Beam Therapeutics Inc. 10-Q

Item 1. Financial Statements (Unaudited) Beam Therapeutics Inc. Condensed Consolidated Balance Sheets ( Unaudited ) (in thousands, except share and per share amounts) March 31, 2021 December 31, 2020 Assets Current assets: Cash and cash equivalents $ 97,241 $ 162,171 Marketable securities 406,238 137,500 Prepaid expenses and other current assets 11,101 8,650 Total current assets 514,580 308,321 Property and equipment, net 51,994 38,513 Restricted cash 14,840 14,840 Operating lease right-of-use assets 106,794 86,859 Other assets 5,033 3,144 Total assets $ 693,241 $ 451,677 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 7,983 $ 6,314 Accrued expenses and other current liabilities 14,976 18,487 Derivative liabilities 73,100 71,200 Current portion of lease liability 3,885 4,218 Current portion of equipment financing liability 2,142 2,118 Total current liabilities 102,086 102,337 Long-term lease liability 125,825 96,014 Long-term equipment financing liability 4,741 5,294 Contingent consideration liabilities 36,818 — Other liabilities 1,342 2,471 Total liabilities 270,812 206,116 Commitments and contingencies (See Note 7, Leases , Note 9, License agreements and Note 10, Collaboration and license agreements ) Stockholders’ equity: Preferred stock, $ 0.01 par value; 25,000,000 shares authorized, and no shares issued or outstanding at March 31, 2021 and December 31, 2020, respectively — — Common stock, $ 0.01 par value; 250,000,000 shares authorized, 62,528,153 and 58,446,016 issued, and 61,735,119 and 57,254,178 outstanding at March 31, 2021 and December 31, 2020, respectively 617 573 Additional paid-in capital 1,021,032 642,633 Accumulated other comprehensive loss ( 24 ) ( 9 ) Accumulated deficit ( 599,196 ) ( 397,636 ) Total stockholders’ equity 422,429 245,561 Total liabilities, redeemable convertible preferred stock, and stockholders’ equity $ 693,241 $ 451,677 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 Beam Therapeutics Inc. Condensed Consolidated Statements of Operations and Other Comprehensive Loss ( Unaudited ) (in thousands, except share and per share amounts) Three Months Ended March 31, 2021 2020 License revenue $ 6 $ 6 Operating expenses: Research and development 190,106 21,549 General and administrative 10,273 6,812 Total operating expenses 200,379 28,361 Loss from operations ( 200,373 ) ( 28,355 ) Other income (expense): Change in fair value of derivative liabilities ( 1,900 ) ( 2,700 ) Change in fair value of contingent consideration liabilities ( 305 ) — Interest and other income, net 1,018 597 Total other income (expense) ( 1,187 ) ( 2,103 ) Net loss $ ( 201,560 ) $ ( 30,458 ) Unrealized loss on marketable securities ( 15 ) ( 360 ) Comprehensive loss $ ( 201,575 ) $ ( 30,818 ) Reconciliation of net loss to net loss attributable to common stockholders: Net loss $ ( 201,560 ) $ ( 30,458 ) Accretion of redeemable convertible preferred stock to redemption value, including dividends on preferred stock — ( 1,277 ) Net loss attributable to common stockholders $ ( 201,560 ) $ ( 31,735 ) Net loss per common share attributable to common stockholders, basic and diluted $ ( 3.35 ) $ ( 1.03 ) Weighted-average common shares used in net loss per share attributable to common stockholders, basic and diluted 60,210,120 30,725,077 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 Beam Therapeutics Inc. Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity ( Unaudited ) (in thousands, except share amounts) Redeemable Convertible Preferred Stock Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders’ (Deficit) Shares Amount Shares Amount Capital Loss Deficit Equity Balance at December 31, 2019 130,616,784 $ 302,049 7,326,185 $ 73 $ 1,851 $ 16 $ ( 203,044 ) $ ( 201,104 ) Accretion of redeemable convertible preferred stock to redemption value — 1,277 — — ( 1,277 ) — — ( 1,277 ) Conversion of redeemable convertible preferred stock to common stock upon closing of initial public offering ( 130,616,784 ) ( 303,326 ) 29,127,523 291 303,035 — — 303,326 Issuance of common stock from initial public offering, net of issuance costs of $ 18.7 million — — 12,176,471 122 188,201 — — 188,323 Vesting of restricted common stock — — 387,866 4 ( 4 ) — — — Stock-based compensation — — — — 2,792 — — 2,792 Exercise of common stock options — — 59,305 1 151 — — 152 Other comprehensive loss — — — — — ( 360 ) — ( 360 ) Net loss — — — — — — ( 30,458 ) ( 30,458 ) Balance at March 31, 2020 — $ — 49,077,350 $ 491 $ 494,749 $ ( 344 ) $ ( 233,502 ) $ 261,394 3 Beam Therapeutics Inc. Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity - Continued ( Unaudited ) (in thousands, except share amounts) Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders’ Shares Amount Capital Loss Deficit Equity Balance at December 31, 2020 57,254,178 $ 573 $ 642,633 $ ( 9 ) $ ( 397,636 ) $ 245,561 Issuance of common stock from private placement, net of issuance costs of $ 8.0 million 2,795,700 28 251,977 — — 252,005 Issuance of common stock to acquire Guide 1,087,153 10 120,022 — — 120,032 Vesting of restricted common stock 398,804 4 ( 4 ) — — — Stock-based compensation — — 4,648 — — 4,648 Exercise of common stock options 199,284 2 1,756 — — 1,758 Other comprehensive loss — — — ( 15 ) — ( 15 ) Net loss — — — — ( 201,560 ) ( 201,560 ) Balance at March 31, 2021 61,735,119 $ 617 $ 1,021,032 $ ( 24 ) $ ( 599,196 ) $ 422,429 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Beam Therapeutics Inc. Condensed Consolidated Statements of Cash Flows ( Unaudited ) (in thousands) Three Months Ended March 31, 2021 2020 Operating activities Net loss $ ( 201,560 ) $ ( 30,458 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,398 1,100 Amortization of investment discount (premiums) 15 ( 129 ) In-process research and development charge 154,953 — Stock-based compensation expense 4,648 2,792 Change in operating lease right-of-use assets 2,359 952 Non-cash research and development license expense, net — 264 Change in fair value of derivative liabilities 1,900 2,700 Change in fair value of contingent consideration liabilities 305 — Other ( 976 ) — Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 2,365 ) ( 3,559 ) Other long-term assets ( 185 ) ( 77 ) Accounts payable ( 666 ) ( 471 ) Accrued expenses and other liabilities ( 4,458 ) 378 Operating lease liabilities 6,111 ( 879 ) Other long-term liabilities ( 57 ) ( 6 ) Net cash used in operating activities ( 38,578 ) ( 27,393 ) Investing activities Purchases of property and equipment ( 11,478 ) ( 3,046 ) Purchases of marketable securities ( 289,218 ) ( 117,719 ) Maturities of marketable securities 20,450 44,723 Net cash acquired from Guide 620 — Purchase of long-term investment — ( 750 ) Net cash used in investing activities ( 279,626 ) ( 76,792 ) Financing activities Proceeds from initial public offering, net of underwriting discount — 192,510 Proceeds from offering of common stock 260,000 — Payment of equity offering costs ( 7,955 ) ( 958 ) Proceeds from equipment financings — 1,625 Repayment of equipment financings ( 529 ) ( 315 ) Proceeds from exercise of stock options 1,758 152 Net cash provided by financing activities 253,274 193,014 Net change in cash, cash equivalents and restricted cash ( 64,930 ) 88,829 Cash, cash equivalents and restricted cash—beginning of period 177,011 50,553 Cash, cash equivalents and restricted cash—end of period $ 112,081 $ 139,382 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Beam Therapeutics Inc. Condensed Consolidated Statements of Cash Flows - Continued ( Unaudited ) (in thousands) Three Months Ended March 31, 2021 2020 Supplemental disclosure of cash flow information: Cash paid for interest $ 159 $ 134 Supplemental disclosure of noncash investing and financing activities: Conversion of redeemable convertible preferred stock to common stock upon closing of the initial public offering $ — $ 303,326 Property and equipment additions in accounts payable and accrued expenses $ 6,671 $ 1,032 Operating lease liabilities arising from obtaining right-of-use assets $ 23,366 $ 4,032 Equity issuance costs in accounts payable and accrued expenses $ 250 $ 707 Contingent consideration liabilities assumed in asset acquisition $ 36,513 $ — Fair value of equity instruments issued in connection with asset acquisition $ 120,032 $ — Accretion of redeemable convertible preferred stock to redemption value, including dividends on preferred stock $ — $ 1,277 The accompanying notes are an integral part of these condensed consolidated financial statements 6 Beam Therapeutics Inc. Notes to Condensed Consolidated Financial Statements ( Unaudited ) 1. Nature of the business and basis of presentation Organization Beam Therapeutics Inc. (the “Company” or “Beam”) is a biotechnology company committed to establishing the leading, fully integrated platform for precision genetic medicines. Beam’s vision is to provide life-long cures to patients suffering from genetic diseases. The Company was incorporated on January 25, 2017 (Inception) as a Delaware corporation and began operations in July 2017. Its principal offices are in Cambridge, Massachusetts. In February 2021, the Company entered into an Agreement and Plan of Merger (“the Guide Merger Agreement”) to acquire Guide Therapeutics, or Guide. Pursuant to the Guide Merger Agreement, the Company paid Guide’s former stockholders and optionholders upfront consideration in an aggregate amount of $ 120.0 million, excluding customary purchase price adjustments, in shares of its common stock, based upon the volume-weighted average price of the common stock over the ten trading day period ending on February 19, 2021. In addition, Guide’s former stockholders and optionholders will be eligible to receive up to an additional $ 100.0 million in technology and $ 220.0 million in product milestone payments, payable in the Company’s common stock. Liquidity and capital resources Since its inception, the Company has devoted substantially all of its resources to building its base editing platform and advancing development of its portfolio of programs, establishing and protecting its intellectual property, conducting research and development activities, organizing and staffing the Company, business planning, raising capital and providing general and administrative support for these operations. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, technical risks associated with the successful research, development and manufacturing of product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Current and future programs will require significant research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. In February 2020, the Company completed its initial public offering, or IPO, in which the Company issued and sold 12,176,471 shares of its common stock, including 1,588,235 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 17.00 per share, for aggregate gross proceeds of $ 207.0 million. The Company received approximately $ 188.3 million in net proceeds after deducting underwriting discounts and offering expenses payable by the Company. In connection with the IPO, all outstanding shares of the Company’s redeemable convertible preferred stock converted into 29,127,523 shares of its common stock. In October 2020, the Company issued and sold 5,750,000 shares of its common stock, including 750,000 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 23.50 per share, for aggregate gross proceeds of $ 135.1 million. The Company received approximately $ 126.6 million in net proceeds after deducting underwriting discounts and offering expenses payable by the Company. On January 16, 2021, the Company entered into a Securities Purchase Agreement with certain purchasers, pursuant to which the Company agreed to sell and issue to the purchasers, in a private placement, shares of common stock of the Company. The closing of the private placement occurred on January 21, 2021. The Company issued and sold 2,795,700 shares of its common stock at a purchase price of $ 93.00 per share for aggregate gross proceeds of $ 260.0 million, before deducting fees to the placement agents and other offering expenses payable by the Company (See Note 11, Preferred stock and common stock ). The Company received approximately $ 252.0 million in net proceeds after deducting fees to the placement agents and offering expenses payable by the Company. Since its inception, the Company has incurred substantial losses and had an accumulated deficit of $ 599.2 million as of March 31, 2021. The Company expects to generate operating losses and negative operating cash flows for the foreseeable future. The Company expects that its cash, cash equivalents, and marketable securities as of March 31, 2021 of $ 503.5 million will be sufficient to fund its operations for at least the next twelve months from the date of issuance of these financial statements. The Company will need additional financing to support its continuing operations and pursue its growth strategy. Until such time as the Company can generate significant revenue from product sales, if ever, it expects to finance its operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. The Company may be unable to raise additional funds or enter into such other agreements when needed on favorable terms or at all. The inability to raise capital as and when needed would have a negative impact on the Company’s financial condition and its ability to pursue its business strategy. The Company will need to generate significant revenue to achieve profitability, and it may never do so. 7 COVID-19-related significant risks and uncertainties With the ongoing concern related to the COVID-19 pandemic during 2020 and in the first three months of 2021, the Company has maintained and expanded its business continuity plans to address and mitigate the impact of the COVID-19 pandemic on its business. In March 2020, to protect the health of its employees, and their families and communities, the Company restricted access to its offices to personnel who performed critical activities that must be completed on-site, limited the number of such personnel that could be present at its facilities at any one time, and requested that most of its employees work remotely. In May 2020, as certain states eased restrictions, the Company established new protocols to better allow its full laboratory staff access to the Company’s facilities. These protocols included several shifts working over a seven-day-week protocol. The Company expects to continue incurring additional costs to ensure it adheres to the guidelines instituted by the Centers for Disease Control and Prevention, or CDC, and to provide a safe working environment to its onsite employees. The extent to which the COVID-19 pandemic impacts the Company’s business, its corporate development objectives, results of operations and financial condition, and the value of and market for its common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements, and the effectiveness of actions taken globally to contain and treat the disease. Disruptions to the global economy, disruption of global healthcare systems, and other significant impacts of the COVID-19 pandemic could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects. While the COVID-19 pandemic did not significantly impact the Company’s business or results of operations during the three months ended March 31, 2021, the length and extent of the pandemic, its consequences, and containment efforts will determine the future impact on the Company’s operations and financial condition. 2. S ummary of significant accounting policies The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2020, and notes thereto, which are included in the Company’s Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on March 15, 2021. Since the date of those financial statements, there have been no material changes to Beam’s significant accounting policies except as noted below. Basis of presentation The accompanying condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles, or GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification, or ASC, and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB. Principles of consolidation The accompanying condensed consolidated financial statements include the results of operations of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses, the determination of the fair value equity instruments and intangible assets acquired in an asset acquisition, and the disclosure of contingent assets and liabilities as of and during the reporting period. The Company bases its estimates and assumptions on historical experience, when available, and on various factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. Actual results could differ from these estimates. Cash, cash equivalents, and restricted cash Cash and cash equivalents consist of standard checking accounts, money market accounts, and all highly liquid investments with a remaining maturity of three months or less at the date of purchase. Restricted cash represents collateral provided for letters of credit issued as security deposits in connection with the Company’s leases of its corporate and manufacturing facilities. 8 The following table reconciles cash, cash equivalents, and restricted cash reported within the Company’s condensed consolidated balance sheets to the total of the amounts shown in the condensed consolidated statements of cash flows (in thousands): March 31, 2021 March 31, 2020 Cash and cash equivalents $ 97,241 $ 126,050 Restricted cash 14,840 13,332 Total cash, cash equivalents, and restricted cash $ 112,081 $ 139,382 Asset Acquisitions In 2018, the Company adopted ASU 2017-01, Business Combinations , or ASU 2017-01, which clarified the definition of a business. The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs, and the consideration is allocated to the items acquired based on a relative fair value methodology. Goodwill is not recognized in asset acquisitions. In an asset acquisition, the cost allocated to acquire in-process research and development with no alternative future use is charged to research and development expense at the acquisition date. At the time of acquisition, the Company determines if a transaction should be accounted for as a business combination or acquisition of assets. Contingent Consideration Liabilities The estimated fair value of contingent consideration liabilities, initially measured and recorded on the acquisition date, are considered to be a Level 3 instrument and are reviewed quarterly, or whenever events or circumstances occur that indicate a change in fair value. The contingent consideration liabilities are recorded at fair value at the end of each reporting period with changes in estimated fair values recorded in other income (expense) in the condensed consolidated statements of operations. The estimated fair value is determined based on probability adjusted discounted cash flow models that include significant estimates and assumptions pertaining to technology and product development. Significant changes in any of the probabilities of success would result in a significantly higher or lower fair value measurement. Significant changes in the probabilities as to the periods in which milestones will be achieved would result in a significantly lower or higher fair value measurement. Recent accounting pronouncements In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements , or ASU 2018-18, which clarifies certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer. ASU 2018-18 became effective for the Company on January 1, 2021 . As such the Company adopted ASU 2018-18 effective January 1, 2021 using a retrospective adoption date of January 1, 2018 when the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and its related amendments, or, collectively, ASC 606 . The adoption of ASU 2018-18 did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , or ASU 2016-13, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes may result in earlier recognition of credit losses. The Company adopted ASU 2016-13 on January 1, 2021 . The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements. 9 3. P roperty and equipment, net Property and equipment consist of the following (in thousands): March 31, 2021 December 31, 2020 Lab equipment $ 20,506 $ 17,201 Leasehold improvements 12,706 12,706 Furniture and fixtures 1,080 1,078 Computer equipment 576 547 Construction in process 27,379 15,880 Total property and equipment 62,247 47,412 Less accumulated depreciation ( 10,253 ) ( 8,899 ) Property and equipment, net $ 51,994 $ 38,513 Depreciation expense for the three months ended March 31, 2021 and 2020 was $ 1.4 million and $ 1.1 million, respectively. 4. f air value of financial instruments The Company’s financial instruments that are measured at fair value on a recurring basis consist of cash equivalents, marketable securities, contingent consideration liabilities related to the Guide Merger and success payment derivative liabilities pursuant to the license agreement between Harvard University, or Harvard, and the Company, or the Harvard License Agreement, and the license agreement between Broad Institute of MIT and Harvard, or Broad Institute, and Blink, or the Broad License Agreement. The Company also holds investments in privately issued corporate equity securities, which are accounted for as investments in equity securities. These investments do not have readily determinable fair values and the Company values such investments based on the cost of the equity securities adjusted for observable market transactions or impairments, if any. As of March 31, 2021, the Company held $ 3.6 million of investments in privately issued corporate equity securities. During the three months ended March 31, 2021, as a result of an observable market transaction (Level 2), the Company adjusted the value of one of its investments and recorded an unrealized gain of $ 1.0 million in interest and other income (expense), net in the Company’s condensed consolidated statements of operations and other comprehensive loss. The following table sets forth the fair value of the Company’s financial assets and liabilities by level within the fair value hierarchy at March 31, 2021 (in thousands): Carrying amount Fair value Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 62,831 $ 62,831 $ 62,831 $ — $ — Commercial paper 33,054 33,053 — 33,053 — Marketable securities: Commercial paper 377,611 377,611 — 377,611 — Corporate notes 23,623 23,623 — 23,623 — Government securities 5,004 5,004 — 5,004 — Total assets $ 502,123 $ 502,122 $ 62,831 $ 439,291 $ — Liabilities Success payment liability – Harvard $ 36,500 $ 36,500 $ — $ — $ 36,500 Success payment liability – Broad Institute 36,600 36,600 — — 36,600 Contingent consideration liability - Technology 29,648 29,648 $ — $ — $ 29,648 Contingent consideration liability - Product 7,170 7,170 — — 7,170 Total liabilities $ 109,918 $ 109,918 $ — $ — $ 109,918 10 The following table sets forth the fair value of the Company’s financial assets and liabilities by level within the fair value hierarchy at December 31, 2020 (in thousands): Carrying amount Fair value Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 88,259 $ 88,259 $ 88,259 $ — $ — Commercial paper 60,494 60,497 — 60,497 — Corporate notes 12,314 12,308 — 12,308 — Marketable securities: Commercial paper 113,622 113,622 — 113,622 — Corporate notes 7,836 7,836 — 7,836 — U.S. Treasury securities 11,009 11,009 — 11,009 — Government securities 5,033 5,033 — 5,033 — Total assets $ 298,567 $ 298,564 $ 88,259 $ 210,305 $ — Liabilities Success payment liability – Harvard $ 35,500 $ 35,500 $ — $ — $ 35,500 Success payment liability – Broad Institute 35,700 35,700 — — 35,700 Total liabilities $ 71,200 $ 71,200 $ — $ — $ 71,200 Cash equivalents – Money market funds included within cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. Commercial paper and corporate notes are classified within Level 2 of the fair value hierarchy because pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Marketable securities – The Company measures its marketable securities at fair value on a recurring basis and classify those instruments within Level 2 of the fair value hierarchy. Marketable securities are classified within Level 2 of the fair value hierarchy because pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined using models or other valuation methodologies. Success Payment Liabilities – As discussed further in Note 9, License agreements , the Company is required to make payments determined based upon the achievement of specified multiples of the initial weighted average value of the Company’s Series A Preferred Stock, or, subsequent to the IPO, the market value of Beam’s common stock, at specified valuation dates. The Company’s liability for success payments under the Harvard License Agreement and Broad License Agreement are carried at fair value. To determine the estimated fair value of the success payment liability, the Company uses a Monte Carlo simulation methodology, which models the future movement of stock prices based on several key variables. The following variables were incorporated in the calculation of the estimated fair value of the Harvard and Broad Institute success payment liabilities: Harvard Broad Institute March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Fair value of common stock (per share) $ 80.04 $ 81.64 $ 80.04 $ 81.64 Expected volatility 76 % 74 % 75 % 74 % Expected term (years) 0.10-8.25 0.35-8.49 0.10-9.11 0.35-9.36 The computation of expected volatility was estimated using available information about the historical volatility of stocks of similar publicly traded companies for a period matching the expected term assumption. In addition, the Company incorporated the estimated number, timing, and probability of valuation measurement dates in the calculation of the success payment liability. The following table reconciles the change in the fair value of success payment liabilities based on Level 3 inputs (in thousands): Three Months Ended March 31, 2021 Harvard Broad Institute Total Balance at December 31, 2020 $ 35,500 $ 35,700 $ 71,200 Change in fair value 1,000 900 1,900 Balance at March 31, 2021 $ 36,500 $ 36,600 $ 73,100 11 Contingent Consideration Liabilities – As discussed further in N ote 8, Guide Acquisition , under the Guide Merger Agreement, Guide’s former stockholders and optionholders are eligible to receive up to an additional $ 100.0 million in technology and $ 220.0 million in product milestone payments, payable in the Company’s common stock valued using the volume-weighted average price of the Company’s stock over the ten - day trading period ending two trading days prior to the date on which the applicable milestone is achieved. As these milestones are payable in the Company’s common stock, the milestone payments result in liability classification under ASC 480, Distinguishing Liabilities from Equity . These contingent consideration liabilities are carried at fair value which was estimated by applying a probability-based model, which utilized inputs that were unobservable in the market. These contingent consideration liabilities are classified within Level 3 of the fair value hierarchy. The fair value of the contingent consideration liabilities as of March 31, 2021 is $ 36.8 million. The following table reconciles the change in fair value of the contingent consideration liabilities based on level 3 inputs (in thousands): Three Months Ended March 31, 2021 Technology Milestones Product Milestones Total Balance at February 23, 2021 (inception) $ 29,403 $ 7,110 $ 36,513 Change in fair value 245 60 305 Balance at March 31, 2021 $ 29,648 $ 7,170 $ 36,818 The following variables were incorporated in the calculation of the estimated fair value of the Guide technology and product contingent consideration liabilities: Technology Milestones Product Milestones March 31, 2021 March 31, 2021 Discount Rate 8.50 % 8.50 % Probability of Payment 10-60% 2-15% Projected Year of Payment 2021-2022 2023-2027 5. Marketable securities The following table summarizes the Company’s marketable securities held at March 31, 2021 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 377,625 $ 14 $ ( 28 ) $ 377,611 Corporate notes 23,633 — ( 10 ) 23,623 Government securities 5,004 — — 5,004 Total $ 406,262 $ 14 $ ( 38 ) $ 406,238 The following table summarizes the Company’s marketable securities held at December 31, 2020 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 113,628 $ 11 $ ( 17 ) $ 113,622 Corporate notes 7,839 2 ( 5 ) 7,836 U.S Treasury securities 11,009 — — 11,009 Government securities 5,033 — — 5,033 Total $ 137,509 $ 13 $ ( 22 ) $ 137,500 The amortized cost of marketable securities is adjusted for amortization of premiums and accretion of discounts to maturity. At March 31, 2021, the balance in accumulated other comprehensive loss was comprised solely of activity related to marketable securities. There were no realized gains or losses recognized on the sale or maturity of marketable securities for the three months ended March 31, 2021 and 2020 and, as a result, the Company did not reclassify any amounts out of accumulated other comprehensive loss for the same periods. 12 The Company holds debt securities of companies with high credit quality and has determined that there was no material change in the credit risk of any of its debt securities. The contractual maturity date s of all the investments are less than one year. 6. Accrued expenses and other current liabilities Accrued expenses and other current liabilities consist of the following (in thousands): March 31, 2021 December 31, 2020 Professional fees $ 3,246 $ 1,948 Other research costs 3,059 2,423 Process development and manufacturing costs 2,042 2,272 Employee compensation and related benefits 1,821 7,591 Other 4,808 4,253 Total $ 14,976 $ 18,487 7. Leases Operating leases The Company’s operating leases are as follows: • A February 2018 lease for 38,203 square feet of office and laboratory space, which commenced in March 2018 and terminates in September 2028 . The lease is subject to fixed-rate rent escalations and provided for $ 6.1 million in tenant improvements and a term extension option, which was not reasonably certain of exercise. • An October 2018 lease for laboratory space, which commenced in April 2019 and was amended in March 2020 and April 2020 . The amended lease commenced in April 2020 and terminates in December 2025 . The amended lease is subject to fixed-rate rent escalations and provides an option to extend the lease for two additional two-year periods through December 31, 2029, which were not reasonably certain of being exercised. Upon commencement of the March 2020 amendment, the Company recorded an operating lease right-of-use, or ROU, asset and a lease liability of $ 4.2 million. Upon commencement of the April 2020 amendment, the Company recorded an operating lease ROU asset and a lease liability of $ 1.8 million. • Leases in June and July 2019 for office and laboratory space, both of which commenced in October 2019 and terminate in December 2021 . The leases are subject to fixed-rate rent escalations. • An April 2019 lease for office and laboratory space to be built, with the rent payments for the first phase expected to commence at the earliest in the second half of 2021 and the rent payments for the second phase expected to commence at the earliest in the first half of 2022. The lease will terminate 12 years from the second phase rent commencement date. The lease is subject to fixed-rate rent escalations and provides for $ 23.4 million in tenant improvements and the option to extend the lease for two terms of five years each, which are not reasonably certain of exercise . The Company determined that it is the accounting owner of all tenant improvements. Upon executing the lease, the Company made a security deposit of $ 11.8 million in the form of a letter of credit, which is included in restricted cash as of March 31, 2021 and December 31, 2020. Upon commencement of the first phase of this lease in October 2020, the Company recorded an operating lease ROU asset of $ 66.8 million and a lease liability of $ 68.8 million and upon commencement of the second phase of this lease in January 2021, the Company recorded an operating lease ROU asset of $ 22.0 million and a corresponding lease liability of $ 23.0 million. The following table summarizes operating lease costs as well as sublease income (in thousands): Three Months Ended March 31, 2021 2020 Operating lease costs $ 4,558 $ 1,598 Variable lease costs 210 288 Total $ 4,768 $ 1,886 The following table summarizes the lease term and discount rate for operating leases: March 31, 2021 December 31, 2020 Weighted-average remaining lease term (years) 11.7 11.5 Weighted-average discount rate 7.1 % 7.4 % 13 The following table summarizes the lease costs for amounts included in the measurement of lease liabilities (in thousands): Three Months Ended March 31, 2021 2020 Operating cash flows used for operating leases $ 1,685 $ 1,525 Operating lease liabilities arising from obtaining ROU assets 23,366 4,032 At March 31, 2021, the future minimum lease payments for the Company’s operating leases for each of the years ending December 31 were as follows (in thousands): Remainder of 2021 $ 7,943 2022 16,121 2023 17,231 2024 17,756 2025 18,228 Thereafter 133,945 Undiscounted lease payments 211,224 Less: imputed interest ( 81,514 ) Total operating lease liabilities $ 129,710 In August 2020, the Company entered into a lease agreement with Alexandria Real Estate Equities, Inc. to build a 100,000 square foot manufacturing facility in Research Triangle Park, North Carolina intended to support a broad range of clinical programs. The lease has a term of fifteen years following the commencement date and provides the Company the option to extend the lease term for two five-year terms. It is subject to fixed rate escalation increases and also provides up to $ 20.0 million for reimbursement of tenant improvements. As the lease had not commenced as of March 31, 2021 , the Company has not recorded an operating lease ROU asset or lease liability for this lease in the accompanying condensed consolidated balance sheets. The lease payments are subject to adjustment following the determination of the total project costs of the landlord. The initial estimate of the minimum amount of undiscounted lease payments due under this lease is $ 63.9 million. The Company expects to invest up to $ 83.0 million over a five-year period and anticipates that the facility will be operational by the first quarter of 2023. Further, the tabular disclosure of minimum lease payments above does not include payments due under this lease . 8. Guide Acquisition On February 23, 2021 , the Company entered into the Guide Merger Agreement. Under the Guide Merger Agreement, the Company paid Guide’s former stockholders and optionholders upfront consideration in an aggregate amount of $ 120.0 million, excluding customary purchase price adjustments and closing costs, in shares of the Company’s common stock, based upon the volume-weighted average price of the Company’s stock over the ten trading day period ending on February 19, 2021. Pursuant to the Guide Merger Agreement, Beam acquired all of the issued and outstanding shares of Guide. The Company issued a total of 1,087,153 shares of its common stock valued at $ 120.0 million in connection with the upfront payments to Guide’s former stockholders and optionholders. The Guide transaction resulted in the acquisition of certain know-how and intellectual property assets related to Guide’s proprietary in vivo LNP screening technology and its library of lipids and lipid nanoparticle formulations identified using the screening technology. Management determined that the acquired assets do not meet the definition of a business pursuant to ASC 805, Business Combinations , as substantially all of the fair value of the acquired assets is concentrated into one identifiable asset, the LNP screening technology and associated lipid library. As of the Merger Agreement Date, the asset acquired had no alternative future use and had not reached a stage of technological feasibility. As a result, all share-based and cash payment obligations have been recorded as research and development expense in the accompanying condensed consolidated statements of operations and other comprehensive loss in the amount of $ 155.0 million. The total transaction price was allocated to the assets acquired and liabilities assumed on a relative fair value basis 14 In addition, Guide’s former stockholders and optionholders will be eligible to receive up to an additional $ 100.0 million in technology and $ 220.0 million in product milestone payments, payable in the Company’s common stock valued using the volume-weighted average price of the Company’s stock over the ten-day trading period ending two trading days prior to the date on which the applicable milestone is received. The Company determined that all future technology and product milestone payments are classified as contingent consideration liabilities under ASC 480 and therefore the Company recorded a liability for these milestones as of the Guide Merger Agreement Date at fair value of $ 36.5 million. These contingent consideration liabilities will be remeasured at fair value each financial reporting period, with the resulting impact reflected in the Company’s condensed consolidated statements of operations and other comprehensive loss, presented within other income (expense) The transaction price was determined and allocated as follows (in thousands): Transaction price Fair value of equity instruments issued $ 120,032 Technology and product contingent consideration liabilities 36,513 Transaction costs 2,531 Total transaction price $ 159,076 Transaction price allocated In-process research and development $ 154,953 Cash acquired 3,151 Prepaid expenses and other assets 264 Property and equipment 1,835 Assembled workforce 300 Other liabilities assumed ( 1,427 ) Total transaction price $ 159,076 9. License agreements Harvard license agreement Under the terms of the Harvard License Agreement, Harvard is entitled to receive success payments determined based upon the achievement of specified multiples of the initial weighted average value of the Company’s Series A Preferred Stock at specified valuation dates. The success payments range from $ 5.0 million to a maximum of $ 105.0 million and have valuation multiples that range from 5 times to 40 times the initial weighted average value of the Series A Preferred Stock. Subsequent to the Company’s February 2020 IPO, the amount of success payments is based on market value of Beam’s common stock. The Company is required to make success payments to Harvard during a period of time, or the Harvard Success Payment Period, which has been determined to be the later of (1) the ninth anniversary of the Harvard License Agreement or (2) the earlier of (a) the twelfth anniversary of the Harvard License Agreement and (b) the third anniversary of the first date on which a licensed product receives regulatory approval in the United States. During the Harvard Success Payment Period, the Company will perform a calculation of any amounts owed to Harvard on each rolling 90-day period, commencing one year after the Company’s IPO. The following table summarizes the Company’s success payment liability for Harvard (in thousands): March 31, 2021 December 31, 2020 Harvard success payment liability $ 36,500 $ 35,500 The following table summarizes the expense resulting from the change in the fair value of the success payment liability for Harvard (in thousands): Three Months Ended March 31, 2021 2020 Change in fair value of Harvard success payment liability $ 1,000 $ 1,300 As of March 31, 2021, no success payments have been paid or are due to Harvard. 15 In May 2021, the first success payment measurement occurred and amounts due to Harvard were calculated to be $ 15.0 million. The Company has elected to make the payment in shares of the Company’s common stock, and thereby expects to issue shares of the Company’s common stock to settle this liability in June 2021 . The annual maintenance fee under the Harvard License Agreement is recorded as research and development expense. Patent prosecution costs are recognized as expense in the period incurred. As of March 31, 2021, the Company determined that product development and regulatory approval milestones and royalties under the Harvard License Agreement were not probable and, as such, no amounts were recognized for the three months ended March 31, 2021. Broad license agreement Under the terms of the Broad License Agreement, Broad Institute is entitled to receive success payments, determined based upon the achievement of specified multiples of the initial weighted average value of Series A Preferred Stock at specified valuation dates. The success payments range from $ 5.0 million to a maximum of $ 105.0 million and have valuation multiples that range from 5 times to 40 times the initial weighted average value of the Series A Preferred Stock. Subsequent to the Company’s February 2020 IPO, the amount of success payments is based on market value of Beam’s common stock. The Company is required to make success payments to Broad Institute during a period of time, or the Broad Success Payment Period, which has been determined to be the earliest of (1) the twelfth anniversary of the Broad License Agreement, or (2) the third anniversary of the first date on which a licensed product receives regulatory approval in the United States. During the Broad Success Payment Period, the Company will perform a calculation of any amounts owed to Broad Institute on each rolling 90-day period, commencing one year after the Company’s IPO . The following table summarizes the Company’s success payment liability for Broad Institute (in thousands): March 31, 2021 December 31, 2020 Broad Institute success payment liability $ 36,600 $ 35,700 The following table summarizes the expense resulting from the change in the fair value of the success payment liability for Broad Institute (in thousands): Three Months Ended March 31, 2021 2020 Change in fair value of Broad Institute success payment liability $ 900 $ 1,400 As of March 31, 2021, no success payments have been paid or are due to Broad Institute. In May 2021, the first success payment measurement occurred and amounts due to Broad Institute were calculated to be $ 15.0 million. The Company has elected to make the payment in shares of the Company’s common stock, and thereby expects to issue shares of the Company’s common stock to settle this liability in June 2021 . The annual maintenance fee under the Broad License Agreement is recorded as research and development expense. Patent prosecution costs are recognized as expense in the period incurred. As of March 31, 2021, the Company determined that product development and regulatory approval milestones and royalties under the Broad License Agreement were not probable and, as such, no amounts were recognized for the three months ended March 31, 2021. Editas license agreement In May 2018, the Company entered into a license agreement, or the Editas License Agreement, with Editas Medicine, Inc., or Editas. Pursuant to the Editas License Agreement, Editas granted to the Company licenses and options to acquire licenses to certain intellectual property rights owned or controlled by Editas, for specified uses. The annual maintenance fees under the Editas License Agreement are recorded as research and development expense. Annual patent costs are expensed as incurred. In addition, the Company is required to make certain development, regulatory and commercial milestone payments to Editas upon the achievement of specified milestones. As of March 31, 2021, the triggering of these milestone payments was not probable and, as such, no amounts were recognized for the three months ended March 31, 2021. 16 Bio Palette license agreement In March 2019, the Company entered into a license agreement with Bio Palette Co., Ltd., or Bio Palette, pursuant to which Beam received an exclusive (even as to Bio Palette), sublicensable license under certain patent rights related to base editing owned or controlled by Bio Palette to exploit products for the treatment of human disease throughout the world, but excluding products in the microbiome field in Asia (the “Bio Palette License Agreement”). In addition, the Company granted Bio Palette an exclusive (even as to Beam) license under certain patent rights related to base editing and gene editing owned or controlled by the Company to exploit products in the microbiome field in Asia. Each party to the agreement retains non-exclusive rights to develop and manufacture products in the microbiome field worldwide for the sole purpose of exploiting those products in its own territory. Each party agrees to certain coordination obligations in the microbiome field if either party determines not to exploit their rights in such field. Unless earlier terminated, the Bio Palette License Agreement will expire on a licensed product-by-licensed product and country-by-country basis upon the expiration of the applicable royalty term for each such licensed product and country. Upon the issuance of a certain Bio Palette patent in the United States in June 2020, the Company made a milestone payment of $ 2.0 million and, in July 2020, issued to Bio Palette 175,000 shares of its common stock valued at $ 0.3 million. As of March 31, 2020, the Company determined that the patent was probable of issuance and recognized $ 2.3 million as research and development expense for the three months ended March 31, 2020. Management concluded that the licenses acquired from each transaction above did not meet the accounting definition of a business as inputs, but no processes or outputs were acquired with the licenses, and the licensed technology had not achieved technological feasibility. As the inputs that were acquired along with the licenses do not constitute a “business,” the transactions have been accounted as asset acquisitions. As of the date of each License Agreement, the assets acquired had no alternative future use and the assets had not reached a stage of technological feasibility. As a result, all share-based and cash payment obligations have been recorded as research and development expense in the accompanying consolidated statements of operations and other comprehensive loss. 10. Collaboration and license agreements Prime Medicine In September 2019, the Company entered into a collaboration and license agreement with Prime Medicine Inc., or Prime Medicine, to research and develop a novel gene editing technology developed by one of Beam’s founders. Under the terms of the agreement, the Company granted Prime Medicine a non-exclusive license to certain of its CRISPR technology (including Cas12b), delivery technology and certain other technology controlled by Beam to develop and commercialize gene editing products for the treatment of human diseases. The Company is not currently using the intellectual property licensed from Prime Medicine in any of its current programs, but it is required to use commercially reasonable efforts to develop new product candidates using the intellectual property licensed from Prime Medicine. Additionally, each party granted to the other party certain exclusive and non-exclusive licenses to certain technology developed after the effective date of the agreement and controlled by the granting party or jointly owned by the parties. Each party has an obligation to assign rights in certain technology developed under the collaboration to the other party. Beam had an obligation to issue $ 5.0 million in shares of its common stock to Prime Medicine, and Prime Medicine had an obligation to issue 5,000,000 shares of its common stock to Beam, should Beam elect to extend the collaboration beyond one year . In September 2020, the Company elected to continue the collaboration and, in October 2020, issued 200,307 shares of the Company’s common stock to Prime Medicine. The Company recognized $ 5.5 million, which represented the fair value of Beam’s common stock issued to Prime Medicine, as research and development expense during the year ended December 31, 2020. Additionally, in October 2020, the Company received 5,000,000 shares of Prime Medicine’s common stock and recognized $ 0.1 million as an offset to research and development expense for the year ended December 31, 2020. Additionally, the Company provided immaterial interim management and startup services to Prime Medicine through March 2021. As of March 31, 2021, the Company determined that future milestones and royalties under the agreement were not probable of recognition. Verve In April 2019, Beam entered into a collaboration and license agreement, or the Verve Agreement, with Verve Therapeutics, Inc., or Verve, to investigate gene editing strategies to modify genes associated with an increased risk of coronary diseases. Under the terms of the Verve Agreement, the Company granted Verve an exclusive license to certain base editor technology and certain delivery technology, and improvements and Verve granted Beam a non-exclusive license under certain know-how and patents controlled by Verve, an interest in joint collaboration technology and an exclusive license (except as to Verve) under certain delivery technology. As of March 31, 2021, the Company determined that milestones and royalties under the Verve Agreement were not probable of recognition. 17 11. Preferred and common stock In January 2020, the Company authorized preferred stock issuable of 25,000,000 shares and increased its authorized common stock issuable to 250,000,000 shares, both with a $ 0.01 par value per share. In February 2020, the Company completed its IPO in which the Company issued and sold 12,176,471 shares of its common stock, including 1,588,235 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 17.00 per share, for aggregate gross proceeds of $ 207.0 million. The Company received approximately $ 188.3 million in net proceeds after deducting underwriting discounts and offering expenses payable by the Company. In connection with the IPO, all outstanding shares of the Company’s preferred stock converted into 29,127,523 shares of the Company’s common stock. In October 2020, the Company issued and sold 5,750,000 shares of its common stock, including 750,000 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 23.50 per share, for aggregate gross proceeds of $ 135.1 million. The Company received approximately $ 126.6 million in net proceeds after deducting underwriting discounts and offering expenses payable by the Company. In October 2020, due to the Company’s election to continue the collaboration agreement between Beam and Prime Medicine, the Company issued 200,307 shares of the Company’s common stock to Prime Medicine. In January 2021, the Company issued and sold 2,795,700 shares of its common stock in a private placement at an offering price of $ 93.00 per share for aggregate gross proceeds of $ 260.0 million. The Company received $ 252.0 million in net proceeds after deducting fees to the placement agents and offering expenses payable by the Company. In April 2021, the Company entered into an At-The-Market (“ATM”) sales agreement with Jefferies LLC (“Jefferies”), under which the Company may offer and sell, from time to time at prevailing market prices, shares of the Company’s common stock having aggregate gross proceeds of up to $ 300.0 million. The sales agent will be entitled to compensation at a commission rate of 3.0 % of the aggregate gross sales price per share sold by it under the sales agreement. In the second quarter of 2021, the Company began to issue and sell securities under this sales agreement. The Company sold 12,607 shares of its common stock under this agreement subsequent to March 31, 2021 through May 4, 2021 for net cash proceeds of $ 0.8 million, after deducting commission fees and offering expenses payable by the Company. In May 2021, the first success payment measurements occurred and success payments to Harvard and Broad Institute were calculated to be $ 15.0 million and $ 15.0 million, respectively. The Company elected to make each payment in shares of the Company’s common stock, and thereby expects to issue shares of the Company’s common stock to settle these liabilities to Harvard and Broad Institute in June 2021. The holders of the Company’s common stock are entitled to one vote for each share of common stock. Subject to the payment in full of all preferential dividends to which the holders of the Company’s preferred stock are entitled, the holders of the Company’s common stock shall be entitled to receive ratably dividends out of funds legally available. In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, after the payment or provision for payment of all debts and liabilities of the Company and all preferential amounts to which the holders of Company’s preferred stock are entitled with respect to the distribution of assets in liquidation, the holders of common stock shall be entitled to share ratably in the remaining assets of the Company available for distribution. 12. Stock option and grant plan Stock option and grant plan The Beam Therapeutics Inc. 2017 Stock Option and Grant Plan adopted by the Company’s board of directors in June 2017 and amended in February and May 2019, provides for the grant of qualified incentive stock options and nonqualified stock options, restricted stock awards, restricted stock units, or other awards to the Company’s employees, officers, directors, advisors, and outside consultants for the issuance or purchase of shares of the Company’s common stock. In October 2019, the Company’s board of directors adopted the Beam Therapeutics Inc. 2019 Equity Incentive Plan, or the 2019 Plan, and, subsequent to the IPO, all equity-based awards are granted under the 2019 Plan. The 2019 Plan provides for grant of qualified and nonqualified stock options, stock appreciation rights, restricted and unrestricted stock and stock units, performance awards, and other share-based awards to the Company’s employees, officers, directors, advisors, and outside consultants. As of March 31, 2021, the Company had 9,594,873 shares reserved and 2,891,667 shares available for future issuance. 18 Stock-based compensation expense recorded as research and development and general and administrative expenses in the condensed consolidated statements of operations and other comprehensive loss is as follows (in thousands): Three Months Ended March 31, 2021 2020 Research and development $ 3,155 $ 1,773 General and administrative 1,493 1,019 Total stock-based compensation expense $ 4,648 $ 2,792 Stock options A summary of option activity under the Company’s equity award plans: Number of options Weighted average exercise price Outstanding at December 31, 2020 5,336,441 $ 9.70 Granted 992,659 80.89 Exercised ( 199,284 ) 8.82 Forfeitures ( 21,690 ) 9.06 Outstanding at March 31, 2021 6,108,126 21.30 Exercisable as of March 31, 2021 1,720,606 5.64 The weighted-average grant date fair value per share of options granted in the three months ended March 31, 2021 was $ 53.59 . As of March 31, 2021, there was $ 79.4 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of approximately 2.6 years. Restricted stock The Company issues shares of restricted common stock, including both restricted stock units and restricted stock awards. Restricted common stock issued generally vests over a period of two to four years . The following summarizes the Company’s restricted stock activity: Shares Weighted- average grant date fair value Unvested as of December 31, 2020 1,275,338 $ 10.95 Issued 511,580 80.04 Vested ( 398,804 ) 3.30 Unvested as of March 31, 2021 1,388,114 $ 37.64 At March 31, 2021, there was approximately $ 53.0 million of unrecognized stock-based compensation expense related to restricted stock that is expected to vest. These costs are expected to be recognized over a weighted-average period of approximately 2.2 years. 19 13. Net loss per share attributable to common stockholders As noted above, for periods in which the Company reports a net loss attributable to common stockholders, potentially dilutive securities have been excluded from the computation of diluted net loss per share as their effects would be anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at period end, from the computation of diluted net loss per share attributable to common stockholders because including them would have had an anti-dilutive effect: As of March 31, 2021 2020 Unvested restricted stock 1,388,114 2,267,940 Outstanding options to purchase common stock 6,108,126 5,663,598 Total 7,496,240 7,931,538 The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company (in thousands except share and per share amounts): Three Months Ended March 31, 2021 2020 Numerator: Net loss attributable to common stockholders $ ( 201,560 ) $ ( 31,735 ) Denominator: Weighted average number of common shares, basic and diluted 60,210,120 30,725,077 Net loss per common share attributable to common stockholders, basic and diluted $ ( 3.35 ) $ ( 1.03 ) 14. Income taxes During the three months ended March 31, 2021 and 2020, the Company recorded a full valuation allowance on federal and state deferred tax assets since management does not forecast the Company to be in a taxable position in the near future. 15. Related party transactions Founders For the three months ended March 31, 2021 and 2020, the Company made payments of $ 0.1 million and $ 0.1 million, respectively, to its three founder shareholders for scientific consulting and other expenses. Verve The Company and Verve are parties to a collaboration and license agreement and have a common board member. During the three months ended March 31, 2020, the Company purchased shares of Verve series A preferred stock valued at $ 0.8 million. During the three months ended March 31, 2021, the Company recorded unrealized gains of $ 1.0 million on its investment in Verve preferred stock. The Company purchased certain materials from Verve amounting to $ 0.2 million, which are recorded as research and development expenses within the accompanying condensed consolidated statements of operations and other comprehensive loss, for the three months ended March 31, 2021. Prime Medicine The Company and Prime Medicine are parties to a collaboration and license agreement and have a common founder and several common board members. Additionally, in September 2019, in connection with the Company’s collaboration and license agreement with Prime Medicine, the Company executed a letter agreement, as amended, to provide certain interim management and startup services to Prime Medicine for up to March 2021. Prime Medicine was obligated to reimburse the Company’s out-of-pocket costs incurred in connection with performing the services and, beginning in October 2020, paid the Company a $ 30 thousand monthly service fee. For the three months ended March 31, 2021, the Company recognized $ 0.1 million for performing such services in interest and other income (expense), net, within the accompanying consolidated statements of operations and other comprehensive loss. 20 16. Subsequent Events At-the-Market Offering In April 2021, the Company entered into an ATM sales agreement with Jefferies, under which the Company may offer and sell, from time to time at prevailing market prices, shares of the Company’s common stock having aggregate gross proceeds of up to $ 300.0 million. The sales agent will be entitled to compensation at a commission rate of 3.0 % of the aggregate gross sales price per share sold by it under the sales agreement. In the second quarter of 2021, the Company began to issue and sell securities under this sales agreement. The Company sold 12,607 shares of its common stock under this agreement subsequent to March 31, 2021 through May 4, 2021 for net cash proceeds of $ 0.8 million, after deducting commission fees and offering expenses payable by the Company. Success Payments In May 2021, the first success payment measurements occurred and success payments to Harvard and Broad Institute were calculated to be $ 15.0 million and $ 15.0 million, respectively. The Company elected to make each payment in shares of the Company’s common stock, and thereby expects to issue shares of the Company’s common stock to Harvard and Broad Institute to settle these liabilities in June 2021. 21