Editas Medicine(EDIT) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Editas Medicine's unaudited condensed consolidated financial statements for Q1 2024 are presented, highlighting financial position and performance Condensed Consolidated Balance Sheets Total assets decreased to $440.3 million as of March 31, 2024, primarily due to reduced cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $69,227 | $123,652 | | Marketable securities | $307,549 | $303,483 | | Total current assets | $305,555 | $340,829 | | Total assets | $440,347 | $499,153 | | Liabilities & Equity | | | | Total current liabilities | $66,487 | $63,217 | | Total liabilities | $145,947 | $150,056 | | Total stockholders' equity | $294,400 | $349,097 | Condensed Consolidated Statements of Operations Net loss increased to $62.0 million in Q1 2024, driven by higher R&D expenses and decreased collaboration revenues Q1 2024 vs. Q1 2023 Statement of Operations (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Collaboration and other R&D revenues | $1,135 | $9,851 | | Research and development expenses | $48,787 | $37,804 | | General and administrative expenses | $19,339 | $23,008 | | Total operating expenses | $68,126 | $60,812 | | Operating loss | ($66,991) | ($50,961) | | Net loss | ($61,950) | ($49,036) | | Net loss per share, basic and diluted | ($0.76) | ($0.71) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $49.9 million in Q1 2024, leading to a $54.4 million decrease in total cash Q1 2024 vs. Q1 2023 Cash Flow Summary (in thousands) | Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($49,872) | ($35,768) | | Net cash (used in) provided by investing activities | ($4,745) | $23,267 | | Net cash provided by financing activities | $192 | $0 | | Net decrease in cash, cash equivalents, and restricted cash | ($54,425) | ($12,501) | Notes to Condensed Consolidated Financial Statements These notes detail liquidity, accumulated deficit, collaboration agreements, and stock-based compensation expenses - Existing cash and marketable securities are projected to fund operations for at least the next twelve months from May 8, 2024[28] - As of March 31, 2024, the company reported an accumulated deficit of $1.3 billion, indicating a need for substantial additional capital[28] - The March 2024 amendment to the BMS collaboration agreement extends it to November 2026, with $56.7 million in deferred revenue to be recognized prospectively[44][45][47] Stock-Based Compensation Expense (in thousands) | Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Research and development | $2,908 | $2,086 | | General and administrative | $4,677 | $2,421 | | Total | $7,585 | $4,507 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's genomic medicine development, Q1 2024 financial results, and liquidity projections into 2026 - The company focuses on advancing its lead ex vivo program, reni-cel, for SCD and TDT, and developing next-generation in vivo gene editing medicines[60][61] - Existing cash, marketable securities, and Vertex payments are expected to fund operations and capital expenditures into 2026[106] - Net loss for Q1 2024 was $62.0 million, up from $49.0 million in Q1 2023, due to higher R&D expenses and lower collaboration revenue[70] Overview Editas Medicine, a clinical-stage gene editing company, focuses on its reni-cel program and strategic partnerships with Vertex and BMS - The lead program, reni-cel, is undergoing evaluation in the RUBY trial for severe SCD and the EdiTHAL trial for TDT[61][63] - Additional clinical data from RUBY and EdiTHAL trials are expected in mid-2024 and by year-end 2024[64] - A Vertex license agreement provided a $50.0 million upfront payment in Q4 2023 and a $10.0 million annual license fee in Q1 2024[67] - The BMS collaboration was extended in March 2024 to November 2026, with options for further extension[68] Results of Operations Q1 2024 saw decreased collaboration revenue, increased R&D expenses, and reduced G&A expenses from lower professional fees Q1 2024 vs. Q1 2023 Operating Results Summary (in thousands) | Item | Q1 2024 | Q1 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Collaboration & other R&D revenues | $1,135 | $9,851 | ($8,716) | (88)% | | Research and development | $48,787 | $37,804 | $10,983 | 29% | | General and administrative | $19,339 | $23,008 | ($3,669) | (16)% | | Total operating expenses | $68,126 | $60,812 | $7,314 | 12% | - The $11.0 million increase in R&D expenses was primarily due to $5.2 million in reni-cel program costs and $4.6 million in sublicense and license fees[87][89] - The $3.7 million decrease in G&A expenses resulted mainly from a $6.1 million reduction in professional service expenses from 2023 strategic initiatives[89][90] Liquidity and Capital Resources The company held $376.8 million in cash and marketable securities as of March 31, 2024, projecting liquidity into 2026 - As of March 31, 2024, the company held $376.8 million in cash, cash equivalents, and marketable securities[92] - A $300.0 million at-the-market (ATM) facility is available but remained unused as of March 31, 2024[93] - Cash runway is projected to extend into 2026, supported by current reserves and Vertex license payments[106] Q1 2024 vs. Q1 2023 Cash Flow Summary (in thousands) | Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($49,872) | ($35,768) | | Net cash (used in) provided by investing activities | ($4,745) | $23,267 | | Net cash provided by financing activities | $192 | $0 | Item 3. Quantitative and Qualitative Disclosures About Market Risk Primary market risk is interest rate sensitivity on its $376.8 million investment portfolio, with no material foreign currency exposure - The company's primary market risk is interest rate sensitivity on its $376.8 million portfolio of cash, cash equivalents, and marketable securities[115] - A 1% (100 basis point) change in interest rates is not expected to materially affect the portfolio's fair value due to its short-term, low-risk nature[115] - The company has no material exposure to foreign currency exchange rate risk, as liabilities are primarily U.S. dollar-denominated[116] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control - The CEO and CFO concluded that disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2024[117] - No material changes occurred in internal control over financial reporting during the quarter[118] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company may face legal proceedings in the ordinary course of business, including intellectual property disputes, with uncertain outcomes - The company may be involved in ordinary course litigation, and certain licensed intellectual property rights are subject to validity disputes[121] Item 1A. Risk Factors This section refers to the comprehensive risk factors detailed in the Annual Report on Form 10-K, with no new material changes - Readers are directed to the 'Risk Factors' section of the Annual Report on Form 10-K for a full discussion of risks[122] Item 5. Other Information This section discloses that no directors or officers adopted or terminated trading arrangements during Q1 2024 - No directors or officers adopted or terminated Rule 10b5-1 or other trading arrangements during the first quarter of 2024[125] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including the BMS collaboration amendment and officer certifications - Key exhibits include the First Amendment to the collaboration agreement with Juno Therapeutics, Inc., dated March 21, 2024, and officer certifications[127]