INTELLIA THERAPEUTICS, INC. 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:
• our ability to execute our clinical study strategy for NTLA-2001, our
program for the treatment of transthyretin 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;
• the acceptance of our initial clinical trial application filing, the
anticipated timing of our clinical trial and initiating patient screening
for NTLA-5001, our program for the treatment of acute myeloid leukemia, or
the success of such program;
• the acceptance of our initial clinical trial application filing, the
anticipated timing of our clinical trial and initiating enrollment for
NTLA-2002, our program for the treatment of hereditary angioedema, or the
success of such program;
• 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;
• our ability to research, develop or maintain a pipeline of product
candidates, including in vivo and ex vivo product candidates;
• our ability to manufacture or obtain materials for our preclinical and
clinical studies, and our product candidates;
• 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 andpotent and that their benefits outweigh known and potential risks for the
intended patient population;
• our ability to advance our genome editing and therapeutic delivery
capabilities;
• 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;
• our ability to operate, including commercializing products, without
infringing or breaching the proprietary or contractual rights of others;
• 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;
• the market acceptance, pricing and reimbursement of our product
candidates, if approved;
• estimates of our expenses, future revenues, capital requirements and our
needs for additional financing;
• 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;
• 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;
• the effect of the COVID-19 pandemic, including mitigation efforts and
economic effects, on any of the foregoing or other aspects of our business
operations; and
• 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 fully realize the transformative potential of CRISPR/Cas9, we are pursuing two primary approaches. Our in vivo programs 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. Our ex vivo programs use CRISPR to create the therapy by using engineered human cells to treat cancer and autoimmune diseases. 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 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, 2020 . 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: • Develop curative CRISPR/Cas9-based medicines; • Advance our science; • Be the best place to make therapies; and • Focus on long-term sustainability. 19
-------------------------------------------------------------------------------- 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. All of our revenue to date has been collaboration revenue. Since our inception and throughJune 30, 2021 , we have raised an aggregate of approximately$1,166.1 million to fund our operations, of which$275.9 million was through our collaboration agreements,$170.5 million was from our initial public offering and concurrent private placements,$438.3 million was from follow-on public offerings,$196.5 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 single knockout, repair 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 and hereditary angioedema ("HAE") 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
Background
ATTR amyloidosis is a progressive and fatal disorder resulting from deposition
of insoluble amyloid fibrils into multiple organs and tissues leading to
systemic failure. Blood-borne transthyretin ("TTR") protein is produced by
hepatocytes and normally circulates as a soluble homotetramer that facilitates
transport of vitamin A, via retinol binding protein, as well as the thyroid
hormone, thyroxine. Mutations in the TTR gene lead to the production of TTR
proteins that are destabilized in their tetramer form. These tetramers more
readily dissociate into the monomeric form, and thence to an aggregative form
that results in amyloid deposits in tissues. These deposits cause damage in
those tissues, resulting in a disorder known as hereditary TTR amyloidosis
("ATTRv"). Over 120 different genetic mutations are currently known to cause
ATTRv.
Deposits of TTR amyloid in the heart, nerves and/or other tissues can lead to
diverse disease manifestations, including two main hereditary forms - ATTRv with
polyneuropathy ("ATTRv-PN") and ATTRv with cardiomyopathy ("ATTRv-CM"). Typical
onset of disease symptoms is during adulthood and can be fatal within two to
15 years. Estimates suggest that approximately 50,000 patients suffer from ATTRv
worldwide.
In addition to the hereditary forms described above, ATTR amyloidosis can also
develop spontaneously in the absence of any TTR gene mutation. This wild-type
ATTR ("ATTRwt") is increasingly being recognized as a significant and often
undiagnosed cause of heart failure in the elderly and is the subject of active
investigation. Recent estimates suggest that, globally, between 200,000 and
500,000 people may suffer from ATTRwt with cardiomyopathy ("ATTRwt-CM").
In non-human primate ("NHP") studies, we have demonstrated our ability to reduce
circulating TTR protein to estimated therapeutically relevant levels after a
single systemic administration of LNPs containing our CRISPR/Cas9 complex. In
December 2019 , we completed a year-long durability study of our lead LNP
formulation, maintaining an average reduction of more than 95% of serum TTR
protein after a single dose in NHPs. The data from our various NHP studies has
shown that following editing, our proprietary modular LNP delivery system is
rapidly cleared from circulation, such that exposure to components is transient
and all CRISPR/Cas9 complex is undetectable in blood within 14 days of
administration.
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About the NTLA-2001 Clinical Program
InNovember 2020 , we announced that the first patient had been dosed with NTLA-2001, our lead in vivo genome editing candidate which we are developing as a single-dose treatment for ATTR amyloidosis, in our Phase 1 study. We are conducting our Phase 1 study to evaluate NTLA-2001 for ATTRv-PN patients. Our first patient was dosed in theUnited Kingdom ("U.K.") pursuant to authorization of our Clinical Trial Application ("CTA"), which was received from theU.K.'s Medicines and Healthcare products Regulatory Agency inOctober 2020 . InNovember 2020 , as part of our ongoing Phase 1 study for NTLA-2001, we received a second CTA authorization fromNew Zealand's Medicines and Medical Device Safety Authority to enroll ATTR amyloidosis patients at a clinical site. As part of our ongoing development strategy, we are submitting additional regulatory applications in other countries. InMarch 2021 , we announced that theEuropean Commission ("EC") granted orphan drug designation to NTLA-2001. Our global Phase 1 trial is an open-label, multi-center, two-part study of NTLA-2001 in adults with ATTRv-PN. The trial's primary objectives are to assess the safety, tolerability, pharmacokinetics and pharmacodynamics of NTLA-2001. Patients receive a single dose of NTLA-2001 via intravenous administration. The study will enroll up to 38 participants (ages 18-80 years) and consist of a single-ascending dose phase in Part 1 and, following the identification of a recommended dose, an expansion cohort in Part 2. OnJune 26, 2021 , at thePeripheral Nerve Society ("PNS") Annual Meeting and in theNew England Journal of Medicine , we publicly disclosed positive interim data from our ongoing Phase 1 clinical study of NTLA-2001. The interim data cover the first six ATTRv-PN patients across two single-ascending dose cohorts of the Phase 1 study, which is currently being conducted in theU.K. andNew Zealand . Single doses of either 0.1 mg/kg or 0.3 mg/kg of NTLA-2001 were administered systemically. Reductions in serum TTR levels were measured from baseline to day 28. Treatment with NTLA-2001 led to dose-dependent reductions in serum TTR, with mean reductions of 52% among the three patients in the 0.1 mg/kg dose group, and 87% among the three patients in the 0.3 mg/kg dose group, including one patient with a 96% reduction. At both dose levels, NTLA-2001 was generally well-tolerated by the six patients included in the interim analysis, with no serious adverse events, or abnormal coagulation or liver findings by day 28. Given the safety and tolerability profile observed to date, NTLA-2001 is continuing to be evaluated in the dose-escalation portion of the study, to determine if a higher dose could result in a deeper reduction in disease-causing protein levels leading to the potential for more meaningful clinical benefit. For the third cohort in the dose-escalation portion, we will be evaluating NTLA-2001 at the 1 mg/kg dose level. Following the identification of a recommended dose in the dose-escalation portion of the study, we expect to begin a single-dose expansion cohort in Part 2 of the Phase 1 trial later this year. After completion of the Phase 1 trial, we plan to move to pivotal studies for both polyneuropathy and cardiomyopathy manifestations of ATTR amyloidosis. We intend to present additional interim data for the dose-escalation portion of the Phase 1 study at a scientific or medical meeting this year. NTLA-2001 is part of a co-development and co-promotion ("Co/Co") agreement directed to our first collaboration target with Regeneron Pharmaceuticals, Inc. ("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 amyloidosis program. For more information regarding our collaboration with Regeneron, see the section below entitled "Collaborations - Regeneron"
Hereditary Angioedema ("HAE") Program
Background
HAE is a rare genetic disorder characterized by recurrent, painful and
unpredictable episodes of severe swelling. The most common areas of the body to
develop swelling are the limbs, face, intestinal tract and airway. Minor trauma
or stress may trigger an attack but swelling often occurs without a known
trigger. Episodes involving the intestinal tract cause severe abdominal pain,
nausea and vomiting. Swelling in the airway can restrict breathing and lead to
life-threatening obstruction of the airway. The disease is caused by increased
levels of bradykinin, a protein which leads to swelling. Most patients with HAE
have a deficiency of C1 esterase inhibitor ("C1-INH") protein, which normally
prevents the unregulated release and buildup of bradykinin. HAE is estimated to
affect 1 in 50,000 people, with an estimated 11,000 to 21,500 diagnosed HAE
patients in the U.S. and Europe .
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Currently, there are multiple therapies approved to treat HAE, including acute
and prophylactic approaches. Acute treatments are used to treat patients who are
experiencing an attack. Prophylactic treatments are used to reduce the number of
attacks that a patient may experience. Prophylactic treatments have proven to be
effective in reducing the number of attacks for most patients, though some
patients still experience breakthrough attacks and such treatment options
require regular injections that can be associated with significant treatment
burden and impact on quality of life.
Using our modular LNP delivery system, we aim to knock out the kallikrein B1
("KLKB1") gene with a single dose of treatment to permanently reduce the plasma
kallikrein protein and activity and thereby ameliorate the frequency and
intensity of HAE attacks. We expect our approach should eliminate the current,
significant treatment burden for people living with HAE and minimize the risk of
breakthrough attacks with extensive and continuous reduction in plasma
kallikrein activity. We believe KLKB1 knockout to be safe, as humans with
prekallikrein deficiency appear to have no known health effects. In addition,
inhibition of kallikrein activity has proven to be clinically effective as a
prophylactic treatment for HAE.
NTLA-2002 is our wholly owned development candidate for the treatment of HAE. In
March 2021 , we presented preclinical results confirming greater reductions in
serum kallikrein protein levels and activity versus the current standard of care
for HAE, sustained over seventeen months following a single dose in an ongoing
NHP study. Additionally, we presented data from a humanized KLKB1 mouse model of
bradykinin-mediated vascular permeability, establishing that a single
administration of NTLA-2002 prevented captopril-induced vascular leakage. These
results affirm NTLA-2002's therapeutic hypothesis of preventing HAE attacks. In
June 2021 , we submitted a CTA for NTLA-2002 to the New Zealand Medicines and
Medical Devises Safety Authority to initiate our Phase 1 study. We plan to
enroll our first patient in the Phase 1 study by year-end and we are also
submitting additional regulatory applications to enable enrollment in other
countries.
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, alpha-1 antitrypsin deficiency, 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. 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. In addition, we have developed combination approaches for delivering the editing machinery by LNP, and the repair and insertion templates by adeno-associated virus ("AAV") vectors. For example, at theAlpha-1 Foundation's 20thGordon L. Snider Critical Issues Workshop : The Promise of Gene-Based Interventions of Alpha-1 Antitrypsin Deficiency, we demonstrated expression of physiological protein levels of human alpha-1 antitrypsin ("AAT") in NHPs following a single administration. Compared to traditional AAV gene therapy, our targeted liver gene insertion technology has the ability to achieve therapeutic levels of protein expression, in a stable and durable manner, after a single dose of treatment. 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 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. These results extend our modular in vivo capabilities to treat inherited blood disorders such as sickle cell disease. 22
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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:
• We are developing TCR-engineered T cells as immuno-oncological therapies.
For example, in our existing collaboration with Ospedale San Raffaele,
optimized TCRs that recognize a tumor target,
could be used to treat a variety of blood cancers and solid tumors;
• We seek to develop 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 therapies could be used
to treat both oncological and immunological diseases; and
• We are also exploring methods to apply CRISPR/Cas9 editing to cluster of
differentiation 4 ("CD4") immune cells to induce a non-reverting
regulatory T cell phenotype, to create therapies that address autoimmune
diseases.
In addition, 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")
Background
AML includes a heterogenous group of blood cancers arising from the malignant expansion of hematopoietic cells of the myeloid lineage. AML is associated with weakness, fatigue and bleeding resulting from the depletion of healthy myeloid cells, and is typically rapidly progressive and fatal without immediate treatment. AML is an aggressive and hard-to-treat cancer, resulting in less than 30% of patients living more than five years after diagnosis. AML is the most common acute leukemia in adults and is associated with the largest number of annual deaths from leukemia in theU.S. It is estimated that there were over 11,000 deaths due to AML, as well as nearly 20,000 new AML cases in theU.S. in 2020. While AML can occur at any age, the prevalence of the disease increases with age, resulting in a median age at diagnosis of 68 years. Over the past several years, new treatments have emerged for AML with different mechanisms of action. While these treatments have led to improvements in response rates and in some cases increased overall survival, the outcomes demonstrated thus far have been incremental in nature and long-term outcomes in AML continue to be extremely poor. NTLA-5001 is our engineered T cell therapy development candidate for the treatment of AML, utilizing our TCR-directed approach to target the WT1 intracellular antigen and restricted to the HLA-A*02:01 allele. As WT1 is overexpressed in >90% of AML blasts, we are developing NTLA-5001 as a broadly applicable treatment for AML, regardless of mutational subtypes of a patient's leukemia. This approach employs CRISPR/Cas9 complexes to knock out and replace the patient's endogenous TCR with a natural, high avidity therapeutic TCR. The resulting cells are engineered to be capable of specific and potent killing of AML blasts without bone marrow cell toxicity. InDecember 2020 , we presented data on NTLA-5001 highlighting the high anti-tumor activity observed in proof-of-concept mouse models of acute leukemias and the faster expansion and superior function of T cells manufactured by our proprietary approach, compared to T cells engineered with a standard genome editing process.
We recently submitted our first CTA to the
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 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
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levels. Our proprietary T cell engineering process enables multiple, sequential
gene edits and is a significant improvement over standard engineering processes
commonly used to introduce proteins and nucleic acids into cells. These platform
advances support NTLA-5001 and other ongoing engineered cell research programs.
At the seventh annual Cold Spring Harbor Laboratory virtual scientific meeting
in March 2021 , we presented our first preclinical data set on our novel,
proprietary cytosine deaminase base editor technology. We demonstrated the
technology's potential for enhanced cell engineering, with multiple simultaneous
gene knockouts achieving >90% T cell editing efficiency and no detectable
increase in translocation above background levels.
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 them. 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
To accelerate the development and commercialization of CRISPR/Cas9-based products in multiple therapeutic areas, we have formed, and may seek other opportunities to form, strategic alliances with collaborators who can augment our leadership in CRISPR/Cas9 therapeutic development.
Regeneron
As described in Note 7, "Collaborations-Regeneron Pharmaceuticals, Inc. ," to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, 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. Under the 2016 Regeneron Agreement, we also may access the Regeneron Genetics Center and proprietary mouse models to be provided by Regeneron for a limited number of our liver programs. OnMay 30, 2020 , we entered into amendment no. 1 (the "2020 Regeneron Amendment") to the 2016 Regeneron Agreement, pursuant to which we expanded the existing collaboration to co-develop potential products for the treatment of hemophilia A and hemophilia B. The collaboration expansion builds upon the jointly developed targeted transgene insertion capabilities designed to durably restore a 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. ThroughJune 30, 2021 , excluding the amounts allocated to Regeneron's purchase of our common stock, we have recorded$145.0 million in upfront payments under the 2016 Regeneron Agreement and the 2020 Regeneron Amendment (the "Amended Agreements") and$35.6 million for research and development services, primarily under the ATTR Co/Co agreement, as described in Note 7 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. ThroughJune 30, 2021 , we have recognized$135.2 million of collaboration revenue under all arrangements, including$5.5 million and$12.0 million during the three and six months endedJune 30, 2021 , respectively, and$16.3 million and$24.2 million during the three and six months endedJune 30, 2020 , respectively, in the condensed consolidated statements of operations and comprehensive loss. This includes$1.0 million and$1.8 million during the three and six months endedJune 30, 2021 , respectively, and$3.8 million and$8.6 million during the three and six months endedJune 30, 2020 , respectively, primarily representing payments due from Regeneron pursuant to the ATTR Co/Co agreement, 24
-------------------------------------------------------------------------------- which is accounted for under Accounting Standards Codification 808, Collaborative Arrangements. These revenues are offset in part by contra-revenue related to the Hemophilia Co/Co agreements amounting to$1.0 million during the three and six months endedJune 30, 2021 , respectively. As ofJune 30, 2021 andDecember 31, 2020 , we had accounts receivable of$1.0 million and$2.1 million , respectively, related to these arrangements. We had deferred revenue of$62.8 million and$73.9 million as ofJune 30, 2021 andDecember 31, 2020 , respectively, related to these arrangements.
Novartis
As described in Note 7, "Collaborations-Novartis Institutes for BioMedical Research, Inc. ," to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, inDecember 2014 , we entered into a strategic collaboration agreement with Novartis (the "2014 Novartis Agreement"), primarily focused on the development of new ex vivo CRISPR/Cas9-edited therapies using CAR-T cells and HSCs. The agreement was amended inDecember 2018 (the "Novartis Amendment") 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 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 condensed consolidated statements of operations and comprehensive loss for the three and six months endedJune 30, 2021 . SinceDecember 31, 2020 , there have been no other material changes to the key terms of the 2014 Novartis Agreement and the Novartis Amendment. For further information on the terms and conditions of these agreements, please see the notes to the consolidated financial statements included in our Annual Report for the year endedDecember 31, 2020 . Revenue Recognition - Milestone. InMarch 2020 , theU.S. Food and Drug Administration ("FDA") accepted the investigational new drug ("IND") application submitted by Novartis for a CRISPR/Cas9-based engineered cell therapy for the treatment of sickle cell disease. As a result of meeting this milestone, we recognized$5.0 million as collaboration revenue within the condensed consolidated statement of operations and comprehensive loss. No other milestones under the 2014 Novartis Agreement and the Novartis Amendment were achieved during the six months endedJune 30, 2021 or 2020. We are eligible to receive additional downstream success-based milestones and royalties.
As of
OnJune 22, 2021 , we announced that we have entered into an agreement withCellex Cell Professionals GmbH ("Cellex") and funds managed byBlackstone Life Sciences Advisors L.L.C. ("BXLS") to establish a new CAR-T cell therapy company ("NewCo") that will be focused on the development of allogeneic universal CAR-T cell therapies for immuno-oncology and autoimmune diseases. The new company will be headquartered inCambridge, Massachusetts and will acquire Cellex's subsidiaryGEMoaB GmbH ("GEMoaB"), with established offices and labs in Dresden,Germany . The new company will have an exclusive license to Intellia's CRISPR/Cas9 allogeneic cell engineering platform limited to its use with GEMoaB's switchable, universal CAR-T cell platforms (UniCAR and RevCAR). As a subsidiary of the new company, GEMoaB will continue to advance its clinical stage, autologous CAR-T cell therapy programs. Funds managed by BXLS have committed up to$250 million to the transaction and with us and Cellex (and certain related entities) have equal ownership of the new company at the time of the initial closing. The transaction closed in the third quarter of 2021. InJuly 2021 , we entered into a license and collaboration agreement with NewCo, under which we will collaborate to develop allogeneic universal CAR-T cell therapies, as well as a co-development and co-funding ("Co/Co") agreement to co-develop an allogeneic universal CAR-T cell product for an immuno-oncology indication, which the parties will co-commercialize in theU.S. and key European countries. We will have one additional option to enter into a second Co/Co agreement from selected allogeneic universal CAR-T cell therapy products that the parties will develop under the collaboration. 25
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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 with Regeneron and Novartis.
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, 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, 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.
Interest Income
Interest income is income earned on our cash, cash equivalents, restricted cash equivalents and marketable securities.
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 June 30, Period-to-
2021 2020 Period Change
(In thousands)
Collaboration revenue $ 6,550 $ 16,263 $ (9,713 )
Operating expenses:
Research and development 58,884 37,771 21,113
General and administrative 16,683 11,526 5,157
Total operating expenses 75,567 49,297 26,270
Operating loss (69,017 ) (33,034 ) (35,983 )
Interest income 211 641 (430 )
Net loss $ (68,806 ) $ (32,393 ) $ (36,413 )
Collaboration Revenue
Collaboration revenue decreased by $9.7 million to $6.6 million during the three
months ended June 30, 2021 , as compared to $16.3 million during the three months
ended June 30, 2020 . The decrease in collaboration revenue during the three
months ended June 30, 2021 is primarily caused by an $8.4 million one-time
cumulative catch-up adjustment related to the modification of the 2016 Regeneron
Agreement recorded in 2020. 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 $21.1 million to $58.9 million
during the three months ended June 30, 2021 , as compared to $37.8 million during
the three months ended June 30, 2020 .
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The following table summarizes our research and development expenses for the
three months ended June 30, 2021 and 2020, together with the changes in those
items in dollars (in thousands) and the respective percentages of change:
Three Months Ended June 30, Period-to- Percent
2021 2020 Period Change Change
External development expenses by
program:
NTLA-2001 $ 4,280 $ 5,313 $ (1,033 ) -19 %
NTLA-2002 1,561 1,456 105 7 %
NTLA-5001 4,724 3,445 1,279 37 %
Unallocated research and development
expenses:
Employee-related expenses 15,635 10,303 5,332 52 %
Research materials and contracted
services 18,679 9,515 9,164 96 %
Facility-related expenses 6,778 4,850 1,928 40 %
Stock-based compensation 6,135 2,390 3,745 157 %
Other 1,092 499 593 119 %
Total research and development expenses
56 %
The increase in research and development expenses for the three months ended
June 30, 2021 compared to the three months ended June 30, 2020 was primarily
attributable to:
• a
NTLA-2001, our lead product candidate, primarily due to a decrease in
contracted services and manufactured components incurred as compared to
the prior period;
• a
NTLA-2002, primarily due to an increase in components as we prepare to
enter into the clinic;
• a
NTLA-5001, primarily due to an increase in contracted services as we
prepare to enter into the clinic;
• a
expansion of our development organization;
• a
primarily related to a $10.0 million one-time payment related to the
amendment of the 2014 Novartis Agreement;
• a
rent, depreciation and technology expense allocated to research and
development; and
• a
workforce and stock valuation.
General and Administrative General and administrative expenses increased by$5.2 million to$16.7 million during the three months endedJune 30, 2021 , compared to$11.5 million during the three months endedJune 30, 2020 . This increase was primarily related to employee-related expenses, including stock-based compensation of$2.1 million .
Interest Income
Interest income decreased by$0.4 million to$0.2 million during the three months endedJune 30, 2021 as compared to$0.6 million during the three months endedJune 30, 2020 . This decrease was due to a decline in investment income due to overall market conditions. 27
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Comparison of Six Months Ended
The following table summarizes our results of operations for the six months
ended
Six Months Ended June 30, Period-to-
2021 2020 Period Change
(In thousands)
Collaboration revenue $ 12,995 $ 29,179 $ (16,184 )
Operating expenses:
Research and development 98,160 72,421 25,739
General and administrative 30,277 22,840 7,437
Total operating expenses 128,437 95,261 33,176
Operating loss (115,442 ) (66,082 ) (49,360 )
Interest income 431 1,883 (1,452 )
Net loss $ (115,011 ) $ (64,199 ) $ (50,812 )
Collaboration Revenue
Collaboration revenue decreased by $16.2 million to $13.0 million during the six
months ended June 30, 2021 , as compared to $29.2 million during the six months
ended June 30, 2020 . The decrease in collaboration revenue during the six months
ended June 30, 2021 is primarily caused by an $8.4 million one-time cumulative
catch-up adjustment related to the modification of the 2016 Regeneron Agreement
and a $5.0 million milestone payment earned from Novartis for the IND submission
of OTQ923, both of which were recorded in the first six months of 2020. 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$25.7 million to$98.2 million during the six months endedJune 30, 2021 , as compared to$72.4 million during the six months endedJune 30, 2020 . The following table summarizes our research and development expenses for the six months endedJune 30, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change: Six Months Ended June 30, Period-to- Percent 2021 2020 Period Change Change
External development expenses by program: NTLA-2001$ 6,602 $ 12,359 $ (5,757 ) -47 % NTLA-2002 3,716 2,289 1,427 62 % NTLA-5001 9,252 5,073 4,179 82 % Unallocated research and development
expenses:
Employee-related expenses 29,302 20,964 8,338 40 % Research materials and contracted services 25,656 16,173 9,483 59 % Facility-related expenses 11,960 9,827 2,133 22 % Stock-based compensation 9,626 4,550 5,076 112 % Other 2,046 1,186 860 73 % Total research and development expenses$ 98,160 $ 72,421 $ 25,739 36 %
The increase in research and development expenses for the six months ended
• a
NTLA-2001, our lead product candidate, primarily due to a decrease in
contracted services and manufactured components incurred as compared to
the prior period;
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• a
NTLA-2002, primarily due to an increase in component costs as we prepare
to enter into the clinic;
• a
NTLA-5001, primarily due to an increase in contracted services as we
prepare to enter into the clinic;
• an
expansion of our development organization;
• a
primarily due to a
of the 2014 Novartis Agreement;
• a
rent, depreciation and technology expense allocated to research and
development; and
• a
workforce and stock valuation.
Through 2021, we expect research and development expenses to increase as we continue to grow our development team, execute clinical trials for ATTR amyloidosis and progress our HAE and AML programs into the clinic.
General and Administrative
General and administrative expenses increased by$7.4 million to$30.3 million during the six months endedJune 30, 2021 , compared to$22.8 million during the six months endedJune 30, 2020 . This increase was primarily related to an increase in employee related expenses, including stock-based compensation of$3.0 million . Interest Income Interest income decreased by$1.5 million to$0.4 million during the six months endedJune 30, 2021 as compared to$1.9 million during the six months endedJune 30, 2020 . This decrease was due to a decline in investment income due to overall market conditions.
Liquidity and Capital Resources
Since our inception throughJune 30, 2021 , we have raised an aggregate of approximately$1,166.1 million to fund our operations, of which$275.9 million was through our collaboration agreements,$170.5 million was from our initial public offering and concurrent private placements,$438.3 million was from follow-on public offerings,$196.5 million was from at-the-market offerings and$85.0 million was from the sale of convertible preferred stock.
As of
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 estimated net proceeds of$648.1 million , after deducting approximately$41.9 million in underwriting discounts and estimated offering costs. We are entitled to receive research payments under our collaboration with Novartis and are also eligible to earn a significant amount of milestone payments and royalties, in each case, on a per-product basis under our collaboration with Novartis and on a per-target basis under our collaboration with Regeneron. 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.
At-the-Market Offering Programs
InAugust 2019 , we entered into an Open Market Sale Agreement (the "2019 Sales 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 Sales Agreement. 29 -------------------------------------------------------------------------------- During the six months endedJune 30, 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 Sales 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.
As of
Funding Requirements
Our primary uses of capital are, and we expect will continue to be, research and development contracted services, compensation and related expenses, laboratory and office facilities, research supplies, legal and regulatory expenses, patent prosecution filing and maintenance costs for our licensed IP and general overhead costs. During 2021, 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 advance additional programs into clinical development. Because our lead programs are still in the preclinical or 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 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 collaboration with Novartis and on a per-target basis under our collaboration with Regeneron, 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 ofJune 30, 2021 , along with the proceeds from theJuly 2021 public offering of common stock, will enable us to fund our ongoing operating expenses and capital expenditure requirements beyond the next twenty-four months, excluding any potential milestone payments or extension fees that could be earned and distributed under the collaboration agreements with Regeneron and Novartis 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. 30
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Cash Flows
The following is a summary of cash flows for the six months endedJune 30, 2021 and 2020: Six Months EndedJune 30, 2021 2020 (In millions)
Net cash (used in) provided by operating activities
7.7 150.4
Net cash provided by financing activities 65.7 137.1
Net cash (used in) provided by operating activities
Net cash used in operating activities of$105.4 million during the six months endedJune 30, 2021 primarily reflects the increased spend in our research and development activities, offset in part by the receipt of$3.2 million in payments from our collaboration partners during those periods. Net cash provided by operating activities of$18.9 million during the six months endedJune 30, 2020 primarily reflects the receipt of a$70.0 million up-front payment and$8.4 million in additional payments under our collaboration with Regeneron and$6.0 million in payments from Novartis, offset in part by increased spend in our research and development activities.
Net cash provided by investing activities
During the six months endedJune 30, 2021 and 2020, our investing activities provided net cash of$7.7 million and$150.4 million , respectively. The increase in the six months endedJune 30, 2021 is primarily due to an increase in marketable securities activity during the period, as$185.4 million in marketable securities were purchased and$198.5 million in marketable securities matured. The increase in the six months endedJune 30, 2020 is primarily due to an increase of$152.3 million from marketable securities activity during the period, as$183.5 million in marketable securities matured and$31.2 million in marketable securities were purchased. These increases in cash provided by investing activity were offset in part by the use of$5.4 million and$1.9 million related to purchases of property and equipment in the six months endedJune 30, 2021 and 2020, respectively.
Net cash provided by financing activities
Net cash provided by financing activities of$65.7 million during the six months endedJune 30, 2021 includes$45.3 million in net proceeds from at-the-market offerings,$19.5 million in cash received from the exercise of stock options and$1.0 million in cash received from the issuance of shares through our employee stock purchase plan. Net cash provided by financing activities of$137.1 million during the six months endedJune 30, 2020 includes$107.7 million in net proceeds from a follow-on offering,$14.7 million in net proceeds from at-the-market offerings,$12.6 million in proceeds from the issuance of common stock to Regeneron in a private placement,$1.4 million in cash received from the exercise of stock options and$0.7 million in cash received from the issuance of shares through our employee stock purchase plan.
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, 2020 .
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.
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Contractual Obligations
There were no material changes to our contractual obligations during the six months endedJune 30, 2021 . 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, 2020 .
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements as defined under the rules and regulations of theSEC .
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