SEC Filing - Regenxbio Inc

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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

☐	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.

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REGENXBIO INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021

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	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

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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 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.

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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.

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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, 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.

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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,
	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.

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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.

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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		—		—			4,247
Issuance of common stock under employee stock purchase plan		55		—