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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, 2021

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.)

 

 

 

9804 Medical Center Drive

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

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 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 October 28, 2021, there were 42,769,208 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.

 

 

 

 


Table of Contents

 

 

REGENXBIO INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021

TABLE OF CONTENTS

 

 

 

PART I—FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Financial Statements (Unaudited)

 

3

 

 

Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020

 

3

 

 

Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2021 and 2020

 

4

 

 

Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2021 and 2020

 

5

 

 

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020

 

7

 

 

Notes to Consolidated Financial Statements

 

8

Item 2.

 

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

 

22

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

33

Item 4.

 

Controls and Procedures

 

33

 

 

 

 

 

 

 

PART II—OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

35

Item 1A.

 

Risk Factors

 

35

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

37

Item 3.

 

Defaults Upon Senior Securities

 

37

Item 4.

 

Mine Safety Disclosures

 

37

Item 5.

 

Other Information

 

37

Item 6.

 

Exhibits

 

38

Signatures

 

39

 

 

 

 


Table of Contents

 

 

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 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 impact of the COVID-19 pandemic on our business, operations and preclinical and clinical development timelines and plans;

 

our ability to establish and maintain development partnerships, including our expectations regarding our proposed collaboration with AbbVie to develop and commercialize RGX-314;

 

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

 

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;

 

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

 

our ability to obtain, maintain and enforce intellectual property protection for our product candidates and technology, and defend against third-party intellectual property-related claims;

 

our expectations regarding the development and commercialization of product candidates currently being developed by third parties that utilize our 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 products that are approved;

 

our expectations regarding our expenses and revenue;

 

our expectations regarding the outcome of legal proceedings, including our ability to enforce the award from our arbitration with Abeona Therapeutics Inc. regarding unpaid license fees if Abeona does not comply with the arbitration tribunal’s ruling;

 

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

 

our ability to accurately predict how long our existing cash resources will be sufficient to fund our anticipated operating expenses.

1


Table of Contents

 

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, 2020 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.

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 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.

AAVIATE, 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.

2


Table of Contents

 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

REGENXBIO INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except per share data)

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

228,387

 

 

$

338,426

 

Marketable securities

 

 

111,473

 

 

 

137,314

 

Accounts receivable, net

 

 

46,017

 

 

 

42,999

 

Prepaid expenses

 

 

18,401

 

 

 

10,505

 

Other current assets

 

 

5,886

 

 

 

1,953

 

Total current assets

 

 

410,164

 

 

 

531,197

 

Marketable securities

 

 

193,640

 

 

 

46,809

 

Accounts receivable, net

 

 

2,730

 

 

 

3,267

 

Property and equipment, net

 

 

122,231

 

 

 

56,467

 

Operating lease right-of-use assets

 

 

61,742

 

 

 

63,815

 

Restricted cash

 

 

1,330

 

 

 

1,330

 

Other assets

 

 

8,558

 

 

 

5,279

 

Total assets

 

$

800,395

 

 

$

708,164

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

19,845

 

 

$

10,622

 

Accrued expenses and other current liabilities

 

 

49,694

 

 

 

49,082

 

Deferred revenue

 

 

395

 

 

 

449

 

Operating lease liabilities

 

 

1,329

 

 

 

2,500

 

Liability related to sale of future royalties

 

 

35,508

 

 

 

18,794

 

Total current liabilities

 

 

106,771

 

 

 

81,447

 

Deferred revenue

 

 

3,531

 

 

 

3,783

 

Operating lease liabilities

 

 

83,880

 

 

 

70,153

 

Liability related to sale of future royalties

 

 

144,315

 

 

 

174,504

 

Other liabilities

 

 

484

 

 

 

524

 

Total liabilities

 

 

338,981

 

 

 

330,411

 

Stockholders’ equity

 

 

 

 

 

 

 

 

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

   and outstanding at September 30, 2021 and December 31, 2020

 

 

 

 

 

 

Common stock; $0.0001 par value; 100,000 shares authorized at September 30, 2021

   and December 31, 2020; 42,752 and 37,476 shares issued and outstanding at

   September 30, 2021 and December 31, 2020, respectively

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

917,950

 

 

 

667,181

 

Accumulated other comprehensive loss

 

 

(1,285

)

 

 

(360

)

Accumulated deficit

 

 

(455,255

)

 

 

(289,072

)

Total stockholders’ equity

 

 

461,414

 

 

 

377,753

 

Total liabilities and stockholders’ equity

 

$

800,395

 

 

$

708,164

 

 

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

 

 

3


Table of Contents

 

 

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,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License and royalty revenue

 

$

30,773

 

 

$

98,912

 

 

$

71,692

 

 

$

133,122

 

Total revenues

 

 

30,773

 

 

 

98,912

 

 

 

71,692

 

 

 

133,122

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

14,105

 

 

 

17,364

 

 

 

28,775

 

 

 

25,457

 

Research and development

 

 

47,855

 

 

 

43,968

 

 

 

133,459

 

 

 

119,114

 

General and administrative

 

 

21,030

 

 

 

15,859

 

 

 

57,293

 

 

 

46,246

 

Provision for credit losses and other

 

 

5,131

 

 

 

7,770

 

 

 

5,781

 

 

 

7,887

 

Total operating expenses

 

 

88,121

 

 

 

84,961

 

 

 

225,308

 

 

 

198,704

 

Income (loss) from operations

 

 

(57,348

)

 

 

13,951

 

 

 

(153,616

)

 

 

(65,582

)

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income from licensing

 

 

117

 

 

 

1,444

 

 

 

700

 

 

 

4,141

 

Investment income (loss)

 

 

5,535

 

 

 

(6,607

)

 

 

6,514

 

 

 

(4,071

)

Interest expense

 

 

(6,709

)

 

 

 

 

 

(19,777

)

 

 

 

Total other income (expense)

 

 

(1,057

)

 

 

(5,163

)

 

 

(12,563

)

 

 

70

 

Income (loss) before income taxes

 

 

(58,405

)

 

 

8,788

 

 

 

(166,179

)

 

 

(65,512

)

Income Tax Benefit (Expense)

 

 

 

 

 

3

 

 

 

(4

)

 

 

503

 

Net income (loss)

 

$

(58,405

)

 

$

8,791

 

 

$

(166,183

)

 

$

(65,009

)

Other Comprehensive Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

(30

)

 

 

(487

)

 

 

(925

)

 

 

58

 

Total other comprehensive income (loss)

 

 

(30

)

 

 

(487

)

 

 

(925

)

 

 

58

 

Comprehensive income (loss)

 

$

(58,435

)

 

$

8,304

 

 

$

(167,108

)

 

$

(64,951

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(1.37

)

 

$

0.24

 

 

$

(3.93

)

 

$

(1.75

)

Diluted

 

$

(1.37

)

 

$

0.23

 

 

$

(3.93

)

 

$

(1.75

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

42,629

 

 

 

37,342

 

 

 

42,324

 

 

 

37,234

 

Diluted

 

 

42,629

 

 

 

38,877

 

 

 

42,324

 

 

 

37,234

 

 

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

 

 

4


Table of Contents

 

 

REGENXBIO INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands)

 

 

 

Three Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances at June 30, 2021

 

 

42,555

 

 

$

4

 

 

$

905,346

 

 

$

(1,255

)

 

$

(396,850

)

 

$

507,245

 

Exercise of stock options

 

 

163

 

 

 

 

 

 

1,729

 

 

 

 

 

 

 

 

 

1,729

 

Issuance of common stock under employee

   stock purchase plan

 

 

35

 

 

 

 

 

 

1,141

 

 

 

 

 

 

 

 

 

1,141

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

9,734

 

 

 

 

 

 

 

 

 

9,734

 

Unrealized loss on available-for-sale securities, net

 

 

 

 

 

 

 

 

 

 

 

(30

)

 

 

 

 

 

(30

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(58,405

)

 

 

(58,405

)

Balances at September 30, 2021

 

 

42,752

 

 

$

4

 

 

$

917,950

 

 

$

(1,285

)

 

$

(455,255

)

 

$

461,414

 

 

 

 

Three Months Ended September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

Balances at June 30, 2020

 

 

37,291

 

 

$

4

 

 

$

648,729

 

 

$

750

 

 

$

(251,622

)

 

$

397,861

 

Exercise of stock options

 

 

74

 

 

 

 

 

 

268

 

 

 

 

 

 

 

 

 

268

 

Issuance of common stock under employee

   stock purchase plan

 

 

38

 

 

 

 

 

 

1,192

 

 

 

 

 

 

 

 

 

1,192

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

8,035

 

 

 

 

 

 

 

 

 

8,035

 

Unrealized loss on available-for-sale securities, net

 

 

 

 

 

 

 

 

 

 

 

(487

)

 

 

 

 

 

(487

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,791

 

 

 

8,791

 

Balances at September 30, 2020

 

 

37,404

 

 

$

4

 

 

$

658,224

 

 

$

263

 

 

$

(242,831

)

 

$

415,660

 

 

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

 

5


Table of Contents

 

 

REGENXBIO INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands)

 

 

 

Nine Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2020

 

 

37,476

 

 

$

4

 

 

$

667,181

 

 

$

(360

)

 

$

(289,072

)

 

$

377,753

 

Issuance of common stock upon public offering,

   net of transaction costs of $14,194

 

 

4,899

 

 

 

 

 

 

216,059

 

 

 

 

 

 

 

 

 

216,059

 

Exercise of stock options

 

 

324

 

 

 

 

 

 

3,296

 

 

 

 

 

 

 

 

 

3,296

 

Issuance of common stock under employee

   stock purchase plan

 

 

54

 

 

 

 

 

 

1,768

 

 

 

 

 

 

 

 

 

1,768

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

29,646

 

 

 

 

 

 

 

 

 

29,646

 

Unrealized loss on available-for-sale securities, net

 

 

 

 

 

 

 

 

 

 

 

(925

)

 

 

 

 

 

(925

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(166,183

)

 

 

(166,183

)

Balances at September 30, 2021

 

 

42,752

 

 

$

4

 

 

$

917,950

 

 

$

(1,285

)

 

$

(455,255

)

 

$

461,414

 

 

 

 

Nine Months Ended September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2019

 

 

36,992

 

 

$

4

 

 

$

627,810

 

 

$

205

 

 

$

(177,822

)

 

$

450,197

 

Exercise of stock options

 

 

356

 

 

 

 

 

 

4,247