Forward-looking Information
This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may be identified by such forward-looking terminology as "may," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue" or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:
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our ability to execute our clinical study strategy for NTLA-2001, our program for the treatment of transthyretin ("ATTR") amyloidosis, including the ability to successfully complete our Phase 1 study and determine a recommended dose in our ongoing Phase 1 study that can be advanced into later-stage studies, or the success of such program;
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our ability to execute our clinical study strategy for NTLA-5001, our program for the treatment of acute myeloid leukemia ("AML"), including the ability to successfully complete our Phase 1/2a study and determine a recommended dose that can be advanced into later-stage studies, or the success of such program;
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our ability to execute our clinical study strategy for NTLA-2002, our program for the treatment of hereditary angioedema ("HAE"), including the ability to successfully complete our Phase 1/2 study and determine a recommended dose that can be advanced into later-stage studies, or the success of such program;
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the anticipated timing of our Investigational New Drug ("IND") or IND-equivalent filing for NTLA-3001, our program for the treatment of alpha-1 antitrypsin deficiency ("AATD")-associated lung disease, or the success of such program;
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our ability to successfully execute our development plans for our preclinical programs, including NTLA-2003 and NTLA-6001;
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our ability to use a modular platform capability or other strategies to efficiently discover and develop product candidates, including by applying learnings from one program to other programs;
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our ability to research, develop or maintain a pipeline of product candidates, including in vivo and ex vivo product candidates as well as allogeneic ex vivo product candidates;
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our ability to manufacture or obtain materials for our preclinical and clinical studies, and our product candidates;
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our ability to advance any product candidates into, and successfully complete, clinical studies, including clinical studies necessary for regulatory approval and commercialization, and to demonstrate to the regulators that the product candidates are safe, effective, pure and potent and that their benefits outweigh known and potential risks for the intended patient population;
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our ability to advance our genome editing and therapeutic delivery capabilities;
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the scope of protection we are able to develop, establish and maintain for intellectual property rights, including patents and license rights, covering our product candidates and technology;
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our ability to operate, including commercializing products, without infringing or breaching the proprietary or contractual rights of others;
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the issuance or enforcement of, and compliance with, regulatory requirements and guidance regarding preclinical and clinical studies relevant to genome editing and our product candidates;
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the market acceptance, pricing and reimbursement of our product candidates, if approved;
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estimates of our expenses, future revenues, capital requirements and our needs for additional financing;
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the potential benefits of strategic agreements, such as collaborations, co-development and co-commercialization, acquisitions, dispositions, mergers, joint ventures, and investment agreements, and our ability to establish and maintain strategic arrangements under favorable terms;
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our ability to acquire and maintain relevant intellectual property licenses and rights, and the scope and terms of such rights;
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developments relating to our licensors, licensees, third parties and ventures from which we derive or license rights, as well as collaborators, competitors and our industry;
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the effect of the ongoing COVID-19 pandemic, including mitigation efforts and economic effects, on any of the foregoing or other aspects of our business operations; and
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other risks and uncertainties, including those listed under the caption "Risk Factors."
All of our express or implied forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to theSecurities and Exchange Commission (the "SEC") could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q. Management OverviewIntellia Therapeutics, Inc. ("we," "us," "our," "Intellia," or the "Company") is a leading clinical-stage genome editing company, focused on developing novel, potentially curative therapeutics using CRISPR/Cas9 technology. CRISPR/Cas9, an acronym for Clustered, Regularly Interspaced Short Palindromic Repeats ("CRISPR")/CRISPR associated 9 ("Cas9"), is a technology for genome editing, the process of altering selected sequences of genomic deoxyribonucleic acid ("DNA"). To realize the transformative potential of CRISPR/Cas9, we are building a full-spectrum genome editing company, by leveraging our modular platform, to advance in vivo and ex vivo therapies for diseases with high unmet need. For our in vivo programs to address genetic diseases, we use intravenously administered CRISPR as the therapy, in which our proprietary delivery technology enables highly precise editing of disease-causing genes directly within specific target tissues. For our ex vivo programs to address immuno-oncology and autoimmune diseases, we use CRISPR to create the therapy by engineering cells outside of the body. Our deep scientific, technical and clinical development experience, along with our robust intellectual property ("IP") portfolio, enables us to unlock broad therapeutic applications of CRISPR/Cas9 and related technologies to create new classes of genetic medicine. Our management's discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, which have been prepared by us in accordance with accounting principles generally accepted inthe United States of America ("U.S. GAAP") for interim periods and with Regulation S-X, promulgated under the Securities Exchange Act of 1934, as amended. This discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q as well as in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K ("Annual Report") for the year endedDecember 31, 2021 . Treating-and potentially curing-a broad range of severe diseases will require multiple gene editing approaches. With proprietary CRISPR/Cas9-based technology at the core of our platform, we continue to add new capabilities to expand our current solutions for addressing a multitude of life-threatening diseases. These additions include our proprietary base editor, as well as novel CRISPR enzymes, which provide us with the capabilities to achieve multiple editing strategies.
We continue to advance our platform's modular solutions and research efforts on genome editing technologies as well as delivery and cell engineering capabilities to generate additional development candidates.
23 -------------------------------------------------------------------------------- Our mission is to transform the lives of people with severe diseases by developing curative genome editing treatments. We believe we can deliver on our mission and provide long-term benefits for all of our stakeholders by focusing on four key elements:
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Develop curative CRISPR/Cas9-based medicines;
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Advance our science;
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Be the best place to make therapies; and
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Focus on long-term sustainability.
Our strategy is to build a full-spectrum genome editing company, by leveraging our modular platform, to advance in vivo and ex vivo therapies for diseases with high unmet need. For in vivo applications to address genetic diseases, we deploy CRISPR/Cas9 as the therapy that targets cells within the body. In parallel, we are developing ex vivo applications to address immuno-oncology and autoimmune diseases, where CRISPR/Cas9 is the tool that creates the engineered cell therapy. All of our revenue to date has been collaboration revenue. Since our inception and throughMarch 31, 2022 , we have raised an aggregate of approximately$1,859.3 million to fund our operations, of which$281.3 million was through our collaboration agreements,$170.5 million was from our initial public offering and concurrent private placements,$1,086.9 million was from follow-on public offerings,$235.6 million was from at-the-market offerings and$85.0 million was from the sale of convertible preferred stock. Our lead in vivo candidate, NTLA-2001 for the treatment of transthyretin ("ATTR") amyloidosis, is the first CRISPR/Cas9-based therapy candidate to be administered systemically, via intravenous infusion, for precision editing of a gene in a target tissue in humans. In parallel, we are developing ex vivo applications to address immuno-oncology and autoimmune diseases, where CRISPR/Cas9 is the tool that creates the engineered cell therapy. Our most advanced ex vivo programs include a wholly-owned T cell receptor ("TCR")-T cell candidate, NTLA-5001 for the treatment of acute myeloid leukemia ("AML"), and a program withNovartis Institutes for BioMedical Research, Inc. ("Novartis") to engineer hematopoietic stem cells ("HSCs") for the treatment of sickle cell disease. Our Pipeline In Vivo Programs Our selection criteria include identifying diseases that originate in the liver; have well-defined mutations that can be addressed by a knockout or insertion approach; have readily measurable therapeutic endpoints with observable clinical responses; and for which effective treatments are absent, limited or unduly burdensome. Our initial in vivo indications target genetic liver diseases, including our ATTR amyloidosis, HAE and AATD development programs. Our current efforts on in vivo delivery focus on the use of lipid nanoparticles ("LNPs") for delivery of the CRISPR/Cas9 complex to the liver.
Transthyretin ("ATTR") Amyloidosis Program
NTLA-2001 is our candidate for the treatment of ATTR amyloidosis. InFebruary 2022 , we presented updated interim clinical data from 15 patients with hereditary ATTR amyloidosis with polyneuropathy ("ATTRv-PN") treated across four single-ascending dose cohorts of the ongoing Phase 1 study. Treatment with NTLA-2001 led to dose-dependent reductions in serum TTR and achieved maximal reductions by day 28 with mean reductions of 86% (n=3) and 93% (n=6) in the 0.7 mg/kg and 1.0 mg/kg dose group, respectively. The maximum TTR reduction was 98% at 1.0 mg/kg. Mean serum TTR reductions were durable through the observation period, with patient follow-up ranging from two to 12 months following a single dose. NTLA-2001 was generally well tolerated at all dose levels. The most frequent adverse events include headache, infusion-related reactions, back pain, rash and nausea. Based on these data, we are evaluating a fixed dose of 80 mg in Part 2 of the Phase 1 study, which is expected to deliver a similar exposure to the 1.0 mg/kg dose. OnMay 5, 2022 , we announced the first patient has been dosed in Part 2, a single-dose expansion cohort, in the polyneuropathy arm. We plan to present additional interim data from Part 1, the single-ascending dose portion of the polyneuropathy arm, at theEuropean Association for the Study of the Liver ("EASL") International Liver Congress™ 2022, to be heldJune 22-26 . We also continue to dose patients in the cardiomyopathy arm of our expanded Phase 1 study, which is currently evaluating NTLA-2001 in dose-escalation cohorts of patients with ATTR amyloidosis with cardiomyopathy ("ATTR-CM"). Our goal is to present the first interim data from the cardiomyopathy arm in the second half of 2022. Enrollment across both ATTRv-PN and ATTR-CM patient populations is expected to be complete in 2022. 24 -------------------------------------------------------------------------------- NTLA-2001 is part of a co-development and co-promotion ("Co/Co") agreement directed to our first collaboration target with Regeneron, ATTR (the "ATTR Co/Co"), for which we are the clinical and commercial lead party and Regeneron is the participating party. Regeneron shares in approximately 25% of worldwide development costs and commercial profits for the ATTR program. For more information regarding our collaboration with Regeneron, see the section below entitled "Collaborations - Regeneron"
Hereditary Angioedema ("HAE") Program
NTLA-2002 is our wholly-owned candidate for the treatment of HAE. We are progressing the single-ascending dose portion of the Phase 1/2 study evaluating the safety, tolerability and activity of NTLA-2002 in adults with Type I or Type II HAE. We have completed dosing in the first dose-escalation cohort (25 mg fixed dose) and have begun enrolling patients in the second dose-escalation cohort (75 mg fixed dose).
We anticipate presenting interim data in the second half of 2022 from the first-in-human study, with initial results expected to characterize the emerging safety and activity profile of NTLA-2002, and potentially demonstrate preliminary proof-of-concept.
Alpha-1 Antitrypsin Deficiency ("AATD") Program
NTLA-3001 for associated lung disease:
NTLA-3001 is our wholly-owned, first-in-class CRISPR-mediated in vivo targeted gene insertion development candidate for the treatment of AATD-associated lung disease. It is designed with the aim to precisely insert a functional copy of the SERPINA1 gene, which encodes the A1AT protein, with the potential to restore permanent expression of functional A1AT protein to therapeutic levels after a single dose. This approach seeks to improve patient outcomes, including eliminating the need for weekly IV infusions of A1AT augmentation therapy or lung transplant in severe cases. We are conducting IND-enabling activities for NTLA-3001, with plans to file an IND or IND-equivalent in 2023.
NTLA-2003 for associated liver disease:
NTLA-2003 is our wholly-owned in vivo knockout development candidate for the treatment of AATD-associated liver disease. It is designed to inactivate the SERPINA1 gene responsible for the production of abnormal alpha-1 antitrypsin ("A1AT") protein in the liver. This approach aims to halt the progression of liver disease and eliminate the need for liver transplant in severe cases. We are initiating IND-enabling activities for NTLA-2003.
In Vivo Research Programs
We continue to work on various liver-focused programs, such as hemophilia A and hemophilia B, which we are co-developing with Regeneron, primary hyperoxaluria type 1, as well as other liver targets, which are worked on both independently and in partnership with Regeneron, which leverage our capabilities to knockout, insert and make consecutive edits to the genome. In the third quarter of 2021, we and Regeneron, the lead party for this program, nominated a Factor 9 ("F9") gene insertion development candidate for our Hemophilia B ("Hem B") program, leveraging our jointly developed targeted transgene insertion capabilities to insert F9. F9 is a gene that encodes for Factor IX ("FIX"), a blood-clotting protein that is missing or defective in Hem B patients. In preclinical studies, we and Regeneron demonstrated the first CRISPR/Cas9-mediated targeted transgene insertion in the liver of non-human primates ("NHPs"), which resulted in circulating FIX levels at or above those found in normal human plasma. At the 2019American Society of Gene and Cell Therapy Annual Meeting, we presented data demonstrating the first CRISPR/Cas9-mediated, targeted transgene insertion in the liver of NHPs, using F9 as a model gene. Following a single dose to NHPs of the hybrid LNP-adeno-associated virus ("AAV") delivery system containing an F9 DNA template, we demonstrated that the circulating human FIX protein levels achieved in NHPs were at or above normal levels. Additionally, the NHP data expands on the durability of clinically relevant human FIX protein levels achieved in mice for over 12 months. InSeptember 2020 , we presented data that showed the persistence of in vivo CRISPR/Cas9 edits in regenerated liver tissue, both knockout and insertion, and corresponding durability of effect following a partial hepatectomy ("PHx") and liver regrowth in a murine model. Unlike traditional gene therapy, for which a significant loss (over 80%) in transgene expression was observed in the insertion PHx model, our targeted gene insertion approach yielded durable edits, with no significant loss in expression. We are further investigating delivery strategies that target tissues outside of the liver. For example, at the Keystone eSymposium:Precision Engineering of the Genome, Epigenome and Transcriptome inMarch 2021 , we presented preclinical data establishing 25 -------------------------------------------------------------------------------- proof-of-concept for non-viral genome editing of bone marrow and HSCs in mice. This represented our first demonstration of systemic in vivo genome editing in bone marrow using our proprietary non-viral delivery platform. We believe these results extend our modular in vivo capabilities to treat inherited blood disorders such as sickle cell disease. In addition, we announced a collaboration with SparingVision to develop novel genomic medicines utilizing CRISPR/Cas9 technology for the treatment of ocular diseases.
With the continued progression of our in vivo research programs, we plan to advance at least one new in vivo development candidate by the end of 2022.
Ex Vivo Programs
We are independently researching and developing proprietary engineered cell therapies to treat various oncological and other disease indications, for example TCR-engineered T cells and chimeric antigen receptor T ("CAR-T") cells for immuno-oncology applications and engineered regulatory T cells for autoimmune disorders. Our diverse product strategy includes multiple elements. In particular:
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We are developing TCR-engineered T cells as immuno-oncological therapies. For example, in our existing collaboration with Ospedale San Raffaele,Milan , a leading European research-university hospital, we have identified optimized TCRs that recognize a tumor target,Wilms' Tumor 1 ("WT1"), that could be used to treat a variety of blood cancers and solid tumors; and
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We are developing allogeneic cellular therapies, which are those derived from unmatched donors and modified outside of the human body to allow them to be administered to an unrelated patient. These allogeneic cellular therapies could be used to treat both oncological and immunological diseases. In addition, we strategically partner with others who possess complementary capabilities or technologies to bring forth innovative engineered cell therapies outside of our core areas of focus. This includes collaborations with AvenCell and Kyverna, who will be leveraging our ex vivo genome editing platform to develop novel cell therapies for a variety of therapeutic indications, as well asONK Therapeutics, Ltd. ("ONK") to advance CRISPR-edited natural killer ("NK") cell therapies. Further, our partner Novartis is developing therapies directed to selected targets using CAR-T cells for oncology indications, as well as HSC and ocular stem cell ("OSC")-based therapies.
Acute Myeloid Leukemia ("AML") Program
NTLA-5001 is our autologous TCR-T cell therapy candidate engineered to target the WT1 antigen for the treatment of all genetic subtypes of AML. InMarch 2022 , we dosed the first patient in our Phase 1/2a study evaluating NTLA-5001 for the treatment of AML. We continue to enroll patients in the ongoing study. In March, we announced that theU.S. Food and Drug Administration ("FDA") granted orphan drug designation to NTLA-5001 for the treatment of AML.
CD30+ Lymphomas
NTLA-6001 is our wholly-owned, allogeneic CAR-T development candidate targeting CD30 for the treatment of CD30-expressing hematologic cancers, including relapsed or refractory classical Hodgkin lymphoma ("cHL"). NTLA-6001 is the first candidate developed using our proprietary allogeneic cell engineering platform, which leverages a novel combination of sequential gene edits to yield T cells shielded from immune rejection by both host T and NK cells. We are initiating IND-enabling activities for NTLA-6001. At the Keystone Symposium onMay 1, 2022 we presented preclinical data leading to the development of NTLA-6001. The data demonstrated that our proprietary allogeneic solution created T cells that not only avoid immune recognition by host CD4 and CD8 T cells, but also were protected from NK cell-mediated killing in in vitro and in vivo mouse models. Furthermore, allogeneic T cells engineered specifically with LNPs retained their viability, cell expansion, memory phenotype, cytotoxic and cytokine secretion characteristics.
Ex Vivo Research Programs
We are developing engineered cell therapies to treat a range of hematological and solid tumors. We are pursuing modalities, such as TCR, with broad potential in multiple indications. We continue to advance efforts to move from autologous to allogeneic therapies and from liquid to solid tumors. Our researchers are developing and improving cell-engineering manufacturing and 26 -------------------------------------------------------------------------------- delivery processes that, we believe, may allow us to deliver T cell therapies with high levels of editing, robust levels of cell expansion, desirable memory phenotypes, improved function and no translocations above background levels. Our proprietary T cell engineering process using LNPs to engineer cell therapies enables multiple, sequential gene edits. We have shared preclinical data demonstrating that our LNP-based engineering technology is a significant improvement over electroporation, the standard engineering process used to introduce proteins and nucleic acids into cells. The resulting T cells engineered with LNPs had improved cell properties and performance both in vitro and in vivo as compared to electroporation. The data support the ability of our platform to be used for a variety of targeting modalities, including CAR and TCRs, and to support both autologous and allogeneic T cell candidates. The LNP-based approach is already being used for NTLA-5001.
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Novartis-Led Sickle Cell Disease and Other Research Programs
InDecember 2019 , the research term under our collaboration agreement with Novartis entered into in 2014 (the "2014 Novartis Agreement") ended, although the 2014 Novartis Agreement remains in effect. Under the 2014 Novartis Agreement, Novartis has selected particular CAR-T cell, HSC and OSC targets for continued development. Novartis has initiated clinical studies for OTQ923 and HIX763, two therapeutic candidates, based on CRISPR/Cas9 editing of HSCs that resulted from our research collaboration with Novartis. Novartis is currently recruiting patients for its Phase 1/2 study of these investigational candidates for treatment of sickle cell diseases. Novartis is developing several other product candidates arising from the 2014 Novartis Agreement. For more information regarding our collaboration with Novartis, see the section below entitled "Collaborations - Novartis"
Collaborations and Other Arrangements
To accelerate the development and commercialization of CRISPR/Cas9-based products in multiple therapeutic areas, we have formed, and intend to seek other opportunities to form, strategic alliances with collaborators who can augment our leadership in CRISPR/Cas9 therapeutic development.
Regeneron
InApril 2016 , we entered into a license and collaboration agreement with Regeneron (the "2016 Regeneron Agreement"). The 2016 Regeneron Agreement has two principal components: (i) a product development component under which the parties will research, develop and commercialize CRISPR/Cas-based therapeutic products primarily focused on genome editing in the liver; and (ii) a technology collaboration component, pursuant to which the parties will engage in research and development activities aimed at discovering and developing novel technologies and improvements to CRISPR/Cas technology to enhance our genome editing platform. We may also access the Regeneron Genetics Center and proprietary mouse models to be provided by Regeneron for a limited number of our liver programs. At the inception of the 2016 Regeneron Agreement, Regeneron selected the first of its 10 targets, ATTR, which is subject to a co-development and co-promotion agreement between us and Regeneron (the "ATTR Co/Co"). OnMay 30, 2020 , we entered into (i) amendment no. 1 (the "2020 Regeneron Amendment") to the 2016 Regeneron Agreement, (ii) co-development and co-funding agreements for the treatment of hemophilia A and hemophilia B (the "Hemophilia Co/Co") agreements and (iii) a stock purchase agreement. The collaboration expansion builds upon the jointly developed targeted transgene insertion capabilities designed to durably restore missing therapeutic protein, and to overcome the limitations of traditional gene therapy. The collaboration was extended untilApril 2024 , at which point Regeneron has an option to renew for an additional two years. The 2020 Regeneron Amendment also grants Regeneron exclusive rights to develop products for five additional in vivo CRISPR/Cas-based therapeutic liver targets and non-exclusive rights to independently develop and commercialize up to 10 ex vivo gene edited products made using certain defined cell types. Refer to Note 7 to our condensed consolidated financial statements of this Quarterly Report on Form 10-Q for additional information related to the terms of the agreement between us and Regeneron. 27 --------------------------------------------------------------------------------
OnJuly 30, 2021 , we finalized a transaction in which we,Cellex Cell Professionals GmbH ("Cellex") and funds managed byBlackstone Life Sciences Advisors L.L.C. ("BXLS") established a new universal CAR-T cell therapy company, AvenCell, and entered into two agreements with AvenCell: (i) a license and collaboration agreement (the "LCA"), under which we will collaborate to develop allogeneic universal CAR-T cell therapies and granted AvenCell a license to develop and commercialize genome edited universal CAR-T cell therapies (limited to its use with their switchable, universal CAR-T cellUniCAR and RevCAR platforms); and (ii) a co-development and co-funding agreement (the "AvenCell Co/Co") under which we will co-develop and co-commercialize allogeneic universal CAR-T cell products for an immuno-oncology indication. In addition to the license, we will collaborate with AvenCell on at least seven universal CAR-T cell products that combine our allogeneic T cell technology with AvenCell's switchable, universal CAR-T cell technology, referred to as the ("Allo Collaboration"). Additionally, AvenCell will pay us to provide supply and manufacturing services for them, including supplying good manufacturing practice ("GMP") CRISPR reagents to support the research and development of all CRISPR Products (as defined in the LCA) under the Allo Collaboration until the completion of the first Pivotal Trial (as defined in the LCA) of the first such CRISPR Product. We will also have one additional option to enter into a second co-development and co-funding agreement from selected allogeneic universal CAR-T cell therapy products that the parties intend to develop under the Allo Collaboration for a payment of$30.0 million to AvenCell.
In exchange for the license, we received a 33.33% equity interest in AvenCell at the time of the initial closing. Refer to Notes 7 and 8 to our condensed consolidated financial statements of this Quarterly Report on Form 10-Q for additional information related to the terms of the agreement between us and AvenCell.
SparingVision SAS ("SparingVision")
InOctober 2021 , we and SparingVision, a genomic medicine company developing vision saving treatments for ocular diseases, entered into a license and collaboration agreement (the "SparingVision LCA"), to develop novel genomic medicines utilizing CRISPR/Cas9 technology for the treatment of ocular diseases. We will grant SparingVision exclusive rights to our proprietary in vivo CRISPR/Cas9-based genome editing technology for up to three ocular targets addressing diseases with significant unmet medical need. In addition, the parties will research and develop novel self-inactivating adeno-associated virus ("AAV") vectors and LNP-based approaches to address delivery of CRISPR/Cas9 genome editing reagents to the retina. SparingVision will lead and fund the preclinical and clinical development for the genome editing product candidates pursued under the collaboration. In exchange for the license, we received an 11% equity ownership in SparingVision as of the closing date as well as three warrants attached to each share received for the right to purchase additional shares at designated prices that are subject to certain vesting conditions. We will also be eligible to receive certain research, development and commercial milestone cash payments (up to approximately$200 million per product) as well as royalties on potential future sales of products arising from the collaboration. We will have an option to obtain exclusiveU.S. commercialization rights for product candidates arising from two of three collaboration targets. For product candidates we choose to option, we will pay an opt-in fee between$10.0 million and$20.0 million depending on the stage of development of the target, reimburse certain costs, share in 50% of development costs and pay royalties to SparingVision onU.S. sales. Refer to Notes 7 and 8 to our condensed consolidated financial statements of this Quarterly Report on Form 10-Q for additional information related to the terms of the agreement between us and SparingVision.
InDecember 2021 , we entered into a licensing and collaboration agreement with Kyverna, a cell therapy company engineering a new class of therapies for autoimmune and inflammatory diseases, for the development of an allogeneic CD19 CAR-T cell therapy for the treatment of a variety of B cell-mediated autoimmune diseases. We granted Kyverna rights to our proprietary ex vivo CRISPR/Cas9-based allogeneic platform for the development of KYV-201, an allogeneic CD19 CAR-T cell investigational candidate for the treatment of select autoimmune diseases. This is a novel approach aimed at targeting CD19 for inflammatory diseases as compared to traditional oncology indications. Kyverna will lead and fund preclinical and clinical development for KYV-201 and we will be eligible to receive certain development and commercial milestone payments, as well as low-to-mid-single-digit royalties on potential future sales. We may also exercise an option to leadU.S. commercialization for KYV-201 under a co-development and co-commercialization agreement. If we choose to co-develop and co-commercialize KYV-201, we will pay an opt-in fee of$5.0 million and share in 50% of development costs and future net profit and/or loss arising from commercializing KYV-201 in theU.S. Kyverna retains all rights outside of theU.S. , and we will receive low-to-mid-single-digit royalties on net sales generated outside of theU.S. 28 -------------------------------------------------------------------------------- In exchange for the license, we received an equity ownership of preferred stock in Kyverna. We separately made an additional investment in Kyverna, purchasing incremental shares of Kyverna's preferred stock in exchange for$3.0 million in cash, bringing our investment to approximately 7% ownership in Kyverna at the time of closing. Refer to Notes 7 and 8 to our condensed consolidated financial statements of this Quarterly Report on Form 10-Q for additional information related to the terms of the agreement between us and Kyverna.
InFebruary 2022 , we announced a license, collaboration and option agreement with ONK for the development of engineered NK cell therapies for the treatment of cancer. The agreement grants ONK a non-exclusive license to our proprietary ex vivo CRISPR/Cas9-based genome editing platform and our LNP-based delivery technologies for development of up to five allogeneic NK cell therapies. ONK will be responsible for preclinical and clinical development for the engineered NK cell therapies enabled by the agreement. We will be eligible to receive up to$184 million per product in development and commercial milestone payments, as well as up to mid-single digit royalties on potential future sales. In addition, the agreement grants us options to co-develop and co-commercialize up to two products worldwide with rights to lead commercialization in theU.S. Refer to Note 7 to our condensed consolidated financial statements of this Quarterly Report on Form 10-Q for additional information related to the terms of the agreement between us and ONK.
Novartis
InDecember 2014 , we entered into a license and collaboration agreement with Novartis (the "2014 Novartis Agreement"), primarily focused on the research of new ex vivo CRISPR/Cas9-edited therapies using CAR-T cells and HSCs. The agreement was amended inDecember 2018 to also include research on OSCs. InDecember 2019 , per the terms of the 2014 Novartis Agreement, the research term ended, although the 2014 Novartis Agreement remains in effect, for which we will be eligible to receive milestone and royalty payments in the future. InJune 2021 , we entered into Amendment No. 3 (the "Amendment") to the 2014 Novartis Agreement. The Amendment amends Novartis' rights with respect to all of the CAR-T Therapeutic Targets (as defined in the 2014 Novartis Agreement) that Novartis selected under the 2014 Novartis Agreement, including (a) making Novartis' license non-exclusive for such CAR-T Therapeutic Targets, (b) removing Novartis' diligence and related reporting obligations for such CAR-T Therapeutic Targets, and (c) refining the scope of Novartis' sublicense rights for such CAR-T Therapeutic Targets. We made a one-time payment to Novartis of$10.0 million within 30 days after the effective date of the Amendment, which was recorded as research and development expense in the consolidated statement of operations and comprehensive loss for the year endedDecember 31, 2021 . SinceDecember 31, 2021 , there have been no other material changes to the key terms of the 2014 Novartis Agreement and the Novartis Amendment. Refer to Note 7 to our condensed consolidated financial statements of this Quarterly Report on Form 10-Q for additional information related to the terms of the agreement between us and Novartis. Financial Overview Collaboration Revenue Our revenue consists of collaboration revenue, including amounts recognized related to upfront technology access payments for licenses, technology access fees, research funding and milestone payments earned under our collaboration and license agreements. Research and Development Research and development expenses consist of expenses incurred in performing research and development activities, such as compensation and benefits, which includes equity-based compensation, for full-time research and development employees, allocated facility-related expenses, overhead expenses, license and milestone fees, contract research, development and manufacturing services, clinical trial costs and other related costs.
General and Administrative
General and administrative expenses consist primarily of compensation and benefits, including equity-based compensation, for our executive, finance, legal, human resources, business development and support functions. Also included in general and administrative expenses are allocated facility-related costs not otherwise included in research and development expenses, travel expenses and professional fees for auditing, tax and legal services, including IP-related legal services, and other consulting fees and expenses. 29 -------------------------------------------------------------------------------- Other (expense) income, net Other (expense) income consists of interest income earned on our cash, cash equivalents, restricted cash equivalents and marketable securities, loss from equity method investment and change in fair value of the contingent consideration.
Results of Operations
The following discussion of the financial condition and results of operations should be read in conjunction with the accompanying condensed consolidated financial statements and the related footnotes thereto.
Comparison of Three Months Ended
The following table summarizes our results of operations for the three months
ended
Three Months Ended March 31, Period-to- 2022 2021 Period Change (In thousands) Collaboration revenue$ 11,252 $ 6,445 $ 4,807 Operating expenses: Research and development 133,095 39,276 93,819 General and administrative 22,403 13,594 8,809 Total operating expenses 155,498 52,870 102,628 Operating loss (144,246 ) (46,425 ) (97,821 ) Other (expense) income, net: Interest income 540 220 320 Loss from equity method investment (2,745 ) - (2,745 ) Change in fair value of contingent consideration (421 ) - (421 ) Total other (expense) income, net (2,626 ) 220 (2,846 ) Net loss$ (146,872 ) $ (46,205 ) $ (100,667 )
Collaboration Revenue
Collaboration revenue increased by approximately$4.8 million to$11.3 million during the three months endedMarch 31, 2022 , as compared to$6.4 million during the three months endedMarch 31, 2021 . The increase in collaboration revenue during the three months endedMarch 31, 2022 is primarily due to our joint venture with AvenCell. Refer to Note 7 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for further details. Research and Development
Research and development expenses increased by approximately
30 -------------------------------------------------------------------------------- The following table summarizes our research and development expenses for the three months endedMarch 31, 2022 and 2021, together with the changes in those items in dollars and the respective percentages of change: Three Months Ended March 31, Period-to- Percent 2022 2021 Period Change Change (In thousands) External development expenses by program: NTLA-2001 $ 8,572$ 2,322 $ 6,250 269 % NTLA-2002 1,700 2,155 (455 ) -21 % NTLA-5001 5,122 4,528 594 13 % Unallocated research and development expenses: Employee-related expenses 24,712 13,667 11,045 81 % Research materials and contracted services 17,629 6,977 10,652 153 % In-process research and development 55,990 - 55,990 0 % Facility-related expenses 8,525 5,183 3,342 64 % Stock-based compensation 10,274 3,491 6,783 194 % Other 571 953 (382 ) -40 % Total research and development expenses$ 133,095 $ 39,276 $ 93,819 239 % The increase in research and development expenses for the three months endedMarch 31, 2022 compared to the three months endedMarch 31, 2021 was primarily attributable to:
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a$6.3 million increase in external costs related to the development of NTLA-2001, our lead product candidate, primarily due to an increase in spend on drug components, contracted services, and consulting services as compared to the prior year;
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General and Administrative
General and administrative expenses increased by$8.8 million to$22.4 million during the three months endedMarch 31, 2022 , compared to$13.6 million during the three months endedMarch 31, 2021 . This increase was primarily related to employee-related expenses, including stock-based compensation of$5.3 million , driven by our larger workforce and higher stock prices. 31 --------------------------------------------------------------------------------
Other (expense) income
The increase in other (expense) income of$2.8 million is primarily related to an increase in our share of three months of AvenCell's losses generated in the fourth quarter of 2021 of$2.7 million and the change in the fair value of our contingent consideration liability of$0.4 million , offset in part by a$0.3 million increase in interest income.
Liquidity and Capital Resources
Since our inception throughMarch 31, 2022 , we have raised an aggregate of approximately$1,859.3 million to fund our operations, of which$281.3 million was through our collaboration agreements,$170.5 million was from our initial public offering and concurrent private placements,$1,086.9 million was from follow-on public offerings,$235.6 million was from at-the-market offerings and$85.0 million was from the sale of convertible preferred stock.
As of
We are eligible to earn a significant amount of milestone payments and royalties, in each case, on a per-product basis under our collaborations with Novartis, SparingVision and ONK, on a per-target basis under our collaboration with Regeneron and upon achievement of certain events under our collaboration with Kyverna. Our ability to earn these milestone payments and the timing of achieving these milestones is dependent upon the outcome of our research and development activities and is uncertain at this time. Our rights to payments under our collaboration agreements are our only committed external source of funds. Follow-on Offerings OnJune 1, 2020 , we entered into an underwriting agreement related to a public offering of 6,301,370 shares of our common stock, par value$0.0001 per share, including the exercise in full by the underwriters of their option to purchase an additional 821,917 shares, at the public offering price of$18.25 per share. The offering closed onJune 5, 2020 and we received net proceeds of$107.7 million , after deducting the underwriting discount, commissions and offering expenses. OnDecember 1, 2020 , we entered into an underwriting agreement related to a public offering of 5,513,699 shares of our common stock, par value$0.0001 per share, including the exercise in full by the underwriters of their option to purchase an additional 719,178 shares, at the public offering price of$36.50 per share. The offering closed onDecember 4, 2020 and we received net proceeds of$188.9 million , after deducting the underwriting discount, commissions and offering expenses. InJuly 2021 , we closed an underwritten public offering of 4,758,620 shares of common stock, including the exercise in full of the underwriters' option to purchase an additional 620,689 shares of common stock, at the public offering price of$145.00 per share, for aggregate net proceeds of$648.3 million , after deducting approximately$41.7 million in underwriting discounts and offering costs.
At-the-Market Offering Programs
InAugust 2019 , we entered into an Open Market Sale Agreement (the "2019 Sale Agreement") with Jefferies, under which Jefferies is able to offer and sell, from time to time in "at-the-market" offerings, shares of our common stock having aggregate gross proceeds of up to$150.0 million . We agreed to pay to Jefferies cash commissions of 3.0% of the gross proceeds of sales of common stock under the 2019 Sale Agreement. During 2021, we issued 641,709 shares of our common stock in a series of sales at an average price of$72.79 per share in accordance with the 2019 Sale Agreement, for aggregate net proceeds of$45.3 million after payment of cash commissions to Jefferies and approximately$0.1 million related to legal, accounting and other fees in connection with the sales. During the first quarter of 2022, we issued 579,788 shares of our common stock in a series of sales at an average price of$69.43 per share in accordance with the 2019 Sale Agreement, for aggregate net proceeds of$38.9 million after payment of cash commissions to Jefferies and approximately$0.2 million related to legal, accounting and other fees in connection with the sales.
As of
InMarch 2022 , we entered into an Open Market Sale Agreement (the "2022 Sale Agreement") with Jefferies, under which Jefferies is able to offer and sell, from time to time in "at-the-market" offerings, shares of our common stock having aggregate gross proceeds of up to$400.0 million . We agreed to pay to Jefferies cash commissions of 3.0% of the gross proceeds of sales 32 --------------------------------------------------------------------------------
of common stock under the 2022 Sale Agreement. No shares have been issued under
the 2022 Sale Agreement through
Funding Requirements
Our primary uses of capital are, and we expect will continue to be, research and development contracted services, clinical trial costs, compensation and related expenses, laboratory and office facilities, research supplies, legal and regulatory expenses, patent prosecution filing and maintenance costs for our licensed IP, milestone and royalty payments and general overhead costs. During 2022, we expect our expenses to increase compared to prior periods in connection with our ongoing activities as we continue to grow our research and development team and clinical development in NTLA-2001, NTLA-2002, NTLA-2003, NTLA-3001, NTLA-5001 and NTLA-6001 and advance additional programs into clinical development. Because our lead programs are still in the early clinical stage and the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully complete the development and commercialization of any future product candidates 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 ongoing cash needs through equity financings and collaboration arrangements. We receive cost reimbursements from Regeneron for the transthyretin ("ATTR") amyloidosis and hemophilia programs. Additionally, we are eligible to earn milestone payments and royalties, in each case, on a per-product basis under our collaborations with Novartis, SparingVision and ONK, on a per-target basis under our collaboration with Regeneron, and upon achievement of certain events with Kyverna, subject to the provisions of our agreements with each of them. Except for these sources of funding, we will not have any committed external source of liquidity. To the extent that we raise additional capital through the future sale of equity, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. 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 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.
Outlook
Based on our research and development plans and our expectations related to the progress of our programs, we expect that our cash, cash equivalents and marketable securities as ofMarch 31, 2022 , as well as research and cost reimbursement funding from Regeneron, AvenCell and SparingVision, will enable us to fund our ongoing operating expenses and capital expenditure requirements beyond the next 24 months, excluding any potential milestone payments or extension fees that could be earned and distributed under our collaboration agreements or any strategic use of capital not currently in the base case planning assumptions. We have based this estimate on current assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Our ability to generate revenue and achieve profitability depends significantly on our success in many areas, including: developing our delivery technologies and our CRISPR/Cas9 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; 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 portfolio of IP rights, including patents, trade secrets, and know-how; and attracting, hiring, and retaining qualified personnel. 33 --------------------------------------------------------------------------------
Cash Flows
The following is a summary of cash flows for the three months endedMarch 31, 2022 and 2021: March 31, 2022 2021 (In millions) Net cash used in operating activities$ (79.8 ) $ (52.4 )
Net cash provided by (used in) investing activities 47.5 (25.5 ) Net cash provided by financing activities
47.3 58.6
Net cash used in operating activities
Net cash used in operating activities of$79.8 million during the three months endedMarch 31, 2022 primarily reflects the increased spend in our research and development activities, offset in part by the receipt of$2.0 million in payments from our collaboration partners during that period. Net cash used in operating activities of$52.4 million during the three months endedMarch 31, 2021 primarily reflects the increased spend in our research and development activities, offset in part by the receipt of$2.4 million in payments from our collaboration partners during those periods.
Net cash provided by (used in) investing activities
During the three months endedMarch 31, 2022 and 2021, our investing activities provided cash of$47.5 million and used cash of$25.5 million , respectively. The increase in the three months endedMarch 31, 2022 is primarily due to$93.7 million in marketable securities maturing, offset in part by$44.8 million in net cash for the acquisition of Rewrite and$1.4 million in cash for the purchase of property and equipment. The decrease in the three months endedMarch 31, 2021 is primarily due to a decrease in marketable securities activity during the period, as$148.3 million in marketable securities were purchased and$125.2 million in marketable securities matured. The decrease in cash is also due to$2.4 million for the purchase of property and equipment during the period.
Net cash provided by financing activities
Net cash provided by financing activities of$47.3 million during the three months endedMarch 31, 2022 includes$38.9 million in net proceeds from at-the-market offerings and$8.4 million in cash received from the exercise of stock options. Net cash provided by financing activities of$58.6 million during the three months endedMarch 31, 2021 includes$45.3 million in net proceeds from at-the-market offerings and$13.3 million in cash received from the exercise of stock options.
Critical Accounting Policies
Our critical accounting policies require the most significant judgments and estimates in the preparation of our condensed consolidated financial statements. Management has determined that our most critical accounting policies are those relating to revenue recognition and equity-based compensation. There have been no changes to our critical accounting policies from those which were discussed in our Annual Report for the year endedDecember 31, 2021 .
Recent Accounting Pronouncements
Please read Note 2, "Summary of Significant Accounting Policies", to our condensed consolidated financial statements included in Part I, Item 1, "Notes to Condensed Consolidated Financial Statements," of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our business. Contractual Obligations There were no material changes to our contractual obligations during the three months endedMarch 31, 2022 . For a complete discussion of our contractual obligations, please refer to our Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report for the year endedDecember 31, 2021 .
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