Sangamo Therapeutics(US:SGMO)2023-02-22 16:00Company Overview - The company is a clinical-stage biotechnology firm with no approved products or product revenues, relying on successful clinical trial results for future success [16]. - The company has incurred significant operating losses since inception and anticipates continued losses for the foreseeable future, indicating a need for substantial additional funding [16]. - The company relies heavily on collaborations with larger biopharmaceutical companies for revenue generation and product development, which poses risks if conflicts arise [16]. - The company faces significant competition in biotechnology and genomic medicine, which may impact its market position [16]. - The company has limited experience in manufacturing and relies heavily on third-party manufacturers, which could lead to unexpected costs and supply interruptions [16]. Financial Performance - Total revenues for 2022 were $111,299,000, a slight increase from $110,701,000 in 2021 [556]. - Research and development expenses rose to $249,898,000 in 2022, compared to $230,819,000 in 2021, reflecting a 8.9% increase [556]. - The net loss for 2022 was $192,278,000, compared to a net loss of $178,297,000 in 2021, indicating a 7.8% increase in losses [556]. - Total current assets decreased to $300,327,000 in 2022 from $398,769,000 in 2021, a decline of 24.6% [554]. - Total liabilities decreased to $267,551,000 in 2022 from $346,580,000 in 2021, a reduction of 22.8% [554]. - Deferred revenues decreased significantly from $85,711,000 in 2021 to $51,780,000 in 2022, a decline of 39.6% [554]. - The company reported a basic and diluted net loss per share of $1.25 for 2022, compared to $1.23 in 2021 [556]. - Cash and cash equivalents decreased to $100,444,000 in 2022 from $178,872,000 in 2021, a drop of 43.8% [554]. - The total stockholders' equity decreased to $294,958,000 in 2022 from $375,343,000 in 2021, a decline of 21.4% [554]. - The net loss for the year ended December 31, 2022, was $192.3 million, compared to a net loss of $178.3 million in 2021 and $121.1 million in 2020 [565]. - Cash, cash equivalents, and restricted cash at the end of 2022 totaled $101.9 million, down from $180.4 million at the end of 2021 [565]. - The company had capital resources of $307.5 million as of December 31, 2022, consisting of cash, cash equivalents, and marketable securities [569]. - The company reported stock-based compensation expenses of $31.7 million in 2022, slightly down from $33.0 million in 2021 [565]. - The company experienced a net cash used in operating activities of $223.6 million in 2022, compared to $233.3 million in 2021 [565]. Currency and Risk Exposure - The company reported foreign currency transaction losses of $3.1 million in 2022, highlighting exposure to foreign currency risk [539]. - A 10% strengthening or weakening in foreign currency rates would have increased or decreased net loss for the year ended December 31, 2022, by approximately $3.3 million [538]. - The company is exposed to credit risk due to investments in financial instruments, with established policies to manage this risk [597]. Collaboration and Revenue Sources - Revenue from major collaboration agreements for 2022 included 36% from Novartis, 35% from Kite Pharma, and 26% from Biogen [588]. - The Company recognized total revenue of $39.728 million related to the Novartis agreement in 2022, an increase from $37.944 million in 2021, reflecting a growth of approximately 4.7% [626]. - The upfront license fee received from Novartis was $75 million, with potential additional earnings of up to $420 million in development milestones and $300 million in commercial milestones [623]. - Under the collaboration with Biogen, the Company received an upfront license fee of $125 million and could earn up to approximately $2.4 billion in total milestone payments [629]. - The Company had deferred revenue of $9.6 million related to the Novartis agreement as of December 31, 2022, down from $40.9 million in 2021, indicating a decrease of approximately 76.5% [626]. - The Company had deferred revenue of $132.2 million related to the Biogen agreement as of December 31, 2022 [637]. - Kite Pharma agreement includes an upfront payment of $150.0 million and potential milestone payments totaling up to $3.0 billion [643]. - Revenue recognized under the Kite agreement was $38.6 million in 2022, an increase from $25.5 million in 2021 [652]. Operational Challenges and Future Outlook - The company plans to continue funding operations through collaborations, strategic partnerships, and equity securities issuance [569]. - Management believes existing resources will be sufficient to fund operations for at least the next 12 months [569]. - The company raised substantial doubt about its ability to continue as a going concern due to ongoing development projects requiring significant expenditures [571]. - The Company plans to implement cost preservation measures, including deferring certain R&D programs and pausing new hiring, to address liquidity needs [573]. - Management believes that the planned actions will provide sufficient liquidity to meet financial obligations over the next twelve months [575]. - The Company is actively seeking additional capital through various financing options, including public or private equity, debt financings, and strategic collaborations [577]. Asset Management - The company’s investment portfolio consists of high-quality securities, with minimal interest rate risk, and is not leveraged [536]. - The fair value of cash equivalents and marketable securities is classified as Level 1 for money market funds and Level 2 for other securities, indicating a reliance on observable market prices [618]. - The Company has cash equivalents totaling $50,820,000 and marketable securities amounting to $207,033,000 as of December 31, 2022, leading to total cash equivalents and marketable securities of $257,853,000 [617]. - Total cash equivalents and marketable securities as of December 31, 2022, amounted to $258.743 million, a decrease from $406.057 million in 2021, representing a decline of approximately 36.3% [619]. Stock and Compensation - The Company has stock options and RSUs outstanding totaling 18,560,755 as of December 31, 2022, which are anti-dilutive and excluded from diluted net loss per share calculations [612]. - The Company awarded 4,349,795, 2,140,785, and 2,517,101 Restricted Stock Units (RSUs) during the years ended December 31, 2022, 2021, and 2020, respectively [724]. - Total stock-based compensation expense recognized was $31.7 million, $33.0 million, and $25.7 million for the years ended December 31, 2022, 2021, and 2020, respectively [726]. - Employee stock-based compensation expense was determined using the Black-Scholes option valuation model for stock options and employee share purchases under the ESPP [727]. Legal and Regulatory Matters - The company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the position will be sustained upon examination [605]. - The company evaluates its property and equipment for impairment whenever events indicate that the carrying amount may not be recoverable [599]. - The Company has not identified any impairment of goodwill or indefinite-lived intangible assets as of December 31, 2022 [590].