Generation Bio(GBIO) - 2021 Q2 - Quarterly Report

Financial Performance - The company reported net losses of $56.4 million for the six months ended June 30, 2021, compared to $35.4 million for the same period in 2020, with an accumulated deficit of $245.3 million as of June 30, 2021[86]. - The net loss for the three months ended June 30, 2021, was $30.8 million, compared to a net loss of $17.7 million for the same period in 2020, reflecting an increase in losses of 73.7%[108]. - Total operating expenses for the six months ended June 30, 2021, were $56.5 million, up from $35.8 million in 2020, indicating a 57.9% increase[113]. - Cash used in operating activities for the six months ended June 30, 2021, was $48.5 million, compared to $33.3 million in 2020, representing a 45.6% increase[118]. - Interest income for the six months ended June 30, 2021, was $0.1 million, down from $0.4 million in 2020, a decrease of 71.4%[116]. - The company expects to incur significant expenses and operating losses for the foreseeable future as it continues its research and development activities[117]. - Existing cash, cash equivalents, and marketable securities are projected to fund operations into 2024, but additional financing may be required sooner than expected[125]. - The company does not have any committed external sources of funds and will need to seek further funding through various means, which may lead to dilution for stockholders[125]. - If sufficient capital is not raised, the company may need to significantly curtail or discontinue research, development programs, or commercialization efforts[126]. Research and Development - The company plans to submit an IND application for its hemophilia A program in 2023 and expects to report Factor VIII expression data in non-human primates by year-end[81]. - The company is advancing a broad portfolio of programs targeting rare and prevalent diseases, initially focusing on liver and retina diseases[79]. - The company aims to enable patients to produce therapeutic antibodies from their own cells for years from a single dose, with in vivo studies showing a peak antibody concentration of 8µg/ml[80]. - The increase in research and development expenses was primarily due to heightened preclinical activity and increased headcount in the R&D function[114]. - Research and development expenses increased to $22.7 million for the three months ended June 30, 2021, up from $13.5 million in the same period of 2020, representing a 68.3% increase[109]. - The company expects substantial increases in expenses related to ongoing activities, particularly in preclinical and clinical trials for product candidates[125]. Manufacturing and Operations - The company has developed a rapid enzymatic synthesis process (RES) that shortens the ceDNA production cycle time from 28 days to one day, aiming to manufacture drug candidates cost-effectively[83]. - The company plans to invest up to $45 million in a new cGMP-compliant manufacturing facility in Waltham, Massachusetts, expected to be operational in 2023[84]. - The company plans to transition all portfolio programs to the RES manufacturing process to enhance scalability and reduce variability[83]. General and Administrative Expenses - General and administrative expenses rose to $8.2 million for the three months ended June 30, 2021, compared to $4.3 million in 2020, marking an increase of 92.5%[111]. COVID-19 Impact - The company is closely monitoring the impact of the COVID-19 pandemic on its operations and has implemented safety measures for its employees[93]. Accounting Policies - Critical accounting policies related to accrued research and development expenses and stock-based compensation are deemed most critical for financial statement preparation[129]. - There have been no material changes to critical accounting policies and estimates from those disclosed in the Annual Report[129]. - The company currently has no off-balance sheet arrangements[130]. - Recently adopted accounting pronouncements that may impact financial position and results of operations are disclosed in the Quarterly Report[131]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[132].