Voyager Therapeutics, Inc. — Q1 2018 Form 10-Q
Business context and period. Clinical-stage gene therapy company focused on severe neurological diseases. This unaudited report covers the three months ended March 31, 2018; balance-sheet comparisons are with December 31, 2017. Voyager had no approved products and no product-sale revenue.
Financial performance and liquidity
Amounts are in U.S. dollars; financial statement figures below are in millions except per-share data.
| Metric | Q1 2018 | Q1 2017 / comparison |
|---|---|---|
| Collaboration revenue | $0.9 | $1.5 |
| Research and development expense | $14.9 | $14.1 |
| General and administrative expense | $7.2 | $4.9 |
| Total operating expenses | $22.0 | $19.0 |
| Operating loss | $(21.1) | $(17.5) |
| Net loss | $(19.9) | $(16.6) |
| Basic and diluted loss per share | $(0.63) | $(0.65) |
| Operating cash flow | $48.6 provided | $14.3 used |
R&D expense rose $0.8 million, mainly from higher personnel and facility costs. G&A rose $2.3 million, primarily from compensation and legal/patent costs. Revenue declined as 2017 included full recognition of amounts related to Sanofi Genzyme’s Parkinson’s program; adoption of ASC 606 also reduced Q1 2018 revenue by $0.4 million versus ASC 605. Loss per share improved despite higher net loss, with weighted-average shares increasing to 31.8 million from 25.8 million.
At March 31, cash and cash equivalents were $140.4 million and marketable securities were $79.1 million, including $77.8 million of current U.S. Treasury notes. Cash, cash equivalents and marketable debt securities totaled $218.2 million. Total liabilities were $136.7 million, including $119.7 million of deferred revenue; the filing reports no material debt balance. Operating cash flow benefited from the $69.0 million AbbVie upfront payment and should not be read as the quarter’s recurring cash generation. Capital expenditures were $1.6 million. Lease commitments totaled $32.5 million.
Collaborations, outlook and material developments
- In February 2018, AbbVie paid a nonrefundable $69.0 million upfront under a tau-related gene therapy collaboration. Voyager recognized $0.4 million of Q1 revenue and deferred most of the payment. Further option payments, milestones and royalties are contingent on development and option exercises.
- Management said existing cash, equivalents and marketable debt securities were expected to fund its current operating plan into 2020. It expects expenses and operating losses to increase; additional funding may be needed, and availability and terms are uncertain. No specific revenue or earnings guidance was provided.
- VY-AADC was in an open-label Phase 1b Parkinson’s trial. The company planned to dose the first patient in a pivotal Phase 2-3 program in mid-2018 and reported FDA Fast Track designation. It reported preliminary motor-function improvements in earlier cohorts, but these early, uncontrolled findings may not predict pivotal-trial results.
- A separate VY-AADC delivery study used a posterior surgical approach; the filing reports eight patients had been dosed by April 2018, after quarter-end. One Phase 1b patient had pulmonary embolism and related arrhythmia, attributed by investigators to immobility around the procedure; thrombosis prophylaxis was added.
- Voyager filed a 510(k) application for its V-TAG delivery device in March 2018. It planned to file two INDs across its ALS, Huntington’s and Friedreich’s ataxia programs during 2019; these were plans, not assured timelines.
- ASC 606 adoption increased deferred revenue and reduced accumulated equity by about $20.0 million at January 1, 2018. The adoption was noncash and reduced Q1 reported revenue by $0.4 million versus the prior standard.
Key investor verification points
- Confirm actual VY-AADC pivotal-trial initiation, enrollment, dose selection and safety/efficacy results against the company’s mid-2018 plan.
- Track cash use excluding collaboration upfront receipts and reassess the stated runway into 2020 as development spending rises.
- Verify AbbVie option exercises and related payments; the potential milestones and royalties are contingent, not committed funding.
- Assess the effect of the manufacturing-process change for later-stage VY-AADC trials and the regulatory status of V-TAG.
- Monitor clinical, manufacturing, regulatory, collaboration and financing risks; the company reported no material legal proceedings and no off-balance-sheet arrangements.