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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2022

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: 001-37923

CRISPR THERAPEUTICS AG

(Exact name of Registrant as specified in its charter)

Switzerland	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Baarerstrasse 14 6300 Zug, Switzerland	Not Applicable
(Address of principal executive offices)	(zip code)

+41 (0)41 561 32 77

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Shares, nominal value CHF 0.03	CRSP	The Nasdaq Global 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 emerging growth company. See definition 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 registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

As of May 5, 2022, there were 77,457,081 shares of registrant’s common shares outstanding.

Throughout this Quarterly Report on Form 10-Q, the “Company,” “CRISPR,” “CRISPR Therapeutics,” “we,” “us,” and “our,” except where the context requires otherwise, refer to CRISPR Therapeutics AG and its consolidated subsidiaries.

“CRISPR Therapeutics®” standard character mark and design logo, “CTX001TM,” “CTX110TM,” “CTX120TM,” “CTX130TM,” and “CRISPR TXTM” are trademarks and registered trademarks of CRISPR Therapeutics AG. All other trademarks and registered trademarks contained in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, trademarks, service marks and trade names referred to in this Quarterly Report on Form 10-Q may appear without the ® or ™ symbols and any such omission is not intended to indicate waiver of any such rights.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q are forward-looking statements. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “potential,” “will,” “would” or the negative or plural of these words or similar expressions or variations, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•the safety, efficacy and clinical progress of our various clinical programs including those for CTX001TM, CTX110TM, CTX120TM, CTX130TM and VCTX210;

•the status of clinical trials, development timelines and discussions with regulatory authorities related to product candidates under development by us and our collaborators;

•the initiation, timing, progress and results of our preclinical studies and clinical trials, including our ongoing clinical trials and any planned clinical trials for CTX001, CTX110, CTX120, CTX130 and VCTX210, and our research and development programs, including delays or disruptions in clinical trials, non-clinical experiments and investigational new drug application-enabling studies;

•the actual or potential benefits of U.S. Food and Drug Administration, or FDA, designations, such as orphan drug, fast track and regenerative medicine advanced therapy, or RMAT, or such European equivalents, including PRIority MEdicines, or PRIME, designation;

•our ability to advance product candidates into, and successfully complete, clinical trials;

•our plan to consolidate our various office and laboratory locations in the greater Boston area into a single location and to validate our cell therapy manufacturing facility to enable us to produce clinical cell therapy product supply in the future;

•our intellectual property coverage and positions, including those of our licensors and third parties as well as the status and potential outcome of proceedings involving any such intellectual property;

•our anticipated expenses, ability to obtain funding for our operations and the sufficiency of our cash resources;

•the therapeutic value, development, and commercial potential of CRISPR/Cas9 gene-editing technologies and therapies; and

•potential impacts due to the ongoing coronavirus pandemic such as delays, interruptions or other adverse effects to clinical trials, delays in regulatory review, manufacturing and supply chain interruptions, adverse effects on healthcare systems and disruption of the global economy, and the overall impact of the coronavirus pandemic on our business, financial condition and results of operations.

Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and assumptions that could cause our actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled “Risk Factors,” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q, if any, our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on February 15, 2022, and in other SEC filings. You should not rely upon forward-looking statements as predictions of future events. Such forward-looking statements speak only as of the date of this report. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make or enter into.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results, performance or achievements may be materially different from what we expect. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Investors and others should note that we announce material information to our investors using our investor relations website (https://crisprtx.gcs-web.com/), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media to communicate with the public about our company, our business, our product candidates and other matters. It is possible that the information we post on social media could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels listed on our investor relations website.

Index

	Page Number
PART I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (unaudited)	2
Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	2
Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2022 and 2021	3
Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2022 and 2021	4
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021	5
Notes to Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures about Market Risk	24
Item 4. Controls and Procedures	25
PART II: OTHER INFORMATION
Item 1. Legal Proceedings	26
Item 1A. Risk Factors	26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3. Defaults Upon Senior Securities	26
Item 4. Mine Safety Disclosures	26
Item 5. Other Information	26
Item 6. Exhibits	27
SIGNATURES	28

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

CRISPR Therapeutics AG

Condensed Consolidated Balance Sheets

(unaudited, in thousands, except share and per share data)

	As of
	March 31,			December 31,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	683,906		$	923,031
Marketable securities		1,537,355			1,456,098
Accounts receivable		143			305
Prepaid expenses and other current assets		39,212			38,079
Total current assets		2,260,616			2,417,513
Property and equipment, net		157,453			137,575
Intangible assets, net		112			125
Restricted cash		12,123			16,913
Operating lease assets		171,541			174,460
Other non-current assets		4,330			5,291
Total assets	$	2,606,175		$	2,751,877
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	27,111		$	14,816
Accrued expenses		72,632			91,003
Deferred revenue, current		—			1,011
Accrued tax liabilities		2,608			724
Operating lease liabilities		11,076			12,158
Other current liabilities		270			171
Total current liabilities		113,697			119,883
Deferred revenue, non-current		12,323			12,323
Operating lease liabilities, net of current portion		227,904			212,872
Other non-current liabilities		7,335			7,339
Total liabilities		361,259			352,417
Commitments and contingencies, see Note 6
Shareholders’ equity:
Common shares, CHF 0.03 par value, 145,364,335 shares authorized at   March 31, 2022 and December 31, 2021, 77,566,721 and 77,170,382   shares issued at March 31, 2022 and December 31, 2021, respectively, 77,386,405 and   76,990,066 shares outstanding at March 31, 2022 and December 31, 2021, respectively		2,407			2,391
Treasury shares, at cost, 180,316 shares at March 31, 2022 and at December 31, 2021		(63	)		(63	)
Additional paid-in capital		2,634,597			2,598,114
Accumulated deficit		(375,132	)		(195,915	)
Accumulated other comprehensive loss		(16,893	)		(5,067	)
Total shareholders' equity		2,244,916			2,399,460
Total liabilities and shareholders’ equity	$	2,606,175		$	2,751,877

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

2

CRISPR Therapeutics AG

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited, in thousands, except share and per share data)

	Three Months Ended
	March 31,
	2022			2021
Revenue:
Collaboration revenue	$	178		$	202
Grant revenue		762			337
Total revenue		940			539
Operating expenses:
Research and development		118,245			70,620
General and administrative		28,021			24,517
Collaboration expense, net		30,646			19,945
Total operating expenses		176,912			115,082
Loss from operations		(175,972	)		(114,543	)
Other income:
Other income, net		363			1,955
Total other income, net		363			1,955
Net loss before income taxes		(175,609	)		(112,588	)
Provision for income taxes		(3,608	)		(575	)
Net loss		(179,217	)		(113,163	)
Foreign currency translation adjustment		(27	)		5
Unrealized loss on marketable securities		(11,799	)		(383	)
Comprehensive loss	$	(191,043	)	$	(113,541	)
Net loss per common share — basic	$	(2.32	)	$	(1.51	)
Basic weighted-average common shares outstanding		77,098,319			75,005,187
Net loss per common share — diluted	$	(2.32	)	$	(1.51	)
Diluted weighted-average common shares outstanding		77,098,319			75,005,187

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

3

CRISPR Therapeutics AG

Condensed Consolidated Statements of Shareholders’ Equity

(unaudited, in thousands, except share and per share data)

	Common Shares				Treasury Shares
	Shares		CHF 0.03 Par Value		Shares		Amount, at cost			Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
Balance at December 31, 2020		73,914,844	$	2,277		195,316	$	(63	)	$	2,235,679	$	(573,576	)	$	(83	)	$	1,664,234
Issuance of common shares, net of issuance costs of $5.4 million		1,353,121		45		—		—			222,130		—			—			222,175
Vesting of restricted shares		109,355		3		—		—			—		—			—			3
Exercise of vested options, net of issuance costs of $1.5 million		342,051		15		—		—			9,769		—			—			9,784
Purchase of common stock under ESPP		11,257		—		—		—			751		—			—			751
Stock-based compensation expense		—		—		—		—			22,092		—			—			22,092
Other comprehensive loss		—		—		—		—			—		—			(378	)		(378	)
Net loss		—		—		—		—			—		(113,163	)		—			(113,163	)
Balance at March 31, 2021		75,730,628	$	2,340		195,316	$	(63	)	$	2,490,421	$	(686,739	)	$	(461	)	$	1,805,498
Balance at December 31, 2021		76,990,066	$	2,391		180,316	$	(63	)	$	2,598,114	$	(195,915	)	$	(5,067	)	$	2,399,460
Vesting of restricted shares		123,564		4		—		—			—		—			—			4
Exercise of vested options, net of issuance costs of $0.2 million		261,280		12		—		—			9,998		—			—			10,010
Purchase of common stock under ESPP		11,495		—		—		—			740		—			—			740
Stock-based compensation expense		—		—		—		—			25,745		—			—			25,745
Other comprehensive loss		—		—		—		—			—		—			(11,826	)		(11,826	)
Net loss		—		—		—		—			—		(179,217	)		—			(179,217	)
Balance at March 31, 2022		77,386,405	$	2,407		180,316	$	(63	)	$	2,634,597	$	(375,132	)	$	(16,893	)	$	2,244,916

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

4

CRISPR Therapeutics AG

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)

	Three Months Ended March 31,
	2022			2021
Operating activities:
Net loss	$	(179,217	)	$	(113,163	)
Reconciliation of net loss to net cash used in operating activities:
Depreciation and amortization		6,039			2,715
Equity-based compensation		25,745			22,092
Other non-cash items, net		6,099			2,064
Changes in:
Accounts receivable		162			(6	)
Prepaid expenses and other assets		4,611			(5,068	)
Accounts payable and accrued expenses		(1,616	)		(5,770	)
Deferred revenue		(762	)		(539	)
Operating lease assets and liabilities		3,854			778
Other liabilities, net		(154	)		(3,766	)
Net cash used in operating activities		(135,239	)		(100,663	)
Investing activities:
Purchase of property, plant and equipment		(15,350	)		(7,024	)
Purchases of marketable securities		(323,140	)		(323,975	)
Maturities of marketable securities		223,975			163,101
Net cash used in investing activities		(114,515	)		(167,898	)
Financing activities:
Proceeds from issuance of common shares, net of issuance costs		—			214,592
Proceeds from exercise of options and ESPP contributions, net of issuance costs		10,649			11,399
Net cash provided by financing activities		10,649			225,991
Effect of exchange rate changes on cash		(27	)		5
Decrease in cash		(239,132	)		(42,565	)
Cash, cash equivalents and restricted cash, beginning of period		939,944			1,185,468
Cash, cash equivalents and restricted cash, end of period	$	700,812		$	1,142,903
Supplemental disclosure of non-cash investing and financing activities
Property and equipment purchases in accounts payable and accrued expenses	$	5,888		$	8,847
Equity issuance costs in accounts payable and accrued expenses	$	217		$	2,868
Leasehold improvements paid directly by landlord	$	13,015		$	—

	As of March 31,
Reconciliation to amounts within the condensed consolidated balance sheets	2022		2021
Cash and cash equivalents		683,906		1,126,059
Prepaid expenses and other current assets		4,783		—
Restricted cash		12,123		16,844
Cash, cash equivalents and restricted cash at end of period	$	700,812	$	1,142,903

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

5

CRISPR Therapeutics AG

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP.

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company views its operations and manages its business in one operating segment, which is the business of discovering, developing and commercializing therapies derived from or incorporating genome-editing technology. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position and results of operations for the three-month interim periods ended March 31, 2022 and 2021.

The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2021, which are contained in the 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on February 15, 2022.

Beginning in the first quarter of 2022, collaboration costs under the Vertex Agreements accounted for under ASC 808, Collaborative Agreements, or ASC 808, are presented within “collaboration expense, net” in the condensed consolidated statements of operations and comprehensive loss. As a result, collaboration costs under the Vertex Agreements accounted for under ASC 808 for the period ending Mach 31, 2021 have been reclassified to conform to the current presentation. No subtotals in the prior interim period's consolidated condensed financial statements were impacted. Refer to Note 7 to these condensed consolidated financial statements for further discussion on the Vertex Agreements.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates, which include, but are not limited to, revenue recognition, equity-based compensation expense and reported amounts of expenses during the period. Significant estimates in these consolidated financial statements have been made in connection with revenue recognition and equity-based compensation expense. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Changes in estimates are reflected in reported results in the period in which they become known.

Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2022 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s 2021 Annual Report on Form 10-K filed with the SEC on February 15, 2022.

New Accounting Pronouncements – Recently Adopted

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the adoption of recently issued standards have or may have a material impact on its consolidated financial statements and disclosures.

6

2. Marketable Securities

The following table summarizes cash equivalents and marketable securities held at March 31, 2022 and December 31, 2021 (in thousands), which are recorded at fair value. The table below excludes $138.8 million and $405.6 million of cash at March 31, 2022 and December 31, 2021, respectively.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
March 31, 2022
Cash equivalents:
Money market funds	$	416,688	$	—	$	—		$	416,688
Corporate debt securities		11,827		—		(3	)		11,824
Certificates of deposit		—		—		—			—
Commercial paper		116,606		1		(4	)		116,603
Total cash equivalents		545,121		1		(7	)		545,115
Marketable securities:
U.S. Treasury securities		12,126		—		(269	)		11,857
Corporate debt securities		1,166,163		3		(15,982	)		1,150,184
Certificates of deposit		57,631		—		—			57,631
Government-sponsored enterprise securities		13,299		—		(236	)		13,063
Commercial paper		305,033		5		(418	)		304,620
Total marketable securities		1,554,252		8		(16,905	)		1,537,355
Total cash equivalents and marketable securities	$	2,099,373	$	9	$	(16,912	)	$	2,082,470
December 31, 2021
Cash equivalents:
Money market funds	$	507,386	$	—	$	—		$	507,386
Corporate debt securities		—		—		—			—
Certificates of deposit		—		—		—			—
Commercial paper		9,997		—		(1	)		9,996
Total cash equivalents		517,383		—		(1	)		517,382
Marketable securities:
U.S. Treasury securities		16,238		6		(52	)