Caribou Biosciences, Inc. — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 30, 2022. Caribou is a clinical-stage CRISPR genome-editing company developing allogeneic CAR-T and CAR-NK cell therapies. It had no approved products and generated no product-sales revenue.
Financial results and liquidity
Amounts below are in millions of dollars, except per-share data. The company remains loss-making, with revenue primarily from licensing and collaborations.
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Licensing and collaboration revenue | $3.3 | $4.0 | $10.2 | $7.0 |
| Research and development expense | $20.0 | $15.8 | $56.5 | $37.1 |
| General and administrative expense | $9.8 | $6.8 | $29.5 | $16.5 |
| Operating loss | $26.5 | $18.6 | $75.8 | $46.6 |
| Net loss | $26.6 | $21.0 | $72.4 | $48.4 |
| Net loss per share, basic and diluted | $0.44 | $0.46 | $1.19 | $2.20 |
At September 30, 2022, cash and cash equivalents were $82.1 million and marketable securities were $260.5 million, for total cash, cash equivalents, and marketable securities of $342.6 million. The company reported $65.9 million of operating cash use for the first nine months; investing cash use was $94.4 million, largely reflecting purchases of marketable securities, and financing provided $2.0 million. No conventional borrowings were reported; lease liabilities totaled $27.9 million, including $0.9 million current. Total assets were $398.8 million, total liabilities $74.7 million, and accumulated deficit $170.2 million. Gross margin is not presented as a meaningful standalone measure in the filing.
Material changes versus the prior comparable periods
- Q3 revenue declined 17% year over year, mainly due to lower revenue recognized under the AbbVie agreement. Nine-month revenue increased 44%, primarily from higher AbbVie revenue recognition.
- Q3 R&D expense rose 26%; nine-month R&D expense rose 52%, reflecting increased hiring, clinical and preclinical work, and manufacturing activity.
- Q3 G&A expense increased 46%; nine-month G&A expense increased 79%, including higher personnel, public-company, legal, accounting, insurance, and facility costs.
- Nine-month net loss widened to $72.4 million from $48.4 million. The prior-year period included a $1.6 million PPP-loan forgiveness gain; no such gain occurred in 2022.
- Cash and marketable securities declined from $413.5 million at December 31, 2021 to $342.6 million at September 30, 2022. Accumulated deficit increased, while common shares outstanding rose to 61.0 million from 60.3 million.
Outlook, management commentary, risks, and unusual items
- Management expected available cash, cash equivalents, and marketable securities to fund the current operating plan for at least 12 months from the financial statements’ issuance. The company expects continued substantial losses and may need additional capital; profitability is uncertain.
- Clinical and pipeline milestones described in the filing: CB-010’s ANTLER Phase 1 trial was enrolling at dose level 2, with additional cohort 1 data expected by year-end 2022; the company reported submitting the CB-011 IND in Q4 2022 and expected a CB-012 IND in 2023; CB-020 target selection and CAR-NK armoring-strategy disclosures were expected in Q4 2022.
- A $400 million shelf registration became effective in August 2022, including a $100 million at-the-market program. No ATM sales had occurred by September 30, 2022. Future equity issuance could dilute stockholders.
- Key risks include clinical, preclinical, regulatory, and manufacturing uncertainty; reliance on third-party CROs and CMOs; intellectual-property disputes and licensing obligations; financing availability; and possible operational effects from COVID-19, geopolitical events, and inflation. The company said risk factors had no material changes from its prior Form 10-K.
- Q3 included a $1.6 million loss from remeasurement of the MSKCC success-payment liability; nine-month results included a $1.0 million gain on that liability and higher interest income. The MSKCC liability was $3.0 million at quarter-end. Adoption of lease accounting rules added right-of-use assets and lease liabilities to the balance sheet.
- The filing reported no material legal proceedings, no subsequent events, and effective disclosure controls as of September 30, 2022.
Important facts for investors to verify
- Whether CB-010 clinical data and the CB-011, CB-012, and CB-020 development timelines meet the stated expectations, and how results affect spending and trial plans.
- Actual cash burn, marketable-security values, and the runway under updated operating assumptions; management’s runway statement is an estimate, not a guarantee.
- Future collaboration revenue recognition, particularly under AbbVie, and the timing and conditions of potential milestones and royalties.
- Potential dilution from the shelf registration, ATM program, equity awards, and other reserved shares.
- Potential financial exposure under license agreements, including MSKCC success payments and clinical, regulatory, commercial, royalty, and lease commitments.