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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended September 30, 2019

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 001-37553

 

REGENXBIO Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

 

47-1851754

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

9600 Blackwell Road, Suite 210

Rockville, MD

 

20850

(Address of principal executive offices)

 

(Zip Code)

(240) 552-8181

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

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

 

Title of each class

Ticker symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

RGNX

The Nasdaq Global Select 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 an emerging growth company. See the definitions 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 the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of November 1, 2019, there were 36,874,282 outstanding shares of the registrant’s common stock, par value $0.0001 per share.

 

 

 


Table of Contents

 

REGENXBIO INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2019

TABLE OF CONTENTS

 

 

 

PART I—FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Financial Statements (Unaudited)

 

3

 

 

Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018

 

3

 

 

Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2019 and 2018

 

4

 

 

Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2019 and 2018

 

5

 

 

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018

 

7

 

 

Notes to Consolidated Financial Statements

 

8

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

30

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

43

Item 4.

 

Controls and Procedures

 

43

 

 

 

 

 

 

 

PART II—OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

44

Item 1A.

 

Risk Factors

 

44

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

46

Item 3.

 

Defaults Upon Senior Securities

 

46

Item 4.

 

Mine Safety Disclosures

 

46

Item 5.

 

Other Information

 

46

Item 6.

 

Exhibits

 

48

Signatures

 

49

 

 

 


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INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “assume,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would” or by variations of such words or by similar expressions. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks, uncertainties, assumptions and other important factors, including, but not limited to:

 

the timing of enrollment, commencement and completion and the success of our clinical trials;

 

the timing of commencement and completion and the success of preclinical studies conducted by us and our development partners;

 

the timely development and launch of new products;

 

our expectations regarding the imposition by the U.S. Food and Drug Administration (the FDA) of a partial clinical hold on our investigational new drug application for RGX-314 for the treatment of wet age-related macular degeneration, including our ability to resolve issues raised by the FDA and the timing of any lifting of the hold by the FDA;

 

the ability to obtain and maintain regulatory approval of our product candidates, and the labeling for any approved products;

 

the scope, progress, expansion and costs of developing and commercializing our product candidates;

 

our ability to obtain and maintain intellectual property protection for our product candidates and technology;

 

our anticipated growth strategies;

 

our expectations regarding competition;

 

the anticipated trends and challenges in our business and the market in which we operate;

 

our ability to attract or retain key personnel;

 

the size and growth of the potential markets for our product candidates and the ability to serve those markets;

 

the rate and degree of market acceptance of any of our product candidates;

 

our ability to establish and maintain development partnerships;

 

our expectations regarding our expenses and revenue;

 

our expectations regarding regulatory developments in the United States and foreign countries; and

 

the use or sufficiency of our cash and cash equivalents and needs for additional financing.

You should carefully read the factors discussed in the sections titled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended December 31, 2018 and in our other filings with the U.S. Securities and Exchange Commission (the SEC) for additional discussion of the risks, uncertainties, assumptions and other important factors that could cause our actual results or developments to differ materially and adversely from those projected in the forward-looking statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on us or our businesses or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially and adversely from those projected in the forward-looking statements. These forward-looking statements speak only as of the date of this report. Except as required by law, we disclaim any duty to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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Available Information

We file annual, quarterly, and current reports, proxy statements, and other documents with the SEC under the Exchange Act. You may obtain any reports, proxy and information statements, and other information that we file electronically with the SEC at www.sec.gov.

You also may view and download copies of our SEC filings free of charge at our website, www.regenxbio.com, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The information contained on, or that can be accessed through, our website will not be deemed to be incorporated by reference in, and is not considered part of, this Quarterly Report on Form 10-Q. Investors should also note that we use our website, as well as SEC filings, press releases, public conference calls and webcasts, to announce financial information and other material developments regarding our business. We use these channels, as well as any social media channels listed on our website, to communicate with investors and members of the public about our business. It is possible that the information that we post on our social media channels could be deemed material information. Therefore, we encourage investors, the media and others interested in our company to review the information that we post on our social media channels.

As used in this Quarterly Report on Form 10-Q, the terms “REGENXBIO,” “we,” “us,” “our” or the “Company” mean REGENXBIO Inc. and its subsidiaries, on a consolidated basis, unless the context indicates otherwise.

NAV, REGENXBIO and the REGENXBIO logos are our registered trademarks. Any other trademarks appearing in this Quarterly Report on Form 10-Q are the property of their respective holders.

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

REGENXBIO INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except per share data)

 

 

 

September 30, 2019

 

 

December 31, 2018

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

79,594

 

 

$

75,561

 

Marketable securities

 

 

252,125

 

 

 

244,200

 

Accounts receivable

 

 

19,175

 

 

 

8,587

 

Prepaid expenses

 

 

6,920

 

 

 

5,734

 

Other current assets

 

 

2,414

 

 

 

3,831

 

Total current assets

 

 

360,228

 

 

 

337,913

 

Marketable securities

 

 

85,408

 

 

 

150,819

 

Accounts receivable

 

 

24,345

 

 

 

23,012

 

Property and equipment, net

 

 

28,287

 

 

 

28,702

 

Operating lease right-of-use assets

 

 

5,905

 

 

 

 

Restricted cash

 

 

1,053

 

 

 

1,053

 

Other assets

 

 

4,011

 

 

 

2,315

 

Total assets

 

$

509,237

 

 

$

543,814

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

9,608

 

 

$

4,412

 

Accrued expenses and other current liabilities

 

 

19,231

 

 

 

17,164

 

Deferred revenue

 

 

 

 

 

600

 

Operating lease liabilities

 

 

2,506

 

 

 

 

Total current liabilities

 

 

31,345

 

 

 

22,176

 

Deferred revenue

 

 

3,333

 

 

 

3,333

 

Operating lease liabilities

 

 

4,320

 

 

 

 

Deferred rent

 

 

 

 

 

1,098

 

Financing lease obligations

 

 

 

 

 

5,854

 

Other liabilities

 

 

1,844

 

 

 

2,505

 

Total liabilities

 

 

40,842

 

 

 

34,966

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Preferred stock; $0.0001 par value; 10,000 shares authorized, and no shares issued

   and outstanding at September 30, 2019 and December 31, 2018

 

 

 

 

 

 

Common stock; $0.0001 par value; 100,000 shares authorized at September 30, 2019

   and December 31, 2018; 36,840 and 36,120 shares issued and outstanding at

   September 30, 2019 and December 31, 2018, respectively

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

619,386

 

 

 

592,580

 

Accumulated other comprehensive income (loss)

 

 

363

 

 

 

(720

)

Accumulated deficit

 

 

(151,358

)

 

 

(83,016

)

Total stockholders’ equity

 

 

468,395

 

 

 

508,848

 

Total liabilities and stockholders’ equity

 

$

509,237

 

 

$

543,814

 

 

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

 

 

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REGENXBIO INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(unaudited)

(in thousands, except per share data)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License and royalty revenue

 

$

14,700

 

 

$

5,306

 

 

$

23,465

 

 

$

177,728

 

Total revenues

 

 

14,700

 

 

 

5,306

 

 

 

23,465

 

 

 

177,728

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

2,494

 

 

 

517

 

 

 

4,450

 

 

 

6,797

 

Research and development

 

 

35,692

 

 

 

18,508

 

 

 

90,378

 

 

 

59,544

 

General and administrative

 

 

12,402

 

 

 

9,008

 

 

 

37,365

 

 

 

25,706

 

Other operating expenses (income)

 

 

8

 

 

 

(2

)

 

 

(54

)

 

 

31

 

Total operating expenses

 

 

50,596

 

 

 

28,031

 

 

 

132,139

 

 

 

92,078

 

Income (loss) from operations

 

 

(35,896

)

 

 

(22,725

)

 

 

(108,674

)

 

 

85,650

 

Other Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income from licensing

 

 

716

 

 

 

109

 

 

 

2,091

 

 

 

8,362

 

Investment income

 

 

431

 

 

 

2,122

 

 

 

37,950

 

 

 

4,177

 

Total other income

 

 

1,147

 

 

 

2,231

 

 

 

40,041

 

 

 

12,539

 

Income (loss) before income taxes

 

 

(34,749

)

 

 

(20,494

)

 

 

(68,633

)

 

 

98,189

 

Income Tax Benefit (Expense)

 

 

165

 

 

 

1,292

 

 

 

364

 

 

 

(2,558

)

Net income (loss)

 

$

(34,584

)

 

$

(19,202

)

 

$

(68,269

)

 

$

95,631

 

Other Comprehensive Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available-for-sale securities,

   net of reclassifications and income tax expense

 

 

(108

)

 

 

(103

)

 

 

1,043

 

 

 

(159

)

Total other comprehensive income (loss)

 

 

(108

)

 

 

(103

)

 

 

1,043

 

 

 

(159

)

Comprehensive income (loss)

 

$

(34,692

)

 

$

(19,305

)

 

$

(67,226

)

 

$

95,472

 

Net income (loss) applicable to common stockholders

 

$

(34,584

)

 

$

(19,202

)

 

$

(68,269

)

 

$

95,631

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.94

)

 

$

(0.56

)

 

$

(1.86

)

 

$

2.94

 

Diluted

 

$

(0.94

)

 

$

(0.56

)

 

$

(1.86

)

 

$

2.67

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,813

 

 

 

33,988

 

 

 

36,618

 

 

 

32,576

 

Diluted

 

 

36,813

 

 

 

33,988

 

 

 

36,618

 

 

 

35,875

 

 

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

 

 

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REGENXBIO INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands)

 

 

 

Three Months Ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

Balances at June 30, 2019

 

 

36,752

 

 

$

4

 

 

$

610,891

 

 

$

471

 

 

$

(116,774

)

 

$

494,592

 

Exercise of stock options

 

 

62

 

 

 

 

 

 

384

 

 

 

 

 

 

 

 

 

384

 

Issuance of common stock under employee

   stock purchase plan

 

 

26

 

 

 

 

 

 

949

 

 

 

 

 

 

 

 

 

949

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

7,162

 

 

 

 

 

 

 

 

 

7,162

 

Unrealized loss on available-for-sale securities,

   net of reclassifications and income tax expense

 

 

 

 

 

 

 

 

 

 

 

(108

)

 

 

 

 

 

(108

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34,584

)

 

 

(34,584

)

Balances at September 30, 2019

 

 

36,840

 

 

$

4

 

 

$

619,386

 

 

$

363

 

 

$

(151,358

)

 

$

468,395

 

 

 

 

Three Months Ended September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances at June 30, 2018

 

 

32,275

 

 

$

3

 

 

$

386,110

 

 

$

(771

)

 

$

(68,120

)

 

$

317,222

 

Issuance of common stock upon public offering,

   net of transaction costs of $12,728

 

 

3,105

 

 

 

1

 

 

 

189,096

 

 

 

 

 

 

 

 

 

189,097

 

Exercise of stock options

 

 

307

 

 

 

 

 

 

2,053

 

 

 

 

 

 

 

 

 

2,053

 

Issuance of common stock under employee

   stock purchase plan

 

 

17

 

 

 

 

 

 

507

 

 

 

 

 

 

 

 

 

507

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,483

 

 

 

 

 

 

 

 

 

4,483

 

Unrealized loss on available-for-sale securities,

   net of reclassifications and income tax expense

 

 

 

 

 

 

 

 

 

 

 

(103

)

 

 

 

 

 

(103

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19,202

)

 

 

(19,202

)

Balances at September 30, 2018

 

 

35,704

 

 

$

4

 

 

$

582,249

 

 

$

(874

)

 

$

(87,322

)

 

$

494,057

 

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

 

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REGENXBIO INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands)

 

 

 

Nine Months Ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2018

 

 

36,120

 

 

$

4

 

 

$

592,580

 

 

$

(720

)

 

$

(83,016

)

 

$

508,848

 

Adoption of ASU 2016-02 (Topic 842)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(33

)

 

 

(33

)

Adoption of ASU 2018-02

 

 

 

 

 

 

 

 

 

 

 

40

 

 

 

(40

)

 

 

 

Exercise of stock options

 

 

684

 

 

 

 

 

 

5,513

 

 

 

 

 

 

 

 

 

5,513

 

Issuance of common stock under employee

   stock purchase plan

 

 

36

 

 

 

 

 

 

1,314

 

 

 

 

 

 

 

 

 

1,314

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

19,979

 

 

 

 

 

 

 

 

 

19,979

 

Unrealized gain on available-for-sale securities,

   net of reclassifications and income tax expense

 

 

 

 

 

 

 

 

 

 

 

1,043

 

 

 

 

 

 

1,043

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(68,269

)

 

 

(68,269

)

Balances at September 30, 2019

 

 

36,840

 

 

$

4

 

 

$

619,386

 

 

$

363

 

 

$

(151,358

)

 

$

468,395

 

 

 

 

Nine Months Ended September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2017

 

 

31,295

 

 

$

3