Voyager Therapeutics, Inc. — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021; balance-sheet comparisons are with December 31, 2020. Amounts below are in U.S. dollars. Voyager is a clinical-stage gene-therapy company and reported no product sales.
Financial performance and liquidity
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Collaboration revenue | $1.5 million | $117.8 million | $9.3 million | $164.6 million |
| Research and development expense | $17.9 million | $25.0 million | $59.8 million | $86.8 million |
| General and administrative expense | $8.7 million | $8.3 million | $28.9 million | $26.7 million |
| Net income (loss) | $(25.1) million | $85.6 million | $(76.9) million | $52.7 million |
| Operating cash flow | Not separately stated for the quarter | Not separately stated for the quarter | $(64.7) million | $(74.7) million |
- At September 30, 2021, cash and cash equivalents were $111.5 million and current marketable securities were $10.0 million, for total cash, cash equivalents and marketable debt securities of $121.5 million. Restricted cash was an additional $1.8 million.
- Total assets were $184.8 million, total liabilities $97.4 million, and stockholders’ equity $87.4 million. The filing reports no conventional borrowings; liabilities include operating lease obligations, with a $45.3 million lease liability and $58.6 million of undiscounted future minimum lease payments.
- Current assets were $126.2 million versus current liabilities of $26.7 million. The accumulated deficit was $352.8 million.
- Nine-month investing cash flow was positive $71.4 million, primarily from sales and maturities of marketable securities; financing cash flow was positive $0.4 million. Cash, cash equivalents and restricted cash increased $7.0 million during the period.
- Profit margins are not a meaningful indicator here: revenue is collaboration-based, the company has no product revenue, and it recorded a loss in 2021.
Material changes versus the prior comparable period
- Revenue fell sharply because prior-year periods included substantial deferred-revenue recognition upon termination of the AbbVie tau and alpha-synuclein collaborations, as well as higher Neurocrine collaboration activity. 2021 collaboration revenue was entirely from Neurocrine research services and cost reimbursement.
- Q3 2020’s $85.6 million net income reflected $105.2 million of revenue recognized from the terminated AbbVie collaborations in that quarter; it is not comparable to recurring operating performance. Q3 2021 instead recorded a $25.1 million net loss.
- Nine-month R&D expense declined $27.0 million, largely because of lower VY-AADC clinical and manufacturing activity and reduced staffing. G&A rose $2.2 million, including costs associated with the CEO’s departure and restructuring.
- Nine-month operating cash use decreased by $10.0 million year over year, mainly reflecting reduced VY-AADC program spending. Marketable securities declined as investments matured or were sold.
- Total assets declined from $261.6 million at year-end 2020 to $184.8 million at September 2021, while equity declined from $154.3 million to $87.4 million, largely reflecting operating losses and use of resources.
Strategy, outlook and material risks
- Management expected September 30 liquidity of $121.5 million to fund planned operating expenses and capital expenditures into early 2023. The company also said it expects near-term expenses to decrease following restructuring and pipeline reprioritization, but expenses may rise as programs and platform research advance. Additional financing or business-development transactions will likely be needed; availability and terms are uncertain.
- In August 2021, the company approved a workforce reduction and shifted resources toward TRACER capsid discovery and programs using novel capsids. It recorded approximately $2.0 million of restructuring costs, of which about $0.9 million had been paid by September 30.
- Neurocrine’s termination of its VY-AADC participation became effective August 2, 2021. Voyager regained worldwide rights but will not advance the program alone and is exploring a partner. The RESTORE-1 Phase 2 trial remained on FDA clinical hold following MRI abnormalities of uncertain clinical significance; Neurocrine remained sponsor and IND holder.
- Voyager discontinued its first-generation VY-HTT01 Huntington’s program and withdrew its IND, opting to develop a second-generation program using a proprietary capsid. Most other programs are at discovery or preclinical stages.
- On October 1, 2021, after the reporting date, Voyager entered a Pfizer capsid option-and-license agreement and received a $30.0 million upfront payment in October. Potential future payments include up to $20.0 million for two option exercises, development/regulatory/commercial milestones and sales milestones, plus tiered royalties. These contingent amounts are not assured; the October payment is not included in September 30 liquidity.
- Voyager subleased part of its Cambridge premises to BioNTech for approximately 3.3 years and expects $8.5 million in receipts over the term. The sublease does not release Voyager from its obligations under the prime lease.
- Key risks include clinical and regulatory uncertainty, gene-therapy safety and manufacturing challenges, dependence on collaborators and licensing partners, potential need for more capital and resulting dilution, competition, and possible disruption from COVID-19. The company also disclosed interim CEO and Chief Scientific Officer arrangements following executive departures. A putative securities class action concerning the Huntington’s program was voluntarily dismissed without prejudice on July 2, 2021 and was no longer pending.
Important facts for investors to verify
- Whether the FDA clinical hold on RESTORE-1 is resolved, what additional information regulators and the DSMB require, and whether a development partner for VY-AADC is secured.
- Actual cash burn and whether the stated runway into early 2023 remains applicable after the October Pfizer payment and subsequent operating decisions.
- Pfizer’s capsid evaluation and option-exercise decisions, and the timing and conditions for any contingent milestones or royalties.
- Progress, funding needs and prioritization of the second-generation Huntington’s program, TRACER platform and other early-stage programs.
- Execution and realized savings from the workforce restructuring, and the financial effect of lease commitments and BioNTech sublease receipts.