Instil Bio, Inc. — Q3 2021 Form 10-Q
Business context and reporting period. Unaudited results for the three and nine months ended September 30, 2021. Instil Bio is a clinical-stage biopharmaceutical company developing autologous tumor-infiltrating lymphocyte (TIL) therapies. It had no approved products and generated no product revenue.
Financial performance and liquidity
Amounts in $ millions, except per-share data.
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | $0.0 | $0.1 | $0.0 | $0.1 |
| Research and development expense | $29.1 | $4.9 | $64.7 | $9.2 |
| General and administrative expense | $14.0 | $2.9 | $37.1 | $7.2 |
| Operating loss | $(43.0) | $(7.7) | $(101.8) | $(16.2) |
| Net loss | $(43.0) | $(7.3) | $(101.4) | $(20.6) |
| Basic and diluted net loss per share | $(0.33) | $(0.43) | $(1.03) | $(1.32) |
- Cash flow: Nine-month operating cash use was $79.3 million; investing cash use was $534.4 million, including $495.0 million net purchases of marketable securities and $39.4 million of property and equipment purchases. Financing provided $393.0 million, principally from the IPO and Series C preferred financing.
- Liquidity: At September 30, 2021, cash and cash equivalents were $20.4 million, restricted cash $0.5 million, and marketable securities $495.0 million, totaling $515.9 million. Current assets were $523.1 million and current liabilities $32.1 million.
- Balance sheet: Total assets were $647.4 million, liabilities $46.0 million, and stockholders’ equity $601.4 million. The filing reports no debt balance. Marketable securities were U.S. Treasury bills with maturities under one year.
- Margins: Not meaningful because the company had no material revenue and remained loss-making.
Material changes versus prior comparable periods
- Operating expenses rose sharply as the company expanded clinical development, manufacturing, staffing, and facilities. Nine-month R&D increased $55.5 million and G&A increased $30.0 million year over year.
- Management attributed the R&D increase mainly to personnel and related costs, clinical development and manufacturing activity, and facilities and overhead. Higher G&A reflected personnel, consultants, facilities, insurance, and public-company costs.
- Cash and cash equivalents fell from $241.7 million at December 31, 2020 to $20.4 million at September 30, 2021, while marketable securities rose to $495.0 million. The company completed its IPO in March, receiving $339.0 million net, and raised $52.5 million net from Series C preferred stock before the IPO.
- Preferred stock converted into common stock at the IPO; 128.9 million common shares were outstanding at September 30, 2021.
Outlook, risks, contingencies, and unusual items
- Management said existing cash, cash equivalents, and marketable securities were expected to fund operating expenses and capital requirements into 2023. This estimate depends on assumptions and could prove incorrect. Management expects continued losses and rising R&D, G&A, and capital expenditures; no product sales revenue is expected for several years, if ever.
- Instil initiated the global Phase 2 DELTA-1 trial of ITIL-168 for advanced melanoma in September 2021. Topline safety and efficacy results were expected in 2023; if positive, management believed results could support a BLA submission in 2023 and an EU marketing application in 2024. Phase 1 trials of ITIL-168 in additional cancer indications and an IND filing for ITIL-306 were planned for the first half of 2022.
- Manufacturing transfer of ITIL-168 from Manchester to Tarzana was still underway, and the company disclosed it had not yet successfully produced a batch at the new facility. Comparability testing and successful scale-up are important dependencies for clinical progress.
- The Tarzana facility development had $78.7 million contractually committed as of September 30, 2021. Future minimum operating lease payments were $10.8 million. Immetacyte acquisition milestone consideration could total up to $14.8 million; its recorded fair value was $12.4 million, with no payments made in the first nine months of 2021.
- Key risks include clinical-trial delays or failure, regulatory uncertainty, patient enrollment, cell-therapy manufacturing and supply challenges, reliance on prior compassionate-use data, competition, and possible COVID-19 impacts. The company reported no material legal proceedings and did not expect ordinary-course legal matters to materially affect its financial position or results.
- Stock-based compensation was $8.7 million in Q3 and $17.3 million for the nine months. A $1.0 million income tax benefit for the nine-month period related to U.K. operations; the company maintained a full valuation allowance against U.S. net deferred tax assets.
Most important facts for investors to verify
- Whether DELTA-1 enrollment, execution, and 2023 data timing remain on plan, and what the final clinical results show.
- Whether the Tarzana manufacturing transfer succeeds, including batch production and comparability testing, and whether manufacturing capacity can support trials.
- Whether the stated liquidity runway into 2023 remains reasonable as operating losses, clinical costs, and facility spending evolve.
- How the $78.7 million facility commitment, lease obligations, and potential acquisition milestone payments affect future cash use.
- Future dilution from outstanding options and equity plans; the filing reported 19.8 million options outstanding at September 30, 2021.