MeiraGTx(US:MGTX)2024-05-09 12:21PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The company presents its unaudited condensed consolidated financial statements for the period ending March 31, 2024 Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $119,206 | $129,566 | | Total Current Assets | $149,300 | $159,622 | | TOTAL ASSETS | $309,235 | $326,744 | | Liabilities & Shareholders' Equity | | | | Total Current Liabilities | $47,543 | $67,078 | | Deferred revenue - related party | $53,331 | $34,017 | | Note payable, net | $72,391 | $72,119 | | TOTAL LIABILITIES | $187,501 | $188,567 | | Total Shareholders' Equity | $121,734 | $138,177 | | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $309,235 | $326,744 | Condensed Consolidated Statements of Operations and Comprehensive Loss Statement of Operations (in thousands, except per share data) | Account | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Total revenue | $697 | $3,334 | | General and administrative | $13,147 | $12,772 | | Research and development | $34,322 | $22,322 | | Total operating expenses | $47,469 | $35,094 | | Loss from operations | $(46,772) | $(31,760) | | Gain on sale of nonfinancial assets | $29,018 | $— | | Net loss | $(20,442) | $(30,364) | | Basic and diluted net loss per ordinary share | $(0.32) | $(0.62) | Condensed Consolidated Statements of Cash Flows Statement of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(36,741) | $(37,392) | | Net cash provided by (used in) investing activities | $27,340 | $(8,605) | | Net cash used in financing activities | $(1,270) | $(1,231) | | Net decrease in cash, cash equivalents and restricted cash | $(10,671) | $(47,228) | - Cash provided by investing activities in Q1 2024 was primarily driven by $29.0 million in proceeds from the sale of nonfinancial assets to Janssen, a significant change from the $8.6 million used in Q1 2023 for property and equipment purchases29233 Notes to Condensed Consolidated Financial Statements Key disclosures cover the Janssen asset sale, liquidity position, share-based compensation, and debt financing agreements - On December 20, 2023, the Company entered into an Asset Purchase Agreement with Janssen, selling assets related to its XLRP-RPGR product candidate (bota-vec) for $65.0 million upfront and up to $350.0 million in future contingent payments3233 - A $50.0 million milestone payment from Janssen was achieved during the first quarter of 2024 related to the initiation of the extension study for the Phase 3 LUMEOS clinical trial34130 - As of March 31, 2024, the Company had $120.3 million in cash, cash equivalents, and restricted cash, which management estimates is sufficient to cover expenses for at least the next twelve months39 - The Company has a senior secured financing agreement with Perceptive for an initial $75.0 million, with an option for an additional $25.0 million, at an annual interest rate of 15.36% as of March 31, 2024153 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, clinical developments, the Janssen asset sale, and the company's liquidity outlook Recent Development Highlights and Anticipated Milestones - AAV-hAQP1 (Xerostomia): The Phase 1 AQUAx study showed statistically significant improvements in patient-reported outcomes, and the pivotal Phase 2 study is ongoing with FDA alignment to support a potential BLA filing175181 - AAV-GAD (Parkinson's Disease): Dosing is complete in the Phase 1 bridging study, with plans to initiate Phase 3 study design discussions with regulators in the second half of 2024182 - Riboswitch Platform: The company is advancing its gene regulation platform for obesity and CAR-T therapies, with data to be presented at an R&D Day in the second half of 2024182 - Bota-vec (XLRP): Received a $50 million milestone payment from Janssen in Q1 2024, with an additional $15 million in near-term milestones anticipated in 2024180183189 Results of Operations Comparison of Three Months Ended March 31, 2024 and 2023 (in thousands) | Account | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Total revenue | $697 | $3,334 | $(2,637) | | General and administrative | $13,147 | $12,772 | $375 | | Research and development | $34,322 | $22,322 | $12,000 | | Loss from operations | $(46,772) | $(31,760) | $(15,012) | | Gain on sale of nonfinancial assets | $29,018 | $— | $29,018 | | Net loss | $(20,442) | $(30,364) | $9,922 | - License revenue decreased by $3.3 million due to the termination of the Janssen Collaboration Agreement in December 2023211 - Research and development expenses increased by $12.0 million, primarily because Janssen reimbursements decreased by $21.9 million following the collaboration's termination217219 - A gain on sale of nonfinancial assets of $29.0 million was recognized in Q1 2024 from the allocation of the $50.0 million Janssen milestone payment223 Liquidity and Capital Resources - As of March 31, 2024, the company had $120.3 million in cash, cash equivalents, and restricted cash228 - Management estimates current cash and expected milestones will fund operations and capital expenditures into the first quarter of 2026227 - Net cash used in operating activities was $36.7 million for the three months ended March 31, 2024, compared to $37.4 million for the same period in 2023228229230 - The company raised gross proceeds of $1.6 million in Q1 2024 through its $100.0 million "at-the-market" (ATM) equity offering program122 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company details its primary market risk exposures from foreign currency fluctuations and variable-rate debt - Foreign Currency Risk: A hypothetical 10% unfavorable movement in foreign currency exchange rates would have resulted in an additional loss of approximately $10.0 million for Q1 2024239 - Interest Rate Risk: A hypothetical 1% increase in SOFR would increase annual interest expense by approximately $0.8 million due to its variable-rate debt240 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2024242 - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls243 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reports that it is not subject to any material legal proceedings - The company is not subject to any material legal proceedings245 Item 1A. Risk Factors The company outlines significant risks related to its financial position, development, commercialization, and intellectual property Risks Related to Financial Position and Need for Additional Capital - The company has a history of significant losses, with an accumulated deficit of $574.7 million as of March 31, 2024, and expects continued losses247 - The company will require additional capital to fund operations, and failure to raise it could force delays or reductions in R&D programs258 - There is no guarantee of receiving future milestone payments from the Janssen Asset Purchase Agreement, which could adversely affect the company's financial position253 Risks Related to Discovery, Development, Clinical Testing, Manufacturing and Regulatory Approval - Gene therapy is a novel field with an uncertain and evolving regulatory landscape, making it difficult to predict the time and cost of obtaining approval280 - Clinical trials are expensive, time-consuming, and have uncertain outcomes, with potential for substantial delays286289 - The company is subject to significant manufacturing regulations (GMP), and any failure to meet requirements could delay development and commercialization323329 Risks Related to Commercialization - The company faces significant competition from large pharmaceutical and biotechnology companies401403 - Successful commercialization depends on obtaining adequate coverage and reimbursement from government and private insurers, which is uncertain404 - The company lacks sales, marketing, and distribution infrastructure and may not be successful in establishing these capabilities416 Risks Related to Intellectual Property - The company depends on technology licensed from others and could lose its rights if it fails to comply with license obligations450 - The ability to compete depends on obtaining and maintaining patent protection, but the patent process is uncertain and may be challenged452 - Third parties may assert patent infringement claims, which could result in substantial costs and block commercialization460 Item 5. Other Information The company discloses the adoption of a Rule 10b5-1 trading plan by its President and CEO - On March 21, 2024, President and CEO Alexandria Forbes, Ph.D., adopted a Rule 10b5-1 trading plan for the sale of up to 190,000 ordinary shares552 Item 6. Exhibits The section lists all exhibits filed with the report, including officer certifications and XBRL data