Caribou Biosciences, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. Caribou is a clinical-stage genome-editing biotechnology company developing off-the-shelf CAR-T and CAR-NK therapies. It has no approved products and generated no product sales; reported revenue is from licensing and collaborations.
Financial performance and liquidity
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Licensing and collaboration revenue | $4.2m | $1.5m | $6.9m | $3.1m |
| Research and development expense | $22.6m | $12.3m | $36.5m | $22.5m |
| General and administrative expense | $10.0m | $5.1m | $19.6m | $9.7m |
| Operating loss | $28.4m | $16.0m | $49.3m | $29.1m |
| Net loss | $26.7m | $14.3m | $45.8m | $27.5m |
| Basic and diluted net loss per share | $0.44 | $1.39 | $0.75 | $2.78 |
Revenue increased 184% for Q2 and 124% for the first half, primarily from recognition of AbbVie collaboration revenue. AbbVie contributed $2.9m, or about 68% of Q2 revenue. Operating expenses rose faster than revenue, and net losses widened. Per-share losses were less negative year over year, in part because weighted-average shares rose substantially following the 2021 IPO; the filing reports 60.8m common shares outstanding at June 30, 2022.
At June 30, cash and cash equivalents were $112.1m and marketable securities were $253.9m, totaling $366.1m. Cash and cash equivalents declined $128.3m during the first half. Operating cash use was $43.5m; investing cash use was $86.1m, principally reflecting purchases of marketable securities net of maturities and equipment purchases. Financing provided $1.4m. The company had no outstanding debt reported. It reported $28.0m of discounted operating lease liabilities, including $0.9m current.
No meaningful product gross margin is reported because Caribou has no product sales. Management expects existing cash, cash equivalents, and marketable securities to fund its current operating plan for at least 12 months from the financial statements’ issuance. Accumulated deficit was $143.6m.
Material changes and unusual items
- R&D expense increased 83% in Q2 and 62% for the first half, driven mainly by CB-010 clinical-trial and manufacturing activity, preclinical work, and higher personnel costs.
- G&A expense increased 96% in Q2 and 102% for the first half, reflecting hiring, facilities, public-company costs, and stock-based compensation.
- Other income included a $2.6m first-half gain from a decrease in the estimated fair value of the MSKCC success-payments liability; this is a valuation change, not operating revenue. The liability was $1.4m at June 30.
- Available-for-sale securities generated $1.4m of first-half unrealized losses in other comprehensive loss. The filing also reports a $1.6m PPP loan forgiveness gain in the 2021 comparative period, with no corresponding 2022 gain.
- Caribou adopted lease-accounting guidance in 2022, recording operating lease right-of-use assets and liabilities. No material legal proceedings or material changes to previously disclosed risk factors were reported.
Outlook, management commentary, and risks
- CB-010 is being evaluated in the ANTLER Phase 1 trial for relapsed or refractory B-cell non-Hodgkin lymphoma. Initial cohort 1, dose-level 1 data were presented in June 2022; additional cohort 1 data were expected by year-end 2022. Enrollment at dose level 2 was underway.
- Management expected to submit an IND for CB-011 in Q4 2022 and for CB-012 in 2023. CB-020 remained in development, with tumor-target selection and CAR-NK armoring-strategy disclosures expected in Q4 2022.
- Management expects substantial ongoing losses and higher expenses as programs advance, and states Caribou may need additional capital. Funding may not be available on acceptable terms; equity financing could dilute shareholders, while collaborations could require granting valuable rights.
- Key risks include clinical and preclinical uncertainty, regulatory approval and safety risks for genome-edited cell therapies, dependence on third-party manufacturers and clinical-service providers, intellectual-property disputes, and potential COVID-19, geopolitical, inflationary, or supply-chain impacts.
- Material contractual exposure includes potential MSKCC clinical, regulatory, and commercial milestones of up to $112m per licensed CLL-1 product, plus success payments capped at $35m; the CB-010 Intellia license includes up to $23m in potential milestones. These are contingent obligations, not current debt.
Investor verification priorities
- Check subsequent ANTLER enrollment, safety, and efficacy disclosures against management’s stated data timeline.
- Verify whether the CB-011 IND was submitted in Q4 2022 and whether the CB-012 and CB-020 development milestones were achieved.
- Track cash and marketable securities, operating cash burn, and any updated runway estimate; the stated runway is based on the then-current operating plan.
- Monitor AbbVie revenue concentration and collaboration progress, along with the recognition and timing of deferred revenue and remaining performance obligations.
- Assess clinical, regulatory, intellectual-property, manufacturing, and financing risks, as well as contingent license milestones and stock-based compensation/dilution.