Management’s Discussion and Analysis of Financial Condition and Results of Operations.
−Removed: You should read the following discussion and analysis of our financial condition and results of operations together with the section entitled “Selected Financial Information” and our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K, or this Annual Report.
+Added: You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K, or this Annual Report.
Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties.
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Please also see the section entitled “Special Note Regarding Forward-Looking Statements.” We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
−Removed: We are a clinical-stage biotechnology company focused on the discovery and development of engineered T cell therapies, and exploring their potential to provide a deep and durable, perhaps curative, treatment, for patients with B cell-mediated autoimmune diseases.
+Added: We are a clinical-stage biotechnology company focused on the discovery and development of engineered T cell therapies, and aim to provide a deep and durable, perhaps curative, treatment, for patients with B cell-mediated autoimmune diseases.
Our proprietary technology utilizes C himeric A uto A ntibody R eceptor, or CAAR, T cells that are designed to selectively bind and eliminate only specific B cells that produce disease-causing autoantibodies, or pathogenic B cells, while sparing normal B cells.
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By harnessing the power of targeted cell therapy, we believe our CAAR T product candidates have the potential to provide responses that may be a safer and more effective option than current treatments.
−Removed: We believe our technology, in combination with our proprietary C abaletta A pproach for selective B cell A blation platform, called our CABA platform, has applicability across over two dozen B cell-mediated autoimmune diseases that we have identified, evaluated and prioritized.
−Removed: In order to accelerate product development for our lead program and to access a proven cell therapy manufacturing platform, we have entered into a collaboration with the University of Pennsylvania, or Penn.
−Removed: We hold multiple agreements with Penn to develop CAAR T cell therapies for the treatment of these diseases.
−Removed: Our goal is to leverage our team’s expertise in autoimmunity and engineered T cell therapy and our collaboration with Penn to rapidly discover and develop our portfolio of CAAR T product candidates.
+Added: We believe our technology, in combination with our proprietary C abaletta A pproach for selective B cell A blation platform, called our CABA TM platform, has applicability across over two dozen B cell-mediated autoimmune diseases that we have identified, evaluated, and prioritized.
Our initial focus is mucosal pemphigus vulgaris, or mPV, which is an autoimmune blistering disease.
−Removed: We submitted an Investigational New Drug, or IND, application for our lead product candidate, DSG3-CAART, to the U.S.
−Removed: Food and Drug Administration, or the FDA, in August 2019 and our IND was cleared in September 2019.
−Removed: The FDA granted DSG3-CAART orphan drug designation for the treatment of PV in January 2020, and fast track designation for improving healing of mucosal blisters in patients with mucosal pemphigus vulgaris, or mPV, in May 2020.
−Removed: Our lead product candidate, DSG3-CAART, designed to treat patients with mPV, is currently enrolling patients for a Phase 1 trial, or the DesCAARTes TM trial.
−Removed: In December 2020, we announced that the first patient had been dosed in the DesCAARTes TM trial.
−Removed: We expect to report the acute safety data from the first cohort of patients in the DesCAARTes TM trial in the first half of 2021, with additional topline data from any completed dose cohorts throughout the second half of 2021 .
−Removed: Our lead preclinical product candidate is designed for the treatment of muscle-specific kinase myasthenia gravis, or MuSK MG, and is currently in IND enabling studies, with an IND submission expected in the second half of 2021.
−Removed: We are also advancing additional product candidates currently in discovery-stage or preclinical development for the treatment of mucocutaneous PV, or mcPV, and Hemophilia A with Factor VIII, or FVIII, alloantibodies in addition to three undisclosed targets.
+Added: Our lead product candidate, DSG3-CAART, is being evaluated for the treatment of mPV, a subtype of pemphigus vulgaris, or PV, that affects the mucous membrane.
+Added: mPV is caused by autoantibodies against the cell adhesion protein desmoglein 3, or DSG3.
+Added: DSG3-CAART is designed to selectively target and eliminate autoreactive B cells specific for DSG3, which may prevent these B cells from differentiating into antibody secreting plasma cells that produce anti-DSG3 antibodies that are the cause of mPV, while preserving general B cell immune function.
+Added: DSG3-CAART is being evaluated in a Phase 1 trial, or the DesCAARTes TM trial, in which we are currently enrolling patients.
+Added: During 2021, we reported acute and 28-day safety data from the first three cohorts of patients in the DesCAARTes TM trial, with no dose-limiting toxicities, or DLTs, or clinically relevant adverse events observed in the 28 days after infusion of DSG3-CAART.
+Added: In November 2021, we reported that dose-dependent increases in DSG3-CAART persistence in the third cohort relative to the first two low dose cohorts throughout the 28 days following infusion had been observed.
+Added: On December 14, 2021, we reported top-line biologic activity data for the first, two low dose cohorts, where no clear evidence of biologic activity was observed at doses that represent less than 2% of the current planned maximum dose in the trial, as well as the continued absence of any DLTs or clinically relevant adverse events.
+Added: Furthermore, we announced the addition of a planned fifth cohort to receive a higher dose with a more consolidated dosing regimen, which we expect to initiate in 2022 after review of the fourth cohort’s 28-day safety data.
+Added: In January 2022, we announced that 28-day safety data for the fourth cohort was anticipated to be announced in the first quarter of 2022, and that other clinical data updates from the DesCAARTes TM trial are expected to be provided at scientific meetings throughout 2022 and 2023 with biologic activity data for cohorts A3 and A4 expected to be announced in mid-2022.
+Added: In March 2022, we disclosed 28-day safety data for the fourth cohort with no DLTs observed in any patient during the 28 days after infusion of DSG3-CAART.
+Added: In addition, we disclosed that we are currently enrolling patients for the fifth cohort, and expect to announce 28-day safety data for the fifth cohort at a scientific meeting in mid-2022, assuming no DLTs are observed during such cohort, that enrollment is uninterrupted and there are no delays due to COVID-19 resurgence.
+Added: Our MuSK-CAART product candidate is designed for the treatment of muscle-specific kinase myasthenia gravis, or MuSK MG.
+Added: In the fourth quarter of 2021, we submitted an Investigational New Drug, or IND, application for the first-in-human studies to the United States Food and Drug Administration, or FDA, which became effective in January 2022.
+Added: In February 2022, MuSK-CAART received fast track designation from the FDA for improving
+Added: activities of daily living and muscle strength in patients with MuSK antibody-positive myasthenia gravis.
+Added: We plan to initiate the MusCAARTes TM trial in 2022.
+Added: We are also advancing additional product candidates currently in discovery-stage or preclinical development for the treatment of mucocutaneous PV, or mcPV, PLA2R-associated membranous nephropathy, or PLA2R MN, and Hemophilia A with Factor VIII, or FVIII, alloantibodies , in addition to two undisclosed targets .
+Added: We conducted a pre-IND interaction with the FDA to discuss the development path for PLA2R-CAART in the fourth quarter of 2021.
+Added: Preclinical data indicating that PLA2R CAAR T cells specifically recognized and eliminated anti-PLA2R antibody-expressing B cells and that membrane proteome arrays screened with PLA2R CAAR candidates did not identify off-target interaction was presented at the American Society of Nephrolog y Kidney Week in the fourth quarter of 2021 .
We were incorporated in April 2017.
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Our operations to date have been financed primarily by net proceeds of $86.4 million from the sale of convertible notes and convertible preferred stock and net proceeds of $71.0 million from the sale of common stock in our initial public offering, or IPO, in October 2019.
−Removed: As of December 31, 2020, we had $108.7 million in cash and cash equivalents and investments.
−Removed: Amended and Restated License Agreement with t he Trustees of the University of Pennsylvania and the Children’s Hospital of Philadelphia
−Removed: In August 2018, we entered into a license agreement with Penn, which was amended and restated in July 2019 to include the Children’s Hospital of Philadelphia, or CHOP, collectively, the Institutions, and collectively with such amendment, as amended in May 2020, the License Agreement, pursuant to which we obtained (a) a non-exclusive, non-sublicensable, worldwide research license to make, have made and use products in two subfields of use, (b) effective as of October 2018, an exclusive, worldwide, royalty-bearing license, with the right to sublicense, under certain of the Institutions’ intellectual property to make, use, sell, offer for sale and import products in the same two subfields of use, and (c) effective as of October 2018, a non-exclusive, worldwide, royalty-bearing license, with limited rights to sublicense, under certain of Penn’s know-how to make, have made, use, sell, offer for sale, import and have imported products in the same two subfields of use.
+Added: In 2021, we raised $49.7 million, with net proceeds of $48.3 million, in “at-the-market” offerings, pursuant to a Sales Agreement, or the Sales Agreement, with Cowen and Company, LLC, or the Sales Agent, which provides for the offering, issuance and sale of up to an aggregate amount of $75.0 million of our common stock.
+Added: As of December 31, 2021, we had $122.2 million in cash and cash equivalents.
+Added: Amended and Restated License Agreement with the Trustees of the University of Pennsylvania and the Children’s Hospital of Philadelphia
+Added: In August 2018, we entered into a license agreement with Penn, which was amended and restated in July 2019 to include the Children’s Hospital of Philadelphia, or CHOP, collectively, the Institutions, and collectively with such amendment, as amended in May 2020 and October 2021, the License Agreement, pursuant to which we obtained (a) a non-exclusive, non-sublicensable, worldwide research license to make, have made and use products in two subfields of use, (b) effective as of October 2018, an exclusive, worldwide, royalty-bearing license, with the right to sublicense, under certain of the Institutions’ intellectual property to make, use, sell, offer for sale and import products in the same two subfields of use, and (c) effective as of October 2018, a non-exclusive, worldwide, royalty-bearing license, with limited rights to sublicense, under certain of Penn’s know-how to make, have made, use, sell, offer for sale, import and have imported products in the same two subfields of use.
Our rights are subject to the rights of the U.S.
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Sponsored Research Agreements
−Removed: We have two sponsored research agreements, or SRAs, with Penn for the laboratories of Drs.
+Added: We have sponsored research agreements, or SRAs, with Penn for the laboratories of Drs.
Payne and Milone, who are also our scientific co-founders and members of our scientific advisory board.
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In August 2020, the Payne SRA was further amended to extend the term of the original research plan.
−Removed: Under the amended agreements, we are committed to funding a defined research plan through February 2023.
+Added: In April 2021 and October 2021, the Milone SRA was amended to extend the term of the original research plan through November 2022.
+Added: In December 2021, we further amended the Payne SRA to extend the term through December 2024 and expand the workplan to include additional correlative studies related to the DesCAARTes TM trial.
The total estimated cost of the agreements is $12.5 million, which satisfies the $2.0 million annual obligation under the License Agreement.
As of December 31, 2021, $9.9 million of cost has been incurred pursuant to these agreements.
+Added: In December 2021, we entered into a SRA with Penn for the laboratory of Dr.
+Added: Drew Weissman, or the Weissman SRA.
+Added: Under the Weissman SRA, discovery-stage proof of concept studies for lipid nanoparticle mRNA for the delivery and/or enhancement of CAAR technology is being conducted.
+Added: Under the Weissman SRA, Penn granted us a non-transferable, non-exclusive license to use certain intellectual property for specific internal research purposes and further grants us the first option to negotiate to acquire, subject to agreement on commercial terms, an exclusive or
+Added: non-exclusive worldwide license to certain patent rights for specific CAAR products developed under the Weissman SRA.
+Added: Unless earlier terminated, the Weissman SRA will expire in December 2023.
+Added: Pursuant to the Weissman SRA, we also entered into an Option Agreement with Penn, or the Weissman Option, which grants us the option to negotiate to acquire a non-exclusive worldwide license to certain patent rights in connection with the Weissman SRA.
Master Translational Research Services Agreement
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laboratory supplies and equipment used for internal research and development activities and related depreciation expense.
−Removed: We have not reported program costs since inception because historically we have not tracked or recorded our research and development expenses on a pre-clinical program-by-program basis.
+Added: We have not reported program costs since inception because historically we have not tracked or recorded our research and development expenses on a preclinical program-by-program basis.
We use our personnel and infrastructure resources across the breadth of our research and development activities, which are directed toward identifying and developing product candidates.
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Specific changes in our research and development expenses year over year include a:
+Added: $3.6 million increase in costs under our development services from increased outsourced preclinical research activities and lab related expenses;
$2.8 million increase in personnel costs primarily driven by an increase in headcount to support overall growth , including an increase of $0.8 million in stock-based compensation expense;
$2.7 million increase in manufacturing costs primarily due to vector manufacturing and cell processing capabilities and related activities ;
−Removed: $2.2 million increase in costs under our development services from increased outsourced preclinical research activities and lab related expenses;
−Removed: $0.8 million increase in costs under our sponsored research agreements primarily due to an expanded scope of research;
$2.0 million increase in clinical trial costs for the DesCAARTes TM trial, including outsourced costs and investigator payments to clinical trial sites.
−Removed: $0.2 million decrease in license of intellectual property and subscription fees and other due primarily to a non-refundable payment made to Penn under a Subscription and Technology Transfer Agreement in the third quarter of 2019 .
General and Administrative Expenses
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The increase of $1.3 million in our general and administrative expenses year over year includes:
−Removed: $2.6 million of additional personnel costs primarily driven by an increase in headcount to support overall growth , including an increase of $1.4 million in stock-based compensation expense;
−Removed: $1.9 million of increased insurance costs, primarily as a result of being a public company for a full year;
−Removed: $1.0 million of additional services, including legal, audit and accounting, public relations, recruiting and other consulting fees and other general and administrative expenses, primarily as a result of being a public company .
+Added: $1.1 million of additional personnel costs primarily due to an increase of $0.7 million in stock-based compensation expense;
+Added: $0.2 million of additional services, including legal and other general and administrative expenses.
Interest income has decreased $0.5 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020 primarily as a result of a significant decrease in interest rates beginning in March 2020.
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Since our inception in April 2017 through December 31, 2020, our operations have been financed by proceeds of $86.4 million from the sale of convertible notes and our convertible preferred stock and proceeds of $71.0 million from the sale of common stock in our initial public offering.
−Removed: As of December 31, 2020, we had $108.7 million in cash, cash equivalents and investments.
+Added: In 2021, we raised $49.7 million, with net proceeds of $48.3 million, in “at-the-market” offerings, pursuant to our Sales Agreement which provides for the offering, issuance and sale of up to an aggregate amount of $75.0 million of our common stock.
+Added: As of December 31, 2021, we had $122.2 million in cash and cash equivalents.
Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.
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Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research, manufacturing and development services, costs relating to the build-out of our headquarters, laboratories and manufacturing facility, license payments or milestone obligations that may arise, laboratory and related supplies, clinical costs, manufacturing costs, legal and other regulatory expenses and general overhead costs.
−Removed: Based upon our current operating plan, we believe that our existing cash, cash equivalents and investments as of December 31, 2020 will enable us to fund our operating expenses and capital expenditure requirements through at least the third quarter of 2022.
+Added: Based upon our current operating plan, we believe that our existing cash , cash equivalents and investments as of December 31, 2021 will enable us to fund our operating expenses and capital expenditure requirements through the third quarter of 2023.
We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.
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On November 10, 2020, we filed a registration statement on Form S-3 (File No.
−Removed: 333-250006) with the SEC, which was declared effective on November 18, 2020 (the Shelf Registration Statement), in relation to the registration of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof for the purposes of selling, from time to time, our common stock, debt securities or other equity securities in one or more offerings.
−Removed: We also simultaneously entered into a Sales Agreement with Cowen and Company, LLC, to provide for the offering, issuance and sale of up to an aggregate amount of $75.0 million of our common stock from time to time in “at-the-market” offerings under the Shelf Registration Statement and subject to the limitations thereof.
−Removed: No shares have been sold pursuant to the Sales Agreement as of December 31, 2020.
+Added: 333-250006) with the SEC, which was declared effective on November 18, 2020, or the Shelf Registration Statement, in relation to the registration of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof for the purposes of selling, from time to time, our common stock, debt securities or other equity securities in one or more offerings.
+Added: We also simultaneously entered into a Sales Agreement with Cowen and Company, LLC, to provide for the offering, issuance and sale of up to an aggregate amount of $75.0 million of our common stock from time to time in “at-the-market” offerings, or the ATM Program, under the Shelf Registration Statement and subject to the limitations thereof.
+Added: We will pay to the Sales Agent cash commissions of 3.0 percent of the aggregate gross proceeds of sales of common stock under the Sales Agreement.
+Added: In 2021, we sold 4,792,562 shares pursuant to the ATM Program for net proceeds of $48.3 million, after deducting commissions of $1.4 million.
Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.
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the timing of, and the costs involved in, obtaining regulatory approvals or clearances for our lead product candidates or any future product candidates;
−Removed: the impact of any business interruptions to our operations or to those of our clinical sites, manufacturers, suppliers, or other vendors resulting from the coronavirus disease (COVID-19) outbreak or similar public health crisis;
+Added: the impact of any business interruptions to our operations or to those of our clinical sites, manufacturers, suppliers, or other vendors resulting from the COVID-19 pandemic or similar public health crisis;
the number and characteristics of any additional product candidates we develop or acquire;
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Financing activities
−Removed: Net (decrease) increase in cash and cash equivalents
+Added: Net increase (decrease) in cash and cash equivalents
Operating Activities
During the year ended December 31, 2021, cash used in operating activities of $34.1 million was attributable to our net loss of $46.3 million, offset by the net change of $5.6 million in our net operating assets and liabilities and non-cash charges of $6.6 million for stock-based compensation charges, amortization of premium on investments and depreciation.
−Removed: During the year ended December 31, 2019, cash used in operating activities of $16.0 million was attributable to our net loss of $16.9 million, increased by the net change of $1.5 million in our net operating assets and liabilities and offset by non-cash charges of $2.4 million for stock-based compensation charges and depreciation.
+Added: During the year ended December 31, 2020, cash used in operating activities of $26.8 million was attributable to our net loss of $33.3 million, offset by the net change of $1.6 million in our net operating assets and liabilities and non-cash charges of $4.9 million for stock-based compensation charges, amortization of premium on investments and depreciation.
Investing Activities
+Added: During the year ended December 31, 2021, cash provided in investing activities of $6.0 million was attributable to proceeds of $7.2 million from maturities of investments, partially offset by $1.2 million of purchases of property and equipment.
During the year ended December 31, 2020, cash used in investing activities of $8.0 million was attributable to $11.1 million of purchases of investments and $0.6 million of purchases of property and equipment, partially offset by proceeds of $3.7 million from maturities of investments.
−Removed: During the year ended December 31, 2019, we used $0.7 million of cash and cash equivalents in investing activities consisting of purchases of property and equipment.
Financing Activities
+Added: During the year ended December 31, 2021, cash provided by financing activities of $48.9 million was from $48.3 million in sales of common stock, net of issuance costs and $0.6 million from stock option exercises and purchases of shares under the 2019 Employee Stock Purchase Plan.
During the year ended December 31, 2020, cash used in financing activities included $0.2 million in payments for common stock issuance costs from our IPO in October 2019, offset by $0.2 million in proceeds from stock option exercises and purchases of shares under the employee stock purchase plan.
−Removed: During the year ended December 31, 2019, cash provided by financing activities of $119.9 million was attributable to $48.7 million of net proceeds upon the issuance of Series B convertible preferred stock in January 2019 and $71.2 million of net proceeds from the issuance of common stock in our initial public offering in October 2019.
Contractual Obligations and Commitments
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The initial annual base rent was $0.3 million, and such amount will increase by 2% annually on each anniversary of the commencement date.
+Added: In February 2022, this lease was amended to extend the term by 35 months, now terminating in June 2025, with annual base rent starting at $0.3M and increasing by 2.5% annually.
+Added: In January 2021, we entered into a Development and Manufacturing Services Agreement (WuXi Agreement) with WuXi Advanced Therapies, Inc.
+Added: (WuXi) to serve as our cell processing manufacturing partner for the planned MuSK-CAART Phase 1 clinical trial, or MusCAARTes TM trial.
+Added: We concluded the WuXi Agreement has an embedded lease as a dedicated manufacturing suite is used for our cell processing manufacturing, with a monthly fee of $0.1 million for this suite.
+Added: The WuXi Agreement will expire the later of January 2024, or upon completion of WuXi’s services related to the MusCAARTes TM trial.
+Added: We have the right to terminate the WuXi Agreement for convenience or other reasons specified in the WuXi Agreement upon prior written notice.
+Added: If we terminate the WuXi Agreement, we will be obligated to pay an early termination fee of up to $1.5 million.
Our commitments include:
−Removed: The License Agreement.
+Added: The Penn License Agreement.
Under the License Agreement, we are required to make milestone payments upon successful completion of certain development, regulatory and sales milestones on a product-by-product and geographical basis.
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In the event that we are able to successfully develop and launch multiple products under the License Agreement, total milestone payments could be approximately $21.0 million.
−Removed: eligible to receive tiered royalties at percentage rates in the low single-digits, subject to an annual minimum royalty, on annual worldwide net sales of any products that are commercialized by us or our sublicensees that contain or incorporate, or are covered by, the intellectual property licensed by us.
+Added: Penn is also eligible to receive tiered royalties at percentage rates in the low single-digits, subject to an annual minimum royalty, on annual worldwide net sales of any products that are commercialized by us or our sublicensees that contain or incorporate, or are covered by, the intellectual property licensed by us.
To the extent we sublicense our license rights under the License Agreement, Penn would be eligible to receive tiered sublicense income at percentage rates in the mid-single to low double-digits.
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In May 2020, the Company amended its Addendum with the Center for Advanced Retinal and Ocular Therapeutics (CAROT) to expand access to vector manufacturing.
−Removed: The Company may incur additional expenses up to $1.4 million through the remaining term of the CAROT Amended Addendum.
+Added: We may incur additional expenses up to $1.4 million through the remaining term of the CAROT Amended Addendum.
Sponsored Research Agreements.
−Removed: We have two sponsored research agreements, or SRAs, with Penn for the laboratories of our scientific co-founders Drs.
+Added: We have sponsored research agreements, or SRAs, with Penn for the laboratories of our scientific co-founders Drs.
Payne and Milone.
In May 2020, the Payne SRA was expanded to include CAAR design and optimization efforts in three additional B cell-mediated autoimmune diseases .
−Removed: In August 2020, this agreement was further amended to extend the term of the original research plan.
−Removed: Under the amended agreements, we are committed to funding a defined research plan through February 2023.
−Removed: The total estimated cost of the agreements is $11.8 million, which satisfies the $2.0 million annual obligation under the License Agreement.
−Removed: As of December 31, 2020, $7.1 million of cost has been incurred pursuant to these agreements.
−Removed: Manufacturing agreements .
−Removed: In January 2021, we entered into a Development and Manufacturing Services Agreement (Wuxi Agreement) with WuXi Advanced Therapies, Inc.
−Removed: (Wuxi) to serve as our cell processing manufacturing partner for the anticipated MuSK-CAART Phase 1 clinical trial.
−Removed: We have the right to terminate the Wuxi Agreement for convenience or other reasons specified in the Wuxi Agreement upon prior written notice.
−Removed: If we terminate the Wuxi Agreement, we will be obligated to pay an early termination fee of $1.5 million.
−Removed: In February 2021, we entered into a research service agreement with CHOP for vector manufacturing, with a total cost of $0.7 million, expected to be incurred during 2021.
+Added: In August 2020, this SRA was further amended to extend the term of the original research plan.
+Added: In December 2021, we further amended the Payne SRA to extend the term through December 2024 and expand the workplan to include additional correlative studies related to the DesCAARTes TM trial.
+Added: In April 2021 and October 2021, the Milone SRA was amended to extend the term of the original research plan through November 2022 .
+Added: The total estimated cost of the agreements is $1 2.
+Added: 5 million, which satisfies the $2.0 million annual obligation under the Penn License Agreement.
+Added: As of December 31, 202 1 , $ 9.9 million of cost has been incurred pursuant to t hese agreements.
+Added: Licence and Supply Agreement.
+Added: In December 2021, we entered into a Licence and Supply agreement, or LSA, with Oxford Biomedica (UK) Limited wherein the LSA grants us a non-exclusive license to Oxford’s LentiVector® platform for its application in our DSG3-CAART program and puts in place a multi-year vector supply agreement.
+Added: Under the terms of the agreement, we are required to pay Oxford an upfront fee, as well as costs associated with initial vector manufacturing activities for a total cost of up to approximately $4.0 million.
+Added: Oxford is eligible to receive regulatory and sales milestones in the low tens of millions and royalties in the low single digits on net sales of products that incorporate the Oxford technology.
+Added: We can terminate the agreement at will upon advance written notice and subject to certain manufacturing slot cancellation fees.
+Added: As of December 31, 2021, we have recognized expenses of approximately $1.1 million under this LSA.
+Added: Manufacturing agreement s.
+Added: In February 2021, as amended in May 2021, we entered into a research service agreement with CHOP for vector manufacturing for a total cost of $1.7 million.
+Added: As of December 31, 2021, we expect to incur the remaining cost of approximately $0.6 million through the first half of 2023.
+Added: I n August 2021 and October 2021, we entered into agreements with a contract manufacturing organization for the purchase of plasmids to be used in vector manufacturing for a total of cost $1.6 million.
+Added: As of December 31, 2021, we expect to incur the remaining cost of $0.3 million in the first quarter of 2022.
Other Purchase Commitments.
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These agreements generally provide for termination or cancellation other than for costs already incurred.
−Removed: Off-Balance Sheet Arrangements
−Removed: During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under SEC rules.
Critical Accounting Policies and Significant Judgments and Estimates
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Research and Development Costs
−Removed: We estimate costs of research and development activities conducted by service providers, which include activities under the License Agreement, the conduct of sponsored research, preclinical studies and contract manufacturing activities.
+Added: We estimate costs of research and development activities conducted by service providers, which include activities under the Penn License Agreement, the conduct of sponsored research, preclinical studies and contract
+Added: manufacturing activities.
We record the estimated costs of research and development activities based upon the estimated amount of services provided and include these costs in the accrued and other current liabilities or prepaid expenses on the balance sheets and within research and development expense on the statements of operations.
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These assumptions include:
−Removed: Fair value of common stock —Prior to our IPO in October 2019, the fair value of our common stock underlying stock-based awards was estimated on each grant date by our board of directors.
−Removed: In order to determine the fair value of our common stock underlying stock-based awards, our board of directors considered, among other things, a valuation of our common stock prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation .
Expected term —The expected term represents the period that stock-based awards are expected to be outstanding.
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Early adoption is permitted.
−Removed: As an Emerging Growth Company, we will adopt Topic 842
−Removed: for our annual period ending December 31 , 2021 , and have not yet finalized our assessment of the impact that ASU 2016-02 will have on our financial statements or financial statement disclosures.
+Added: As an Emerging Growth Company, we expect to adopt Topic 842 in 2022 and have not yet finalized the assessment of the impact that Topic 842 will have on our financial statements or financial statement disclosures.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.