Vor Biopharma Inc. — Q2 2021 Form 10-Q
Reporting period: Three and six months ended June 30, 2021. Vor is a pre-revenue cell and genome engineering company developing engineered hematopoietic stem cell therapies and companion targeted therapies for blood cancers. Its lead programs are VOR33 and VCAR33.
Financial performance and liquidity
| Metric | Q2 2021 | Q2 2020 | Six months 2021 | Six months 2020 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $13.0 million | $6.0 million | $21.9 million | $12.1 million |
| General and administrative expense | $5.4 million | $2.1 million | $10.2 million | $3.8 million |
| Net loss | $18.4 million | $8.0 million | $32.1 million | $15.9 million |
| Net loss per share | $0.50 | $56.85 | $1.13 | $115.83 |
| Cash used in operating activities | — | — | $34.2 million | $14.4 million |
At June 30, 2021, cash and cash equivalents were $169.5 million and investments were $75.1 million, totaling $244.6 million. Current assets were $249.3 million and current liabilities were $8.3 million. Total liabilities were $25.0 million, primarily operating lease liabilities; the company reported no debt outstanding. The filing does not report meaningful product margins because Vor has no product revenue.
Financing provided $232.4 million in cash during the first half, including $45.4 million from Series B preferred stock and approximately $187.0 million in net IPO proceeds. Investing activities used $77.2 million, mostly for purchases of U.S. Treasury securities. The company said its June 30 cash, cash equivalents and investments were expected to fund operating and capital requirements into at least Q1 2023; it also stated that these resources would cover at least one year after the financial statements were issued.
Changes versus the prior comparable period
- Q2 net loss widened to $18.4 million from $8.0 million; first-half net loss rose to $32.1 million from $15.9 million.
- First-half operating cash use increased to $34.2 million from $14.4 million, reflecting higher operating expenses and growth in personnel and development activity.
- R&D expense increased 117% in Q2 and 80% for the first half. G&A expense increased 162% in Q2 and 170% for the first half, with increases attributed to hiring, professional fees, insurance and facilities.
- The February 2021 IPO and preferred-stock conversion substantially increased cash and common shares outstanding. The company raised approximately $186.3 million net in the IPO and reported 37.1 million common shares issued at June 30.
Outlook, developments and risks
- Vor expects no product revenue in the near future and anticipates significant, increasing losses and expenses as it advances development. It expects to need substantial additional funding; the stated runway is based on assumptions and could be shorter.
- The FDA accepted the VOR33 investigational new drug application in January 2021; Health Canada issued a no-objection letter in April. Vor expected first-patient enrollment in its Phase 1/2a VOR33 trial in the following months and initial clinical data in the first half of 2022. The trial had been delayed in part by COVID-19.
- Vor expected to submit an IND for the VOR33/VCAR33 treatment system in the second half of 2022, subject to data from the VOR33 study and the NMDP-sponsored VCAR33 trial. FDA acceptance of comparability and the ability to reference NMDP data are not assured.
- Management highlighted an external Phase 3 study of CD34-selected stem cell grafts: it showed no statistically significant difference in the primary endpoint, lower chronic graft-versus-host disease, and higher treatment-related mortality associated in part with infectious complications. Further analysis could lead Vor to change its VOR33 protocol or manufacturing process and delay development.
- Two June lease amendments expand Cambridge office, laboratory and manufacturing space. They add approximately 40,400 square feet and about $31.3 million of fixed rent payments, excluded from the balance sheet because the leases had not yet commenced. The amendments require a $2.4 million letter of credit, with $1.6 million secured by restricted cash equivalents.
- Key risks include unproven engineered-cell and genome-editing technology, clinical and regulatory uncertainty, potential serious adverse effects, patient enrollment and COVID-19 disruption, reliance on third-party manufacturing and licensed intellectual property, competition, and the need for further financing. Vor reported no material legal proceedings and said disclosure controls were effective.
Important facts for investors to verify
- Whether VOR33 enrollment and the planned first-half 2022 initial data timing were achieved, and whether COVID-19 or external trial findings changed the protocol or manufacturing plan.
- Whether VCAR33 data can be used in future filings and whether regulators accept manufacturing comparability with the NMDP trial.
- Actual cash burn and runway against management’s estimate through at least Q1 2023, including the effect of clinical advancement, hiring and facility expansion.
- The terms, commencement dates and full fixed and variable costs of the expanded leases, plus any future financing needs or dilution.
- Clinical safety and efficacy evidence for VOR33 and VCAR33; the filing reports no completed clinical trials by Vor and no product revenue.