Caribou Biosciences, Inc. — Q1 2022 Form 10-Q
Business context and reporting period. The clinical-stage CRISPR genome-editing company reported for the three months ended March 31, 2022. It is developing allogeneic CAR-T and CAR-NK cell therapies and has no products approved for sale; current revenue is from licensing and collaborations.
Financial position and results
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Licensing and collaboration revenue | $2.7 million | $1.6 million; up 68% |
| Research and development expense | $13.9 million | $10.2 million; up 37% |
| General and administrative expense | $9.6 million | $4.6 million; up 109% |
| Operating loss | $20.9 million | $13.2 million |
| Net loss | $19.1 million | $13.2 million |
| Basic and diluted loss per share | $0.32 | $1.39 |
| Operating cash flow | Used $21.7 million | Provided $20.3 million |
Cash, cash equivalents, and marketable securities totaled $390.8 million at March 31, 2022, down from $413.5 million at December 31, 2021. Total assets were $446.0 million; total liabilities were $74.2 million; accumulated deficit was $116.9 million. The filing reports no material borrowing or credit-line commitments. Operating lease liabilities totaled $28.1 million, of which $0.8 million was current. The company reported no gross profit or operating margin measure.
Material changes versus the prior comparable period
- Revenue rose by $1.1 million, including $0.9 million recognized under the AbbVie collaboration; the remaining increase came primarily from other license agreements.
- R&D expense increased by $3.8 million, principally from personnel costs and external clinical-trial and manufacturing activity.
- G&A expense increased by $5.0 million, reflecting personnel costs and public-company expenses.
- Net loss widened by $5.9 million. A $1.6 million gain from the lower fair value of the MSKCC success-payment liability partly offset operating losses.
- Operating cash flow shifted from positive to negative. Q1 2021 included AbbVie’s $30.0 million upfront payment, recorded as deferred revenue; Q1 2022 had no comparable financing inflow. Q1 2022 investing outflow mainly reflected purchases of marketable securities.
Outlook, commentary, risks, and unusual items
- Management expected existing cash, cash equivalents, and marketable securities to fund the current operating plan for at least 12 months from the financial statements’ issuance date. The company expects continued substantial losses and may need additional capital; profitability is uncertain.
- CB-010 was in the ANTLER Phase 1 trial for relapsed or refractory B-cell non-Hodgkin lymphoma; initial clinical data were expected at the June 2022 EHA congress. The company expected to submit an IND for CB-011 in the second half of 2022 and for CB-012 in 2023. It expected to select a CB-020 target and disclose CAR-NK armoring strategies during 2022.
- Key risks include clinical, manufacturing and regulatory uncertainty; reliance on third-party manufacturers and trial providers; intellectual-property disputes and licensing obligations; potential difficulty raising capital; and possible effects of COVID-19 or geopolitical events on supply, studies, and access to financial markets.
- AbbVie may terminate the collaboration at its discretion on 90 days’ notice. Potential future milestone and royalty payments under collaborations and licenses are contingent; the filing constrains AbbVie development and regulatory milestone revenue as of March 31, 2022.
- Adoption of lease accounting on January 1, 2022 added operating lease right-of-use assets and liabilities; comparative periods were not adjusted. The company also entered a new Berkeley lease for approximately 10,000 square feet, with a 10.5-year term.
- No material legal proceedings, material changes to previously disclosed risk factors, or subsequent events were reported. Management concluded disclosure controls were effective.
Important facts for investors to verify
- Whether clinical timelines and data expectations for CB-010, CB-011, CB-012, and CB-020 are achieved, and what safety and efficacy evidence supports further development.
- Cash consumption and the assumptions underlying management’s stated 12-month runway, particularly as R&D, public-company, and facility costs rise.
- How much future revenue depends on a limited number of licensees: four licensees represented 77.8% of Q1 2022 revenue, and three represented 75.7% of accounts receivable and contract assets.
- Potential dilution and obligations from equity compensation, leases, and collaboration or license milestone, royalty, and success payments.
- Marketable-security valuation exposure: the portfolio had $1.1 million of gross unrealized losses at March 31, 2022, recorded in other comprehensive loss.