Voyager Therapeutics, Inc. — Q1 2021 Form 10-Q
Business context and reporting period
Clinical-stage gene therapy company developing AAV-based treatments for serious neurological diseases. This unaudited quarterly report covers the three months ended March 31, 2021; balance-sheet comparisons are with December 31, 2020. Voyager had no approved products and generated no product sales.
Financial and operating metrics
| Metric | Q1 2021 | Q1 2020 / prior date |
|---|---|---|
| Collaboration revenue | $6.5 million | $18.1 million |
| Research and development expense | $22.3 million | $32.3 million |
| General and administrative expense | $9.7 million | $10.2 million |
| Total operating expenses | $32.1 million | $42.5 million |
| Operating loss | $25.6 million | $24.4 million |
| Net loss | $21.6 million | $24.3 million |
| Basic and diluted net loss per share | $0.58 | $0.66 |
| Net cash used in operating activities | $21.3 million | $28.8 million |
- Revenue fell about 64% year over year. All Q1 2021 collaboration revenue was from Neurocrine; Q1 2020 included revenue from Neurocrine and the AbbVie collaborations.
- Operating expenses declined 24%, primarily from lower external R&D and reduced R&D headcount. Net loss narrowed despite a larger operating loss, aided by $3.9 million of other income, mainly unrealized gains on ClearPoint Neuro securities and warrants; Q1 2020 had $0.2 million of total other income.
- At March 31, cash and cash equivalents were $117.8 million; marketable securities were $43.7 million, including $35.3 million of U.S. Treasury notes and $8.5 million of equity securities. The company cited $153.1 million of cash, cash equivalents and marketable debt securities for liquidity planning.
- Cash, cash equivalents and restricted cash totaled $119.6 million at quarter-end. Investing activities provided $34.6 million, principally from $35.0 million of marketable-security maturities; financing provided $0.03 million. The resulting $13.4 million increase in cash and restricted cash should not be read as operating cash generation.
- Total liabilities were $101.5 million and stockholders’ equity was $136.2 million. The filing does not disclose conventional borrowings; operating lease liabilities were $46.7 million, against $61.8 million of undiscounted future minimum lease payments.
Material changes, outlook and risks
- Neurocrine notified Voyager that it would terminate its collaboration for VY-AADC, effective August 2, 2021. Voyager expected to regain worldwide rights, but would lose related cost reimbursement and future milestone and royalty rights. Voyager said it would not advance the program alone and expected to seek a partner.
- RESTORE-1, the VY-AADC Phase 2 Parkinson’s trial, remained on FDA clinical hold following review of MRI abnormalities. The DSMB described their clinical significance as uncertain and requested further information. Neurocrine remained the sponsor and IND holder; the clinical path forward was unresolved.
- The FDA removed the clinical hold on the VY-HTT01 IND in April 2021, after quarter-end. Voyager planned to begin the VYTAL Phase 1/2 Huntington’s trial by the end of 2021 and expected initial safety, tolerability and biomarker data in 2022.
- Management expected existing cash, cash equivalents, marketable debt securities and anticipated Neurocrine reimbursements to fund planned operating expenses and capital expenditures into mid-2022. The company expected continuing losses and stated that additional funding may be needed; financing may be unavailable or dilutive, and collaboration income may remain lower following terminations.
- Other notable items: Q1 revenue included an approximately $0.9 million cumulative adjustment related to reallocating remaining Neurocrine collaboration consideration after the VY-AADC termination. A putative securities class action filed in January 2021 alleged misstatements concerning the Huntington’s program and VY-HTT01 IND; Voyager denied wrongdoing and planned to defend itself. No material legal reserve was reported in the supplied text.
- Key risks include gene-therapy safety and regulatory uncertainty, clinical and manufacturing delays, dependence on collaborators and external financing, competition and intellectual-property challenges, and COVID-19 impacts on laboratory work, trials and suppliers. Management reported disclosure controls effective at the reasonable-assurance level and no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Whether the FDA clinical hold on RESTORE-1 is resolved, what the MRI findings mean, and whether the program obtains a development partner.
- Whether VYTAL starts on the stated schedule and whether the planned trial produces interpretable safety and biomarker data.
- Actual cash burn and Neurocrine reimbursements against management’s mid-2022 runway estimate, particularly after VY-AADC reimbursement ends.
- The drivers and sustainability of collaboration revenue, including the remaining Neurocrine programs and the effects of terminated AbbVie collaborations.
- Potential financial or disclosure consequences of the securities class action, and the company’s lease commitments and future financing needs.