Intellia Therapeutics(US:NTLA)2024-08-08 20:06PART I - FINANCIAL INFORMATION Financial Statements Intellia Therapeutics reported a net loss of $254.4 million for the six months ended June 30, 2024, with cash, cash equivalents, and marketable securities decreasing to $939.9 million Condensed Consolidated Balance Sheets Total assets decreased to $1.19 billion as of June 30, 2024, primarily due to reduced cash and marketable securities, while total liabilities also decreased to $220.5 million Balance Sheet Summary (in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $130,849 | $226,748 | | Marketable securities (Current & Noncurrent) | $809,024 | $785,339 | | Total current assets | $757,211 | $998,330 | | Total assets | $1,191,536 | $1,300,977 | | Liabilities & Equity | | | | Total current liabilities | $105,090 | $115,208 | | Total liabilities | $220,474 | $250,808 | | Total stockholders' equity | $971,062 | $1,050,169 | Condensed Consolidated Statements of Operations and Comprehensive Loss Collaboration revenue for Q2 2024 was $7.0 million, with the net loss widening to $147.0 million for the quarter and $254.4 million for the six-month period Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Collaboration revenue | $6,957 | $13,594 | $35,892 | $26,200 | | Research and development | $114,207 | $115,276 | $226,054 | $212,392 | | General and administrative | $31,793 | $30,652 | $62,884 | $58,100 | | Operating loss | $(139,043) | $(132,334) | $(253,046) | $(244,292) | | Net loss | $(146,975) | $(123,681) | $(254,411) | $(226,807) | | Net loss per share | $(1.52) | $(1.40) | $(2.64) | $(2.58) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities improved to $178.8 million for the six months ended June 30, 2024, while financing activities provided $101.2 million Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(178,848) | $(199,651) | | Net cash used in investing activities | $(18,289) | $(156,786) | | Net cash provided by financing activities | $101,238 | $4,737 | | Net decrease in cash, cash equivalents | $(95,899) | $(351,700) | Notes to Condensed Consolidated Financial Statements Key notes detail liquidity, collaboration agreements, and investment valuations, including a $21.0 million revenue recognition and $25.3 million impairment from the AvenCell investment - The company expects its cash, cash equivalents, and marketable securities as of June 30, 2024, will be sufficient to fund operating expenses and capital expenditures for at least the next twelve months16 - In Q1 2024, the company changed its accounting for its AvenCell investment, recognizing $21.0 million of previously eliminated intra-entity profit as collaboration revenue and recording a $25.3 million impairment charge47 - During the six months ended June 30, 2024, the company issued 3.8 million shares under its at-the-market (ATM) offering program for aggregate net proceeds of $94.4 million75 - On July 8, 2024, BlueAllele Corp. filed a patent infringement complaint against the company related to its bi-directional insertion template technology30 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses advancing its CRISPR/Cas9 pipeline, including Phase 3 trials for NTLA-2001 and NTLA-2002, and expects current cash of $939.9 million to fund operations into late 2026 Pipeline and Business Updates Intellia is advancing its clinical pipeline, with NTLA-2001's Phase 3 trial enrolling, NTLA-2002's Phase 2 meeting endpoints, and NTLA-3001 initiating a first-in-human study - NTLA-2001 (ATTR): The pivotal Phase 3 MAGNITUDE trial for ATTR-CM is enrolling, with a separate pivotal Phase 3 trial for ATTRv-PN planned to initiate by year-end 20248687 - NTLA-2002 (HAE): Positive topline results from the Phase 2 study met all primary and secondary endpoints, with the 50 mg dose selected for a global pivotal Phase 3 study initiating in H2 20249192 - NTLA-3001 (AATD): Received authorization in the U.K. to initiate a first-in-human study and expects to dose the first patient in the second half of 202493 Results of Operations Collaboration revenue increased by $9.7 million due to the AvenCell agreement, while R&D and G&A expenses rose, widening the net loss to $254.4 million Comparison of Operations (Six Months Ended June 30) | Metric | 2024 ($ thousands) | 2023 ($ thousands) | Change ($ thousands) | | :--- | :--- | :--- | :--- | | Collaboration Revenue | 35,892 | 26,200 | 9,692 | | Research and development | 226,054 | 212,392 | 13,662 | | General and administrative | 62,884 | 58,100 | 4,784 | | Operating loss | (253,046) | (244,292) | (8,754) | - The increase in collaboration revenue for the first six months of 2024 was primarily due to the recognition of $21.0 million of previously eliminated intra-entity profit under the AvenCell LCA112 R&D Expense Breakdown by Program (Six Months Ended June 30, in thousands) | Program | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | NTLA-2001 | $28,364 | $23,119 | $5,245 | | NTLA-2002 | $19,469 | $11,610 | $7,859 | | NTLA-3001 | $5,239 | $8,161 | $(2,922) | Liquidity and Capital Resources As of June 30, 2024, the company held $939.9 million in cash and marketable securities, expected to fund operations into late 2026, supplemented by $94.4 million from ATM offerings - As of June 30, 2024, the company had $939.9 million in cash, cash equivalents and marketable securities118 - The company expects its current cash position will fund ongoing operating expenses and capital expenditure requirements into late 2026122 - In the first six months of 2024, the company raised $94.4 million in net proceeds from its at-the-market (ATM) offering program, with $331.7 million remaining available119 Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate sensitivity on its $913.0 million investment portfolio, though a 100-basis-point change is not expected to be material - The company's primary market risk is interest rate sensitivity affecting its $913.0 million in cash equivalents, restricted cash, and marketable securities as of June 30, 2024131 - Management believes that an immediate 100 basis point change in interest rates would not materially affect the fair market value of its investment portfolio due to its short-term duration and low-risk profile132 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2024134 - No material changes to the company's internal control over financial reporting occurred during the three months ended June 30, 2024135 PART II - OTHER INFORMATION Legal Proceedings The company is involved in various legal proceedings, including a patent infringement complaint filed by BlueAllele Corp. on July 8, 2024 - On July 8, 2024, BlueAllele Corp. filed a complaint alleging patent infringement by Intellia related to its bi-directional insertion template technology138 Risk Factors The company faces significant risks including the unproven nature of CRISPR/Cas9 technology, reliance on licensed intellectual property, a history of net losses, and dependence on collaborations - The company's CRISPR/Cas9 genome editing technology has limited clinical validation and is an unproven approach that may never lead to marketable products141143 - The company's rights to key CRISPR/Cas9 technology are sublicensed through Caribou from a patent family co-owned by UC/Vienna/Charpentier, with ongoing legal proceedings potentially affecting these rights142175176 - The company has incurred net losses since inception, anticipates continued losses, and may never achieve profitability, with revenue generation dependent on successful product candidates142219 - The company relies on collaborations, particularly with Regeneron, for technological advancement and potential revenue, where termination or adverse changes could harm the business142266 Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the period - None336 Other Information Michael P. Dube, VP and Chief Accounting Officer, adopted a Rule 10b5-1 trading arrangement on June 27, 2024, for the sale of company securities - On June 27, 2024, Michael P. Dube (VP, Chief Accounting Officer) adopted a Rule 10b5-1 trading arrangement for the sale of company securities338 Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents and required certifications