MeiraGTx Holdings plc — Q2 2021 Form 10-Q
Reporting period: Three and six months ended June 30, 2021. MeiraGTx is a clinical-stage gene therapy company with six programs in clinical development and manufacturing operations in the UK and Ireland. It has not generated product sales revenue.
Financial performance
| Metric ($ millions, except per-share data) | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 |
|---|---|---|---|---|
| License revenue, related party | 5.1 | 2.5 | 9.7 | 6.7 |
| General and administrative expense | 10.4 | 11.5 | 20.3 | 23.3 |
| Research and development expense | 15.2 | 16.2 | 31.9 | 24.3 |
| Total operating expenses | 25.6 | 27.7 | 52.2 | 47.6 |
| Loss from operations | (20.5) | (25.2) | (42.5) | (40.9) |
| Net loss | (20.1) | (25.4) | (43.7) | (41.1) |
| Net loss per ordinary share | (0.46) | (0.69) | (0.99) | (1.12) |
License revenue is amortization of Janssen’s $100 million upfront collaboration payment, not product revenue. Janssen also reimburses eligible research and development costs; those reimbursements are recorded as reductions to R&D expense. Reimbursements recognized were $18.1 million in Q2 and $30.2 million in H1 2021, compared with $10.6 million and $24.6 million in the respective 2020 periods.
Q2 net loss narrowed by $5.3 million year over year, alongside higher license revenue and lower reported operating expenses. H1 net loss widened by $2.6 million as R&D spending rose, partly offset by higher license revenue and lower G&A. The filing attributes some 2020-to-2021 expense comparisons to a $7.7 million noncash Emrys Bio acquisition charge in Q2 2020, increased clinical and preclinical activity, manufacturing costs, and Janssen research funding. No gross margin is reported; operating margins are not a meaningful product-sales measure at this pre-commercial stage.
Cash, liquidity and obligations
- Cash and cash equivalents were $172.6 million at June 30, 2021, down from $209.5 million at December 31, 2020. The company reported $18.0 million due from Janssen, expected to be collected in Q3 2021.
- For H1 2021, operating cash outflow was $12.2 million, investing cash outflow was $24.4 million, and financing cash inflow was $0.4 million. Cash decreased by $36.3 million, including a $0.7 million adverse exchange-rate effect.
- Current assets were $207.0 million versus current liabilities of $57.3 million. Total liabilities were $121.0 million, including $25.5 million of lease obligations and $64.2 million of deferred Janssen revenue. The filing reports no material conventional borrowing balance; lease obligations are not equivalent to funded debt.
- Accumulated deficit was $304.7 million. Management estimated cash and expected Janssen research funding would fund operating expenses and capital needs into Q2 2023, while cautioning that assumptions could prove wrong. The liquidity note separately states cash on hand was expected to cover expenses for at least 12 months from issuance.
Outlook, developments and risks
- Management expected to initiate the Phase 3 Lumeos AAV-RPGR trial and a Phase 3 AAV-RPE65 trial in the second half of 2021, complete enrollment in the Phase 1 AQUAx AAV-AQP1 trial in that half, and file an AAV-GAD Parkinson’s disease IND in Q3 2021. These are stated plans, not assurances of completion.
- The company expected R&D and G&A costs to increase as it advances trials, expands its pipeline, hires staff and develops manufacturing capacity. Janssen funding was expected to offset some costs. The filing provides no formal financial guidance for revenue, earnings or cash burn.
- MeiraGTx completed acquisition of its Shannon, Ireland facilities in January 2021, expanding viral-vector, plasmid and DNA manufacturing capacity. H1 investing outflows included property and equipment, facility-related payments and $5.5 million of investments.
- Key risks include ongoing losses and potential need for additional capital; clinical, regulatory and manufacturing uncertainty for gene therapies; dependence on Janssen and other third parties; limited manufacturing capacity and scale-up risk; competition and intellectual-property dependence; and possible COVID-19 impacts on trials, supply chains and financing. The company said COVID-19 had not materially affected H1 2021 financial results or operations, but reported some trial delays and limited supply disruptions.
- Foreign currency movements affected results: H1 included a $1.2 million foreign-currency loss and a $0.7 million translation loss. The company had no foreign-exchange forward contracts and said a 10% unfavorable currency move would not significantly increase net loss.
- No material legal proceedings or subsequent events were reported. Management concluded disclosure controls and procedures were effective at the end of the quarter.
Most important facts for investors to verify
- Whether the $18.0 million Janssen receivable was collected as expected and whether collaboration funding continues on anticipated terms.
- Whether trial and regulatory milestones—including the Lumeos and AAV-RPE65 Phase 3 starts and AAV-GAD IND filing—were achieved, and what subsequent clinical data show.
- Whether actual spending, cash burn and manufacturing investment remain consistent with the Q2 2023 runway estimate, and what financing may be needed.
- How much of reported revenue and expense support depends on Janssen, and how the collaboration’s remaining $64.2 million deferred upfront payment is recognized over time.
- Whether Shannon facility start-up, internal plasmid production and manufacturing scale-up proceed on schedule and meet regulatory requirements.