SS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30,March 31, 20212022
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission file number: 001-37923
CRISPR THERAPEUTICS AG
(Exact name of Registrant as specified in its charter)
Switzerland | Not Applicable |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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Baarerstrasse 14 6300 Zug, Switzerland | Not Applicable |
(Address of principal executive offices) | (zip code) |
+41 (0)41 561 32 77
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered |
Common Shares, nominal value CHF 0.03 | CRSP | The Nasdaq Global Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated filer | ☒ | Accelerated filer | ☐ |
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Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
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| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒
As of November 1, 2021,May 5, 2022, there were 76,526,96477,457,081 shares of registrant’s common shares outstanding.
Throughout this Quarterly Report on Form 10-Q, the “Company,” “CRISPR,” “CRISPR Therapeutics,” “we,” “us,” and “our,” except where the context requires otherwise, refer to CRISPR Therapeutics AG and its consolidated subsidiaries.
“CRISPR Therapeutics®” standard character mark and design logo, “CTX001TM,” “CTX110TM,” “CTX120TM,” and “CTX130TM,” and “CRISPR TXTM” are trademarks and registered trademarks of CRISPR Therapeutics AG. All other trademarks and registered trademarks contained in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, trademarks, service marks and trade names referred to in this Quarterly Report on Form 10-Q may appear without the ® or ™ symbols and any such omission is not intended to indicate waiver of any such rights.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q are forward-looking statements. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “potential,” “will,” “would” or the negative or plural of these words or similar expressions or variations, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and assumptions that could cause our actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled “Risk Factors,” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q, if any, our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on February 16, 2021,15, 2022, and in other SEC filings. You should not rely upon forward-looking statements as predictions of future events. Such forward-looking statements speak only as of the date of this report. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make or enter into.
You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results, performance or achievements may be materially different from what we expect. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
Investors and others should note that we announce material information to our investors using our investor relations website (https://crisprtx.gcs-web.com/), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media to communicate with the public about our company, our business, our product candidates and other matters. It is possible that the information we post on social media could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels listed on our investor relations website.
Index
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
CRISPR Therapeutics AG
Condensed Consolidated Balance Sheets
(unaudited, in thousands, except share and per share data)
|
| As of |
|
| As of |
| ||||||||||
|
| September 30, |
| December 31, |
|
| March 31, |
| December 31, |
| ||||||
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||
Assets | Assets |
| Assets |
| ||||||||||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
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| ||||
Cash and cash equivalents |
| $ | 1,011,548 |
|
| $ | 1,168,620 |
|
| $ | 683,906 |
| $ | 923,031 |
| |
Marketable securities |
|
| 1,465,812 |
|
|
| 521,713 |
|
|
| 1,537,355 |
| 1,456,098 |
| ||
Accounts receivable |
|
| 152 |
|
|
| 144 |
|
|
| 143 |
| 305 |
| ||
Prepaid expenses and other current assets |
|
| 41,423 |
|
|
| 26,143 |
|
|
| 39,212 |
|
|
| 38,079 |
|
Total current assets |
|
| 2,518,935 |
|
|
| 1,716,620 |
|
|
| 2,260,616 |
| 2,417,513 |
| ||
Property and equipment, net |
|
| 105,883 |
|
|
| 42,160 |
|
|
| 157,453 |
| 137,575 |
| ||
Intangible assets, net |
|
| 139 |
|
|
| 180 |
|
|
| 112 |
| 125 |
| ||
Restricted cash |
|
| 16,848 |
|
|
| 16,848 |
|
|
| 12,123 |
| 16,913 |
| ||
Operating lease assets |
|
| 175,132 |
|
|
| 50,865 |
|
|
| 171,541 |
| 174,460 |
| ||
Other non-current assets |
|
| 4,788 |
|
|
| 1,293 |
|
|
| 4,330 |
|
|
| 5,291 |
|
Total assets |
| $ | 2,821,725 |
|
| $ | 1,827,966 |
|
| $ | 2,606,175 |
|
| $ | 2,751,877 |
|
Liabilities and shareholders’ equity | Liabilities and shareholders’ equity |
| Liabilities and shareholders’ equity |
| ||||||||||||
Current liabilities: |
|
|
|
|
|
|
|
|
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| |||||
Accounts payable |
| $ | 10,167 |
|
| $ | 9,094 |
|
| $ | 27,111 |
| $ | 14,816 |
| |
Accrued expenses |
|
| 68,303 |
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|
| 53,782 |
|
|
| 72,632 |
| 91,003 |
| ||
Deferred revenue, current |
|
| 1,562 |
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|
| 2,341 |
|
|
| — |
| 1,011 |
| ||
Accrued tax liabilities |
|
| 3,265 |
|
|
| 10,473 |
|
|
| 2,608 |
| 724 |
| ||
Operating lease liabilities |
|
| 12,641 |
|
|
| 11,362 |
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|
| 11,076 |
| 12,158 |
| ||
Other current liabilities |
|
| 268 |
|
|
| 7,207 |
|
|
| 270 |
|
|
| 171 |
|
Total current liabilities |
|
| 96,206 |
|
|
| 94,259 |
|
|
| 113,697 |
| 119,883 |
| ||
Deferred revenue, non-current |
|
| 11,776 |
|
|
| 11,776 |
|
|
| 12,323 |
| 12,323 |
| ||
Operating lease liabilities, net of current portion |
|
| 192,734 |
|
|
| 50,067 |
|
|
| 227,904 |
| 212,872 |
| ||
Other non-current liabilities |
|
| 8,086 |
|
|
| 7,630 |
|
|
| 7,335 |
|
|
| 7,339 |
|
Total liabilities |
|
| 308,802 |
|
|
| 163,732 |
|
|
| 361,259 |
|
|
| 352,417 |
|
Commitments and contingencies, see Note 6 |
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Shareholders’ equity: |
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Common shares, CHF 0.03 par value, 145,364,335 and 115,172,786 shares authorized at |
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| 2,366 |
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| 2,277 |
| ||||||||
Treasury shares, at cost, 180,316 shares at September 30, 2021 and 195,316 at December 31, 2020. |
|
| (63 | ) |
|
| (63 | ) | ||||||||
Common shares, CHF 0.03 par value, 145,364,335 shares authorized at |
| 2,407 |
| 2,391 |
| |||||||||||
Treasury shares, at cost, 180,316 shares at March 31, 2022 and at December 31, 2021 |
| (63 | ) |
| (63 | ) | ||||||||||
Additional paid-in capital |
|
| 2,566,057 |
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| 2,235,679 |
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| 2,634,597 |
| 2,598,114 |
| |||
Accumulated deficit |
|
| (54,667 | ) |
|
| (573,576 | ) |
|
| (375,132 | ) |
| (195,915 | ) | |
Accumulated other comprehensive loss |
|
| (770 | ) |
|
| (83 | ) |
|
| (16,893 | ) |
|
| (5,067 | ) |
Total shareholders' equity |
|
| 2,512,923 |
|
|
| 1,664,234 |
|
|
| 2,244,916 |
|
|
| 2,399,460 |
|
Total liabilities and shareholders’ equity |
| $ | 2,821,725 |
|
| $ | 1,827,966 |
|
| $ | 2,606,175 |
|
| $ | 2,751,877 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
CRISPR Therapeutics AG
Condensed Consolidated Statements of Operations and Comprehensive (Loss) IncomeLoss
(unaudited, in thousands, except share and per share data)
|
| Three Months Ended |
| Nine Months Ended |
|
| Three Months Ended |
| ||||||||||||||||
|
| September 30, |
| September 30, |
|
| March 31, |
| ||||||||||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 |
|
| 2022 |
|
| 2021 |
| |||||||||
Revenue: |
|
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|
|
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|
|
|
|
|
|
|
|
|
|
| ||||||
Collaboration revenue |
| $ | 329 |
|
| $ | 148 |
|
| $ | 900,733 |
|
| $ | 349 |
|
| $ | 178 |
|
| $ | 202 |
|
Grant revenue |
|
| 495 |
|
|
| — |
|
|
| 1,331 |
|
|
| — |
|
|
| 762 |
|
|
| 337 |
|
Total revenue |
|
| 824 |
|
|
| 148 |
|
|
| 902,064 |
|
|
| 349 |
|
|
| 940 |
|
|
| 539 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Research and development |
| 105,321 |
| 71,008 |
| 304,163 |
| 184,581 |
|
| 118,245 |
| 70,620 |
| ||||||||||
General and administrative |
|
| 24,352 |
|
| 21,539 |
|
| 78,675 |
|
| 62,442 |
|
| 28,021 |
| 24,517 |
| ||||||
Collaboration expense, net |
|
| 30,646 |
|
|
| 19,945 |
| ||||||||||||||||
Total operating expenses |
|
| 129,673 |
|
| 92,547 |
|
| 382,838 |
|
| 247,023 |
|
|
| 176,912 |
|
|
| 115,082 |
| |||
(Loss) income from operations |
|
| (128,849 | ) |
|
| (92,399 | ) |
|
| 519,226 |
|
| (246,674 | ) | |||||||||
Loss from operations |
|
| (175,972 | ) |
|
| (114,543 | ) | ||||||||||||||||
Other income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income, net |
|
| 1,101 |
|
| 160 |
|
| 3,806 |
|
| 5,804 |
|
|
| 363 |
|
|
| 1,955 |
| |||
Total other income, net |
|
| 1,101 |
|
| 160 |
|
| 3,806 |
|
| 5,804 |
|
|
| 363 |
|
|
| 1,955 |
| |||
Net (loss) income before income taxes |
| (127,748 | ) |
| (92,239 | ) |
| 523,032 |
| (240,870 | ) | |||||||||||||
Benefit (provision) for income taxes |
|
| 595 |
|
| (200 | ) |
|
| (4,123 | ) |
|
| (956 | ) | |||||||||
Net (loss) income |
| (127,153 | ) |
| (92,439 | ) |
| 518,909 |
| (241,826 | ) | |||||||||||||
Net loss before income taxes |
| (175,609 | ) |
| (112,588 | ) | ||||||||||||||||||
Provision for income taxes |
|
| (3,608 | ) |
|
| (575 | ) | ||||||||||||||||
Net loss |
| (179,217 | ) |
| (113,163 | ) | ||||||||||||||||||
Foreign currency translation adjustment |
| (24 | ) |
| 31 |
| (14 | ) |
| 3 |
|
| (27 | ) |
| 5 |
| |||||||
Unrealized loss on marketable securities |
|
| (117 | ) |
|
| (144 | ) |
|
| (673 | ) |
|
| (144 | ) |
|
| (11,799 | ) |
|
| (383 | ) |
Comprehensive (loss) income |
| $ | (127,294 | ) |
| $ | (92,552 | ) |
| $ | 518,222 |
| $ | (241,967 | ) | |||||||||
Comprehensive loss |
| $ | (191,043 | ) |
| $ | (113,541 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (loss) income per common share — basic |
| $ | (1.67 | ) |
| $ | (1.32 | ) |
| $ | 6.85 |
| $ | (3.77 | ) | |||||||||
Net loss per common share — basic |
| $ | (2.32 | ) |
| $ | (1.51 | ) | ||||||||||||||||
Basic weighted-average common shares outstanding |
|
| 76,288,534 |
|
| 70,143,481 |
|
| 75,712,437 |
|
| 64,159,224 |
|
|
| 77,098,319 |
|
|
| 75,005,187 |
| |||
Net (loss) income per common share — diluted |
| $ | (1.67 | ) |
| $ | (1.32 | ) |
| $ | 6.44 |
| $ | (3.77 | ) | |||||||||
Net loss per common share — diluted |
| $ | (2.32 | ) |
| $ | (1.51 | ) | ||||||||||||||||
Diluted weighted-average common shares outstanding |
|
| 76,288,534 |
|
| 70,143,481 |
|
| 80,554,682 |
|
| 64,159,224 |
|
|
| 77,098,319 |
|
|
| 75,005,187 |
| |||
|
|
|
|
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|
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|
|
|
|
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|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
CRISPR Therapeutics AG
Condensed Consolidated Statements of Shareholders’ Equity
(unaudited, in thousands, except share and per share data)
| Common Shares |
| Treasury Shares |
|
|
|
|
|
|
|
|
| Common Shares |
| Treasury Shares |
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
| Shares |
| CHF 0.03 |
| Shares |
| Amount, |
| Additional |
| Retained Earnings |
| Accumulated |
| Total |
| ||||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
| 60,783,799 |
| 1,847 |
| 250,226 |
| (63 | ) |
| 1,162,345 |
| (224,711 | ) |
| 7 |
| 939,425 |
| |||||||||||||||||||||||||||||
Vesting of restricted shares |
| 5,000 |
| — |
| — |
| — |
| — |
| — |
| — |
| - |
| |||||||||||||||||||||||||||||||
Exercise of vested options |
| 83,406 |
| 3 |
| — |
| — |
| 1,385 |
| — |
| — |
| 1,388 |
| |||||||||||||||||||||||||||||||
Stock-based compensation expense |
| — |
| — |
| — |
| — |
| 14,151 |
| — |
| — |
| 14,151 |
| |||||||||||||||||||||||||||||||
Issuance of common shares related to license agreement |
| 17,830 |
| — |
| (17,830 | ) |
| — |
| 889 |
| — |
| — |
| 889 |
| ||||||||||||||||||||||||||||||
Other comprehensive loss |
| — |
| — |
| — |
| — |
| — |
| — |
| (25 | ) |
| (25 | ) | ||||||||||||||||||||||||||||||
Net loss |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| (69,731 | ) |
| — |
|
| (69,731 | ) | ||||||||||||||||||||||||
Balance at March 31, 2020 |
| 60,890,035 |
| $ | 1,850 |
|
| 232,396 |
| $ | (63 | ) | $ | 1,178,770 |
| $ | (294,442 | ) | $ | (18 | ) | $ | 886,097 |
| ||||||||||||||||||||||||
Issuance of common shares, net of issuance costs of $3.1 million |
| 1,238,453 |
| 38 |
| — |
| — |
| 82,151 |
| — |
| — |
| 82,189 |
| |||||||||||||||||||||||||||||||
Vesting of restricted shares |
| 29,916 |
| 1 |
| — |
| — |
| — |
| — |
| — |
| 1 |
| |||||||||||||||||||||||||||||||
Exercise of vested options |
| 394,101 |
| 11 |
| (37,080 | ) |
| — |
| 6,334 |
| — |
| — |
| 6,345 |
| ||||||||||||||||||||||||||||||
Stock-based compensation expense |
| — |
| — |
| — |
| — |
| 15,697 |
| — |
| — |
| 15,697 |
| |||||||||||||||||||||||||||||||
Other comprehensive loss |
| — |
| — |
| — |
| — |
| — |
| — |
| (3 | ) |
| (3 | ) | ||||||||||||||||||||||||||||||
Net loss |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| (79,656 | ) |
| — |
|
| (79,656 | ) | ||||||||||||||||||||||||
Balance at June 30, 2020 |
| 62,552,505 |
| $ | 1,900 |
|
| 195,316 |
| $ | (63 | ) | $ | 1,282,952 |
| $ | (374,098 | ) | $ | (21 | ) | $ | 910,670 |
| ||||||||||||||||||||||||
Issuance of common shares, net of issuance costs of $32.8 million |
| 7,499,135 |
| 240 |
| — |
| — |
| 494,349 |
| — |
| — |
| 494,589 |
| |||||||||||||||||||||||||||||||
Vesting of restricted shares |
| 39,667 |
| 1 |
| — |
| — |
| — |
| — |
| — |
| 1 |
| |||||||||||||||||||||||||||||||
Exercise of vested options |
| 499,145 |
| 16 |
| — |
| — |
| 12,643 |
| — |
| — |
| 12,659 |
| |||||||||||||||||||||||||||||||
Purchase of common stock under ESPP |
| 13,410 |
| — |
| — |
| — |
| 694 |
| — |
| — |
| 694 |
| |||||||||||||||||||||||||||||||
Stock-based compensation expense |
| — |
| — |
| — |
| — |
| 17,240 |
| — |
| — |
| 17,240 |
| |||||||||||||||||||||||||||||||
Other comprehensive loss |
| — |
| — |
| — |
| — |
| — |
| — |
| (113 | ) |
| (113 | ) | ||||||||||||||||||||||||||||||
Net loss |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| (92,439 | ) |
| — |
|
| (92,439 | ) | ||||||||||||||||||||||||
Balance at September 30, 2020 |
| 70,603,862 |
| $ | 2,157 |
|
| 195,316 |
| $ | (63 | ) | $ | 1,807,878 |
| $ | (466,537 | ) | $ | (134 | ) | $ | 1,343,301 |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| CHF 0.03 |
| Shares |
| Amount, |
| Additional |
| Accumulated Deficit |
| Accumulated |
| Total |
| ||||||||||||||||
Balance at December 31, 2020 |
| 73,914,844 |
| $ | 2,277 |
| 195,316 |
| $ | (63 | ) | $ | 2,235,679 |
| $ | (573,576 | ) | $ | (83 | ) | $ | 1,664,234 |
|
| 73,914,844 |
| $ | 2,277 |
| 195,316 |
| $ | (63 | ) | $ | 2,235,679 |
| $ | (573,576 | ) | $ | (83 | ) | $ | 1,664,234 |
| ||
Issuance of common shares, net of issuance costs of $5.4 million |
| 1,353,121 |
| 45 |
| — |
| — |
| 222,130 |
| — |
| — |
| 222,175 |
|
| 1,353,121 |
| 45 |
| — |
| — |
| 222,130 |
| — |
| — |
| 222,175 |
| ||||||||||||||
Vesting of restricted shares |
| 109,355 |
| 3 |
| — |
| — |
| — |
| — |
| — |
| 3 |
|
| 109,355 |
| 3 |
| — |
| — |
| — |
| — |
| — |
| 3 |
| ||||||||||||||
Exercise of vested options, net of issuance costs of $1.5 million |
| 342,051 |
| 15 |
| — |
| — |
| 9,769 |
| — |
| — |
| 9,784 |
|
| 342,051 |
| 15 |
| — |
| — |
| 9,769 |
| — |
| — |
| 9,784 |
| ||||||||||||||
Purchase of common stock under ESPP |
| 11,257 |
| — |
| — |
| — |
| 751 |
| — |
| — |
| 751 |
|
| 11,257 |
| — |
| — |
| — |
| 751 |
| — |
| — |
| 751 |
| ||||||||||||||
Stock-based compensation expense |
| — |
| — |
| — |
| — |
| 22,092 |
| — |
| — |
| 22,092 |
|
| — |
| — |
| — |
| — |
| 22,092 |
| — |
| — |
| 22,092 |
| ||||||||||||||
Other comprehensive loss |
| — |
| — |
| — |
| — |
| — |
| — |
| (378 | ) |
| (378 | ) |
| — |
| — |
| — |
| — |
| — |
| — |
| (378 | ) |
| (378 | ) | ||||||||||||
Net loss |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| (113,163 | ) |
| — |
|
| (113,163 | ) |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| (113,163 | ) |
| — |
|
| (113,163 | ) |
Balance at March 31, 2021 |
| 75,730,628 |
| $ | 2,340 |
|
| 195,316 |
| $ | (63 | ) | $ | 2,490,421 |
| $ | (686,739 | ) | $ | (461 | ) | $ | 1,805,498 |
|
| 75,730,628 |
| $ | 2,340 |
|
| 195,316 |
| $ | (63 | ) | $ | 2,490,421 |
| $ | (686,739 | ) | $ | (461 | ) | $ | 1,805,498 |
|
Issuance of common shares |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Balance at December 31, 2021 |
| 76,990,066 |
| $ | 2,391 |
| 180,316 |
| $ | (63 | ) | $ | 2,598,114 |
| $ | (195,915 | ) | $ | (5,067 | ) | $ | 2,399,460 |
| |||||||||||||||||||||||||
Vesting of restricted shares |
| 3,667 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| 123,564 |
| 4 |
| — |
| — |
| — |
| — |
| — |
| 4 |
| ||||||||||||||
Exercise of vested options, net of issuance costs of $0.4 million |
| 344,158 |
| 12 |
| — |
| — |
| 10,897 |
| — |
| — |
| 10,909 |
| |||||||||||||||||||||||||||||||
Stock-based compensation expense |
| — |
| — |
| — |
| — |
| 28,331 |
| — |
| — |
| 28,331 |
| |||||||||||||||||||||||||||||||
Other comprehensive loss |
| — |
| — |
| — |
| — |
| — |
| — |
| (168 | ) |
| (168 | ) | ||||||||||||||||||||||||||||||
Net income |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 759,225 |
|
| — |
|
| 759,225 |
| ||||||||||||||||||||||||
Balance at June 30, 2021 |
| 76,078,453 |
| $ | 2,352 |
|
| 195,316 |
| $ | (63 | ) | $ | 2,529,649 |
| $ | 72,486 |
| $ | (629 | ) | $ | 2,603,795 |
| ||||||||||||||||||||||||
Issuance of common shares |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |||||||||||||||||||||||||||||||
Vesting of restricted shares |
| 96,167 |
| 4 |
| — |
| — |
| — |
| — |
| — |
| 4 |
| |||||||||||||||||||||||||||||||
Exercise of vested options, net of issuance costs of $0.4 million |
| 278,227 |
| 10 |
| (15,000 | ) |
| — |
| 8,865 |
| — |
| — |
| 8,875 |
| ||||||||||||||||||||||||||||||
Exercise of vested options, net of issuance costs of $0.2 million |
| 261,280 |
| 12 |
| — |
| — |
| 9,998 |
| — |
| — |
| 10,010 |
| |||||||||||||||||||||||||||||||
Purchase of common stock under ESPP |
| 10,333 |
| — |
| — |
| — |
| 1,344 |
| — |
| — |
| 1,344 |
|
| 11,495 |
| — |
| — |
| — |
| 740 |
| — |
| — |
| 740 |
| ||||||||||||||
Stock-based compensation expense |
| — |
| — |
| — |
| — |
| 26,199 |
| — |
| — |
| 26,199 |
|
| — |
| — |
| — |
| — |
| 25,745 |
| — |
| — |
| 25,745 |
| ||||||||||||||
Other comprehensive loss |
| — |
| — |
| — |
| — |
| — |
| — |
| (141 | ) |
| (141 | ) |
| — |
| — |
| — |
| — |
| — |
| — |
| (11,826 | ) |
| (11,826 | ) | ||||||||||||
Net loss |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| (127,153 | ) |
| — |
|
| (127,153 | ) |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| (179,217 | ) |
| — |
|
| (179,217 | ) |
Balance at September 30, 2021 |
| 76,463,180 |
| $ | 2,366 |
|
| 180,316 |
| $ | (63 | ) | $ | 2,566,057 |
| $ | (54,667 | ) | $ | (770 | ) | $ | 2,512,923 |
| ||||||||||||||||||||||||
Balance at March 31, 2022 |
| 77,386,405 |
| $ | 2,407 |
|
| 180,316 |
| $ | (63 | ) | $ | 2,634,597 |
| $ | (375,132 | ) | $ | (16,893 | ) | $ | 2,244,916 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
CRISPR Therapeutics AG
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| ||||||||||
|
| 2021 |
| 2020 |
|
| 2022 |
|
| 2021 |
| |||||
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income (loss) |
| $ | 518,909 |
|
| $ | (241,826 | ) | ||||||||
Reconciliation of net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
| |||||||||||
Net loss |
| $ | (179,217 | ) |
| $ | (113,163 | ) | ||||||||
Reconciliation of net loss to net cash used in operating activities: |
|
|
|
|
| |||||||||||
Depreciation and amortization |
|
| 11,692 |
|
|
| 6,618 |
|
| 6,039 |
| 2,715 |
| |||
Equity-based compensation |
|
| 76,622 |
|
|
| 47,088 |
|
| 25,745 |
| 22,092 |
| |||
Other income (expense), non-cash |
|
| 9,420 |
|
|
| 979 |
| ||||||||
Other non-cash items, net |
| 6,099 |
| 2,064 |
| |||||||||||
Changes in: |
|
|
|
|
|
|
|
|
|
| ||||||
Accounts receivable |
|
| (8 | ) |
|
| (11 | ) |
| 162 |
| (6 | ) | |||
Prepaid expenses and other assets |
|
| (18,775 | ) |
|
| 19,273 |
|
| 4,611 |
| (5,068 | ) | |||
Accounts payable and accrued expenses |
|
| 14,733 |
|
|
| 17,394 |
|
| (1,616 | ) |
| (5,770 | ) | ||
Deferred revenue |
|
| (779 | ) |
|
| (350 | ) |
| (762 | ) |
| (539 | ) | ||
Operating lease assets and liabilities |
|
| 19,679 |
|
|
| (282 | ) |
| 3,854 |
| 778 |
| |||
Other liabilities, net |
|
| (6,483 | ) |
|
| (6,037 | ) |
|
| (154 | ) |
|
| (3,766 | ) |
Net cash provided by (used in) operating activities |
|
| 625,010 |
|
|
| (157,154 | ) | ||||||||
Net cash used in operating activities |
|
| (135,239 | ) |
|
| (100,663 | ) | ||||||||
Investing activities: |
|
|
|
|
|
|
|
|
|
| ||||||
Purchase of property, plant and equipment |
|
| (72,522 | ) |
|
| (12,119 | ) |
| (15,350 | ) |
| (7,024 | ) | ||
Purchases of marketable securities |
|
| (1,386,785 | ) |
|
| (325,316 | ) |
| (323,140 | ) |
| (323,975 | ) | ||
Maturities of marketable securities |
|
| 432,593 |
|
|
| 509 |
|
|
| 223,975 |
|
|
| 163,101 |
|
Net cash used in investing activities |
|
| (1,026,714 | ) |
|
| (336,926 | ) |
|
| (114,515 | ) |
|
| (167,898 | ) |
Financing activities: |
|
|
|
|
|
|
|
|
|
| ||||||
Proceeds from issuance of common shares, net of issuance costs |
|
| 213,267 |
|
|
| 582,225 |
|
| 0 |
| 214,592 |
| |||
Proceeds from exercise of options and ESPP contributions, net of issuance costs |
|
| 31,379 |
|
|
| 21,300 |
|
|
| 10,649 |
|
|
| 11,399 |
|
Net cash provided by financing activities |
|
| 244,646 |
|
|
| 603,525 |
|
|
| 10,649 |
|
|
| 225,991 |
|
Effect of exchange rate changes on cash |
|
| (14 | ) |
|
| 5 |
|
|
| (27 | ) |
|
| 5 |
|
Increase (decrease) in cash |
|
| (157,072 | ) |
|
| 109,450 |
| ||||||||
Decrease in cash |
|
| (239,132 | ) |
|
| (42,565 | ) | ||||||||
Cash, cash equivalents and restricted cash, beginning of period |
|
| 1,185,468 |
|
|
| 948,812 |
|
|
| 939,944 |
|
|
| 1,185,468 |
|
Cash, cash equivalents and restricted cash, end of period |
| $ | 1,028,396 |
|
| $ | 1,058,262 |
|
| $ | 700,812 |
|
| $ | 1,142,903 |
|
Supplemental disclosure of non-cash investing and financing activities |
|
|
|
|
|
|
|
|
|
| ||||||
Property and equipment purchases in accounts payable and accrued expenses |
| $ | 6,264 |
|
| $ | 2,863 |
|
| $ | 5,888 |
|
| $ | 8,847 |
|
Equity issuance costs in accounts payable and accrued expenses |
| $ | 391 |
|
| $ | 5,955 |
|
| $ | 217 |
|
| $ | 2,868 |
|
Leasehold improvements paid directly by landlord |
| $ | 13,015 |
|
| $ | — |
|
|
| As of September 30, |
|
| As of March 31, |
| ||||||||||
Reconciliation to amounts within the condensed consolidated balance sheets |
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||
Cash and cash equivalents |
| $ | 1,011,548 |
|
| $ | 1,041,417 |
|
| 683,906 |
| 1,126,059 |
| |||
Prepaid expenses and other current assets |
| 4,783 |
| — |
| |||||||||||
Restricted cash |
|
| 16,848 |
|
|
| 16,845 |
|
|
| 12,123 |
|
| 16,844 |
| |
Cash, cash equivalents and restricted cash at end of period |
| $ | 1,028,396 |
|
| $ | 1,058,262 |
|
| $ | 700,812 |
|
| $ | 1,142,903 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
CRISPR Therapeutics AG
Notes to Condensed Consolidated Financial Statements
(unaudited)
1. Basis of Presentation and Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP.
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company views its operations and manages its business in 1 operating segment, which is the business of discovering, developing and commercializing therapies derived from or incorporating genome-editing technology. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position and results of operations for the three and nine-monththree-month interim periods ended September 30, 2021March 31, 2022 and 2020.2021.
The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2020,2021, which are contained in the 20202021 Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on February 16, 2021.15, 2022.
Beginning in the first quarter of 2022, collaboration costs under the Vertex Agreements accounted for under ASC 808, Collaborative Agreements, or ASC 808, are presented within “collaboration expense, net” in the condensed consolidated statements of operations and comprehensive loss. As a result, collaboration costs under the Vertex Agreements accounted for under ASC 808 for the period ending Mach 31, 2021 have been reclassified to conform to the current presentation. No subtotals in the prior interim period's consolidated condensed financial statements were impacted. Refer to Note 7 to these condensed consolidated financial statements for further discussion on the Vertex Agreements.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates, which include, but are not limited to, revenue recognition, equity-based compensation expense and reported amounts of expenses during the period. Significant estimates in these consolidated financial statements have been made in connection with revenue recognition and equity-based compensation expense. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Changes in estimates are reflected in reported results in the period in which they become known.
Significant Accounting Policies
The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and nine months ended September 30, 2021March 31, 2022 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s 20202021 Annual Report on Form 10-K filed with the SEC on February 16, 2021.15, 2022.
New Accounting Pronouncements – Recently Adopted
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the adoption of recently issued standards have or may have a material impact on its consolidated financial statements and disclosures.
6
2. Marketable Securities
The following table summarizes cash equivalents and marketable securities held at September 30, 2021March 31, 2022 and December 31, 20202021 (in thousands), which are recorded at fair value. The table below excludes $481.1138.8 million and $395.1405.6 million of cash at September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.
|
| Amortized |
|
| Gross |
|
| Gross |
|
| Fair Value |
|
| Amortized |
|
| Gross |
|
| Gross |
|
| Fair Value |
| ||||||||
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Money market funds |
| $ | 515,478 |
| $ | — |
| $ | — |
| $ | 515,478 |
|
| $ | 416,688 |
| $ | — |
| $ | — |
| $ | 416,688 |
| ||||||
Corporate debt securities |
| — |
| — |
|
|
|
| — |
|
| 11,827 |
| — |
| (3 | ) |
| 11,824 |
| ||||||||||||
Certificates of deposit |
| — |
| — |
| — |
| — |
|
| — |
| — |
| — |
| — |
| ||||||||||||||
Commercial paper |
|
| 14,999 |
|
| — |
|
| (1 | ) |
|
| 14,998 |
|
|
| 116,606 |
|
|
| 1 |
|
|
| (4 | ) |
|
| 116,603 |
| ||
Total cash equivalents |
| 530,477 |
| — |
| (1 | ) |
| 530,476 |
|
| 545,121 |
| 1 |
| (7 | ) |
| 545,115 |
| ||||||||||||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
U.S. Treasury securities |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 12,126 |
|
|
| — |
|
|
| (269 | ) |
|
| 11,857 |
|
Corporate debt securities |
| 1,148,979 |
|
| 153 |
|
|
| (905 | ) |
|
| 1,148,227 |
|
| 1,166,163 |
|
| 3 |
|
|
| (15,982 | ) |
|
| 1,150,184 |
| ||||
Certificates of deposit |
| 47,559 |
|
| — |
|
|
| — |
|
|
| 47,559 |
|
| 57,631 |
|
| — |
|
|
| — |
|
|
| 57,631 |
| ||||
Government-sponsored enterprise securities |
| 22,809 |
|
| 1 |
|
|
| (20 | ) |
|
| 22,790 |
|
| 13,299 |
|
| — |
|
|
| (236 | ) |
|
| 13,063 |
| ||||
Commercial paper |
|
| 247,267 |
|
| — |
|
|
| (31 | ) |
|
| 247,236 |
|
|
| 305,033 |
|
|
| 5 |
|
|
| (418 | ) |
|
| 304,620 |
| |
Total marketable securities |
|
| 1,466,614 |
|
| 154 |
|
|
| (956 | ) |
|
| 1,465,812 |
|
|
| 1,554,252 |
|
|
| 8 |
|
|
| (16,905 | ) |
|
| 1,537,355 |
| |
Total cash equivalents and marketable securities |
| $ | 1,997,091 |
|
| $ | 154 |
|
| $ | (957 | ) |
| $ | 1,996,288 |
|
| $ | 2,099,373 |
|
| $ | 9 |
|
| $ | (16,912 | ) |
| $ | 2,082,470 |
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Money market funds |
| $ | 742,958 |
| $ | — |
| $ | — |
| $ | 742,958 |
|
| $ | 507,386 |
| $ | — |
| $ | — |
| $ | 507,386 |
| ||||||
Corporate debt securities |
| 2,526 |
| 1 |
| (24 | ) |
| 2,503 |
|
|
| — |
| — |
| — |
| — |
| ||||||||||||
Certificates of deposit |
| 12,527 |
| — |
| — |
| 12,527 |
|
|
| — |
| — |
| — |
| — |
| |||||||||||||
Commercial paper |
|
| 15,549 |
|
| — |
|
| — |
|
| 15,549 |
|
|
| 9,997 |
|
|
| — |
|
|
| (1 | ) |
|
| 9,996 |
| |||
Total cash equivalents |
| 773,560 |
| 1 |
| (24 | ) |
| 773,537 |
|
|
| 517,383 |
| — |
| (1 | ) |
| 517,382 |
| |||||||||||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
U.S. Treasury securities |
| 47,976 |
|
| 3 |
|
|
| — |
|
|
| 47,979 |
|
|
| 16,238 |
|
| 6 |
|
|
| (52 | ) |
|
| 16,192 |
| |||
Corporate debt securities |
| 324,569 |
|
| 43 |
|
|
| (156 | ) |
|
| 324,456 |
|
|
| 1,173,659 |
|
| 10 |
|
|
| (4,903 | ) |
|
| 1,168,766 |
| |||
Certificates of deposit |
| 25,162 |
|
| — |
|
|
| — |
|
|
| 25,162 |
|
|
| 45,164 |
|
| — |
|
|
| — |
|
|
| 45,164 |
| |||
Government-sponsored enterprise securities |
| 33,738 |
|
| 5 |
|
|
| (2 | ) |
|
| 33,741 |
|
|
| 13,334 |
|
| — |
|
|
| (77 | ) |
|
| 13,257 |
| |||
Commercial paper |
|
| 90,375 |
|
| — |
|
|
| — |
|
|
| 90,375 |
|
|
| 212,805 |
|
|
| — |
|
|
| (86 | ) |
|
| 212,719 |
| |
Total marketable securities |
|
| 521,820 |
|
| 51 |
|
|
| (158 | ) |
|
| 521,713 |
|
|
| 1,461,200 |
|
|
| 16 |
|
|
| (5,118 | ) |
|
| 1,456,098 |
| |
Total cash equivalents and marketable securities |
| $ | 1,295,380 |
|
| $ | 52 |
|
| $ | (182 | ) |
| $ | 1,295,250 |
|
| $ | 1,978,583 |
|
| $ | 16 |
|
| $ | (5,119 | ) |
| $ | 1,973,480 |
|
As of September 30, 2021March 31, 2022 and December 31, 2020,2021, the aggregate fair value of marketable securities that were in an unrealized loss position for less than twelve months was $1,028.9534.9 million and $280.31,311.6 million, respectively. As of September 30, 2021March 31, 2022 and December 31, 2020,2021, the aggregate fair value of marketable securities that were in an unrealized loss position for more than twelve months was not material.$9.5 million and $4.6 million, respectively. The Company has recorded a net unrealized loss of $0.111.8 million and $0.70.4 million during the three and nine months ended September 30,March 31, 2022 and 2021 respectively, related to its debt securities, which is included in comprehensive (loss) incomeloss on the condensed consolidated statements of operations and comprehensive (loss) income. The Company has recorded a net unrealized loss of $loss.0.1 million during the three and nine months ended September 30, 2020 related to its debt securities, which is included in comprehensive (loss) income on the condensed consolidated statements of operations and comprehensive (loss) income. NaN unrealized losses related to debt securities were recorded in net (loss) income during the three and nine months ended September 30, 2021 and the three and nine months ended September 30, 2020.
The Company determined that there is no material credit risk associated with the above investments as of September 30, 2021.March 31, 2022. The Company has the intent and ability to hold such securities until recovery. As a result, the Company did 0tnot record any charges for credit-related impairments for its marketable securities for the three and nine months ended September 30,March 31, 2022 and 2021. NaN available-for-sale debt securities held as of September 30, 2021March 31, 2022 had remaining maturities greater than thirty months.
7
3. Fair Value Measurements
The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the fair value hierarchy classification of such fair values as of September 30, 2021March 31, 2022 and December 31, 20202021 (in thousands):
|
| Fair Value Measurements at |
|
| Fair Value Measurements at |
| ||||||||||||||||||||||||||
|
| September 30, 2021 |
|
| March 31, 2022 |
| ||||||||||||||||||||||||||
|
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cash |
| $ | 481,072 |
| $ | 481,072 |
| $ | — |
| $ | — |
|
| $ | 138,791 |
| $ | 138,791 |
| $ | — |
| $ | — |
| ||||||
Money market funds |
| 515,477 |
| 515,477 |
| — |
| — |
|
| 416,688 |
| 416,688 |
| — |
| — |
| ||||||||||||||
Corporate debt securities |
| — |
| — |
| — |
| — |
|
| 11,824 |
| — |
| 11,824 |
| — |
| ||||||||||||||
Certificates of deposit |
| — |
| — |
| — |
| — |
|
| 116,603 |
| — |
| 116,603 |
| — |
| ||||||||||||||
Commercial paper |
| 14,999 |
| — |
| 14,999 |
| — |
|
| — |
| — |
| — |
| — |
| ||||||||||||||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
U.S. Treasury securities |
| — |
| — |
| — |
| — |
|
| 11,857 |
| — |
| 11,857 |
| — |
| ||||||||||||||
Corporate debt securities |
| 1,148,228 |
| — |
| 1,148,228 |
| — |
|
| 1,150,184 |
| — |
| 1,150,184 |
| — |
| ||||||||||||||
Certificates of deposit |
| 47,559 |
| — |
| 47,559 |
| — |
|
| 57,631 |
| — |
| 57,631 |
| — |
| ||||||||||||||
Government-sponsored enterprise securities |
| 22,789 |
| — |
| 22,789 |
| — |
|
| 13,063 |
| — |
| 13,063 |
| — |
| ||||||||||||||
Commercial paper |
| 247,236 |
| — |
| 247,236 |
| — |
|
| 304,620 |
| — |
| 304,620 |
| — |
| ||||||||||||||
Other non-current assets |
|
| 2,212 |
|
| — |
|
| — |
|
| 2,212 |
|
|
| 2,212 |
|
|
| — |
|
|
| — |
|
|
| 2,212 |
| |||
Total |
| $ | 2,479,572 |
|
| $ | 996,549 |
|
| $ | 1,480,811 |
|
| $ | 2,212 |
|
| $ | 2,223,473 |
|
| $ | 555,479 |
|
| $ | 1,665,782 |
|
| $ | 2,212 |
|
|
| Fair Value Measurements at |
|
| Fair Value Measurements at |
| ||||||||||||||||||||||||||
|
| December 31, 2020 |
|
| December 31, 2021 |
| ||||||||||||||||||||||||||
|
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cash |
| $ | 395,083 |
| $ | 395,083 |
| $ | — |
| $ | — |
|
| $ | 405,648 |
| $ | 405,648 |
| $ | — |
| $ | — |
| ||||||
Money market funds |
| 742,958 |
| 742,958 |
| — |
| — |
|
| 507,386 |
| 507,386 |
| — |
| — |
| ||||||||||||||
Corporate debt securities |
| 2,503 |
| — |
| 2,503 |
| — |
|
| — |
| — |
| — |
| — |
| ||||||||||||||
Certificates of deposit |
| 12,527 |
| — |
| 12,527 |
| — |
|
| — |
| — |
| — |
| — |
| ||||||||||||||
Commercial paper |
| 15,549 |
| — |
| 15,549 |
| — |
|
| 9,997 |
| — |
| 9,997 |
| — |
| ||||||||||||||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
U.S. Treasury securities |
| 47,979 |
| — |
| 47,979 |
| — |
|
| 16,192 |
| — |
| 16,192 |
| — |
| ||||||||||||||
Corporate debt securities |
| 324,456 |
| — |
| 324,456 |
| — |
|
| 1,168,766 |
| — |
| 1,168,766 |
| — |
| ||||||||||||||
Certificates of deposit |
| 25,162 |
| — |
| 25,162 |
| — |
|
| 45,164 |
| — |
| 45,164 |
| — |
| ||||||||||||||
Government-sponsored enterprise securities |
| 33,741 |
| — |
| 33,741 |
| — |
|
| 13,257 |
| — |
| 13,257 |
| — |
| ||||||||||||||
Commercial paper |
| 90,375 |
| — |
| 90,375 |
| — |
|
| 212,719 |
| — |
| 212,719 |
| — |
| ||||||||||||||
Other non-current assets |
|
| 600 |
|
| — |
|
| — |
|
| 600 |
|
|
| 2,212 |
|
|
| — |
|
|
| — |
|
|
| 2,212 |
| |||
Total |
| $ | 1,690,933 |
|
| $ | 1,138,041 |
|
| $ | 552,292 |
|
| $ | 600 |
|
| $ | 2,381,341 |
|
| $ | 913,034 |
|
| $ | 1,466,095 |
|
| $ | 2,212 |
|
Marketable securities classified as Level 2 within the valuation hierarchy generally consist of U.S. treasury securities and government agency securities, corporate bonds, and commercial paper. The Company estimates the fair values of these marketable securities by taking into consideration valuations obtained from third-party pricing sources.
The Company holds equity securities classified as Level 3 which are not material to the Company’s financial position.
4. Property and Equipment, net
Property and equipment, net, consists of the following (in thousands):
|
| As of |
|
| As of |
| ||||||||||
|
| September 30, |
|
| December 31, |
|
| March 31, |
|
| December 31, |
| ||||
|
| 2021 |
| 2020 |
|
| 2022 |
|
| 2021 |
| |||||
Computer equipment |
| $ | 1,757 |
| $ | 727 |
|
| $ | 1,943 |
| $ | 1,757 |
| ||
Furniture, fixtures and other |
|
| 3,420 |
|
|
| 3,416 |
|
|
| 4,371 |
|
|
| 4,371 |
|
Laboratory equipment |
|
| 32,851 |
| 25,353 |
|
|
| 34,705 |
| 30,123 |
| ||||
Leasehold improvements |
|
| 26,779 |
| 25,473 |
|
|
| 86,401 |
| 86,735 |
| ||||
Construction work in process |
|
| 73,902 |
|
| 8,366 |
|
|
| 73,866 |
|
|
| 52,396 |
| |
Total property and equipment, gross |
| 138,709 |
|
|
| 63,335 |
|
| 201,286 |
| 175,382 |
| ||||
Accumulated depreciation |
|
| (32,826 | ) |
|
| (21,175 | ) |
|
| (43,833 | ) |
|
| (37,807 | ) |
Total property and equipment, net |
| $ | 105,883 |
| $ | 42,160 |
|
| $ | 157,453 |
|
| $ | 137,575 |
|
8
Depreciation expense for the three and nine months ended September 30,March 31, 2022 and 2021 was $5.36.0 million and $11.7 million, respectively. Depreciation expense for the three and nine months ended September 30, 2020 was $2.3 million and $6.62.7 million, respectively.
5. Accrued Expenses
Accrued expenses consist of the following (in thousands):
|
| As of |
|
| As of |
| ||||||||||
|
| September 30, |
| December 31, |
|
| March 31, |
| December 31, |
| ||||||
|
| 2021 |
| 2020 |
|
| 2022 |
|
| 2021 |
| |||||
Payroll and employee-related costs |
| $ | 17,027 |
|
| $ | 22,402 |
|
| $ | 8,780 |
| $ | 23,661 |
| |
Research costs |
|
| 36,316 |
|
|
| 21,684 |
|
| 49,925 |
| 47,986 |
| |||
Licensing fees |
|
| 97 |
|
|
| 1,401 |
|
| 533 |
| 138 |
| |||
Professional fees |
|
| 3,567 |
|
|
| 1,670 |
|
| 4,456 |
| 4,720 |
| |||
Intellectual property costs |
|
| 5,042 |
|
|
| 3,625 |
|
| 4,345 |
| 6,120 |
| |||
Accrued property and equipment |
|
| 5,922 |
|
|
| 2,835 |
|
| 2,321 |
| 7,113 |
| |||
Other |
|
| 332 |
|
|
| 165 |
|
|
| 2,272 |
|
|
| 1,265 |
|
Total |
| $ | 68,303 |
|
| $ | 53,782 |
|
| $ | 72,632 |
|
| $ | 91,003 |
|
6. Commitments and Contingencies
Leases
Refer to Note 7 to the consolidated financial statements in the Company’s 20202021 Annual Report on Form 10-K filed with the SEC on February 16, 202115, 2022 for discussion on the Company’s lease arrangements. In the second quarter of 2021, the following events results in material changes to the Company’s leasing disclosure:
In July 2020, the Company entered into a lease agreement for an office and laboratory facility in Boston, Massachusetts, or the 2020 Lease. The lease expires in October 2034, and the Company has the option to extend the 2020 lease for 2 additional five-year periods. The 2020 Lease commenced in the second quarter of 2021, and at lease commencement, the Company recorded a right-of-use asset of $149.8 million and a corresponding operating lease liability of $147.9 million. Tenant incentives of $49.2 million were recorded as a reduction to the operating lease asset and liability at lease commencement. The right-of-use asset and corresponding lease liability does not include the additional five-year periods under the renewal option as the Company is not reasonably certain to exercise that option.
In May 2016, the Company entered into a sublease agreement for its primary office and research facility in Cambridge, Massachusetts, or the 2016 Sublease. In December 2019, Casebia Therapeutics, Limited Liability Partnership, or Casebia, became a wholly-owned subsidiary of the Company. In connection therewith, Casebia assigned its sublease for an office and research facility in Cambridge, Massachusetts, or the 2019 Sublease, to the Company. The Company modified its 2016 Sublease and 2019 Sublease such the Company expects to vacate the premises on or about July 2022. The right-of-use assets and right-of-use liabilities were adjusted in the second quarter of 2021 accordingly.
9
Litigation
In the ordinary course of business, the Company is from time to time involved in lawsuits, investigations, proceedings and threats of litigation related to, among other things, the Company’s intellectual property estate (including certain in-licensed intellectual property), commercial arrangements and other matters. Such proceedings may include quasi-litigation, inter partes administrative proceedings in the U.S. Patent and Trademark Office and the European Patent Office involving the Company’s intellectual property estate including certain in-licensed intellectual property. The outcome of any of the foregoing, regardless of the merits, is inherently uncertain. In addition, litigation and related matters are costly and may divert the attention of Company’s management and other resources that would otherwise be engaged in other activities. If the Company is unable to prevail in any such proceedings, the Company’s business, results of operations, liquidity and financial condition could be adversely affected.
Letters of Credit
As of September 30, 2021,March 31, 2022, the Company had restricted cash of $16.816.9 million, representing letters of credit securing the Company’s obligations under certain leased facilities. The letters of credit are secured by cash held in a restricted depository account. The cash deposit is recordedaccount, with $4.8 million included in restricted cash“Prepaid expenses and other current assets” and $12.1 million included in “Restricted cash” on the accompanyingCompany's condensed consolidated balance sheetsheets as of September 30, 2021.March 31, 2022.
Research, Manufacturing, License and Intellectual Property Agreements
The Company has engaged several research institutions and companies to identify new delivery strategies and applications of the Company’s gene-editing technology. The Company is also a party to a number of license agreements which require significant upfront payments and may be required to make future royalty payments and potential milestone payments from time to time. In addition, the Company is also a party to intellectual property agreements, which require maintenance and milestone payments from time to time. Further, the Company is a party to a number of manufacturing agreements that require upfront payments for the future performance of services.
In association with these agreements, on a product-by-product basis, the counterparties are eligible to receive up to low eight-digit potential payments upon specified research, development and regulatory milestones. In addition, on a product-by-product basis, the counterparties are eligible to receive potential commercial milestone payments based on specified annual sales thresholds. The potential payments are low-single digit percentages of the specified annual sales thresholds. The counterparties are also eligible to receive low single-digit royalties on future net sales.
9
Under certain circumstances and if certain contingent future events occur, Vertex Pharmaceuticals Incorporated and certain of its subsidiaries, or Vertex, is eligible to receive up to $395.0 million in potential specified research, development, regulatory and commercial milestones and tiered single-digit percentage royalties on future net sales related to a specified target under an amendment to the 2015 Collaboration Agreement defined in Note 7 below. In addition, Vertex has the option to conduct research at their own cost in certain defined areas that, if beneficial to the CTX001 program and ultimately achieves regulatory approval, then the Company could owe Vertex certain milestone payments aggregating to high eight digits, subject to certain limitations on the profitability of the CTX001 program. Refer to Note 7 for further discussion on the Company’s arrangements with Vertex.
7. Significant Contracts
Agreements with Vertex Pharmaceuticals Incorporated and certain of its subsidiaries
Summary
On October 26, 2015, the Company entered into a strategic collaboration, option and license agreement, or the 2015 Collaboration Agreement, with Vertex. The 2015 Collaboration Agreement is focused on the use of the Company’s CRISPR/Cas9 gene-editing technology to discover and develop potential new treatments aimed at the underlying genetic causes of human disease.
On December 12, 2017, the Company and Vertex entered into Amendment No. 1 to the 2015 Collaboration Agreement, or Amendment No. 1, and the Joint Development Agreement, or the JDA. Amendment No. 1, among other things, modified certain definitions and provisions of the 2015 Collaboration Agreement to make them consistent with the JDA and clarified how many options are exercised (or deemed exercised) in connection with certain targets specified under the 2015 Collaboration Agreement. Amendment No. 1 also amended other provisions of the 2015 Collaboration Agreement, including the expiration terms.
10
In connection with the 2015 Collaboration Agreement, Vertex made a nonrefundable upfront payment of $75.0 million. Under the 2015 Collaboration Agreement, Vertex agreed to fund the discovery activities conducted pursuant to the agreement while retaining options to co-exclusive and exclusive licenses. In December 2017, upon execution of the JDA and Amendment No. 1, Vertex exercised its option to obtain a co-exclusive license to develop and commercialize hemoglobinopathy and beta-globin targets. As such, for potential hemoglobinopathy treatments, including treatments for sickle cell disease, the Company and Vertex willagreed to share equally all research and development costs and worldwide revenues. In connection with the JDA, the Company received a $7.0 million up-front payment from Vertex and subsequently received a one-time low seven-digit milestone payment upon the dosing of the second patient in a clinical trial with the initial product candidate. In addition, upon execution of the JDA and Amendment No. 1, it was clarified that Vertex may elect to license up to four remaining targets, for which it will lead global development and commercialization activities, and the Company received the right to receive up to $420.0 million in development, regulatory and commercial milestones and royalties on net product sales for each of the targets (inclusive of $10 million due upon exercise of each exclusive option).
In June 2019, the Company and Vertex entered into a series of agreements, which closed on July 23,in the second quarter of 2019, including a strategic collaboration and license agreement, or the 2019 Collaboration Agreement, for the development and commercialization of products for the treatment of Duchenne muscular dystrophy, or DMD, and Myotonic Dystrophy Type 1, or DM1. Under the terms of the 2019 Collaboration Agreement, the Company received an upfront, nonrefundable payment of $175.0 million. In addition, the Company iswas initially eligible to receive potential aggregate payments of up to $825.0 million based upon the successful achievement of specified research, development, regulatory and commercial milestones for the DMD and DM1 programs.
The Company is also eligible to receive tiered royalties on future net sales on any products that may result from this collaboration.the 2019 Collaboration Agreement. For the DMD program, Vertex is responsible for all research, development, manufacturing and commercialization activities and all related costs. For the DM1 program, the Company will performperformed specified guide RNA research and Vertex is responsible for all other research, development, manufacturing and commercialization costs. Upon Investigational New Drug, or IND, application filing, the Company has the option to forego the DM1 milestones and royalties, and instead, co-develop and co-commercialize all DM1 products globally in exchange for payment of 50% of research and development costs incurred by Vertex from the effective date of the agreement through IND filing.
In connection with the execution of the 2019 Collaboration Agreement, the Company and Vertex entered into a second amendment to the 2015 Collaboration Agreement, or Amendment No. 2. Among other things, Amendment No. 2 modified certain definitions and provisions of the 2015 Collaboration Agreement to make them consistent with the 2019 Collaboration Agreement and set forth the number and identity of the collaboration targets under the 2015 Collaboration Agreement. The Company and Vertex agreed that 1 of the 4 remaining options under the 2015 Collaboration Agreement, as amended, would not be exercised; instead, the Company reacquired the exclusive rights and agreed to conduct research and development activities for the specified target. Vertex will have the option to co-develop and co-commercialize the specified target upon IND filing in exchange for payment of 50% of research and development costs incurred by the Company from the effective date of the agreement through IND filing. If Vertex does not exercise its option to co-develop and co-commercialize the specified target, Vertex is eligible to receive up to $395.0 million in potential specified research, development, regulatory and commercial milestones and tiered single-digit royalties on future net sales.
10
In October 2019, Vertex exercised the remaining 3 options granted to it under the 2015 Collaboration Agreement to exclusively license the collaboration targets developed under the 2015 Collaboration Agreement, resulting in a payment of $30.0 million to the Company in the fourth quarter of 2019. In addition, the Company achieved the first milestone under the 2019 Collaboration Agreement in the first quarter of 2020 and, in connection therewith, received a payment of $25.0 million in April 2020. The Company achieved the second milestone under the 2019 Collaboration Agreement in the fourth quarter of 2021 and, in connection therewith, received a payment of $12.5 million in December 2021. As of March 31, 2022, the Company is eligible to receive remaining potential future milestones of $775.0 million under the 2019 Collaboration Agreement.
OnIn April 16, 2021, the Company and Vertex agreed to amend and restate the JDA and entered into an Amended and Restated Joint Development and Commercialization Agreement, or the “A&R Vertex JDCA,” pursuant to which the parties agreed to, among other things, (a) adjust the governance structure for the collaboration and adjust the responsibilities of each party thereunder, whereby Vertex shall lead and have all decision making (i.e., control) in relation to the CTX001 program prospectively; (b) adjust the allocation of net profits and net losses between the parties with respect to CTX001 only, which will be allocated 40% to the Company and 60% to Vertex, prospectively; and (c) exclusively license (subject to the Company’s reserved rights to conduct certain activities) certain intellectual property rights to Vertex relating to the specified product candidates and products (including CTX001) that may be researched, developed, manufactured and commercialized on a worldwide basis under such agreement. The transaction contemplated by the A&R Vertex JDCA closed on June 2,in the second quarter of 2021. The Company will provideis providing certain specified transition services to Vertex in connection with the agreement.
In connection with the closing of the transaction contemplated by the A&R Vertex JDCA, the Company received a $900.0 million up-front payment from Vertex. Additionally, the Company is eligible to receive a one-time $200.0 million milestone payment upon receipt by Vertex of the first marketing approval of the initial product candidate from the U.S. Food and Drug Administration or the European Commission. With respect to CTX001 only, the net profits and net losses, as applicable, incurred under the A&R Vertex JDCA through July 1, 2021 in connection with the initial shared product (i.e., CTX001) were shared equally between the Company and Vertex, and beginning July 1, 2021, the net profits and net losses, as applicable, incurred under the A&R Vertex JDCA are allocated 40% to the Company and 60% to Vertex. Additionally, the A&R Vertex JDCA allows the Company to defer a portion of its share of costs under the arrangement if spending on the CTX001 program exceeds specified amounts. Any deferred amounts are only payable to Vertex as an offset against future profitability of the CTX001 program and the amounts payable are capped at a specified maximum amount per year.
11
Accounting for the Vertex Agreements
The 2015 Collaboration Agreement, Amendment No. 1, and JDA are collectively the “2015 Agreements” and the 2019 Collaboration Agreement and Amendment No. 2. are collectively the “2019 Agreements.” The 2015 Collaboration Agreement, Amendment No. 1, Amendment No. 2, JDA, A&R Vertex JDCA and 2019 Collaboration Agreement are collectively the “Vertex Agreements.”
The Vertex Agreements include components of a customer-vendor relationship as defined under ASC 606, Revenue from Contracts with Customers, or ASC 606, collaborative arrangements as defined under ASC 808, Collaborative Agreements, or ASC 808, and research and development costs as defined under ASC 730, Research and Development, or ASC 730. Additionally, the A&R Vertex JDCA allows the Company to defer a portion of its share of costs under the arrangement if spending on the CTX001 program exceeds specified amounts, which are only payable to Vertex as an offset against future profitability of the CTX001 program up to a maximum amount per year.
11
Accounting Analysis Under ASC 606
Accounting for the A&R Vertex JDCA
Identification of the Contract
The A&R Vertex JDCA represented a contractual modification to the JDA. For accounting purposes, the A&R Vertex JDCA was treated as a separate contract.
Identification of Performance Obligations
The Company concluded the A&R Vertex JDCA contained a single material promise, an exclusive worldwide license granting Vertex an additional 10% economic interest in the CTX001 program and the right to control development and commercialization of CTX001, or the “CTX001 Exclusive License.” The Company concluded the CTX001 Exclusive License was both capable of being distinct and distinct within the context of the A&R Vertex JDCA, and the CTX001 Exclusive License was sold at its estimated standalone selling price, or “ESSP.” As such, the CTX001 Exclusive License represented a separate performance obligation.
Determination of Transaction Price
The transaction price was comprised of the upfront payment of $900.0 million. The Company determined that all other possible variable consideration resulting from milestones and royalties discussed above was fully constrained at the time of the transaction. The Company will reevaluate the transaction price in each reporting period.
Allocation of Transaction Price to Performance Obligations
The selling price of the performance obligation was determined based on the Company’s ESSP. The Company developed the ESSP for the CTX001 Exclusive License with the objective of determining the price at which it would sell such an item if it were to be sold regularly on a standalone basis.
The ESSP for the exclusive worldwide license for CTX001 Exclusive License was determined to be approximately $900.0 million. The ESSP was determined based on 10% of the probability and present value adjusted cash flows from projected worldwide net profit for CTX001 based on probability assessments, projections based on internal forecasts, industry data, and information from other guideline companies within the same industry and other relevant factors. As the Company determined the CTX001 Exclusive License was the only performance obligation, the entire transaction price was allocated to the CTX001 Exclusive License. The aforementioned ESSP reflects the level of risk and expected probability of success inherent in the nature of the associated research area.
Recognition of Revenue
The Company determined that the CTX001 Exclusive License represented functional intellectual property, as the intellectual property provides Vertex with the ability to perform a function or task in the form of research and development, manufacturing and commercialization. As such, the revenue related to the CTX001 Exclusive License was recognized at the point in time, which was upon transfer in the second quarter of 2021.
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Accounting for the 2019 Agreements
Identification of the Contract
The 2019 Agreements represented a contract modification to the 2015 Agreements. As a result, the 2019 Agreements and the 2015 Agreements are combined for accounting purposes and treated as a single arrangement.
Identification of Performance Obligations
The Company concluded the following material promises were both capable of being distinct and distinct within the context of the Vertex Agreements and represented separate performance obligations: (i) an exclusive license for worldwide rights for DMD gene editing products, or DMD License; (ii) an exclusive license for worldwide rights for DM1 gene editing products, or DM1 License; (iii) the performance of specified guide RNA research for DM1, or DM1 R&D Services; (iv) a material right representing the option to obtain a co-exclusive development and commercialization license for a specified target, or Specified Target Option; (v) three material rights representing the option for up to three exclusive licenses to develop and commercialize the collaboration targets, or Collaboration Target Options; and (vi) the waiving of Vertex’s material right associated with its option to a fourth exclusive license in connection with the Company’s reacquisition of exclusive rights to the specified target.
Determination of Transaction Price
The overall transaction price was determined based on the remaining transaction price from the 2015 Agreements, as well as the transaction price from Transactions under the 2019 Agreements. The transaction price includes variable consideration estimated usingAgreements were not material for the most likely amount methodology. As such, the Company determined the transaction price totaling $268.6 million was comprised of: (i) $57.8 million of pre-existing deferred revenue from the 2015 Agreements; (ii) non-cash consideration of $10.0 million related to the waiving of Vertex’s material right associated with its option to a fourth exclusive license in connection with the Company’s reacquisition of exclusive rights to the specified target; (iii) an upfront payment of $175.0 million; (iv) variable consideration of $25.0 million which represented the Company’s estimate related to a near-term researchthree months ended March 31, 2022 and development milestone for which the Company determined that it is not probable that a significant reversal of cumulative consideration will occur at the onset of the transaction; and (v) variable consideration of $0.8 million which represents the Company’s estimate of payments from Vertex for DM1 R&D Services.2021.
The Company determined that all other possible variable consideration remaining under the 2019 Agreements resulting from milestones and royalties discussed above was fully constrained as of September 30, 2021.March 31, 2022. The Company will re-evaluate the transaction price in each reporting period.
Allocation of Transaction Price to Performance Obligations
The selling price of each performance obligation was determined based on the Company’s ESSP. The Company developed the ESSP for all the performance obligations included in the Vertex Agreements with the objective of determining the price at which it would sell such an item if it were to be sold regularly on a standalone basis. The Company then allocated the transaction price to each performance obligation on a relative standalone selling price basis.
The ESSP for the DMD License and DM1 License was determined to be $224.6 million and $76.2 million, respectively. The ESSP was determined based on probability and present value adjusted cash flows from projected worldwide net profit for each of the respective programs based on probability assessments, projections based on internal forecasts, industry data, and information from other guideline companies within the same industry and other relevant factors. On a relative basis, $151.1 million and $51.3 million of the transaction price was allocated to the DMD License and DM1 License, respectively.
The ESSP for the Specified Target Option material right was determined to be $17.5 million, which was based on the incremental discount between (i) the value of the probability and present value adjusted cash flows from the equal sharing of projected worldwide net profit increased by the value of the option provided to Vertex less (ii) the expected exercise price at the time of option exercise. The present value adjusted cash flows also considered projections based on internal forecasts, industry data, and information from other guideline companies within the same industry and other relevant factors. On a relative basis, $11.8 million of the transaction price was allocated to the Specified Target Option material right.
The ESSP for each of the three Collaboration Target Option material rights was determined to be $25.0 million, $22.2 million and $22.2 million, respectively, which was determined based on the probability and present value adjusted cash flows from milestone payments owed for exclusive licenses, less the price paid to exercise each option. On a relative basis, $46.7 million of the transaction price was allocated to the Collaboration Target Option material rights.
The aforementioned ESSPs reflect the level of risk and expected probability of success inherent in the nature of the associated research area.
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The ESSP for the waiving of Vertex’s material right associated with its option to a fourth exclusive license under the 2015 Agreements was determined to be $10.0 million, or the contractual value of the option. On a relative basis, $6.7 million of the transaction price was allocated to the waiving of Vertex’s material right associated with its option to a fourth exclusive license under the 2015 Agreements.
The ESSP for the DM1 R&D Services was determined to be $1.7 million, which was based on estimates of the associated effort and cost of the services, adjusted for a reasonable profit margin that would be expected to be realized under similar contracts. On a relative basis, $1.1 million of the transaction price was allocated to the DM1 R&D Services.
Recognition of Revenue
The Company determined that the DMD License and DM1 License represent functional intellectual property, as the intellectual property provides Vertex with the ability to perform a function or task in the form of research and development. As such, the revenue related to the licenses was recognized at the point in time in which they were delivered during the third quarter of 2019.
The revenue allocated to the waiving of Vertex’s material right associated with its option to a fourth exclusive license in connection with Company’s reacquisition of exclusive rights to the specified target was recognized at the point in time in which the option was waived, on the effective date of the 2019 Agreements.
The Company concluded that the Specified Target Option and Collaboration Target Options were considered material rights under the Vertex Agreements. Revenue related to the three Collaboration Target Options material right was recognized at the point in time in which Vertex exercised the Collaboration Target Options, which occurred in the fourth quarter of 2019.
The Company recognizes revenue related to the DM1 R&D Services over time as the services are rendered, which was originally expected to be over an 18-month period from the effective date of the 2019 Agreements and is now expected to be over a 24-month period from the effective date of the 2019 Agreements.
Accounting for the 2015 Agreements (prior to the execution of the 2019 Agreements)
On January 1, 2018, the Company adopted ASC 606 using the modified retrospective approach. The Company applied the practical expedient in ASC 606-10-65-1 in identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price under the practical expedient in ASC 606. There was no significant impact on revenue recognized under ASC 606 and the prior revenue recognition as a result of the adoption.
Identification of the Contract
Amendment No. 1 and the JDA represented a contract modification to the 2015 Collaboration Agreement. As a result, the 2015 Agreements are combined for accounting purposes and treated as a single arrangement.
Identification of Performance Obligations
The Company concluded the following material promises were both capable of being distinct and distinct within the context of the 2015 Agreements and represented separate performance obligations: (i) the non-exclusive research license; (ii) four material rights representing the option for up to four exclusive licenses to develop and commercialize the collaboration targets; (iii) a combined performance obligation representing the co-exclusive research license, and a development and commercialization license to develop and commercialize hemoglobinopathies and beta-globin targets; and (iv) the performance of R&D Services.
Determination of Transaction Price
The overall transaction price was comprised of: (i) original upfront payment of $75.0 million, (ii) an upfront payment of $7.0 million under the JDA, and (iii) $19.3 million of variable consideration associated with the R&D services.
The Company determined that all other possible variable consideration resulting from milestones and royalties discussed above was fully constrained at the time of the transaction.
Allocation of Transaction Price to Performance Obligations
The selling price of each performance obligation was determined based on the Company’s ESSP. The Company developed the ESSP for all the performance obligations included in the 2015 Agreements with the objective of determining the price at which it
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would sell such an item if it were to be sold regularly on a standalone basis. The Company then allocated the transaction price to each performance obligation on a relative standalone selling price basis.
The ESSP for R&D Services was determined to be $19.3 million. The Company developed the ESSP for the R&D Services primarily based on the nature of the services to be performed and estimates of the associated effort and cost of the services, adjusted for a reasonable profit margin that would be expected to be realized under similar contracts. The Company allocated $19.3 million of the transaction price to R&D Services.
The Company’s ESSP for each of the remaining material rights to obtain an exclusive license to develop and commercialize a single collaboration target are $45.6 million, $38.4 million, $17.3 million and $17.3 million for a total of $118.6 million. ESSPs for these items were determined based on the probability and present value adjusted cash flows from milestone payments owed for exclusive licenses, less the price paid to exercise each option. On a relative basis, $57.7 million of the transaction price was allocated to these material rights.
The Company’s ESSP for the co-exclusive research license and the development and commercialization licenses for hemoglobinopathy and beta-globin targets is $48.9 million. The ESSP for this item was determined based on probability and present value adjusted cash flows from the equal sharing of projected worldwide net profit. ESSP reflects the level of risk and expected probability of success inherent in the nature of the associated research area. On a relative basis, $23.8 million of the transaction price was allocated to the co-exclusive research license and the development and commercialization licenses for hemoglobinopathy and beta-globin targets.
The Company used a market-based approach to determine the ESSP of the non-exclusive research license of $1.0 million. The Company determined ESSP by use of comparative data, including in-licensed research agreements negotiated and executed within the Company. On a relative basis, $0.5 million of the transaction price was allocated to the non-exclusive research license.
The aforementioned ESSPs reflect the level of risk and expected probability of success inherent in the nature of the associated research area.
Recognition of Revenue
The Company determined that the non-exclusive research license is symbolic intellectual property as Vertex receives value from the license through the Company’s ongoing activities, and, as such, the revenue related to the non-exclusive research license was recognized ratably over the term of the arrangement. Upon the execution of the JDA, a co-exclusive research, development and commercialization license was granted for hemoglobinopathy and beta-globin targets. The Company determined that the revenue related to these licenses was recognized at a point in time, in which they were delivered at inception of the JDA in December 2017. As Vertex has the material right in its option to obtain four additional exclusive licenses to develop and commercialize four additional collaboration targets, the Company determined that consideration allocated to these material rights would be included in the transaction price of the exclusive license and recognized at a point in time, upon the exercise of the option by Vertex or expiration. As the Company has a right to consideration from Vertex in an amount that corresponds directly with the value of the Company’s performance completed to date for the R&D services, the Company recognized revenue related to the R&D services as invoiced, in line with the practical expedient in ASC 606-10-55-18.
Revenue recognized in connection with the Vertex Agreements
Revenue recognized under the Vertex Agreements for the three and nine months ended September 30,March 31, 2022 and 2021, respectively, was $0.2 million and $900.6 million, respectively. Revenue recognized under the Vertex Agreements for the three and nine months ended September 30, 2020, respectively, was 0tnot material.
As of September 30,March 31, 2022 and December 31, 2021, there was 0 current deferred revenue related to the collaboration with Vertex. As of DecemberMarch 31, 2020,2022, there was $0.4 million of current deferred revenue related to the collaboration with Vertex. As of September 30, 2021, there was $11.812.3 million of non-current deferred revenue related to the collaboration with Vertex, which is unchanged from December 31, 2020.2021. The transaction price allocated to the remaining performance obligations was $11.812.3 million.
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Future Milestones under the Vertex Agreements
The Company has evaluated the milestones that may be received in connection with the Vertex Agreements. As discussed above, the Company is eligible to receive up to $410.0 million in additional development, regulatory and commercial milestones and royalties on net product sales for each of the three collaboration targets that Vertex licensed in the fourth quarter of 2019. Each
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milestone is payable only once per collaboration target, regardless of the number of products directed to such collaboration target that achieve the relevant milestone event.
The Company is eligible to receive additional potential future payments of up to $800.0775.0 million based upon the successful achievement of specified research, development, regulatory and commercial milestones for the DMD and DM1 programs. The Company is also eligible to receive tiered royalties on future net sales on any products that may result from this collaboration; however, the Company has the option to forego the DM1 milestones and royalties to co-develop and co-commercialize all DM1 products globally.
The Company is eligible to receive additional potential future payments of up to $200.0 million upon receipt by Vertex of the first marketing approval of the initial product candidate from the U.S. Food and Drug Administration or the European Commission. In addition, the Company has the option to conduct research at their own cost in certain defined areas that, if beneficial to the CTX001 program and CTX001 ultimately achieves regulatory approval in such areas, then the Company could be entitled to certain milestone payments aggregating to high eight digits from Vertex.
Each of the remaining milestones are fully constrained as of September 30, 2021.March 31, 2022. There is uncertainty that the events to obtain the research and developmental milestones will be achieved given the nature of clinical development and the stage of the CRISPR/Cas9 technology. The remaining research, development and regulatory milestones will be constrained until it is probable that a significant revenue reversal will not occur. Commercial milestones and royalties relate predominantly to a license of intellectual property and are determined by sales or usage-based thresholds. The commercial milestones and royalties are accounted for under the royalty recognition constraint and will be accounted for as constrained variable consideration. The Company applies the royalty recognition constraint for each commercial milestone and will not recognize revenue for each until the subsequent sale of a licensed product (achievement of each) occurs.
Accounting Analysis under ASC 808
In connection with the Vertex Agreements, the Company identified the following collaborative elements, which are accounted for under ASC 808: (i) development and commercialization services for shared products, including any transition services related to CTX001 as stipulated inunder the A&R JDCA, the cost of such services will be shared by the parties pursuant to the cost share agreement;Vertex JDCA; (ii) R&D Services for follow-on products; and (iii) committee participation. The related impact of the cost sharing associated with research and development is included within collaboration expense, net, in researchthe condensed consolidated statements of operations and development expense. Expenses related to services performed by the Company are classified as research and development expense. Payments received from Vertex for partial reimbursement of expenses are recorded as a reduction of research and development expense.comprehensive loss.
During the three and nine months ended September 30,March 31, 2022 and 2021, the Company recognized $22.530.6 million and $69.419.9 million of research and developmentcollaboration expense, net, related to the Vertex Agreements, respectively. During the three and nine months ended September 30, 2020, the Company recognizedCollaboration expense, net, was net of $12.57.4 million and $31.5 million of research and development expense related to the Vertex Agreements, respectively. Research and development expense for the three and nine months ended September 30, 2021 was net of $15.8 million and $39.010.6 million of reimbursements from Vertex, respectively. Research and development expense for the three and nine months ended September 30, 2020 was net of $6.8 million and $17.8 million of reimbursements from Vertex, respectively.
Accounting Analysis under ASC 730
In connection with the 2019 Agreements, the Company and Vertex agreed that 1 of the 4 remaining options under the 2015 Agreements, as amended, would not be exercised; instead, the Company will conduct research and development activities for a specified target. Vertex will have the option to co-develop and co-commercialize the specified target upon IND filing in exchange for payment of 50% of research and development costs incurred by the Company from the effective date of the agreement through IND filing. If Vertex does not exercise its option to do so within a specified time period, Vertex is eligible to receive up to $395.0 million in potential specified research, development, regulatory and commercial milestones and tiered single-digit royalties on future net sales.
In connection therewith, the Company determined that in order for the Company to obtain the right to conduct research and development activities on the specified target, the Company had waived its right to receive an option exercise payment of $10.0 million from Vertex, which was included as non-cash consideration in the transaction price for the 2019 Agreements described above. The Company then subsequently reacquired its rights to the specified target by waiving payment owed by Vertex of $10.0 million for a license that represents in-process research and development and therefore, $10.0 million of non-cash consideration was fully expensed upon the execution of the 2019 Agreements. The Company also determined that research and development services through IND for the specified target and any payment of future development and commercialization milestones, as well as sales-based milestones and royalties for the specified target, would be accounted for as research and development costs under ASC 730 and
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expensed as incurred. In addition, the Company also determined that should the Company elect its option to co-develop and co-commercialize all DM1 products globally, it will record the option fee as research and development expense upon exercise.
In connection with the A&R JDCA, Vertex has the option to conduct research at their own cost in certain defined areas that, if beneficial to the CTX001 program and CTX001 ultimately achieves regulatory approval in such areas, then the Company could owe Vertex certain milestone payments aggregating to high eight digits, subject to certain limitations on the profitability of the CTX001 program.
Agreements with Bayer Healthcare LLC
Summary
On December 19, 2015, the Company entered into an agreement with Bayer, to establish a joint venture to focus on the research and the development of new therapeutics to cure blood disorders, blindness and congenital heart disease. On February 12, 2016, the Company and Bayer completed the formation of the joint venture entity, Casebia. Bayer and the Company each received a 50% equity interest in the entity in exchange for their respective contributions to the entity. At that time, the Company also entered into a separate service agreement with Casebia, under which the Company agreed to provide compensated research and development services. Collectively, these agreements are referred to as the “2015 Casebia Agreements.”
On December 13, 2019, the Company, Bayer and Casebia entered into a series of transactions by which, among other things, the Company acquired 100% of the partnership interests in Casebia, or the Retirement Agreement, the Company and Bayer terminated their joint venture, or the Joint Venture Termination Agreement, and the Company and Bayer entered into a new option agreement, or the 2019 Option Agreement. Collectively, these agreements are referred to as the “2019 Casebia Agreements.”
In connection with the Retirement Agreement, Casebia retired Bayer’s outstanding partnership interests in exchange for $22.0 million less certain estimated interim operating expenses of $6.0 million, and the Company acquired 100% of the partnership interests in Casebia.
In connection with entering into the Retirement Agreement, the Company, Bayer and Casebia entered into the Joint Venture Termination Agreement. In connection therewith, the Company and Bayer agreed to terminate the Joint Venture Agreement from December 2015. Under the Joint Venture Termination Agreement, Casebia-owned patents are now co-owned by the Company and Bayer, subject to certain exclusive licenses granted therein. Under the Joint Venture Termination Agreement, the Company and Bayer each retained rights to their respective contributed intellectual property.
In connection with entering into the Retirement Agreement and the Joint Venture Termination Agreement, the Company and Bayer also entered into the 2019 Option Agreement, under which, among other things, the Company committed to invest a specified amount in certain research and development activities as described under “Accounting Analysis – Accounting for 2019 Casebia Agreements”. In addition, Bayer has an option (exercisable during a specified exercise period defined by future events, but in no event longer than 5 years after the effective date of the 2019 Option Agreement) to co-develop and co-commercialize 2 products for the diagnosis, treatment or prevention of certain autoimmune disorders, eye disorders or hemophilia A disorders. In the event Bayer elects to co-develop and co-commercialize a product, the parties will negotiate and enter into a co-development and co-commercialization agreement, or the Co-Commercialization Agreement, for such product, and Bayer would be responsible for 50% of the research and development costs incurred by the Company for such product going forward. Bayer would receive 50% of all profits from sales of such product and would be responsible for 50% of all losses.
If Bayer elects to exercise its option to co-develop and co-commercialize a product, Bayer will make a one-time $20.0 million payment, or the Option Payment, to the Company that will become non-refundable once the parties execute a Co-Commercialization Agreement with respect to such optioned product. The Option Payment is payable only once with respect to the first time Bayer exercises an option under the 2019 Option Agreement.
In addition, following Bayer’s exercise of its option and/or the execution of the Co-Commercialization Agreement for an optioned product, for a period beginning on the effective date of such Co-Commercialization Agreement and ending on the earlier of the three month anniversary of such effective date or during the 90-day negotiation process of such Co-Commercialization Agreement, Bayer has a right to negotiate an exclusive license to develop and commercialize such optioned product. If Bayer exercises such right, the parties will enter into an exclusive license agreement for such optioned product on terms mutually agreeable to the parties. Further, the Option Payment paid for such optioned product would become credited against payments due under such exclusive license or any other exclusive license entered into in connection with the 2019 Option Agreement.
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Either party may terminate the 2019 Option Agreement upon the other party’s material breach, subject to specified notice and cure provisions. The Company may also terminate the 2019 Option Agreement in the event Bayer commences or participates in any action or proceeding challenging the validity or enforceability of any Company patent necessary or useful for the research, development, manufacture or commercialization of a product that is the subject of the 2019 Option Agreement. Bayer may also terminate the 2019 Option Agreement upon the Company’s bankruptcy or insolvency, or for convenience at any time, after giving written notice.
Accounting Analysis
Accounting for the 2015 Casebia Agreements
Transactions under the 2015 Casebia Agreements ceased on the effective date of the 2019 Casebia Agreements. There was no financial impact of the 2015 Casebia Agreements for the three and nine months ended September 30, 2021 and 2020.
Accounting for the 2019 Casebia Agreements
The Company determined that the Retirement Agreement and Joint Venture Termination Agreement resulted in the Company obtaining a controlling interest in Casebia and should be accounted for as a separate component from the 2019 Option Agreement. In doing so, the Company allocated the consideration transferred of $41.0 million (consisting of $16.0 million of assets acquired net of the purchase price, as displayed in the table below, and $25.0 million of cash allocated to the 2019 Option Agreement) between the two components using a relative fair value approach. The Company determined the relative fair value related to obtaining a controlling interest in Casebia was $32.0 million and the relative fair value of the consideration transferred related to the 2019 Option Agreement was $25.0 million, which is comprised of $20.2 million related to certain research and development activities and $4.8 million related to certain options as described above.
As a result of the Retirement Agreement, the Company determined that it had obtained a controlling interest in a variable interest entity, for which it became the primary beneficiary. As such, under ASC 810, Consolidation, the Company accounted for the net assets obtained under ASC 805, Business Combinations. In accordance therewith, the Company determined the set of acquired assets and assumed liabilities did not meet the definition of a business, as the Company did not acquire an assembled workforce and thus the Company did not acquire substantive processes capable of producing outputs. As such, no goodwill was recorded. The Company measured the fair value of the assets and liabilities received, determining the relative fair value was $16.0 million (after paying the $16.0 million for Bayer’s 50% interest) and recorded the difference between that amount and the Company’s carrying amount, which was 0, as a gain within other income (expense). The relative fair value of the assets and liabilities received (exclusive of the $16.0 million paid from Casebia to Bayer to retire Bayer’s interest in the JV) was determined as follows (in thousands):
Fair value |
| Amount |
| |
Cash and cash equivalents |
| $ | 6,784 |
|
Prepaid expenses and other current assets |
|
| 2,565 |
|
Property, plant and equipment, net |
|
| 9,340 |
|
Operating lease assets |
|
| 11,003 |
|
Restricted cash |
|
| 1,226 |
|
Accrued expenses and other current liabilities |
|
| (3,915 | ) |
Operating lease liabilities |
|
| (11,003 | ) |
Net assets |
| $ | 16,000 |
|
The value of the reacquired rights related to the intellectual property was determined to be insignificant.
The Company determined that the 2019 Option Agreement should be accounted for under ASC 730. This determination was based on the fact that the financial risk associated with the research and development has been transferred to the Company because repayment of any of the funds provided by Bayer depends solely on the results of the research and development having a future economic benefit. The Company further determined that it had two separate obligations under the 2019 Option Agreements, which consist of (i) research and development services and (ii) future delivery of up to 2 options for products in defined fields. The relative fair value of the obligations was determined to be $20.2 million and $4.8 million, respectively. As the Company has accounted for its obligations as a contract to perform research and development for others, with respect to the obligation to perform research and development services the Company will recognize an offset to research and development expense as the research is performed and, with respect to the future delivery of up to two option for products in defined fields, at the earlier of option exercise (at or near IND application filing), expiration, or when commercially reasonable efforts to progress the program have been exhausted.
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During the three and nine months ended September 30, 2021, the Company recorded a benefit of $0.0 million and $7.0 million, respectively, to research and development expense for qualifying expenses incurred under the 2019 Option Agreement. During the three and nine months ended September 30, 2020, the Company recorded a benefit of $4.4 million and $8.6 million, respectively, to research and development expense for qualifying expenses incurred under the 2019 Option Agreement. As of September 30, 2021 and December 31, 2020, the Company has recorded $0.0 million and $7.0 million, respectively, in other current liabilities relating to certain research and development obligations to be satisfied within one year of the balance sheet date. As of September 30, 2021, the Company has recorded $4.8 million in other long-term liabilities consisting of the previously allocated value of such obligations to be satisfied beyond one year from the balance sheet date as well as the relative fair value of the options, which is unchanged from December 31, 2020.
8. Share Capital
The Company had 145,364,335 authorized common shares as of September 30, 2021,March 31, 2022, with a par value of CHF 0.03 per share. Share Capital consisted of the following:
|
| As of |
|
| As of |
| ||||||||||||||
Type of Share Capital |
| Conditional Capital |
| September 30, 2021 |
| December 31, 2020 |
|
| Conditional Capital |
| March 31, 2022 |
|
| December 31, 2021 |
| |||||
Common shares |
| Registered share capital |
| 80,321,227 |
| 75,133,951 |
|
| Registered share capital |
| 82,028,328 |
| 80,321,227 |
| ||||||
Common shares |
| Authorized share capital |
| 39,316,975 |
| 17,625,426 |
|
| Authorized share capital |
| 39,316,975 |
| 39,316,975 |
| ||||||
Common shares |
| Conditional share capital - Bonds or similar debt instruments |
| 4,919,700 |
| 4,919,700 |
|
| Conditional share capital - Bonds or similar debt instruments |
| 4,919,700 |
| 4,919,700 |
| ||||||
Common shares |
| Conditional share capital - Employee benefit plans |
|
| 20,806,433 |
|
| 17,493,709 |
|
| Conditional share capital - Employee benefit plans |
|
| 19,099,332 |
|
|
| 20,806,433 |
| |
|
| Total |
|
| 145,364,335 |
|
| 115,172,786 |
|
| Total |
|
| 145,364,335 |
|
|
| 145,364,335 |
|
Common Share Issuances
At-the-Market OfferingsOffering
In August 2019, the Company entered into an Open Market Sale AgreementSM with Jefferies LLC, or Jefferies, under which the Company was able to offer and sell, from time to time at its sole discretion through Jefferies, as its sales agent, its common shares, par value of CHF 0.03 per share, or the August 2019 Sales Agreement. In August 2019, the Company filed a prospectus supplement with the SEC to offer and sell, from time to time, common shares having aggregate gross proceeds of up to $200.0 million, or the 2019 ATM. During the year ended December 31, 2020, the Company issued and sold an aggregate of 2.2 million common shares under the 2019 ATM at an average price of $89.47 per share for aggregate proceeds of $195.5 million, which were net of equity issuance costs of $4.5 million.
In December 2020, in connection with the August 2019 Sales Agreement, the Company filed a prospectus supplement with the SEC to offer and sell, from time to time, common shares having aggregate gross proceeds of up to $13350.0
million, or the 2020 ATM. During the year ended December 31, 2020, the Company issued and sold an aggregate of 1.8 million common shares under the 2020 ATM at an average price of $169.57 per share for aggregate proceeds of $298.0 million, which were net of equity issuance costs of $4.5 million. Additional equity issuance costs for stamp taxes related to shares sold in 2020 related to the 2019 ATM and 2020 ATM were $4.9 million, of which $4.0 million was payable as of December 31, 2020.
In January 2021, the Company issued and sold under the 2020 ATM an aggregate of 0.3 million common shares at an average price of $162.46 per share with aggregate proceeds of $46.7 million, which were net of equity issuance costs of $0.7 million. An additional $0.5 million of stamp taxes on this amount was paid in 2021.
In January 2021, in connection with the August 2019 Sales Agreement, the Company filed a prospectus supplement with the SEC to offer and sell, from time to time, common shares having aggregate gross proceeds of up to $600.0 million. In July 2021, the Company filed a new prospectus supplement with the SEC, which replaced the previous prospectus supplement filed in January 2021, to offer and sell, from time to time, common shares having aggregate gross proceeds of up to $419.8million, or the 2021 ATM. As of September 30, 2021,March 31, 2022, the Company has issued and sold an aggregate of 1.1 million common shares under the 2021 ATM at an average price of $169.82 per share for aggregate proceeds of $177.8 million, which were net of equity issuance costs of $2.4 million. An additional $1.8NaN million of stamp taxes on this amount was paid in 2021.
July 2020 Offering
In July 2020,shares were issued and sold under the Company sold 7.4 million common shares through an underwritten public offering (inclusive of shares sold pursuant to2021 ATM for the exercise of the underwriters’ option to purchase additional shares) at a public offering price of $70.00 per share for aggregate net proceeds of $484.8 million, which were net of equity issuance costs and stamp tax of $32.5 million.three months ended March 31, 2022.
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9. Stock-based Compensation
During the three and nine months ended September 30,March 31, 2022 and 2021, and 2020, the Company recognized the following stock-based compensation expense (in thousands):
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| ||||||||||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 |
|
| 2022 |
|
| 2021 |
| |||||||||
Research and development |
| $ | 14,190 |
| $ | 9,109 |
| $ | 43,230 |
| $ | 24,492 |
|
| $ | 14,589 |
| $ | 12,845 |
| ||||
General and administrative |
|
| 12,009 |
|
|
| 8,131 |
|
|
| 33,392 |
|
|
| 22,596 |
|
|
| 11,156 |
|
|
| 9,247 |
|
Total |
| $ | 26,199 |
| $ | 17,240 |
| $ | 76,622 |
| $ | 47,088 |
|
| $ | 25,745 |
|
| $ | 22,092 |
|
Stock option activity
The following table summarizes stock option activity for the ninethree months ended September 30, 2021:March 31, 2022:
|
| Shares |
|
| Weighted- |
| ||
Outstanding at December 31, 2020 |
|
| 8,101,980 |
|
| $ | 42.44 |
|
Granted |
|
| 1,130,158 |
|
|
| 136.22 |
|
Exercised |
|
| (964,436 | ) |
|
| 33.09 |
|
Cancelled or forfeited |
|
| (379,930 | ) |
|
| 65.84 |
|
Outstanding at September 30, 2021 |
|
| 7,887,772 |
|
| $ | 55.89 |
|
Exercisable at September 30, 2021 |
|
| 4,374,086 |
|
| $ | 37.27 |
|
Vested and expected to vest at September 30, 2021 |
|
| 7,887,772 |
|
| $ | 55.89 |
|
|
| Shares |
|
| Weighted- |
| ||
Outstanding at December 31, 2021 |
|
| 7,812,982 |
|
| $ | 58.07 |
|
Granted |
|
| 820,189 |
|
|
| 58.62 |
|
Exercised |
|
| (261,280 | ) |
|
| 39.17 |
|
Cancelled or forfeited |
|
| (151,433 | ) |
|
| 78.48 |
|
Outstanding at March 31, 2022 |
|
| 8,220,458 |
|
| $ | 58.35 |
|
Exercisable at March 31, 2022 |
|
| 4,757,990 |
|
| $ | 43.59 |
|
Vested and expected to vest at March 31, 2022 |
|
| 8,220,458 |
|
| $ | 58.35 |
|
As of September 30, 2021,March 31, 2022, total unrecognized compensation expense related to stock options was $159.2157.6 million, which the Company expects to recognize over a remaining weighted-average period of 2.72.8 years.
Restricted stock activity
The following table summarizes restricted stock activity for the ninethree months ended September 30, 2021:March 31, 2022:
|
| Restricted |
| Weighted- |
|
| Restricted |
|
| Weighted- |
| |||||
Unvested balance as of December 31, 2020 |
|
| 894,092 |
|
| $ | 70.55 |
| ||||||||
Unvested balance as of December 31, 2021 |
|
| 934,175 |
|
| $ | 100.14 |
| ||||||||
Granted |
|
| 404,575 |
|
|
| 130.45 |
|
| 361,896 |
| 58.55 |
| |||
Vested |
|
| (209,189 | ) |
|
| 43.56 |
|
| (123,564 | ) |
| 83.94 |
| ||
Cancelled or forfeited |
|
| (73,247 | ) |
|
| 88.49 |
|
|
| (25,143 | ) |
|
| 109.89 |
|
Unvested balance as of September 30, 2021 |
|
| 1,016,231 |
|
| $ | 98.50 |
| ||||||||
Unvested balance as of March 31, 2022 |
|
| 1,147,364 |
|
| $ | 88.56 |
|
As of September 30, 2021,March 31, 2022, total unrecognized compensation expense related to unvested restricted common shares was $70.081.6 million, which the Company expects to recognize over a remaining weighted-average vesting period of 2.62.7 years.
14
10. Net (Loss) IncomeLoss Per Share Attributable to Common Shareholders
Basic net (loss) incomeloss per share is calculated by dividing net (loss) incomeloss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net (loss) incomeloss per share is calculated by dividing the net (loss) incomeloss attributable to common shareholders by the weighted-average number of common share equivalents outstanding for the period, including any dilutive effect from outstanding stock options and warrants using the treasury stock method. The Company’s net (loss) incomeloss is net (loss) incomeloss attributable to common shareholders for all periods presented.
20
The following table sets forth the computation of basic and diluted net (loss) income per share for the periods ended (in thousands, except share and per share amounts):
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Net (loss) income |
| $ | (127,153 | ) |
| $ | (92,439 | ) |
| $ | 518,909 |
|
| $ | (241,826 | ) |
Basic weighted-average common shares outstanding |
|
| 76,288,534 |
|
|
| 70,143,481 |
|
|
| 75,712,437 |
|
|
| 64,159,224 |
|
Effect of potentially dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Outstanding options |
|
| — |
|
|
| — |
|
|
| 4,340,103 |
|
|
| — |
|
Unvested restricted common shares |
|
| — |
|
|
| — |
|
|
| 502,142 |
|
|
| — |
|
Diluted weighted-average common shares outstanding |
|
| 76,288,534 |
|
|
| 70,143,481 |
|
|
| 80,554,682 |
|
|
| 64,159,224 |
|
Basic net (loss) income per common share |
|
| (1.67 | ) |
|
| (1.32 | ) |
|
| 6.85 |
|
|
| (3.77 | ) |
Diluted net (loss) income per common share |
|
| (1.67 | ) |
|
| (1.32 | ) |
|
| 6.44 |
|
|
| (3.77 | ) |
The following common stock equivalents were excluded from the calculation of diluted net (loss) incomeloss per share for the periods indicated because including them would have had an anti-dilutive effect:effect (in thousands):
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
|
| 2022 |
|
| 2021 |
| ||||||
Outstanding options |
| 7,887,772 |
| 7,932,906 |
| 1,556,588 |
| 7,932,906 |
|
|
| 8,220,458 |
| 8,572,663 |
| ||||||||||
Unvested restricted common shares |
| 1,016,231 |
| 897,510 |
| 143,617 |
| 897,510 |
|
|
| 1,147,364 |
| 1,052,379 |
| ||||||||||
ESPP |
|
| 7,685 |
|
| 11,808 |
|
| 6,578 |
|
| 11,808 |
|
|
|
| 10,969 |
|
|
| 10,594 |
| |||
Total |
|
| 8,911,688 |
|
| 8,842,224 |
|
| 1,706,783 |
|
| 8,842,224 |
|
|
|
| 9,378,791 |
|
|
| 9,635,636 |
|
11. Income Taxes
During the three and nine months ended September 30,March 31, 2022 and 2021, the Company recorded an income tax benefit of $0.6 million and a provision of $4.1 million, respectively, representing an effective tax rate of 0.5% and 0.8%, respectively. During the three and nine months ended September 30, 2020, the Company recorded an income tax provision of $0.23.6 million and a provision of $1.00.6 million, respectively, representing an effective tax rate of -0.22.1% and -0.40.5%, respectively. The income tax provision is primarily attributable to the year-to-date pre-tax income earned by the Company’s U.S. subsidiary. The decrease in the rate for the three months ended March 31, 2022 is primarily attributable to the requirement to capitalize research and development costs for tax purposes under the 2017 “Tax Cuts and Jobs Act” (TCJA) which impacts the Company's permanent tax adjustments and the Company's valuation allowance assessment. The difference in the statutory tax rate andand effective tax rate is primarily a result of the jurisdictional mix of earnings, research credits generated, and the valuation allowance recorded against certain deferred tax assets. The Company maintains a valuation allowance against certain deferred tax assets that are not more-likely-than-not realizable.
2115
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (i) our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and (ii) our audited consolidated financial statements and related notes and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 20202021 filed with the Securities and Exchange Commission, or the SEC, on February 16, 2021.15, 2022. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and impact and potential impacts on our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including, without limitation, those factors set forth in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 20202021 and the “Risk Factors” section of subsequent Quarterly Reports on Form 10-Q, our actual results or timing of certain events could differ materially from the results or timing described in, or implied by, these forward-looking statements.
Special Note About Coronavirus (COVID-19)
Since March 2020, we have been evaluating the actual and potential business impacts related to the outbreak of a novel strain of virus named SARS-CoV-2 (severe acute respiratory syndrome 2), or coronavirus, which causes coronavirus disease, or COVID-19. As a result of the ongoing coronavirus pandemic, we have experienced, and may further experience, disruptions, pauses and/or delays that have and could further adversely impact our business operations, and/or associated timelines. As we gradually return to work in accordance with state and local regulations, weWe maintain temporary work-from-home procedures for all employees other than for those personnel and contractors who perform essential activities that must be completed on-site. If negative developments relating to the coronavirus pandemic continue, including as a result of a continued so-called “resurgence” or“periodic resurgence” and additional “waves”, we may be required to restrict on-site staff at our offices and laboratories again and at times have limited access to our offices on a temporary and intermittent basis; with respect to our hemoglobinopathies clinical trials, we may elect to pause patient dosing in certain of our trials again if ICU beds and related healthcare resources become significantly constrained again or governmental authorities impose additional business or travel restrictions; with respect to our immuno-oncology clinical trials, investigators participating in our clinical trials may not want to take the risk of exposing cancer patients to the coronavirus since the dosing of patients is conducted within an in-patient setting; and certain aspects of our supply chain could be disrupted if our third party suppliers and manufacturers paused their operations again in response to such negative developments and/or as a result of national and local regulations. The ultimate impact of the coronavirus pandemic on our business operations remains uncertain and subject to change and will depend on future developments, which cannot be accurately predicted. We will continue to monitor the situation closely.
Overview
We are a leading gene editing company focused on the development of CRISPR/Cas9-based therapeutics. CRISPR/Cas9 is a revolutionary gene editing technology that allows for precise, directed changes to genomic DNA. The application of CRISPR/Cas9 for gene editing was co-invented by one of our scientific founders, Dr. Emmanuelle Charpentier, who, along with her collaborators, published work elucidating how CRISPR/Cas9, a naturally occurring viral defense mechanism found in bacteria, can be adapted for use in gene editing. We are applying this technology to potentially treat a broad set of rare and common diseases by disrupting, correcting or regulating the genes related to such diseases. We believe that our scientific expertise, together with our approach, may enable an entirely new class of highly active and potentially curative therapies for patients for whom current biopharmaceutical approaches have had limited success.
Our Programs
We have established a portfolio of therapeutic programs across a broad range of disease areas including hemoglobinopathies, oncology, regenerative medicine and rare diseases.
Hemoglobinopathies
Our lead product candidate, CTX001, is an investigational, autologous, gene-edited hematopoietic stem cell therapy that is being evaluated for the treatment of transfusion-dependent beta thalassemia, or TDT, and severe sickle cell disease, or SCD. CTX001 is being developed under a joint development and commercialization agreement between us and Vertex Pharmaceuticals Incorporated and certain of its subsidiaries, or Vertex.
16
We and Vertex are investigating CTX001 in antwo ongoing Phase 1/23 open-label clinical trial, CLIMB THAL-111,trials that isare designed to assess the safety and efficacy of a single dose of CTX001 in patients ages 12 to 35 with TDT. In the fourth quarter of 2019, we expanded the TDT patient population for CTX001 to include beta zero/beta zero subtypes.(CLIMB THAL-111) or SCD (CLIMB SCD-121), respectively. The first two patients in theeach trial were treated sequentially and, following data from the initial two patients indicating successful engraftment and an acceptable safety profile, the corresponding trial opened for concurrent dosing. CLIMB THAL-111 isand CLIMB SCD-121 are designed to follow patients for approximately two years after
22
infusion. Each patient will be asked to participate in a long-term, open-label follow-up study.trial, CLIMB-131, to evaluate the safety and efficacy of CTX001 has been granted Regenerative Medicine Advanced Therapy, or RMAT, designation, as well as Fast Track Designationin patients who received CTX001. CLIMB-131 is designed to follow participants for up to 15 years after CTX001 infusion. Enrollment is complete for both CLIMB THAL-111 and Rare Pediatric Disease designation by the U.S. Food and Drug Administration, or FDA, for the treatment of TDT. In addition, CTX001 for the treatment of TDT has received orphan drug designation, or ODD, by the FDA and European Commission; and CTX001 has been granted Priority Medicines (PRIME) designation by the European Medicines Agency for the treatment of TDT. CLIMB SCD-121.
In the second quarter of 2021, at the European Hematology Association Annual Meeting,Congress, we releasedpresented updated clinical data from CLIMB THAL-111 and CLIMB SCD-121 for the first fifteen patients with TDT and first seven patients with SCD treated with CTX001 who had reached at least three months of follow-up after CTX001 dosing.
We and Vertex arehave also investigating CTX001 in an ongoinginitiated two additional Phase 1/2 open-label3 clinical trial, CLIMB SCD-121, that is designed to assess the safety and efficacy of a single dosetrials of CTX001 in pediatric patients ages 12 to 35 with severeTDT and SCD. Similar to the trial in TDT, the first two patients in the trial were treated sequentially and, following data from the initial two patients indicating successful engraftment and an acceptable safety profile, the trial opened for concurrent dosing. CLIMB SCD-121 is designed to follow patients for approximately two years after infusion. Each patient will be asked to participate in a long-term follow-up study.
CTX001 has been granted a number of regulatory designations from the FDA, including RMAT, Designation, as well as Fast Track, DesignationOrphan Drug, and Rare Pediatric Disease designation by the FDAdesignations for the treatment of SCD. In addition, CTX001 for the treatment of SCD has received ODD by the FDAboth TDT and European Commission; andSCD. CTX001 has also been granted Priority Medicines (PRIME)Orphan Drug Designation from the European Commission, as well as PRIME designation byfrom the European Medicines Agency, for the treatment of both TDT and SCD. In the second quarter of 2021, at the European Hematology Association Annual Meeting, we released updated clinical data from the first seven patients with SCD treated with CTX001 who had reached at least three months of follow-up after CTX001 dosing.
Immuno-Oncology
In addition, we are developing our own portfolio of CAR-T cell product candidates based on our gene-editing technology.
CTX110. Our lead immuno-oncology product candidate, CTX110, is a healthy donor-derived gene-edited allogeneic CAR-T investigational therapy targeting clusterCluster of differentiationDifferentiation 19, or CD19. CTX110 is being investigated in an ongoing Phase 1 single-arm, multi-center, open-label clinical trial, CARBON, that is designed to assess the safety and efficacy of several dose levels of CTX110 for the treatment ofin adult patients with relapsed or refractory B-cell malignancies. malignancies who have received at least two prior lines of therapy. CTX110 has been granted RMAT designation by the FDA.
In Octoberthe fourth quarter of 2021, we released additionalupdated clinical data from the ongoing CARBON clinical trial.trial for 26 patients treated with CTX110 who had reached at least 28 days of follow-up.
CTX120. CTX120 is a healthy donor-derived gene-edited allogeneic CAR-T investigational therapy targeting B-cell maturation antigen. CTX120 is being investigated in an ongoing Phase 1 single-arm, multi-center, open-label clinical trial that is designed to assess the safety and efficacy of several dose levels of CTX120 for the treatment of relapsed or refractory multiple myeloma. CTX120 has received ODD byOrphan Drug Designation from the FDA.
CTX130. CTX130 is a healthy donor-derived gene-edited allogeneic CAR-T investigational therapy targeting clusterCluster of differentiationDifferentiation 70, or CD70, an antigen expressed on various solid tumors and hematologic malignancies. CTX130 is being developed for the treatment of both solid tumors, such as renal cell carcinoma, and T-cell and B-cell hematologic malignancies. CTX130 is being investigated in two ongoing independent Phase 1 single-arm, multi-center, open-label clinical trials that are designed to assess the safety and efficacy of several dose levels of CTX130 for the treatment of relapsed or refractory renal cell carcinoma and various types of lymphoma, respectively. CTX130 for the treatment of T-cell lymphoma has received ODD byOrphan Drug Designation from the FDA.
Strategic Regenerative Medicine
Regenerative medicine, or the use of stem cells to repair or replace tissue or organ function lost due to disease, damage or age, holds the potential to treat both rare and common diseases. We are pursuing gene-editing approaches to allow allogeneic use of stem cell-derived therapies by enabling immune evasion, improving existing cell function and directing cell fate using CRISPR/Cas9.
Our first major effort in this area is in diabetes, and we and ViaCyte, Inc., or ViaCyte, are advancing a program as part of a strategic collaboration for the discovery, development, and commercialization of gene-edited stem cell therapies for the treatment of diabetes.
17
VCTX210. VCTX210 is an investigational, allogeneic, gene-edited, immune-evasive, stem cell-derived product candidate for the treatment of type 1 diabetes, or T1D, developed by applying our gene-editing technology to ViaCyte’s proprietary stem cell capabilities. We and ViaCyte are investigating VCTX210 in an ongoing Phase 1 clinical trial that is designed to assess VCTX210’s safety, tolerability, and immune evasion in patients with T1D.
In Vivo
In addition to our ex vivo programs, we are pursuing a number of in vivo gene-editing programs. Our initial in vivo applications target diseases of the liver, lung, muscle and central nervous system and leverage well-established delivery technologies for gene-based therapeutics, such as lipid nanoparticle-based delivery vehicles, or LNPs, and adeno-associated viral vectors, or AAV vectors.
Partnerships
Given the numerous potential therapeutic applications for CRISPR/Cas9, we have partnered strategically to broaden the indications we can pursue and accelerate development of programs by accessing specific technologies and/or disease-area expertise. We maintain three broad strategic partnerships to develop gene editing-based therapeutics in specific disease areas.
Vertex. We established our initial collaboration agreement in 2015 with Vertex, which focused on TDT, SCD, cystic fibrosis and select additional indications. In December 2017, we entered into a joint development and commercialization agreement with Vertex pursuant to which, among other things, we are co-developing and preparing to co-commercialize CTX001 for TDT and SCD. OnIn April 16, 2021, we and Vertex agreed to amend and restate our existing joint development and commercialization agreement, pursuant to which, among other things, we will continue to develop and prepare to commercialize CTX001 for TDT and SCD in partnership with Vertex, subject to, among other things, certain adjustments to the governance structure for the collaboration and responsibilities of the parties. In addition, we adjusted the allocation of net profits and net losses between the parties with respect to CTX001 only and exclusively licensed (subject to our reserved rights to conduct certain activities) certain intellectual property rights to Vertex relating to the specified product candidates and products (including CTX001) that may be researched, developed, manufactured and commercialized under such agreement.Vertex. We also entered into a strategic collaboration and license agreement with Vertex in June 2019 for the development and commercialization of products for the treatment of Duchenne muscular dystrophy and myotonic dystrophy type 1.
23
ViaCyte. We entered into the ViaCyte Collaboration Agreementa research and collaboration agreement in September 2018 with ViaCyte, Inc., or ViaCyte to pursue the discovery, development and commercialization of gene-edited allogeneic stem cell therapies for the treatment of diabetes and in July 2021, we entered into a joint development and commercialization agreement with ViaCyte. Under the joint development and commercialization agreement, we and ViaCyte will jointly develop and commercialize product candidates and shared products for use in the treatment of diabetes type 1, diabetes type 2 and insulin dependent/requiring diabetes throughout the world. We believe the combination of ViaCyte’s stem cell capabilities and our gene editing capabilities has the potential to enable a beta-cell replacement product that may deliver durable benefit to patients without the need for immune suppression.
Bayer. In the fourth quarter of 2019, we entered into a series of transactions, or the Bayer Transaction, pursuant to which we and Bayer terminated our 2015 agreement, which created the joint venture, Casebia Therapeutics Limited Liability Partnership, or Casebia, to discover, develop and commercialize CRISPR/Cas9 gene-editing therapeutics to treat the genetic causes of bleeding disorders, autoimmune disease, blindness, hearing loss and heart disease. In connection thereto, Casebia became a wholly-owned subsidiary of ours. We and Bayer also entered into a new option agreement pursuant to which Bayer has an option to co-develop and co-commercialize two products for the diagnosis, treatment or prevention of certain autoimmune disorders, eye disorders, or hemophilia A disorders for a specified period of time, or, under certain circumstances, exclusively license such optioned products.
18
Nkarta. In the second quarter of 2021, we entered into a research and collaboration agreement with Nkarta, Inc., or Nkarta, to bring together our gene editing technology and T-cell expertise with Nkarta’s leading natural killer, or NK, cell discovery, development and manufacturing capabilities. Under the collaboration, we and Nkarta are co-developing and co-commercializing two donor-derived, gene-edited CAR-NK cell product candidates, one of which targets CD70, and a product candidate combining NK and T cells.
Capsida. In the second quarter of 2021, we entered into a strategic collaboration agreement with Capsida Biotherapeutics, Inc., or Capsida, to develop in vivo gene editing therapies delivered with engineered AAV vectors for the treatment of amyotrophic lateral sclerosis, or ALS, and Friedreich’s ataxia. Under the agreement, we lead research and development of the Friedreich’s ataxia program and perform gene-editing activities for both programs, and Capsida leads research and development of the ALS program and conducts capsid engineering for both programs. Capsida’s high-throughput AAV engineering platform aims to generate capsids optimized to target specific tissue types and limits transduction of tissues and cell types that are not relevant to the target disease, potentially improving the activity and tolerability of our gene editing investigational therapies. We and Capsida each have the option to co-develop and co-commercialize the program that the other leads.
Financial Overview
Since our inception in October 2013, we have devoted substantially all of our resources to our research and development efforts, identifying potential product candidates, undertaking drug discovery and preclinical development activities, building and protecting our intellectual property estate, organizing and staffing our company, business planning, raising capital and providing general and administrative support for these operations. To date, we have primarily financed our operations through private placements of our preferred shares, common share issuances, convertible loans and collaboration agreements with strategic partners.
Our revenueWhile we were in a net income position in certain previous years due to date has been primarily derived fromupfront payments associated with our collaborations with partners. We were profitable for the year ended December 31, 2019 due to collaboration revenue from Vertex, and the gain from consolidating Casebia, as well as for the nine months ended September 30, 2021 due to collaboration revenue from Vertex, but we do not expect to sustain our profitability in future years. With the exception of the year ended December 31, 2019 and the nine months ended September 30, 2021, we have incurred significant net operatinga history of recurring losses each year since our inception and we expect to continue to incur net operating losses for the foreseeable future. As of September 30, 2021, we had $2,477.4 million in cash, cash equivalents and marketable securities and an accumulated deficit of $54.7 million. We expect to continue to incur significant expenses and increasing operating losses for the next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase significantly as we continue our current research programs and development activities; seek to identify additional research programs and additional product candidates; conduct initial drug application supporting preclinical studies and initiate clinical trials for our product candidates; initiate preclinical testing and clinical trials for any other product candidates we identify and develop; maintain, expand and protect our intellectual property estate; further develop our gene editing platform; hire additional research, clinical and scientific personnel; incur facilities costs associated with such personnel growth; develop manufacturing infrastructure;infrastructure and conduct related regulatory validation activities; and incur additional costs associated with operating as a public company. In addition, we expect to spend significantly more on capital expenditures than we have historically incurred in order to construct and build out our new U.S. headquarters for research and development in Boston, Massachusetts, and our cell therapy manufacturing facility in Framingham, Massachusetts. Please refer to Part I, Item 2 of our Annual Report on Form 10-K for the year ended December 31, 20202021 filed with the SEC on February 16, 202115, 2022 for more information about these facilities.
Revenue Recognition
We have not generated any revenue to date from product sales and do not expect to do so in the near future. Revenue recognized for the three and nine months ended September 30,March 31, 2022 and 2021 was $0.8 million and $902.1 million, respectively. Revenue recognized for the three and nine months ended September 30, 2020 was not material. For additional information about our revenue recognition policy, see Note 2, “Summary of Significant Accounting Policies,” in our Annual Report on Form 10-K for the year ended December 31, 20202021 filed with the SEC on February 16, 2021,15, 2022, as well as Note 7 of the notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our product discovery efforts and the development of our product candidates, which include:
24
19
Research and development costs are expensed as incurred. Nonrefundable advance payments for research and development goods or services to be received in the future are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed. At this time, we cannot reasonably estimate or know the nature, timing or estimated costs of the efforts that will be necessary to complete the development of any product candidates we may identify and develop. This is due to the numerous risks and uncertainties associated with developing such product candidates, including the uncertainty of:
A change in the outcome of any of these variables with respect to the development of any product candidates or the subsequent commercialization of any product candidates we may successfully develop could significantly change the costs, timing and viability associated with the development of that product candidate.
Except for activities we perform in connection with our collaborationcollaborations with Vertex and ViaCyte, as well as in connection with the Bayer Transaction, we do not track research and development costs on a program-by-program basis.
Research and development activities are central to our business model. We expect our research and development costs to increase significantly for the foreseeable future as our current development programs progress, new programs are added and as we continue to prepare regulatory filings. These increases will likely include the costs related to the implementation and expansion of clinical trial sites and related patient enrollment, monitoring, program management and manufacturing expenses for current and future clinical trials.
General and Administrative Expenses
General and administrative expenses consist primarily of employee related expenses, including salaries, benefits and equity-based compensation, for personnel in executive, finance, accounting, business development and human resources functions. Other significant costs include pre-commercial expenses associated with our collaboration with Vertex, facility costs not otherwise included in research and development expenses, legal fees relating to patent and corporate matters and fees for accounting and consulting services.
We anticipate that our general and administrative expenses will increase in the future to support continued research and development activities, and potential commercialization of our product candidates. In addition, we anticipate increased expenses related to the reimbursements of third-party patent related expenses in connection with certain of our in-licensed intellectual property.
Collaboration Expense, Net
Collaboration expense, net, consists of collaboration costs under our collaboration with Vertex.
Other Income (Expense), Net
Other income (expense), net consists primarily of interest income earned on investments.
2520
Results of Operations
Comparison of three months ended September 30,March 31, 2022 and 2021 and 2020 (in thousands):
|
| Three Months Ended September 30, |
| Period to Period |
|
| Three Months Ended March 31, |
|
| Period to Period |
| |||||||||||||
|
| 2021 |
| 2020 |
|
| Change |
|
| 2022 |
|
| 2021 |
|
| Change |
| |||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Collaboration revenue |
| $ | 329 |
|
| $ | 148 |
|
| $ | 181 |
|
| $ | 178 |
|
| $ | 202 |
| $ | (24 | ) | |
Grant revenue |
|
| 495 |
|
|
| — |
|
|
| 495 |
|
|
| 762 |
|
|
| 337 |
|
|
| 425 |
|
Total revenue |
|
| 824 |
|
|
| 148 |
|
|
| 676 |
|
| 940 |
|
|
| 539 |
| 401 |
| |||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Research and development |
|
| 105,321 |
|
|
| 71,008 |
|
|
| 34,313 |
|
| 118,245 |
|
|
| 70,620 |
| 47,625 |
| |||
General and administrative |
|
| 24,352 |
|
|
| 21,539 |
|
|
| 2,813 |
|
| 28,021 |
|
|
| 24,517 |
| 3,504 |
| |||
Collaboration expense, net |
|
| 30,646 |
|
|
| 19,945 |
|
|
| 10,701 |
| ||||||||||||
Total operating expenses |
|
| 129,673 |
|
|
| 92,547 |
|
|
| 37,126 |
|
|
| 176,912 |
|
|
| 115,082 |
|
|
| 61,830 |
|
(Loss) income from operations |
|
| (128,849 | ) |
|
| (92,399 | ) |
|
| (36,450 | ) | ||||||||||||
Loss from operations |
| (175,972 | ) |
|
| (114,543 | ) |
| (61,429 | ) | ||||||||||||||
Other income, net |
|
| 1,101 |
|
|
| 160 |
|
|
| 941 |
|
|
| 363 |
|
|
| 1,955 |
|
|
| (1,592 | ) |
Net (loss) income before income taxes |
|
| (127,748 | ) |
|
| (92,239 | ) |
|
| (35,509 | ) | ||||||||||||
Benefit (provision) for income taxes |
|
| 595 |
|
|
| (200 | ) |
|
| 795 |
| ||||||||||||
Net (loss) income |
| $ | (127,153 | ) |
| $ | (92,439 | ) |
| $ | (34,714 | ) | ||||||||||||
Net loss before income taxes |
| (175,609 | ) |
|
| (112,588 | ) |
| (63,021 | ) | ||||||||||||||
Provision for income taxes |
|
| (3,608 | ) |
|
| (575 | ) |
|
| (3,033 | ) | ||||||||||||
Net loss |
| $ | (179,217 | ) |
| $ | (113,163 | ) |
| $ | (66,054 | ) |
Collaboration Revenue
Collaboration revenue for the three months ended September 30,March 31, 2022 and 2021 and 2020 was not material. Please refer to Note 7 of the notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for further information.
Research and Development Expenses
Research and development expenses were $105.3$118.2 million for the three months ended September 30, 2021,March 31, 2022, compared to $71.0$70.6 million for the three months ended September 30, 2020.March 31, 2021. The increase of approximately $34.3$47.6 million was primarily attributable to the following:
General and Administrative Expenses
General and administrative expenses were $24.3$28.0 million for the three months ended September 30, 2021,March 31, 2022, compared to $21.5$24.5 million for the three months ended September 30, 2020.March 31, 2021. The increase of approximately $2.8$3.5 million was primarily attributable to the following:
Collaboration Expense, Net
Collaboration expense, net, was $30.6 million for the three months ended March 31, 2022, compared to $19.9 million for the three months ended March 31, 2021. The increase of approximately $10.7 million was primarily attributable to the following:
21
Other Income, Net
Other income was $1.1$0.4 million for the three months ended September 30, 2021,March 31, 2022, compared to $0.2$2.0 million of income for the three months ended September 30, 2020.March 31, 2021. The change was primarily due to an increase in interest income earned on cash, cash equivalents and marketable securities for the three months ended September 30, 2021 as a result of an increase in our cash, cash equivalents and marketable securities.
26
Comparison of nine months ended September 30, 2021 and 2020 (in thousands):
|
| Nine Months Ended September 30, |
|
| Period to Period |
| ||||||
|
| 2021 |
|
| 2020 |
|
| Change |
| |||
Revenue: |
|
|
|
|
|
|
|
|
| |||
Collaboration revenue |
| $ | 900,733 |
|
| $ | 349 |
|
| $ | 900,384 |
|
Grant revenue |
|
| 1,331 |
|
|
| — |
|
|
| 1,331 |
|
Total revenue |
|
| 902,064 |
|
|
| 349 |
|
|
| 901,715 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
| |||
Research and development |
|
| 304,163 |
|
|
| 184,581 |
|
|
| 119,582 |
|
General and administrative |
|
| 78,675 |
|
|
| 62,442 |
|
|
| 16,233 |
|
Total operating expenses |
|
| 382,838 |
|
|
| 247,023 |
|
|
| 135,815 |
|
Income (loss) from operations |
|
| 519,226 |
|
|
| (246,674 | ) |
|
| 765,900 |
|
Other income, net |
|
| 3,806 |
|
|
| 5,804 |
|
|
| (1,998 | ) |
Net income (loss) before income taxes |
|
| 523,032 |
|
|
| (240,870 | ) |
|
| 763,902 |
|
Provision for income taxes |
|
| (4,123 | ) |
|
| (956 | ) |
|
| (3,167 | ) |
Net income (loss) |
| $ | 518,909 |
|
| $ | (241,826 | ) |
| $ | 760,735 |
|
Collaboration Revenue
Collaboration revenue for the nine months ended September 30, 2021 was $900.7 million. Collaboration revenue for the nine months ended September 30, 2020 was not material. The increase in collaboration revenue was due to a $900.0 million upfront payment in connection with the A&R JDCA with Vertex. Please refer to Note 7 of the notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for further information.
Research and Development Expenses
Research and development expenses were $304.2 million for the nine months ended September 30, 2021, compared to $184.6 million for the nine months ended September 30, 2020. The increase of approximately $119.6 million was primarily attributable to the following:
General and Administrative Expenses
General and administrative expenses were $78.7 million for the nine months ended September 30, 2021, compared to $62.4 million for the nine months ended September 30, 2020. The increase of approximately $16.3 million was primarily attributable to the following:
Other Income, Net
Other income was $3.8 million for the nine months ended September 30, 2021, compared to $5.8 million of income for the nine months ended September 30, 2020. The decrease was primarily due to interest income earned on cash, cash equivalents and marketable securities for the ninethree months ended September 30, 2021 as a result of decrease in interest rates.March 31, 2022.
27
Liquidity and Capital Resources
As of September 30, 2021,March 31, 2022, we had cash, cash equivalents and marketable securities of approximately $2,477.4$2,221.3 million, of which approximately $729.6$395.7 million was held outside of the United States.
In August 2019, we entered into an Open Market Sale AgreementSM with Jefferies LLC, or Jefferies, under which we are able to offer and sell, from time to time at our sole discretion through Jefferies, as our sales agent, our common shares, par value of CHF 0.03 per share, or the August 2019 Sales Agreement. In December 2020, in connection with the August 2019 Sales Agreement, we filed a prospectus supplement with the SEC to offer and sell from time to time common shares having aggregate gross proceeds of up to $350.0 million, or the 2020 ATM. In January 2021, we issued and sold under the 2020 ATM an aggregate of 0.3 million common shares at an average price of $162.46 per share with aggregate proceeds of $46.7 million, which were net of equity issuance costs of $0.7 million. An additional $0.5 million of stamp taxes on this amount was paid in 2021.
In January 2021, in connection with the August 2019 Sales Agreement, we filed a prospectus supplement with the SEC to offer and sell from time to time common shares having aggregate gross proceeds of up to $600.0 million. As of September 30,In July 2021, we havefiled a new prospectus supplement with the SEC, which replaced the previous prospectus supplement filed in January 2021, to offer and sell, from time to time, common shares having aggregate gross proceeds of up to $419.8 million, or the 2021 ATM. No shares were issued and sold an aggregate of 1.1 million common shares under the 2021 ATM at an average price of $169.82 per share for aggregate proceeds of $177.8 million, which were net of equity issuance costs of $2.4 million. An additional $1.8 million of stamp taxes on this amount was paid in 2021.the three months ended March 31, 2022.
We have predominantly incurred losses and cumulative negative cash flows from operations since our inception. We were profitable for the year ended December 31, 2019 due to collaboration revenue from Vertex and the gain from consolidating Casebia, as well as for the nine months ended September 30, 2021 due to collaboration revenue from Vertex, but we do not expect to sustain our profitability in future years. With the exception of the year ended December 31, 2019 and the nine months ended September 30, 2021, we have incurred significant net operating losses each year since our inception and we expect to continue to incur net operating losses for the foreseeable future. As of September 30, 2021,March 31, 2022, we had $2,477.4$2,221.3 million in cash, cash equivalents and marketable securities and an accumulated deficit of $54.7$375.1 million. We anticipate that we will continue to incur losses for at least the next several years. We expect that our research and development and general and administrative expenses will continue to increase and, as a result, we will need additional capital to fund our operations, which we may raise through public or private equity or debt financings, strategic collaborations, or other sources.
Funding Requirements
Our primary uses of capital are, and we expect will continue to be, research and development activities, manufacturing activities, compensation and related expenses, laboratory and related supplies, legal and other regulatory expenses, patent prosecution filing and maintenance costs for our licensed intellectual property and general overhead costs, including costs associated with operating as a public company. We expect our expenses to increase compared to prior periods in connection with our ongoing activities, particularly as we continue research and development and preclinical and clinical activities and initiate preclinical studies to support initial drug applications. We also anticipate that we will incur significant capital expenditures as we develop our manufacturing infrastructure and facilities.
Because our research programs are still in early stages of development and the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully complete the development, manufacture and commercialization of any current or future product candidates, if approved, or whether, or when, we may achieve profitability. Until such time as we can generate substantial product revenues, if ever, we expect to finance our cash needs through a combination of equity financings, debt financings and payments received in connection with our collaboration agreements. We are entitled to research payments under our collaboration with Vertex. Additionally, we are eligible to earn payments, in each case, on a per-product basis under our collaboration with Vertex. Except for this source of funding, we do not have any committed external source of liquidity. We intend to consider opportunities to raise additional funds through the sale of equity or debt securities when market conditions are favorable to us to do so. However, including as a result of the coronavirus pandemic, the trading prices for our common shares and other biopharmaceutical companies have been highly volatile. As a result, we may face difficulties raising capital through sales of our common shares or such sales may be on unfavorable terms. In addition, a recession, depression or other sustained adverse market event, including resulting from the spread of the coronavirus, could materially and adversely affect our business and the value of our common shares. To the extent that we raise additional capital through the future sale of equity or debt securities, the ownership interests of our shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing shareholders. If we raise additional funds through collaboration arrangements in the future, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
2822
Outlook
Based on our research and development plans and our timing expectations related to the progress of our programs, we expect our existing cash will enable us to fund our operating expenses and capital expenditures for at least the next 24 months without giving effect to any additional proceeds we may receive under our collaboration with Vertex and any other capital raising transactions we may complete. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Given our need for additional financing to support the long-term clinical development of our programs, we intend to consider additional financing opportunities when market terms are favorable to us.
Our ability to generate revenue and achieve profitability depends significantly on our success in many areas, including: developing our delivery technologies and our gene-editing technology platform; selecting appropriate product candidates to develop; completing research and preclinical and clinical development of selected product candidates; obtaining regulatory approvals and marketing authorizations for product candidates for which we complete clinical trials; developing a sustainable and scalable manufacturing process for product candidates; launching and commercializing product candidates for which we obtain regulatory approvals and marketing authorizations, either directly or with a collaborator or distributor; obtaining market acceptance of our product candidates, if approved; addressing any competing technological and market developments; negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; maintaining good relationships with our collaborators and licensors; maintaining, protecting and expanding our estate of intellectual property rights, including patents, trade secrets and know-how; and attracting, hiring and retaining qualified personnel.
Cash Flows
The following table provides information regarding our cash flows for each of the periods below (in thousands):
|
| Nine Months Ended September 30, |
| Period to Period |
|
| Three Months Ended March 31, |
|
| Period to Period |
| |||||||||||||
|
| 2021 |
| 2020 |
|
| Change |
|
| 2022 |
|
| 2021 |
|
| Change |
| |||||||
Net cash provided by (used in) operating activities |
| $ | 625,010 |
|
| $ | (157,154 | ) |
| $ | 782,164 |
| ||||||||||||
Net cash used in operating activities |
| $ | (135,239 | ) |
| $ | (100,663 | ) |
| $ | (34,576 | ) | ||||||||||||
Net cash used in investing activities |
|
| (1,026,714 | ) |
|
| (336,926 | ) |
|
| (689,788 | ) |
| (114,515 | ) |
|
| (167,898 | ) |
|
| 53,383 |
| |
Net cash provided by financing activities |
|
| 244,646 |
|
|
| 603,525 |
|
|
| (358,879 | ) |
| 10,649 |
|
|
| 225,991 |
|
|
| (215,342 | ) | |
Effect of exchange rate changes on cash |
|
| (14 | ) |
|
| 5 |
|
|
| (19 | ) |
|
| (27 | ) |
|
| 5 |
|
|
| (32 | ) |
Net increase (decrease) in cash |
| $ | (157,072 | ) |
| $ | 109,450 |
|
| $ | (266,522 | ) | ||||||||||||
Net decrease in cash |
| $ | (239,132 | ) |
| $ | (42,565 | ) |
| $ | (196,567 | ) |
Net Cash Used in Operating Activities
Net cash provided byused in operating activities was $625.0$135.2 million for the ninethree months ended September 30, 2021,March 31, 2022, compared to cash used in operating activities of $157.2$100.7 million for the ninethree months ended September 30, 2020.March 31, 2021. The $782.2 million increase in cash provided byused in operating activities of $34.5 million was primarily driven by an increase in net incomeloss of $760.7$66.1 million, from a net loss of $241.8$113.2 million for the ninethree months ended September 30, 2020March 31, 2021 to net incomeloss of $518.9$179.2 million for the ninethree months ended September 30, 2021.March 31, 2022. The increase in net income is primarily drivencash used in operations was offset by a $900.0 million upfront payment from Vertexan increase in connection with the A&R JDCA. Additionally, non-cash expense increased $43.0of $11.0 million, primarily related to an increase in stock compensation, fixed asset depreciation and depreciation. The increase was offset by increased spending in our clinicalamortization of premiums and pre-clinical stage programs and increased payroll and payroll-related expenses to support overall growth,discounts on marketable securities, as well as a $21.6$20.5 million decreaseincrease in net changes of operating assets and liabilities.
Net Cash Used in Investing Activities
Net cash used in investing activities for the ninethree months ended September 30, 2021March 31, 2022 was $1,026.7$114.5 million, compared to $336.9$167.9 million for the ninethree months ended September 30, 2020.March 31, 2021. The increasedecrease in net cash used in investing activities consisted primarily of a reduction in marketable securities maturities, offset by purchases of marketable securities and property and equipment.
Net Cash Provided by Financing Activities
Net cash provided by financing activities for the ninethree months ended September 30, 2021March 31, 2022 was $244.6$10.6 million, compared with $603.5$226.0 million for the ninethree months ended September 30, 2020. The netMarch 31, 2021. Net cash provided by financing activities for the ninethree months ended September 30, 2021March 31, 2022 consisted of option exercise proceeds, net of issuance costs. Additionally, 1.4 million common shares were issued in connection with our Open Market Sale AgreementSM, which resulted in $219.9Net cash provided by financing activities for the three months ended March 31, 2021 consisted primarily of $222.1 million of net cash proceeds after deducting $3.1related to the issuance of 1.4 million common shares in equity issuance costsconnection with our 2021 ATM. No shares were issued and $2.2 million of stamp taxes.sold under the 2021 ATM for the three months ended March 31, 2022.
2923
Contractual Obligations
The disclosure of our contractual obligations and commitments was reported in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 16, 2021. There have been no material changes from the contractual commitments and obligations previously disclosed in our Annual Report on Form 10-K.
Off-Balance Sheet Arrangements
As of September 30, 2021, we did not have any off-balance sheet arrangements as defined under applicable SEC rules.
Critical Accounting Policies and Significant Judgments and Estimates
This discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with U.S. GAAP. We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as critical because these specific areas generally require us to make judgments and estimates about matters that are uncertain at the time we make the estimate, and different estimates—which also would have been reasonable—could have been used. On an ongoing basis, we evaluate our estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We believe that our most critical accounting policies are those relating to revenue recognition, variable interest entities and equity-based compensation, and there have been no changes to our accounting policies discussed in our Annual Report on Form 10-K for the year ended December 31, 20202021 filed with the SEC on February 16, 2021.15, 2022.
Recent Accounting Pronouncements
Refer to Note 1 of the notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.
Item 3. Qualitative and Quantitative Disclosures about Market Risk
Interest Rate Sensitivity
We are exposed to market risk related to changes in interest rates. As of September 30, 2021,March 31, 2022, we had cash, cash equivalents and marketable securities of $2,477.4$2,221.3 million, primarily invested in U.S. treasury securities and government agency securities, corporate bonds, commercial paper and money market accounts invested in U.S. government agency securities. Due to the conservative nature of these instruments, we do not believe that we have a material exposure to interest rate risk. If interest rates were to increase or decrease by 1%, the fair value of our investment portfolio would increase or decrease by an immaterial amount.
Foreign Currency Exchange Rate Risk
As a result of our foreign operations, we face exposure to movements in foreign currency exchange rates, primarily the Swiss Franc and British Pound, against the U.S. dollar. The current exposures arise primarily from cash, accounts payable and intercompany receivables and payables. Changes in foreign exchange rates affect our consolidated statement of operations and distort comparisons between periods. To date, foreign currency transaction gains and losses have not been material to our financial statements, and we have not engaged in any foreign currency hedging transactions.
24
Item 4. Controls and Procedures.
Management’s Evaluation of our Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities and Exchange Act of 1934 is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
30
As of September 30, 2021,March 31, 2022, our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934). Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our principal executive officer and principal financial officer have concluded based upon the evaluation described above that, as of September 30, 2021,March 31, 2022, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
During the quarter ended September 30, 2021,March 31, 2022, there were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Securities Exchange Act of 1934, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
3125
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
In the ordinary course of business, we are from time to time involved in lawsuits, investigations, proceedings and threats of litigation related to, among other things, our intellectual property estate (including certain in-licensed intellectual property), commercial arrangements and other matters. Such proceedings may include quasi-litigation, inter partes administrative proceedings in the U.S. Patent and Trademark Office and the European Patent Office involving our intellectual property estate including certain in-licensed intellectual property. There are currently no claims or actions pending against us that, in the opinion of our management, are likely to have a material adverse effect on our business.
There have been no material developments with respect to the legal proceedings previously disclosed in “Item 3. Legal Proceedings” of our Annual Report on Form 10-K for the fiscal year ended December 31, 20202021 filed with the SEC on February 16, 2021.15, 2022.
Item 1A. Risk Factors.
In addition to the risks described in our Annual Report on Form 10-Kan, you should carefully consider the other information set forth in this Form 10-Q and the information in our other filings with the SEC, as they could materially affect our business, financial condition or future results of operations. There have been no material changes to the risk factors previously disclosed in Part I, Item 1A (Risk Factors) of our Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
26
Item 6. Exhibits
The exhibits filed as part of this Quarterly Report on Form 10-Q are set forth in the Exhibit Index below.
Exhibit Number |
| Description of Document |
|
|
|
31.1* |
| Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
31.2* |
| Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.1*+ |
| |
|
|
|
101.INS* |
| Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document. |
|
|
|
101.SCH* |
| Inline XBRL Taxonomy Extension Schema Document |
|
|
|
101.CAL* |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.DEF* |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
101.LAB* |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
101.PRE* |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
104* |
| Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) |
* Filed herewith.
+ The certification attached as Exhibit 32.1 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of CRISPR Therapeutics AG under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.
3227
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CRISPR Therapeutics AG | |
|
|
|
Dated: | By: | /s/ Samarth Kulkarni |
|
| Samarth Kulkarni |
|
| Chief Executive Officer |
|
| (Principal Executive Officer) |
|
|
|
Dated: | By: | /s/ Brendan Smith |
|
| Brendan Smith |
|
| Chief Financial Officer |
|
| (Principal Financial Officer) |
3328