PRECISION BIOSCIENCES INC (DTIL)·Q3 2024 Earnings Summary

Executive Summary

• Q3 2024 revenue was $0.6M, down sharply year over year, with net loss of $16.4M and basic/diluted EPS of $(2.25) as collaboration revenues declined; cash, cash equivalents, and restricted cash were $121.3M, supporting runway into 2H 2026 .
• Precision received its first CTA approval for PBGENE-HBV in Moldova, opened the Phase 1 program, and began patient screening; management expects clinical data throughout 2025, positioning clinical progress as the primary stock-reaction catalyst .
• Operating discipline was evident: R&D fell $2.8M YoY due to lower PBGENE-HBV external costs, partially offset by PBGENE-3243 ramp; G&A decreased $0.8M YoY on lower consulting/tax/insurance .
• Wall Street consensus via S&P Global was unavailable for this period due to access limits; no estimate comparison included. If third-party sources are used, note they may reflect different EPS methodologies than company-reported GAAP [functions.GetEstimates error; S&P Global unavailable].
• Key forward drivers: multi-country Phase 1 (ELIMINATE‑B) scaling, potential additional CTA/IND approvals, and cadence of 2025 safety/efficacy disclosures for PBGENE-HBV .

What Went Well and What Went Wrong

• What Went Well

  • PBGENE-HBV advanced into first-in-human trials: “we have arrived at the next phase… as a single platform, clinical stage in vivo gene editing company,” and sites began screening patients in Moldova .
  • Strengthened clinical leadership ahead of hepatitis trial execution (SVP Clinical Development and Strategic Hepatitis Advisor appointments) .
  • Maintained cash runway into 2H 2026, sufficient to reach Phase 1 data readouts for multiple in vivo programs (HBV in 2025; PBGENE‑3243 IND/CTA in 2025) .

• What Went Wrong

  • Revenue collapsed to $0.6M from $13.1M YoY as Novartis and Prevail collaboration revenue recognition tapered post-conclusion of the Prevail agreement; operating loss widened to $(21.3)M .
  • Net loss from continuing operations increased to $16.4M vs $12.1M YoY due to lower collaboration revenues, despite reduced R&D and G&A .
  • Elevated share count (7.29M weighted-average vs 3.84M YoY) reflects prior financings and dilutive impact, a potential investor concern until clinical value is demonstrated .

Financial Results

Segment breakdown: Not applicable; revenues primarily from collaboration/deferred recognition, with no commercial product segmentation disclosed .

Guidance Changes

Earnings Call Themes & Trends

Note: No formal Q3 earnings call transcript was available; themes reflect Q3 press release and Nov 15 investor event transcript.

Management Commentary

• “With the clearance of our first clinical trial application (CTA) for our lead program, PBGENE-HBV, we have arrived at the next phase of Precision’s journey as a single platform, clinical stage in vivo gene editing company… leveraging our robust regulatory package to seek additional regulatory application approvals globally” — CEO Michael Amoroso .
• “Looking ahead, we expect to report phase 1 PBGENE-HBV data throughout 2025 while… submit an IND and/or CTA for… PBGENE-3243” — CEO Michael Amoroso .
• Investor Event: “Clinic, we are back in the clinic… we’ve already screened 2 patients in the last week” — CEO Michael Amoroso .
• “ARCUS… is the only clinical-stage gene editor designed to eliminate cccDNA… small size and single-component simplicity support safety and delivery” — Head of Gene Therapy Cassie Gorsuch .

Q&A Highlights

• Data cadence and disclosures: Management plans steady 2025 updates, prioritizing safety first, then efficacy (S‑antigen serology), with redosing and schedule optimization guiding timing .
• Global standard-of-care harmonization: Investigators emphasized tenofovir/entecavir consensus across guidelines, facilitating consistent entry criteria globally .
• Dosing strategy rationale: Multi-dose design to cumulatively increase editing; ability to escalate dose or add administrations subject to safety/biomarkers, aiming for sterilizing cure .
• Preclinical-to-clinic translation: NHP surrogate model set high bar (≈100 copies/cell); biodistribution and tolerability data underpin multi-dosing; no germline distribution observed .
• Enrollment considerations: Screen failure rates around ~20% mitigated via prescreening; Phase 1 target populations expected to be ample in real-world settings .

Estimates Context

• S&P Global consensus estimates for Q3 2024 were unavailable due to access limits; no official comparison is provided in this recap. Values retrieved from S&P Global were not accessible at time of reporting (S&P Global unavailable).
• Note: A third-party outlet reported a larger loss vs Zacks consensus, which may reflect different EPS definitions than GAAP; investors should anchor on company-reported GAAP and await S&P consensus for formal comparisons .

Key Takeaways for Investors

• Clinical inflection: First-in-human PBGENE-HBV is active with initial site(s) screening; multi-country expansion and 2025 safety/efficacy cadence are near-term catalysts .
• Revenue trough: Collaboration revenue recognition fell sharply as Novartis/Prevail contributions tapered, widening losses; focus shifts to value creation via clinical readouts .
• Disciplined spend: YoY declines in R&D and G&A reflect prioritization (HBV clinical, PBGENE‑3243 IND/CTA), with cash runway into 2H 2026 supporting execution .
• ARCUS differentiation: HDR insertion data, mitochondrial editing potential, and HBV dual-modality targeting reinforce platform versatility and competitive moat .
• Trial design pragmatism: Multi-dose, dose-escalation framework seeks to maximize cumulative editing toward functional/sterilizing cure; redosing decisions guided by biomarkers and safety .
• Partnered optionality: iECURE OTC program’s 2025 data and Novartis collaboration sustain external validation of ARCUS and potential future economics .
• Trading lens: Stock likely sensitive to regulatory site activations, early safety signals, and tangible biomarker movement (HBsAg decline), with narrative risk tied to tolerability and efficacy translation from preclinical models .