10-Q 1 crsp-20240331.htm 10-Q 10-Q
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SS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to .

Commission File Number: 001-37923

 

CRISPR THERAPEUTICS AG

(Exact name of registrant as specified in its charter)

 

 

Switzerland

Not Applicable

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

Baarerstrasse 14

6300 Zug, Switzerland

Not Applicable

(Address of principal executive offices)

(Zip Code)

+41 (0)41 561 32 77

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares, nominal value CHF 0.03

CRSP

The Nasdaq Global Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesNo

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YesNo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of May 3, 2024, there were 84,918,093 shares of registrant’s common shares outstanding.

 


 

Throughout this Quarterly Report on Form 10-Q, the “Company,” “CRISPR,” “CRISPR Therapeutics,” “we,” “us,” and “our,” except where the context requires otherwise, refer to CRISPR Therapeutics AG and its consolidated subsidiaries;“our board of directors” refers to the board of directors of CRISPR Therapeutics AG; and we generally refer to CASGEVY (exagamglogene autotemcel [exa-cel]), formerly CTX001, as "CASGEVY".

“CRISPR Therapeutics®” standard character mark and design logo, “CRISPRXTM,” “CRISPR TXTM,” “CTX112TM,” “CTX131TM,” “CTX310TM,” “CTX320TM,” “CTX330TM,” and “CTX211TM” are trademarks and registered trademarks of CRISPR Therapeutics AG. The CASGEVY™ word mark and design are trademarks of Vertex Pharmaceuticals Incorporated. All other trademarks and registered trademarks contained in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, trademarks, service marks and trade names referred to in this Quarterly Report on Form 10-Q may appear without the ® or symbols and any such omission is not intended to indicate waiver of any such rights.

 

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q are forward-looking statements. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “potential,” “will,” “would” or the negative or plural of these words or similar expressions or variations, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

the safety, efficacy and clinical progress of various clinical programs, including those for CASGEVY, CTX112, CTX131, CTX211, CTX310 and CTX320;
plans and expectations for the commercialization of, and anticipated benefits of, CASGEVY, including the anticipated patient population eligible for CASGEVY in the United States and plans for patient access to CASGEVY, as well as timelines for and expectations regarding additional regulatory agency decisions regarding CASGEVY;
the status of clinical trials, including development timelines and discussions with regulatory authorities related to product candidates under development by us and our collaborators;
the initiation, timing, progress and results of our preclinical studies and clinical trials, including our ongoing clinical trials and any planned clinical trials, and our research and development programs, including delays or disruptions in clinical trials, non-clinical experiments and Investigational New Drug, or IND, application-enabling studies;
the actual or potential benefits of regulatory designations, such as Orphan Drug, Fast Track and regenerative medicine advanced therapy, or RMAT, in the United States or such European equivalents, including PRIority MEdicines, or PRIME, designation;
our ability to advance product candidates into, and successfully complete, clinical trials;
the size and growth potential of the markets for our product candidates and our ability to serve those markets;
the rate and degree of market acceptance of our product candidates and the success of competing therapies that are or become available;
our efforts to establish internal manufacturing capabilities and operation of our cell therapy manufacturing facility;
our intellectual property coverage and positions, including those of our licensors and third parties as well as the status and potential outcome of proceedings involving any such intellectual property;
our anticipated expenses, ability to obtain funding for our operations and the sufficiency of our cash resources; and
the therapeutic value, development, and commercial potential of CRISPR/Cas9 gene editing technologies and therapies.

Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and assumptions that could cause our actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled “Risk Factors,” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q, if any, our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on February 21, 2024, and in other SEC filings. You should not rely upon forward-looking statements as predictions of future events. Such forward-looking statements speak only as of the date of this report. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make or enter into.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results, performance or achievements may be materially different from what we expect. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

 


 

Investors and others should note that we announce material information to our investors using our investor relations website (https://crisprtx.gcs-web.com/), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media to communicate with the public about our Company, our business, our product candidates and other matters. It is possible that the information we post on social media could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our Company to review the information we post on the social media channels listed on our investor relations website.

 


 

Index

 

Page

Number

PART I: FINANCIAL INFORMATION

 

 

 

Item 1. Condensed Consolidated Financial Statements (unaudited)

2

 

 

Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023

2

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2024 and 2023

3

 

 

Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2024 and 2023

4

 

 

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023

5

 

 

Notes to Condensed Consolidated Financial Statements

6

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

25

 

 

Item 4. Controls and Procedures

25

 

 

PART II: OTHER INFORMATION

 

 

 

Item 1. Legal Proceedings

26

 

 

Item 1A. Risk Factors

26

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

26

 

 

Item 3. Defaults Upon Senior Securities

26

 

 

Item 4. Mine Safety Disclosures

26

 

 

Item 5. Other Information

26

 

 

Item 6. Exhibits

27

 

 

SIGNATURES

28

 

 


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

CRISPR Therapeutics AG

Condensed Consolidated Balance Sheets

(unaudited, in thousands, except share and per share data)

 

 

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Assets

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

707,427

 

 

$

389,477

 

Marketable securities

 

 

1,400,698

 

 

 

1,304,215

 

Accounts receivable

 

 

 

 

 

200,000

 

Prepaid expenses and other current assets

 

 

11,499

 

 

 

14,386

 

Total current assets

 

 

2,119,624

 

 

 

1,908,078

 

Property and equipment, net

 

 

147,253

 

 

 

151,945

 

Marketable securities, non-current

 

 

 

 

 

1,973

 

Intangible assets, net

 

 

2

 

 

 

16

 

Restricted cash

 

 

11,516

 

 

 

11,591

 

Operating lease assets

 

 

151,254

 

 

 

153,993

 

Other non-current assets

 

 

9,368

 

 

 

1,975

 

Total assets

 

$

2,439,017

 

 

$

2,229,571

 

Liabilities and shareholders’ equity

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

16,463

 

 

$

38,147

 

Accrued expenses

 

 

76,432

 

 

 

45,335

 

Deferred revenue, current

 

 

4,072

 

 

 

4,105

 

Accrued tax liabilities

 

 

1,207

 

 

 

438

 

Operating lease liabilities

 

 

15,992

 

 

 

15,625

 

Other current liabilities

 

 

4,824

 

 

 

5,141

 

Total current liabilities

 

 

118,990

 

 

 

108,791

 

Deferred revenue, non-current

 

 

13,541

 

 

 

14,012

 

Operating lease liabilities, net of current portion

 

 

218,935

 

 

 

223,007

 

Other non-current liabilities

 

 

3,615

 

 

 

958

 

Total liabilities

 

 

355,081

 

 

 

346,768

 

Commitments and contingencies, see Note 7

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Common shares, CHF 0.03 nominal value, 130,452,265 and 126,536,183 shares authorized at
 March 31, 2024 and December 31, 2023, respectively,
85,007,926 and 80,214,694 shares issued at March 31, 2024 and December 31, 2023, respectively, 84,837,610 and 80,044,378 shares outstanding at March 31, 2024 and December 31, 2023, respectively

 

 

2,658

 

 

 

2,497

 

Treasury shares, at cost, 170,316 shares at March 31, 2024 and at December 31, 2023

 

 

(62

)

 

 

(62

)

Additional paid-in capital

 

 

3,199,183

 

 

 

2,878,155

 

Accumulated deficit

 

 

(1,116,291

)

 

 

(999,700

)

Accumulated other comprehensive (loss) income

 

 

(1,552

)

 

 

1,913

 

Total shareholders' equity

 

 

2,083,936

 

 

 

1,882,803

 

Total liabilities and shareholders’ equity

 

$

2,439,017

 

 

$

2,229,571

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2


 

CRISPR Therapeutics AG

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited, in thousands, except share and per share data)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

Revenue:

 

 

 

 

 

 

Collaboration revenue

 

$

 

 

$

100,000

 

Grant revenue

 

 

504

 

 

 

 

Total revenue

 

 

504

 

 

 

100,000

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

76,172

 

 

 

99,935

 

General and administrative

 

 

17,953

 

 

 

22,360

 

Collaboration expense, net

 

 

46,966

 

 

 

42,192

 

Total operating expenses

 

 

141,091

 

 

 

164,487

 

Loss from operations

 

 

(140,587

)

 

 

(64,487

)

Other income:

 

 

 

 

 

 

Other income, net

 

 

24,720

 

 

 

12,742

 

Total other income, net

 

 

24,720

 

 

 

12,742

 

Net loss before income taxes

 

 

(115,867

)

 

 

(51,745

)

Provision for income taxes

 

 

(724

)

 

 

(1,320

)

Net loss

 

 

(116,591

)

 

 

(53,065

)

Foreign currency translation adjustment

 

 

(11

)

 

 

32

 

Unrealized (loss) gain on marketable securities

 

 

(3,454

)

 

 

6,227

 

Comprehensive loss

 

$

(120,056

)

 

$

(46,806

)

 

 

 

 

 

 

Net loss per common share — basic

 

$

(1.43

)

 

$

(0.67

)

Basic weighted-average common shares outstanding

 

 

81,794,630

 

 

 

78,676,986

 

Net loss per common share — diluted

 

$

(1.43

)

 

$

(0.67

)

Diluted weighted-average common shares outstanding

 

 

81,794,630

 

 

 

78,676,986

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3


 

CRISPR Therapeutics AG

Condensed Consolidated Statements of Shareholders’ Equity

(unaudited, in thousands, except share and per share data)

.

 

 

Common Shares

 

Treasury Shares

 

 

 

 

 

 

 

 

 

 

Shares

 

CHF 0.03
Nominal Value

 

Shares

 

Amount,
at cost

 

Additional
Paid-in
Capital

 

Accumulated
Deficit

 

Accumulated
Other
Comprehensive
Gain/(Loss)

 

Total
Shareholders’
Equity

 

Balance at December 31, 2022

 

78,512,450

 

$

2,441

 

 

180,316

 

$

(63

)

$

2,734,838

 

$

(846,090

)

$

(15,647

)

$

1,875,479

 

Vesting of restricted shares

 

172,995

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

5

 

Exercise of vested options, net of issuance costs of $0.2 million

 

159,184

 

 

6

 

 

 

 

 

 

4,677

 

 

 

 

 

 

4,683

 

Purchase of common stock under ESPP

 

19,105

 

 

 

 

 

 

 

 

660

 

 

 

 

 

 

660

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

20,875

 

 

 

 

 

 

20,875

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

6,259

 

 

6,259

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(53,065

)

 

 

 

(53,065

)

Balance at March 31, 2023

 

78,863,734

 

$

2,452

 

 

180,316

 

$

(63

)

$

2,761,050

 

$

(899,155

)

$

(9,388

)

$

1,854,896

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2023

 

80,044,378

 

$

2,497

 

 

170,316

 

$

(62

)

$

2,878,155

 

$

(999,700

)

$

1,913

 

$

1,882,803

 

Issuance of common stock, net of issuance costs of $3.8 million

 

3,929,610

 

 

132

 

 

 

 

 

 

277,015

 

 

 

 

 

 

277,147

 

Vesting of restricted shares

 

214,913

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

7

 

Exercise of vested options, net of issuance costs of $0.6 million

 

632,683

 

 

22

 

 

 

 

 

 

23,844

 

 

 

 

 

 

23,866

 

Purchase of common stock under ESPP

 

16,026

 

 

 

 

 

 

 

 

764

 

 

 

 

 

 

764

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

19,405

 

 

 

 

 

 

19,405

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,465

)

 

(3,465

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(116,591

)

 

 

 

(116,591

)

Balance at March 31, 2024

 

84,837,610

 

$

2,658

 

 

170,316

 

$

(62

)

$

3,199,183

 

$

(1,116,291

)

$

(1,552

)

$

2,083,936

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4


 

CRISPR Therapeutics AG

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Operating activities:

 

 

 

 

 

 

Net loss

 

$

(116,591

)

 

$

(53,065

)

Reconciliation of net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

4,833

 

 

 

5,051

 

Equity-based compensation

 

 

19,405

 

 

 

20,875

 

Other non-cash items, net

 

 

(8,385

)

 

 

(969

)

Changes in:

 

 

 

 

 

 

Accounts receivable

 

 

200,000

 

 

 

 

Prepaid expenses and other assets

 

 

2,949

 

 

 

12,040

 

Accounts payable and accrued expenses

 

 

9,443

 

 

 

25,214

 

Deferred revenue

 

 

(504

)

 

 

 

Operating lease assets and liabilities

 

 

(966

)

 

 

(177

)

Other liabilities, net

 

 

(432

)

 

 

(170

)

Net cash provided by operating activities

 

 

109,752

 

 

 

8,799

 

Investing activities:

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

(721

)

 

 

(3,059

)

Investment in equity securities

 

 

(7,500

)

 

 

 

Purchases of marketable securities

 

 

(326,915

)

 

 

(265,627

)

Maturities of marketable securities

 

 

237,336

 

 

 

386,515

 

Net cash (used in) provided by investing activities

 

 

(97,800

)

 

 

117,829

 

Financing activities:

 

 

 

 

 

 

Proceeds from issuance of common shares, net of issuance costs

 

 

280,745

 

 

 

 

Proceeds from exercise of options and ESPP contributions, net of issuance costs

 

 

25,189

 

 

 

5,404

 

Net cash provided by financing activities

 

 

305,934

 

 

 

5,404

 

Effect of exchange rate changes on cash

 

 

(11

)

 

 

32

 

Increase in cash

 

 

317,875

 

 

 

132,064

 

Cash, cash equivalents and restricted cash, beginning of period

 

 

401,068

 

 

 

224,060

 

Cash, cash equivalents and restricted cash, end of period

 

$

718,943

 

 

$

356,124

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

Property and equipment purchases in accounts payable and accrued expenses

 

$

131

 

 

$

2,633

 

Equity issuance costs in accounts payable, accrued expenses, and other long-term liabilities

 

$

4,522

 

 

$

155

 

 

 

 

As of March 31,

 

Reconciliation to amounts within the condensed consolidated balance sheets

 

2024

 

 

2023

 

Cash and cash equivalents

 

$

707,427

 

 

$

344,407

 

Restricted cash

 

 

11,516

 

 

 

11,717

 

Cash, cash equivalents and restricted cash at end of period

 

$

718,943

 

 

$

356,124

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5


 

CRISPR Therapeutics AG

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP.

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company views its operations and manages its business in one operating segment, which is the business of discovering, developing and commercializing therapies derived from or incorporating genome-editing technology. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position and results of operations for the three-month interim periods ended March 31, 2024 and 2023.

The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2023, which are contained in the 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on February 21, 2024.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates, which include, but are not limited to, revenue recognition, equity-based compensation expense and reported amounts of expenses during the period. Significant estimates in these consolidated financial statements have been made in connection with revenue recognition and equity-based compensation expense. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Changes in estimates are reflected in reported results in the period in which they become known.

Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2024 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s 2023 Annual Report on Form 10-K filed with the SEC on February 21, 2024.

New Accounting Pronouncements – Recently Adopted

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the adoption of recently issued standards has or may have a material impact on its condensed consolidated financial statements and disclosures.

 

 

6


 

2. Marketable Securities

The following table summarizes cash equivalents and marketable securities held at March 31, 2024 and December 31, 2023 (in thousands), which are recorded at fair value. The table below excludes $455.0 million and $197.8 million of cash at March 31, 2024 and December 31, 2023, respectively.

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair Value

 

March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

142,451

 

 

$

 

 

$

 

 

$

142,451

 

Commercial paper

 

 

106,879

 

 

 

 

 

 

(115

)

 

 

106,764

 

U.S. Treasury securities

 

 

3,192

 

 

 

 

 

 

 

 

 

3,192

 

Total cash equivalents

 

 

252,522

 

 

 

 

 

 

(115

)

 

 

252,407

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

23,267

 

 

 

2

 

 

 

 

 

 

23,269

 

Corporate debt securities

 

 

885,237

 

 

 

1,319

 

 

 

(1,885

)

 

 

884,671

 

Certificates of deposit

 

 

21,930

 

 

 

 

 

 

 

 

 

21,930

 

Government-sponsored enterprise securities

 

 

238,595

 

 

 

58

 

 

 

(830

)

 

 

237,823

 

Commercial paper

 

 

233,124

 

 

 

4

 

 

 

(123

)

 

 

233,005

 

Total marketable securities

 

 

1,402,153

 

 

 

1,383

 

 

 

(2,838

)

 

 

1,400,698

 

Total cash equivalents and marketable securities

 

$

1,654,675

 

 

$

1,383

 

 

$

(2,953

)

 

$

1,653,105

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

185,990

 

 

$

 

 

$

 

 

$

185,990

 

U.S. Treasury securities

 

 

5,731

 

 

 

 

 

 

 

 

 

5,731

 

Total cash equivalents

 

 

191,721

 

 

 

 

 

 

 

 

 

191,721

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

22,963

 

 

 

45

 

 

 

 

 

 

23,008

 

Corporate debt securities

 

 

883,550

 

 

 

3,367

 

 

 

(1,559

)

 

 

885,358

 

Certificates of deposit

 

 

47,282

 

 

 

 

 

 

 

 

 

47,282

 

Government-sponsored enterprise securities

 

 

195,106

 

 

 

377

 

 

 

(352

)

 

 

195,131

 

Commercial paper

 

 

155,403

 

 

 

32

 

 

 

(26

)

 

 

155,409

 

Total marketable securities

 

 

1,304,304

 

 

 

3,821

 

 

 

(1,937

)

 

 

1,306,188

 

Total cash equivalents and marketable securities

 

$

1,496,025

 

 

$

3,821

 

 

$

(1,937

)

 

$

1,497,909

 

 

As of March 31, 2024 marketable securities were in a net unrealized loss position of $1.6 million. As of December 31, 2023, marketable securities were in a net unrealized gain position of $1.9 million. The Company has recorded a net unrealized loss of $3.5 million and a net unrealized gain of $6.2 million during the three months ended March 31, 2024 and 2023, respectively, related to its debt securities, which is included in comprehensive loss on the condensed consolidated statements of operations and comprehensive loss.

As of March 31, 2024 and December 31, 2023, the aggregate fair value of marketable securities that were in an unrealized loss position for less than twelve months was $893.8 million and $463.5 million, respectively. As of March 31, 2024 and December 31, 2023, the aggregate fair value of marketable securities that were in an unrealized loss position for more than twelve months was $125.9 million and $138.4 million, respectively. As of March 31, 2024, no securities that have been in an unrealized loss position for more than twelve months will mature beyond one year. As of December 31, 2023, securities in an unrealized loss position for more than twelve months totaling $2.0 million had maturities beyond one year.

The Company determined that there is no material credit risk associated with the above investments as of March 31, 2024. The Company has the intent and ability to hold such securities until recovery. As a result, the Company did not record any charges for credit-related impairments for its marketable securities for the three months ended March 31, 2024. No available-for-sale debt securities held as of March 31, 2024 had remaining maturities greater than thirty months.

7


 

3. Fair Value Measurements

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the fair value hierarchy classification of such fair values as of March 31, 2024 and December 31, 2023 (in thousands):

 

 

 

Fair Value Measurements at

 

 

 

March 31, 2024

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

455,020

 

 

$

455,020

 

 

$

 

 

$

 

Money market funds

 

 

142,451

 

 

$

142,451

 

 

 

 

 

 

 

Commercial paper

 

 

106,764

 

 

 

 

 

 

106,764

 

 

 

 

U.S. Treasury securities

 

 

3,192

 

 

 

 

 

 

3,192

 

 

 

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

23,269

 

 

 

 

 

 

23,269

 

 

 

 

Corporate debt securities

 

 

884,671

 

 

 

 

 

 

884,671

 

 

 

 

Certificates of deposit

 

 

21,930

 

 

 

 

 

 

21,930

 

 

 

 

Government-sponsored enterprise securities

 

 

237,823

 

 

 

 

 

 

237,823

 

 

 

 

Commercial paper

 

 

233,005

 

 

 

 

 

 

233,005

 

 

 

 

Total

 

$

2,108,125

 

 

$

597,471

 

 

$

1,510,654

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at

 

 

 

December 31, 2023

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

197,756

 

 

$

197,756

 

 

$

 

 

$

 

Money market funds

 

 

185,990

 

 

 

185,990

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

5,731

 

 

 

 

 

 

5,731

 

 

 

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

23,008

 

 

 

 

 

 

23,008

 

 

 

 

Corporate debt securities

 

 

885,358

 

 

 

 

 

 

885,358

 

 

 

 

Certificates of deposit

 

 

47,282

 

 

 

 

 

 

47,282

 

 

 

 

Government-sponsored enterprise securities

 

 

195,131

 

 

 

 

 

 

195,131

 

 

 

 

Commercial paper

 

 

155,409

 

 

 

 

 

 

155,409

 

 

 

 

Total

 

$

1,695,665

 

 

$

383,746

 

 

$

1,311,919

 

 

$

 

 

Marketable securities classified as Level 2 within the valuation hierarchy generally consist of U.S. treasury securities and government agency securities, certificates of deposit, corporate bonds and commercial paper. The Company estimates the fair value of these marketable securities by taking into consideration valuations obtained from third-party pricing sources.

 

4. Property and Equipment, net

Property and equipment, net, consists of the following (in thousands):

 

 

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Computer equipment

 

$

3,739

 

 

$

3,739

 

Furniture, fixtures and other

 

 

8,109

 

 

 

8,109

 

Laboratory equipment

 

 

41,559

 

 

 

41,411

 

Leasehold improvements

 

 

143,260

 

 

 

143,260

 

Construction work in process

 

 

8,838

 

 

 

8,859

 

Total property and equipment, gross

 

 

205,505

 

 

 

205,378

 

Accumulated depreciation

 

 

(58,252

)

 

 

(53,433

)

Total property and equipment, net

 

$

147,253

 

 

$

151,945

 

 

8


 

Depreciation expense for the three months ended March 31, 2024 and 2023 was $4.8 million and $5.0 million, respectively.

5. Accrued Expenses

Accrued expenses consist of the following (in thousands):

 

 

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Payroll and employee-related costs

 

$

7,480

 

 

$

17,347

 

Research costs

 

 

13,502

 

 

 

16,962

 

Collaboration costs

 

 

47,767

 

 

 

2,395

 

Licensing fees

 

 

2,505

 

 

 

3,143

 

Professional fees

 

 

3,348

 

 

 

2,515

 

Intellectual property costs

 

 

1,363

 

 

 

1,642

 

Accrued property and equipment

 

 

34

 

 

 

630

 

Other

 

 

433

 

 

 

701

 

Total

 

$

76,432

 

 

$

45,335

 

 

 

6. Significant Contracts

Agreements with Vertex

2015 collaboration

In 2015, the Company entered into a strategic collaboration, option and license agreement, or the 2015 Collaboration Agreement, with Vertex Pharmaceuticals Incorporated, or Vertex. The 2015 Collaboration Agreement is focused on the use of the Company’s CRISPR/Cas9 gene editing technology to discover and develop potential new treatments aimed at the underlying genetic causes of human disease. The Company and Vertex amended the 2015 Collaboration Agreement in 2017 and 2019 with Amendment No. 1 and Amendment No. 2, respectively, namely to clarify Vertex’s option rights under the 2015 Collaboration Agreement and to modify certain definitions and provisions of the 2015 Collaboration Agreement to make them consistent with the JDA (as defined below) and the 2019 Collaboration Agreement (as defined below). In 2017, Vertex exercised an option granted to it under the 2015 Collaboration Agreement to obtain a co-exclusive license to develop and commercialize hemoglobinopathy and beta-globin targets, and in 2019, Vertex exercised the remaining options granted to it under the 2015 Collaboration Agreement to exclusively license certain collaboration targets developed under the 2015 Collaboration Agreement.

Hemoglobinopathies collaboration

In 2017, following Vertex's exercise of its option to obtain a co-exclusive license to develop and commercialize hemoglobinopathy and beta-globin targets, the Company and Vertex entered into a joint development and commercialization agreement, or the JDA, and agreed for potential hemoglobinopathy treatments, including CASGEVY, the Company and Vertex would share equally all research and development costs and worldwide revenues. In 2021, the Company and Vertex amended and restated the JDA, or the A&R Vertex JDCA (as amended and in effect, from time to time), pursuant to which the parties agreed to, among other things, (a) adjust the governance structure for the collaboration and adjust the responsibilities of each party thereunder, whereby Vertex leads and has all decision making (i.e., control) in relation to the CASGEVY program prospectively; (b) adjust the allocation of net profits and net losses between the parties with respect to CASGEVY only, which will be allocated 40% to the Company and 60% to Vertex, prospectively; and (c) exclusively license (subject to the Company’s reserved rights to conduct certain activities) certain intellectual property rights to Vertex relating to the specified product candidates and products (including CASGEVY) that may be researched, developed, manufactured and commercialized on a worldwide basis under the A&R Vertex JDCA. Additionally, the A&R Vertex JDCA allows the Company to defer a portion of its share of costs under the arrangement if spending on the CASGEVY program exceeds specified amounts through 2024. In December 2023, the Company entered into an amendment to the A&R Vertex JDCA, or Amendment No. 1 to the A&R Vertex JDCA, with Vertex related to the global development, manufacturing, and commercialization of CASGEVY. Pursuant to Amendment No. 1 to the A&R Vertex JDCA, among other things, the Company and Vertex agreed to (a) allocate certain costs arising from a license agreement with a third party, resulting in a current payment due to Vertex by the Company of $20.0 million upon an event specified in Amendment No. 1 to the A&R Vertex JDCA, and (b) adjust, under certain specified circumstances, the timing of and portion of the Company’s share of costs it is permitted to defer under the agreement. Any deferred amounts under the A&R Vertex JDCA, as amended, are only payable to Vertex as an offset against future profitability of the CASGEVY program and the amounts payable are capped at a specified maximum amount per year.

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In connection with the closing of the transaction contemplated by the A&R Vertex JDCA, the Company received a $900.0 million up-front payment from Vertex. Additionally, in December 2023, the Company and Vertex received approval of CASGEVY by the U.S. Food and Drug Administration, or the FDA. The FDA’s approval of CASGEVY triggered Vertex’s obligation to make a $200.0 million milestone payment to the Company, which was recognized in December 2023 and for which payment was received in January 2024 is included in accounts receivable in the accompanying consolidated balance sheets as of December 31, 2023.

DMD and DM1 exclusive license

In 2019, the Company and Vertex entered into a series of agreements, including a strategic collaboration and license agreement, or the 2019 Collaboration Agreement, for the development and commercialization of products for the treatment of Duchenne muscular dystrophy, or DMD, and myotonic dystrophy Type 1, or DM1. For the DMD and DM1 programs, Vertex is responsible for all research, development, manufacturing and commercialization activities and all related costs. Upon IND filing, the Company has the option to forego the DM1 milestones and royalties, and instead, co-develop and co-commercialize all DM1 products globally in exchange for payment of 50% of research and development costs incurred by Vertex from the effective date of the agreement through IND filing.

Collaboration in the field of diabetes

In 2021, the Company and ViaCyte, Inc., or ViaCyte, entered into a joint development and commercialization agreement, or the ViaCyte JDCA, to jointly develop and commercialize product candidates and shared products for the diagnosis, treatment or prevention of diabetes type 1, diabetes type 2 or insulin dependent / requiring diabetes throughout the world. In the third quarter of 2022, Vertex acquired ViaCyte, and ViaCyte became a wholly-owned subsidiary of Vertex. In March 2023, (1) the Company and ViaCyte entered into an amendment to the ViaCyte JDCA, or the ViaCyte JDCA Amendment, and adjusted certain rights and obligations of the Company and ViaCyte under the ViaCyte JDCA, and (2) the Company and Vertex entered into a non-exclusive license agreement, or the Non-Ex License Agreement, pursuant to which the Company agreed to license to Vertex, on a non-exclusive basis, certain of its gene editing intellectual property to exploit certain products for the diagnosis, treatment or prevention of diabetes type 1, diabetes type 2 or insulin dependent / requiring diabetes throughout the world. Subsequently, ViaCyte elected to opt-out of the ViaCyte JDCA. Per the opt-out terms, the on-going collaboration assets are now wholly owned by the Company, subject to a royalty on future sales owed to ViaCyte. The opt-out became effective in early February 2024.

In connection with entering into the Non-Ex License Agreement, the Company received a $100.0 million up front payment from Vertex in the first quarter of 2023 and subsequently received a $70.0 million research milestone achieved in the second quarter of 2023. The Company is eligible to receive additional milestone payments of up to $160 million in aggregate, which are dependent on the achievement of pre-determined research, development and commercial milestones for certain products utilizing the licensed intellectual property. Additionally, the Company is eligible to receive tiered royalties on the sales of certain products in the low to mid-single digits.

Accounting Analysis

For purposes of this Note 6, the 2015 Collaboration Agreement, Amendment No. 1, Amendment No. 2, A&R Vertex JDCA, Amendment No. 1 to the A&R Vertex JDCA and 2019 Collaboration Agreement are collectively referred to as the “Vertex Agreements” and the Non-Ex License Agreement and ViaCyte JDCA Amendment are collectively referred to as the “March 2023 Agreements.”

The Vertex Agreements and the March 2023 Agreements include components of a customer-vendor relationship as defined under ASC 606, Revenue from Contracts with Customers, or ASC 606, collaborative arrangements as defined under ASC 808, Collaborative Agreements, or ASC 808, and research and development costs as defined under ASC 730, Research and Development, or ASC 730. Specifically, with regards to the March 2023 Agreements, the Company concluded that the non-exclusive license is a performance obligation under ASC 606 and the ongoing research and development services under the ViaCyte JDCA Amendment are a unit of account under ASC 808.

Accounting Analysis Under ASC 606

March 2023 Agreements

Identification of the Contract

The March 2023 Agreements were negotiated as a package with a single commercial objective and, as such, the March 2023 Agreements were combined for accounting purposes and treated as a single arrangement. The Company determined for accounting purposes that the combined contract terminates the original ViaCyte JDCA and created a new contract.

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Identification of Performance Obligations

The Company concluded the transfer of the non-exclusive license, including certain modified rights and obligations provided as part of the ViaCyte JDCA Amendment to support the delivery of the license, was both capable of being distinct and distinct within the context of the contract.

Determination of Transaction Price

The initial transaction price was comprised of the upfront payment of $100.0 million.

In the second quarter of 2023, the Company adjusted the transaction price to include $70.0 million in previously constrained variable consideration related to a research milestone which was achieved in the second quarter of 2023. The Company determined that all other possible variable consideration resulting from milestones and royalties discussed below was fully constrained as of March 31, 2024. The Company will re-evaluate the transaction price in each reporting period.

Allocation of Transaction Price to Performance Obligations

The Company identified one performance obligation for the March 2023 Agreements and, as a result, no allocation of the transaction price was required.

Recognition of Revenue

The Company determined the non-exclusive license, including certain modified rights and obligations provided as part of the ViaCyte JDCA Amendment to support the delivery of the license, represented functional intellectual property, as the intellectual property provides Vertex with the ability to perform a function or task in the form of research and development in the field of diabetes. In 2023, the Company recognized revenue of $100.0 million for the non-exclusive license at the onset of the arrangement, as this was the point in time in which the non-exclusive license was delivered.

In 2023, revenue from variable consideration of $70.0 million was recognized related to a research milestone that was achieved during the second quarter of 2023. Revenue recognized under the March 2023 Agreements for year ended December 31, 2023 was $170.0 million in aggregate.

No revenue was recognized under the March 2023 Agreements for the three months ended March 31, 2024. Revenue recognized under the March 2023 Agreements for the three months ended March 31, 2023 was $100.0 million.

Milestones under the Non-Ex License Agreement

As of March 31, 2024, the Company is eligible to receive potential future milestone payments from Vertex of up to $160.0 million in the aggregate under the Non-Ex License Agreement depending on the achievement of pre-determined research, development and commercial milestones for certain products utilizing the licensed intellectual property. Additionally, the Company is eligible to receive tiered royalties on the sales of certain products in the low to mid-single digits.

Each of the remaining milestones under the Non-Ex License Agreement are fully constrained as of March 31, 2024. There is uncertainty as to whether the events to obtain the research and developmental milestones will be achieved given the nature of clinical development and the stage of the CRISPR/Cas9 technology. The remaining research, development and regulatory milestones will be constrained until it is probable that a significant revenue reversal will not occur. Commercial milestones and royalties relate predominantly to a license of intellectual property and are determined by sales or usage-based thresholds. The commercial milestones and royalties are accounted for under the royalty recognition constraint and will be accounted for as constrained variable consideration. The Company applies the royalty recognition constraint for each commercial milestone and will not recognize revenue for each until the subsequent sale of a licensed product (achievement of each) occurs.

Vertex Agreements

Deferred revenue

As of March 31, 2024 and December 31, 2023, there was no current deferred revenue related to the Vertex Agreements. As of March 31, 2024, there was $12.3 million of non-current deferred revenue related to the Vertex Agreements, which is unchanged from December 31, 2023. The transaction price allocated to the remaining performance obligations was $12.3 million.

Milestones

The Company has evaluated the milestones that may be received in connection with the Vertex Agreements.

Under the 2015 Collaboration Agreement and subsequent amendments, the Company is eligible to receive up to $410.0 million in additional development, regulatory and commercial milestones and royalties on net product sales for each of the three collaboration targets that Vertex licensed in 2019. Each milestone is payable only once per collaboration target, regardless of the number of products directed to such collaboration target that achieve the relevant milestone event.

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The Company is eligible to receive potential future payments of up to $775.0 million under the 2019 Collaboration Agreement based upon the successful achievement of specified development, regulatory and commercial milestones for the DMD and DM1 programs. The Company is also eligible to receive tiered royalties on future net sales on any products that may result from this collaboration; however, the Company has the option to forego the DM1 milestones and royalties to co-develop and co-commercialize all DM1 products globally.

The Company has the option to conduct research at their own cost in certain defined areas that, if beneficial to the CASGEVY program and CASGEVY ultimately achieves regulatory approval in such areas, then the Company could be entitled to certain milestone payments aggregating to high eight digits from Vertex.

Each of the remaining milestones described above are fully constrained as of March 31, 2024. There is uncertainty that the events to obtain the research and developmental milestones will be achieved given the nature of clinical development and the stage of the CRISPR/Cas9 technology. The remaining research, development and regulatory milestones will be constrained until it is probable that a significant revenue reversal will not occur. Commercial milestones and royalties relate predominantly to a license of intellectual property and are determined by sales or usage-based thresholds. The commercial milestones and royalties are accounted for under the royalty recognition constraint and will be accounted for as constrained variable consideration. The Company applies the royalty recognition constraint for each commercial milestone and will not recognize revenue for each until the subsequent sale of a licensed product (achievement of each) occurs.

Accounting Analysis under ASC 808

Vertex Agreements

In connection with the Vertex Agreements, the Company identified the following collaborative elements, which are accounted for under ASC 808: (i) development and commercialization services for shared products, including any transition services related to CASGEVY under the A&R Vertex JDCA; (ii) R&D Services for follow-on products; and (iii) committee participation. The related impact of the cost sharing is included within collaboration expense, net, in the condensed consolidated statements of operations and comprehensive loss. During the three months ended March 31, 2024 and 2023, the Company recognized $47.0 million and $42.2 million of collaboration expense, net, related to the CASGEVY program, respectively. Collaboration expense, net, during the three months ended March 31, 2024 and 2023 was net of $0.8 million and $2.8 million of reimbursements from Vertex related to the CASGEVY program, respectively.

 

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7. Commitments and Contingencies

Leases

Refer to Note 7 to the consolidated financial statements in the Company’s 2023 Annual Report on Form 10-K filed with the SEC on February 21, 2024 for discussion of the Company’s lease arrangements.

Litigation

In the ordinary course of business, the Company is from time to time involved in lawsuits, investigations, proceedings and threats of litigation related to, among other things, the Company’s intellectual property estate (including certain in-licensed intellectual property), commercial arrangements and other matters. Such proceedings may include quasi-litigation, inter partes administrative proceedings in the U.S. Patent and Trademark Office and the European Patent Office involving the Company’s intellectual property estate including certain in-licensed intellectual property. The outcome of any of the foregoing, regardless of the merits, is inherently uncertain. In addition, litigation and related matters are costly and may divert the attention of Company’s management and other resources that would otherwise be engaged in other activities. If the Company is unable to prevail in any such proceedings, the Company’s business, results of operations, liquidity and financial condition could be adversely affected.

Letters of Credit

As of March 31, 2024, the Company had restricted cash of $11.5 million, representing letters of credit securing the Company’s obligations under certain leased facilities. The letters of credit are secured by cash held in a restricted depository account and included in “Restricted cash” on the Company's condensed consolidated balance sheets as of March 31, 2024.

Research, Manufacturing, License and Intellectual Property Agreements

The Company has engaged several research institutions and companies to identify new delivery strategies and applications of the Company’s gene editing technology. The Company is also a party to a number of license agreements which require significant upfront payments and may be required to make future royalty payments and potential milestone payments from time to time. In addition, the Company is also a party to intellectual property agreements, which require maintenance and milestone payments from time to time. Further, the Company is a party to a number of manufacturing agreements that require upfront payments for the future performance of services.

In association with these agreements, on a product-by-product basis, the counterparties are eligible to receive up to low eight-digit potential payments upon specified research, development and regulatory milestones. In addition, on a product-by-product basis, the counterparties are eligible to receive potential commercial milestone payments based on specified annual sales thresholds. The potential payments are low-single digit percentages of the specified annual sales thresholds. The counterparties are also eligible to receive low single-digit royalties on future net sales.

Under certain circumstances and if certain contingent future events occur, Vertex is eligible to receive up to $395.0 million in potential specified research, development, regulatory and commercial milestones and tiered single-digit percentage royalties on future net sales related to a specified target under an amendment to the 2015 Collaboration Agreement (as such term is defined in Note 6 above). In addition, Vertex has the option to conduct research at its own cost in certain defined areas that, if beneficial to the CASGEVY program and ultimately achieves regulatory approval, could result in the Company owing Vertex certain milestone payments aggregating to high eight digits, subject to certain limitations on the profitability of the CASGEVY program.

Under the A&R Vertex JDCA, the Company has an option to defer specified costs on the CASGEVY program in excess of $110.3 million for the years ended December 31, 2022, 2023 and 2024. As of March 31, 2024, $4.0 million of costs incurred in 2024 under the A&R JDCA have been deferred. In 2023, the Company exercised its option to defer specified costs on the CASGEVY program in excess of the deferral limit under A&R Vertex JDCA, which resulted in a deferral of $80.9 million as of December 31, 2023. In 2022, the Company also exercised its option to defer its share of costs incurred in 2022 on the CASGEVY program in excess of the deferral limit under the A&R Vertex JDCA, which resulted in a deferral of $36.1 million as of December 31, 2022. Any deferred amounts are only payable to Vertex as an offset against future profitability of the CASGEVY program and the amounts payable are capped at a specified maximum amount per year. These deferred costs on the CASGEVY program will be accrued for when it is probable that a liability has been incurred and the amount can be reasonably estimated. As of March 31, 2024, no contingent payments have been accrued to date.

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8. Share Capital

All of the Company's common shares are authorized under Swiss corporate law with a nominal value of 0.03 CHF per share. Though the nominal value of common shares is stated in Swiss francs, the Company continues to use U.S. dollars as its reporting currency for preparing the condensed consolidated financial statements.

As of March 31, 2024, the Company's share capital consists of 88,517,810 registered common shares with a nominal value of CHF 0.03 per share, 8,202,832 registered common shares reserved for potential issuance of bonds or similar instruments, and 19,925,932 registered common shares reserved for the Company's employee equity incentive plans. In addition, the Board of Directors is authorized to conduct one or more increases of the share capital at any time until June 8, 2028, or the expiry of the capital band if earlier, within a lower limit of CHF 2,538,051.84 and an upper limit of CHF 2,952,222.57, corresponding to 13,805,691 registered common shares with a nominal value of CHF 0.03 each to be fully paid in.

 

Common Share Issuances

At-the-Market Offering

In August 2019, the Company entered into an Open Market Sale AgreementSM with Jefferies LLC, or Jefferies, under which the Company was able to offer and sell, from time to time at its sole discretion through Jefferies, as its sales agent, its common shares, or the August 2019 Sales Agreement.

In January 2021, in connection with the August 2019 Sales Agreement, the Company filed a prospectus supplement with the SEC to offer and sell, from time to time, common shares having aggregate gross proceeds of up to $600.0 million. In July 2021, the Company filed a new prospectus supplement with the SEC, which replaced the previous prospectus supplement filed in January 2021, to offer and sell, from time to time, the common shares remaining under the original prospectus supplement having aggregate gross proceeds of up to $419.8 million, or, together with the January 2021 prospectus supplement, the 2021 ATM.

As of March 31, 2024, the Company has issued and sold an aggregate of 1.5 million common shares under the 2021 ATM at an average price of $139.28 per share for aggregate proceeds of $212.4 million, which were net of equity issuance costs of $2.9 million, excluding stamp taxes.

Registered Direct Offering

In February 2024, the Company entered into an investment agreement for the sale of approximately $280.0 million of its common shares to a group of institutional investors in a registered direct offering, at a price per share of $71.50. The Company received net proceeds of $279.0 million, excluding stamp taxes due of $2.8 million.

9. Stock-based Compensation

During the three months ended March 31, 2024 and 2023, the Company recognized the following stock-based compensation expense (in thousands):

 

 

 

Three Months Ended March 31,