10-Q 1 ntla-20240331.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 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: 001-37766

 

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 May 3, 2024: 96,475,421 shares.

 

 


 

PART I - FINANCIAL INFORMATION

 

 

 

Item 1. Financial Statements (unaudited)

 

 

 

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

3

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2024 and 2023

4

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2024 and 2023

5

 

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023

6

 

 

Notes to Condensed Consolidated Financial Statements

7

 

 

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

18

 

 

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

71

 

 

Item 5. Other Information

71

 

 

Item 6. Exhibits

72

 

 

Signatures

73

 

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)

 

 

March 31,
2024

 

 

December 31,
2023

 

ASSETS

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

171,979

 

 

$

226,748

 

Marketable securities

 

 

619,315

 

 

 

685,475

 

Accounts receivable

 

 

36,427

 

 

 

36,456

 

Prepaid expenses and other current assets

 

 

56,322

 

 

 

49,651

 

Total current assets

 

 

884,043

 

 

 

998,330

 

Marketable securities - noncurrent

 

 

162,090

 

 

 

99,864

 

Property and equipment, net

 

 

32,075

 

 

 

32,760

 

Operating lease right-of-use assets

 

 

110,424

 

 

 

115,375

 

Equity method investment

 

 

-

 

 

 

11,765

 

Investments and other assets

 

 

70,957

 

 

 

42,883

 

Total assets

 

$

1,259,589

 

 

$

1,300,977

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

13,689

 

 

$

7,452

 

Accrued expenses

 

 

43,276

 

 

 

67,017

 

Current portion of operating lease liability

 

 

18,763

 

 

 

18,599

 

Current portion of deferred revenue

 

 

22,184

 

 

 

22,140

 

Total current liabilities

 

 

97,912

 

 

 

115,208

 

Deferred revenue, net of current portion

 

 

33,440

 

 

 

38,853

 

Long-term operating lease liability

 

 

92,100

 

 

 

96,747

 

Total liabilities

 

 

223,452

 

 

 

250,808

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.0001 par value; 240,000,000 shares authorized at March 31, 2024 and December 31, 2023; 96,333,373 and 92,997,158 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

 

 

10

 

 

 

9

 

Additional paid-in capital

 

 

2,802,889

 

 

 

2,710,797

 

Accumulated other comprehensive loss

 

 

(947

)

 

 

(2,258

)

Accumulated deficit

 

 

(1,765,815

)

 

 

(1,658,379

)

Total stockholders’ equity

 

 

1,036,137

 

 

 

1,050,169

 

Total liabilities and stockholders’ equity

 

$

1,259,589

 

 

$

1,300,977

 

 

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 March 31,

 

 

 

2024

 

 

2023

 

Collaboration revenue

 

$

28,935

 

 

$

12,606

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

111,847

 

 

 

97,116

 

General and administrative

 

 

31,091

 

 

 

27,448

 

Total operating expenses

 

 

142,938

 

 

 

124,564

 

Operating loss

 

 

(114,003

)

 

 

(111,958

)

Other income (expense), net:

 

 

 

 

 

 

Interest income

 

 

12,632

 

 

 

11,980

 

Change in fair value of investments, net

 

 

(6,065

)

 

 

-

 

Loss from equity method investment

 

 

-

 

 

 

(3,048

)

Change in fair value of contingent consideration

 

 

-

 

 

 

(100

)

Total other income (expense), net

 

 

6,567

 

 

 

8,832

 

Net loss

 

$

(107,436

)

 

$

(103,126

)

Net loss per share, basic and diluted

 

$

(1.12

)

 

$

(1.17

)

Weighted average shares outstanding, basic and
   diluted

 

 

95,502

 

 

 

87,772

 

Other comprehensive (loss) gain:

 

 

 

 

 

 

Unrealized (loss) gain on marketable securities

 

 

(821

)

 

 

2,989

 

Other comprehensive gain from equity method investment

 

 

-

 

 

 

1,794

 

Comprehensive loss

 

$

(108,257

)

 

$

(98,343

)

 

See notes to condensed consolidated financial statements.

4


 

INTELLIA THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ Equity (unaudited)

(Amounts in thousands except share data)

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated Other

 

 

 

 

 

Total

 

 

Common

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2023

 

92,997,158

 

 

$

9

 

 

$

2,710,797

 

 

$

(2,258

)

 

$

(1,658,379

)

 

$

1,050,169

 

Issuance of common stock through
   at-the-market offerings, net of
   issuance costs of $
210

 

2,209,938

 

 

 

1

 

 

 

55,958

 

 

 

-

 

 

 

-

 

 

 

55,959

 

Exercise of stock options

 

110,734

 

 

 

-

 

 

 

1,958

 

 

 

-

 

 

 

-

 

 

 

1,958

 

Vesting of restricted stock units

 

1,015,543

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock-based compensation

 

-

 

 

 

-

 

 

 

34,176

 

 

 

-

 

 

 

-

 

 

 

34,176

 

Other comprehensive loss - unrealized loss on
   marketable securities

 

-

 

 

 

-

 

 

 

-

 

 

 

(821

)

 

 

-

 

 

 

(821

)

Reclassification of other comprehensive loss -
   equity method investment

 

-

 

 

 

-

 

 

 

-

 

 

 

2,132

 

 

 

-

 

 

 

2,132

 

Net loss

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(107,436

)

 

 

(107,436

)

Balance at March 31, 2024

 

96,333,373

 

 

$

10

 

$

2,802,889

 

$

(947

)

 

$

(1,765,815

)

 

$

1,036,137

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated Other

 

 

 

 

 

Total

 

 

Common

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2022

 

87,103,007

 

 

$

9

 

 

$

2,420,223

 

 

$

(7,461

)

 

$

(1,177,187

)

 

$

1,235,584

 

Issuance of common stock through
   at-the-market offerings, net of
   issuance costs of $
62

 

35,349

 

 

 

-

 

 

 

1,466

 

 

 

-

 

 

 

-

 

 

 

1,466

 

Contingent consideration paid to Rewrite Holders

 

567,045

 

 

 

-

 

 

 

24,126

 

 

 

-

 

 

 

-

 

 

 

24,126

 

Exercise of stock options

 

48,353

 

 

 

-

 

 

 

755

 

 

 

-

 

 

 

-

 

 

 

755

 

Vesting of restricted stock units

 

342,025

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock-based compensation

 

-

 

 

 

-

 

 

 

27,255

 

 

 

-

 

 

 

-

 

 

 

27,255

 

Other comprehensive gain - unrealized gain on
   marketable securities

 

-

 

 

 

-

 

 

 

-

 

 

 

2,989

 

 

 

-

 

 

 

2,989

 

Other comprehensive gain - equity method
   investment

 

-

 

 

 

-

 

 

 

-

 

 

 

1,794

 

 

 

-

 

 

 

1,794

 

Net loss

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(103,126

)

 

 

(103,126

)

Balance at March 31, 2023

 

88,095,779

 

 

$

9

 

$

2,473,825

 

$

(2,678

)

 

$

(1,280,313

)

 

$

1,190,843

 

 

See notes to condensed consolidated financial statements.

5


 

INTELLIA THERAPEUTICS, INC.

Condensed Consolidated Statements of Cash Flows (unaudited)

(Amounts in thousands)

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$

(107,436

)

$

(103,126

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

2,512

 

 

 

2,050

 

Stock-based compensation

 

 

34,176

 

 

 

27,255

 

Accretion of investment discounts and premiums

 

 

(5,285

)

 

 

(4,571

)

(Recognition) deferral of equity method investment intra-entity profit on sales

 

 

(20,967

)

 

 

2,812

 

Change in fair value of investments, net

 

 

6,065

 

 

 

-

 

Loss from equity method investment

 

 

-

 

 

 

3,048

 

Change in fair value of contingent consideration

 

 

-

 

 

 

100

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

29

 

 

 

(1,138

)

Prepaid expenses and other current assets

 

 

(8,746

)

 

 

(4,815

)

Operating lease right-of-use assets

 

 

4,951

 

 

 

4,658

 

Other assets

 

 

724

 

 

 

(393

)

Accounts payable

 

 

5,569

 

 

 

1,170

 

Accrued expenses

 

 

(22,403

)

 

 

(17,392

)

Deferred revenue

 

 

(5,368

)

 

 

(14,566

)

Operating lease liabilities

 

 

(4,483

)

 

 

(4,420

)

Net cash used in operating activities

 

 

(120,662

)

 

 

(109,328

)

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(2,506

)

 

 

(3,832

)

Purchases of marketable securities

 

 

(259,558

)

 

 

(382,033

)

Maturities of marketable securities

 

 

267,965

 

 

 

263,617

 

Net cash provided by (used in) investing activities

 

 

5,901

 

 

 

(122,248

)

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Net proceeds from issuance of common stock through at-the-market offerings

 

 

58,034

 

 

 

1,466

 

Proceeds from options exercised

 

 

1,958

 

 

 

755

 

Net cash provided by financing activities

 

 

59,992

 

 

 

2,221

 

Net decrease in cash, cash equivalents and restricted cash equivalents

 

 

(54,769

)

 

 

(229,355

)

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

 

 

240,353

 

 

 

535,463

 

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

 

$

185,584

 

 

$

306,108

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Cash and cash equivalents

 

$

171,979

 

 

$

294,150

 

Restricted cash equivalents, included in investments and other assets

 

 

13,605

 

 

 

11,958

 

Total cash, cash equivalents and restricted cash equivalents

 

$

185,584

 

 

$

306,108

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

Purchases of property and equipment unpaid at period end

 

$

847

 

 

$

3,525

 

Shares issued for Rewrite contingent consideration

 

 

-

 

 

 

24,126

 

 

See notes to condensed consolidated financial statements.

6


 

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 gene 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 gene 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. The Company’s in vivo programs use CRISPR to enable precise editing of disease-causing genes directly inside the human body. In addition, the Company is advancing ex vivo applications to address immuno-oncology and autoimmune diseases, where it uses CRISPR/Cas9 as the tool to create the engineered cell therapy. For its ex vivo programs, CRISPR/Cas9 is used to engineer human cells outside the body. 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, 2023.

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 gain/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 stock-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, if any, would be 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 March 31, 2024, the Company has raised an aggregate of $2,598.3 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 March 31, 2024 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.

7


 

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, 2023. There have been no material changes to these policies during the three months ended March 31, 2024.

Recent Issued Accounting Pronouncements Not Yet Effective

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting - Improvements to Reportable Segment Disclosures.” The ASU requires disclosure of incremental segment information on an annual and interim basis and also requires companies with a single reportable segment to provide all disclosures required by this ASU and all existing segment disclosures in Accounting Standard Codification (“ASC”) 280, “Segment Reporting.” The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU updates income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 and is applicable to the Company’s fiscal year beginning January 1, 2025, with early application permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

3. Marketable Securities

The following table summarizes the Company’s available-for-sale marketable securities as of March 31, 2024 and December 31, 2023:

 

 

March 31, 2024

 

 

 

Amortized
Cost

 

 

Gross Unrealized
Gains

 

 

Gross Unrealized
Losses

 

 

Estimated Fair
Value

 

 

 

(In thousands)

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and other government-backed securities

 

$

401,660

 

 

$

40

 

 

$

(589

)

 

$

401,111

 

Financial institution debt securities

 

 

214,001

 

 

 

56

 

 

 

(292

)

 

 

213,765

 

Corporate debt securities

 

 

112,194

 

 

 

12

 

 

 

(129

)

 

 

112,077

 

Other asset-backed securities

 

 

54,496

 

 

 

3

 

 

 

(47

)

 

 

54,452

 

Total

 

$

782,351

 

 

$

111

 

 

$

(1,057

)

 

$

781,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

 

 

Amortized
Cost

 

 

Gross Unrealized
Gains

 

 

Gross Unrealized
Losses

 

 

Estimated Fair
Value

 

 

 

(In thousands)

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and other government-backed securities

 

$

382,260

 

 

$

302

 

 

$

(254

)

 

$

382,308

 

Financial institution debt securities

 

 

246,270

 

 

 

92

 

 

 

(243

)

 

 

246,119

 

Corporate debt securities

 

 

97,490

 

 

 

53

 

 

 

(135

)

 

 

97,408

 

Other asset-backed securities

 

 

59,453

 

 

 

75

 

 

 

(24

)

 

 

59,504

 

Total

 

$

785,473

 

 

$

522

 

 

$

(656

)

 

$

785,339

 

The amortized cost of available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity. There were no material realized gains or losses in the three months ended March 31, 2024 or for the year ended December 31, 2023. 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 March 31, 2024 and December 31, 2023, the Company did not hold any marketable securities that matured beyond five years of the balance sheet date.

8


 

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.

The Company’s financial assets recognized at fair value on a recurring basis consisted of the following:

 

 

March 31, 2024

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(In thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents and restricted cash equivalents

 

$

143,500

 

 

$

143,500

 

 

$

-

 

 

$

-

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and other government-backed securities

 

 

401,111

 

 

 

179,434

 

 

 

221,677

 

 

 

-

 

Financial institution debt securities

 

 

213,765

 

 

 

-

 

 

 

213,765

 

 

 

-

 

Corporate debt securities

 

 

112,077

 

 

 

-

 

 

 

112,077

 

 

 

-

 

Other asset-backed securities

 

 

54,452

 

 

 

-

 

 

 

54,452

 

 

 

-

 

Total marketable securities

 

 

781,405

 

 

 

179,434

 

 

 

601,971

 

 

 

-

 

Investment in Kyverna Therapeutics, Inc.

 

 

29,158

 

 

 

29,158

 

 

 

-

 

 

 

-

 

Total assets

 

$

954,063

 

 

$

352,092

 

 

$

601,971

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(In thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents and restricted cash equivalents

 

$

136,254

 

 

$

136,254

 

 

$

-

 

 

$

-

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and other government-backed securities

 

 

382,308

 

 

 

120,556

 

 

 

261,752

 

 

 

-

 

Financial institution debt securities

 

 

246,119

 

 

 

-

 

 

 

246,119

 

 

 

-

 

Corporate debt securities

 

 

97,408

 

 

 

-

 

 

 

97,408

 

 

 

-

 

Other asset-backed securities

 

 

59,504

 

 

 

-

 

 

 

59,504

 

 

 

-

 

Total marketable securities

 

 

785,339

 

 

 

120,556

 

 

 

664,783

 

 

 

-

 

Total assets

 

$

921,593

 

 

$

256,810

 

 

$

664,783

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certain of the Company’s financial assets, including cash equivalents, restricted cash equivalents and marketable securities, have been initially valued at the transaction price, and subsequently revalued at the end of each reporting period, utilizing third party pricing services or other observable market data. The pricing services utilize industry standard valuation models and observable market inputs to determine value.

Other financial instruments, including accounts receivable, accounts payable and accrued expense, are carried at cost, which approximates fair value due to the short duration and term to maturity.

The Company has determined that the estimated fair value of its investment in Kyverna Therapeutics, Inc. (“Kyverna”), a publicly traded company, is reported as Level 1 as it is valued at a quoted market price in an active market. The investment in Kyverna is classified within “investments and other assets” in the condensed consolidated balance sheets. Refer to Note 8 for further details.

Other Investments

The Company’s other investments include investments in AvenCell Therapeutics, Inc. (“AvenCell”) and SparingVision Sas (“SparingVision”). These investments are accounted for under ASC 321, “Investments in Equity Securities” (“ASC 321”) using the measurement alternative at cost minus impairment with adjustments for changes in observable prices. The Company

9


 

previously accounted for the AvenCell investment under the equity method; refer to Note 8 for further details. The Company monitors any events or changes in circumstances that may have a significant effect on the fair value of investments, either due to impairment or based on observable price changes, and records adjustments as needed. These investments are classified as Level 3 assets and are not included in the fair value table above as they are not valued at fair value on a recurring basis.

5. Accrued Expenses

Accrued expenses consisted of the following:

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Accrued research and development

 

$

21,197

 

 

$

27,411

 

Employee compensation and benefits

 

 

10,386

 

 

 

26,615

 

Accrued legal and professional expenses

 

 

3,808

 

 

 

2,063

 

Accrued construction costs

 

 

3,995

 

 

 

6,891

 

Accrued other

 

 

3,890

 

 

 

4,037

 

Total accrued expenses

 

$

43,276

 

 

$

67,017

 

 

6. Commitments and Contingencies

Litigation

There have been no material changes to any outstanding litigation, nor is the Company a party to any new litigation, since December 31, 2023. For further information please see the notes to the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2023.

License Agreements

The Company is party to license agreements, which may include contingent payments. These payments will become payable if and when certain development, regulatory and commercial milestones are achieved. As of March 31, 2024, the satisfaction and timing of the contingent payments is uncertain and not reasonably estimable.

7. Collaborations and Other Arrangements

To accelerate the development and commercialization of CRISPR/Cas9-based products in multiple therapeutic areas, the Company has formed, and intends to seek other opportunities to form, strategic alliances with collaborators who can augment its leadership in CRISPR/Cas9 therapeutic development. As of March 31, 2024, the Company’s accounts receivable were related to its collaborations with Regeneron Pharmaceuticals, Inc. (“Regeneron”), SparingVision, Kyverna and AvenCell, and the Company’s contract liabilities were related to its collaborations with Regeneron and SparingVision. As of December 31, 2023, the Company’s accounts receivable were related to its collaborations with Regeneron, SparingVision, AvenCell and Kyverna and the Company’s contract liabilities were related to its collaborations with Regeneron and SparingVision.

The following table presents changes in the Company’s accounts receivable and contract liabilities during the three months ended March 31, 2024 and 2023 (in thousands):

 

 

Balance at
Beginning of
Period

 

 

Additions

 

 

Deductions

 

 

Balance at End
of Period

 

Three months ended March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

$

36,456

 

 

$

5,872

 

 

$

(5,901

)

 

$

36,427

 

Contract liabilities - deferred revenue

 

$

60,993

 

 

$

-

 

 

$

(5,369

)

 

$

55,624

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at
Beginning of
Period

 

 

Additions

 

 

Deductions

 

 

Balance at End
of Period

 

Three months ended March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

$

3,768

 

 

$

4,488

 

 

$

(3,350

)

 

$

4,906

 

Contract liabilities - deferred revenue

 

$

63,771

 

 

$

-

 

 

$

(14,566

)

 

$

49,205

 

 

10


 

During the three months ended March 31, 2024 and 2023, the Company recognized the following revenues as a result of changes in the contract liability balance (in thousands):

 

 

Three Months Ended March 31,

 

Revenue recognized in the period from:

 

2024

 

 

2023

 

Amounts included in the contract liability at the beginning of the period

 

$

5,369

 

 

$

11,753

 

The Company has not incurred significant expenses to obtain collaboration agreements and costs to fulfill those contracts do not generate or enhance resources of the Company. As such, no costs to obtain or fulfill a contract have been capitalized in any period.

Regeneron Pharmaceuticals, Inc.

In April 2016, the Company entered into a license and collaboration agreement with Regeneron (as amended from time to time, the “2016 Regeneron Agreement”). In October 2023, Regeneron exercised its one-time option to extend the technology collaboration term for an additional two years (the “2024 Technology Collaboration Extension”), until April 2026, in exchange for a nonrefundable payment of $30.0 million, which was received by the Company in April 2024. In September 2023, Regeneron and Intellia further expanded the research collaboration (the “2023 Regeneron Amendment”) to develop additional in vivo CRISPR-based gene editing therapies focused on neurological and muscular diseases.

In 2018, the Company entered into a co-development and co-promotion (“Co/Co”) agreement with Regeneron for transthyretin (“ATTR”) amyloidosis (the “ATTR Co/Co”). In May 2020, the Company entered into co-development and co-funding agreements for the treatment of hemophilia A and hemophilia B (the “Hemophilia Co/Co”) agreements. In March 2024, the Company notified Regeneron that it is opting out of its hemophilia B Co/Co agreement. The Company will continue to have obligations under the hemophilia B Co/Co agreement until September 2024. In addition, after termination of the hemophilia B Co/Co agreement the Company will continue to support Regeneron with the development of gene editing products directed to hemophilia B, as applicable, under the 2016 Regeneron Agreement. That agreement will control the parties’ obligations to develop and commercialize gene editing products directed to hemophilia B. The Company may be eligible to receive up to $320.0 million in milestone payments and royalties in the high-single digits to low teens, which royalties are potentially subject to various reductions, offsets and upstream payment obligations.

Since December 31, 2023, there have been no material changes to the key terms of the 2016 Regeneron Agreement, ATTR Co/Co, Hemophilia Co/Co, or 2023 Regeneron Amendment (the “Regeneron Agreements”), other than as described above.

The Company recognized collaboration revenue of $7.4 million and $6.8 million during the three months ended March 31, 2024 and 2023, respectively. This includes $4.7 million and $4.2 million during the three months ended March 31, 2024 and 2023, respectively, primarily representing payments due from Regeneron pursuant to the ATTR Co/Co agreement. These revenues are offset in part by contra-revenue related to the Hemophilia Co/Co agreements amounting to approximately $3.3 million and $2.9 million during the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, there was $41.9 million of the aggregate transaction price remaining to be recognized through April 2026, the remaining period of the collaboration. As of March 31, 2024 and December 31, 2023, the Company had accounts receivable of $35.9 million and $35.7 million, respectively, and deferred revenue of $41.9 million and $47.1 million, respectively, related to the Regeneron Agreements.

SparingVision SAS

In October 2021, the Company and SparingVision, a genomic medicine company developing vision saving treatments for ocular diseases, entered into a license and collaboration agreement (the “SparingVision LCA”) to develop novel genomic medicines utilizing CRISPR/Cas9 technology for the treatment of ocular diseases.

Since December 31, 2023, there have been no material changes to the key terms of the SparingVision LCA agreement.

The Company recognized collaboration revenue of $0.5 million and $0.4 million related to the SparingVision LCA for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, the Company had $0.3 million and $0.5 million in accounts receivable, respectively, related to the SparingVision LCA. As of March 31, 2024 and

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December 31, 2023, the Company had deferred revenue of $13.7 million and $13.9 million, respectively, related to the SparingVision LCA, which is expected to be recognized over a six to nine year period from the signing of the agreement.

ReCode Therapeutics, Inc. (“ReCode”)

On February 14, 2024, the Company entered into a license, collaboration and option agreement with ReCode (the “ReCode LCA”), a clinical-stage genetic medicines company, to develop novel genomic medicines for the treatment of cystic fibrosis (“CF”). The ReCode LCA leverages the Company’s proprietary CRISPR-based gene editing platform, including its DNA writing technology, and ReCode’s proprietary Selective Organ Targeting (“SORT”) lipid nanoparticle delivery platform to precisely correct one or more CF disease-causing gene mutations. As part of the agreement, the companies will focus initial research efforts on therapeutic approaches that address CF for patients who have limited or no treatment options available, with the opportunity to expand the scope of the collaboration in later phases. The Company will be responsible for the design of the editing strategy and research-grade components for the investigational therapies. ReCode will lead the subsequent preclinical and clinical development and worldwide commercialization for certain programs arising from the collaboration. The Company also has an option to lead commercialization in the U.S. for certain programs (the “Co/Co option”).

The ReCode LCA did not include an exchange of upfront consideration between the parties. The Company will be eligible to receive pre-specified development and commercial milestone payments, up to $262.0 million per product, as well as single digit royalties on potential sales. Certain milestone and royalty payments may be removed or reduced for a product if the Company exercises the Co/Co option. The Company did not recognize any revenue from the ReCode LCA during the three months ended March 31, 2024.

Other Agreements

The Company has existing license and collaboration agreements with AvenCell, Kyverna, and ONK Therapeutics, Ltd (“ONK”). Since December 31, 2023, there have been no material changes to the key terms of the AvenCell, Kyverna and ONK license and collaboration agreements. During the three months ended March 31, 2024, the Company recognized $21.0 million of previously eliminated intra-entity profit related to the AvenCell agreement. See Note 8 for further details. The Company did not recognize material revenue from the Kyverna and ONK agreements during that period. During the three months ended March 31, 2023, the Company recognized $4.9 million, $0.4 million and $0.1 million in revenue related to AvenCell, Kyverna and ONK, respectively.

8. Investments and Other Assets

Investments and other assets consisted of the following:

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Investment in Kyverna

 

$

29,158

 

 

$

10,000

 

Other investments

 

 

24,213

 

 

 

14,760

 

Restricted cash, long-term

 

 

13,605

 

 

 

13,605

 

Prepaid expenses and other assets, long-term

 

 

3,981

 

 

 

4,518

 

Total investments and other assets

 

$

70,957

 

 

$

42,883

 

Kyverna Therapeutics, Inc.

In February 2024, Kyverna completed an initial public offering of its common stock (the “Kyverna IPO”). Prior to the Kyverna IPO, the Company accounted for its investment in Kyverna using the measurement alternative as Kyverna was a private company with no readily observable transaction price, and the investment was valued at $10.0 million as of December 31, 2023. As of March 31, 2024, the Company’s investment in Kyverna is valued at $29.2 million. The Company recognized an unrealized gain of $19.2 million recorded within “change in fair value of investments, net” in the condensed consolidated statement of operations and comprehensive loss during the three months ended March 31, 2024, associated with changes in the fair value of Kyverna’s common stock.

AvenCell Therapeutics, Inc.

As of December 31, 2023 and March 31, 2024, the Company holds a 33.33% equity interest in AvenCell. As of December 31, 2023, the Company accounted for its investment using the equity method of accounting, as the Company had significant influence, but not control, over AvenCell, and the investment was valued at $11.8 million. During the first quarter of 2024, in

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conjunction with the completion of a debt financing, AvenCell increased the size of their board, with a single investor having control over AvenCell’s operational and financial decisions. As a result, the Company no longer has the ability to exercise significant influence over AvenCell, and therefore the Company’s investment in AvenCell is accounted for in accordance with ASC 321 as of March 31, 2024, and AvenCell is no longer considered to be a related party. The Company did not recognize any revenue related to the AvenCell LCA during the three months ended March 31, 2024. During the three months ended March 31, 2023, the Company recognized $4.9 million in revenue related to the AvenCell LCA. The Company had $0.2 million in accounts receivable and $1.0 million in accrued expenses related to the AvenCell agreements as of both March 31, 2024 and December 31, 2023.

The transition from equity method accounting to ASC 321 required the Company to reclassify $2.1 million from accumulated other comprehensive loss amounts previously recognized as a result of the investment in AvenCell to the carrying value of the investment in AvenCell and recognize $21.0 million of previously eliminated intra-entity profit as “collaboration revenue” in the condensed consolidated statement of operations and comprehensive loss during the three months ended March 31, 2024. The Company also considered whether there was an indication that the investment was impaired, and recorded an impairment of $25.3 million within “change in fair value of investments, net” in the condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2024. This impairment was caused by AvenCell’s financial condition, indicators of fair value based on the completion of the debt financing, and an executed term sheet for further financing, which indicated that the fair value of the investment was less than its carrying value. The Company used a market approach to value the investment, which is a Level 3 measurement in the fair value hierarchy.

As of March 31, 2024, the carrying value of the Company’s investment in AvenCell was $9.6 million.

SparingVision SAS

As of March 31, 2024, the fair value of the Company’s investment in SparingVision was $14.6 million. There have been no material changes in the valuation of the SparingVision investment as of March 31, 2024.

9. Leases

The Company leases approximately 230,000 square feet of real estate, including laboratory and office space in Cambridge, Massachusetts, and the surrounding areas. The Company’s leases have remaining terms ranging from one to approximately nine years. Certain leases include options to renew, exercised at the Company’s sole discretion, with varying renewal terms that can extend the lease term for an additional three to five years. All of the Company’s leases qualify as operating leases.

Separately, the Company entered into an agreement in February 2022, later amended in June 2023, to lease approximately 140,000 square feet of office, general laboratory and planned good manufacturing practice (“GMP”) manufacturing space at 840 Winter Street in Waltham, Massachusetts (the “840 Winter Lease”). The Company anticipates a phased move-in process during the second half of 2024. As of March 31, 2024, the Company had not taken control of the premises and therefore there are no right of use assets or liabilities recorded related to the 840 Winter Lease under ASC 842, “Leases (Topic 842)” (“ASC 842”).

10. Stock-Based Compensation

Stock-based compensation expense is classified in the condensed consolidated statements of operations and comprehensive loss as follows:

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Research and development

 

$

20,161

 

 

$

16,931

 

General and administrative

 

 

14,015

 

 

 

10,324

 

Total

 

$

34,176

 

 

$

27,255

 

Stock Option and Incentive Plan

In April 2016, the Company adopted the Amended and Restated 2015 Stock Option and Incentive Plan (the “2015 Plan”). The 2015 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and other stock-based awards. Recipients of incentive stock options and non-qualified stock options are eligible to purchase shares of the Company’s common stock at an exercise price equal to the fair value of such stock on the grant date.

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The Company maintains a retirement policy for equity awards granted to all employees, which applies to all equity awards granted after July 1, 2022 to employees who meet certain retirement eligibility criteria.

As of March 31, 2024, there were 4,365,763 shares available for future issuance under the 2015 Plan. The number of shares reserved for issuance under the 2015 Plan will be cumulatively increased on each January 1st by four percent of the number of shares of stock issued and outstanding on the immediately preceding December 31st or such lesser number of shares of stock as determined by the board of directors.

Restricted Stock Units

The following table summarizes the Company’s RSU activity for the three months ended March 31, 2024:

 

 

Number of
Shares

 

 

Weighted
Average Grant
Date Fair Value
per Share

 

Unvested restricted stock units as of December 31, 2023

 

 

4,041,753

 

 

$

50.40

 

Granted

 

 

2,939,011

 

 

 

34.52

 

Vested

 

 

(1,015,543

)

 

 

51.62

 

Cancelled

 

 

(270,591

)

 

 

46.14

 

Unvested restricted stock units as of March 31, 2024

 

 

5,694,630

 

 

$

42.18

 

Restricted Stock Units - Service Awards

The Company awards RSUs with a service condition to all employees upon hire and as part of their annual grant. RSUs with a service condition granted under the 2015 Plan in 2024 and 2023 generally vest as to one-third on the first anniversary of the original vesting date, with the balance vesting annually over the remaining two years.

In March 2024, the Company granted 2,157,921 RSUs with a service condition to employees as part of their annual grant, which have the potential to vest over a period of three years. The weighted average grant date fair value of these RSUs was $32.66 and the vesting start date for these RSUs was January 1, 2024.

In March 2023, the Company granted 2,195,135 RSUs with a service condition to employees as part of their annual grant, which have the potential to vest over a period of three years. The weighted average grant date fair value of these RSUs was $40.75 and the vesting start date for these RSUs was January 1, 2023.

Unvested restricted stock units as of March 31, 2024 in the table above includes 4,733,350 RSUs that are service-based.

Restricted Stock Units - Market Awards

In March 2024, 2023 and 2022, market-based RSUs were granted to senior executives as part of their annual grant. These RSUs have the potential to vest after a period of three years, with a vesting start date of January 1, 2024, 2023 and 2022, respectively, and the number of shares to be delivered will depend on the Company’s Total Shareholder Return (“TSR”), a market condition, over that period relative to a defined group of biotechnology companies. The number of market-based RSUs granted in March 2024, 2023 and 2022 was 235,858, 181,743 and 55,144, respectively. The grant date fair value for the market-based RSUs, calculated using a Monte Carlo valuation model, was $51.12, $68.55 and $126.49, respectively. The following assumptions were used to determine the grant date fair value for the three years, respectively: risk free interest rate: 4.28%, 4.60% and 1.44%; expected volatility: 77.2%, 84.34% and 82.53%. The expected term for all grants was approximately 3.0 years; the expected dividend yield was 0.0%.

Unvested restricted stock units as of March 31, 2024 in the table above includes 472,745 RSUs that are market-based.

Restricted Stock Units - Performance-Based Awards with TSR Multiplier

Also in March 2024, 444,117 performance-based RSUs (“PSUs”) with a relative TSR modifier were granted to senior executives as part of their annual grant. These PSUs, to the extent earned, shall vest on January 1, 2027, and the number of shares to be delivered will be determined based upon the achievement of certain performance goals, which can range from 0% to 200%. Following the determination of the achievement of performance criteria, the amount of shares awarded will be subject to adjustment based on the application of a TSR modifier, which can range from 75% to 125%. The grant date fair value for these

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PSUs, calculated using a Monte Carlo valuation model, was $36.16. The following assumptions were used to determine the grant date fair value: risk free interest rate: 4.28%; expected volatility: 77.2%; expected term approximately 3.0 years; expected dividend yield: 0.0%. The Company recognizes compensation expense ratably over the required service period based on its estimate of the number of shares that will vest based upon the probability of achieving the performance goals.

Unvested restricted stock units as of March 31, 2024 in the table above includes 444,117 PSUs with a TSR multiplier.

Restricted Stock Units - Performance-Based Awards

In March 2022, the Company granted 66,296 performance-based RSUs to certain non-executive employees that would vest upon obtaining certain scientific milestones. There were two separate tranches, each attached to a different set of milestones. The milestone related to the first tranche, made up of 21,878 RSUs, was achieved in the first quarter of 2023 and these RSUs vested. The remaining performance milestones were considered not probable of achievement as of March 31, 2024 and, therefore, no related stock-based compensation was recorded during the period then ending.

Unvested restricted stock units as of March 31, 2024 in the table above includes 44,418 performance-based RSUs.

The weighted-average grant date fair value of all RSUs granted during the three months ended March 31, 2024 and 2023 was $34.52 and $42.78, respectively. The total fair value of RSUs vested (measured on the date of vesting) for the three months ended March 31, 2024 and 2023 was $30.9 million and $12.1 million, respectively.

As of March 31, 2024, there was $191.3 million of unrecognized stock-based compensation expense related to all RSUs that are expected to vest. These costs are expected to be recognized over a weighted average remaining vesting period of 2.0 years.

Stock Options

The weighted average grant date fair value of options, estimated as of the grant date using the Black-Scholes option pricing model, was $22.61 and $28.82 per option for those options granted during the three months ended March 31, 2024 and 2023, respectively. Weighted average assumptions used to apply this pricing model were as follows:

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Risk-free interest rate

 

4.2%

 

4.4%

Expected term

 

6.0 years

 

6.0 years

Expected volatility of underlying stock

 

76.4%

 

78.7%

Expected dividend yield

 

0.0%