Intellia Therapeutics, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022; unaudited. 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 has been collaboration revenue.
Financial performance and liquidity
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Collaboration revenue | $14.0m | $6.6m | $25.3m | $13.0m |
| Research and development expense | $90.2m | $58.9m | $223.3m | $98.2m |
| General and administrative expense | $22.1m | $16.7m | $44.5m | $30.3m |
| Operating loss | $(98.3)m | $(69.0)m | $(242.5)m | $(115.4)m |
| Net loss | $(100.7)m | $(68.8)m | $(247.6)m | $(115.0)m |
| Basic and diluted loss per share | $(1.33) | $(1.01) | $(3.29) | $(1.70) |
Margins: A conventional gross margin is not presented; revenue is collaboration revenue. Operating expenses substantially exceeded revenue in both periods.
Cash flow, six months: Operating cash used was $164.9m versus $105.4m in 2021; investing activities provided $142.8m versus $7.7m; financing activities provided $53.2m versus $65.7m. Investing cash flow included $224.6m of marketable-security maturities and $44.8m net cash used for the Rewrite acquisition. Financing included $38.9m of net ATM proceeds.
Liquidity at June 30: Cash and cash equivalents were $147.8m and marketable securities totaled $759.1m, or $906.9m combined. The company stated these resources, together with expected collaboration and cost-reimbursement funding, were expected to fund operations and capital needs beyond 24 months, excluding potential milestone payments and strategic uses of capital; management cautioned that assumptions could prove wrong. No borrowings are shown in the supplied filing text. Operating lease liabilities totaled approximately $69.6m, current and long-term combined.
Changes versus prior comparable periods
- Q2 revenue increased $7.5m year over year, mainly from AvenCell and Kyverna collaboration activity. First-half revenue rose $12.3m for similar reasons.
- Q2 R&D expense rose $31.3m; first-half R&D rose $125.1m, including a $56.0m one-time in-process R&D charge for the Rewrite acquisition. Other drivers included increased clinical and platform spending, employee costs, facilities and stock-based compensation.
- Net loss widened by $31.9m in Q2 and $132.5m for the first half. First-half results also included a $6.0m equity-method loss from AvenCell and $41.6m of equity-based compensation.
- Marketable securities declined from $962.6m at December 31, 2021 to $759.1m at June 30, 2022; the company recorded a $6.1m first-half unrealized securities loss in other comprehensive loss.
- Shares outstanding increased from 74.5m at year-end 2021 to 76.0m at June 30, 2022. First-half ATM sales generated $38.9m net proceeds.
Outlook, developments and risks
- No product-sales revenue or profitability guidance was provided. The company expects second-half 2022 expenses to increase as it expands R&D, advances clinical programs and moves additional programs forward. It expects continued losses and may need additional financing; future equity issuance could dilute shareholders.
- NTLA-2001: The filing reports more than 30 patients treated across ATTR study arms and sustained, deep TTR reductions in interim data. A liver-enzyme elevation in one dose-expansion patient normalized without medical intervention; it was considered possibly treatment-related and nonserious by the investigator. The company described planned dose-expansion work and further interim data, subject to regulatory feedback.
- NTLA-2002 was in early clinical development, with interim data anticipated in the second half of 2022. NTLA-3001 had IND-enabling work underway, with an IND or equivalent filing planned for 2023. NTLA-2003 and NTLA-6001 were also in IND-enabling activities.
- The company said it would discontinue the NTLA-5001 autologous study and pivot to an allogeneic version; it stated this decision was not prompted by safety or efficacy data. The filing also describes a plan to focus ex vivo development on allogeneic cell therapies.
- Rewrite acquisition: approximately $45.0m upfront cash consideration, with up to $155.0m in additional research and regulatory milestones ($130.0m cash and $25.0m stock). The upfront acquisition-related amount was expensed as R&D because the acquired in-process technology had no alternative future use and was not technologically feasible. A $10.8m fair-value liability was recorded for the stock-settled research milestone.
- Facility commitments are expanding: leases cover approximately 38,000 square feet of office/lab space expected to commence in October 2022, 62,000 square feet expected in September 2022, and 140,000 square feet of manufacturing space expected in February 2024. Rent, operating costs and restricted letters of credit add future cash obligations.
- Key risks include early-stage clinical and regulatory uncertainty for genome editing, potential safety or unintended-editing risks, manufacturing and trial execution, competition, reliance on collaborators, financing and dilution, cybersecurity, and significant intellectual-property disputes. The PTAB ruled in February 2022 that the Broad Institute patent family had priority over the UC/Vienna/Charpentier family in an interference; appeals were pending. The company reported no material change in litigation since year-end 2021.
- Management said disclosure controls were effective at the reasonable-assurance level and that no material change in internal control over financial reporting occurred during the quarter.
Most important facts for investors to verify
- Updated NTLA-2001 safety, durability and dose-expansion results, including follow-up on the liver-enzyme event and regulatory decisions.
- NTLA-2002 clinical data and timing, plus progress toward the stated NTLA-3001 filing plan and other IND-enabling milestones.
- Actual cash burn and collaboration reimbursements relative to the stated runway; the outlook depends on assumptions and excludes potential milestones and strategic uses.
- Whether the Rewrite research or regulatory milestones become payable, and the resulting cash, dilution and liability effects.
- Progress and economics of the new leases, manufacturing build-out, and any additional capital raises or ATM issuance.
- Developments in CRISPR patent proceedings and any effects on licensed rights, freedom to operate or program timelines.