Intellia Therapeutics, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-looking Information This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding: • our ability to execute our clinical study strategy for NTLA-2001, our program for the treatment of transthyretin amyloidosis; • the anticipated timing of preclinical studies, manufacturing activities and our investigational new drug application (“IND”) or equivalent regulatory filing for NTLA-5001, our program for the treatment of acute myeloid leukemia; • the anticipated timing of preclinical studies, manufacturing activities and our IND application or equivalent regulatory filing for NTLA-2002, our program for the treatment of hereditary angioedema; • our ability to use a modular platform capability or other strategy to efficiently discover and develop product candidates, including by applying learnings from one program to other programs; • our ability to research, develop or maintain a pipeline of product candidates; • our ability to manufacture or obtain material for our preclinical and clinical studies, and our product candidates; • our ability to advance any product candidates into, and successfully complete, clinical studies, including clinical studies necessary for regulatory approval and commercialization, and to demonstrate to the regulators that the product candidates are safe, effective, pure and potent and that their benefits outweigh known and potential risks for the intended patient population; • our ability to advance our genome editing and therapeutic delivery capabilities; • the scope of protection we are able to develop, establish and maintain for intellectual property rights, including patents and license rights, covering our product candidates and technology; • our ability to operate, including commercializing products, without infringing or breaching the proprietary or contractual rights of others; • the issuance or enforcement of, and compliance with, regulatory requirements and guidance regarding preclinical and clinical studies relevant to genome editing and our product candidates; • the pricing and reimbursement of our product candidates, if approved; • estimates of our expenses, future revenues, capital requirements and our needs for additional financing; • the potential benefits of strategic collaboration agreements and our ability to enter into strategic arrangements; • our ability to maintain and establish collaborations with third parties under favorable terms; • our ability to acquire and maintain relevant intellectual property licenses and rights, and the scope and terms of such rights; 22 • developments relating to our licensors, licensees, third-parties from which we derive rights, collaborators, competitors and our industry; • the effect of the coronavirus disease 2019 (“COVID-19”) pandemic, including mitigation efforts and economic effects, on any of the foregoing or other aspects of our business operations; • our ability to agree to terms with Caribou Biosciences, Inc. (“Caribou”) in accordance with the September 2019 interim award issued by the arbitration panel in our arbitration against Caribou (the “Caribou Arbitration”), including the scope and potential payments of such arrangement; and • other risks and uncertainties, including those listed under the caption “Risk Factors.” All of our express or implied forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q. Management Overview Intellia Therapeutics, Inc. (“we,” “us,” “our,” “Intellia,” or the “Company”) is a leading genome editing company, focused on the development of proprietary, potentially curative therapeutics utilizing a biological tool known as CRISPR/Cas9, which stands for C lustered, R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”) /CRISPR associated 9 (“Cas9”). This is a technology for genome editing, the process of altering selected sequences of genomic deoxyribonucleic acid (“DNA”). We believe that CRISPR/Cas9 technology has the potential to transform medicine by both producing therapeutics that permanently edit and/or correct disease-associated genes in the human body with a single treatment course, and creating enhanced engineered cells that can treat oncological and immunological diseases. Our combination of deep scientific, technical and clinical development experience, along with our intellectual property (“IP”) portfolio, puts us in a position to unlock broad therapeutic applications of the CRISPR/Cas9 technology and create new classes of therapeutic products . Our management’s discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, which have been prepared by us in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim periods and with Regulation S-X, promulgated under the Securities Exchange Act of 1934, as amended. This discussion and analysis should be read in conjunction with these unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q as well as in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K (“Annual Report”) for the year ended December 31, 2019. Our mission is to build a company to develop curative genome editing treatments that can positively transform the lives of people living with severe and life-threatening disease. We believe we can deliver on our mission and provide long-term benefits for all of our stakeholders by focusing on four key elements: • Develop curative CRISPR/Cas9-based medicines; • Advance our science to help more patients; • Foster an environment that is the best place to make therapies; and • Focus on long-term sustainability. 23 Our strategy is to build a full-spectrum genome editing company, by leveraging our CRISPR/Cas9 platform across two areas: in vivo applications, in which CRISPR/Cas9 is the therapy, delivered to target cells within the body; and ex vivo applications, in which CRISPR/Cas9 creates the therapy of engineered human cells. All of our revenue to date has been collaboration revenue . Since our inception and through September 3 0 , 20 20 , we have raised an aggregate of approximately $ 8 93.6 million to fund our operations, of which $ 272.6 million was through our collaboration agreements, $170.5 million was from our initial public offering and concurrent private placements, $ 2 4 9. 1 million was from follow-on offering s , $ 1 1 6. 4 million was from at-the-market offering s and $85.0 million was from the sale of convertible preferred stock . The breadth of our CRISPR/Cas9 platform and delivery technology allows us to pursue a multitude of therapeutic targets/clinical indications. Specifically, we can target diseases that have the potential to be addressed by directly editing specific genes (i.e., gene knockout, repair, or insertion) as well as diseases that may be targeted by genetically engineered cell therapies. The successful treatment of these disorders may require various types of genome edits, CRISPR/Cas9 elements and DNA templates. We have assembled multiple in vivo and engineered cell therapy capabilities into a pipeline that reflects our full-spectrum approach and leverages the modularity inherent in our platform . Our diversified pipeline includes in vivo development programs targeting genetic diseases, including transthyretin amyloidosis (“ATTR”), hemophilia A and hemophilia B, which we are co-developing with Regeneron Pharmaceuticals, Inc. (“Regeneron”), and hereditary angioedema (“ HAE ”) . Our pipeline also includes ex vivo programs consisting of two separate efforts: (i) a set of proprietary programs focused on engineered cell therapies to treat various cancers and autoimmune diseases including our lead ex vivo program to target Wilms’ Tumor 1 (“WT1”) for acute myeloid leukemia (“AML”); and (ii) partnered programs developed in collaboration with Novartis Institutes for BioMedical Research, Inc. (“Novartis”), focused on chimeric antigen receptor (“CAR”) T (“CAR-T”) cells, hematopoietic stem cells (“HSCs”), the stem cells from which all of the various types of blood cells originate, and stem cells in the eye, or ocular stem cells (“OSCs”). Our Pipeline Our diversified pipeline includes in vivo and ex vivo programs. Our in vivo programs focus on treating patients that have significant unmet medical needs due to diseases attributable to genes expressed in the liver – ATTR (which we are co-developing with Regeneron) and HAE. Delivery plays a key role in our in vivo therapeutic approach. We have shown in animal models that our proprietary lipid nanoparticle (“LNP”) delivery technology, which encapsulates the therapeutic Cas9 messenger RNA (“mRNA”) and guide RNA (“gRNA”) into LNPs, can systemically deliver these therapeutic components to the liver. For ex vivo applications, our wholly owned programs focus on next-generation, engineered cell therapy solutions that utilize antigen-specific T cell receptors (“TCRs”). The cells to be modified ex vivo can come from the individual patient (autologous source) or from another individual (allogeneic source). Our goal for the ex vivo pipeline is to move from autologous to allogeneic therapies, and from liquid to solid tumors. We believe our full spectrum approach to in vivo and ex vivo programs positions us to build a pipeline across a wide range of indications. In Vivo Programs Our selection criteria include identifying diseases that originate in the liver; have well-defined mutations that can be addressed by a single knockout, repair or insertion approach; have readily measurable therapeutic endpoints with observable clinical responses; and for which effective treatments are absent, limited or unduly burdensome. Our initial in vivo indications target genetic liver diseases, including ATTR and HAE, using a knockout approach. Our current efforts on in vivo delivery focus on the use of LNPs for delivery of the CRISPR/Cas9 complex to the liver. Transthyretin Amyloidosis – (“ATTR”) ATTR is a progressive and fatal disorder resulting from deposition of insoluble amyloid fibrils into multiple organs and tissues leading to systemic failure. Blood-borne transthyretin (“TTR”) protein is produced by hepatocytes and normally circulates as a soluble homotetramer that facilitates transport of vitamin A, via retinol binding protein, as well as the thyroid hormone, thyroxine. Mutations in the TTR gene lead to the production of TTR proteins that are destabilized in their tetramer form. These tetramers more readily dissociate into the monomeric form, and thence to an aggregative form that results in amyloid deposits in tissues. These deposits cause damage in those tissues, resulting in a disorder known as hereditary TTR amyloidosis (“hATTR”). Over 120 different genetic mutations are currently known to cause hATTR. 24 Deposits of TTR amyloid in the heart, nerves and/or other tissues can lead to diverse disease manifestations, including two main hereditary forms – hATTR with polyneuropathy (“hATTR-PN”), and hATTR with cardiomyopathy (“hATTR-CM”). Typical onset of disease symptoms is during adulthood and can be fatal within 2 to 15 years. Estimates suggest that approximately 50,000 patients suffer from hATTR worldwide. In addition to the hereditary forms described above, ATTR can also develop spontaneously in the absence of any TTR gene mutation. This wild-type ATTR (“wtATTR”) is increasingly being recognized as a significant and often undiagnosed cause of heart failure in the elderly and is the subject of active investigation. Recent estimates suggest that, globally, between 200,000 and 500,000 people may suffer from wtATTR with cardiomyopathy (“wtATTR-CM”). In non-human primate (“NHP”) studies, we have demonstrated our ability to reduce circulating TTR protein to estimated therapeutically relevant levels after a single systemic administration of LNPs containing our CRISPR/Cas9 complex. In December 2019, we completed a year-long durability study of our lead LNP formulation, maintaining an average reduction of more than 95% of serum TTR protein after a single dose in NHPs. The data from our various NHP studies has also demonstrated the transient nature of our proprietary modular LNP delivery system, which was rapidly cleared from circulation, with all CRISPR/Cas9 complex undetectable in blood and liver within ten days of administration. Our lead candidate, NTLA-2001, applies an in vivo liver gene knockout approach for the treatment of ATTR. In October 2020, we announced the authorization of our Clinical Trial Application (“CTA”) by the United Kingdom’s Medicines and Healthcare products Regulatory Agency (“MHRA”) to initiate our Phase 1 study to evaluate NTLA-2001 for the treatment of hATTR-PN. Subject to the potential impact of the COVID-19 pandemic, we expect to dose the first patient in this Phase 1 trial during the fourth quarter of 2020. In addition, we are submitting additional regulatory applications to enable enrollment in other countries as part of our global clinical development plans. The Phase 1 study will be a two-part, open label, multi-center study in adults with hATTR-PN to assess the safety, tolerability, pharmacokinetics and pharmacodynamics of NTLA-2001, which will include the measurement of serum TTR levels following a single intravenous infusion. NTLA-2001 is part of a co-development and co-promotion (“Co/Co”) agreement directed to our first collaboration target with Regeneron, ATTR (the “ATTR Co/Co”), for which we are the clinical and commercial Lead Party and Regeneron is the Participating Party (see Note 7 to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for further detail). Pursuant to the ATTR Co/Co agreement, Regeneron funded approximately 50% of the program’s development costs through 2019. On December 13, 2019, Regeneron informed us that it would exercise its right under the ATTR Co/Co agreement to modify its share of worldwide development costs and profits from 50% to 25%, effective in mid-June 2020. Hereditary Angioedema – (“HAE”) HAE is a rare genetic disorder characterized by recurrent, painful and unpredictable episodes of severe swelling. The most common areas of the body to develop swelling are the limbs, face, intestinal tract and airway. Minor trauma or stress may trigger an attack but swelling often occurs without a known trigger. Episodes involving the intestinal tract cause severe abdominal pain, nausea and vomiting. Swelling in the airway can restrict breathing and lead to life-threatening obstruction of the airway. The disease is caused by increased levels of bradykinin, a protein which leads to swelling. Most patients with HAE have a deficiency of C1 esterase inhibitor (“C1-INH”) protein, which normally prevents the unregulated release and buildup of bradykinin. HAE is estimated to affect 1 in 50,000 people, with an estimated 11,000 to 21,500 diagnosed HAE patients in the U.S. and Europe. Currently there are multiple therapies approved to treat HAE, including acute and prophylactic approaches. Acute treatments are used to treat patients who are experiencing an attack. Prophylactic treatments are used to reduce the number of attacks that a patient may experience. Prophylactic treatments have proven to be effective in reducing the number of attacks for most patients, though some patients still experience breakthrough attacks and such treatment options require regular injections which can be associated with significant treatment burden and impact on quality of life. Using our modular LNP delivery system, we aim to knock out the prekallikrein B1 (“KLKB1” ) gene with a single course of treatment to reduce plasma kallikrein activity to prevent excess bradykinin production leading to HAE attacks. We believe KLKB1 knockout to be safe, as humans with prekallikrein deficiency appear to have no known health effects. In addition, inhibition of kallikrein activity has proven to be a clinically effective approach as a prophylactic treatment for HAE. 25 On May 7, 2020, we announced a development candidate for the treatment of HAE, NTLA-2002 , a wholly owned program . We have completed a NHP durability study of our lead LNP formulation in support of NTLA-2002, which resulted in a year-long therapeutically relevant reduction of serum kallikrein protein levels and activity following a single dose. In addition, during the third quarter of 2020 we have initiated Good Laboratory Practices ( “ GLP ” ) toxicology studies in preparation for an IND or IND-equivalent regulatory submission for NTLA-2002 in the second half of 2021. Ex Vivo Programs We are independently researching and developing proprietary engineered cell therapies to treat various oncological and autoimmune diseases, for example TCR-engineered T cells for immuno-oncology applications and engineered regulatory T cells for autoimmune disorders. Our diverse product strategy includes multiple elements. In particular: • We are exploring non-CAR-T cellular approaches that use immune cells, including T cells expressing recombinant TCRs, for oncology indications. For example, in our existing collaboration with IRCCS Ospedale San Raffaele (“OSR”), a leading European research-university hospital, we have identified optimized TCRs that recognize a WT1 target that could be used to treat a variety of cancers. • We seek to develop allogeneic cellular therapies, which are those derived from unmatched donors and modified outside of the human body to allow them to be administered to an unrelated patient. • We are also exploring methods to apply CRISPR/Cas9 editing to CD4 immune cells to induce a non-reverting regulatory T cell phenotype, to create therapies that address autoimmune diseases. In addition, based on our collaboration and technology, Novartis is developing therapies using CAR-T cells for oncology indications, as well as HSC and OSC-based therapies for a variety of diseases. Acute Myeloid Leukemia – (“AML”) AML includes a heterogenous group of blood cancers arising from the malignant expansion of hematopoietic cells of the myeloid lineage. AML is associated with weakness, fatigue and bleeding resulting from the depletion of healthy myeloid cells, and is typically rapidly progressive and fatal without immediate treatment. AML is an aggressive and hard-to-treat cancer, resulting in less than 30% of patients living more than five years after diagnosis. AML is the most common acute leukemia in adults and is associated with the largest number of annual deaths from leukemia in the U.S. It is estimated that there have been nearly 11,000 deaths due to AML, as well as over 21,000 new AML cases in the U.S. in 2019. While AML can occur at any age, the prevalence of the disease increases with age, resulting in a median age at diagnosis of 67 years. Over the past several years, new treatments have emerged for AML with different mechanisms of action. While these treatments have led to improvements in response rates and in some cases increased overall survival, the outcomes demonstrated thus far have been incremental in nature and long-term outcomes in AML continue to be extremely poor. We have nominated NTLA-5001 as our first engineered T cell therapy development candidate for the treatment of AML, utilizing our TCR-directed approach to target the WT1 intracellular antigen. Our WT1-directed TCR T-cell therapy aims to develop a broadly applicable treatment for AML, regardless of mutational subtypes of a patient’s leukemia. This approach employs CRISPR/Cas9 complexes to knock out and replace the endogenous TCR with a natural, high affinity therapeutic TCR. The resulting cells are engineered to be capable of specific and potent killing of AML blasts without bone marrow cell toxicity. In February 2020, we presented data demonstrating that the selection of a natural, high-affinity TCR, in combination with our CRISPR-enabled engineering and targeted insertion, results in an engineered T cell capable of specific and potent killing of primary AML blasts. Importantly, our studies showed that CRISPR-enabled engineering overcomes key challenges of traditional TCR approaches, such as mispairing between therapeutic and endogenous TCR, therefore creating a more homogenous T cell product. The cells engineered with our lead WT1 TCR also exhibited no detectable reactivity to bone marrow cells, which express WT1 at low levels. In May 2020, we presented data on our proprietary T cell engineering process in support of NTLA-5001. The data presented showed that our proprietary process enables multiple, highly efficient, sequential edits in T cells, whether knocking out or inserting genes. This technology yields engineered cells with high anti-tumor activity and favorable attributes, including a desired memory phenotype, which is associated with longer lasting treatment effects. Importantly, chromosomal translocations (i.e., undesired chromosomal rearrangements) were similar to background levels in untreated cells. We continue to advance IND-enabling activities and we are on track to submit an IND or IND-equivalent for NTLA-5001 in the first half of 2021. 26 Research Collaboration with Novartis In December 2019, the research term under our collaboration agreement with Novartis ended, although the 2014 Novartis Agreement remains in effect. Accordingly, Novartis has selected various CAR-T cell, HSC and OSC targets for continued development, for which we will be eligible to receive milestone and royalty payments in the future. Further, we are eligible to earn up to $230.3 million in development, regulatory and sales-based milestone payments and mid-single-digit royalties, in each case, on a per-product basis for the products developed by Novartis, subject to certain target-based limitations. During the first quarter of 2020, the U.S. Food and Drug Administration (“FDA”) accepted the IND application submitted by Novartis, for a CRISPR/Cas9-based engineered cell therapy for the treatment of sickle cell disease. As a result of meeting this milestone, we recognized a $5.0 million milestone payment that was previously constrained as collaboration revenue within the condensed consolidated statement of operations and comprehensive loss. Novartis is currently actively recruiting patients for its Phase 1/2 study of QTQ923 and HIX763, both candidates which were developed under the research collaboration. For more information regarding our collaboration with Novartis, see the section below entitled “Collaborations - Novartis.” Other Research Programs We are pursuing a number of in vivo and ex vivo genome editing programs. Within our in vivo research efforts, we continue to work on programs such as primary hyperoxaluria Type 1, alpha-1 antitrypsin deficiency, hemophilia A and hemophilia B which leverage our capabilities to knockout, insert and make consecutive edits to the genome. In September 2020, we presented data that showed the persistence of in vivo CRISPR/Cas9 edits in regenerated liver tissue, both knockout and insertion, and corresponding durability of effect following a partial hepatectomy (“PHx”) and liver regrowth in a murine model. Unlike traditional gene therapy, for which a significant loss (over 80%) in transgene expression was observed in the insertion PHx model, our targeted gene insertion approach yielded durable edits, with no significant loss in expression. We are also investigating delivery strategies that target tissues outside of the liver. Within our ex vivo research efforts, we are developing engineered cell therapies to treat a range of hematological and solid tumors. We are pursuing modalities, such as TCR, with broad potential in multiple indications. Further, we continue to advance efforts to move from autologous to allogeneic and from liquid to solid tumors. Our researchers are developing and improving cell-engineering manufacturing and delivery processes that, we believe, are designed to allow us to deliver T cell therapies with high levels of editing, achieve robust levels of expansion, ensure desirable memory phenotypes, improve function and reduce translocations. These platform advances will support NTLA-5001 and other ongoing research programs. Collaborations To accelerate the development and commercialization of CRISPR/Cas9-based products in multiple therapeutic areas, we have formed, and may seek other opportunities to form, strategic alliances with collaborators who can augment our leadership in CRISPR/Cas9 therapeutic development. Regeneron As described in Note 7, “Collaborations—Regeneron Pharmaceuticals, Inc.,” to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, in April 2016 we entered into a license and collaboration agreement with Regeneron (the “2016 Regeneron Agreement”). The 2016 Regeneron Agreement has two principal components: (i) a product development component under which the parties will research, develop and commercialize CRISPR/Cas-based therapeutic products primarily focused on genome editing in the liver; and (ii) a technology collaboration component, pursuant to which the parties will engage in research and development activities aimed at discovering and developing novel technologies and improvements to CRISPR/Cas technology to enhance our genome editing platform. Under the 2016 Regeneron Agreement, we also may access the Regeneron Genetics Center and proprietary mouse models to be provided by Regeneron for a limited number of our liver programs. On May 30, 2020, we entered into amendment no. 1 (the “2020 Regeneron Amendment”) to the 2016 Regeneron Agreement, pursuant to which we expanded the existing collaboration to co-develop potential products for the treatment of hemophilia A and hemophilia B. The collaboration expansion builds upon the jointly developed targeted transgene insertion capabilities designed to durably restore a missing therapeutic protein, and to overcome the limitations of traditional gene therapy. The collaboration has been extended until April 2024, at which point Regeneron has an option to renew for an additional two years. The 2020 Regeneron Amendment also grants Regeneron rights to develop products for five additional in vivo CRISPR/Cas-based therapeutic liver targets and non-exclusive rights to independently develop and commercialize up to 10 ex vivo gene edited products made using certain defined cell types. 27 Through September 3 0 , 20 20 , excluding amounts allocated to Regeneron’s purchase of our common stock, we have recorded $ 145.0 million in upfront payment s under the 2016 Regeneron Agreement and the 2020 Regeneron Amendment and $ 3 3 . 8 million primarily for research and development services under the ATTR Co/Co agreement, a s described in Note 7 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q . Through September 3 0 , 20 20 , we have recognized $ 116. 7 million of collaboration revenue under all arrangements , including $ 22. 2 million and $ 46. 4 million during the three and nine months ended September 30, 2020 and $ 5.8 million and $1 7.8 million during the three and nine months ended September 30, 2019, respectively , in the condensed consolidated statements of operations and comprehensive loss . This includes $ 1 . 2 million and $ 9 . 8 million during the three and nine months ended September 30, 2020, respectively, and $ 2.6 million and $ 8.4 million during the three and nine months ended September 30, 2019 , respectively, primarily representing payments due from Regeneron pursuant to the ATTR Co / Co a greement , which is accounted for under Accounting Standards Codification 808 , Collaborative Arrangements . As of September 3 0 , 20 20 and December 31, 201 9 , we had accounts receivable of $ 1 . 2 million and $ 3 .6 million, respectively, and deferred revenue of $ 79.6 million and $ 28.8 million , respectively, related to th ese a r range ment s . Novartis As described in Note 7, “Collaborations—Novartis Institutes for BioMedical Research, Inc.,” to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, i n December 2014, we entered into a strategic collaboration agreement with Novartis (the “2014 Novartis Agreement”), primarily focused on the development of new ex vivo CRISPR/Cas9-edited therapies using CAR-T cells and HSCs. The agreement was amended in December 2018 (the “Novartis Amendment”) to also include research on OSCs. Through September 30, 2020, excluding amounts allocated to Novartis’ purchase of the Company’s Class A-1 and Class A-2 Preferred Units, we had recorded a total of $62.4 million in cash under the 2014 Novartis Agreement and the Novartis Amendment. Through September 30, 2020, we have recognized $62.4 million of collaboration revenue, including $5.0 million related to a development milestone that was recognized in the first quarter of 2020 and $4.8 million and $14.3 million in the three and nine months ended September 30, 2019, respectively. No collaboration revenue was recorded during the three months ended September 30, 2020, related to the 2014 Novartis Agreement and the Novartis Amendment. As of September 30, 2020, we had no accounts receivable related to the 2014 Novartis Agreement and the Novartis Amendment. As of December 31, 2019, we had accounts receivable of $1.0 million related to the 2014 Novartis Agreement and the Novartis Amendment. As of September 30, 2020 and December 31, 2019, we had no deferred revenue related to the 2014 Novartis Agreement and the Novartis Amendment. Financial Overview Collaboration Revenue Our revenue consists of collaboration revenue, including amounts recognized related to upfront technology access payments for licenses, technology access fees, research funding and milestone payments earned under our collaboration and license agreements with Novartis and Regeneron. Research and Development Research and development expenses consist of expenses incurred in performing research and development activities, including compensation and benefits, which includes equity-based compensation, for full-time research and development employees, allocated facility-related expenses, overhead expenses, clinical manufacturing costs, license and milestone fees, contract research services and other related costs. General and Administrative General and administrative expenses consist primarily of compensation and benefits, including equity-based compensation, for our executive, finance, legal, business development and support functions. Also included in general and administrative expenses are allocated facility-related costs not otherwise included in research and development expenses, travel expenses and professional fees for auditing, tax and legal services, including IP-related legal services, and other consulting fees and expenses. Interest Income Interest income is income earned on our cash, cash equivalents and marketable securities. 28 Results of Operations The following discussion of the financial condition and results of operations should be read in conjunction with the accompanying condensed consolidated financial statements and the related footnotes thereto. Comparison of Three Months Ended September 30 , 2020 and 2019 The following table summarizes our results of operations for the three months ended September 30, 2020 and 2019: Three Months Ended September 30, Period-to- 2020 2019 Period Change Collaboration revenue $ 22,220 $ 10,616 $ 11,604 Operating expenses: Research and development 39,756 27,513 12,243 General and administrative 10,566 8,431 2,135 Total operating expenses 50,322 35,944 14,378 Operating loss (28,102 ) (25,328 ) (2,774 ) Interest income 262 1,694 (1,432 ) Net loss $ (27,840 ) $ (23,634 ) $ (4,206 ) Collaboration Revenue Collaboration revenue increased $11.6 million to $22.2 million during the three months ended September 30, 2020, as compared to $10.6 million during the three months ended September 30, 2019. The increase in collaboration revenue during the three months ended September 30, 2020 is primarily due to the Company recording $15.3 million related to the transfer of control of the license to develop the Factor VIII target for hemophilia A, partially offset by a decrease in revenue related to the Novartis collaboration. Refer to Note 7 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for further details. Research and Development Research and development expenses increased by $12.2 million to $39.8 million during the three months ended September 30, 2020, as compared to $27.5 million during the three months ended September 30, 2019. The following table summarizes our research and development expenses for the three months ended September 30, 2020 and 2019, together with the changes in those items in dollars (in thousands) and the respective percentages of change: Three Months Ended September 30, Period-to- Percent 2020 2019 Period Change Change Pipeline and platform development expenses $ 21,274 $ 13,866 $ 7,408 53 % Employee-related expenses 10,968 8,033 2,935 37 % Allocated facility-related expenses 4,712 3,902 810 21 % Stock-based compensation expense 2,775 1,513 1,262 83 % Other expenses 27 199 (172 ) -86 % Total research and development expenses $ 39,756 $ 27,513 $ 12,243 44 % The increase in research and development expenses for the three months ended September 30, 2020 compared to the three months ended September 30, 2019 was primarily attributable to: • approximately $7.4 million in increased pipeline and platform development expenses driven by increased costs as we prepared to enter the clinic for NTLA-2001, increased preclinical studies for NTLA-2002 and NTLA-5001, and an upfront payment associated with a research collaboration and licensing agreement; 29 • approximately $ 2.9 million in employee - related expenses driven by an increase in the size of our workforce due to the advancement of our programs ; • approximately $0.8 million in increased facility-related expenses primarily related to rent, depreciation and technology expense allocated to research and development; and • approximately $1.3 million in increased stock-based compensation driven by our larger workforce. Through 2020, we expect research and development expenses to increase as we continue to grow our development team, execute clinical trials for ATTR and advance our AML and HAE programs towards clinical development. General and Administrative General and administrative expenses increased by approximately $2.1 million to $10.6 million during the three months ended September 30, 2020, compared to $8.4 million during the three months ended September 30, 2019. This increase was primarily related to employee related expenses, including stock-based compensation, of $2.0 million. Interest Income Interest income decreased by approximately $1.4 million to $0.3 million during the three months ended September 30, 2020 as compared to $1.7 million during the three months ended September 30, 2019. This decrease was due to a decline in investment income due to market conditions. Comparison of Nine Months Ended September 30 , 2020 and 2019 The following table summarizes our results of operations for the nine months ended September 30, 2020 and 2019: Nine Months Ended September 30, Period-to- 2020 2019 Period Change Collaboration revenue $ 51,399 $ 32,167 $ 19,232 Operating expenses: Research and development 112,177 76,682 35,495 General and administrative 33,406 32,082 1,324 Total operating expenses 145,583 108,764 36,819 Operating loss (94,184 ) (76,597 ) (17,587 ) Interest income 2,145 5,340 (3,195 ) Net loss $ (92,039 ) $ (71,257 ) $ (20,782 ) Collaboration Revenue Collaboration revenue increased approximately $19.2 million to $51.4 million during the nine months ended September 30, 2020, as compared to $32.2 million during the nine months ended September 30, 2019. The increase in collaboration revenue during the nine months ended September 30, 2020 is primarily caused by an $8.4 million one-time cumulative catch-up adjustment related to the modification of the 2016 Regeneron Agreement as well as $15.3 million recorded due to the transfer of control of the license to develop the Factor VIII target for hemophilia A, partially offset by a decrease in revenue related to the Novartis collaboration. Refer to Note 7 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for further details. Research and Development Research and development expenses increased by approximately $35.5 million to $112.2 million during the nine months ended September 30, 2020, as compared to $76.7 million during the nine months ended September 30, 2019. 30 The following table summarizes our research and development expenses for the nine months ended September 3 0 , 2020 and 2019, together with the changes in those items in dollars (in thousands) and the respective percentages of change: Nine Months Ended September 30, Period-to- Percent 2020 2019 Period Change Change Pipeline and platform development expenses $ 57,168 $ 34,927 $ 22,241 64 % Employee-related expenses 31,932 23,052 8,880 39 % Allocated facility-related expenses 14,539 11,820 2,719 23 % Stock-based compensation expense 7,325 5,392 1,933 36 % Other expenses 1,213 1,491 (278 ) -19 % Total research and development expenses $ 112,177 $ 76,682 $ 35,495 46 % The increase in research and development expenses for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 was primarily attributable to : • approximately $22.2 million in increased pipeline and platform development expenses driven by increased manufacturing and related costs as we prepared to file our CTA and enter the clinic for NTLA-2001, increased preclinical studies for NTLA-2002 and NTLA-5001, and upfront payments associated with a research collaboration and licensing agreement; • approximately $8.9 million in employee-related expenses driven by an increase in the size of our workforce due to the advancement of our programs; • approximately $2.7 million in increased facility-related expenses primarily related to rent, depreciation and technology expense allocated to research and development; and • approximately $1.9 million in increased stock-based compensation driven by our larger workforce. Through 2020, we expect research and development expenses to increase as we continue to grow our development team, execute clinical trials for ATTR and advance our AML and HAE programs towards clinical development. General and Administrative General and administrative expenses increased by approximately $1.3 million to $33.4 million during the nine months ended September 30, 2020, compared to $32.1 million during the nine months ended September 30, 2019. This increase was primarily related to a $3.2 million increase in employee-related expenses offset by a decrease in legal expenses of $2.3 million. Interest Income Interest income decreased by approximately $3.2 million to $2.1 million during the nine months ended September 30, 2020 as compared to $5.3 million during the nine months ended September 30, 2019. This decrease was due to a decline in investment income due to market conditions. Liquidity and Capital Resources Since our inception through September 30, 2020, we have raised an aggregate of $893.6 million to fund our operations, of which $272.6 million was through our collaboration agreements, $170.5 million was from our initial public offering and concurrent private placements, $249.1 million was from follow-on public offerings, $116.4 million was from at-the-market offerings and $85.0 million was from the sale of convertible preferred stock. 31 As of September 3 0 , 20 20 , we had $ 4 07.9 million in cash, cash equivalents and marketable securities. We are entitled to receive research payments under our collaboration with Novartis and are also eligible to earn a significant amount of milestone payments and royalties, in each case, on a per-product basis under our collaboration with Novartis and on a per-target basis under our collaboration with Regeneron. Our ability to earn these milestone payments and the timing of achieving these milestones is dependent upon the outcome of our research and development activities and is uncertain at this time. Our rights to payments under our collaboration agreements are our only committed external source of funds. Follow-on Offering On June 1, 2020, we entered into an underwriting agreement related to a public offering of 6,301,370 shares of our common stock, par value $0.0001 per share, including the exercise in full by the underwriters of their option to purchase an additional 821,917 shares, at the public offering price of $18.25 per share. The offering closed on June 5, 2020 and we received net proceeds of $107.7 million, after deducting the underwriting discount, commissions and approximately $0.4 million in offering expenses. Shares Issued in Private Placement to Regeneron As described in Note 7 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, in May 2020 we entered into the 2020 Regeneron Amendment. Simultaneously with the 2020 Regeneron Amendment, we and Regeneron entered into the 2020 Stock Purchase Agreement , under which we sold to Regeneron 925,218 shares of our common stock, par value $0.0001 per share, for aggregate cash consideration of $30.0 million, or $32.42 per share, representing a 100% premium over the volume-weighted average trading price of our common stock during the 30-day period prior to the closing. Under the 2020 Stock Purchase Agreement, Regeneron will not dispose of any shares of common stock it beneficially owns in Intellia until the termination of the Technology Collaboration Term (see Note 7). After applying equity accounting guidance to measure the issuance of the shares, $12.6 million was recorded as fair value in the condensed consolidated statement of stockholders’ equity for the shares. At-the-Market Offering Programs In October 2018, we entered into an Open Market Sale Agreement (the “2018 Sales Agreement”) with Jefferies LLC (“Jefferies”), under which Jefferies was able to offer and sell, from time to time in “at-the-market” offerings, shares of our common stock having aggregate gross proceeds of up to $100.0 million. We paid to Jefferies cash commissions of 3.0% of the gross proceeds of sales of common stock under the 2018 Sales Agreement. We issued 5,890,648 shares of our common stock at an average price of $16.98 per share in accordance with the 2018 Sales Agreement for aggregate net proceeds of $96.4 million, after payment of cash commissions to Jefferies and approximately $0.6 million related to legal, accounting and other fees in connection with the sales. All shares related to the 2018 Sales Agreement had been sold as of December 31, 2019 . In August 2019, we entered into an Open Market Sale Agreement (the “2019 Sales Agreement”) with Jefferies, under which Jefferies is able to offer and sell, from time to time in “at-the-market” offerings, shares of our common stock having aggregate gross proceeds of up to $150.0 million. We agreed to pay to Jefferies cash commissions of 3.0% of the gross proceeds of sales of common stock under the 2019 Sales Agreement. During the year ended December 31, 2019, we issued 287,231 shares of our common stock, in a series of sales, at an average price of $ 16.48 per share, in accordance with the 2019 Sales Agreement for aggregate net proceeds of $ 4.4 million, after payment of cash commissions to Jefferies and approximately $0.2 million related to legal, accounting and other fees in connection with the sales . During the nine months ended September 30, 2020, we issued 1,107,100 shares of our common stock in a series of sales at an average price of $13.78 per share in accordance with the 2019 Sales Agreement, for aggregate net proceeds of $14.7 million after payment of cash commissions to Jefferies and approximately $0.1 million related to legal, accounting and other fees in connection with the sales. As of September 30, 2020, $130.0 million in shares of common stock remain eligible for sale under the 2019 Sales Agreement. 32 Funding Requirements Our primary uses of capital are, and we expect will continue to be, research and development contracted services, compensation and related expenses, laboratory and office facilities, research supplies, legal and regulatory expenses, patent prosecution filing and maintenance costs for our licensed IP and general overhead costs. During 2020, we expect our expenses to increase compared to prior periods in connection with our ongoing activities, as we continue to grow our research and development team and begin clinical development. Because our lead programs are still in the discovery, preclinical or early clinical stage and the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully complete the development and commercialization of any future product candidates or whether, or when, we may achieve profitability. Until such time as we can generate substantial product revenues, if ever, we expect to finance our ongoing cash needs through equity financings and collaboration arrangements. We receive cost reimbursements from Regeneron for the ATTR and hemophilia programs. Additionally, we are eligible to earn milestone payments and royalties, in each case, on a per-product basis under our collaboration with Novartis and on a per-target basis under our collaboration with Regeneron, subject to the provisions of our agreements with each of them. Except for these sources of funding, we will not have any committed external source of liquidity. To the extent that we raise additional capital through the future sale of equity, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. If we raise additional funds through collaboration arrangements in the future, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Outlook Based on our research and development plans and our expectations related to the progress of our programs, we expect that our cash, cash equivalents and marketable securities as of September 30, 2020, as well as research and cost reimbursement funding from Regeneron, will enable us to fund our ongoing operating expenses and capital expenditure requirements at least through the next twenty-four months, excluding any potential mile stone payments or extension fees that could be earned and distributed under the collaboration agreements with Regeneron and Novartis or any strategic use of capital not currently in the base case planning assumptions. We have based this estimate on current assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Our ability to generate revenue and achieve profitability depends significantly on our success in many areas, including: developing our delivery technologies and our CRISPR/Cas9 technology platform; selecting appropriate product candidates to develop; completing research and preclinical and clinical development of selected product candidates; obtaining regulatory approvals and marketing authorizations for product candidates for which we complete clinical trials; developing a sustainable and scalable manufacturing process for product candidates; launching and commercializing product candidates for which we obtain regulatory approvals and marketing authorizations, either directly or with a collaborator or distributor; obtaining market acceptance of our product candidates; addressing any competing technological and market developments; negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter; maintaining good relationships with our collaborators and licensors; maintaining, protecting, and expanding our portfolio of IP rights, including patents, trade secrets, and know-how; and attracting, hiring, and retaining qualified personnel . Cash Flows The following is a summary of cash flows for the nine months ended September 30, 2020 and 2019: Nine Months Ended September 30, 2020 2019 (In thousands) Net cash used in operating activities $ (9,686 ) $ (74,578 ) Net cash used in investing activities $ (3,569 ) $ (2,708 ) Net cash provided by financing activities $ 137,686 $ 56,870 33 Net cash used in operating activities Net cash used in operating activities of $9.7 million during the nine months ended September 30, 2020 primarily reflects the receipt of a $70.0 million up-front payment and $12.2 million in additional payments under our collaboration with Regeneron and $6.0 million in payments from Novartis, offset in part by increased spend in our research and development activities. Net cash used in operating activities of $74.6 million during the nine months ended September 30, 2019 primarily reflects increased spend in our research and development and general administrative activities, offset in part by the receipt of $8.0 million and $7.3 million in payments from our collaboration partners, Novartis and Regeneron, respectively, during those periods. Net cash used in investing activities During the nine months ended September 30, 2020 and 2019, our investing activities used net cash of $3.6 million and $2.7 million, respectively. The decrease in the nine months ended September 30, 2020 is primarily related to the use of $2.6 million in cash for the purchase of property and equipment and a decrease of $1.0 million from marketable securities activity during the period, as $243.8 million in marketable securities matured and $244.8 million in marketable securities were purchased. The decrease in the nine months ended September 30, 2019 is primarily related to the use of $4.2 million in cash for the purchase of property and equipment, offset in part by an increase of $1.5 million from marketable securities activity during the period, as $265.5 million in marketable securities matured and $264.0 million in marketable securities were purchased. Net cash provided by financing activities Net cash provided by financing activities of $137.7 million during the nine months ended September 30, 2020 includes $107.7 million in net proceeds from a follow-on offering, $14.7 million in net proceeds from at-the-market offerings, $12.6 million in proceeds from the issuance of common stock to Regeneron in a private placement, $2.0 million in cash received from the exercise of stock options and $0.7 million in cash received from the issuance of shares through our employee stock purchase plan. Net cash provided by financing activities of $56.9 million during the nine months ended September 30, 2019 includes $54.1 million in net proceeds from at-the-market offerings, $2.2 million in cash received from the exercise of stock options and $0.5 million in cash received from the issuance of shares through our employee stock purchase plan. Critical Accounting Policies Our critical accounting policies require the most significant judgments and estimates in the preparation of our condensed consolidated financial statements. Management has determined that our most critical accounting policies are those relating to revenue recognition and equity-based compensation. There have been no changes to our critical accounting policies from those which were discussed in our Annual Report for the year ended December 31, 2019. Recent Accounting Pronouncements Please read Note 2, “Summary of Significant Accounting Policies”, to our condensed consolidated financial statements included in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our business. Contractual Obligations In March 2020, we entered into a second amendment to the 130 Brookline Lease (the “Second Amendment”). The Second Amendment amends certain terms of our existing lease, dated October 21, 2014, as amended on April 5, 2019. The Second Amendment extends the term of the 130 Brookline Lease by approximately six years through January 31, 2031. This extended term is included as part of the lease liability and right-of-use asset at September 30, 2020. The Second Amendment also provides an option to extend the lease for two consecutive five-year terms. We recognized a right-of-use asset and lease liability of approximately $7.3 million related to the Second Amendment. In March 2020, we entered into an agreement to lease approximately 39,000 square feet of office and laboratory space at 281 Albany Street in Cambridge, Massachusetts under an operating lease agreement (the “281 Albany Lease”). Our obligation to pay rent on the 281 Albany Lease will start on the date that is six months after the commencement date or the date on which we occupy the premises, whichever occurs earlier (the “Rent Commencement Date”). The initial term of the 281 Albany Lease is ten years following the Rent Commencement Date. The base rent under the 281 Albany Lease is $99.00 per square foot per year during the first year of the term, which is subject to scheduled annual increases up to $128.87 per square foot per year during the last year of the initial term, plus certain operating expenses and taxes. In addition, the landlord will contribute an 34 aggregate of $4.4 million toward the cost of construction and tenant improvements for the p remises. We have the option to extend the 281 Albany Lease for two successive five-year terms . There were no other material changes to our contractual obligations during the nine months ended September 30, 2020. For a complete discussion of our contractual obligations, please refer to our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report for the year ended December 31, 2019. Off-Balance Sheet Arrangements We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements as defined under the rules and regulations of the SEC.