Editas Medicine (EDIT +9.35%) released fourth-quarter 2017 results on Wednesday after the market closed, highlighting encouraging pipeline progress, a solid balance sheet, and updates on its longer-term goals.
With shares of the early-stage biopharma leader up around 10% in response, let's take a closer look at what Editas had to say.
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Editas Medicine results: The raw numbers
| Metric |
Q4 2017 |
Q4 2016 |
Year-Over-Year Growth |
|---|---|---|---|
|
Collaboration and other research and development revenue |
$3.7 million |
$0.9 million |
311.1% |
|
GAAP net income (loss) |
($36.2 million) |
($39.4 million) |
N/A |
|
GAAP net income (loss) per share |
($0.84) |
($1.10) |
N/A |
Data source: Editas Medicine.
What happened with Editas Medicine this quarter?
- Growth in collaboration and other R&D revenue was driven by a $3.2 million increase in revenue recognized under Editas' strategic alliance with Allergan, offset by a $0.4 million decline in reimbursable R&D expenses.
- R&D expenses declined 1.5% to $26.4 million, while general and administrative expenses climbed 5.4% to $13.7 million.
- Editas ended the year with cash, cash equivalents, and marketable securities of $329.1 million -- good for at least 24 months of operating expenses and capital expenditures.
- The EDIT-101 drug candidate, developed to treat the world's leading cause of childhood blindness, Leber Congenital Amaurosis type 10 (LCA10), remains on track for a mid-2018 Investigational New Drug (IND) filing.
- Editas' first oncology candidate developed under its collaboration with Juno Therapeutics (JUNO +0.00%) is progressing toward clinical trials. Juno will begin IND-enabling studies this year and plans to initiate human clinical trials next year for a T cell medicine using Editas' proprietary gene edits to treat HPV-associated solid tumors.
- Continued to explore development of a medicine for sickle cell disease and beta-thalassemia. Editas will present its latest progress to that end in the first half of this year.
- Editas sees a "broader ocular pipeline emerging" for treatments of recurring ocular herpes simplex virus type 1 (HSV-1) infection and Usher Syndrome type 2a (USH2a). Proof-of-concept data for the former will be presented at the Association for Research in Vision & Ophthalmology in April. Results that validate a potential gene-editing approach for the latter will be presented in the first half of this year.
- Acquired RNA engineering and manufacturing assets and capabilities from i2 Pharmaceuticals and its affiliates, demonstrating Editas' "continued commitment to build an unparalleled genome editing platform to develop best-in-class CRISPR medicines."
What management had to say
CEO Katrine Bosley stated:
Our accomplishments in 2017 provide strong momentum into 2018 and beyond as we work to bring transformative medicines to patients. We advanced our lead experimental medicine, EDIT-101, toward the clinic, made important progress on multiple additional ocular and engineered cell medicine programs, and further strengthened our business with key new team members and strategic business development. We are well positioned to achieve our EM22 five-year goals, which include having five medicines in clinical development in 2022.
Looking forward
Editas doesn't provide revenue or earnings guidance. But it did outline several goals for 2018, including submitting the IND for its LCA10 program by the middle of the year, reporting preclinical proof-of-concept data from its additional programs, advancing its manufacturing capabilities for future INDs in 2019, and continuing to identify new strategic alliances.
In addition, speaking to Bosley's comments, by the end of 2022 Editas targets having at least three experimental medicines in early clinical trials, as well as two in (or ready for) late-stage clinical trials. These totals include at least two medicines in ophthalmology and at least one from its partnership with Juno.
All things considered, this was as solid a report as Editas investors could have hoped for. In particular, it's encouraging to see that not only is its key EDIT-101 candidate still on track for a mid-2018 IND filing, but also that its supplementary pipeline -- notably including the first fruits of its partnership with Juno gearing up for human clinical trials next year -- has made significant progress in recent months.
So even with Editas Medicine shares having nearly doubled over the past year, it's no surprise to see the market so aggressively bidding up the stock once again today.
