Intellia Therapeutics, Inc. — FY 2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020. Intellia is a clinical-stage genome-editing company developing CRISPR/Cas9 therapies. It had no approved products and generated no product-sale revenue; reported revenue came from collaborations.
Financial performance and liquidity
| Metric | FY 2020 | FY 2019 |
|---|---|---|
| Collaboration revenue | $58.0 million | $43.1 million |
| Research and development expense | $150.4 million | $108.4 million |
| General and administrative expense | $44.2 million | $41.1 million |
| Operating loss | $136.6 million | $106.4 million |
| Net loss | $134.2 million; $2.40 per share | $99.5 million; $2.11 per share |
| Net cash used in operating activities | $49.9 million | $103.2 million |
- Revenue increased 34.5%; R&D expense increased 38.7%, primarily reflecting clinical-manufacturing preparation and preclinical work on NTLA-2001, NTLA-2002 and NTLA-5001, as well as workforce growth.
- Net loss widened 34.9%. Revenue included an $8.4 million cumulative catch-up adjustment and $15.3 million recognized upon transfer of the hemophilia A Factor VIII target to Regeneron. Lower Novartis collaboration revenue partly offset these items.
- At year-end, cash and cash equivalents were $160.0 million and marketable securities were $437.4 million, totaling $597.4 million. The balance sheet reported total assets of $676.3 million, current liabilities of $64.3 million and stockholders’ equity of $527.1 million. Restricted cash was $4.6 million. No borrowings or debt balance is reported in the supplied financial statements; lease liabilities were $39.3 million.
- Operating cash use declined year over year, primarily reflecting Regeneron collaboration receipts, including a $70.0 million upfront payment. Financing provided $371.8 million, including $296.6 million from follow-on offerings, $49.5 million from at-the-market sales and $12.6 million recorded for shares issued to Regeneron.
- There is no meaningful product gross margin because Intellia had no product sales. The company reported no cash-flow or operating margin measure as a key performance metric.
Pipeline, outlook and material developments
- NTLA-2001, an in vivo CRISPR/Cas9 candidate for transthyretin amyloidosis, entered a global Phase 1 study; the first patient was dosed in November 2020. Intellia expected early clinical data in 2021. The trial’s primary focus is safety, tolerability, pharmacokinetics and pharmacodynamics.
- NTLA-2002 for hereditary angioedema was in development, with clinical manufacturing underway and an IND or equivalent submission planned for the second half of 2021. NTLA-5001 for acute myeloid leukemia was expected to reach an IND or equivalent submission in mid-2021.
- The May 2020 Regeneron amendment expanded the collaboration, extended its term to April 2024 (with a paid extension option), and added hemophilia A and B co-development. Regeneron leads those programs and bears 65% of worldwide development costs and profits; Intellia bears 35%. In the ATTR co-development arrangement, Regeneron’s share of costs and profits decreased from 50% to 25% in mid-2020.
- Management expected year-end cash, cash equivalents and marketable securities, together with Regeneron research and cost-reimbursement funding, to fund operating and capital needs for at least 24 months from the filing’s planning perspective. This estimate excludes potential milestones and other strategic uses of capital and depends on assumptions. The financial-statement notes separately state that resources were expected to cover at least 12 months following issuance; investors should reconcile the differing runway statements.
- Management expected R&D expense to increase in 2021 as clinical work on ATTR advances and AML and HAE programs progress. Intellia expects continued losses and may require additional financing; future milestone and royalty receipts are uncertain. The company reported no royalty revenue to date.
- Key risks include unvalidated CRISPR/Cas9 safety and efficacy, clinical and regulatory delays, manufacturing and supply constraints, COVID-19 disruption, competition, dependence on collaborators, and uncertain coverage and reimbursement. Intellectual-property disputes include ongoing CRISPR patent interference proceedings involving the UC/Vienna/Charpentier portfolio, Broad and ToolGen, and unresolved terms from the Caribou guide-RNA arbitration.
- FY 2020 net loss was $134.2 million versus $99.5 million in 2019; fourth-quarter 2020 net loss was $42.2 million versus $28.3 million in fourth-quarter 2019. The filing reports that 2020 share issuance increased year-end shares outstanding to 66.2 million from 50.2 million a year earlier.
Investor verification checklist
- Reconcile management’s stated 24-month cash runway with the financial-statement note’s 12-month statement, and assess the assumptions and dependence on collaboration funding.
- Review the composition, maturity and availability of the $597.4 million in cash, cash equivalents and marketable securities, including restricted cash and future lease commitments.
- Track NTLA-2001 clinical safety and biomarker data, and confirm whether the planned NTLA-2002 and NTLA-5001 regulatory submissions and trial timelines were met.
- Separate recurring collaboration revenue and reimbursements from one-time amendment, license-transfer and milestone recognition; verify the timing and conditions of future partner payments.
- Assess dilution from 2020 equity issuance and any further use of the remaining $94.1 million capacity under the at-the-market program.
- Monitor the patent interference proceedings and final Caribou arbitration terms for potential effects on licensed rights, competition and development plans.
The filing reports an unqualified audit opinion on the financial statements and effective internal control over financial reporting as of December 31, 2020.