MeiraGTx Holdings plc — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. The company is a clinical-stage gene therapy developer with six programs in clinical development, preclinical programs and gene-therapy manufacturing facilities. It had no approved products and no product-sales revenue.
Financial performance and liquidity
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| License revenue, all from related party | $5.6 million | $4.6 million; up $1.0 million |
| General and administrative expenses | $11.3 million | $9.9 million |
| Research and development expenses | $23.1 million | $16.7 million |
| Total operating expenses | $34.4 million | $26.6 million |
| Loss from operations | $28.7 million | $22.0 million |
| Net loss | $31.0 million | $23.6 million |
| Basic and diluted loss per share | $0.70 | $0.54 |
| Cash and cash equivalents at period end | $113.8 million | $137.7 million at Dec. 31, 2021 |
Revenue was amortized from Janssen collaboration payments, not product sales. Janssen also reimbursed $13.2 million of research and development costs, recorded as an offset to R&D expense. The company reported a $371.6 million accumulated deficit. No income tax provision was recorded.
Cash-flow statement figures show $8.3 million used in operating activities, $12.5 million used in investing activities and $2.6 million used in financing activities. Cash declined by $23.3 million, including the effect of exchange rates. Capital spending principally supported manufacturing and laboratory facilities. The MD&A gives slightly different operating cash use and cash-decrease figures; see investor checks below.
At March 31, current assets were $142.9 million and current liabilities were $65.5 million. The balance sheet reports $24.4 million of lease obligations, primarily operating leases; it reports no conventional borrowing balance. Deferred revenue from Janssen was $57.5 million, of which $20.2 million was current. Management expected to collect $13.1 million from Janssen in Q2 2022.
Changes versus the prior-year quarter
- Net loss widened by $7.4 million as operating expenses increased $7.7 million, partly offset by $1.0 million higher license revenue.
- R&D expense rose $6.4 million, mainly reflecting clinical-trial material manufacturing, personnel, share-based compensation, clinical and preclinical activity, and facilities costs. Janssen research funding increased and partially offset costs.
- G&A expense increased $1.4 million, primarily due to share-based compensation and payroll-related costs.
- Operating cash flow changed from $9.1 million provided in Q1 2021 to cash used in Q1 2022. Investing outflows were lower than the prior year, which included facility-related lease and investment payments.
Outlook, commentary and risks
Management estimated that cash on hand, expected Janssen research funding and milestone payments would fund operating and capital expenditure requirements into Q4 2023. The filing cautions that this estimate depends on assumptions and capital may be consumed sooner; additional financing may be needed. Management expected operating expenses, particularly R&D, to rise as programs advance.
- The Phase 3 Lumeos trial of botaretigene sparoparvovec for X-linked retinitis pigmentosa was enrolling and dosing patients. The company planned a clinical update in Q2 2022.
- The company planned to initiate a Phase 3 AAV-RPE65 trial; it expected to file an IND for AAV-GAD in May 2022. It also anticipated further achromatopsia studies with Janssen in 2022.
- For AAV-hAQP1, management planned to present Phase 1 data in Q4 2022 and expected to initiate a randomized Phase 2 study by year-end 2022.
- Key risks include clinical and regulatory uncertainty, manufacturing capacity and compliance, patient enrollment, dependence on Janssen and other third parties, competition, intellectual-property rights and the need for further capital. COVID-19 had not materially affected Q1 2022 results, but management said future effects remained uncertain.
Unusual or notable items included a $2.6 million foreign-currency loss, attributed primarily to U.S.-dollar strengthening against sterling and the euro; a $0.4 million fair-value gain on a contingent share liability; and $7.6 million of share-based compensation. Foreign-currency translation produced a $1.9 million gain in other comprehensive income.
Most important facts for investors to verify
- Reconcile cash-flow amounts: the cash-flow statement reports $8.298 million used in operating activities and a $23.340 million decrease in cash, while MD&A reports $8.208 million and a $23.250 million decrease.
- Confirm timing and collection of the $13.1 million Janssen receivable and the assumptions behind the Q4 2023 cash-runway estimate.
- Track progress, enrollment, data and regulatory milestones for Lumeos, AAV-RPE65, AAV-GAD, AAV-hAQP1 and the Janssen-supported achromatopsia programs.
- Monitor R&D spending, manufacturing-facility investment and the extent to which Janssen funding offsets those costs.
- Assess funding needs and potential dilution if additional capital is required, alongside manufacturing, clinical, regulatory and collaboration risks.