VOYAGER THERAPEUTICS, INC. The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited condensed
consolidated financial statements and related notes appearing elsewhere in this
Quarterly Report on Form 10-Q and the audited financial information and the
notes thereto included in our Annual Report on Form 10-K for the year ended
Our actual results and timing of certain events may differ materially from the results discussed, projected, anticipated, or indicated in any forward-looking statements. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, they may not be predictive of results or developments in future periods.
The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report on Form 10-Q, including those risks identified under "Part II, Item 1A-Risk Factors."
These forward-looking statements are made under the safe harbor provisions of
Section 27A of the Securities Act of 1933, as amended, or the Securities Act,
and Section 21E of the Securities Exchange Act of 1934, as amended, or the
Exchange Act. These statements are neither promises nor guarantees. We caution
readers not to place undue reliance on any forward-looking statements made by
us, which speak only as of the date they are made. We disclaim any obligation,
except as specifically required by law and the rules of the
Overview
We are a gene therapy and neuroscience company developing life-changing treatments and next-generation adeno-associated virus, or AAV, capsids. We focus on diseases where we believe a single dose AAV gene therapy or an antibody can either halt or slow disease progression or reduce symptom severity, therefore providing clinically meaningful impact to patients. Our gene therapy platforms enable us to engineer, optimize, manufacture and deliver AAV-based gene therapies that we believe have the potential to safely provide durable efficacy. Our team of experts in the field of AAV gene therapy and neuroscience first identifies and selects diseases in which we believe an AAV gene therapy or an antibody will answer a high unmet medical need, be supported by target validation, offer an efficient path to human proof of biology, present robust preclinical pharmacology, and offer strong commercial potential. We then engineer and optimize either an AAV vector for delivery of the virus payload to the targeted tissue or cells or a passive antibody for systemic delivery.
We are identifying proprietary AAV capsids, the outer viral protein shells that enclose genetic material of a virus payload. Our team has developed a proprietary AAV capsid discovery platform called TRACERTM (Tropism Redirection of AAV by Cell Type-Specific Expression of RNA) to facilitate the selection of AAV capsids with blood brain barrier, or BBB, crossing and cell-specific transduction properties for particular therapeutic applications. The TRACER discovery platform is a broadly applicable, functional RNA-based AAV capsid discovery platform that allows for rapid in vivo evolution of AAV capsids with cell-specific transduction properties in multiple species, including non-human primates. We believe our single dose gene therapies have the potential to be delivered with targeted or systemic surgical delivery or infusions, in conjunction with capsids we discover through our TRACER discovery platform, which we refer to as TRACER capsids.
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We are also applying the TRACER discovery platform to identify capsid variant libraries and facilitate the selection of capsids with tropism and transduction in additional cell and tissue types. We are actively engaged in discussions with multiple parties to make TRACER capsids available to third parties for use in their drug development programs through potential licensing and other arrangements.
In addition to our TRACER discovery platform, we have developed a vectorized antibody platform which we believe will overcome many of the challenges of passive immunization. However, we have also seen promising preclinical results from the passive immunization approach and we are investigating both passive immunization and vectorized approaches to administer proprietary antibodies that selectively target pathological tau to address tauopathies.
Our business strategy focuses on discovering, developing, manufacturing and
commercializing our gene therapy and antibody programs. As part of this
strategy, we have developed core competencies specific to AAV gene therapy
development and manufacturing. This business strategy also includes business
development activities that may include in-licensing activities or partnering
certain programs in specific geographies with collaborators, as we have
demonstrated through our ongoing collaboration with Neurocrine Biosciences,
Inc., which we refer to as Neurocrine, or out-licensing activities including
license agreements related to our TRACER capsids with Pfizer Inc., which we
refer to as Pfizer, and with
We have funded our operations primarily through private placements of redeemable
convertible preferred stock, public offerings of our common stock, and fees,
milestone payments, and cost reimbursements associated with our strategic
collaborations, including our prior collaboration with
In
We determined in 2021 that we would not advance our VY-AADC program, a gene therapy program for the treatment of Parkinson's disease which we had previously licensed to Neurocrine, on our own. Additionally, to take advantage of our TRACER capsid development efforts, we decided in 2021 to discontinue our VY-HTT01 program for the treatment of Huntington's disease and to initiate a second-generation program for the treatment of Huntington's disease leveraging a proprietary AAV capsid that may enable intravenous administration and achieve broad distribution to affected tissue. We also initiated gene therapy programs using our TRACER capsids in treatment programs for monogenic amyotrophic lateral sclerosis, or ALS, with superoxide dismutase 1, or SOD1, mutations; spinal muscular atrophy, or SMA; and various diseases linked to glucocerebrosidase 1, or GBA1, mutations, including Parkinson's
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disease. We also determined that we would continue to advance our vectorized antibody platform capability with programs for tauopathies and indications in neuro-oncology.
In
We remain interested in advancing our other programs and are pursuing additional product candidates in the discovery and preclinical stages of development, including our second-generation program for the treatment of Huntington's disease, our program for the treatment of SMA, and our program for the treatment of human epidermal growth factor receptor positive, or HER2+, brain metastases. We are evaluating opportunities to do so via collaborative partnership, and will continue to conduct preclinical research for our second-generation program for the treatment of Huntington's disease and our program for the treatment of HER2+ brain metastases. We expect to continue to conduct early preclinical research for our second-generation program for the treatment of SMA as we seek a collaborative partner for the program.
We continue to partner with Neurocrine on programs for diseases including Friedreich's ataxia. All of our current product candidates are in the early stages of development. We also continue to evaluate additional diseases that could be treated using AAV gene therapy or our proprietary antibodies and are also actively exploring additional potential treatment methods that can utilize our proprietary TRACER capsids.
Our pipeline of prioritized gene therapy and antibody programs is summarized in
the table below:
[[Image Removed: Graphic]]
Overview of Our Pipeline
We have leveraged our gene therapy platform, our vectorized antibody platform, and our expertise with proprietary antibodies to assemble a pipeline of proprietary AAV gene therapies and passive and vectorized antibodies for the treatment of neurological and other diseases with high unmet medical need. Depending on the disease, our current
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AAV gene therapies will use a gene replacement or gene silencing approach, and our current antibodies will use a passive administration or vectorized delivery approach. Our goal is to address the underlying cause or the predominant manifestations of a specific disease by significantly increasing or decreasing expression of the relevant proteins in targeted tissues
TRACER Capsid Discovery
Our scientists have developed TRACER, a proprietary AAV capsid discovery
platform to facilitate the selection of TRACER capsids for particular
therapeutic applications based on BBB-crossing and cell-specific transduction
properties in multiple species, including non-human primates, or NHPs. In
At the
We continue to perform screening campaigns with our TRACER discovery platform to identify additional proprietary AAV9- and AAV5-derived TRACER capsids and to refine previously-identified TRACER capsids to target or de-target multiple tissue and cell types. These TRACER capsids offer the potential to broaden the therapeutic window substantially and enable gene therapies in a wide range of diseases based on enhanced tissue and cell tropisms that allow for lower doses and with lower off-target effects or toxicities. We are currently conducting studies to assess gene expression and therapeutic indices at order-of-magnitude lower doses, and we intend to submit the results of these studies for presentation at an upcoming scientific conference.
We have identified the cell surface attachment receptor used by one of our more promising BBB-penetrant TRACER capsids. In addition to demonstrating direct binding to the human isoform of this receptor, our experiments have demonstrated that overexpression of human, murine, or cyno-derived orthologs of this receptor mediate improved transduction with AAV, supporting a conserved cross-species mechanism of action of transduction of this BBB-penetrant TRACER capsid. Further, the specificity of this AAV:receptor interaction is supported by experiments demonstrating that pharmacological manipulation of the receptor functionally impacts cellular transduction by the capsid, and that inhibition of the receptor's natural processing pathway blocks transduction. Expression of this receptor has been confirmed in rodent, NHP, and human endothelial cells and multiple CNS cell types. Accordingly, we believe that the characterization of this receptor and confirmation that those capsids can bind to the human isoform of the receptor increases the probability that the TRACER capsid will cross the BBB in humans. We expect the discovery of this receptor to support the clinical translatability of this TRACER capsid toward human application, and inform our approach to the design of future TRACER capsids for intravenous delivery. We also intend to explore whether this
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receptor has the potential to enable intravenous delivery to the CNS for other therapeutic modalities such as proteins, antibodies, and oligonucleotides. We expect to share data on this finding at an upcoming scientific conference.
We are actively engaged in discussions to make TRACER capsids available to third parties for use in their drug development programs through potential licensing and other arrangements. We believe there is significant opportunity for out-licensing transactions related to our TRACER capsids. To maximize the potential of our TRACER capsids for both our own programs and out-licensing transactions, we have retained to date, and expect to retain in the future, all rights associated with such TRACER capsids other than the rights specific to their use in combination with the licensee's transgenes.
Pfizer Option and License Agreement
In
Under the Pfizer License Agreement, we have agreed to provide Pfizer with
certain quantities of materials encoding specified existing capsids for Pfizer's
evaluation. During the research term, which extends until
Novartis Option and License Agreement
In
During the period, which we refer to as the Novartis Research Term, commencing on the Novartis Effective Date and ending on the first anniversary thereof or, in the event Novartis exercises a Novartis License Option, the third anniversary thereof, we have granted Novartis a non-exclusive research license to evaluate our TRACER capsids for potential use, in combination with Novartis Payloads, in programs targeting three specified genes, which we refer to as the Initial Novartis Targets. Upon the payment of additional fees, Novartis may also assess our TRACER capsids for use with two other targets, which we refer to as Additional Novartis Targets, subject to certain conditions including that such target is not part of, or reasonably competitive with, our current development programs. We refer to the Initial Novartis Targets and the Additional Novartis Targets, collectively, as the Novartis Targets. During the Novartis Research Term, we may, at our sole discretion and expense, conduct further research activities to identify additional TRACER capsids.
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If we elect to do so, we have agreed to disclose performance characteristics of such new TRACER capsids to Novartis on a rolling basis.
During the Novartis Research Term, Novartis may exercise up to three Novartis
License Options-or up to five Novartis License Options if Novartis is evaluating
the Additional Novartis Targets-in the aggregate, provided that Novartis may
only exercise one Novartis License Option for each
Neurocrine Collaboration
In
Anti-Tau Antibody Program for the Treatment of Alzheimer's Disease
We are developing proprietary antibodies that selectively target pathological tau to treat tauopathies. Our lead indication for these antibodies is Alzheimer's disease. We have maintained a long-standing focus on developing proprietary and complimentary approaches to disrupt the progression of tau pathology believed to be central to Alzheimer's disease and other relevant neurodegenerative diseases. Reduction of toxic tau aggregates may slow disease progression and cognitive decline in these diseases. We are exploring both passive administration and vectorized delivery utilizing our BBB-penetrant TRACER capsids with our anti-tau antibody. Collectively, our passive and vectorized anti-tau antibodies have differentiated properties including improved targeting of specific regions of tau protein that could offer an improved profile compared to first-generation approaches. We believe that our antibody targeting the C-terminus is highly differentiated from other approaches. Further, we believe that following the clearance of an investigational new drug, or IND, application, clinical assessments utilizing positron emission tomography (PET) imaging of human tau, together with measuring plasma and cerebrospinal fluid biomarkers, have the potential to enable an efficient and accelerated demonstration of human proof-of-biology.
At the Alzheimer's
Humanization of the murine antibody is currently underway. We intend to nominate a lead antibody development candidate in the first half of 2023, initiate Good Laboratory Practice, or GLP, toxicology studies in the second half of 2023, and, if preclinical results are supportive, file an IND application in the first half of 2024.
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GBA1 Gene Replacement Program for the Treatment of Parkinson's Disease
We are developing a gene therapy leveraging a BBB-penetrant, CNS-tropic TRACER
capsid to treat diseases linked to GBA1 mutations via a gene replacement
approach. Our lead indication for this gene therapy is Parkinson's disease with
GBA1 mutations. Mutations in GBA1, the gene encoding the lysosomal enzyme
glucocerebrosidase, or GCase, are the most common genetic risk factor for
synucleinopathies such as Parkinson's disease. Parkinson's disease is among the
most common neurodegenerative diseases, impacting about one million patients in
We believe that restoring GCase activity may attenuate disease progression and potentially slow neurodegeneration. We anticipate delivering GBA1 via intravenous administration to enable widespread distribution to multiple affected brain regions and to avoid the need for more invasive approaches. We believe that the measurement of the GCase substrates such as glucosylsphingosine as cerebrospinal fluid biomarkers may facilitate efficient clinical demonstration of proof-of-biology. Such substrates of the GCase enzyme are elevated in the cerebrospinal fluid of Parkinson's disease patients who harbor the GBA1 mutation, and we expect that substrate levels would fall to normal if our gene therapy restores GCase enzyme expression in the brain. This gene therapy may also have potential utility in idiopathic Parkinson's disease, where there is evidence of loss of GCase activity in the substantia nigra in Parkinson's disease patients even in the absence of GBA1 mutations as well as evidence of lysosomal dysfunction in general.
At the
An NHP capsid selection study for the program is currently underway. We intend to select a development candidate in the first half of 2023, initiate a dose range finding study in NHPs in the second half of 2023, initiate GLP toxicology studies in 2024, and if preclinical results are supportive, file an IND application in 2025. We are evaluating options to further accelerate the development timeline for this program.
SOD1 Gene Silencing Program for the Treatment of ALS
We are developing a gene therapy leveraging a BBB-penetrant, CNS-tropic TRACER
capsid to treat ALS caused by the SOD1 mutation via a gene silencing approach.
SOD1 ALS is typically fatal within approximately three years of diagnosis and
impacts approximately 800 patients in
At the
Our NHP capsid selection study for the program is already underway, and we expect to select a development candidate for the program by the end of 2022. We intend to complete a dose range-finding NHP study in 2023, initiate GLP toxicology studies in the first half of 2024, and, if preclinical results are supportive, file an IND application in 2024.
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Other Discovery and Preclinical Pipeline Programs
We are evaluating additional neurological and other diseases that could be treated using AAV gene therapy through application of either a gene replacement or a gene silencing approach and are also actively exploring additional potential treatment methods that can utilize an AAV vector. We expect to leverage our proprietary gene therapy platform technologies, including TRACER capsids and our vectorized antibody platform, for any such programs. We are pursuing additional product candidates in the discovery and preclinical stages of development, including a second-generation treatment program for Huntington's Disease and a treatment program for SMA, which leverage our TRACER capsids, and a treatment program for HER2+ brain metastases, which leverages a TRACER capsid and our vectorized antibody platform. We are evaluating opportunities to advance these programs via collaborative partnership, and will continue to conduct preclinical research for our second-generation program for the treatment of Huntington's disease and our program for the treatment of HER2+ brain metastases. We expect to continue to conduct early preclinical research for our second-generation program for the treatment of SMA as we seek a collaborative partner for the program.
Vector Engineering and Optimization
We have advanced or intend to advance our multiple preclinical programs towards selection of lead clinical candidates using AAV vectors that we believe are best suited for each of our programs either through use of our existing capsids, through exercising a non-exclusive worldwide commercial license to capsid sequences covered by third parties, or by engineering or optimizing TRACER capsids. The key components of an AAV vector include: (i) the capsid; (ii) the therapeutic gene, or transgene; and (iii) payload control elements, including the promoter or other DNA sequences that modulate the expression of the transgene.
We have a history of incurring significant losses. Our net loss was
? continue investing in our gene therapy platform to optimize capsid engineering
and payload development, manufacturing, dosing, and delivery techniques;
increase our investment in and support for TRACER, our proprietary discovery
? platform to facilitate the selection of AAV capsids and expand our investment
to discover TRACER capsids with broad tropism in CNS and other tissues with
cell-specific transduction properties for particular therapeutic applications;
? continue to develop our vectorized antibody platform and other proprietary
antibodies;
? enter into licensing agreements regarding our TRACER capsids, such as the
Pfizer License Agreement and the Novartis License Agreement;
conduct preclinical development activities and initiate IND-enabling studies
? and clinical trials in connection with our tau antibody program, our GBA1 gene
therapy program, and our SOD1 ALS gene therapy program;
? initiate additional preclinical studies and clinical trials for, and continue
research and development of, our other programs;
conduct joint research and development under our strategic collaborations for
? the research, development, and commercialization of certain of our pipeline
programs;
? continue our process research and development activities, as well as establish
our research-grade and commercial manufacturing capabilities;
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? identify additional diseases for treatment with our AAV gene therapies and
develop additional programs or product candidates;
? seek marketing and regulatory approvals for any of our product candidates or
devices that successfully complete clinical development;
? maintain, expand, protect and enforce our intellectual property portfolio;
? identify, acquire or in-license other product candidates and technologies;
? develop a sales, marketing and distribution infrastructure to commercialize any
product candidates for which we may obtain marketing approval;
expand our operational, financial and management systems and personnel,
? including personnel to support our clinical development, manufacturing and
commercialization efforts and our operations as a public company;
? increase our product liability and clinical trial insurance coverage as we
expand our clinical trials and commercialization efforts;
? continue to operate as a public company; and
? determine the appropriate path forward, if any, for VY-AADC (NBIb-1817) as a
treatment for Parkinson's disease.
Financial Operations Overview
Revenue
To date, we have not generated any revenue from product sales and do not expect
to generate any revenue from product sales for the foreseeable future. For the
six months ended
For additional information about our revenue recognition policy related to collaborations and a description of the key terms of the Neurocrine Collaboration Agreement, the Pfizer License Agreement, and the Novartis License Agreement, refer to Note 8, Commitments and Contingencies, of our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
For the foreseeable future, we expect substantially all of our revenue will be generated from the Neurocrine Collaboration Agreement, the Pfizer License Agreement, the Novartis License Agreement, and any other strategic collaborations and out-licensing arrangements we may enter into. If our development efforts are successful, we may also generate revenue from product sales in the future.
Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our program discovery efforts, and the development of our programs and gene therapy platform, vectorized antibody platform, and proprietary antibodies, which include:
? employee-related expenses including salaries, benefits, and stock-based
compensation expense;
costs of funding research performed by third parties that conduct research and
? development, clinical and preclinical activities, manufacturing and production
design on our behalf;
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? the cost of purchasing lab supplies and non-capital equipment used in
designing, developing and manufacturing preclinical study materials;
? consultant fees;
? facility costs including rent, depreciation and maintenance expenses; and
? fees for maintaining licenses under our third-party licensing agreements.
Research and development costs are expensed as incurred. Costs for certain activities, such as manufacturing, preclinical studies, and clinical trials, are generally recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and collaborators.
At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of our product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from sales of our product candidates. This is due to the numerous risks and uncertainties associated with developing such product candidates, including the uncertainty of:
? identifying additional product candidates;
? completing preclinical studies successfully;
? designing, initiating, enrolling and completing clinical trials successfully;
? establishing an appropriate safety profile;
? establishing commercial manufacturing capabilities or making arrangements with
third-party manufacturers;
? receiving marketing approvals from applicable regulatory authorities;
? commercializing the product candidates, if and when approved, whether alone or
in collaboration with others;
? obtaining and maintaining patent and trade secret protection and regulatory
exclusivity for our product candidates;
? continued acceptable safety profiles of the products following approval; and
? recruiting and retaining key research and development personnel.
A change in the outcome of any of these variables with respect to the development of any of our product candidates would significantly change the costs, timing and viability associated with the development of that product candidate.
Research and development activities are central to our business model. We are in the early stages of development of our product candidates. Our research and development costs have decreased relative to pre-2021 levels as a result of our strategic restructuring, the reevaluation of our product candidate pipeline, our strategic shift to invest in TRACER capsid development efforts, and our initiation of other cost-saving initiatives. As our development programs progress and as we identify product candidates and initiate preclinical studies and clinical trials, we expect research and development costs to increase.
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General and Administrative Expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, accounting, business development, legal and human resource functions. Other significant costs include corporate facility costs not otherwise included in research and development expenses, legal fees related to patent and corporate matters and fees for accounting and consulting services.
Our general and administrative expenses have decreased relative to pre-2021 levels as a result of our strategic restructuring costs. As a result of the strategic restructuring, there are decreases including a reduction in personnel costs and fees paid to outside consultants, as well as other cost-saving initiatives including a reduction in facility-related expenditures. As our development programs progress and we identify product candidates and initiate preclinical studies and clinical trials, we expect general and administrative expenses to increase to support these additional research and development activities.
Other Income (Expense), net
Other income (expense) for the three months ended
Critical Accounting Policies and Estimates
We believe that several accounting policies are important to understanding our
historical and future performance. We refer to these policies as critical
because these specific areas generally require us to make judgments and
estimates about matters that are uncertain at the time we make the estimate.
There were no changes to our critical accounting policies during the six months
ended
Results of Operations
Comparison of the three months ended
The following table summarizes our results of operations for the three months endedJune 30, 2022 and 2021, together with the changes in those items in dollars: Three Months Ended June 30, 2022 2021 Change (in thousands) Collaboration revenue$ 712 $ 1,357 $ (645) Operating expenses: Research and development 12,527 19,505 (6,978) General and administrative 7,552 10,437 (2,885) Total operating expenses 20,079 29,942 (9,863) Other income, net: Interest income 219 48 171 Other (expense) income 61 (1,583) 1,644 Total other income 280 (1,535) 1,815 Net (loss) income$ (19,087) $ (30,120) $ 11,033 38 Table of Contents Collaboration Revenue
Collaboration revenue was
Research and Development Expense
Research and development expense decreased by
Three Months Ended
June 30,
2022 2021 Change
(in thousands)
Employee and consultant $ 6,924 $ 10,265 $ (3,341)
External research and development 2,794 4,283 (1,490)
Facilities and other 1,022 2,458 (1,437)
Professional fees 1,787 2,498 (711)
Total research and development expenses
The decrease in research and development expense for the three months ended
approximately
? primarily related to a reduction in clinical activities to prepare for the
first-in humans trial of the VY-HTT01 for the Huntington's disease program; and
approximately
? with lower headcount in research and development functions as compared to the
prior year; and
approximately
? related to the gain recorded on the terminated lease at 75 Sidney as disclosed
in this Quarterly Report on Form 10-Q.
? approximately
to support the pipeline programs.
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General and Administrative Expense
General and administrative expense decreased by
approximately
? compensation associated with recognition of the severance expensed as a result
of the reduction in force;
approximately
? related to the gain recorded on the terminated lease at 75 Sidney as disclosed
in this Quarterly Report on Form 10-Q; and
? approximately
related expenses..
Other (Expense) Income, net
Interest and other income of approximately
Comparison of the six months ended
The following table summarizes our results of operations for the six months endedJune 30, 2022 and 2021, together with the changes in those items in dollars: Six Months Ended June 30, 2022 2021 Change (in thousands) Collaboration revenue$ 1,371 $ 7,858 $ (6,487) Operating expenses: Research and development 26,876 41,851 (14,975) General and administrative 15,211 20,181 (4,970) Total operating expenses 42,087 62,032 (19,945) Other income, net: Interest income 271 132 139 Other income (expense) 39 2,273 (2,234) Total other income, net 310 2,405 (2,095) Net (loss) income$ (40,406) $ (51,769) $ 11,363 Collaboration Revenue
Collaboration revenue was
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attributable to the Pfizer License Agreement and the Novartis License Agreement.
Our collaboration revenues were not materially impacted by the coronavirus
disease 2019, or COVID-19, pandemic during the three months ended
Research and Development Expense
Research and development expense decreased by
Six Months Ended
June 30,
2022 2021 Change
(in thousands)
Employee and consultant $ 13,567 $ 21,690 $ (8,124)
External research and development 4,595 10,347 (5,752)
Facilities and other 4,627 4,976 (349)
Professional fees 4,088 4,837 (749)
Total research and development expenses
The decrease in research and development expense for the six months ended
approximately
primarily related to a reduction in clinical and manufacturing activities to
? prepare for the first-in humans trial of the VY-HTT01 for the Huntington's
disease and decrease spend on external costs incurred in connection with the
Neurocrine Collaboration Agreement; and
approximately
? with lower headcount in research and development functions compared to the
prior year; and
approximately
? related to the gain recorded on the terminated lease at 75 Sidney as disclosed
in this Quarterly Report on Form 10-Q, partially offset by increased facility
and other costs including rent, depreciation, maintenance, and other expenses.
? Approximately
to support the pipeline programs.
General and Administrative Expense
General and administrative expense decreased by
approximately
? compensation associated with recognition of the severance expensed as a result
of the reduction in force;
? approximately
related to the gain recorded on the terminated lease at
? approximately
related expenses.
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Other Income, net
Interest and other income of approximately
COVID-19
The COVID-19 pandemic continues to evolve. We have and will continue to be guided by applicable guidelines and safety measures, including any stay-at-home policies for certain non-essential employees, consultants, contractors, and staff. Certain of our clinical trial sites, collaboration partners, suppliers and consultants have experienced facility closures or been subject to quarantines, travel restrictions and other governmental restrictions or supply chain disruptions and have appropriately diverted attention and resources to respond to the impacts of COVID-19 on their own operations and personnel. Some have even become involved in research and development efforts related to COVID-19.
We will continue to monitor the issues raised by the global spread of COVID-19 and have put in place and will continue to put in place measures as appropriate and necessary for, or that we believe to be in the best interest of, our business, employees, collaborators, stockholders, and the community.
Liquidity and Capital Resources
Sources of Liquidity
We have funded our operations primarily through private placements of redeemable convertible preferred stock, public offerings of our common stock, our strategic collaborations, including our prior Sanofi Genzyme Collaboration, AbbVie Tau Collaboration, and AbbVie Alpha-Synuclein Collaboration, our ongoing Neurocrine Collaboration, and our out-licensing arrangements, including the Pfizer License Agreement and the Novartis License Agreement.
As of
Cash Flows
The following table provides information regarding our cash flows for the six
months ended
Six Months Ended
June 30,
2022 2021
(in thousands)
Net cash (used in) provided by:
Operating activities $ 15,941 $ (44,011)
Investing activities (56,128) 57,030
Financing activities 819 385
Net (decrease) increase in cash, cash equivalents, and
restricted cash $ (39,368) $ 13,404
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Net Cash Provided by (Used in) Operating Activities
Net cash provided by operating activities was
Net cash used in investing activities was
Net Cash Provided by Financing Activities
Net cash provided by financing activities was
Funding Requirements
We expect our expenses to decrease from prior year in the near term as a result of our strategic restructuring, the reevaluation of our product candidate pipeline, our strategic shift to invest in TRACER capsid development efforts, and our initiation of other cost-saving initiatives. We expect our expenses to increase in the future, however, as we continue the research and development of, conduct clinical trials of, and seek marketing approval for, our product candidates and as we continue to enter into or conduct activities in connection with our collaboration agreements. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant expenses related to program sales, marketing, manufacturing and distribution to the extent that such sales, marketing and distribution are not the responsibility of potential collaborators. Furthermore, we expect to incur increasing costs associated with operating as a public company, meeting financial controls, satisfying regulatory and quality standards, fulfilling healthcare compliance requirements, and maintaining product, clinical trial and directors' and officers' liability insurance coverage. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital or enter into business development transactions when needed or on acceptable terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts.
Based upon our current operating plan, we expect that our existing cash, cash
equivalents, and marketable securities at
? the scope, progress, results, and costs of product discovery, preclinical
studies and clinical trials for our product candidates;
? the scope, progress, results, costs, prioritization, and number of our research
and development programs;
the progress and status of our strategic collaborations and licensing
agreements, including any research and development costs for which we are
responsible, our collaborators' or licensors' willingness and ability to
? approve desirable budgets for research and development costs for which they are
responsible, the potential exercise by our collaboration partners or licensors
of any options to develop or license certain products and product candidates
that they might have, our potential receipt of future milestone payments and
royalties
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from our collaboration partners or licensors, and any decisions by our
collaborators or licensors to exercise their rights to terminate a collaboration
in whole or in part;
the extent to which we are obligated to reimburse, or entitled to reimbursement
? of, preclinical development and clinical trial costs, or the achievement of
milestones or occurrence of other developments that trigger payments, under any
other collaboration agreement to which we might become a party;
? the costs, timing and outcome of regulatory review of our product candidates;
our ability to establish and maintain collaboration, distribution, or other
? marketing arrangements for our product candidates on favorable terms, if at
all;
the costs and timing of preparing, filing and prosecuting patent applications,
? maintaining and enforcing our intellectual property rights and defending
intellectual property-related claims;
the extent to which we acquire or in-license other product candidates and
? technologies, including any intellectual property associated with such
candidates or technologies, acquire or invest in other businesses, or
out-license our product candidates, capsids or other technologies;
? the costs of advancing our manufacturing capabilities and securing
manufacturing arrangements for pre-commercial and commercial production;
? the level of product sales by us or our collaborators from any product
candidates for which we obtain marketing approval in the future;
the costs of operating as a public company, meeting applicable financial,
? regulatory, and quality control standards, fulfilling healthcare compliance
requirements, and maintaining adequate product, clinical trial, and directors'
and officers' liability insurance coverage; and
the costs of establishing or contracting for sales, manufacturing, marketing,
? distribution, and other commercialization capabilities if we obtain regulatory
approvals to market our product candidates.
Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete. We may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our product revenues, if any, and any commercial milestone payments or royalty payments under our collaboration agreements, will be derived from sales of products that may not be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing and business development transactions to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.
Until such time, if ever, as we can generate product revenues sufficient to achieve consistent profitability, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. We do not have any committed external source of funds other than the amounts we are entitled to receive from our collaboration partners and licensors for reimbursement of certain research and development expenses, potential option exercises, the achievement of specified regulatory and commercial milestones, and royalty payments under our collaboration and licensing agreements, as applicable. To the extent that we raise additional capital through the sale of equity or equity-linked securities, including convertible debt, our stockholders' ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our existing stockholders' rights as holders of our common stock. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, obtaining additional capital, acquiring or divesting businesses, making capital expenditures or declaring dividends.
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If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Contractual Obligations
We enter into agreements in the normal course of business with clinical research organizations, contract manufacturing organizations, and institutions to license intellectual property. These contracts are generally cancelable at any time by us, upon 30 to 90 days prior written notice.
Our agreements to license intellectual property include potential milestone payments that are dependent upon the development of products using the intellectual property licensed under the agreements and contingent upon the achievement of clinical trial or regulatory approval milestones. We may also be required to pay annual maintenance fees or minimum amounts payable ranging from low-four digits to low five-digits depending upon the terms of the applicable agreement.
We also have non-cancelable operating lease commitments arising from our leases
of office and laboratory space at our facilities in
Other than the termination of our lease for
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 applicable
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