What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-06 compared with 2024-05-07 · 155 added, 86 removed, 248 unchanged (49% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes included in Part I, Item 1, of this Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 (“Form 10-Q”) and with the audited consolidated financial statements and the related notes for the fiscal year ended December 31, 2023 included in our Annual Report on Form 10-K (“Form 10-K”) filed with the U.S.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes included in Part I, Item 1, of this Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024 (“Form 10-Q”) and with the audited consolidated financial statements and the related notes for the fiscal year ended December 31, 2023 included in our Annual Report on Form 10-K (“Form 10-K”) filed with the U.S.

Securities and Exchange Commission (“SEC”) on March 11, 2024.

28 unchanged sentences

Our genome-editing platform, including our novel chRDNA ( C RISPR h ybrid R NA- DNA , or “chRDNA,” pronounced “chardonnay”) technology, enables more precise genome editing to develop cell therapies that are armored to improve activity against diseases.

We are advancing a pipeline of allogeneic, or off-the-shelf, cell therapies from our chimeric antigen receptor (“CAR”) T (“CAR-T”) cell and CAR-natural killer (“CAR-NK”) cell platforms as readily available therapeutic treatments for patients.

We are advancing a pipeline of allogeneic, or off-the-shelf, cell therapies from our chimeric antigen receptor (“CAR”) T (“CAR-T”) cell platform as readily available therapeutic treatments for patients.

We are currently focused on advancing our allogeneic cell therapies for the treatment of hematologic malignancies and autoimmune diseases.

Our therapies are directed at established cell surface targets for which autologous CAR-T cell therapeutics have already demonstrated clinical proof of concept, including CD19 and B cell maturation antigen (“BCMA”), as well as targets such as C-type lectin-like molecule-1 (“CLL-1,” also known as CD371).

Our therapies are directed at established cell surface targets for which autologous CAR-T cell therapeutics have already demonstrated clinical proof of concept, including CD19 and B cell maturation antigen (“BCMA”), as well as other targets such as C-type lectin-like molecule-1 (“CLL-1,” also known as CD371).

chRDNA technologies to armor our cell therapies through multiple genome-editing strategies, such as checkpoint disruption, immune cloaking, or a combination of these two strategies to enhance activity against devastating diseases.

Our lead product candidate, CB-010, is an allogeneic CAR-T cell therapy that is, to our knowledge, the first anti-CD19 allogeneic, or off-the-shelf, CAR-T cell therapy to be evaluated in patients with second-line relapsed or refractory large B cell lymphoma (“r/r LBCL”) .

To our knowledge, CB-010 is also the first clinical-stage allogeneic anti-CD19 CAR-T cell therapy with programmed cell death protein 1 (“PD-1”) removed from the CAR-T cell surface by a genome-edited knockout of the PDCD1 gene.

CB-010 is being evaluated in our ongoing ANTLER phase 1 clinical trial.

In the dose escalation portion of our ANTLER clinical trial, three dose levels of CB-010 were evaluated:

Our lead product candidate, CB-010, is an allogeneic anti-CD19 CAR-T cell therapy that is being evaluated in patients with relapsed or refractory large B cell non-Hodgkin lymphoma (“r/r B-NHL”) in our ongoing ANTLER phase 1 clinical trial.

To our knowledge, CB-010 is the first clinical-stage allogeneic anti-CD19 CAR-T cell therapy with programmed cell death protein 1 (“PD-1”) removed from the CAR-T cell surface by a genome-edited knockout of the PDCD1 gene.

In our ANTLER phase 1 clinical trial, 16 patients with multiple subtypes of aggressive r/r B-NHL were enrolled in the dose escalation portion of the clinical trial, and three dose levels of CB-010 were evaluated:

dose level 1 (40x10 6 viable CAR-T cells, n=8), dose level 2 (80x10 6 viable CAR-T cells, n=5), and dose level 3 (120x10 6 viable CAR-T cells, n=3).

CB-010 was generally well-tolerated with adverse events as expected for anti-CD19 CAR-T cell therapies.

Based on these encouraging dose escalation data, we are evaluating CB-010 in adult second-line LBCL patients in the dose expansion portion of the ongoing ANTLER trial.

Additionally, based on a retrospective analysis of the ANTLER data, we intend to investigate partial human leukocyte antigen matching and donor-specific antibody screening for CB-010 and our other CAR-T programs.

An abstract on the ANTLER phase 1 clinical trial has been accepted for a poster presentation on June 3, 2024, at the 2024 American Society of Clinical Oncology (“ASCO”) Annual Meeting, and we plan to present initial dose expansion data, the recommended phase 2 dose (“RP2D”) in second-line LBCL patients, and emerging translational data.

CB-010 has received regenerative medicine advanced therapy (“RMAT”) designation for r/r LBCL, fast track designation for relapsed or refractory B cell non-Hodgkin lymphoma (“r/r B-NHL”), and orphan drug designation for follicular lymphoma (“FL”) from the U.S.

Food and Drug Administration (“FDA”).

We are expanding our clinical development of CB-010 to include autoimmune diseases, and we recently received clearance of our investigational new drug (“IND”) application from the FDA for CB-010 to be evaluated in adult patients with lupus nephritis (“LN”) and extrarenal lupus (“ERL”) in our multicenter, open label, GALLOP phase 1 clinical trial, which we expect to initiate by year-end 2024.

Following the conclusion of the dose escalation portion of our ANTLER clinical trial, we began enrolling second-line (“2L”) large B cell lymphoma (“LBCL”) patients in the dose expansion phase of our ANTLER clinical trial, which is still ongoing.

Dose level 2 (80x10 6 viable CAR-T cells) was selected as the recommended phase 2 dose (“RP2D”).

In early June 2024, we presented safety, efficacy, and translational data for the first 46 patients evaluated in our ANTLER phase 1 clinical trial during a poster presentation at the 2024 American Society of Clinical Oncology (“ASCO”) Annual Meeting.

CB-010 was generally well-tolerated with adverse events as expected for anti-CD19 cell therapies.

A retrospective analysis of the ANTLER clinical trial data showed that patients who received a dose of CB-010 manufactured from a healthy donor who shared four or more matching human leukocyte antigen (“HLA”) alleles with the patient (referred to as “partial HLA matching”) demonstrated the potential for improved efficacy.

Based on these data, we have begun dosing a cohort of approximately 20 2L LBCL patients to prospectively evaluate whether partial HLA matching improves patient outcomes.

In addition, we are enrolling approximately 10 patients who have relapsed following any prior CD19-targeted therapy in a proof-of-concept cohort, which will also incorporate partial HLA matching.

We plan to report initial data from both cohorts in the first half of 2025.

Upon confirmation of improved outcomes in 2L LBCL patients receiving a partially HLA matched dose of CB-010, we plan to initiate a pivotal phase 3 clinical trial in the second half of 2025, following agreement with the U.S.

Food and Drug Administration (“FDA”) on a pivotal trial design.

CB-010 has received regenerative medicine advanced therapy (“RMAT”) designation for relapsed or refractory LBCL, fast track designation for r/r B-NHL, and orphan drug designation for follicular lymphoma (“FL”) from the FDA.

We are expanding our clinical development of CB-010 to include autoimmune diseases, and we plan to evaluate CB-010 in a multicenter, open label, phase 1 clinical trial (“GALLOP”) in adult patients with lupus nephritis (“LN”) and extrarenal lupus (“ERL”), which will incorporate partial HLA matching.

We expect to initiate our GALLOP clinical trial by year-end 2024.

Our second product candidate, CB-011, is an allogeneic CAR-T cell therapy that is, to our knowledge, the first anti-BCMA CAR-T cell therapy incorporating an immune cloaking approach that includes both the removal of the endogenous beta-2 microglobulin (“B2M”) protein and insertion of a beta-2-microglobulin–human-leukocyte-antigen-E–peptide transgene (“B2M–HLA-E”).

1 unchanged sentence

CB-011 is being evaluated in our CaMMouflage phase 1 clinical trial in adult patients with relapsed or refractory multiple myeloma (“r/r MM”), and we are currently enrolling patients in the dose escalation portion of the CaMMouflage trial.

We plan to report initial dose escalation data by year-end 2024.

CB-011 was granted fast track and orphan drug designations for r/r MM from the FDA.

3 unchanged sentences

CB-012 is being evaluated in our AMpLify phase 1 clinical trial in adult patients with relapsed or refractory AML (“r/r AML”), and we are currently enrolling patients in the dose escalation portion of the AMpLify trial.

Since our founding in 2011, we have devoted substantially all of our resources to organizing and staffing, business planning, raising capital, expanding our genome-editing platform technologies, developing our product candidates and building our pipeline, creating and maintaining our intellectual property portfolio, and establishing arrangements with third parties for the manufacture, testing, and clinical trial evaluations of our product candidates.

We plan to provide updates on dose escalation as the AMpLify phase 1 clinical trial in r/r AML advances.

Since our founding in 2011, we have devoted substantially all our resources to organizing and staffing, business planning, raising capital, expanding our genome-editing platform technologies, developing our product candidates and building our pipeline, creating and maintaining our intellectual property portfolio, and establishing arrangements with third parties for the manufacture, testing, and clinical trial evaluations of our product candidates.

We do not have any products approved for commercial sale and have not generated any revenue from product sales.

2 unchanged sentences

(“Intellia”) common stock.

Our net losses for the three months ended March 31, 2024, and 2023 were $41.2 million and $28.0 million, respectively.

We had an accumulated deficit of $340.5 million as of March 31, 2024.

Our net losses for the three months ended June 30, 2024, and 2023, were $37.7 million and $29.5 million, respectively.

Our net losses for the six months ended June 30, 2024, and 2023, were $78.9 million and $57.6 million, respectively.

We had an accumulated deficit of $378.2 million as of June 30, 2024.

Our net losses and operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of expenses associated with our clinical trials and nonclinical studies and our other research and development expenses.

1 unchanged sentence

• advance clinical trials for our CAR-T cell therapy product candidates;

• continue our current research programs and our preclinical and clinical development of our other current product candidates and any other product candidates we identify and choose to develop;

• hire additional clinical, quality control, regulatory, and scientific personnel;

• seek to identify additional research programs and additional product candidates;

• continue our current research programs and our preclinical and clinical development of our current product candidates and any other product candidates we identify and choose to develop;

• further develop our genome-editing technologies;

• acquire or in-license technologies;

• acquire or in-license new technologies;

• expand, maintain, enforce, and defend our intellectual property portfolio;

1 unchanged sentence

• establish and expand manufacturing capabilities and supply chain capacity for our product candidates;

• add operational, legal, financial, and management information systems and personnel;

• add operational, legal, financial, and management information systems to support growth initiatives;

• hire additional personnel as we advance our product candidates;

• experience any delays, challenges, or other issues associated with any of the above, including the failure of clinical trials meeting endpoints, the generation of unanticipated preclinical results or clinical trial data subject to differing interpretations, or the occurrence of potential safety issues or other development or regulatory challenges;

3 unchanged sentences

We do not own or operate any manufacturing facilities.

We use multiple contract manufacturing organizations (“CMOs”) to individually manufacture, under current good manufacturing processes, our chRDNA guides, Cas9 and Cas12a proteins, plasmids, and adeno-associated virus serotype 6 (“AAV6”) vectors used in the manufacture of our cell therapy product candidates as well as the CAR-T and CAR-NK cell therapy product candidates themselves.

We expect to continue to rely on our CMOs for the manufacturing of our preclinical study and clinical trial materials, and most of these CMOs have capabilities for commercial manufacturing.

5 unchanged sentences

If we are unable to raise capital as and when needed or on attractive terms, we may have to significantly delay, reduce, or discontinue the development and commercialization of our product candidates or scale back or terminate our pursuit of new in-licenses and acquisitions.

On July 16, 2024, we announced that we had discontinued preclinical research activities associated with our allogeneic CAR-NK platform and had reduced our workforce by 21 positions, or approximately 12%.

This workforce reduction, together with other cost containment measures, is expected to extend our cash runway by at least six months into the second half of 2026, which will enable us to focus resources on our allogeneic CAR-T cell therapy platform and on

rapidly advancing our four oncology and autoimmune disease clinical programs through certain milestones expected in 2024 and 2025.

In connection with the workforce reduction, we will incur approximately $0.5 million to $1.0 million in costs, consisting primarily of cash severance costs, benefits, and transition support services for impacted employees, which we expect to recognize in the third quarter of 2024.

Components of Results of Operations

3 unchanged sentences

We cannot predict if, when, or to what extent we will generate revenue from the commercialization and sale of our product candidates if we succeed in obtaining regulatory approval for these product candidates.

To date, all of our revenue consists of licensing and collaboration revenue earned from collaboration and/or licensing agreements entered into with third parties, including related parties.

To date, all our revenue consists of licensing and collaboration revenue earned from collaboration and/or licensing agreements entered into with third parties, including related parties.

Under these agreements, we license rights to certain intellectual property controlled by us.

6 unchanged sentences

Each of these payments results in licensing and collaboration revenue.

Revenue under such licensing and collaboration agreements was $2.4 million and $3.5 million for the three months ended March 31, 2024, and 2023, respectively.

Revenue under such licensing and collaboration agreements was $3.5 million and $3.8 million for the three months ended June 30, 2024, and 2023, respectively, and $5.9 million and $7.3 million for the six months ended June 30, 2024, and 2023, respectively.

See Notes 4, 5, and 7 to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for additional information.

14 unchanged sentences

However, payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses and other current assets on our unaudited condensed consolidated balance sheets.

The capitalized amounts are recognized as expenses as the goods are delivered or as related services are performed.

The capitalized amounts are

recognized as expenses as the goods are delivered or as related services are performed.

We separately track certain external costs on a program-by-program basis;

6 unchanged sentences

seek regulatory approvals for any product candidates that successfully complete clinical trials;

expand our research and development efforts and incur expenses associated with hiring additional personnel to support our research and development efforts;

and seek to identify, in-license, acquire, and/or develop additional product candidates.

The successful development of our CAR-T and CAR-NK product candidates, as well as other potential future product candidates, is highly uncertain.

The successful development of our CAR-T cell therapy product candidates, as well as other potential future product candidates, is highly uncertain.

Accordingly, we cannot reasonably estimate or know the nature, timing, and costs of the efforts that will be necessary to complete the development of our product candidates.

We are also unable to predict

when, if ever, we will generate revenue and material net cash inflows from the commercialization and sale of any of our product candidates for which we may obtain regulatory approval.

We are also unable to predict when, if ever, we will generate revenue and material net cash inflows from the commercialization and sale of any of our product candidates for which we may obtain regulatory approval.

We may never succeed in achieving regulatory approval for any of our product candidates.

1 unchanged sentence

• sufficiency of our financial and other resources;

• acceptance of our CRISPR chRDNA genome-editing technology;

• ability to develop differentiating features so that our products have a competitive edge;

• completion of preclinical studies;

• acceptance of our CRISPR chRDNA genome-editing technology and other new technologies we may develop or in-license;

• the ability to develop differentiating features so that our products have a competitive edge;

• establishment, maintenance, enforcement, and defense of our patents and other intellectual property rights;

• our ability to not infringe, misappropriate, or otherwise violate third-party intellectual property rights;

• the ability to not infringe, misappropriate, or otherwise violate third-party intellectual property rights;

• clearance of IND applications to initiate clinical trials on new product candidates;

• successful enrollment in, and completion of, our clinical trials on our product candidates;

• data from our clinical trials that support an acceptable risk-benefit profile of our product candidates for the intended patient populations and that demonstrate safety and efficacy;

• generation of data from our clinical trials that support an acceptable risk-benefit profile of our product candidates for the intended patient populations and that demonstrate safety and efficacy;

• entry into collaborations to further the development of our product candidates or for the development of new product candidates;

• successful development of our internal process development and transfer to larger-scale facilities;

• establishment of agreements with CMOs and suppliers for clinical and commercial supplies and scaling up manufacturing processes and capabilities to support our clinical trials;

• maintenance of, and compliance with, our agreements with CMOs and suppliers for clinical and commercial supplies and scaling up manufacturing processes and capabilities to support our clinical trials;

• receipt of marketing approvals from applicable regulatory authorities;

7 unchanged sentences

The following table summarizes our research and development expenses for the periods indicated:

Three Months Ended March 31,

(in thousands)

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

(in thousands) (in thousands)

External costs:

16 unchanged sentences

We accrue for these reimbursements as the respective expenses are incurred and classify such reimbursements as a reduction of general and administrative expenses.

During the three months ended March 31, 2024, and 2023, we recorded $0.1 million and $0.4 million, respectively, of patent cost reimbursements as a reduction to general and administrative expense.

We expect that our general and administrative expenses will increase in the future as a result of expanding our operations, including hiring personnel, preparing for potential commercialization of our product candidates, and additional facility occupancy costs, as well as other expenses necessary to support the growth and operations of a clinical-stage public company.

During the three months ended June 30, 2024, and 2023, we recorded $0.4 million and $0.7 million, respectively, of patent cost reimbursements as a reduction to general and administrative expense.

During the six months ended June 30, 2024, and 2023, we recorded $0.5 million and $1.1 million, respectively, of patent cost reimbursements as a reduction to general and administrative expense.

We expect that our general and administrative expenses will increase in the future as a result of expanding our operations, including preparing for potential commercialization of our product candidates, and additional facility occupancy costs, as well as other expenses necessary to support the growth and operations of a clinical-stage public company.

Other Income (Expense)

1 unchanged sentence

Results of Operations

Comparison of the Three Months Ended March 31, 2024, and 2023

Comparison of the Three Months Ended June 30, 2024, and 2023

The following table summarizes our results of operations for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30,

2024 2023 Change

13 unchanged sentences

Licensing and Collaboration Revenue

Licensing and collaboration revenue decreased by $1.1 million to $2.4 million for the three months ended March 31, 2024, from $3.5 million for the three months ended March 31, 2023.

This decrease primarily relates to a decrease of $1.6 million recognized under the now-terminated Collaboration and License Agreement, dated February 9, 2021 (as amended, “AbbVie Agreement”) with AbbVie Manufacturing Management Unlimited Company (“AbbVie”), partially offset by an increase of $0.6 million in revenues recognized under our Information Rights Agreement with Pfizer, Inc.

Licensing and collaboration revenue decreased by $0.3 million to $3.5 million for the three months ended June 30, 2024, from $3.8 million for the three months ended June 30, 2023.

This decrease primarily relates to a decrease of $1.4 million of revenue recognized under the now-terminated Collaboration and License Agreement, dated February 9, 2021 (as amended, “AbbVie Agreement”) with AbbVie Manufacturing Management Unlimited Company (“AbbVie”), partially offset by (i) an increase of $0.6 million in revenue recognized under our Information Rights Agreement with Pfizer Inc.

(“Pfizer”), dated June 29, 2023;

and (ii) a net increase of $0.5 million in revenue recognized under our agreements with Edge Animal Health (“Edge”), driven by (a) an increase of $1.6 million related to the Exclusive License Agreement for Veterinary Therapeutics (as amended, the “Edge chRDNA License Agreement”) with Edge, partially offset by (b) a decrease of $1.2 million related to the Exclusive License Agreement for Veterinary Therapeutics (CRISPR-Cas9) (the “Edge Cas9 License Agreement”) with Edge.

The following table summarizes our revenue by licensee for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30,

2024 2023 Change

1 unchanged sentence

AbbVie $ — $ 1,374 $ (1,374)

Edge Animal Health, related party 1,623 1,150 $ 473

Pfizer, related party

3 unchanged sentences

Research and Development Expenses

Research and development expenses increased by $8.1 million to $33.8 million for the three months ended March 31, 2024, from $25.7 million for the three months ended March 31, 2023.

This increase was primarily related to increases of $3.2 million in expenses related to licenses and milestones;

$2.0 million in personnel-related expenses, including stock-based compensation, due to headcount increases;

and $1.8 million of net increase in external CMO and CRO activities for our clinical CAR-T cell therapy product candidates, driven by an increase of $5.1 million in CRO activities for clinical trials, and partially offset by a decrease of $3.6 million due to timing of CMO activities.

Research and development expenses increased by $9.0 million to $35.5 million for the three months ended June 30, 2024, from $26.5 million for the three months ended June 30, 2023.

This increase was primarily related to (i) an increase of $5.1 million in other research and development expenses to advance preclinical and clinical research for our programs, as well as other consulting services related to research and development;

(ii) a net increase of $1.9 million in external CMO and CRO activities for our clinical CAR-T cell therapy product candidates, driven by (a) an increase of $3.6 million in CRO activities for clinical trials, partially offset by (b) a decrease of $1.7 million due to timing of CMO activities;

(iii) an increase of $1.6 million in personnel-related expenses, including stock-based compensation, due to

headcount increases;

and (iv) an increase of $0.8 million in other facilities and allocated expenses;

partially offset by a decrease of $0.4 million in expenses related to licenses, sublicensing revenue, and milestones.

General and Administrative Expenses

General and administrative expenses increased by $5.7 million to $14.6 million for the three months ended March 31, 2024, from $8.9 million for the three months ended March 31, 2023.

This increase was primarily related to increases of $4.6 million in legal, and other service-related expenses, including $3.9 million of accrued litigation settlement

and $1.3 million in personnel-related expenses, including stock-based compensation, due to headcount increases;

partially offset by a decrease of $0.4 million in patent prosecution and maintenance fees.

General and administrative expenses increased by $1.4 million to $11.5 million for the three months ended June 30, 2024, from $10.1 million for the three months ended June 30, 2023.

This increase was primarily related to increases of $1.3 million in personnel-related expenses, including stock-based compensation, due to headcount increases and $0.8 million in legal, and other service-related expenses;

partially offset by a decrease of $0.6 million in patent prosecution and maintenance costs.

Total Other Income

Total other income increased by $1.7 million for three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

We recognized a gain related to the change in the fair value of the MSKCC success payments liability in the amount of $0.3 million, for each of the three-month periods ended March 31, 2024, and 2023.

Other income, net increased by $1.6 million during the three months ended March 31, 2024, compared to March 31, 2023.

Total other income increased by $2.5 million for three months ended June 30, 2024, as compared to the three months ended June 30, 2023.

We recognized a gain related to the change in the fair value of the MSKCC success payments liability in the amount of $1.8 million and $0.3 million, for the three months ended June 30, 2024, and 2023, respectively.

Other income, net increased by $1.1 million during the three months ended June 30, 2024, compared to June 30, 2023.

The increase primarily relates to a $1.0 million increase in interest income earned from marketable securities.

Comparison of the Six Months Ended June 30, 2024, and 2023

The following table summarizes our results of operations for the periods indicated:

Six Months Ended June 30,

2024 2023 Change

(in thousands)

Licensing and collaboration revenue $ 5,893 $ 7,257 $ (1,364)

Operating expenses:

Research and development 69,268 52,212 17,056

General and administrative 26,128 19,029 7,099

Total operating expenses 95,396 71,241 24,155

Loss from operations (89,503) (63,984) (25,519)

Other income (expense):

Change in fair value of equity securities (102) 7 (109)

Change in fair value of the MSKCC success payments liability 2,098 534 1,564

Other income, net 8,576 5,880 2,696

Total other income 10,572 6,421 4,151

Net loss $ (78,931) $ (57,563) $ (21,368)

Licensing and Collaboration Revenue

Licensing and collaboration revenue decreased by $1.4 million to $5.9 million for the six months ended June 30, 2024, from $7.3 million for the six months ended June 30, 2023.

This decrease primarily relates to a decrease of $3.0 million recognized under the now-terminated AbbVie Agreement, partially offset by (i) an increase of $1.2 million in revenue recognized under our Information Rights Agreement with Pfizer, dated June 29, 2023;

and (ii) a net increase of $0.5 million in revenue recognized under our agreements with Edge, driven by (a) an increase of $1.6 million related to the Edge chRDNA License Agreement, partially offset by (b) a decrease of $1.2 million related to the Edge Cas9 License Agreement.

The following table summarizes our revenue by licensee for the periods indicated:

Six Months Ended June 30,

2024 2023 Change

(in thousands)

AbbVie $ — $ 2,983 $ (2,983)

Edge Animal Health, related party

1,623 1,150 $ 473

Pfizer, related party

Other licensees 3,027 3,124 (97)

Total licensing and collaboration revenue

$ 5,893 $ 7,257 $ (1,364)

Research and Development Expenses

Research and development expenses increased by $17.1 million to $69.3 million for the six months ended June 30, 2024, from $52.2 million for the six months ended June 30, 2023.

This increase was primarily related to (i) an increase of $5.6 million in other research and development expenses to advance preclinical and clinical research for our programs, as well as other consulting services related to research and development;

(ii) a net increase of $3.7 million in external CMO and CRO activities for our clinical CAR-T cell therapy product candidates, driven by (a) an increase of $9.1 million in CRO activities for clinical trials, partially offset by (b) a decrease of $5.4 million due to timing of CMO activities;

(iii) an increase of $3.6 million in personnel-related expenses, including stock-based compensation, due to headcount increases;

(iv) an increase of $2.9 million in expenses related to licenses, sublicensing revenue, and milestones;

and (v) an increase of $1.3 million in other facilities and allocated expenses.

General and Administrative Expenses

General and administrative expenses increased by $7.1 million to $26.1 million for the six months ended June 30, 2024, from $19.0 million for the six months ended June 30, 2023.

This increase was primarily related to increases of $5.7 million in legal, and other service-related expenses, including $3.9 million of accrued securities litigation settlement costs and $2.6 million in personnel-related expenses, including stock-based compensation, due to headcount increases;

partially offset by a decrease of $1.1 million patent prosecution and maintenance costs.

Total Other Income

Total other income increased by $4.2 million for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.

We recognized a gain related to the change in the fair value of the MSKCC success payments liability in the amount of $2.1 million and $0.5 million, for the six months ended June 30, 2024, and 2023, respectively.

Other income, net increased by $2.7 million during the six months ended June 30, 2024, compared to June 30, 2023.

The increase primarily relates to a $2.7 million increase in interest income earned from marketable securities.

Liquidity, Capital Resources, and Capital Requirements

4 unchanged sentences

Additionally, we received a $25.0 million equity investment from Pfizer through a private placement transaction in June 2023.

Through March 31, 2024, we received approximately $96.5 million from licensing agreements, licensing and collaboration agreements, a service agreement, patent assignments, and government grants, including $36.7 million that was received from AbbVie under the now-terminated AbbVie Agreement.

On August 9, 2022, we filed a universal shelf registration statement on Form S-3 (“Shelf Registration Statement”) with the SEC, which allows us to, from time to time, sell up to $400.0 million of common stock, preferred stock, debt securities, warrants, rights, or units comprised of any combination thereof (including the $100.0 million of common stock reserved for our at-the-market equity offering program).

Through June 30, 2024, we received approximately $98.2 million from licensing agreements, licensing and collaboration agreements, a service agreement, patent assignments, and government grants, including $36.7 million that was received from AbbVie under the now-terminated AbbVie Agreement.

securities, warrants, rights, or units comprised of any combination thereof (including the $100.0 million of common stock reserved for our at-the-market equity offering program).

The Shelf Registration Statement was declared effective by the SEC on August 16, 2022.

2 unchanged sentences

We pay Jefferies a commission equal to 3.0% of the aggregate gross proceeds of any shares sold through Jefferies pursuant to the ATM Sales Agreement.

As of March 31, 2024, we have sold 1,762,806 shares of our common stock under the ATM Sales Agreement, at an average price per share of $7.32 for aggregate gross proceeds of $12.9 million ($12.3 million net of offering expenses).

As of June 30, 2024, we have sold 1,762,806 shares of our common stock under the ATM Sales Agreement, at an average price per share of $7.32 for aggregate gross proceeds of $12.9 million ($12.3 million net of offering expenses).

In July and August 2023, we issued and sold a total of 22,115,384 shares of our common stock in an underwritten follow-on public offering at a price to the public of $6.50 per share, which included the full exercise of the underwriters’ right to purchase 2,884,615 additional shares of our common stock.

1 unchanged sentence

The shares were sold under the Shelf Registration Statement.

As of March 31, 2024, we had cash, cash equivalents, and marketable securities of $345.9 million.

As of June 30, 2024, we had cash, cash equivalents, and marketable securities of $311.8 million.

We will continue to be dependent upon equity financing, debt financing, collaboration and licensing arrangements, and/or other forms of capital raises at least until we are able to generate significant positive cash flows from our operations.

as described in Note 8 and in Notes 4 and 9, respectively, to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

We have no current ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, except for our lease commitments and payments under certain of our license agreements, as described in Note 8 and in Notes 4 and 9, respectively, to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

Based on our current operating plan, we expect that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operations for at least the next 12 months from the date of this Form 10-Q.

11 unchanged sentences

Through an information sharing committee, we provide calendar quarter updates to Pfizer regarding the development program for a BCMA Product Candidate.

Additionally, we provide Pfizer access to any preclinical or interim or final clinical data (including raw data) and results generated as part of the development program for a BCMA Product Candidate at the same time that we provide such data to a third party (other than to our service providers or the FDA or other regulatory authorities), subject to certain confidentiality exceptions.

Additionally, we provide Pfizer access to any preclinical or interim or final clinical data (including raw data) and results generated as part of the

development program for a BCMA Product Candidate at the same time that we provide such data to a third party (other than to our service providers or the FDA or other regulatory authorities), subject to certain confidentiality exceptions.

On June 29, 2023, we and Pfizer also entered into a Voting Agreement, pursuant to which, for a period of 12 months, Pfizer agreed to cause our voting securities that Pfizer beneficially owns (within the meaning of Rules 13d-3 or 13d-5 under the Exchange Act) in excess of 4.99% of our then issued and outstanding voting securities to be voted (i) with respect to any matter directly relating to remuneration of directors, directors’ insurance, or indemnification or release from liability of directors, in a manner proportionally consistent with the votes properly cast for and against by holders of voting securities not beneficially owned by Pfizer, and (ii) with respect to any other matter in which Pfizer shall have the right to vote such voting securities, in accordance with the recommendation of our board of directors or any applicable committee thereof.

4 unchanged sentences

• the initiation, progress, timing, costs, and results of preclinical studies and clinical trials for our product candidates;

• the clinical development plans we establish for these product candidates;

• the number and characteristics of the product candidates that we develop;

• increases in the number of our employees and expansion of our physical facilities to support growth initiatives;

• the clinical development plans we establish for our product candidates;

• the number and characteristics of the new product candidates that we develop;

• the outcome, timing, and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities;

1 unchanged sentence

• the cost of filing and prosecuting our patent applications, and maintaining and enforcing our patents and other intellectual property rights;

• the extent to which we acquire or in-license other product candidates and technologies;

• the extent to which we acquire or in-license other product candidates and/or new technologies;

• the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against our products after we receive regulatory approval;

• the effect of competing technological and market developments;

• the cost and timing of completion of commercial-scale outsourced manufacturing activities or the cost and timing of completion of clinical-scale and commercial-scale internal manufacturing activities;

• the cost and timing of completion of commercial-scale outsourced manufacturing activities;

• the cost and timing of completion of clinical-scale and commercial-scale internal manufacturing activities, if we elect to conduct these activities ourselves;

• increases in the number of our employees and expansion of our physical facilities to support growth initiatives;

• the cost of establishing sales, marketing, and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products without a partner;

13 unchanged sentences

If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances, or licensing arrangements with third parties or other sources, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams, or research programs or grant licenses on terms that may not be favorable to us.

Comparison of the Three Months Ended March 31, 2024, and 2023

Comparison of the Six Months Ended June 30, 2024, and 2023

The following table summarizes our cash flows for the periods indicated:

Three Months Ended March 31,

Six Months Ended June 30,

2024 2023 Change

3 unchanged sentences

Cash provided by financing activities 12,617 19,213 (6,596)

Net decrease in cash, and cash equivalents $ (1,762) $ (5,594) $ 3,832

Net (decrease) increase in cash, and cash equivalents $ (13,296) $ 7,856 $ (21,152)

Cash Used in Operating Activities

Net cash used in operating activities was $37.2 million and $27.9 million for the three months ended March 31, 2024, and 2023, respectively.

Cash used in operating activities for the three months ended March 31, 2024, was primarily due to our net loss of $41.2 million, adjusted by non-cash charges of $4.9 million and net changes in our operating assets and liabilities of $0.8 million.

Our non-cash charges were primarily comprised of $4.0 million of stock-based compensation, $0.7 million of depreciation and amortization expense, and non-cash lease expense of $0.5 million, which were partially offset by change in the fair value of the MSKCC success payments liability of $0.3 million, and accretion of discounts on our marketable securities investments of $1.5 million.

The changes in our operating assets and liabilities were primarily due to an increase in accounts receivable of $0.8 million, and prepaid expenses and other current assets of $0.8 million and decreases of $2.2 million in accrued expenses and other current liabilities, and $0.7 million in deferred revenue, current and long-term, partially offset by decreases in other receivables of $0.6 million, and $0.5 million in contract assets, and an increase of $2.7 million in accounts payable.

Cash used in operating activities for the three months ended March 31, 2023, was primarily due to our net loss of $28.0 million, adjusted by non-cash charges of $2.5 million and net changes in our operating assets and liabilities of $2.4 million.

Our non-cash charges were primarily comprised of $3.1 million of stock-based compensation, $0.6 million of depreciation and amortization expense, and non-cash lease expense of $0.5 million, which were partially offset by amortization of investment premiums of $1.5 million, and change in the fair value of the MSKCC success payments liability of $0.3 million.

The changes in our operating assets and liabilities were due to increases of $1.3 million in accounts receivable, and decreases of $4.1 million in accrued expenses and other current liabilities, $1.1 million in deferred revenue, and $0.3 million in operating lease liabilities, partially offset by decreases in prepaid expenses and other current assets of $1.8 million, contract assets of $0.6 million, and other receivables of $0.5 million, and an increase of $1.5 million in accounts payable.

Net cash used in operating activities was $70.1 million and $43.1 million for the six months ended June 30, 2024, and 2023, respectively.

Cash used in operating activities for the six months ended June 30, 2024, was primarily due to our net loss of $78.9 million, adjusted by non-cash charges of $6.9 million and net changes in our operating assets and liabilities of $2.0 million.

Our non-cash charges were primarily comprised of (i) $8.7 million of stock-based compensation, (ii) $1.6 million of depreciation and amortization expense, (iii) $1.6 million of acquired in-process research and development, and (iv) non-cash lease expense of $1.0 million;

which were partially offset by (i) accretion of discounts on our marketable securities investments of $2.5 million, (ii) change in the fair value of the MSKCC success payments liability of $2.1 million, and (iii) non-cash consideration for licensing and collaboration revenue of $1.6 million.

The changes in our operating assets and liabilities were primarily due to (i) decreases in other receivables of $0.6 million and $0.5 million in contract assets, and (ii) increases of $2.8 million in accrued expenses and other current liabilities and $0.4 million in accounts payable;

partially offset by (i) an increase in prepaid expenses and other current assets of $0.2 million and (ii) decreases of $1.5 million in deferred revenue, current and long-term and $0.3 million in operating lease liabilities.

Cash used in operating activities for the six months ended June 30, 2023, was primarily due to our net loss of $57.6 million, adjusted by non-cash charges of $4.7 million and net changes in our operating assets and liabilities of $9.7 million.

Our non-cash charges were primarily comprised of (i) $6.7 million of stock-based compensation, (ii) $1.2 million of depreciation and amortization expense, and (iii) non-cash lease expense of $1.0 million;

which were partially offset by (i) amortization of investment premiums of $3.6 million, and (ii) change in the fair value of the MSKCC success payments liability of $0.5 million.

The changes in our operating assets and liabilities were due to (i) decreases in prepaid expenses and other current assets of $2.4 million, contract assets of $0.8 million, and other receivables of $0.7 million, and (ii) increases of $5.2 million in deferred revenue (including $7.5 million related to the Pfizer Investment) and $2.0 million in

accounts payable;

partially offset by (i) an increase of $0.6 million in accounts receivable, and (ii) decreases of $0.5 million in operating lease liabilities and $0.4 million in accrued expenses and other current liabilities.

Cash Provided by Investing Activities

During the three months ended March 31, 2024, and 2023, cash provided by investing activities was $23.0 million, and $20.7 million, respectively.

Cash provided by investing activities for the three months ended March 31, 2024, was primarily due to proceeds from the sales and maturities of marketable securities of $97.1 million, partially offset by purchases of marketable securities of $71.2 million, in-process research and development of $1.5 million, and property and equipment of $1.4 million.

Cash provided by investing activities for the three months ended March 31, 2023, was primarily due to proceeds from the sales and maturities of marketable securities of $98.7 million, partially offset by sales of marketable securities of $75.9 million and property and equipment of $2.0 million.

During the six months ended June 30, 2024, and 2023, cash provided by investing activities was $44.2 million, and $31.8 million, respectively.

Cash provided by investing activities for the six months ended June 30, 2024, was primarily due to proceeds from the sales and maturities of marketable securities of $204.9 million, partially offset by purchases of marketable securities of $155.4 million, in-process research and development of $1.6 million, and property and equipment of $3.7 million.

Cash provided by investing activities for the six months ended June 30, 2023, was primarily due to proceeds from the sales and maturities of marketable securities of $171.0 million, partially offset by purchases of marketable securities of $134.7 million and property and equipment of $4.6 million.

Cash Provided by Financing Activities

During the three months ended March 31, 2024, and 2023, cash provided by financing activities was $12.5 million and $1.6 million, respectively.

Cash provided by financing activities for the three months ended March 31, 2024, was primarily due to net proceeds from our at-the-market equity offering program of $11.3 million, the purchases of common stock under the 2021 Employee Stock Purchase Plan (“2021 ESPP”) of $0.7 million, and the exercise of stock options of $0.5 million.

Cash provided by financing activities for the three months ended March 31, 2023, was due to net proceeds from our at-the-market equity offering program of $1.1 million and the exercise of stock options and purchases of common stock under the 2021 ESPP of $0.5 million.

During the six months ended June 30, 2024, and 2023, cash provided by financing activities was $12.6 million and $19.2 million, respectively.

Cash provided by financing activities for the six months ended June 30, 2024, was primarily due to net proceeds from our at-the-market equity offering program of $11.3 million, the purchases of common stock under the 2021 Employee Stock Purchase Plan (“ESPP”) of $0.7 million, and the exercise of stock options of $0.6 million.

Cash provided by financing activities for the six months ended June 30, 2023, was primarily due to $17.5 million of gross proceeds allocated to the issuance of common stock in connection with the Pfizer Investment, net proceeds from our at-the-market equity offering program of $1.0 million, and the exercise of stock options and purchases of common stock under the ESPP of $0.8 million.

Critical Accounting Policies and Significant Judgments and Estimates

13 unchanged sentences

Quantitative and Qualitative Disclosures about Market Risk.

There have been no material changes to our market risk during the three months ended March 31, 2024.

There have been no material changes to our market risk during the six months ended June 30, 2024.

For a discussion of our exposure to market risk, refer to the section titled “Quantitative and Qualitative Disclosures About Market Risk” in our Form 10-K.

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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis