the June 30 liquidity balance was expected to fund its current operating plan for at least 12 months from issuance of the financial statements. After quarter-end, the company raised approximately $134.6 million net in a July–August public offering.
Material changes versus comparable periods
- Q2 revenue fell $0.4 million year over year, mainly because AbbVie revenue declined, partly offset by $1.2 million from a new Edge Animal Health license. Six-month revenue rose $0.4 million year over year.
- R&D expense increased $3.9 million in Q2 and $15.7 million for the first half, primarily due to higher clinical and manufacturing activity and personnel costs. Six-month operating loss widened to $64.0 million from $49.3 million.
- Six-month net loss increased $11.8 million year over year. Higher interest income on marketable securities partly offset higher operating expenses; the prior-year period also included a larger gain from revaluation of the MSKCC success-payment liability.
- Common shares outstanding were 66.1 million at June 30 versus 61.0 million at year-end. This includes 4.69 million shares issued to Pfizer; the later public offering added 22.12 million shares.
Outlook, commentary, and risks
- Management expects substantial continuing losses and rising R&D spending as it advances CB-010 and CB-011 trials and develops CB-012 and CB-020. It cautions that it may never achieve profitability and may need additional capital.
- CB-010 is in the ANTLER Phase 1 trial; the company reported long-term dose-escalation follow-up on July 13, 2023, planned an FDA discussion about a potential pivotal second-line LBCL trial in the second half of 2023, and planned initial second-line dose-expansion data in the first half of 2024. The filing does not include the detailed clinical results from that July announcement.
- CB-011 is in the CaMMouflage Phase 1 trial for relapsed or refractory multiple myeloma. Pfizer invested $25.0 million gross, with proceeds generally restricted for 36 months to CB-011 or another qualifying anti-BCMA program. Pfizer also received information rights, a 30-day right of first negotiation on certain program-rights transactions, and a scientific advisory board designee right.
- CB-012 remained in IND-enabling studies, with an IND submission planned for the second half of 2023. CB-020 is a CAR-NK candidate in development for solid tumors.
- Potential risks include clinical, regulatory, manufacturing, financing, intellectual-property, and competition uncertainties. The company relies on third-party manufacturers and service providers. It disclosed two active putative class actions alleging deficiencies in disclosures concerning CB-010’s durability and prospects; the company says it believes the cases are without merit. A related federal case was denied a requested stay in July 2023. No material changes to previously disclosed risk factors were reported.
- No formal financial guidance or profitability target is provided. The company disclosed approximately $161.2 million of potential future development, regulatory, and sales milestone payments under certain license agreements, contingent on applicable events.
Important facts for investors to verify
- Review the full CB-010 follow-up data and subsequent FDA feedback, including whether trial results support the planned development path.
- Track enrollment, safety, efficacy, and timing for CB-010 and CB-011, and progress toward the planned CB-012 IND submission.
- Assess cash burn against the stated runway, the use restrictions attached to Pfizer’s investment, and dilution from the post-quarter public offering.
- Monitor the status and potential costs or outcomes of the Bergman and Lowry lawsuits, which concern disclosures about CB-010.
- Evaluate revenue concentration: three licensees accounted for 84.3% of first-half revenue, and the business remains dependent on licensing and collaboration revenue.