MeiraGTx Holdings plc — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021. MeiraGTx is a clinical-stage gene therapy company with six programs in clinical development and manufacturing facilities in the U.K. and Ireland. It had no approved products and no product-sales revenue.
Financial performance and position
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| License revenue | $6.9 million | $5.1 million | $16.7 million | $11.8 million |
| Operating expenses | $29.5 million | $13.5 million | $81.7 million | $61.1 million |
| Research and development | $21.6 million | $4.6 million | $53.5 million | $28.9 million |
| General and administrative | $7.9 million | $8.9 million | $28.2 million | $32.2 million |
| Net loss | $25.9 million | $6.4 million | $69.6 million | $47.5 million |
| Net loss per share | $0.59 | $0.17 | $1.58 | $1.29 |
- License revenue is amortization of Janssen’s $100 million upfront collaboration payment; it is not product-sales revenue. Janssen research and development reimbursements are recorded as an offset to R&D expense, not revenue: $16.9 million for Q3 and $47.1 million for the nine-month period.
- Gross margin is not meaningful because the company has no product sales. Operating losses were $22.6 million in Q3 and $65.1 million for the nine months.
- Cash and cash equivalents were $143.6 million at September 30, down from $209.5 million at December 31, 2020. Nine-month cash use was $29.4 million from operations and $36.3 million from investing; financing provided $0.4 million. Ending cash was $143.6 million.
- Total assets were $303.3 million; total liabilities were $115.5 million and shareholders’ equity was $187.8 million. The balance sheet reports no borrowings; lease obligations totaled approximately $24.5 million. Deferred revenue due to related party was $55.5 million. Accumulated deficit was $330.7 million.
- No profitability or cash-flow margin was reported; the company expects continuing losses. No income tax provision was recorded.
Changes versus prior comparable periods
- Q3 net loss widened by $19.5 million year over year, primarily alongside a $17.0 million rise in R&D. R&D growth reflected clinical and preclinical work, clinical material manufacturing, hiring, facilities and depreciation, partly offset by higher Janssen research funding.
- For the nine months, net loss widened by $22.1 million. R&D rose $24.6 million, while G&A declined $4.0 million, mainly because prior-year management share compensation and payroll costs were higher.
- Higher license revenue reflects increased amortization of the Janssen upfront fee. Foreign currency losses were $3.4 million in Q3 and $4.6 million for the nine months, compared with gains in the respective 2020 periods; management attributed the change primarily to a stronger U.S. dollar versus sterling and the euro.
- Investing outflows increased to $36.3 million from $26.8 million, including property and equipment spending and $5.5 million of investments. Cash declined by $65.3 million, versus $47.9 million in the prior-year nine-month period.
Outlook, commentary and risks
- Management estimated that cash, together with expected Janssen research funding and milestone payments, would fund operating and capital requirements into the second quarter of 2023. The estimate depends on assumptions and may prove wrong; the filing also identifies a need for additional capital and warns financing may not be available on acceptable terms.
- Planned milestones at filing included starting the Phase 3 Lumeos trial of botaretigene sparoparvovec in Q4 2021; completing enrollment and providing an update for the Phase 1 AAV-AQP1 AQUAx trial in Q4/early December 2021; filing an AAV-GAD IND in Q4 2021; starting a Phase 3 AAV-RPE65 trial in early 2022; and advancing AAV-CNGB3/CNGA3 toward late-stage trials in 2022. These are management expectations, not assured outcomes.
- Management expected R&D and G&A costs to rise as trials advance, manufacturing capacity expands, and the company hires. It reported progress optimizing its AAV manufacturing platform and said the internal plasmid facility was operational.
- Key risks include clinical and regulatory uncertainty for gene therapies, trial enrollment or delays, manufacturing capacity and compliance, reliance on Janssen and other third parties, competition, intellectual-property rights, and the need for future financing. COVID-19 had not materially affected nine-month 2021 results, but the company cited possible future effects on trials, manufacturing, supply chains and financing.
- The filing reports no material legal proceedings, no new material commitments for the nine-month period, and no subsequent events to report. Management concluded disclosure controls were effective; it reported no material changes in internal control over financial reporting.
Investor verification points
- Confirm cash runway assumptions, expected Janssen funding and collection of the $16.8 million related-party receivable expected in Q4 2021.
- Track actual timing and enrollment for the stated Phase 3 and other clinical milestones, and review clinical data and regulatory feedback as reported.
- Assess whether R&D spending, manufacturing build-out and cash burn evolve as management projected, including the effect of collaboration reimbursements.
- Review the economics and execution of the Janssen collaboration, including deferred revenue recognition, milestones, royalties and commercialization responsibilities.
- Monitor foreign-exchange exposure, manufacturing readiness and any need for additional financing or potential shareholder dilution.