Financial Performance - Net loss for Q1 2023 was $28,844,000, compared to a net income of $92,105,000 in Q1 2022, reflecting a significant change in financial performance[13]. - Loss from operations for Q1 2023 was $27,511,000, compared to a loss of $37,618,000 in Q1 2022, indicating an improvement of about 27%[13]. - For the three months ended March 31, 2023, the company reported a net loss of $28.8 million compared to a net income of $92.1 million for the same period in 2022[20]. - The company incurred a loss from operations of $28.8 million during the three months ended March 31, 2023, and has an accumulated deficit of $458.0 million as of the same date[26]. - The accumulated deficit increased to $457,981,000 as of March 31, 2023, from $429,137,000 at the end of 2022[11]. Revenue and Expenses - Collaboration revenue for the three months ended March 31, 2023, was $802,000, consistent with the same period in 2022[13]. - Total operating expenses decreased to $28,313,000 in Q1 2023 from $38,420,000 in Q1 2022, representing a reduction of approximately 26%[13]. - Research and development expenses for Q1 2023 were $19,988,000, down from $24,273,000 in Q1 2022, a decrease of approximately 18%[13]. - General and administrative expenses also decreased to $8,325,000 in Q1 2023 from $14,147,000 in Q1 2022, a reduction of about 41%[13]. - The company did not generate any revenue from product sales and does not expect to do so in the foreseeable future[26]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $39.5 million as of March 31, 2023, down from $248.4 million at the end of the same period in 2022[36]. - The company recorded a net cash used in operating activities of $26.1 million for the three months ended March 31, 2023, compared to $30.7 million for the same period in 2022[20]. - The company provided $31.4 million in net cash from investing activities during the three months ended March 31, 2023, compared to $168.3 million in the same period in 2022[20]. - As of March 31, 2023, the company believes its cash and cash equivalents will enable it to continue operations for at least one year[27]. - The company expects to incur additional operating losses and negative operating cash flows for the foreseeable future[26]. Stockholders' Equity and Investments - Total stockholders' equity decreased to $151,899,000 as of March 31, 2023, down from $177,978,000 at the end of 2022[11]. - The Company’s total short-term investments amounted to $110.571 million, with $31.297 million in commercial paper, $57.202 million in US Treasury securities, and $22.072 million in corporate debt securities[63]. - The company has filed a Registration Statement for the registration of up to $250.0 million of its common stock, with $75.0 million available for sale under an "at-the-market" offering[24]. - The company recorded a gain of $131.2 million on the sale of its manufacturing business, with cash received amounting to $130.0 million and a fair value of equity method investment at $31.2 million[80]. Lease and Operating Costs - Operating lease costs for the three months ended March 31, 2023, were $1.1 million, compared to $0.9 million for the same period in 2022[88]. - The company has a noncancelable operating lease for approximately 67,000 square feet, with an initial annual base rent of $39.50 per square foot, increasing by three percent annually[83]. - Total undiscounted lease payments amount to $43.646 million, with a present value of operating lease liabilities at $29.101 million[89]. - Cash paid for lease liabilities in Q1 2023 was $1.101 million, an increase from $0.877 million in Q1 2022[91]. Risks and Future Outlook - The company anticipates continued losses for the foreseeable future and will require additional capital to fund operations[6]. - The company is heavily dependent on the success of its product candidates, with no history of commercializing genetic medicine products, which poses significant risks[6]. - The company does not believe inflation has materially affected its financial condition as of March 31, 2023, but acknowledges potential future impacts on expenses[204]. Stock-Based Compensation - The Company recorded stock-based compensation expense of $2.369 million in Q1 2023, down from $4.051 million in Q1 2022[106]. - The Company expects to recognize $15.8 million of unrecognized compensation expense related to unvested share-based compensation over approximately 2.7 years[106]. - The fair value of stock options granted in Q1 2023 was estimated at $1.06 per share, compared to $1.78 in Q1 2022[101]. - The total intrinsic value of options exercised during Q1 2022 was insignificant, with no options exercised in Q1 2023[101]. Collaboration and Agreements - Under the Supply Agreement with OXB Solutions, the company is committed to purchase approximately $29.7 million worth of AAV-based products in 2023[117]. - The company recorded purchases from OXB Solutions of $4.9 million for drug substance and $1.2 million for process development services during the three months ended March 31, 2023[118]. - The exclusive right of first refusal (ROFR) granted to Pfizer for collaboration on HMI-102 and HMI-103 expired on May 9, 2023[111].
Q32 Bio Inc.(QTTB) - 2023 Q1 - Quarterly Report