crsp-10q_20200930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 001-37923

CRISPR THERAPEUTICS AG

(Exact name of Registrant as specified in its charter)

Switzerland	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Baarerstrasse 14 6300 Zug, Switzerland	Not Applicable
(Address of principal executive offices)	(zip code)

+41 (0)41 561 32 77

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Shares, CHF 0.03 par value	CRSP	The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

As of October 23, 2020, there were 70,652,429 shares of registrant’s common shares outstanding.

Throughout this Quarterly Report on Form 10-Q, the “Company,” “CRISPR,” “CRISPR Therapeutics,” “we,” “us,” and “our,” except where the context requires otherwise, refer to CRISPR Therapeutics AG and its consolidated subsidiaries.

“CRISPR Therapeutics®” standard character mark and design logo, “CTX001^TM,” “CTX110^TM,” “CTX120^TM,” and “CTX130^TM” are trademarks and registered trademarks of CRISPR Therapeutics AG. All other trademarks and registered trademarks contained in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, trademarks, service marks and trade names referred to in this Quarterly Report on Form 10-Q may appear without the ^® or ^™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks, service marks and trade names.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q are forward-looking statements. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “potential,” “will,” “would” or the negative or plural of these words or similar expressions or variations, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•

the safety, efficacy and clinical progress of our various clinical programs including those for CTX001^TM, CTX110^TM, CTX120^TM and CTX130^TM;

•

the status of clinical trials, development timelines and discussions with regulatory authorities related to product candidates under development by us and our collaborators;

•

the initiation, timing, progress and results of our preclinical studies and clinical trials, including our ongoing clinical trials and any planned clinical trials for CTX001, CTX110, CTX120 and CTX130, and our research and development programs, including delays or disruptions in clinical trials, non-clinical experiments and investigational new drug application-enabling studies;

•

the actual or potential benefits of United States Federal Drug Administration, or FDA, designations, such as orphan drug, fast track and regenerative medicine advanced therapy, or such European equivalents, including Priority Medicines (PRIME) designation;

•

our ability to advance product candidates into, and successfully complete, clinical trials;

•

our intellectual property coverage and positions, including those of our licensors and third parties as well as the status and potential outcome of proceedings involving any such intellectual property;

•

our anticipated expenses, ability to obtain funding for our operations and the sufficiency of our cash resources;

•

the therapeutic value, development, and commercial potential of CRISPR/Cas9 gene-editing technologies and therapies; and

•

potential impacts due to the coronavirus pandemic such as delays, interruptions or other adverse effects to clinical trials, delays in regulatory review, manufacturing and supply chain interruptions, adverse effects on healthcare systems and disruption of the global economy, and the overall impact of the coronavirus pandemic on our business, financial condition and results of operations.

Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and assumptions that could cause our actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled “Risk Factors,” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q, if any, our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on February 12, 2020, and in other SEC filings. You should not rely upon forward-looking statements as predictions of future events. Such forward-looking statements speak only as of the date of this report. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make or enter into.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results, performance or achievements may be materially different from what we expect. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Investors and others should note that we announce material information to our investors using our investor relations website (https://crisprtx.gcs-web.com/), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media to communicate with the public about our company, our business, our product candidates and other matters. It is possible that the information we post on social media could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels listed on our investor relations website.

Index


	Page Number
PART I: FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (unaudited)

Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019	2

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2020 and 2019	3

Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended September 30, 2020 and 2019	4

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019	6

Notes to Condensed Consolidated Financial Statements	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3. Quantitative and Qualitative Disclosures about Market Risk	31

Item 4. Controls and Procedures	31

PART II: OTHER INFORMATION

Item 1. Legal Proceedings	33

Item 5. Other Information	33

Item 6. Exhibits	33

SIGNATURES	34

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

CRISPR Therapeutics AG

Condensed Consolidated Balance Sheets

(unaudited, in thousands, except share and per share data)

	As of
	September 30,			December 31,
	2020			2019
Assets
Current assets:
Cash and cash equivalents	$	1,041,417		$	943,771
Marketable securities		324,573			—
Accounts receivable		110			99
Prepaid expenses and other current assets		24,839			43,677
Total current assets		1,390,939			987,547
Property and equipment, net		37,924			31,330
Intangible assets, net		194			235
Restricted cash		16,845			5,041
Operating lease assets		38,454			41,502
Other non-current assets		662			1,097
Total assets	$	1,485,018		$	1,066,752
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	19,020		$	5,944
Accrued expenses		35,445			30,180
Deferred revenue, current		610			960
Accrued tax liabilities		6,348			583
Operating lease liabilities		10,640			8,489
Other current liabilities		12,086			10,950
Total current liabilities		84,149			57,106
Deferred revenue, non-current		11,776			11,776
Operating lease liabilities, net of current portion		38,570			44,050
Other non-current liabilities		7,222			14,395
Total liabilities		141,717			127,327
Commitments and contingencies, see Note 6
Shareholders’ equity:
Common shares, CHF 0.03 par value, 115,172,786 and 103,901,006 shares authorized at September 30, 2020 and December 31, 2019, respectively, 70,799,178 and 61,034,025 shares issued at September 30, 2020 and December 31, 2019, respectively, 70,603,862 and 60,783,799 shares outstanding at September 30, 2020 and December 31, 2019, respectively.		2,157			1,847
Treasury shares, at cost, 195,316 and 250,226 shares at September 30, 2020 and December 31, 2019, respectively.		(63	)		(63	)
Additional paid-in capital		1,807,878			1,162,345
Accumulated deficit		(466,537	)		(224,711	)
Accumulated other comprehensive (loss) income		(134	)		7
Total shareholders' equity		1,343,301			939,425
Total liabilities and shareholders’ equity	$	1,485,018		$	1,066,752

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CRISPR Therapeutics AG

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(unaudited, in thousands, except share and per share data)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
Collaboration revenue (1)	$	148		$	211,928		$	349		$	212,574
Operating expenses:
Research and development (2)		71,008			57,246			184,581			130,601
General and administrative		21,539			15,519			62,442			46,216
Total operating expenses		92,547			72,765			247,023			176,817
Income (loss) from operations		(92,399	)		139,163			(246,674	)		35,757
Other income (expense):
Loss from equity method investment		—			(3,430	)		—			(5,467	)
Other income, net		160			2,964			5,804			6,470
Total other income (expense), net		160			(466	)		5,804			1,003
Net income (loss) before income taxes		(92,239	)		138,697			(240,870	)		36,760
Provision for income taxes		(200	)		(274	)		(956	)		(444	)
Net income (loss)		(92,439	)		138,423			(241,826	)		36,316
Foreign currency translation adjustment		31			(12	)		3			(14	)
Unrealized loss on marketable securities		(144	)		—			(144	)		—
Comprehensive income (loss)	$	(92,552	)	$	138,411		$	(241,967	)	$	36,302

Net income (loss) per common share — basic	$	(1.32	)	$	2.52		$	(3.77	)	$	0.68
Basic weighted-average common shares outstanding		70,143,481			54,829,057			64,159,224			53,380,123
Net income (loss) per common share — diluted	$	(1.32	)	$	2.40		$	(3.77	)	$	0.65
Diluted weighted-average common shares outstanding		70,143,481			57,598,901			64,159,224			55,821,420

(1) Including the following revenue from a related party, see Notes 7 & 12:	$	—		$	31		$	—		$	677
(2) Including the following research and development expense with a related party, see Notes 7 & 12:	$	—		$	31		$	—		$	14,490

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CRISPR Therapeutics AG

Condensed Consolidated Statements of Shareholders’ Equity

(unaudited, in thousands, except share and per share data)

	Common Shares				Treasury Shares
	Shares		CHF 0.03 Par Value		Shares			Amount, at cost			Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance at December 31, 2018		51,852,862		1,584		307,936			(57	)		682,245		(291,569	)		(8	)		392,195
Issuance of common shares, net of issuance costs of $1.2 million		631,580		—		—			—			23,472		—			—			23,472
Vesting of restricted shares		9,288		—		—			—			15		—			—			15
Exercise of vested options		141,915		5		—			—			1,827		—			—			1,832
Stock-based compensation expense		—		—		—			—			10,696		—			—			10,696
Other comprehensive income		—		—		—			—			—		—			8			8
Net loss		—		—		—			—			—		(48,408	)		—			(48,408	)
Balance at March 31, 2019		52,635,645	$	1,589		307,936		$	(57	)	$	718,255	$	(339,977	)	$	—		$	379,810
Issuance of common shares, net of issuance costs of $1.3 million		732,108		40		(47,297	)		—			28,074		—			—			28,114
Vesting of restricted shares		12,317		1		—			—			15		—			—			16
Exercise of vested options		118,987		—		(3,650	)		—			1,254		—			—			1,254
Stock-based compensation expense		—		—		—			—			12,198		—			—			12,198
Other comprehensive loss		—		—		—			—			—		—			(10	)		(10	)
Net loss		—		—		—			—			—		(53,699	)		—			(53,699	)
Balance at June 30, 2019		53,499,057	$	1,630		256,989		$	(57	)	$	759,796	$	(393,676	)	$	(10	)	$	367,683
Issuance of common shares, net of issuance costs of $2.3 million		1,452,880		43		—			—			68,618		—			—			68,661
Vesting of restricted shares		34,328		1		—			—			11		—			—			12
Exercise of vested options		203,105		10		—			—			2,328		—			—			2,338
Stock-based compensation expense		—		—		—			—			14,773		—			—			14,773
Other comprehensive loss		—		—		—			—			—		—			(12	)		(12	)
Net income		—		—		—			—			—		138,423			—			138,423
Balance at September 30, 2019		55,189,370	$	1,684		256,989		$	(57	)	$	845,526	$	(255,253	)	$	(22	)	$	591,878

CRISPR Therapeutics AG

Condensed Consolidated Statements of Shareholders’ Equity – (continued)

(unaudited, in thousands, except share and per share data)

	Common Shares				Treasury Shares
	Shares		CHF 0.03 Par Value		Shares			Amount, at cost			Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance at December 31, 2019		60,783,799		1,847		250,226			(63	)		1,162,345		(224,711	)		7			939,425
Vesting of restricted shares		5,000		—		—			—			—		—			—			-
Exercise of vested options		83,406		3		—			—			1,385		—			—			1,388
Stock-based compensation expense		—		—		—			—			14,151		—			—			14,151
Issuance of common shares related to license agreement		17,830		—		(17,830	)		—			889		—			—			889
Other comprehensive loss		—		—		—			—			—		—			(25	)		(25	)
Net loss		—		—		—			—			—		(69,731	)		—			(69,731	)
Balance at March 31, 2020		60,890,035	$	1,850		232,396		$	(63	)	$	1,178,770	$	(294,442	)	$	(18	)	$	886,097
Issuance of common shares, net of issuance costs of $3.1 million		1,238,453		38		—			—			82,151		—			—			82,189
Vesting of restricted shares		29,916		1		—			—			—		—			—			1
Exercise of vested options		394,101		11		(37,080	)		—			6,334		—			—			6,345
Stock-based compensation expense		—		—		—			—			15,697		—			—			15,697
Other comprehensive loss		—		—		—			—			—		—			(3	)		(3	)
Net loss		—		—		—			—			—		(79,656	)		—			(79,656	)
Balance at June 30, 2020		62,552,505	$	1,900		195,316		$	(63	)	$	1,282,952	$	(374,098	)	$	(21	)	$	910,670
Issuance of common shares, net of issuance costs of $32.8 million		7,499,135		240		—			—			494,349		—			—			494,589
Vesting of restricted shares		39,667		1		—			—			—		—			—			1
Exercise of vested options		499,145		16		—			—