SEC Filing | CRISPR Therapeutics

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10-Q

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, 2022


☐	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(s)	Name of each exchange on which registered
Common Shares, nominal value CHF 0.03	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 28, 2022, there were 78,294,139 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, “COBALTTM,” “CTX001TM,” “CTX110®,” “CTX112TM,” “CTX120TM,” “CTX121TM,” “CTX130TM,” “CTX131TM,” “CRISPR TXTM,” “VCTX210TM” and “VCTX211TM,” 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 and any such omission is not intended to indicate waiver of any such rights.

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 exa-cel (formerly known as CTX001TM), CTX110®, CTX130TM and VCTX210TM;

•

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 exa-cel, CTX110, CTX112TM, CTX130, VCTX210 and VCTX211TM, 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 U.S. Food and Drug Administration, or FDA, designations, such as Orphan Drug, Fast Track and regenerative medicine advanced therapy, or RMAT, or such European equivalents, including PRIority MEdicines, or 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 ongoing 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 15, 2022, 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)	2

Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	2

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the three and nine months ended September 30, 2022 and 2021	3

Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended September 30, 2022 and 2021	4

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	5

Notes to Condensed Consolidated Financial Statements	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3. Quantitative and Qualitative Disclosures about Market Risk	27

Item 4. Controls and Procedures	28

PART II: OTHER INFORMATION

Item 1. Legal Proceedings	29

Item 1A. Risk Factors	29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3. Defaults Upon Senior Securities	29

Item 4. Mine Safety Disclosures	29

Item 5. Other Information	29

Item 6. Exhibits	30

SIGNATURES	31

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,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	494,151		$	923,031
Marketable securities		1,401,824			1,456,098
Accounts receivable		49			305
Prepaid expenses and other current assets		36,679			38,079
Total current assets		1,932,703			2,417,513
Property and equipment, net		166,110			137,575
Marketable securities, non-current		77,147			—
Intangible assets, net		84			125
Restricted cash		12,123			16,913
Operating lease assets		161,507			174,460
Other non-current assets		3,682			5,291
Total assets	$	2,353,356		$	2,751,877
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	32,114		$	14,816
Accrued expenses		102,954			91,003
Deferred revenue, current		—			1,011
Accrued tax liabilities		4,272			724
Operating lease liabilities		11,260			12,158
Other current liabilities		270			171
Total current liabilities		150,870			119,883
Deferred revenue, non-current		12,323			12,323
Operating lease liabilities, net of current portion		230,895			212,872
Other non-current liabilities		5,314			7,339
Total liabilities		399,402			352,417
Commitments and contingencies, see Note 6
Shareholders’ equity:
Common shares, CHF 0.03 par value, 150,347,467 and 145,364,335 shares authorized at September 30, 2022 and December 31, 2021, respectively, 78,428,146 and 77,170,382 shares issued at September 30, 2022 and December 31, 2021, respectively, 78,247,830 and 76,990,066 shares outstanding at September 30, 2022 and December 31, 2021, respectively		2,433			2,391
Treasury shares, at cost, 180,316 shares at September 30, 2022 and at December 31, 2021		(63	)		(63	)
Additional paid-in capital		2,709,361			2,598,114
Accumulated deficit		(735,515	)		(195,915	)
Accumulated other comprehensive loss		(22,262	)		(5,067	)
Total shareholders' equity		1,953,954			2,399,460
Total liabilities and shareholders’ equity	$	2,353,356		$	2,751,877

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

CRISPR Therapeutics AG

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income

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


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Revenue:
Collaboration revenue	$	94		$	329		$	430		$	900,733
Grant revenue		—			495			762			1,331
Total revenue		94			824			1,192			902,064
Operating expenses:
Research and development		116,622			83,500			358,090			237,472
General and administrative		27,001			23,709			81,295			76,012
Collaboration expense, net		38,859			22,464			103,427			69,354
Total operating expenses		182,482			129,673			542,812			382,838
(Loss) income from operations		(182,388	)		(128,849	)		(541,620	)		519,226
Other income:
Other income, net		7,264			1,101			11,171			3,806
Total other income, net		7,264			1,101			11,171			3,806
Net (loss) income before income taxes		(175,124	)		(127,748	)		(530,449	)		523,032
Benefit (provision) for income taxes		575			595			(9,151	)		(4,123	)
Net (loss) income		(174,549	)		(127,153	)		(539,600	)		518,909
Foreign currency translation adjustment		(100	)		(24	)		(195	)		(14	)
Unrealized loss on marketable securities		(1,820	)		(117	)		(17,001	)		(673	)
Comprehensive (loss) income	$	(176,469	)	$	(127,294	)	$	(556,796	)	$	518,222

Net (loss) income per common share — basic	$	(2.24	)	$	(1.67	)	$	(6.96	)	$	6.85
Basic weighted-average common shares outstanding		78,021,520			76,288,534			77,547,771			75,712,437
Net (loss) income per common share — diluted	$	(2.24	)	$	(1.67	)	$	(6.96	)	$	6.44
Diluted weighted-average common shares outstanding		78,021,520			76,288,534			77,547,771			80,554,682

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 Loss			Total Shareholders’ Equity
Balance at December 31, 2020		73,914,844	$	2,277		195,316		$	(63	)	$	2,235,679	$	(573,576	)	$	(83	)	$	1,664,234
Issuance of common shares, net of issuance costs of $5.4 million		1,353,121		45		—			—			222,130		—			—			222,175
Vesting of restricted shares		109,355		3		—			—			—		—			—			3
Exercise of vested options, net of issuance costs of $1.5 million		342,051		15		—			—			9,769		—			—			9,784
Purchase of common stock under ESPP		11,257		—		—			—			751		—			—			751
Stock-based compensation expense		—		—		—			—			22,092		—			—			22,092
Other comprehensive loss		—		—		—			—			—		—			(378	)		(378	)
Net loss		—		—		—			—			—		(113,163	)		—			(113,163	)
Balance at March 31, 2021		75,730,628	$	2,340		195,316		$	(63	)	$	2,490,421	$	(686,739	)	$	(461	)	$	1,805,498
Vesting of restricted shares		3,667		—		—			—			—		—			—			—
Exercise of vested options, net of issuance costs of $0.4 million		344,158		12		—			—			10,897		—			—			10,909
Stock-based compensation expense		—		—		—			—			28,331		—			—			28,331
Other comprehensive loss		—		—		—			—			—		—			(168	)		(168	)
Net income		—		—		—			—			—		759,225			—			759,225
Balance at June 30, 2021		76,078,453	$	2,352		195,316		$	(63	)	$	2,529,649	$	72,486		$	(629	)	$	2,603,795
Vesting of restricted shares		96,167		4		—			—			—		—			—			4
Exercise of vested options, net of issuance costs of $0.4 million		278,227		10		(15,000	)		—			8,865		—			—			8,875
Purchase of common stock under ESPP		10,333		—		—			—			1,344		—			—			1,344
Stock-based compensation expense		—		—		—			—			26,199		—			—			26,199
Other comprehensive loss		—		—		—			—			—		—			(141	)		(141	)
Net loss		—		—		—			—			—		(127,153	)		—			(127,153	)
Balance at September 30, 2021		76,463,180	$	2,366		180,316		$	(63	)	$	2,566,057	$	(54,667	)	$	(770	)	$	2,512,923

Balance at December 31, 2021		76,990,066	$	2,391		180,316		$	(63	)	$	2,598,114	$	(195,915	)	$	(5,067	)	$	2,399,460
Vesting of restricted shares		123,564		4		—			—			—		—			—			4
Exercise of vested options, net of issuance costs of $0.2 million		261,280		12		—			—			9,998		—			—			10,010
Purchase of common stock under ESPP		11,495		—		—			—			740		—			—			740
Stock-based compensation expense		—		—		—			—			25,745		—			—			25,745
Other comprehensive loss		—		—		—			—			—		—			(11,826