MeiraGTx Holdings plc — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; filed March 10, 2022. MeiraGTx is a clinical-stage gene therapy company with no approved products or product sales. Its six clinical programs target inherited retinal diseases, radiation-induced xerostomia and Parkinson’s disease, supported by preclinical programs and internal manufacturing capabilities.
Financial performance and liquidity
| Metric | 2021 | 2020 | Change |
|---|---|---|---|
| License revenue, related party | $37.7m | $15.6m | +$22.1m |
| Operating expenses | $110.9m | $78.1m | +$32.8m |
| Operating loss | $(73.2)m | $(62.6)m | Loss increased $10.6m |
| Net loss | $(79.6)m | $(58.0)m | Loss increased $21.6m |
| Net loss per share | $(1.80) | $(1.54) | — |
| Net cash used in operations | $(10.5)m | $(64.0)m | Use decreased $53.4m |
| Cash and cash equivalents at year-end | $137.7m | $209.5m | Down $71.8m |
Revenue was collaboration-related license revenue, principally amortization of Janssen’s upfront and milestone payments; it was not product revenue. Janssen also reimbursed $69.0m of research and development costs in 2021, recorded as an offset to R&D expense. Gross R&D costs rose to $141.5m from $96.6m, while reported R&D expense after reimbursements and tax incentives rose to $67.1m from $33.9m. G&A was broadly flat at $43.8m.
Operating cash use was substantially below net loss, reflecting noncash charges and favorable changes in working capital, including related-party receivables and deferred revenue. Investing activities used $61.7m, primarily for manufacturing, laboratory and Ireland facility buildout; financing activities provided $1.7m. The company reported no debt outstanding other than lease obligations. Current assets were $183.2m and current liabilities $68.1m at year-end; lease obligations totaled approximately $23.7m. Accumulated deficit was $340.6m. No income tax benefit was recognized.
Material changes and business developments
- Net loss widened as operating expenses increased, especially R&D, while a $6.3m foreign-currency loss replaced a $3.4m gain in 2020.
- License revenue increased following recognition of Janssen collaboration consideration, including a $30m clinical milestone received in December 2021. The company had $64.9m of related deferred revenue remaining at year-end.
- Cash declined amid $61.7m of investing outflows and limited new financing, following $82.7m of financing cash inflows in 2020.
- MeiraGTx acquired Bullseye Therapeutics in October 2021 for reported total consideration of approximately $1.5m, including assumed liabilities, adding retinal drug and gene-therapy delivery capabilities.
- It acquired buildings for a second viral-vector manufacturing facility and a plasmid and DNA facility in Shannon, Ireland. The plasmid/DNA facility was complete; the viral-vector facility was expected to be completed in 2022.
Outlook, commentary and risks
- Management estimated that year-end cash and expected Janssen research funding and milestone payments would fund operating and capital requirements through the second quarter of 2023. This estimate depends on assumptions, and management warned funds could be used sooner than expected.
- Expected 2022 developments included continued dosing and enrollment in the Phase 3 Lumeos trial of botaretigene sparoparvovec; planned later-stage studies with Janssen for AAV-CNGB3 and AAV-CNGA3; an expected Phase 3 start for AAV-RPE65; a planned AAV-hAQP1 Phase 2 start by year-end; and an anticipated AAV-GAD IND filing in the first half of 2022. These are plans, not guaranteed outcomes.
- Preliminary AAV-hAQP1 Phase 1 data reported clinically meaningful symptom improvement in six of seven participants assessed at 90 days, with apparent tolerability at doses tested. The filing cautions that preliminary clinical data may change and require verification.
- Management expects continuing losses and increased development and manufacturing spending. It states that additional capital will be required in the future; financing may be unavailable or dilutive or may require unfavorable collaboration terms.
- Principal risks include clinical and regulatory uncertainty for gene therapies, trial delays or safety issues, reliance on Janssen for partnered programs and funding, manufacturing scale-up and supply constraints, competition, intellectual-property and licensing exposure, reimbursement and pricing uncertainty, and foreign-exchange volatility. COVID-19 had caused some trial and supply-chain disruption, though the company said it had not materially affected 2021 or 2020 results.
- Ernst & Young issued an unqualified audit opinion on the financial statements. Management concluded disclosure controls and internal control over financial reporting were effective; the auditor did not attest to internal-control effectiveness because the company qualified as an emerging growth company.
Important facts for investors to verify
- Whether the anticipated Janssen funding and milestones materialized and whether the stated cash runway remains valid against actual cash burn and Ireland facility spending.
- Updated enrollment, safety and efficacy results, endpoint status and regulatory plans for the Phase 3 Lumeos trial and other lead programs.
- Whether the AAV-hAQP1 Phase 1 preliminary findings hold in complete analyses and support the planned controlled Phase 2 study.
- Completion, qualification and usable capacity of the Shannon manufacturing facilities, including any cost overruns or regulatory delays.
- The company’s future financing needs, collaboration economics and obligations, including Janssen’s development and commercialization responsibilities and the deferred revenue balance.