CRISPR Therapeutics AG — Q2 2023 Form 10-Q
Business context and period. Unaudited results for the three and six months ended June 30, 2023. CRISPR Therapeutics is a clinical-stage gene-editing company with programs in hemoglobinopathies, immuno-oncology, regenerative medicine and in vivo editing. It reported no product-sale revenue; collaboration payments were the period’s principal revenue.
Key financial results
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | $70.0m | $0.2m | $170.0m | $1.1m |
| Operating expenses | $165.2m | $183.4m | $329.7m | $360.3m |
| Operating loss | $95.2m | $183.3m | $159.7m | $359.2m |
| Other income, net | $18.4m | $3.5m | $31.1m | $3.9m |
| Net loss | $77.7m | $185.8m | $130.8m | $365.1m |
| Basic and diluted loss per share | $0.98 | $2.40 | $1.66 | $4.72 |
Amounts are U.S. dollars; losses and loss per share are shown as positive magnitudes. Revenue was $100m of upfront consideration from Vertex recognized in Q1 and a $70m research milestone recognized in Q2 under diabetes-related agreements. The Q2 milestone remained in accounts receivable at June 30. The filing does not provide a meaningful product gross margin; the company had no product sales.
Research and development expense declined to $101.6m in Q2 and $201.5m for the half year, primarily on lower external research and manufacturing costs. General and administrative expense also fell. Net collaboration expense rose to $44.6m in Q2 and $86.8m for the half year, mainly from higher exa-cel manufacturing and pre-commercial costs. Higher interest income contributed to improved net results.
Liquidity, cash flow and balance sheet
- Cash, cash equivalents and marketable securities totaled $1.773bn at June 30, 2023; current assets were $1.860bn and current liabilities were $132.8m.
- Six-month operating cash use was $124.4m, versus $277.2m in the prior-year period. Investing activities provided $334.8m, principally reflecting net maturities of marketable securities; financing provided $22.2m, mainly from option exercises and employee share purchases.
- Total assets were $2.197bn and shareholders’ equity was $1.816bn. No financial borrowings are listed; operating lease liabilities totaled $245.2m, including current and non-current portions.
- The company reported an accumulated deficit of $976.9m. It stated existing cash resources were expected to fund operating expenses and capital expenditures for at least 24 months, excluding potential additional Vertex proceeds and future capital raises. Management cautioned this estimate depends on assumptions and resources could be used sooner.
Material changes and outlook
- Compared with Q2 2022, Q2 2023 revenue increased substantially due to the Vertex research milestone. The half-year net loss narrowed substantially, reflecting collaboration revenue, lower R&D and G&A costs, and higher interest income; this does not represent recurring product revenue.
- Management expects continued losses and significant ongoing R&D, manufacturing and potential commercialization costs. The company may need additional capital through equity, debt or collaborations; financing could dilute shareholders or require concessions on rights.
- In June 2023, the company and Vertex reported that exa-cel met primary and key secondary endpoints at prespecified interim analyses in the Phase 3 TDT and severe SCD trials. The FDA accepted the U.S. applications, assigning a December 8, 2023 target action date for SCD (Priority Review) and March 30, 2024 for TDT (Standard Review); an advisory committee meeting was anticipated. These were pending regulatory reviews, not approvals.
- Other disclosed programs include ongoing clinical trials for allogeneic CAR-T candidates CTX110, CTX112, CTX130 and CTX131, and diabetes candidates VCTX210 and VCTX211. Clinical progress, regulatory decisions, manufacturing, intellectual-property protection and financing remain material uncertainties.
- Remaining Vertex and other collaboration milestones and royalties were generally constrained and not recognized because achievement was uncertain or depended on future product sales. The company disclosed ordinary-course intellectual-property and other proceedings, but no pending claims management considered likely to have a material adverse effect. No material changes to previously disclosed risk factors were reported.
Important facts for investors to verify
- Whether exa-cel receives regulatory approval on the stated FDA timelines and the eventual label, safety profile and commercial terms.
- Whether the $70m Vertex milestone receivable is collected, and how much future collaboration revenue is contingent rather than recurring.
- Whether the stated 24-month cash runway remains adequate as clinical, manufacturing and commercialization spending evolves.
- Progress and results in the broader pipeline, including trial enrollment, safety, efficacy and manufacturing readiness.
- Potential dilution or other financing needs, and the status of intellectual-property disputes and contingent collaboration obligations.