Metagenomi Inc
For the period ended Sep 30, 2024. Filed Nov 13, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 13, 2024
MGX$0.71-2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0000950170-24-096665
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0000950170-24-126273
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 124 previous paragraphs and 123 current paragraphs.
87 unchanged; 29 reworded; 7 added; 5 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
We initiated manufacturing activities to support IND-enabling studies and clinical material supply. We are planning for additional engagement with the FDA and regulatory agencies outside the U.S. in preparation for a potential IND/Clinical Trial Application filing in 2026.
Current report
Generative AI and Structure-Guided Engineering
Current report
We believe our metagenomics-based, AI-enhanced discovery approach will allow us to achieve our goal of having the most effective genome editing tools to address any genetic disease anywhere in the human genome. In August 2024, we presented a poster at the CRISPR Frontiers conference at Cold Spring Harbor Laboratory titled “Unlocking the Therapeutic Potential of Compact SMART Nucleases through Ancestral Reconstruction, Structure-Guided Engineering, and Generative AI” which demonstrated how our metagenomics-informed synthetic sequence generation, including ancestral sequence reconstruction and generative AI techniques, potentially enable rapid development of novel programmable CRISPR nuclease- and base editing systems.
Current report
The chassis of our nucleases can be leveraged by adding on additional effector enzymes to create base editors capable of single nucleotide changes in the genome. In October 2024, we presented a poster at the European Society of Gene and Cell Therapy’s 31st Annual Congress titled “Efficient and specific genome editing with metagenomics-derived base editor for human therapeutic applications.” We showcased that our novel Adenine Base Editor (“ABE”) was targetable to over 95% of the human genome’s base pairs, a significantly wider range of sites than first-generation SpCas9 base editors. Our ABE platform achieved over 95% reproducible and durable triplex protein knockdown in primary T-cells, confirming its highly efficient application for multiplex gene editing. Our ABE demonstrated highly specific on-target deamination with minimum-to-no indel formation, and genome-wide analyses confirmed no detectable translocations and no significant genomic composition differences when compared to unedited cells.
Current report
Our ABEs triplex protein knockdowns exhibited excellent tolerability in cells, with no adverse effects on cell viability, expansion, or changes in stress-related gene expression observed post-editing.
Current report
Research and development expenses were $26.3 million for the three months ended September 30, 2024, compared to $26.8 million for the three months ended September 30, 2023. The decrease of $0.6 million was primarily due to a decrease of $1.6 million in laboratory materials and supplies partially as a result of the Termination Agreement, offset by an increase of $1.2 million in other research and development and consulting costs due to the timing of external research and development costs to support our research and preclinical development activities.
Current report
General and administrative expenses were $7.6 million for the three months ended September 30, 2024, compared to $7.9 million for the three months ended September 30, 2023. The decrease of $0.3 million was primarily related to a decrease in professional service fees and other costs.
Removed paragraphs (5)
Previous report
The chassis of our nucleases can be leveraged by adding on additional effector enzymes to create base editors capable of single nucleotide changes in the genome. We showed that by using PAM interacting domain engineering, we expanded the genome targetability of our base editors by 5-fold compared to SpCas9 base editors. We recently achieved multiplex base editing proof-of-concept and plan to present this data at a scientific conference in the second half of 2024.
Previous report
Termination of Moderna Agreement
Previous report
On April 26, 2024 (the “Termination Date”), we and ModernaTx, Inc. (“Moderna”) mutually terminated the Strategic Collaboration and License Agreement, dated October 29, 2021 (the “Moderna Agreement”), by and between us and Moderna. The Moderna Agreement was terminated pursuant to a Mutual Termination Agreement (the “Termination Agreement”), dated as of April 26, 2024, by and between us and Moderna. Pursuant to the Termination Agreement, we regained full development and commercialization rights to our wholly-owned base editing and RIGS technologies that were subject to the Moderna Agreement. Effective as of the Termination Date, the Moderna Agreement was terminated in its entirety and the rights and licenses granted by us to Moderna terminated in all respects. We are not entitled to receive any future payments from Moderna pursuant to the Termination Agreement or Moderna Agreement.
Previous report
As a result of the termination of the Moderna Agreement, we also regained full rights to our Primary Hyperoxaluria Type 1 (“PH1”) program. We have decided to look for a partner or licensee for further development of PH1. Previously disclosed data achieved preclinical proof-of-concept in an accepted disease model of PH1.
Previous report
Research and development expenses increased by $5.6 million, from $22.7 million for the three months ended June 30, 2023 to $28.3 million for the three months ended June 30, 2024 and increased by $16.9 million, from $42.8 million for the six months ended June 30, 2023 to $59.8 million for the six months ended June 30, 2024.
Reworded paragraphs (29)
Previous wording
We are a precision genetic medicines company committed to developing curative therapeutics for patients using our proprietary, comprehensive metagenomics-derived genome editing toolbox. We are harnessing the power of metagenomics, the study of genetic material recovered from the natural environment, to unlock four billion years of microbial evolution to discover and develop a suite of novel editing tools capable of correcting any type of genetic mutation found anywhere in the genome. Our platform combines AI and proprietary algorithms run on expansive cloud computing infrastructure to screen for novel clustered regularly interspaced short palindromic repeat (“CRISPR”) nucleases and other effector enzymes at high speed.
Current wording
We are a precision genetic medicines company committed to developing curative therapeutics for patients using our proprietary, genome editing toolbox. We are harnessing the power of metagenomics, the study of genetic material recovered from the natural environment, to unlock four billion years of microbial evolution to discover and develop a suite of novel editing tools capable of correcting any type of genetic mutation found anywhere in the genome. Our platform combines artificial intelligence (“AI”), ancestral state reconstruction, and proprietary algorithms run on expansive cloud computing infrastructure to identify novel clustered regularly interspaced short palindromic repeat (“CRISPR”) nucleases and other effector enzymes at high speed.
Previous wording
Our comprehensive genome editing toolbox includes programmable nucleases, base editors, RNA-mediated integration systems (“RIGS”) for small corrections (“prime editing”) as well as for larger integrations, and CRISPR-associated transposases (“CASTs”) for doing large integrations with DNA. These tools form a toolbox that can potentially make any desired gene modification – gene knock-down, gene knock-in as well as small and large genetic changes. In addition to overcoming the activity, targetability, and specificity limitations of first-generation systems, our toolbox includes ultra small editing systems, designed to have broad compatibility with viral and nonviral delivery technologies, to address the full spectrum of genetic medicine for hepatic- and extrahepatic therapeutic indications. All elements of our toolbox are wholly owned, and we have constructed a broad patent estate that protects our intellectual property. We anticipate that our toolbox will continue to expand as we discover, interrogate, and optimize our novel editing systems.
Current wording
Our comprehensive genome editing toolbox includes systems for making small edits such as programmable nucleases, base editors, and small RNA-mediated integration systems (“RIGS”), as well as large gene integration systems including large template RIGS and CRISPR-associated transposases (“CASTs”). These tools form a toolbox that can potentially make any desired gene modification – gene knock-down, gene knock-in as well as small and large genetic changes. In addition, our toolbox includes ultra small editing systems that are small enough to be packaged into a single adeno-associated virus (“AAV”) to address extrahepatic therapeutic indications. All elements of our toolbox are wholly owned, and we have constructed a broad patent estate that protects our intellectual property. We anticipate that our toolbox will continue to expand as we discover, interrogate, and optimize our novel editing systems.
Previous wording
We are taking a stepwise approach deploying our genome editing toolbox to develop potentially curative therapies for patients. Our lead programs are selected to both address important diseases and to establish new standards in targetability, precision, efficiency, and scope of editing capabilities. Each of these indications was chosen based on our conviction in the underlying disease biology, existence of validating preclinical and clinical data, availability of pharmacodynamic and translational tools to assess early proof-of-concept, relevant value supporting outcome measures, and ongoing clinical unmet need. While we do not currently have any approved products and all of our product candidates are preclinical, our lead programs capture an ever-growing set of translational learnings and insights that will inform and potentially accelerate future therapeutic programs. Ultimately, we intend to prosecute a genetic medicine therapeutic development strategy across a broad array of diseases and target organs including liver, central nervous system, muscle, kidney, and lung.
Current wording
We are taking a stepwise approach deploying our genome editing toolbox to prosecute a genetic medicine therapeutic development strategy across a broad array of diseases and target organs including liver, central nervous system, muscle, kidney, and lung, matching the right tool to each specific target.
Previous wording
In an ongoing non-human primate (“NHP”) study, we demonstrated integration of a surrogate cynomolgus-FVIII cassette (used to avoid immune response that would occur with a foreign human FVIII protein) and observed therapeutically relevant levels of the cyno-FVIII protein in all 3 treated animals that was extended for 4.5 months. We presented this data in a late breaking session at the World Federation of Hemophilia World Congress, in April 2024.
Current wording
In an ongoing non-human primate (“NHP”) study, we demonstrated integration of a surrogate cynomolgus-FVIII cassette (used to avoid immune response that would occur with a foreign human FVIII protein) and confirmed durable FVIII activity levels over a twelve-month period, as of the September 2024 data cutoff. Treatment was generally well tolerated with findings limited to moderate transient elevation of liver transaminases following AAV and LNP administration. There were no notable findings in total bilirubin or albumin levels or adverse clinical observations.
Previous wording
Following our meeting with the FDA to align on key aspects of our planned IND submission, in August 2024, we nominated a lead development candidate, MGX-001. We plan to present 12-month durability data for FVIII expression in our ongoing NHP study in September 2024. In parallel, we are initiating current good manufacturing practices manufacturing activities.
Current wording
This early NHP study was conducted without the benefit of several subsequent optimizations of the therapeutic candidate designed to enhance safety and efficacy in the clinic. Following our meeting with the FDA to align on key aspects of our planned IND submission, in August 2024, we nominated a lead development candidate, MGX-001. For the development candidate MGX-001, the company selected a bioengineered FVIII construct.
Previous wording
All four therapeutic targets in Wave 1 of our collaboration with Ionis Pharmaceuticals, Inc. (“Ionis”) focus on high value cardiometabolic diseases and are advancing in lead optimization, including transthyretin amyloidosis which targets TTR and refractory hypertension which targets angiotensinogen (“AGT”). Following selection of the remaining Wave 1 targets in the Ionis collaboration in the first quarter of 2024, all four therapeutic programs successfully advanced into the lead optimization phase in the second quarter of 2024. Along with our partner Ionis, we are conducting preclinical activities with the aim of demonstratingin vivo proof-of-concept in 2024, advancing NHP studies and unlocking potential for one to two development candidate nominations in 2025.
Current wording
All four therapeutic targets in Wave 1 of our collaboration with Ionis Pharmaceuticals, Inc. (“Ionis”) focus on high value cardiometabolic diseases and are advancing in lead optimization. In vivo rodent proof-of-concept was achieved in all four wave 1 genetic targets, including transthyretin (“TTR”) for transthyretin amyloidosis and angiotensinogen (“AGT”) for refractory hypertension, as well as two undisclosed programs in significant cardiometabolic indications. Along with our partner Ionis, we are conducting preclinical activities with the plan to nominate one to two development candidates in 2025.
Previous wording
The ability to package our systems into a single AAV will enable more efficient targeting of organs and diseases beyond what is currently possible with LNP delivery. For example, at 429 aa in length, one of our SMART nucleases is a fraction of the size of the industry-standard SpCas9 system, which is 1,300 aa and exceeds the delivery capacity of standard AAV vectors. We recently achievedin vitro proof-of-concept for an undisclosed neuromuscular target with one of our compact editing systems.
Current wording
The ability to package our systems into a single AAV will enable more efficient targeting of organs and diseases beyond what is currently possible with LNP delivery. For example, at 429 aa in length, one of our SMART nucleases is a fraction of the size of the industry-standard SpCas9 system, which is 1,300 aa and exceeds the delivery capacity of standard AAV vectors. We recently achievedin vitro proof-of-concept for an undisclosed neuromuscular target with one of our compact editing systems. In October 2024, we presented a poster at the American Institute of Chemical Engineers’ 7th International Conference on CRISPR Technologies titled “Engineering of compact and efficient adenine base editors from metagenomic derived systems.” We showcased our SMART genome editing systems that are small enough to be packaged into standard AAV vectors, even when additional effector domains are included for base editing, potentially enabling a differentiated therapeutic approach for neuromuscular targets.
Previous wording
We recently achievedin vitro proof-of-concept using our RIGS for a small gene correction in undisclosed liver targets. Additionally, using proprietary reverse transcriptases we demonstrated what we believe to be the first-ever targeted integration of >900 bp in human cells with our RIGS using all-RNA delivery. We consider this to be a major step forward in the gene editing space, as these systems could be delivered entirely as RNA, compatible with current LNP delivery technologies, and could enable large, targeted exogenous gene integrations.
Current wording
We recently achievedin vitro proof-of-concept using our RIGS for a small gene correction in undisclosed liver targets. Additionally, using proprietary reverse transcriptases we demonstrated what we believe to be the first-ever targeted integration of >900 bp in human cells with our RIGS using all-RNA delivery. We consider this to be a major step forward in the genome editing space, as these systems could be delivered entirely as RNA, compatible with current LNP delivery technologies, and could enable large, targeted exogenous gene integrations.
Previous wording
As a result of the acceleration of all four Wave 1 Ionis targets into lead optimization, as well as our decision to deprioritize PH1, we are revising to provide pipeline guidance only through year-end 2025, including the next one to two DC nominations in 2025. We are maintaining our guidance for the planned IND filing for hemophilia A in 2026.
Current wording
As a result of the acceleration of all four Wave 1 Ionis targets into lead optimization, as well as our decision to deprioritize Primary Hyperoxaluria Type 1 (“PH1”), we provided pipeline guidance through year-end 2025, including one to two DC nominations in 2025. We maintained our guidance for the planned IND filing for hemophilia A in 2026. We focused our internal efforts onin vivo genome editing therapeutic approaches and pursue technology out-licensing forex vivo cell therapy, where next generation genome editing systems are an important enabler of novel therapies. We determined that we would not pursue amyotrophic lateral sclerosis (“ALS”) based upon peer company clinical data regarding the lack of efficacy of Ataxin-2 as a therapeutic target for ALS. We revised our pipeline design to consolidate earlier stage programs and make it easier to identify our near term pipeline priorities focused onin vivo genome editing and liver indications.
Previous wording
On July 19, 2024, pursuant to the terms of the Affini-T Agreement, we received equity consideration of 933,650 shares of Affini-T common stock, estimated at a fair value of $4.0 million, upon the achievement of a regulatory milestone related to the submission of drug master files to FDA in support of an IND for Affini-T’s T-cell receptor based therapy.
Current wording
In July 2024, pursuant to the terms of the Affini-T Agreement, we received equity consideration of 933,650 shares of Affini-T common stock upon the achievement of a regulatory milestone related to the submission of drug master files to the FDA in support of an IND for Affini-T’s T-cell receptor based therapy. In August 2024, in connection with Affini-T’s Series B extension, we purchased 33,383 shares of Affini-T’s Series B Preferred Stock and received warrants to purchase up to 16,691 shares of Affini-T’s common stock.
Previous wording
As part of our strategy, we have entered into collaborations with third parties for one or more of our programs or product candidates we may develop. For example, in June 2022, we entered into a Development, Option and License Agreement with Affini-T Therapeutics, Inc. (“Affini-T”) (the “Affini-T Agreement”) to develop and commercialize gene edited T-cell receptor (“TCR”)-based therapeutic products exclusively in the field of treatment, prevention or diagnosis of any human cancer using products with any engineered primary TCR alpha/beta T cells and non-exclusively in the field of treatment, prevention or diagnosis of any human cancer using products with certain other engineered immune cells worldwide, and in November 2022, we entered into a Collaboration and License Agreement with Ionis to research, develop and commercialize investigational medicines using genome editing technologies. In October 2021, we entered into the Moderna Agreement with Moderna, focused on advancing new genome editing system forin vivo human therapeutic applications, and in April 2024, we and Moderna mutually terminated the Moderna Agreement. Refer to Note 7 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information related to the terms of the agreements between us and our collaborators and Note 12 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information related to the termination of the Moderna Agreement.
Current wording
As part of our strategy, we have entered into collaborations with third parties for one or more of our programs or product candidates we may develop. For example, in June 2022, we entered into a Development, Option and License Agreement with Affini-T Therapeutics, Inc. (“Affini-T”) (the “Affini-T Agreement”) to develop and commercialize gene edited TCR-based therapeutic products exclusively in the field of treatment, prevention or diagnosis of any human cancer using products with any engineered primary TCR alpha/beta T cells and non-exclusively in the field of treatment, prevention or diagnosis of any human cancer using products with certain other engineered immune cells worldwide, and in November 2022, we entered into a Collaboration and License Agreement with Ionis to research, develop and commercialize investigational medicines using genome editing technologies. In October 2021, we entered into a Strategic Collaboration and License Agreement (the “Moderna Agreement”) with ModernaTx, Inc. (“Moderna”), focused on advancing new genome editing system forin vivo human therapeutic applications, and in April 2024, we and Moderna mutually terminated the Moderna Agreement. Refer to Note 7 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information related to the terms of the agreements between us and our collaborators.
Previous wording
To date, all of our revenue consists of collaboration revenue, earned from collaboration agreements with Moderna (prior to the termination of the Moderna Agreement), Ionis and Affini-T. These agreements may include the following types of promised goods or services: (i) grants of licenses; (ii) performance of research and development services and (iii) participation on joint research and/or development committees. They also may include options to obtain licenses to our intellectual property or to extend the term of the research activities. Our revenues under such collaboration agreements were $20.0 million and $31.2 million for the three and six months ended June 30, 2024, respectively, and $11.3 million and $20.0 million for the three and six months ended June 30, 2023, respectively.
Current wording
To date, all of our revenue consists of collaboration revenue, earned from collaboration agreements with Moderna (prior to the termination of the Moderna Agreement), Ionis and Affini-T. These agreements may include the following types of promised goods or services: (i) grants of licenses; (ii) performance of research and development services and (iii) participation on joint research and/or development committees. They also may include options to obtain licenses to our intellectual property or to extend the term of the research activities. Our revenues under such collaboration agreements were $11.5 million and $42.7 million for the three and nine months ended September 30, 2024, respectively, and $12.4 million and $32.4 million for the three and nine months ended September 30, 2023, respectively.
Previous wording
Total other income, net, includes interest income from our investments in available-for-sale marketable securities and changes in the fair value of our investment in Affini-T.
Current wording
Total other income, net, includes interest income from our investments in available-for-sale marketable securities and changes in the fair value of our investments in Affini-T.
Previous wording
Comparison of the Three and Six Months Ended June 30, 2024 and 2023
Current wording
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023
Previous wording
Our revenue consists of collaboration revenue recognized under our agreements with Moderna (prior to the termination of the Moderna Agreement), Affini-T and Ionis. We recognize revenue as the performance obligations are satisfied. Collaboration revenue increased by $8.7 million, from $11.3 million for the three months ended June 30, 2023 to $20.0 million for the three months ended June 30, 2024 and increased by $11.2 million, from $20.0 million for the six months ended June 30, 2023 to $31.2 million for the six months ended June 30, 2024. The increase in collaboration revenue for the three months ended June 30, 2024 was primarily driven by a $11.4 million increase in revenue related to the Moderna Agreement mainly due to the recognition of all remaining deferred revenue of $15.9 million resulting from the Termination Agreement, offset by a $1.7 million decrease in revenue related to the Ionis Agreement and a $1.0 million decrease in revenue related to the Affini-T Agreement. The increase in collaboration revenue for the six months ended June 30, 2024 was primarily driven by a $9.9 million increase in revenue related to the Moderna Agreement mainly due to the recognition of all remaining deferred revenue during the six months ended June 30, 2024 and a $2.7 million increase in revenue related to the Ionis Agreement as we performed more services, offset by a $1.4 million decrease in revenue related to the Affini-T Agreement.
Current wording
Our revenue consists of collaboration revenue recognized under our agreements with Moderna (prior to the termination of the Moderna Agreement), Affini-T and Ionis. We recognize revenue as the performance obligations are satisfied. Collaboration revenue decreased by $0.8 million, from $12.4 million for the three months ended September 30, 2023 to $11.5 million for the three months ended September 30, 2024 and increased by $10.3 million, from $32.4 million for the nine months ended September 30, 2023 to $42.7 million for the nine months ended September 30, 2024. The decrease in collaboration revenue for the three months ended September 30, 2024 was primarily driven by a $5.3 million decrease in revenue related to the Termination Agreement, offset by a $3.9 million increase in revenue related to the Ionis Agreement as we performed more services and a $0.5 million increase in revenue related to the Affini-T Agreement. The increase in collaboration revenue for the nine months ended September 30, 2024 was primarily driven by a $6.6 million increase in revenue related to the Ionis Agreement as we performed more services and a $4.5 million increase in revenue related to the Moderna Agreement mainly due to the recognition of all remaining deferred revenue during the nine months ended September 30, 2024, offset by a $0.8 million decrease in revenue related to the Affini-T Agreement.
Previous wording
Employee-related expenses increased by $3.7 million and $10.9 million during the three and six months ended June 30, 2024, respectively, including a $1.9 million and $5.7 million increase, respectively, in stock-based compensation expense related to increased headcount and issuance of annual equity awards to existing employees, in addition to a one-time acceleration of stock-based compensation expense related to profits interests units that were canceled without a concurrent grant of a replacement award during the Reorganization and were accounted for as a repurchase for no consideration during the six months ended June 30, 2024. Laboratory materials and supplies increased by $2.1 million and $3.5 million during the three and six months ended June 30, 2024, respectively, due to expansion of our research and development operations. Facilities and allocated overhead, including rent, repairs and maintenance costs, common facilities and information technology related expenses allocated to research and development increased by $1.4 million and $1.8 million during the three and six months ended June 30, 2024, respectively. Other research and development and consulting costs decreased by $1.6 million during the three months ended June 30, 2024 and increased by $0.7 million during the six months ended June 30, 2024, mainly due to the timing of external research and development costs to support our research and preclinical development activities.
Current wording
Research and development expenses were $86.0 million for the nine months ended September 30, 2024, compared to $69.6 million for the nine months ended September 30, 2023. The increase of $16.4 million was primarily due to an increase of $10.2 million in employee-related expenses, including stock-based compensation expense, related to increased headcount and the issuance of annual equity awards to existing employees, in addition to a one-time acceleration of stock-based compensation expense related to profits interests units that were canceled without a concurrent grant of a replacement award during the Reorganization and were accounted for as a repurchase for no consideration during the nine months ended September 30, 2024, an increase of $2.4 million in facilities and allocated overhead, including rent, repairs and maintenance costs, common facilities and information technology related expenses allocated to research and development due to expansion of our research and development operations, an increase of $2.0 million in other research and development and consulting costs mainly due to the timing of external research and development costs to support our research and preclinical development activities, and an increase of $1.8 million in laboratory materials and supplies.
Previous wording
General and administrative expenses increased by $1.9 million, from $6.6 million for the three months ended June 30, 2023 to $8.6 million for the three months ended June 30, 2024 and increased by $4.2 million, from $13.1 million for the six months ended June 30, 2023 to $17.3 million for the six months ended June 30, 2024. The increase for both the three and six months ended June 30, 2024 was primarily related to an increase in employee-related expenses, including stock-based compensation expense, as a result of increased headcount and issuance of annual equity awards to existing employees.
Current wording
General and administrative expenses were $24.9 million for the nine months ended September 30, 2024, compared to $21.0 million for the nine months ended September 30, 2023. The increase of $3.9 million was primarily related to an increase of $4.6 million in employee-related expenses, including stock-based compensation expense, as a result of increased headcount and the issuance of annual equity awards to existing employees and an increase of $0.8 million in facilities and allocated overhead, offset by a decrease of $1.5 million in professional service fees and other costs.
Previous wording
Total other income, net, decreased by $2.9 million, from $6.9 million for the three months ended June 30, 2023 to $3.9 million for the three months ended June 30, 2024 and decreased by $3.0 million, from $10.9 million for the six months ended June 30, 2023 to $7.8 million for the six months ended June 30, 2024. The decrease in other income, net, for both the three and six months ended June 30, 2024 was primarily due to a change in the fair value of our long term investment in Affini-T which was remeasured to fair value during the three and six months ended June 30, 2023.
Current wording
Total other income, net, decreased by $2.3 million, from $3.8 million for the three months ended September 30, 2023 to $1.5 million for the three months ended September 30, 2024 and decreased by $5.3 million, from $14.6 million for the nine months ended September 30, 2023 to $9.3 million for the nine months ended September 30, 2024. The decrease in other income, net, for both the three and nine months ended September 30, 2024 was primarily due to a net change in the fair value of our long term investment in Affini-T.
Previous wording
Provision for income taxes decreased by $4.1 million and $6.3 million for the three and six months ended June 30, 2024, respectively, from a provision for income taxes of $1.9 million and $4.1 million for three and six months ended June 30, 2023, respectively, to a benefit for income taxes of $2.2 million for both the three and six months ended June 30, 2024. The benefit for income taxes for the three and six months ended June 30, 2024 was due to our intention to elect to carry back the 2024 research and development credit to the prior year. The provision for income taxes for the three and six months ended June 30, 2023 was mainly due to our taxable income related to an upfront payment received under the Ionis Agreement and capitalization of research and development expenses under the Internal Revenue Code Section 174 (“Section 174”).
Current wording
Provision for income taxes decreased by $3.3 million and $9.6 million for the three and nine months ended September 30, 2024, respectively, from a provision for income taxes of $1.2 million and $5.3 million for three and nine months ended September 30, 2023, respectively, to a benefit for income taxes of $2.1 million and $4.3 million for the three and nine months ended September 30, 2024, respectively. The benefit for income taxes for the three and nine months ended September 30, 2024 was primarily due to our intention to elect to carry back the 2024 research and development credit to the prior year, in addition to a return to provision adjustment related to the prior year return. The provision for income taxes for the three and nine months ended September 30, 2023 was mainly due to our taxable income related to an upfront payment received under the Ionis Agreement and capitalization of research and development expenses under the Internal Revenue Code Section 174 (“Section 174”).
Previous wording
We have incurred significant operating losses since inception and we expect to continue to incur substantial losses for the foreseeable future. Our net losses were $68.3 million and $43.6 million for the years ended December 31, 2023 and 2022, respectively, and $35.9 million and $29.1 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $180.8 million.
Current wording
We have incurred significant operating losses since inception and we expect to continue to incur substantial losses for the foreseeable future. Our net losses were $68.3 million and $43.6 million for the years ended December 31, 2023 and 2022, respectively, and $54.7 million and $49.0 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $199.6 million.
Previous wording
As of June 30, 2024, we had $299.9 million in cash, cash equivalents and available-for-sale marketable securities. We believe that our existing cash, cash equivalents and available-for-sale marketable securities will be sufficient to fund our current operating plan for at least the next 12 months. Based on our current operating plan, we estimate that our existing cash, cash equivalents and available-for-sale marketable securities will be sufficient to fund our projected operating expenses and capital expenditure requirements into 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “Liquidity and Capital Resources” and “Risk Factors—Risks Related To Our Financial Position and Need for Additional Capital.” We expect that we will require additional funding to: continue our current research development activities; develop, maintain, expand and protect our intellectual property portfolio; further develop our platform; and hire additional research, clinical and scientific personnel. If we receive regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize our products.
Current wording
As of September 30, 2024, we had $274.6 million in cash, cash equivalents and available-for-sale marketable securities. We believe that our existing cash, cash equivalents and available-for-sale marketable securities will be sufficient to fund our current operating plan for at least the next 12 months. Based on our current operating plan, we estimate that our existing cash, cash equivalents and available-for-sale marketable securities will be sufficient to fund our projected operating expenses and capital expenditure requirements into 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “Liquidity and Capital Resources” and “Risk Factors—Risks Related To Our Financial Position and Need for Additional Capital.” We expect that we will require additional funding to: continue our current research development activities; develop, maintain, expand and protect our intellectual property portfolio; further develop our platform; and hire additional research, clinical and scientific personnel. If we receive regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize our products.
Previous wording
Net cash used in operating activities was $56.2 million for the six months ended June 30, 2024 and consisted primarily of our net loss of $35.9 million and changes in our net operating assets and liabilities of $31.7 million, partially offset by net non-cash charges of $11.4 million. The net change in operating assets and liabilities consisted primarily of a decrease of $29.4 million in deferred revenue as we recognized revenue under our collaboration agreements, a $3.3 million decrease in income tax payable due to payment of our 2023 income tax liability and a decrease of $1.3 million in other non-current liabilities, offset by an increase of $1.7 million in accounts payable due to the timing of payments to our vendors. The net non-cash charges consisted primarily of $9.6 million in stock-based compensation expense, $2.6 million of depreciation expense, and $2.3 million in non-cash lease expense, partially offset by $3.2 million in amortization of discounts on available-for-sale marketable securities.
Current wording
Net cash used in operating activities was $82.8 million for the nine months ended September 30, 2024 and consisted primarily of our net loss of $54.7 million and changes in our net operating assets and liabilities of $44.2 million, partially offset by net non-cash charges of $16.1 million. The net change in operating assets and liabilities consisted primarily of a decrease of $38.4 million in deferred revenue as we recognized revenue under our collaboration agreements, a decrease of $3.3 million in income tax payable due to payment of our 2023 income tax liability, a decrease of $2.2 million in operating lease liabilities, a decrease of $2.0 million in other non-current liabilities and an increase of $1.2 million in prepaid expenses and other current assets, offset by a decrease of $1.9 million in accounts receivable related to the Affini-T Agreement and the Moderna Agreement and an increase of $1.5 million in accounts payable due to the timing of payments to our vendors. The net non-cash charges consisted primarily of $12.8 million in stock-based compensation expense, $3.9 million of depreciation expense, $3.4 million in non-cash lease expense, and a $2.1 million charge related to the fair value of our investments in Affini-T, partially offset by $4.8 million in amortization of discounts on available-for-sale marketable securities and $1.6 million in amortization of non-cash collaboration revenue related to the Affini-T Agreement.
Previous wording
Net cash used in operating activities for the six months ended June 30, 2023 was $47.1 million and consisted primarily of our net loss of $29.1 million and changes in our net operating assets and liabilities of $15.1 million, partially offset by net non-cash income of $2.8 million. The changes in our net operating assets and liabilities consisted primarily of a decrease of $16.2 million in deferred revenue as we recognized revenue under our collaboration agreements, and an increase of $2.3 million in accounts receivable, partially offset by a $1.3 million decrease in contract assets and a $1.2 million increase in income tax payable. The net non-cash income consisted primarily of $4.5 million in amortization of the discount on our available-for-sale marketable securities and $2.9 million increase in the fair value of our investments in Affini-T, offset by $2.0 million in non-cash lease expense, $1.9 million of depreciation expense, and $1.2 million in stock-based compensation expense.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2023 was $70.8 million and consisted primarily of our net loss of $49.0 million and changes in our net operating assets and liabilities of $22.1 million, partially offset by net non-cash charges of $0.2 million. The changes in our net operating assets and liabilities consisted primarily of a decrease of $25.0 million in deferred revenue and collaboration advances as we recognized revenue under our collaboration agreements, an increase of $3.9 million in accounts receivable related to the Affini-T Agreement and the Moderna Agreement and a $1.0 million decrease in operating lease liabilities due to recurring payments under the existing lease agreements, partially offset by a $2.4 million increase in accounts payable due to the timing of payments to our vendors, a $2.4 million increase in other non-current liabilities, a $1.3 million decrease in contract assets related to the Affini-T Agreement, a $0.7 million increase in accrued expenses and other liabilities and a $0.6 million increase in income tax payable due to additional tax expense. The net non-cash charges consisted primarily of $4.5 million in stock-based compensation expense, $3.1 million in non-cash lease expense and $3.0 million of depreciation expense, offset by $6.9 million credit related to amortization of the discount on our available-for-sale marketable securities, $2.9 million increase in the fair value of our investments in Affini-T and $0.7 million in amortization of non-cash collaboration revenue related to the Affini-T Agreement.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2023 was $90.8 million due to net purchases of available-for-sale marketable securities of $85.0 million and purchases of property and equipment of $5.8 million.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2024 was $116.7 million primarily due to net purchases of available-for-sale marketable securities of $113.6 million and purchases of property and equipment of $2.8 million.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2024 was $107.8 million due to net purchases of available-for-sale marketable securities of $106.2 million and purchases of property and equipment of $1.6 million.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2023 was $14.9 million due to net purchases of available-for-sale marketable securities of $6.8 million and purchases of property and equipment of $8.1 million.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2024 was $84.5 million due to net proceeds from the issuance of our common stock in our IPO, net of issuance costs paid during the period.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2024 was $84.0 million due to net proceeds from the issuance of our common stock in our IPO, net of issuance costs paid during the period.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2023 was $4.3 million primarily due to net proceeds from the issuance of our Series B-1 redeemable convertible preferred stock.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2023 was $2.3 million due to net proceeds from the issuance of our Series B-1 redeemable convertible preferred stock of $4.3 million, offset by $1.9 million payments of initial public offering costs.
Previous wording
Our material cash requirements include our contractual obligations for our leased office and laboratory space under three lease agreements and one vivarium lease agreement. During the six months ended June 30, 2024, there were no material changes outside the ordinary course of our business to our material cash requirements described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 27, 2024.
Current wording
Our material cash requirements include our contractual obligations for our leased office and laboratory space under three lease agreements and one vivarium lease agreement. During the nine months ended September 30, 2024, there were no material changes outside the ordinary course of our business to our material cash requirements described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 27, 2024.
Previous wording
During the six months ended June 30, 2024, there were no material changes to our critical accounting estimates or in the methodology used for estimates from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
During the nine months ended September 30, 2024, there were no material changes to our critical accounting estimates or in the methodology used for estimates from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
We are focusing our internal efforts onin vivo gene editing therapeutic approaches and pursue technology out-licensing forex vivo cell therapy, where next generation gene editing systems are an important enabler of novel therapies.
Previous report — wording carried elsewhere
Going forward, we are not going to pursue amyotrophic lateral sclerosis (ALS) based upon recent peer company clinical data regarding the lack of efficacy of Ataxin-2 as a therapeutic target for ALS.
Previous report — wording carried elsewhere
We have revised our pipeline design to consolidate earlier stage programs and make it easier to identify our near term pipeline priorities focused onin vivo gene editing and liver indications.