Caribou Biosciences, Inc. — Q3 2023 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2023. Caribou is a clinical-stage CRISPR genome-editing company developing allogeneic CAR-T and CAR-NK cell therapies. It has no approved products and has not generated product-sale revenue.
Financial performance and position
Amounts below are in USD millions except per-share data. Q3 and nine-month results are compared with the same 2022 periods.
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Licensing and collaboration revenue | $23.7 | $3.3 | $30.9 | $10.2 |
| Research and development expense | $28.6 | $20.0 | $80.8 | $56.5 |
| General and administrative expense | $9.7 | $9.8 | $28.7 | $29.5 |
| Operating loss | $(14.6) | $(26.5) | $(78.6) | $(75.8) |
| Net loss | $(10.0) | $(26.6) | $(67.6) | $(72.4) |
| Basic and diluted loss per share | $(0.12) | $(0.44) | $(0.98) | $(1.19) |
- Cash and liquidity: At September 30, cash and cash equivalents were $104.1 million, with short- and long-term marketable securities of $292.6 million; total cash, cash equivalents, and marketable securities were $396.7 million. Current assets were $350.7 million and current liabilities $24.6 million.
- Cash flow: For the nine months, operating cash use was $71.9 million, investing cash use $36.7 million, and financing cash provided $154.3 million. Cash, cash equivalents, and restricted cash increased $45.7 million.
- Debt and obligations: The filing reports no material ongoing financing commitments such as credit lines. Lease liabilities totaled $27.5 million ($1.1 million current); undiscounted future lease payments were $42.9 million. Potential future development, regulatory, and sales milestone payments under certain licenses totaled approximately $161.2 million, contingent on specified events.
- Margins: The filing does not present gross profit or a meaningful product margin; revenue is from licensing and collaborations, not product sales.
Material changes versus prior periods
- Q3 revenue rose $20.4 million year over year, primarily because AbbVie termination led Caribou to recognize $20.8 million of previously deferred revenue. AbbVie revenue was $21.5 million in Q3 and $24.5 million for the nine months.
- AbbVie gave notice on September 26, 2023, to terminate its collaboration; the termination became effective October 25, 2023. Caribou stopped performing related preclinical services and treated its performance obligation as substantially complete at September 30.
- Q3 net loss narrowed by $16.6 million, largely reflecting the higher AbbVie revenue and increased interest income. For the nine months, net loss improved by $4.9 million, while operating loss widened by $2.8 million as R&D spending increased.
- R&D expense increased $24.3 million for the nine months, driven mainly by external CRO/CMO activity and higher personnel costs. G&A declined $0.7 million.
- Financing included a July–August follow-on offering of 22.1 million shares, generating approximately $134.4 million net, and a June Pfizer private placement of approximately $25.0 million gross. Shares outstanding increased to 88.4 million at September 30 from 61.0 million at year-end 2022.
Outlook, commentary, and risks
- Management expected existing cash, cash equivalents, and marketable securities to fund its current operating plan for at least 12 months from the financial-statement issuance date. Caribou expects continued substantial losses and says it may need additional capital; profitability is uncertain.
- Management planned to meet with the FDA by year-end 2023 about a potential pivotal trial for CB-010 in second-line large B-cell lymphoma, with feedback expected by year-end, and planned initial second-line dose-expansion data in the first half of 2024. These are forward-looking plans, not assured outcomes.
- CB-010 is in the ANTLER Phase 1 trial; CB-011 is in the CaMMouflage Phase 1 trial; CB-012 had FDA IND clearance and was planned for evaluation in the AMpLify Phase 1 trial; CB-020 is a CAR-NK candidate in development. The company relies on third-party manufacturers and service providers.
- Pfizer’s $25.0 million investment proceeds are restricted for 36 months to the CB-011/other qualifying anti-BCMA program. Pfizer also received information rights, a 30-day right of first negotiation for potential program-rights transactions, and a scientific advisory board designation right.
- Key risks include clinical and regulatory uncertainty, whether early clinical results predict later outcomes, manufacturing and third-party reliance, intellectual-property disputes, future financing and dilution, and the possibility that cell therapies may not gain approval or acceptance.
- Two putative securities class actions allege misleading disclosures concerning CB-010’s therapeutic durability and clinical/commercial prospects. The company says it considers the claims without merit and intends to defend them; no probable or reasonably estimable litigation liability was recorded.
Most important facts for investors to verify
- How much of reported revenue and the improved quarterly loss reflects the one-time recognition of AbbVie deferred revenue, and what revenue remains after the collaboration ended.
- Clinical-trial progress and the timing, quality, and interpretation of CB-010, CB-011, and CB-012 data, including the stated FDA and data-update plans.
- Whether the $396.7 million liquidity balance and management’s runway estimate remain adequate as clinical and manufacturing spending grows.
- Future dilution and any financing or partnering terms, including the use restrictions and information/negotiation rights associated with Pfizer’s investment.
- Developments in the CB-010-related lawsuits, the contingent license milestone obligations, and the execution of lease and manufacturing commitments.