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SS

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 

OR

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, “CTX001TM,” “CTX110TM,” “CTX120TM,” and “CTX130TM 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 CTX001TM, CTX110TM, CTX120TM and CTX130TM;

 

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.

2


 

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.

 

 

 

3


 

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

 

 

4


 

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