Intellia Therapeutics(NTLA) - 2023 Q4 - Annual Report

Financial Performance - Collaboration revenue decreased by $15.8 million to $36.3 million in 2023 compared to $52.1 million in 2022, primarily due to a $10.3 million adjustment from a contract modification[460] - Net loss for 2023 was $481.2 million, slightly higher than the $474.2 million loss in 2022, with a $50.1 million increase in other income (expense), net, driven by higher interest income[459][466] - Net cash used in operating activities was $394.1 million in 2023, primarily due to a net loss of $481.2 million, partially offset by non-cash charges including stock-based compensation of $134.1 million[482] - Net cash provided by financing activities was $130.3 million in 2023, primarily from $119.8 million in net proceeds from at-the-market offerings[486] - The company's investing activities used $31.3 million in 2023, primarily due to $904.5 million in marketable securities purchases, offset by $887.1 million in maturing marketable securities[484] Research and Development - Research and development expenses increased by $15.1 million to $435.1 million in 2023, driven by higher external costs for programs like NTLA-2001 ($16.6 million increase) and NTLA-2002 ($12.9 million increase)[461][463] - Research and development expenses for NTLA-2001 increased by 44% to $54.5 million in 2023, while NTLA-2002 expenses surged by 112% to $24.6 million[463] - The company expects research and development expenses to increase in 2024 as it advances global pivotal trials for NTLA-2001 and NTLA-2002, and progresses the NTLA-3001 program[464] General and Administrative Expenses - General and administrative expenses rose by $26.2 million to $116.5 million in 2023, mainly due to increased employee-related expenses, including $16.7 million in stock-based compensation[465] - Stock-based compensation increased by $25.9 million in 2023, driven by higher employee headcount[463] Cash and Investments - The company had $1,012.1 million in cash, cash equivalents, and marketable securities as of December 31, 2023[468] - Cash equivalents, restricted cash equivalents, and marketable securities totaled $921.6 million as of December 31, 2023[507] - Primary market risk exposure is interest rate sensitivity due to investments in marketable securities[507] - A 100 basis points change in interest rates would not materially affect the fair market value of the investment portfolio[507] - Declines in interest rates would reduce future investment income[507] Strategic Initiatives and Workforce - The company announced a workforce reduction of approximately 15% in January 2024 as part of a strategic review to streamline operations[478] - The company raised $121.9 million in 2023 through the issuance of 4,122,824 shares of common stock under the 2022 Sale Agreement[472] Collaboration and Milestone Payments - The company is eligible to earn milestone payments and royalties under collaborations with SparingVision, ONK, Regeneron, and Kyverna, contingent on research and development outcomes[476] - The company does not include potential future milestone or royalty payments in its contractual obligations due to uncertainty, with a research milestone related to Rewrite achieved and settled in January 2023[492] Revenue Recognition and Accounting - Revenue recognition is based on ASC 606, with significant judgments required for determining transaction prices, standalone selling prices, and revenue recognition patterns[497][499] - Stock-based compensation expense is measured using the Black-Scholes option pricing model, with significant judgments related to volatility and expected life assumptions[502][503] Market and Economic Risks - No foreign currency or derivative financial instruments held by the company[508] - Inflation increased labor and clinical trial costs but did not materially affect 2023 results[508] Future Outlook - The company expects its cash, cash equivalents, and marketable securities as of December 31, 2023, along with research and cost reimbursement funding from collaboration agreements, to fund ongoing operating expenses and capital expenditure requirements into mid-2026[478] - The company's ability to generate revenue and achieve profitability depends on successful development of its CRISPR/Cas9 technology platform, regulatory approvals, and market acceptance of product candidates[479] Contractual Commitments - Contractual commitments for property leases as of December 31, 2023, totaled $146.5 million, with an additional $146.0 million committed for a new lease starting in the second half of 2024[489][490]