Voyager Therapeutics, Inc. — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 30, 2022. Amounts below are in millions of dollars unless noted. Voyager is an early-stage gene-therapy and neuroscience biotechnology company; it had no approved products and generated no product sales. Revenue came from collaborations and licensing arrangements.
Financial results and liquidity
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Collaboration revenue | $41.1 | $1.5 | $42.5 | $9.3 |
| Research and development expense | $19.3 | $17.9 | $46.2 | $59.8 |
| General and administrative expense | $7.3 | $8.7 | $22.5 | $28.9 |
| Operating income (loss) | $14.4 | $(25.1) | $(26.3) | $(79.3) |
| Net income (loss) | $17.6 | $(25.1) | $(22.8) | $(76.9) |
| Basic earnings (loss) per share | $0.46 | $(0.67) | $(0.59) | $(2.04) |
- Q3 operating margin was approximately 35%; the quarter’s profit reflects collaboration revenue recognition and other income, not product sales. Revenue is likely to be uneven as option payments and collaboration obligations are recognized.
- Cash, cash equivalents and marketable securities totaled $131.6 at September 30, 2022, compared with $132.5 at December 31, 2021. Cash, cash equivalents and restricted cash were $98.4, down $20.8 during the first nine months.
- Operating cash use was $0.3 for the nine months, versus $64.7 in the prior-year period; the filing attributes much of the improvement to increased deferred revenue and lower net loss. Investing activities used $21.4, including purchases of marketable securities.
- Current assets were $146.9 and current liabilities $73.2. Deferred revenue was $64.0 in total. No conventional borrowing balance is separately presented; lease liabilities totaled about $23.8, and a $1.0 research-and-development financing liability is included in other non-current liabilities.
- Management estimated resources, expected Neurocrine cost reimbursements and the $10.0 Pfizer option fee received in Q4 2022 would fund planned operations and capital expenditures into 2024. The estimate depends on operating plans and partner funding.
Material changes and significant items
- Q3 collaboration revenue increased by $39.6 year over year. Pfizer’s option exercise and expiration of its second option accounted for $40.0 of revenue recognized in the first nine months of 2022: $25.0 related to the rare-neurological-disease option exercise, including its $10.0 exercise fee, and $15.0 to the expired cardiovascular option. Pfizer did not exercise the cardiovascular option, and those rights reverted to Voyager.
- Neurocrine revenue was $1.1 in Q3 and $2.5 for the first nine months of 2022, down from $1.5 and $9.3, respectively, in the comparable 2021 periods. Voyager revised its estimate of remaining Neurocrine cost reimbursements to approximately $79.4.
- The $54.0 Novartis upfront payment remained deferred at September 30, 2022; no Novartis revenue had been recognized by that date. The agreement provides options to license TRACER capsids for specified targets.
- Research and development expense fell $13.6 and general and administrative expense fell $6.4 for the first nine months, primarily reflecting lower staffing and related costs, reduced external work and facility expenses. Q3 R&D included a $5.0 Touchlight technology-access-fee charge, recorded before the license agreement was signed on November 3, 2022.
- In Q2, Voyager terminated its 75 Sidney Street lease without a termination penalty, derecognized related lease assets and liabilities, and recorded a $2.5 gain. Q3 other income included an employee retention tax credit and interest income; the filing does not provide a clear amount for the tax credit separately.
Outlook, programs and risks
- Voyager planned to select lead development candidates for GBA1 gene therapy for Parkinson’s disease, SOD1 gene therapy for ALS, and an anti-tau antibody program between Q4 2022 and H1 2023, with IND filings anticipated in 2024 and 2025. These programs were in preclinical development.
- The company expects expenses to rise over the longer term as programs advance, while noting that future costs and timelines are uncertain. It expects to rely on additional financing and business-development transactions; funding may be unavailable or dilutive, or require granting rights to its technology or candidates.
- Key risks include the early stage and uncertain safety, efficacy and regulatory path of gene therapies; manufacturing and clinical-trial delays; dependence on collaborators and licensees; potential termination or deprioritization of partner programs; and the need for future capital. COVID-19, supply constraints and inflation may also affect operations and costs.
- The RESTORE-1 Phase 2 trial of VY-AADC remained on FDA clinical hold; Neurocrine remained sponsor and IND holder after ending its participation in that program. Voyager stated it would not advance the program without a partner.
Important facts for investors to verify
- Whether the stated runway into 2024 remains achievable, including actual Neurocrine reimbursements, spending and the effect of the Q4 Pfizer payment.
- How and when deferred Pfizer and Novartis consideration is recognized, and whether additional partner options are exercised or agreements are terminated.
- Progress toward the stated candidate-selection and IND timelines, and any changes in program priorities or development costs.
- Current status of the RESTORE-1 clinical hold and any new safety, regulatory or manufacturing developments.
- Terms and potential economic impact of the Touchlight license, including contingent milestones and low-single-digit royalties on qualifying TRACER capsids and licensing receipts.