UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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:
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of | (I.R.S. Employer | |
(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
64 Sidney Street, Cambridge, Massachusetts 02139
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the 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 | ☐ | |
☒ | 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 Exchange Act). Yes
The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, as of October 30, 2023 was
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, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “target,” “potential,” “contemplate,” “anticipate,” “goals,” “will,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about:
● | our plans to develop and commercialize our product candidates based on adeno-associated virus, or AAV, gene therapy and our proprietary antibodies; |
● | our ability to continue to develop our proprietary gene therapy platform technologies, including our TRACERTM discovery platform and our vectorized antibody platform, and our proprietary antibodies; |
● | our ability to identify and optimize product candidates and proprietary AAV capsids; |
● | our strategic collaborations and licensing agreements with, and funding from, our collaboration partner, Neurocrine Biosciences, Inc. and our licensees Alexion, AstraZeneca Rare Disease, or Alexion (successor-in-interest to former licensee Pfizer Inc.), and Novartis Pharma AG; |
● | our ongoing and planned preclinical development efforts, related timelines and studies; |
● | our ability to enter into future collaborations, strategic alliances, or option and license arrangements; |
● | the timing of and our ability to submit applications and obtain and maintain regulatory approvals for our product candidates, including the ability to submit investigational new drug, or IND, applications for our programs; |
● | our estimates regarding revenue, expenses, contingent liabilities, future revenues, existing cash resources and capital requirements; |
● | our intellectual property position and our ability to obtain, maintain and enforce intellectual property protection for our proprietary assets; |
● | our estimates regarding the size of the potential markets for our product candidates and our ability to serve those markets; |
● | our need for additional funding and our plans and ability to raise additional capital, including through equity offerings, debt financings, collaborations, strategic alliances, and option and license arrangements; |
● | our competitive position and the success of competing products that are or might become available for the indications that we are pursuing; |
● | the impact of government laws and regulations including in the United States, the European Union, and other important geographies such as Japan; and |
● | our ability to control costs and prioritize our product candidate pipeline and platform development objectives successfully in connection with our strategic initiatives. |
2
These forward-looking statements are only predictions, and we may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. You should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. We have included important factors in the cautionary statements included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 7, 2023, particularly in “Part I, Item 1A — Risk Factors,” and, if applicable, our Quarterly Reports on Form 10-Q, particularly in “Part II, Item 1A — Risk Factors,” that could cause actual future results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, strategic collaborations, joint ventures or investments we may make.
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 with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
3
VOYAGER THERAPEUTICS, INC.
FORM 10-Q
TABLE OF CONTENTS
4
PART I. FINANCIAL INFORMATION
Voyager Therapeutics, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands, except share and per share data)
(unaudited)
September 30, | December 31, |
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| 2023 |
| 2022 |
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Assets |
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Current assets: | |||||||
Cash and cash equivalents | $ | | $ | | |||
Marketable securities, current |
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Related party collaboration receivable | | | |||||
Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Deposits and other non-current assets |
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Operating lease, right-of-use assets |
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Total assets | $ | | $ | | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | | $ | | |||
Accrued expenses |
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Other current liabilities | | | |||||
Deferred revenue, current |
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Total current liabilities |
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Deferred revenue, non-current |
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Other non-current liabilities |
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Total liabilities |
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Commitments and contingencies (see note 8) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $ | |||||||
Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
| ( |
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Accumulated deficit |
| ( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Voyager Therapeutics, Inc.
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income
(amounts in thousands, except share and per share data)
(unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, |
| September 30, |
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| 2023 |
| 2022 |
| 2023 |
| 2022 |
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Collaboration revenue | $ | |
| $ | | $ | |
| $ | | |||
Operating expenses: | |||||||||||||
Research and development |
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General and administrative |
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Total operating expenses |
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Operating (loss) income | ( | | | ( | |||||||||
Interest income |
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Other income |
| — |
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Total other income, net |
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(Loss) income before income taxes | ( | | | ( | |||||||||
Income tax (benefit) provision | ( | — | | — | |||||||||
Net (loss) income | $ | ( | $ | | $ | | $ | ( | |||||
Other comprehensive (loss) income: | |||||||||||||
Net unrealized (loss) gain on available-for-sale securities |
| ( |
| |
| ( |
| ( | |||||
Total other comprehensive (loss) income |
| ( |
| |
| ( |
| ( | |||||
Comprehensive (loss) income | $ | ( | $ | | $ | | $ | ( | |||||
Net (loss) income per share, basic | $ | ( | $ | | $ | | $ | ( | |||||
Net (loss) income per share, diluted | $ | ( | $ | | $ | | $ | ( | |||||
Weighted-average common shares outstanding, basic | | | | | |||||||||
Weighted-average common shares outstanding, diluted | | | | | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Voyager Therapeutics, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(amounts in thousands, except share data)
(unaudited)
Accumulated |
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Additional | Other |
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Common Stock | Paid-In | Comprehensive | Accumulated | Stockholders’ |
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| Shares |
| Amount |
| Capital |
| (Loss) Income |
| Deficit |
| Equity |
| ||||||
Balance at December 31, 2021 | | $ | | $ | | $ | ( | $ | ( | $ | | |||||||
Exercises of vested stock options | | — | | — | — | | ||||||||||||
Vesting of restricted stock units | | — | — | — | — | — | ||||||||||||
Stock-based compensation expense | — | — | | — | — | | ||||||||||||
Unrealized loss on available-for-sale securities, net of tax | — | — | — | ( | — | ( | ||||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||||
Balance at March 31, 2022 | | $ | | $ | | $ | ( | $ | ( | $ | | |||||||
Exercises of vested stock options | | — | | — | — | | ||||||||||||
Vesting of restricted stock units | | — | — | — | — | — | ||||||||||||
Issuance of common stock under ESPP | | — | | — | — | | ||||||||||||
Stock-based compensation expense | — | — | | — | — | | ||||||||||||
Unrealized loss on available-for-sale securities, net of tax | — | — | — | ( | — | ( | ||||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||||
Balance at June 30, 2022 | | $ | | $ | | $ | ( | $ | ( | $ | | |||||||
Exercises of vested stock options | | — | | — | — | | ||||||||||||
Vesting of restricted stock units | | — | — | — | — | — | ||||||||||||
Stock-based compensation expense | — | — | | — | — | | ||||||||||||
Unrealized gain on available-for-sale securities, net of tax | — | — | — | | — | | ||||||||||||
Net income | — | — | — | — | | | ||||||||||||
Balance at September 30, 2022 | | $ | | $ | | $ | ( | $ | ( | | ||||||||
Balance at December 31, 2022 | | $ | | $ | | $ | ( | $ | ( | | ||||||||
Exercises of vested stock options | | — | | — | — | | ||||||||||||
Vesting of restricted stock units | | — | — | — | — | — | ||||||||||||
Issuance of common stock in connection with the 2023 Neurocrine Collaboration Agreement | | | | — | — | | ||||||||||||
Stock-based compensation expense | — | — | | — | — | | ||||||||||||
Unrealized gain on available-for-sale securities, net of tax | — | — | — | | — | | ||||||||||||
Net income | — | — | — | — | | | ||||||||||||
Balance at March 31, 2023 | | $ | | $ | | $ | ( | $ | ( | $ | | |||||||
Exercises of vested stock options | | | | — | — | | ||||||||||||
Vesting of restricted stock units | | — | — | — | — | — | ||||||||||||
Issuance of common stock under ESPP | | | | |||||||||||||||
Stock-based compensation expense | — | — | | — | — | | ||||||||||||
Unrealized loss on available-for-sale securities, net of tax | — | — | — | ( | — | ( | ||||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||||
Balance at June 30, 2023 | | $ | | $ | | $ | ( | $ | ( | $ | | |||||||
Exercises of vested stock options | | — | | — | — | | ||||||||||||
Vesting of restricted stock units | | — | — | — | — | — | ||||||||||||
Stock-based compensation expense | — | — | | — | — | | ||||||||||||
Unrealized loss on available-for-sale securities, net of tax | — | — | — | ( | — | ( | ||||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||||
Balance at September 30, 2023 | | $ | | $ | | $ | ( | $ | ( | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
Voyager Therapeutics, Inc.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)
Nine Months Ended | |||||||
September 30, |
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| 2023 |
| 2022 |
| |||
Cash flow from operating activities |
|
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Net income (loss) | $ | | $ | ( | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||
Stock-based compensation expense |
| |
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Depreciation |
| |
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Amortization of premiums and discounts on marketable securities | ( | ( | |||||
Loss on disposal of fixed assets |
| |
| — | |||
Other non-cash items | — | ( | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | — | ( | |||||
Related party collaboration receivable | ( | | |||||
Prepaid expenses and other current assets |
| ( |
| ( | |||
Operating lease, right-of-use asset |
| |
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Accounts payable |
| |
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Accrued expenses |
| |
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Operating lease liabilities |
| ( |
| ( | |||
Other non-current liabilities | — | ( | |||||
Deferred revenue |
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Net cash provided by (used in) operating activities |
| |
| ( | |||
Cash flow from investing activities | |||||||
Purchases of property and equipment |
| ( |
| ( | |||
Purchases of marketable securities |
| ( |
| ( | |||
Proceeds from sales and maturities of marketable securities |
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Net cash used in investing activities |
| ( |
| ( | |||
Cash flow from financing activities | |||||||
Proceeds from the exercise of stock options |
| |
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Proceeds from the issuance of common stock in connection with the 2023 Neurocrine Collaboration Agreement | | — | |||||
Proceeds from the purchase of common stock under ESPP | | | |||||
Net cash provided by financing activities |
| |
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Net decrease in cash, cash equivalents, and restricted cash |
| ( |
| ( | |||
Cash, cash equivalents, and restricted cash, beginning of period |
| |
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Cash, cash equivalents, and restricted cash, end of period | $ | | $ | | |||
Supplemental disclosure of cash and non-cash activities | |||||||
Capital expenditures incurred but not yet paid | $ | — | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
VOYAGER THERAPEUTICS INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of business
Voyager Therapeutics, Inc. (the “Company”) is a biotechnology company dedicated to breaking through barriers in gene therapy and neurology. The Company focuses on leveraging its expertise in capsid discovery and neuropharmacology to address the delivery hurdles that have constrained the gene therapy and neurology disciplines, with the goal of either halting or slowing disease progression or reducing symptom severity, therefore providing clinically meaningful impact to patients. The Company’s gene therapy platforms enable it to engineer, optimize, manufacture and deliver its adeno-associated virus (“AAV”) based gene therapies that it believes have the potential to safely provide durable efficacy. The Company’s team of experts in the fields of AAV gene therapy and neuroscience first identifies and selects diseases in which the Company believes an AAV gene therapy or other biological therapy will answer a high unmet medical need, be supported by target validation, offer an efficient path to human proof of biology, present robust preclinical pharmacology, and offer strong commercial potential. The Company then engineers and optimizes an AAV vector or other biological therapy for activity in, efficacy in, or delivery to, the targeted tissue or cells.
The Company is identifying proprietary AAV capsids, the outer viral protein shells that enclose genetic material that makes up the vector payload. The Company’s team has developed a proprietary AAV capsid discovery platform called TRACERTM (Tropism Redirection of AAV by Cell Type-Specific Expression of RNA) that employs directed evolution to facilitate the selection of AAV capsids with enhanced tissue delivery characteristics, such as more effective delivery across the blood-brain barrier (“BBB”). The TRACER discovery platform is a broadly applicable, functional RNA-based AAV capsid discovery platform that allows for rapid in vivo evolution of AAV capsids with cell-specific transduction properties in multiple species, including non-human primates. The Company believes that the capsids it discovers through its TRACER discovery platform (“TRACER Capsids”) have the potential to significantly enhance the efficacy and safety of its single dose gene therapies, which the Company expects to be delivered with systemic infusions, as compared with conventional capsids. The Company has leveraged the TRACER discovery platform to generate multiple families of TRACER Capsids with robust central nervous system (“CNS”) tropism following intravenous delivery. The Company has presented data at scientific conferences demonstrating strong transduction to multiple areas within the brain and activity across multiple species. The Company has identified receptors for some of its TRACER Capsid families as well as a ligand for a particular receptor and is conducting experiments to evaluate the potential to leverage its receptors to shuttle non-viral genetic medicines across the BBB.
In addition to leveraging TRACER Capsids in potential licensing arrangements, the Company is advancing its own proprietary pipeline of drug candidates for neurological diseases, with a focus on Alzheimer’s disease. The Company’s wholly-owned prioritized pipeline programs include superoxide dismutase 1 (“SOD1”) gene therapy for amyotrophic lateral sclerosis (“ALS”) and an anti-tau antibody for Alzheimer’s disease. The Company identified a lead development candidate in its anti-tau antibody program in the first quarter of 2023, initiated good laboratory practices toxicology studies in the third quarter of 2023, and expects to submit an investigational new drug application (“IND”) to the U.S. Food and Drug Administration (“FDA”) in the first half of 2024. The Company continues to evaluate the data from preclinical studies for its SOD1 program and expects to identify a lead development candidate in 2023. The Company expects to submit an IND for its SOD1 program in mid-2025. The Company’s pipeline also includes four early research initiatives to develop gene therapies for the treatment of Alzheimer’s disease, Huntington’s disease, and brain metastases from HER2+ metastatic breast cancer.
In addition to these wholly-owned programs, the Company is actively advancing two later preclinical-stage programs in collaboration with Neurocrine Biosciences, Inc. (“Neurocrine”): a glucocerebrosidase 1 (“GBA1”) gene therapy program for Parkinson’s disease and other GBA1-mediated diseases (the “GBA1 Program”), and a FXN gene therapy program for Friedreich’s ataxia. The Company also maintains a robust early research pipeline of wholly-owned and collaborative gene therapy programs for neurological diseases.
The Company has a history of incurring annual net operating losses. As of September 30, 2023, the Company had an accumulated deficit of $
9
collaborations with Sanofi Genzyme Corporation (“Sanofi Genzyme”) and AbbVie Biotechnology Ltd and AbbVie Ireland Unlimited Company, its ongoing collaborations with Neurocrine, its option and license agreement with Alexion, AstraZeneca Rare Disease (“Alexion”) (successor-in-interest to former licensee Pfizer Inc. (“Pfizer”)), and its option and license agreement with Novartis Pharma AG (“Novartis”), as well as public offerings and private placements of its equity securities.
As of September 30, 2023, the Company had cash, cash equivalents, and marketable securities of $
There can be no assurance that the Company will be able to obtain additional debt or equity financing on terms acceptable to the Company or generate product revenue or revenue from collaboration partners, on a timely basis or at all. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations, and financial condition.
2. Summary of significant accounting policies and basis of presentation
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as filed with the Securities and Exchange Commission (“SEC”) on March 7, 2023. These interim condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the periods presented. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates of the Financial Accounting Standards Board.
Principles of Consolidation
The unaudited interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary as disclosed in Note 2, under the heading “Summary of Significant Accounting Policies and Basis of Presentation” within the “Notes to Consolidated Financial Statements” accompanying the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates, which include, but are not limited to, estimates related to revenue recognition, accrued expenses, stock-based compensation expense, and income taxes. 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.
Summary of Significant Accounting Policies
There have been no changes in the Company's significant accounting policies as described in Note 2, “Summary of Significant Accounting Policies and Basis of Presentation” within the “Notes to Consolidated Financial Statements” accompanying the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
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3. Fair value measurements
Assets and liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 are as follows:
Quoted Prices | Significant |
| |||||||||||
in Active | Other | Significant |
| ||||||||||
Markets for | Observable | Unobservable |
| ||||||||||
Identical Assets | Inputs | Inputs | |||||||||||
Assets |
| Total |
| (Level 1) |
| (Level 2) |
| (Level 3) |
| ||||
September 30, 2023 | (in thousands) |
| |||||||||||
Money market funds included in cash and cash equivalents |
| $ | |
| $ | |
| $ | — |
| $ | — | |
Marketable securities: | |||||||||||||
U.S. Treasury notes |
| |
| |
| — |
| — | |||||
U.S. Government agency securities | | | — | — | |||||||||
Corporate bonds | | — | | — | |||||||||
Commercial paper | | — | | — | |||||||||
Total | $ | | $ | | $ | | $ | — | |||||
December 31, 2022 | |||||||||||||
Money market funds included in cash and cash equivalents |
| $ | |
| $ | |
| $ | — |
| $ | — | |
Marketable securities: | |||||||||||||
U.S. Treasury notes | |
| | — | — | ||||||||
Total | $ | | $ | | $ | — | $ | — |
The Company measures the fair value of money market funds, U.S. Treasury notes, and U.S. Government agency securities based on quoted prices in active markets for identical securities. The Company measures the fair value of the Level 2 securities, corporate bonds and commercial paper, based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data.
11
4. Cash, cash equivalents, restricted cash, and available-for-sale marketable securities
Cash, cash equivalents, and marketable securities included the following at September 30, 2023 and December 31, 2022:
Amortized | Unrealized | Unrealized | Fair | ||||||||||
| Cost |
| Gains |
| Losses |
| Value | ||||||
(in thousands) | |||||||||||||
As of September 30, 2023 |
|
|
|
|
|
|
|
| |||||
Money market funds included in cash and cash equivalents | $ | | $ | — | $ | — | $ | | |||||
Marketable securities: | |||||||||||||
U.S. Treasury notes |
| | | ( | | ||||||||
U.S. Government agency securities | | — | ( | | |||||||||
Corporate bonds | | — | ( | | |||||||||
Commercial paper | | — | — | | |||||||||
Total money market funds and marketable securities | $ | | $ | | $ | ( | $ | | |||||
As of December 31, 2022 |
|
|
|
|
|
|
|
| |||||
Money market funds included in cash and cash equivalents | $ | | — | — | $ | | |||||||
Marketable securities: | |||||||||||||
U.S. Treasury notes |
| | — | ( |
| | |||||||
Total money market funds and marketable securities | $ | | $ | — | $ | ( | $ | |
All of the Company’s marketable securities as of September 30, 2023 have a contractual maturity of
The Company reviews investments whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. In connection with these investments, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors, considering the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss on the condensed consolidated balance sheet, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that is not related to credit is recognized in other comprehensive (loss) income. Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense in general and administrative expenses within the condensed consolidated statement of operations. Losses are charged against the allowance when the Company believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.
The Company held $
12
The following table provides a reconciliation of cash, cash equivalents, and restricted cash within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows:
As of September 30, | As of December 31, | ||||||
2023 |
| 2022 | |||||
| (in thousands) | ||||||
Cash and cash equivalents | $ | | $ | | |||
Restricted cash included in deposits and other non-current assets | | | |||||
Total cash, cash equivalents, and restricted cash | $ | | $ | |
5. Accrued expenses
Accrued expenses as of September 30, 2023 and December 31, 2022 consist of the following:
As of September 30, | As of December 31, | ||||||
| 2023 |
| 2022 |
| |||
(in thousands) | |||||||
Employee compensation costs | $ | | $ | | |||
Research and development costs | | | |||||
Professional services | | | |||||
Accrued goods and services |
| |
| | |||
Total | $ | | $ | | |||
6. Lease obligation
Operating Leases
As of September 30, 2023, the Company has a lease for office and laboratory space at 64 Sidney Street in Cambridge, Massachusetts through November 30, 2026 and a lease for laboratory and office space at 75 Hayden Avenue in Lexington, Massachusetts through January 31, 2031.
In September 2021, the Company entered into an agreement with BioNTech US, Inc. (“BioNTech US”) to sublease part of the office and laboratory space leased by the Company at 75 Sidney Street in Cambridge, Massachusetts (the “Sublease Agreement”) at that time. The sublease term was for approximately
On June 22, 2022, the Company entered into a Lease Termination Agreement (the “Lease Termination Agreement”) and terminated the lease for office and laboratory space at 75 Sidney Street, effective immediately. In connection with the Lease Termination Agreement, the Company also entered into a Sublease Termination Agreement (the “Sublease Termination Agreement”) and terminated the Sublease Agreement with BioNTech US. The Company did not incur any termination penalties in connection with the Lease Termination Agreement or Sublease Termination Agreement. The Company derecognized the related right-of-use asset of approximately $
The Company’s lease agreements require the Company to maintain a cash deposit or irrevocable letter of credit in the aggregate amount of $
13
On August 11, 2023, the Company entered into a first amendment (the “First Amendment”) to its existing lease for laboratory and office space at 75 Hayden Avenue in Lexington, Massachusetts, pursuant to which the Company agreed to lease approximately
During each of the three and nine months ended September 30, 2023, the Company incurred lease expenses of $
The following table summarizes the operating sublease income generated under the Sublease Agreement for the three and nine months ended September 30, 2023 and 2022:
Three Months Ended | Nine Months Ended | ||||||||||
September 30, | September 30, | ||||||||||
2023 |
| 2022 | 2023 |
| 2022 | ||||||
(in thousands) | |||||||||||
Operating sublease income | $ | — | $ | — | $ | — | $ | |
7. Other liabilities
As of September 30, 2023 and December 31, 2022, other current and non-current liabilities consisted of the following:
As of September 30, | As of December 31, | |||||
2023 |
| 2022 | ||||
(in thousands) | ||||||
Other current liabilities | ||||||
Lease liability | | | ||||
Total other current liabilities | $ | | $ | | ||
Other non-current liabilities | ||||||
Lease liability | $ | | $ | | ||
Other | | | ||||
Total other non-current liabilities | $ | | $ | |
8. Significant agreements
The Company’s significant agreements are described in Note 9 of the December 31, 2022 consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2022. During the nine months ended September 30, 2023 and 2022, there were no material changes to the Company’s collaboration agreement with Neurocrine executed in March 2019 (the “2019 Neurocrine Collaboration Agreement”) and the option and license agreement executed with Pfizer in October 2021 (the “Pfizer Agreement”) other than the assignment of the Pfizer Agreement to Alexion. Accordingly, there were no changes to the Company’s accounting treatment for these agreements through September 30, 2023.
The Company recorded revenue of $
14
September 30, 2023 and 2022, respectively. The Company did
2023 Neurocrine Collaboration Agreement
Summary of Agreement
On January 8, 2023, the Company entered into a collaboration and license agreement with Neurocrine (the “2023 Neurocrine Collaboration Agreement”) for the research, development, manufacture and commercialization of gene therapy products directed to the GBA1 Program, and
Collaboration and License
Under the 2023 Neurocrine Collaboration Agreement, the Company and Neurocrine have agreed to collaborate on the conduct of the 2023 Neurocrine Programs. Under the terms of the 2023 Neurocrine Collaboration Agreement, subject to the rights retained by the Company thereunder, the Company granted to Neurocrine, as of the Neurocrine Effective Date, an exclusive, royalty-bearing, sublicensable, worldwide license, under certain of the Company’s intellectual property rights, to research, develop, manufacture and commercialize gene therapy products (the “2023 Collaboration Products”), arising under the 2023 Neurocrine Programs.
Pursuant to mutually-agreed workplans, during the period beginning on the Neurocrine Effective Date and ending on the third anniversary of the Neurocrine Effective Date, which period may be extended upon mutual written agreement of the Company and Neurocrine, (the “2023 Discovery Period”), and as overseen by the Joint Steering Committee (“JSC”) for the ongoing collaboration with Neurocrine, the Company is responsible for identifying capsids meeting target criteria, producing development candidates, and conducting other pre-clinical activities regarding the 2023 Collaboration Products. Neurocrine has agreed to be responsible for all costs the Company incurs in conducting pre-clinical development activities for each 2023 Neurocrine Program, in accordance with JSC agreed upon workplans and budgets. If the Company breaches its responsibilities during this time or, in certain circumstances, upon a change of control, Neurocrine has the right, but not the obligation, to assume the conduct of the Company’s activities under such 2023 Neurocrine Program.
The Company has been granted the option (“2023 Co-Co Option”) to co-develop and co-commercialize 2023 Collaboration Products in the GBA1 Program in the United States upon the occurrence of the Company receiving topline data from the first Phase 1 clinical trial for a product candidate being developed pursuant to the GBA1 Program. Should the Company elect to exercise its 2023 Co-Co Option, the Company and Neurocrine agree to enter into a cost and profit-sharing arrangement (a “2023 Co-Co Agreement”), whereby the Company and Neurocrine agree to jointly develop and commercialize 2023 Collaboration Products in the GBA1 Program (“2023 Co-Co Products”) in the United States and share equally in the GBA1 Program’s costs, profits and losses in the United States, with each party entitled to or responsible for