10-Q 1 ntla-20230630.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, 2023

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: 001-37766

 

INTELLIA THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

36-4785571

(State or Other Jurisdiction of

(I.R.S. Employer

Incorporation or Organization)

Identification No.)

 

 

40 Erie Street, Suite 130, Cambridge, Massachusetts

02139

(Address of Principal Executive Offices)

(Zip Code)

857-285-6200

(Registrant’s Telephone Number, Including Area Code)

 

Securities Registered Pursuant to Section 12(b) of the Act:

 

Title of each Class

Trade Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

NTLA

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. Yes ☒ No ☐

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). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions 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 the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No

The number of shares outstanding of the registrant’s common stock as of July 28, 2023: 88,490,950 shares.

 

 


PART I - FINANCIAL INFORMATION

 

 

 

Item 1. Financial Statements (unaudited)

 

 

 

Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022

3

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2023 and 2022

4

 

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022

5

 

 

Notes to Condensed Consolidated Financial Statements

6

 

 

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

21

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

31

 

 

Item 4. Controls and Procedures.

32

 

 

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

33

 

 

Item 1A. Risk Factors

33

 

 

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

77

 

 

Item 5. Other Information

77

 

 

Item 6. Exhibits

78

 

 

Signatures

79

 

2


PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

INTELLIA THERAPEUTICS, INC.

Condensed Consolidated Balance Sheets (unaudited)

(Amounts in thousands except share and per share data)

 

 

June 30,
2023

 

 

December 31,
2022

 

ASSETS

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

171,806

 

 

$

523,506

 

Marketable securities

 

 

736,268

 

 

 

669,116

 

Accounts receivable ($0 and $0.3 million, respectively, from related party)

 

 

5,056

 

 

 

3,768

 

Prepaid expenses and other current assets

 

 

26,485

 

 

 

20,407

 

Total current assets

 

 

939,615

 

 

 

1,216,797

 

Marketable securities - noncurrent

 

 

164,013

 

 

 

69,338

 

Property and equipment, net

 

 

33,194

 

 

 

27,921

 

Operating lease right-of-use assets

 

 

123,550

 

 

 

133,076

 

Equity method investment

 

 

21,837

 

 

 

32,455

 

Investments and other assets

 

 

41,031

 

 

 

40,527

 

Total Assets

 

$

1,323,240

 

 

$

1,520,114

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

11,634

 

 

$

5,154

 

Accrued expenses ($1.4 million and $1.6 million, respectively, from related party)

 

 

49,534

 

 

 

60,876

 

Current portion of operating lease liability

 

 

16,750

 

 

 

16,685

 

Current portion of deferred revenue ($2.9 million and $19.9 million, respectively,
    from related party)

 

 

21,933

 

 

 

43,839

 

Total current liabilities

 

 

99,851

 

 

 

126,554

 

Deferred revenue, net of current portion

 

 

12,919

 

 

 

19,932

 

Long-term operating lease liability

 

 

105,582

 

 

 

114,018

 

Contingent consideration liability

 

 

-

 

 

 

24,026

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

Common stock, $0.0001 par value; 240,000,000 and 120,000,000 shares authorized at
   June 30, 2023 and December 31, 2022, respectively;
88,347,634 and 87,103,007 shares
   issued and outstanding at June 30, 2023 and December 31, 2022, respectively

 

 

9

 

 

 

9

 

Additional paid-in capital

 

 

2,512,741

 

 

 

2,420,223

 

Accumulated other comprehensive loss

 

 

(3,868

)

 

 

(7,461

)

Accumulated deficit

 

 

(1,403,994

)

 

 

(1,177,187

)

Total stockholders’ equity

 

 

1,104,888

 

 

 

1,235,584

 

Total Liabilities and Stockholders’ Equity

 

$

1,323,240

 

 

$

1,520,114

 

See notes to condensed consolidated financial statements.

3


INTELLIA THERAPEUTICS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)

(Amounts in thousands except per share data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Collaboration revenue (1)

 

$

13,594

 

 

$

14,030

 

 

$

26,200

 

 

$

25,282

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

115,276

 

 

 

90,199

 

 

 

212,392

 

 

 

223,294

 

General and administrative

 

 

30,652

 

 

 

22,132

 

 

 

58,100

 

 

 

44,535

 

Total operating expenses

 

 

145,928

 

 

 

112,331

 

 

 

270,492

 

 

 

267,829

 

Operating loss

 

 

(132,334

)

 

 

(98,301

)

 

 

(244,292

)

 

 

(242,547

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

12,653

 

 

 

703

 

 

 

24,633

 

 

 

1,243

 

Loss from equity method investment

 

 

(4,000

)

 

 

(3,252

)

 

 

(7,048

)

 

 

(5,997

)

Change in fair value of contingent consideration

 

 

-

 

 

 

172

 

 

 

(100

)

 

 

(249

)

Total other income (expense), net

 

 

8,653

 

 

 

(2,377

)

 

 

17,485

 

 

 

(5,003

)

Net loss

 

$

(123,681

)

 

$

(100,678

)

 

$

(226,807

)

 

$

(247,550

)

Net loss per share, basic and diluted

 

$

(1.40

)

 

$

(1.33

)

 

$

(2.58

)

 

$

(3.29

)

Weighted average shares outstanding, basic and
   diluted

 

 

88,185

 

 

 

75,823

 

 

 

87,979

 

 

 

75,282

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on marketable securities

 

 

(1,482

)

 

 

(932

)

 

 

1,507

 

 

 

(6,060

)

Other comprehensive gain (loss) from
   equity method investment

 

 

292

 

 

 

(560

)

 

 

2,086

 

 

 

(862

)

Comprehensive loss

 

$

(124,871

)

 

$

(102,170

)

 

$

(223,214

)

 

$

(254,472

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Including the following revenue from related party
  (see Notes 7 and 8):

 

$

5,792

 

 

$

7,767

 

 

$

10,727

 

 

$

13,151

 

 

See notes to condensed consolidated financial statements.

4


INTELLIA THERAPEUTICS, INC.

Condensed Consolidated Statements of Cash Flows (unaudited)

(Amounts in thousands)

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$

(226,807

)

$

(247,550

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

4,220

 

 

 

3,591

 

Loss on disposal of property and equipment

 

 

15

 

 

 

-

 

Equity-based compensation

 

 

63,655

 

 

 

41,559

 

(Accretion)/amortization of investment discounts and premiums

 

 

(11,667

)

 

 

4,428

 

Loss from equity method investment

 

 

7,048

 

 

 

5,997

 

Deferral of equity method investment intra-entity profit on sales

 

 

5,656

 

 

 

5,656

 

Change in fair value of contingent consideration

 

 

100

 

 

 

249

 

In-process research and development charge

 

 

-

 

 

 

55,990

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(1,289

)

 

 

(824

)

Prepaid expenses and other current assets

 

 

(6,078

)

 

 

434

 

Operating lease right-of-use assets

 

 

9,373

 

 

 

5,368

 

Other assets

 

 

(503

)

 

 

(802

)

Accounts payable

 

 

6,287

 

 

 

(3,710

)

Accrued expenses

 

 

(12,525

)

 

 

(721

)

Deferred revenue

 

 

(28,919

)

 

 

(30,099

)

Operating lease liabilities

 

 

(8,217

)

 

 

(4,458

)

Net cash used in operating activities

 

 

(199,651

)

 

 

(164,892

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(8,133

)

 

 

(5,409

)

Purchases of marketable securities

 

 

(625,319

)

 

 

(31,524

)

Maturities of marketable securities

 

 

476,666

 

 

 

224,583

 

Acquired in-process research and development, net of cash acquired of $287

 

 

-

 

 

 

(44,832

)

Net cash (used in) provided by investing activities

 

 

(156,786

)

 

 

142,818

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from issuance of common stock through at-the-market offerings,
   net of issuance costs

 

 

1,466

 

 

 

38,885

 

Proceeds from options exercised

 

 

1,220

 

 

 

13,262

 

Issuance of shares through employee stock purchase plan

 

 

2,051

 

 

 

1,068

 

Net cash provided by financing activities

 

 

4,737

 

 

 

53,215

 

Net (decrease) increase in cash, cash equivalents and restricted cash equivalents

 

 

(351,700

)

 

 

31,141

 

Cash, cash equivalents and restricted cash equivalents, beginning of period

 

 

535,463

 

 

 

125,486

 

Cash, cash equivalents and restricted cash equivalents, end of period

 

$

183,763

 

 

$

156,627

 

 

 

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash
   equivalents to condensed consolidated balance sheet:

 

 

 

 

 

 

Cash and cash equivalents

 

$

171,806

 

 

$

147,781

 

Restricted cash equivalents, included in investments and other assets

 

 

11,957

 

 

 

8,846

 

Total cash, cash equivalents and restricted cash equivalents

 

$

183,763

 

 

$

156,627

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

Purchases of property and equipment unpaid at period end

 

$

2,998

 

 

$

3,750

 

Shares issued for Rewrite research milestone liability

 

 

24,126

 

 

 

-

 

Contingent consideration liability assumed in asset acquisition

 

 

-

 

 

 

10,541

 

 

 

See notes to condensed consolidated financial statements.

5


INTELLIA THERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Overview and Basis of Presentation

Intellia Therapeutics, Inc. (“Intellia” or the “Company”) is a leading clinical-stage genome editing company, focused on developing potentially curative therapeutics using CRISPR/Cas9-based technologies. CRISPR/Cas9, an acronym for Clustered, Regularly Interspaced Short Palindromic Repeats (“CRISPR”)/CRISPR associated 9 (“Cas9”), is a technology for genome editing, the process of altering selected sequences of genomic deoxyribonucleic acid (“DNA”). To fully realize the transformative potential of CRISPR/Cas9-based technologies, Intellia is building a full-spectrum genome editing company, by leveraging its modular platform, to advance in vivo and ex vivo therapies for diseases with high unmet need by pursuing two primary approaches. For in vivo applications to address genetic diseases, the Company deploys CRISPR/Cas9 as the therapy that targets cells within the body. In parallel, the Company is developing ex vivo applications to address immuno-oncology and autoimmune diseases, where the Company uses CRISPR/Cas9 as the tool to create the engineered cell therapy. The Company’s deep scientific, technical and clinical development experience, along with its robust intellectual property (“IP”) portfolio, have enabled it to unlock broad therapeutic applications of CRISPR/Cas9 and related technologies to create new classes of genetic medicine.

The condensed consolidated financial statements of the Company included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K (“Annual Report”) for the year ended December 31, 2022.

The unaudited condensed consolidated financial statements include the accounts of Intellia Therapeutics, Inc. and its wholly- owned subsidiary, Intellia Securities Corp. All intercompany balances and transactions have been eliminated in consolidation. Comprehensive loss is comprised of net loss, unrealized gain/loss on marketable securities and other comprehensive loss from equity method investment.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates in these condensed consolidated financial statements have been made in connection with the calculation of revenues, research and development expenses, valuation of equity and fair value method investments, contingent consideration and equity-based compensation expense. The Company bases its estimates on historical experience and various other assumptions that management believes to be reasonable under the circumstances at the time such estimates are made. Actual results could differ from those estimates. The Company periodically reviews its estimates in light of changes in circumstances, facts and experience.

The effects of material revisions in estimates are reflected in the condensed consolidated financial statements prospectively from the date of the change in estimate.

In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the results for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.

Liquidity

Since its inception through June 30, 2023, the Company has raised an aggregate of approximately $2,404.8 million to fund its operations through its initial public offering (“IPO”) and concurrent private placements, follow-on public offerings, at-the-market offerings and the sale of convertible preferred stock, as well as through its collaboration agreements. The Company expects that its cash, cash equivalents and marketable securities as of June 30, 2023 will enable the Company to fund its ongoing operating expenses and capital expenditure requirements for at least the twelve-month period following the issuance of these condensed consolidated financial statements.

6


2. Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies” to the consolidated financial statements included in the Annual Report for the year ended December 31, 2022. There have been no material changes to these policies during the six months ended June 30, 2023.

3. Marketable Securities

The following table summarizes the Company’s available-for-sale marketable securities as of June 30, 2023 and December 31, 2022 at net book value:

 

 

June 30, 2023

 

 

 

Amortized
Cost

 

 

Gross Unrealized
Gains

 

 

Gross Unrealized
Losses

 

 

Estimated Fair
Value

 

 

 

(In thousands)

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and other government securities

 

$

369,427

 

 

$

9

 

 

$

(1,134

)

 

$

368,302

 

Financial institution debt securities

 

 

417,802

 

 

 

59

 

 

 

(691

)

 

 

417,170

 

Corporate debt securities

 

 

79,251

 

 

 

2

 

 

 

(311

)

 

 

78,942

 

Other asset-backed securities

 

 

36,056

 

 

 

-

 

 

 

(189

)

 

 

35,867

 

Total

 

$

902,536

 

 

$

70

 

 

$

(2,325

)

 

$

900,281

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

 

Amortized
Cost

 

 

Gross Unrealized
Gains

 

 

Gross Unrealized
Losses

 

 

Estimated Fair
Value

 

 

 

(In thousands)

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and other government securities

 

$

244,562

 

 

$

62

 

 

$

(1,938

)

 

$

242,686

 

Financial institution debt securities

 

 

380,891

 

 

 

-

 

 

 

(1,030

)

 

 

379,861

 

Corporate debt securities

 

 

102,059

 

 

 

-

 

 

 

(509

)

 

 

101,550

 

Other asset-backed securities

 

 

14,703

 

 

 

-

 

 

 

(346

)

 

 

14,357

 

Total

 

$

742,215

 

 

$

62

 

 

$

(3,823

)

 

$

738,454

 

The amortized cost of available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity. At June 30, 2023 and December 31, 2022, the balance in the Company’s accumulated other comprehensive loss was composed of activity related to the Company’s available-for-sale marketable securities and equity method investment. There were no material realized gains or losses in the six months ended June 30, 2023 or for the year ended December 31, 2022. The Company did not reclassify any amounts out of accumulated other comprehensive loss during this period. The Company generally does not intend to sell any investments prior to recovery of their amortized cost basis for any investment in an unrealized loss position. As such, the Company has classified these losses as temporary in nature.

The Company’s available-for-sale securities that are classified as short-term marketable securities in the condensed consolidated balance sheet mature within one year or less as of the balance sheet date. Available-for-sale securities that are classified as noncurrent in the condensed consolidated balance sheet are those that mature after one year but within five years from the balance sheet date and that the Company does not intend to dispose of within the next twelve months. At June 30, 2023 and December 31, 2022, the Company did not hold any investments that matured beyond five years of the balance sheet date.

4. Fair Value Measurements

The Company classifies fair value-based measurements using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1, quoted market prices (unadjusted) in active markets for identical assets or liabilities; Level 2, observable inputs other than quoted market prices included in Level 1, such as quoted market prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data; and Level 3, unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

7


As of June 30, 2023 and December 31, 2022, the Company’s financial assets and liabilities recognized at fair value on a recurring basis consisted of the following:

 

 

Fair Value as of June 30, 2023

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(In thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents and restricted cash equivalents

 

$

150,907

 

 

$

150,907

 

 

$

-

 

 

$

-

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and other government securities

 

 

368,302

 

 

 

117,973

 

 

 

250,329

 

 

 

-

 

Financial institution debt securities

 

 

417,170

 

 

 

-

 

 

 

417,170

 

 

 

-

 

Corporate debt securities

 

 

78,942

 

 

 

-

 

 

 

78,942

 

 

 

-

 

Other asset-backed securities

 

 

35,867

 

 

 

-

 

 

 

35,867

 

 

 

-

 

Total marketable securities

 

 

900,281

 

 

 

117,973

 

 

 

782,308

 

 

 

-

 

Total Assets

 

$

1,051,188

 

 

$

268,880

 

 

$

782,308

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value as of December 31, 2022

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(In thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents and restricted cash equivalents

 

$

534,581

 

 

$

534,581

 

 

$

-

 

 

$

-

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and other government securities

 

 

242,686

 

 

 

172,939

 

 

 

69,747

 

 

 

-

 

Financial institution debt securities

 

 

379,861

 

 

 

-

 

 

 

379,861

 

 

 

-

 

Corporate debt securities

 

 

101,550

 

 

 

-

 

 

 

101,550

 

 

 

-

 

Other asset-backed securities

 

 

14,357

 

 

 

-

 

 

 

14,357

 

 

 

-

 

Total marketable securities

 

 

738,454

 

 

 

172,939

 

 

 

565,515

 

 

 

-

 

Total Assets

 

$

1,273,035

 

 

$