REGENXBIO(RGNX) - 2020 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION Financial Statements (Unaudited) Unaudited consolidated financial statements for Q2 2020 show a net loss and decreased total assets, reflecting the period's financial performance Consolidated Balance Sheet Highlights (in thousands of dollars) | | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Assets | $449,738 | $497,908 | | Cash and cash equivalents | $94,222 | $69,514 | | Marketable securities | $245,018 | $330,481 | | Total Liabilities | $51,877 | $47,711 | | Total Stockholders' Equity | $397,861 | $450,197 | Consolidated Statements of Operations Highlights (in thousands of dollars) | | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Total Revenues | $34,210 | $8,765 | | Total Operating Expenses | $113,743 | $81,543 | | Loss from operations | $(79,533) | $(72,778) | | Net Loss | $(73,800) | $(33,685) | | Net Loss Per Share | $(1.98) | $(0.92) | - The company is a clinical-stage biotechnology firm focused on gene therapy via its proprietary NAV Technology Platform, licensed to third parties and used for its internal pipeline, with Zolgensma® as a commercial product[26] - As of June 30, 2020, the company reported an accumulated deficit of $251.6 million, with $339.2 million in cash, cash equivalents, and marketable securities deemed sufficient to fund operations for at least the next 12 months[27] - Accounts receivable included $28.8 million from a license agreement with Abeona Therapeutics Inc., which led to the agreement's termination and an ongoing arbitration proceeding to collect unpaid fees due to Abeona's payment failure[67][68][69] Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes financial performance, pipeline progress, and COVID-19 impacts, confirming sufficient liquidity for the next 12 months - The company is advancing its pipeline, with plans to initiate a pivotal program for the subretinal delivery of RGX-314 for wet AMD in the second half of 2020 and a Phase II trial for its suprachoroidal delivery in Q3 2020[85][86] - The COVID-19 pandemic has not significantly impacted financial results for the period but is expected to delay new headquarters construction and potentially affect future clinical trials[96][97] Comparison of Results of Operations (in thousands of dollars) | | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $16,566 | $7,881 | $34,210 | $8,765 | | R&D Expense | $38,111 | $29,483 | $75,146 | $54,686 | | G&A Expense | $15,554 | $13,405 | $30,387 | $24,963 | | Net Loss | $(33,762) | $(1,457) | $(73,800) | $(33,685) | - The increase in license and royalty revenue was primarily driven by higher royalty revenue from sales of Zolgensma, totaling $11.9 million and $21.9 million for the three and six months ended June 30, 2020, respectively[116][120] - R&D expenses increased by $20.5 million for the first six months of 2020 compared to 2019, mainly due to a $9.1 million increase in personnel-related costs from higher headcount and increased external costs for manufacturing and clinical trial activities[121] - As of June 30, 2020, the company had $339.2 million in cash, cash equivalents, and marketable securities, expected to fund operations and capital expenditures for at least the next 12 months[122] Quantitative and Qualitative Disclosures About Market Risk No material changes to the company's market risk exposure were reported for the six months ended June 30, 2020 - There have been no material changes to the company's exposure to market risk during the six months ended June 30, 2020[142] Controls and Procedures Disclosure controls and procedures were effective as of June 30, 2020, with no material changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2020[143][144] - No changes occurred during the quarter ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[145] PART II—OTHER INFORMATION Legal Proceedings The company is in arbitration with Abeona Therapeutics Inc. to collect $28.0 million in unpaid license fees after agreement termination - Abeona Therapeutics Inc. failed to pay an $8.0 million license fee due by April 1, 2020, resulting in a breach and subsequent termination of the license agreement[149] - Upon termination, an additional $20.0 million fee became payable, bringing the total amount due from Abeona to $28.0 million, plus interest[149][150] - The company has filed a counterclaim in arbitration to collect the unpaid fees and believes its risk of loss from Abeona's claim is remote[150] Risk Factors Updated risk factors highlight COVID-19 impacts on operations and clinical development, alongside risks from third-party collaborations - The COVID-19 pandemic could adversely affect business by delaying clinical trials, disrupting the supply chain, and delaying the construction of the new cGMP production facility[152][154][155] - The company faces risks related to its reliance on third-party licensees and collaborators, including lack of control over development, potential for disputes, and termination of agreements, which could harm financial results[158][159] - The ongoing arbitration with Abeona is presented as an example of risks related to third-party agreements, which could result in delayed or non-payment of significant fees and have a material adverse effect on the business[162][163] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported for the period - None[165] Defaults Upon Senior Securities No defaults upon senior securities were reported - None[166] Mine Safety Disclosures This item is not applicable to the company - Not Applicable[167] Other Information No information was reported for this item - None[168] Exhibits This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and Inline XBRL financial data - The exhibits include certifications from the CEO and CFO under Section 302 of the Sarbanes-Oxley Act (Exhibits 31.1 and 31.2)[170] - Financial data is provided in Inline XBRL format as Exhibit 101[170]