10-Q 1 crsp-20240630.htm 10-Q 10-Q
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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 June 30, 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 August 1, 2024, there were 85,168,158 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, “CRISPRX™,” “CRISPR TX™,” “CTX112™,” “CTX131™,” “CTX310™,” “CTX320™,” “CTX330™,” and “CTX211™” 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:

our strategic plans to develop and, if approved, subsequently commercialize any product candidates we may develop, including plans and expectations for the commercialization of, and anticipated benefits of, CASGEVY;
the safety, efficacy and clinical progress of various clinical programs, including those for CASGEVY, CTX112, CTX131, CTX211, CTX310 and CTX320;
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 results of our preclinical studies and clinical trials, including our ongoing clinical trials and any planned clinical trials, and our research and development programs;
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, including our estimates regarding the addressable patient population and potential market opportunity for our current and future product candidates;
the rate and degree of market acceptance of our product candidates and the success of competing therapies that are or become available;
our 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;
the expected benefits of our collaborations;
our strategy, goals, anticipated financial performance;
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 June 30, 2024 and December 31, 2023

2

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024 and 2023

3

 

 

Condensed Consolidated Statements of Shareholders’ Equity for the three and six months ended June 30, 2024 and 2023

4

 

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 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

26

 

 

Item 4. Controls and Procedures

27

 

 

PART II: OTHER INFORMATION

 

 

 

Item 1. Legal Proceedings

28

 

 

Item 1A. Risk Factors

28

 

 

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

28

 

 

Item 3. Defaults Upon Senior Securities

28

 

 

Item 4. Mine Safety Disclosures

28

 

 

Item 5. Other Information

28

 

 

Item 6. Exhibits

29

 

 

SIGNATURES

30

 

 


 

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

 

 

 

June 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Assets

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

484,472

 

 

$

389,477

 

Marketable securities

 

 

1,517,147

 

 

 

1,304,215

 

Accounts receivable

 

 

 

 

 

200,000

 

Prepaid expenses and other current assets

 

 

8,788

 

 

 

14,386

 

Total current assets

 

 

2,010,407

 

 

 

1,908,078

 

Property and equipment, net

 

 

143,031

 

 

 

151,945

 

Marketable securities, non-current

 

 

11,216

 

 

 

1,973

 

Intangible assets, net

 

 

 

 

 

16

 

Restricted cash

 

 

11,520

 

 

 

11,591

 

Operating lease assets

 

 

148,538

 

 

 

153,993

 

Other non-current assets

 

 

15,141

 

 

 

1,975

 

Total assets

 

$

2,339,853

 

 

$

2,229,571

 

Liabilities and shareholders’ equity

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

9,452

 

 

$

38,147

 

Accrued expenses

 

 

91,883

 

 

 

45,335

 

Deferred revenue, current

 

 

4,759

 

 

 

4,105

 

Accrued tax liabilities

 

 

454

 

 

 

438

 

Operating lease liabilities

 

 

16,451

 

 

 

15,625

 

Other current liabilities

 

 

4,824

 

 

 

5,141

 

Total current liabilities

 

 

127,823

 

 

 

108,791

 

Deferred revenue, non-current

 

 

12,583

 

 

 

14,012

 

Operating lease liabilities, net of current portion

 

 

214,852

 

 

 

223,007

 

Other non-current liabilities

 

 

3,646

 

 

 

958

 

Total liabilities

 

 

358,904

 

 

 

346,768

 

Commitments and contingencies, see Note 7

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Common shares, CHF 0.03 nominal value, 132,477,166 and 126,536,183 shares authorized at June 30, 2024 and December 31, 2023, respectively, 85,215,817 and 80,214,694 shares issued at June 30, 2024 and December 31, 2023, respectively, 85,045,501 and 80,044,378 shares outstanding at June 30, 2024 and December 31, 2023, respectively

 

 

2,665

 

 

 

2,497

 

Treasury shares, at cost, 170,316 shares at June 30, 2024 and at December 31, 2023

 

 

(62

)

 

 

(62

)

Additional paid-in capital

 

 

3,223,924

 

 

 

2,878,155

 

Accumulated deficit

 

 

(1,242,699

)

 

 

(999,700

)

Accumulated other comprehensive (loss) income

 

 

(2,879

)

 

 

1,913

 

Total shareholders' equity

 

 

1,980,949

 

 

 

1,882,803

 

Total liabilities and shareholders’ equity

 

$

2,339,853

 

 

$

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

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration revenue

 

$

 

 

$

70,000

 

 

$

 

 

$

170,000

 

Grant revenue

 

 

517

 

 

 

 

 

 

1,021

 

 

 

 

Total revenue

 

 

517

 

 

 

70,000

 

 

 

1,021

 

 

 

170,000

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

80,165

 

 

 

101,555

 

 

 

156,338

 

 

 

201,490

 

General and administrative

 

 

19,481

 

 

 

19,032

 

 

 

37,434

 

 

 

41,392

 

Collaboration expense, net

 

 

52,131

 

 

 

44,636

 

 

 

99,097

 

 

 

86,828

 

Total operating expenses

 

 

151,777

 

 

 

165,223

 

 

 

292,869

 

 

 

329,710

 

Loss from operations

 

 

(151,260

)

 

 

(95,223

)

 

 

(291,848

)

 

 

(159,710

)

Other income:

 

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

26,139

 

 

 

18,406

 

 

 

50,860

 

 

 

31,148

 

Total other income, net

 

 

26,139

 

 

 

18,406

 

 

 

50,860

 

 

 

31,148

 

Net loss before income taxes

 

 

(125,121

)

 

 

(76,817

)

 

 

(240,988

)

 

 

(128,562

)

Provision for income taxes

 

 

(1,287

)

 

 

(923

)

 

 

(2,011

)

 

 

(2,243

)

Net loss

 

 

(126,408

)

 

 

(77,740

)

 

 

(242,999

)

 

 

(130,805

)

Foreign currency translation adjustment

 

 

2

 

 

 

28

 

 

 

(9

)

 

 

60

 

Unrealized (loss) gain on marketable securities

 

 

(1,329

)

 

 

452

 

 

 

(4,783

)

 

 

6,679

 

Comprehensive loss

 

$

(127,735

)

 

$

(77,260

)

 

$

(247,791

)

 

$

(124,066

)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share — basic

 

$

(1.49

)

 

$

(0.98

)

 

$

(2.92

)

 

$

(1.66

)

Basic weighted-average common shares outstanding

 

 

84,920,929

 

 

 

79,091,061

 

 

 

83,357,780

 

 

 

78,885,168

 

Net loss per common share — diluted

 

$

(1.49

)

 

$

(0.98

)

 

$

(2.92

)

 

$

(1.66

)

Diluted weighted-average common shares outstanding

 

 

84,920,929

 

 

 

79,091,061

 

 

 

83,357,780

 

 

 

78,885,168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Vesting of restricted shares

 

97,631

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

4

 

Exercise of vested options, net of issuance costs of $0.3 million

 

411,001

 

 

18

 

 

 

 

 

 

16,605

 

 

 

 

 

 

16,623

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

21,765

 

 

 

 

 

 

21,765

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

480

 

 

480

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(77,740

)

 

 

 

(77,740

)

Balance at June 30, 2023

 

79,372,366

 

$

2,474

 

 

180,316

 

$

(63

)

$

2,799,420

 

$

(976,895

)

$

(8,908

)

$

1,816,028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Vesting of restricted shares

 

163,013

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

6

 

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

 

44,878

 

 

1

 

 

 

 

 

 

1,069

 

 

 

 

 

 

1,070

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

23,672

 

 

 

 

 

 

23,672

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,327

)

 

(1,327

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(126,408

)

 

 

 

(126,408

)

Balance at June 30, 2024

 

85,045,501

 

$

2,665

 

 

170,316

 

$

(62

)

$

3,223,924

 

$

(1,242,699

)

$

(2,879

)

$

1,980,949

 

 

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)

 

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

Operating activities:

 

 

 

 

 

 

Net loss

 

$

(242,999

)

 

$

(130,805

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

9,678

 

 

 

10,012

 

Equity-based compensation

 

 

43,077

 

 

 

42,640

 

Other non-cash items, net

 

 

(16,566

)

 

 

(5,620

)

Acquired in-process research and development

 

 

 

 

 

1,500

 

Changes in:

 

 

 

 

 

 

Accounts receivable

 

 

200,000

 

 

 

(70,000

)

Prepaid expenses and other assets

 

 

5,297

 

 

 

15,952

 

Accounts payable and accrued expenses

 

 

18,724

 

 

 

13,637

 

Deferred revenue

 

 

(775

)

 

 

 

Operating lease assets and liabilities

 

 

(1,874

)

 

 

(1,277

)

Other liabilities, net

 

 

(392

)

 

 

(485

)

Net cash provided by (used in) operating activities

 

 

14,170

 

 

 

(124,446

)

Investing activities:

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

(1,428

)

 

 

(6,614

)

Purchase of in-process research and development

 

 

 

 

 

(1,500

)

Investment in equity securities

 

 

(12,885

)

 

 

 

Purchases of marketable securities

 

 

(797,509

)

 

 

(452,363

)

Maturities of marketable securities

 

 

587,117

 

 

 

795,229

 

Net cash (used in) provided by investing activities

 

 

(224,705

)

 

 

334,752

 

Financing activities:

 

 

 

 

 

 

Proceeds from issuance of common shares, net of issuance costs

 

 

279,733

 

 

 

 

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

 

 

25,735

 

 

 

22,169

 

Net cash provided by financing activities

 

 

305,468

 

 

 

22,169

 

Effect of exchange rate changes on cash

 

 

(9

)

 

 

60

 

Increase in cash

 

 

94,924

 

 

 

232,535

 

Cash, cash equivalents and restricted cash, beginning of period

 

 

401,068

 

 

 

224,060

 

Cash, cash equivalents and restricted cash, end of period

 

$

495,992

 

 

$

456,595

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

Property and equipment purchases in accounts payable and accrued expenses

 

$

20

 

 

$

1,029

 

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

 

$

3,029

 

 

$

293

 

 

 

 

As of June 30,

 

Reconciliation to amounts within the condensed consolidated balance sheets

 

2024

 

 

2023

 

Cash and cash equivalents

 

$

484,472

 

 

$

444,796

 

Restricted cash

 

 

11,520

 

 

 

11,799

 

Cash, cash equivalents and restricted cash at end of period

 

$

495,992

 

 

$

456,595

 

 

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 and six-month interim periods ended June 30, 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 and six months ended June 30, 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 June 30, 2024 and December 31, 2023 (in thousands), which are recorded at fair value. The table below excludes $188.0 million and $197.8 million of cash at June 30, 2024 and December 31, 2023, respectively.

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair Value

 

June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

139,868

 

 

$

 

 

$

 

 

$

139,868

 

Certificates and term deposits

 

 

25,351

 

 

 

 

 

 

 

 

 

25,351

 

Commercial paper

 

 

125,953

 

 

 

 

 

 

(58

)

 

 

125,895

 

Corporate debt securities

 

 

1,424

 

 

 

 

 

 

 

 

 

1,424

 

U.S. Treasury securities

 

 

3,974

 

 

 

 

 

 

 

 

 

3,974

 

Total cash equivalents

 

 

296,570

 

 

 

 

 

 

(58

)

 

 

296,512

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

11,883

 

 

 

 

 

 

(9

)

 

 

11,874

 

Corporate debt securities

 

 

1,013,028

 

 

 

669

 

 

 

(2,517

)

 

 

1,011,180

 

Certificates and term deposits

 

 

132,499

 

 

 

 

 

 

 

 

 

132,499

 

Government-sponsored enterprise securities

 

 

243,521

 

 

 

22

 

 

 

(927

)

 

 

242,616

 

Commercial paper

 

 

130,273

 

 

 

 

 

 

(79

)

 

 

130,194

 

Total marketable securities

 

 

1,531,204

 

 

 

691

 

 

 

(3,532

)

 

 

1,528,363

 

Total cash equivalents and marketable securities

 

$

1,827,774

 

 

$

691

 

 

$

(3,590

)

 

$

1,824,875

 

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 and term deposits

 

 

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 June 30, 2024, marketable securities were in a net unrealized loss position of $2.9 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 $1.3 million and $4.8 million during the three and six months ended June 30, 2024, respectively, related to its debt securities, which is included in comprehensive loss on the condensed consolidated statements of operations and comprehensive loss. The Company recorded a net unrealized gain of $0.5 million and $6.7 million during the three and six months ended June 30, 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 June 30, 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 $995.5 million and $463.5 million, respectively. As of June 30, 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 $229.2 million and $138.4 million, respectively. As of June 30, 2024, securities in an unrealized loss position for more than twelve months totaling $11.2 million had maturities beyond one year, which is included in marketable securities, non-current, on the condensed consolidated balance sheet. 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, which is included in marketable securities, non-current, on the condensed consolidated balance sheet.

7


 

The Company determined that there is no material credit risk associated with the above investments as of June 30, 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 and six months ended June 30, 2024 and 2023. No available-for-sale debt securities held as of June 30, 2024 had remaining maturities greater than thirty months.

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 June 30, 2024 and December 31, 2023 (in thousands):

 

 

 

Fair Value Measurements at

 

 

 

June 30, 2024

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

187,960

 

 

$

187,960

 

 

$

 

 

$

 

Money market funds

 

 

139,868

 

 

 

139,868

 

 

 

 

 

 

 

Certificates and term deposits

 

 

25,351

 

 

 

 

 

 

25,351

 

 

 

 

Commercial paper

 

 

125,895

 

 

 

 

 

 

125,895

 

 

 

 

Corporate debt securities

 

 

1,424

 

 

 

 

 

 

1,424

 

 

 

 

U.S. Treasury securities

 

 

3,974

 

 

 

 

 

 

3,974

 

 

 

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

 

11,874

 

 

 

 

 

 

11,874

 

 

 

 

Corporate debt securities

 

 

1,011,180

 

 

 

 

 

 

1,011,180

 

 

 

 

Certificates and term deposits

 

 

132,499

 

 

 

 

 

 

132,499

 

 

 

 

Government-sponsored enterprise securities

 

 

242,616

 

 

 

 

 

 

242,616

 

 

 

 

Commercial paper

 

 

130,194

 

 

 

 

 

 

130,194

 

 

 

 

Total

 

$

2,012,835

 

 

$

327,828

 

 

$

1,685,007

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at