QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
|
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Title of each class
|
Trading symbol
|
Name of each exchange on which registered
|
||
|
“
|
|
|
Accelerated Filer ☐
|
Non-accelerated Filer ☐
|
Smaller Reporting Company
|
Emerging Growth Company
|
PART I
|
FINANCIAL INFORMATION
|
|
ITEM 1:
|
Financial Statements:
|
|
3
|
||
Condensed Consolidated
Statements of Operations for the three and nine months ended September 30, 2023 and 2022 (unaudited)
|
4
|
|
Condensed Consolidated
Statements of Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022 (unaudited)
|
5
|
|
Condensed Consolidated Statements of
Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022 (unaudited)
|
6
|
|
Condensed Consolidated Statements of
Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited)
|
8
|
|
9
|
||
ITEM 2:
|
||
22
|
||
24
|
||
24
|
||
31
|
||
ITEM 3:
|
33
|
|
ITEM 4:
|
33
|
|
PART II
|
33
|
|
ITEM 1:
|
33
|
|
ITEM 1A:
|
33
|
|
ITEM 2:
|
51
|
|
ITEM 3:
|
51
|
|
ITEM 4:
|
51
|
|
ITEM 5:
|
51
|
|
ITEM 6:
|
52
|
|
53
|
September 30,
2023
|
December 31,
2022
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Short-term investments
|
|
|
||||||
Contracts receivable
|
|
|
||||||
Inventories
|
|
|
||||||
Other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Property, plant and equipment, net
|
|
|
||||||
Right-of-use assets
|
|
|
||||||
Deposits and other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued compensation
|
|
|
||||||
Accrued liabilities
|
|
|
||||||
Income taxes payable
|
|
|
||||||
Current portion of deferred contract revenue
|
|
|
||||||
Other current liabilities
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Long-term deferred contract revenue
|
|
|
||||||
|
|
|
||||||
|
|
|
||||||
|
|
|
||||||
Liability related to sale of future royalties, net
|
|
|
||||||
Long-term lease liabilities
|
|
|
||||||
Long-term obligations
|
|
|
||||||
Total liabilities
|
|
|
||||||
Stockholders’ equity:
|
||||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenue:
|
||||||||||||||||
Commercial revenue:
|
||||||||||||||||
SPINRAZA royalties
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Other commercial revenue
|
|
|
|
|
||||||||||||
Total commercial revenue
|
|
|
|
|
||||||||||||
Research and development revenue:
|
||||||||||||||||
Collaborative agreement revenue
|
|
|
|
|
||||||||||||
Eplontersen joint development revenue
|
|
|
|
|
||||||||||||
Total research and development revenue
|
|
|
|
|
||||||||||||
Total revenue
|
|
|
|
|
||||||||||||
Expenses:
|
||||||||||||||||
Cost of sales
|
|
|
|
|
||||||||||||
Research, development and patent
|
|
|
|
|
||||||||||||
Selling, general and administrative
|
|
|
|
|
||||||||||||
Total operating expenses
|
|
|
|
|
||||||||||||
Loss from operations
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Other income (expense):
|
||||||||||||||||
Investment income
|
|
|
|
|
||||||||||||
Interest expense
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Interest expense related to sale of future royalties
|
(
|
)
|
|
(
|
)
|
|
||||||||||
Gain (loss) on investments
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Other income (expense)
|
|
|
|
(
|
)
|
|||||||||||
Loss before income tax expense
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Income tax expense
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Basic and diluted net loss per share
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Shares used in computing basic and diluted net loss per share
|
|
|
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Unrealized gains (losses) on debt securities, net of tax
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Currency translation adjustment
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||
Comprehensive loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
Common Stock
|
Additional
|
Accumulated Other
|
Accumulated
|
Total
Stockholders’
|
||||||||||||||||||||
Description
|
Shares
|
Amount
|
Paid in Capital
|
Comprehensive Loss
|
Deficit
|
Equity
|
||||||||||||||||||
Balance at June 30, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||
Net loss
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Change in unrealized losses, net of tax
|
—
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Foreign currency translation
|
—
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
|
|
|
|
|
|
||||||||||||||||||
Stock-based compensation expense
|
—
|
|
|
|
|
|
||||||||||||||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee
stock options
|
(
|
)
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||
Balance at September 30, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||
Balance at June 30, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||
Net loss
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Change in unrealized losses, net of tax
|
—
|
|
|
|
|
|
||||||||||||||||||
Foreign currency translation
|
—
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
|
|
|
|
|
|
||||||||||||||||||
Stock-based compensation expense
|
—
|
|
|
|
|
|
||||||||||||||||||
Balance at September 30, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
Common Stock
|
Additional
|
Accumulated Other
|
Accumulated
|
Total
Stockholders’
|
||||||||||||||||||||
Description
|
Shares
|
Amount
|
Paid in Capital
|
Comprehensive Loss
|
Deficit
|
Equity
|
||||||||||||||||||
Balance at December 31, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||
Net loss
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Change in unrealized losses, net of tax
|
—
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Foreign currency translation
|
—
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
|
|
|
|
|
|
||||||||||||||||||
Stock-based compensation expense
|
—
|
|
|
|
|
|
||||||||||||||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee
stock options
|
(
|
)
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||
Balance at September 30, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||
Balance at December 31, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||
Net loss
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Change in unrealized gains, net of tax
|
—
|
|
|
|
|
|
||||||||||||||||||
Foreign currency translation
|
—
|
|
|
|
|
|
||||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
|
|
|
|
|
|
||||||||||||||||||
Stock-based compensation expense
|
—
|
|
|
|
|
|
||||||||||||||||||
Balance at September 30, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
Nine Months Ended
September 30,
|
||||||||
2023
|
2022
|
|||||||
Operating activities:
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation
|
|
|
||||||
Amortization of right-of-use operating lease assets
|
|
|
||||||
Amortization of other assets
|
|
|
||||||
Amortization of premium (discount) on investments, net
|
(
|
)
|
|
|||||
Amortization of debt issuance costs
|
|
|
||||||
Non-cash royalty revenue related to sale of royalties
|
(
|
)
|
|
|||||
Non-cash interest related to sale of future royalties
|
|
|
||||||
Stock-based compensation expense
|
|
|
||||||
Loss on investments
|
|
|
||||||
Gain on early retirement of debt
|
(
|
)
|
|
|||||
Non-cash losses related to disposal of property, plant and equipment
|
|
|
||||||
Non-cash losses related to other assets
|
|
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Contracts receivable
|
(
|
)
|
|
|||||
Inventories
|
(
|
)
|
|
|||||
Other current and long-term assets
|
(
|
)
|
(
|
)
|
||||
Income taxes payable
|
|
(
|
)
|
|||||
Accounts payable
|
(
|
)
|
|
|||||
Accrued compensation
|
(
|
)
|
(
|
)
|
||||
Accrued liabilities and other current liabilities
|
(
|
)
|
|
|||||
Deferred contract revenue
|
|
(
|
)
|
|||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Investing activities:
|
||||||||
Purchases of short-term investments
|
(
|
)
|
(
|
)
|
||||
Proceeds from sale of short-term investments
|
|
|
||||||
Purchases of property, plant and equipment
|
(
|
)
|
(
|
)
|
||||
Acquisition of licenses and other assets, net
|
(
|
)
|
(
|
)
|
||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
Financing activities:
|
||||||||
Proceeds from equity, net
|
|
|
||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of
employee stock options
|
|
(
|
)
|
|||||
Proceeds from issuance of
|
|
|
||||||
|
(
|
)
|
|
|||||
Repurchase of $
|
(
|
)
|
|
|||||
Proceeds from sale of future royalties
|
|
|
||||||
Payments of transaction costs related to sale of future royalties
|
(
|
)
|
|
|||||
Proceeds from real estate transaction
|
|
|
||||||
Principal payments on mortgage debt
|
(
|
)
|
(
|
)
|
||||
Net cash provided by (used in) financing activities
|
|
(
|
)
|
|||||
Effects of exchange rates on cash
|
|
(
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
|
(
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Interest paid
|
$
|
|
$
|
|
||||
Income taxes paid
|
$
|
|
$
|
|
||||
Supplemental disclosures of non-cash investing and financing activities:
|
||||||||
Amounts accrued for capital and patent expenditures
|
$
|
|
$
|
|
||||
Right-of-use assets obtained in exchange for lease liabilities
|
$
|
|
$
|
|
September 30, 2023
|
December 31, 2022
|
|||||||
Raw materials:
|
||||||||
Raw materials - clinical
|
$
|
|
$
|
|
||||
Raw materials - commercial
|
|
|
||||||
Total raw materials
|
|
|
||||||
Work in process
|
|
|
||||||
Finished goods
|
|
|
||||||
Total inventory
|
$
|
|
$
|
|
September 30, 2023
|
December 31, 2022
|
|||||||
Clinical development expenses
|
$
|
|
$
|
|
||||
In-licensing expenses
|
|
|
||||||
Commercial expenses
|
|
|
||||||
Other miscellaneous expenses
|
|
|
||||||
Total accrued liabilities
|
$
|
|
$
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenue:
|
||||||||||||||||
Commercial revenue:
|
||||||||||||||||
SPINRAZA royalties
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Other commercial revenue:
|
||||||||||||||||
TEGSEDI and WAYLIVRA revenue, net
|
|
|
|
|
||||||||||||
Licensing and other royalty revenue
|
|
|
|
|
||||||||||||
Total other commercial revenue
|
|
|
|
|
||||||||||||
Total commercial revenue
|
|
|
|
|
||||||||||||
Research and development revenue:
|
||||||||||||||||
Collaborative agreement revenue
|
|
|
|
|
||||||||||||
Eplontersen joint development revenue
|
|
|
|
|
||||||||||||
Total research and development revenue
|
|
|
|
|
||||||||||||
Total revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenue from our relationship with AstraZeneca
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Percentage of total revenue
|
|
%
|
|
%
|
|
%
|
|
%
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenue from our relationship with Biogen
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Percentage of total revenue
|
|
%
|
|
%
|
|
%
|
|
%
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenue from our relationship with GSK
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Percentage of total revenue
|
|
%
|
|
%
|
|
%
|
|
%
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenue from our relationship with Novartis
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Percentage of total revenue
|
|
%
|
|
%
|
|
%
|
|
%
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
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2023
|
2022
|
2023
|
2022
|
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R&D revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
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Percentage of total revenue
|
|
%
|
|
%
|
|
%
|
|
%
|