Intellia Therapeutics, Inc. (NASDAQ:NTLA) Q4 2023 Earnings Call Transcript
Intellia Therapeutics, Inc. (NASDAQ:NTLA) Q4 2023 Earnings Call Transcript February 22, 2024
Intellia Therapeutics, Inc. beats earnings expectations. Reported EPS is $-1.46, expectations were $-1.47. Intellia Therapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning and welcome to the Intellia Therapeutics' Fourth Quarter and Full Year 2023 Financial Results Conference Call. My name is Drew and I will be your conference operator today. Following formal remarks, we will open the call up for a question-and-answer session. This conference is being recorded at the Company's request and will be available on the Company's website following the end of the call. As a reminder, all participants are currently in a listen-only mode. [Operator Instructions]. I will now turn the conference over to Ian Karp, Senior Vice President of Investor Relations and Corporate Communications at Intellia. Please proceed.
Ian Karp: Thank you, operator and good morning, everyone. Welcome to Intellia Therapeutics fourth quarter and full year 2023 earnings call. Earlier this morning, Intellia issued a press release outlining the Company's progress this quarter, as well as topics for discussion on today's call. This release can be found on the Investors & Media section of Intellia's website at intelliatx.com. This call is being broadcast live and a replay will be archived on the Company's website. At this time, I would like to take a minute to remind listeners that during the call, Intellia management may make certain forward-looking statements and ask that you refer to our SEC filings available at sec.gov for a discussion of potential risks and uncertainties.
All information presented on this call is current as of today, and Intellia undertakes no duty to update this information unless required by law. Joining me from Intellia are John Leonard, Chief Executive Officer; David Lebwohl, Chief Medical Officer; and Laura Sepp-Lorenzino, Chief Scientific Officer; and Glenn Goddard, Chief Financial Officer. John will begin with an overview of recent business highlights. David will provide an update on our clinical pipeline progress, Laura will review our R&D updates, and Glenn will review our financials before we open up the call for questions. With that, I'll now turn the call over to John, our Chief Executive Officer.
John Leonard: Thank you, Ian. Good morning everyone and thank you all for joining us today. 2023 was an outstanding year for Intellia and its strong momentum has carried into 2024 with our two lead programs either in or approaching Phase 3 clinical development, we are now closer than ever to the first In Vivo CRISPR based therapies reaching the market. We have made critical advances for the field of genome editing and for patients suffering from ATTR amyloidosis. Offering potentially unmatched clinical profiles would address significant patient unmet need in two large and rapidly growing commercial markets. Having clinically validated our In Vivo CRISPR gene editing technology by inactivating genetic targets in the liver, we're now bringing forth the next wave of innovation.
This new frontier will come in two dimensions, broadening what we can do and expanding where we can go, all of which will allow us to increase the number of diseases we can pursue. The genome editing revolution is only made possible by the unique properties of CRISPR/Cas. Intellia’s expertise with CRISPR/Cas9 is unsurpassed and serves as a foundation for the diverse set of editing tools that we've developed and continue to advance. Whether using base editing or DNA writing tools, each of these technologies rely on the specificity and versatility of the CRISPR system. With our wide range of editing and delivering capabilities, we can apply the best tool for each therapeutic application. This allows us to address diseases where there is a meaningful opportunity to improve the standard of care.
In some cases, we may even be able to pursue diseases that would otherwise be considered untreatable, if not for the power of CRISPR. It is this expansive and modular platform coupled with our strong balance sheet that will allow us to achieve the three-year strategic priorities announced earlier this year. Our focus remains on both near-term clinical execution as well as value-creating platform innovation. With this as a backdrop, we expect the following by the end of this year. Two In Vivo knockout programs in active Phase 3 studies, two In Vivo gene insertion programs in first in human studies, and five different tissues outside the liver with active research programs. And additionally, we expect to have six or more collaborations with at least a dozen potential drug products utilizing our technology in research and development.
We're confident in our ability to deliver on these ambitious goals. We have a proven track record of success with regulators in advancing CRISPR-based therapies and clinical trials. We've consistently delivered on our commitments to the scientific, patient, and investment communities. And finally, we have a world-class team of drug developers who have pioneered some of the most innovative and commercially successful medicines in history. In summary, Intellia is the company with the most advanced and expansive In Vivo and Ex Vivo pipeline in the industry. With a potential BLA submission in 2026, we're well positioned to bring forth the first ever In Vivo CRISPR-based therapy. I'll now hand the call over to our Chief Medical Officer, David Lebwohl, who will provide an update on our clinical programs.
David?
David Lebwohl: Thanks, John and welcome, everyone. I'll begin with 2001, our In Vivo CRISPR candidate for the treatment of ATTR amyloidosis. In December, we initiated the Phase 3 MAGNITUDE trial for patients with cardiomyopathy. Since then we're hitting the aggressive timelines we have set for ourselves, including multiple sites opening and regulatory approvals in geographies with large patient numbers. Notably, we have our first U.S. site actively enrolling patients and on track to dose the first patient in the first quarter. We are making great progress and expect many additional sites to ramp up throughout the year. At the same time, we are actively preparing for a global, pivotal Phase 3 study of 2001 for the treatment of patients with polyneuropathy.
We expect to provide additional information on our Phase 3 plans later this year. Finally, we plan to present new data from the ongoing Phase 1 study this year. I'll now turn to 2002, our In Vivo CRISPR candidate for the treatment of hereditary angioedema or HAE. A few weeks ago, the New England Journal of Medicine published our landmark Phase 1 data. This marks the second consecutive Intellia In Vivo program to have initial clinical data published in this prestigious medical journal. We are continuing to follow the Phase 1 patients and plan to present additional data this year. As previously announced, high interest in 2002 allowed us to identify all patients for the Phase 2 study in only six months. We have since completed enrollment and dosing.
We look forward to presenting the initial results for the first time later this year. Importantly, these data will determine the dose selected for the pivotal Phase 3 study. We expect to initiate the Phase 3 study in the second half of this year. Of course, this is subject to regulatory feedback, but we think we're in an excellent position. With five special regulatory designations granted to 2002, we've taken advantage of the opportunities for additional interactions with the FDA and other agencies to gain early alignment on our Phase 3 plan. In summary, we believe both programs could reset the standard of care for people living with ATTR amyloidosis or HAE. I'll now hand over the call to Laura, our Chief Scientific Officer, who will provide updates on our R&D efforts.
Laura Sepp-Lorenzino: Thank you, David. Good morning, everyone. We're continuing to advance novel gene editing and delivery technologies for both In Vivo and Ex Vivo therapeutic applications. Building on the success of our In Vivo gene inactivation programs, we're leading the development of CRISPR-based targeted gene insertion. Here, we're leveraging the same R&D platform using our gene knockout programs to deliver the CRISPR machinery along with an AAB to deliver a functional gene. Unlike traditional gene therapy, we expect our approach will permanently restore a missing or defective protein without a waning effect over time. Earlier this month, our collaborator Regeneron announced that the Factor-9 gene insertion program for hemophilia B has achieved IND clearance.
This milestone puts Intellia at three for three In Vivo IND clearances within 30 days of submission, a testament to our high standard for drug development. In parallel, we also expect to begin this year the Phase 1 study of our wholly owned program, NTLA-3001, for alpha-1 antitrypsin deficiency. Based on our preclinical data, NTLA-3001 could potentially achieve normal human levels of the alpha-1 protein after a single dose. Further, the potential human proof of concept of our modular gene insertion platform would open a whole new category of diseases that require restoring a missing or defective protein. This may include diseases that are not addressable by either base editing or DNA writing. Beyond our liver-directed program, our goal is to harness the full potential of gene editing by extending the reach of our industry-leading platform to other tissues.
Recently, we announced a collaboration with ReCode Therapeutics to accelerate the development of CRISPR-based treatments targeting genes in the line for cystic fibrosis. This collaboration provides yet another example of our partnering strategy to enable pipeline optionality outside our core areas of focus while retaining attractive commercialization bites. With this new collaboration, alongside our own and other partner programs, we're actively pursuing gene editing programs across five different tissues. Finally, in the Ex Vivo setting, we're continuing to advance multiple programs, both wholly owned and with collaborators. For example, AvenCell is now dosing patients in their first in human study of an allogeneic candidate. Kyverna is utilizing our allogeneic platform to advance a next-gen CAR-T program for autoimmune disease.
Both collaborators are using Intellia’s proprietary Allo Solution, which is designed to both T-cell and NK-cell-mediated rejection, a previously unsolved challenge for the field of cell therapy. I'll now hand over the call to Glenn, our Chief Financial Officer, who will provide an update on our financial results as of fourth quarter 2023.
Glenn Goddard: Thank you, Laura. Good morning, everyone. Intellia continues to maintain a strong balance sheet that allows us to execute on our pipeline and platform. Our cash, cash equivalents, and marketable securities were approximately $1 billion as of December 31, 2023 compared to $1.3 billion as of December 31, 2022. The decrease was driven by cash used to fund operations of approximately $448.8 million. The decrease was offset in part by $119.8 million of net equity proceeds from the company's market program, $49.8 million of interest income, $18.7 million of collaborator reimbursements, and $10.5 million in proceeds from employee-based stock plans. Our collaboration revenue decreased by $15.5 million to negative $1.9 million during the fourth quarter of 2023, compared to $13.6 million during the fourth quarter of 2022.
This decrease was mainly driven by a $10.3 million one-time revenue recognition adjustment related to Regeneron extending the technology collaboration to April 2026. Intellia will receive a $30 million payment due in April as part of the Regeneron extension. R&D expenses increased by $9 million to $109 million during the fourth quarter of 2023, compared to $100 million during the fourth quarter of 2022. The increase was mainly driven by the advancement of our lead programs and personnel growth to support these programs. Stock-based compensation included in R&D expenses was $21.7 million for the fourth quarter of 2023. G&A expenses increased by $5.4 million to $29 million during the fourth quarter of 2023, compared to $23.6 million during the fourth quarter of 2022.
This increase was primarily related to an increase in stock-based compensation of $4.3 million. Stock-based compensation included in G&A expenses was approximately $13.3 million for the fourth quarter of 2023. Finally, we expect our cash balance to fund our operating plans into mid-2026. 2024 will be another productive and catalyst-rich year for Intellia, and we look forward to updating you on our continued progress. With that, we will now open the call for your questions. Operator, you may now open the call for Q&A.
Operator: [Operator Instructions]. The first question comes from Maury Raycroft with Jefferies. Please go ahead.
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