Intellia Therapeutics, Inc. — Q2 2023 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2023; filed August 3, 2023. Intellia is a clinical-stage CRISPR/Cas9 genome-editing company developing in vivo and ex vivo therapies. It has no approved products, and all revenue to date is collaboration revenue.
Financial performance and liquidity
Amounts below are in millions of dollars, except per-share data.
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Collaboration revenue | $13.6 | $14.0 | $26.2 | $25.3 |
| Research and development | $115.3 | $90.2 | $212.4 | $223.3 |
| General and administrative | $30.7 | $22.1 | $58.1 | $44.5 |
| Operating loss | $(132.3) | $(98.3) | $(244.3) | $(242.5) |
| Net loss | $(123.7) | $(100.7) | $(226.8) | $(247.6) |
| Net loss per share, basic and diluted | $(1.40) | $(1.33) | $(2.58) | $(3.29) |
- Cash and investments: $1.072 billion in cash, cash equivalents and marketable securities at June 30, 2023, versus approximately $1.262 billion at December 31, 2022. Current assets were $939.6 million and current liabilities $99.9 million, a current ratio of approximately 9.4x.
- Cash flows, six months: $199.7 million used in operating activities, $156.8 million used in investing activities and $4.7 million provided by financing activities. Cash, cash equivalents and restricted cash ended at $183.8 million; the larger cash-and-investments total also includes marketable securities.
- Debt and margins: No borrowings or debt balance is reported on the balance sheet. Product gross margins are not applicable; the filing reports collaboration revenue and operating losses, not product sales.
- Equity and dilution: Common shares outstanding were 88.35 million at June 30, versus 87.10 million at year-end. The company increased authorized common shares to 240 million. It raised $1.5 million net through its ATM program in the first half; $203.4 million remained eligible for sale.
Changes versus prior periods
- Q2 operating loss widened by $34.0 million and net loss by $23.0 million year over year, despite a $12.0 million increase in interest income. Q2 R&D rose 28%, mainly from lead-program spending, employee costs, facilities and stock-based compensation; G&A rose 38%.
- First-half net loss improved by $20.7 million, while operating loss was nearly unchanged. The comparison benefited from the absence of the $56.0 million Rewrite in-process R&D charge recorded in 2022 and higher interest income; R&D excluding that prior-year charge increased overall spending in key programs.
- First-half collaboration revenue increased $0.9 million. Revenue from Kyverna had been recognized in full by Q1 2023; the company cited SparingVision as the principal source of the first-half revenue increase.
- Equity-method losses from AvenCell were $7.0 million in the first half. The $25.0 million Rewrite research milestone was settled in February with $0.9 million cash and 567,045 shares; the cash portion was recorded as R&D expense.
Outlook, management commentary and risks
- Management expects June 30 cash, cash equivalents and marketable securities, together with collaboration research and cost-reimbursement funding, to support operations and capital requirements beyond 24 months. This estimate excludes potential collaboration milestone payments and strategic uses of capital, and depends on assumptions that may prove incorrect. The financial-statement note separately says resources are expected to cover at least the following 12 months.
- Management expects expenses to increase in 2023 as it grows R&D and advances clinical programs. The company expects to rely on collaboration arrangements and potentially equity financing until it can generate substantial product revenue; it has no committed external funding source beyond collaboration-related payments and reimbursements.
- NTLA-2001: Management planned to submit an FDA IND for the ATTR-CM arm in September 2023 and, subject to regulatory feedback, begin a global pivotal study by year-end. Additional study data were expected by year-end. The ATTRv-PN dose-expansion enrollment was completed, with pivotal-study preparation underway.
- NTLA-2002: The FDA had cleared the IND and granted RMAT designation. Interim Phase 1 data reported a 95% mean reduction in monthly HAE attack rate across 10 patients after one dose, with median follow-up of 9 months; the company cautioned that interim findings may change. FDA requested supplemental preclinical data concerning women of child-bearing potential. Management planned Phase 3 initiation as early as Q3 2024, subject to regulatory feedback.
- Other programs and operations: Management planned a CTA for NTLA-3001 by year-end 2023 and completion of NTLA-2003 IND-enabling work by year-end. The AvenCell co-development arrangement was terminated following program reprioritization; related obligations were completed in Q2. A 140,000-square-foot Waltham manufacturing lease is expected to commence in 2024, with a phased move planned for the second half of that year.
- Principal risks: Clinical and regulatory uncertainty for novel genome-editing therapies; potential safety, efficacy, manufacturing and enrollment setbacks; dependence on collaborators and contract manufacturers; competition; and material patent ownership, validity and infringement disputes involving CRISPR intellectual property. The company also highlights financing and dilution risk, data-security risk and the possibility that additional regulatory requirements delay trials.
- The filing reports no material changes to outstanding litigation since year-end and no material changes to contractual obligations during Q2. Management concluded disclosure controls were effective at the reasonable-assurance level; no material change in internal control over financial reporting was reported.
Important facts for investors to verify
- Progress against the NTLA-2001 and NTLA-2002 clinical, regulatory and pivotal-trial timelines, including the status and implications of the FDA-requested NTLA-2002 preclinical data.
- Whether the reported NTLA-2002 interim efficacy and safety findings hold with longer follow-up and larger patient populations.
- Cash burn, investment balances and the assumptions supporting management’s beyond-24-month runway estimate, including the distinction between that outlook and the note’s minimum 12-month liquidity statement.
- R&D and G&A growth, stock-based compensation, future manufacturing-facility costs and the company’s need for additional capital or collaboration funding.
- Developments in CRISPR-related patent proceedings and licensing rights, collaboration economics and the AvenCell investment, and the cost and timing of the Waltham lease and construction.