REGENXBIO(US:RGNX)2024-05-08 20:16PART I—FINANCIAL INFORMATION Item 1. Financial Statements The unaudited consolidated financial statements for Q1 2024 show a reduced net loss, strengthened balance sheet from a public offering, and decreased cash burn from operations Consolidated Balance Sheets Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $112,975 | $34,522 | | Total current assets | $395,418 | $334,971 | | Total assets | $629,215 | $573,970 | | Total current liabilities | $110,179 | $130,272 | | Total liabilities | $238,549 | $262,228 | | Total stockholders' equity | $390,666 | $311,742 | - The increase in cash and stockholders' equity was primarily driven by a public offering of common stock and pre-funded warrants in March 20242269 Consolidated Statements of Operations and Comprehensive Loss Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Total revenues | $15,622 | $19,138 | | Research and development | $54,844 | $58,516 | | General and administrative | $18,291 | $22,634 | | Loss from operations | ($63,863) | ($66,157) | | Net loss | ($63,330) | ($66,676) | | Net loss per share, basic and diluted | ($1.38) | ($1.53) | - Revenues decreased primarily due to non-recurring development milestone revenue recognized in Q1 2023 and a $0.9 million decrease in Zolgensma royalty revenues137 Consolidated Statements of Stockholders' Equity - Total stockholders' equity increased from $311.7 million at year-end 2023 to $390.7 million at March 31, 2024, primarily driven by $131.1 million in net proceeds from a public offering, offset by a net loss of $63.3 million for the quarter2269 Consolidated Statements of Cash Flows Consolidated Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($55,455) | ($80,918) | | Net cash provided by investing activities | $13,183 | $63,094 | | Net cash provided by (used in) financing activities | $120,725 | ($9,037) | | Net increase (decrease) in cash | $78,453 | ($26,861) | - The significant cash provided by financing activities in Q1 2024 was due to $131.6 million in net proceeds from a public offering of common stock and pre-funded warrants25149 Notes to Consolidated Financial Statements - In March 2024, the company entered into an agreement to sublease its New York office, resulting in an impairment charge of $2.1 million on long-lived assets, including the right-of-use asset and property and equipment575961 - The liability related to the sale of future Zolgensma royalties to HCR decreased to $83.3 million as of March 31, 2024, from $94.1 million at year-end 202368 - In March 2024, the company completed a public offering of common stock and pre-funded warrants, receiving aggregate net proceeds of $131.1 million69 - Zolgensma royalties for Q1 2024 were $15.2 million, a decrease from $16.1 million in Q1 20237481 - Under the AbbVie collaboration, the company recorded a net cost reimbursement of $24.6 million as a reduction to operating expenses in Q1 2024, compared to $18.3 million in Q1 202391 - The company implemented a corporate restructuring in November 2023, which included a 15% workforce reduction, with the remaining restructuring liability at $0.3 million as of March 31, 2024101102103 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses clinical program progress, analyzes decreased revenues and operating expenses, and highlights improved liquidity from a recent public offering Overview of Business and Product Candidates - ABBV-RGX-314 (for wet AMD & DR): - Subretinal delivery pivotal trials (ATMOSPHERE® and ASCENT™) are on track to support global regulatory submissions in the first half of 2026 - Suprachoroidal delivery (AAVIATE® trial) data updates are expected in Q3 2024 - The first pivotal trial for DR (ALTITUDE®) is expected to initiate in the first half of 2025111112113 - RGX-202 (for Duchenne): - Dose level 2 has been selected as the pivotal dose - Initiation of the pivotal trial is expected in late Q3 to early Q4 2024, with plans to use microdystrophin expression as a surrogate endpoint for accelerated approval114115 - RGX-121 (for MPS II): - The pivotal phase of the CAMPSIITE® trial achieved its primary endpoint - The company plans to submit a Biologics License Application (BLA) in 2024, using a surrogate endpoint for accelerated approval115 Results of Operations Comparison of Operating Results (in thousands) | Line Item | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | License and royalty revenue | $15,622 | $19,138 | ($3,516) | | Research and development | $54,844 | $58,516 | ($3,672) | | General and administrative | $18,291 | $22,634 | ($4,343) | | Net loss | ($63,330) | ($66,676) | $3,346 | - The decrease in R&D expenses was primarily due to a $7.1 million reduction in manufacturing costs, a $3.3 million decrease in personnel costs (related to the 2023 restructuring), and a $2.0 million drop in lab facility costs, partially offset by a $9.2 million increase in clinical trial activity costs138 - General and administrative expenses decreased mainly due to a $2.8 million reduction in professional services and a $1.3 million decrease in personnel-related costs, also driven by the 2023 restructuring139 Liquidity and Capital Resources - As of March 31, 2024, the company had $380.5 million in cash, cash equivalents, and marketable securities139 - Management believes current capital is sufficient to fund operating expenses and capital expenditure requirements for at least the next 12 months139 - In March 2024, a public offering of common stock and pre-funded warrants generated aggregate net proceeds of $131.1 million140 - Net cash used in operating activities decreased to $55.5 million in Q1 2024 from $80.9 million in Q1 2023, largely due to lower operating expenses and increased cost reimbursement from AbbVie143144 Item 3. Quantitative and Qualitative Disclosures about Market Risk No material changes to the company's market risk exposure were reported for Q1 2024 compared to the 2023 Annual Report - There have been no material changes to the company's exposure to market risk during the first quarter of 2024158 Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2024, the company's disclosure controls and procedures were effective at a reasonable assurance level160 - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting161 PART II—OTHER INFORMATION Item 1. Legal Proceedings The company is not currently involved in any legal proceedings expected to materially adversely affect its operations or financial condition - The company is not currently party to any legal proceedings expected to have a material adverse effect on its business165 Item 1A. Risk Factors No material changes to the company's risk factors were reported compared to the 2023 Annual Report on Form 10-K - No material changes have occurred to the risk factors disclosed in the company's 2023 Annual Report on Form 10-K166 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities No unregistered sales of equity securities, use of proceeds, or issuer purchases were reported for the period - None reported for the quarter167 Item 5. Other Information Several Section 16 officers and directors adopted Rule 10b5-1 trading plans during the first quarter of 2024 Adoption of Rule 10b5-1 Trading Plans in Q1 2024 | Name | Title | Action | Date Adopted | | :--- | :--- | :--- | :--- | | Olivier Danos | Executive Vice President, Chief Scientific Officer | Adoption | 3/15/2024 | | Curran Simpson | Executive Vice President, Chief Operating Officer | Adoption | 3/15/2024 | | A.N. "Jerry" Karabelas | Director | Adoption | 3/25/2024 | | Vittal Vasista | Executive Vice President, Chief Financial Officer | Adoption | 3/27/2024 | Item 6. Exhibits This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL financial statements - Exhibits filed include CEO/CFO certifications (31.1, 31.2, 32.1) and Inline XBRL data (101)172