What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-06 compared with 2024-08-06 · 112 added, 107 removed, 296 unchanged (43% 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 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.

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 September 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.

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risks caused by public health crises or geopolitical events on our business and operations;

and other risks described in greater detail in the section of our Form 10-K titled “Risk Factors,” and in other filings we make with the SEC.

The events and circumstances reflected in our forward-looking statements may not be achieved or may not occur, and actual results could differ materially from those described in or implied by the forward-looking statements.

and other risks described in greater detail in the section of our Form 10-K titled “Risk Factors,” and in other filings we make with the SEC, the events and circumstances reflected in our forward-looking statements may not be achieved or may not occur, and actual results could differ materially from those described in or implied by the forward-looking statements.

As a result of these risks, you should not place undue reliance on these forward-looking statements.

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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.

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

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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.

Upon confirmation of improved outcomes in 2L LBCL patients receiving a partially HLA matched dose of CB-010, we expect 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.

CB-010 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 our multicenter, open label, GALLOP phase 1 clinical trial 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.

CB-010 received fast track designation for refractory systemic lupus erythematosus (“SLE”) from the FDA.

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”).

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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.

The third product candidate from our CAR-T cell platform is CB-012, an allogeneic CAR-T cell therapy targeting CLL-1 (also known as CD371).

Recently, we implemented a lymphodepletion regimen that includes a higher dose of cyclophosphamide than was part of the original protocol, and we plan to present initial dose escalation data from our CaMMouflage phase 1 clinical trial in the first half of 2025.

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

The third product candidate from our CAR-T cell platform is CB-012, an allogeneic CAR-T cell therapy targeting CLL-1.

CB-012 is, to our knowledge, the first allogeneic CAR-T cell therapy with both checkpoint disruption and immune cloaking strategies.

We believe that CLL-1 is an attractive target for acute myeloid leukemia (“AML”) due to its expression on myeloid cancer cells, its enrichment on leukemic stem cells, and its absence on hematopoietic stem cells (“HSCs”).

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.

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

We plan to provide updates on dose escalation as our AMpLify phase 1 clinical trial advances.

CB-012 received fast track and orphan drug designations for r/r AML from the FDA.

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.

We do not have any products

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

We have incurred operating losses since commencement of our operations.

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(“Intellia”) common stock.

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 for the three months ended September 30, 2024, and 2023, were $34.7 million and $10.0 million, respectively.

Our net losses for the nine months ended September 30, 2024, and 2023, were $113.6 million and $67.6 million, respectively.

We had an accumulated deficit of $412.9 million as of September 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.

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• 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;

• 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 study results or clinical trial data subject to differing interpretations, or the occurrence of potential safety issues or other development or regulatory challenges;

• make royalty, milestone, or other payments under current, and any future, in-license or assignment agreements;

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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 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.

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

Additionally, we may decide to bring certain manufacturing functions in house and/or build our own manufacturing facility in the future to provide greater flexibility and control over our clinical and commercial manufacturing needs.

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If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us.

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.

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%.

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.

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 2025.

In connection with the workforce reduction, we recorded a total of $0.6 million in non-recurring restructuring charges during the three months ended September 30, 2024, consisting primarily of cash severance costs, continuation of benefits, and transition support services for impacted employees.

Components of Results of Operations

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Each of these payments results in licensing and collaboration revenue.

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.

Revenue under such licensing and collaboration agreements was $2.0 million and $23.7 million for the three months ended September 30, 2024, and 2023, respectively, and $7.9 million and $30.9 million for the nine months ended September 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.

For additional information about our revenue recognition policy related to our licensing and collaboration agreements, see Note 2 to the consolidated financial statements included in our Form 10-K.

For the foreseeable future, we expect substantially all of our revenue will be generated from licensing and collaboration agreements.

For the foreseeable future, we expect substantially all our revenue will be generated from licensing and collaboration agreements.

Operating Expenses

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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;

however, we do not track costs that are deployed across multiple programs.

Research and development activities are central to our business model.

Research and development activities are central to our business strategy.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

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• 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 CMOs;

• 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;

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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$ 375 $ 968 $ 4,429 $ 2,141

Services provided by CROs, CMOs, and other third parties that conduct preclinical studies and clinical trials on our behalf

Services provided by CROs, CMOs, and third parties that conduct preclinical studies and clinical trials on our behalf

13,060 11,928 37,215 32,345

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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 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.

During the three months ended September 30, 2024, and 2023, we recorded $0.4 million and $0.2 million, respectively, of patent cost reimbursements as a reduction to general and administrative expense.

During the nine months ended September 30, 2024, and 2023, we recorded $0.9 million and $1.3 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)

Other income (expense) consists primarily of interest income earned on cash and marketable securities and the change in fair value of the Memorial Sloan Kettering Cancer Center (“MSKCC”) success payments liability under our Exclusive License Agreement, dated November 13, 2020, with MSKCC (“MSKCC Agreement”).

Other income consists primarily of interest income earned on cash and marketable securities and the change in fair value of the Memorial Sloan Kettering Cancer Center (“MSKCC”) success payments liability under our Exclusive License Agreement, dated November 13, 2020, with MSKCC (“MSKCC Agreement”).

Results of Operations

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

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

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

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

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Loss from operations (38,238) (14,633) (23,605)

Other income (expense):

Other income:

Change in fair value of equity securities (14) (4) (10)

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Licensing and Collaboration Revenue

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.

Licensing and collaboration revenue decreased by $21.6 million to $2.0 million for the three months ended September 30, 2024, from $23.7 million for the three months ended September 30, 2023.

This decrease was primarily related to a decrease of $21.5 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”).

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

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

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AbbVie $ — $ 21,476 $ (21,476)

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

Pfizer, related party

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Research and Development Expenses

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;

Research and development expenses increased by $1.8 million to $30.4 million for the three months ended September 30, 2024, from $28.6 million for the three months ended September 30, 2023.

This increase was primarily related to (i) a net increase of $1.1 million in external CMO and CRO activities for our clinical CAR-T cell therapy product candidates, driven by (a) an increase of $1.4 million in CRO activities for clinical trials;

partially offset by (b) a decrease of $0.3 million due to timing of CMO activities;

(ii) an increase of $1.0 million in personnel-related expenses, including stock-based compensation, primarily due to severance and other related expenses recorded as a result of the July 2024 workforce reduction;

and (iii) an increase of $0.3 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;

partially offset by a decrease of $0.6 million in expenses related to licenses, sublicensing revenue, and milestones.

General and Administrative Expenses

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.

General and administrative expenses increased by $0.1 million to $9.8 million for the three months ended September 30, 2024, from $9.7 million for the three months ended September 30, 2023.

This increase was primarily related to increases of $0.4 million in patent prosecution and maintenance costs;

partially offset by a decrease of $0.3 million in legal and other service-related expenses.

Total Other Income

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

Total other income decreased by $1.1 million for three months ended September 30, 2024, as compared to the three months ended September 30, 2023.

We recognized a loss related to the change in the fair value of the MSKCC success payments liability in the amount of $0.2 million and $0.1 million, for the three months ended September 30, 2024, and 2023, respectively.

Other income, net decreased by $1.0 million during the three months ended September 30, 2024, compared to September 30, 2023.

This decrease was primarily related to a $1.0 million decrease in interest income earned from marketable securities.

Comparison of the Nine Months Ended September 30, 2024, and 2023

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

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 Change

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Loss from operations (127,741) (78,617) (49,124)

Other income (expense):

Other income:

Change in fair value of equity securities (116) 3 (119)

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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.

Licensing and collaboration revenue decreased by $23.0 million to $7.9 million for the nine months ended September 30, 2024, from $30.9 million for the nine months ended September 30, 2023.

This decrease was primarily related to a decrease of $24.5 million in revenue 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,

Nine Months Ended September 30,

2024 2023 Change

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Pfizer, related party

1,865 622 1,243

Other licensees 4,429 4,689 (260)

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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.

Research and development expenses increased by $18.9 million to $99.7 million for the nine months ended September 30, 2024, from $80.8 million for the nine months ended September 30, 2023.

This increase was primarily related to (i) an increase of $5.9 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;

(ii) a net increase of $4.9 million in external CMO and CRO activities for our clinical CAR-T cell therapy product candidates, driven by (a) an increase of $10.5 million in CRO activities for clinical trials;

partially offset by (b) a decrease of $5.6 million due to timing of CMO activities;

(iii) an increase of $4.6 million in personnel-related expenses, including stock-based compensation, due to headcount increases;

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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.

General and administrative expenses increased by $7.2 million to $36.0 million for the nine months ended September 30, 2024, from $28.7 million for the nine months ended September 30, 2023.

This increase was primarily related to increases of $5.4 million in legal, and other service-related expenses, including $3.9 million of accrued costs for the securities litigation settlement and $2.7 million in personnel-related expenses, including stock-based compensation, due to headcount increases;

partially offset by a decrease of $0.7 million in 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.

Total other income increased by $3.1 million for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

We recognized a gain related to the change in the fair value of the MSKCC success payments liability in the amount of $1.9 million and $0.4 million, for the nine months ended September 30, 2024, and 2023, respectively.

Other income, net increased by $1.7 million during the nine months ended September 30, 2024, compared to September 30, 2023.

This increase was primarily related to a $1.7 million increase in interest income earned from marketable securities.

Liquidity, Capital Resources, and Capital Requirements

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Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations.

We have funded our operations through sales of our capital stock, including sales of our convertible preferred stock, which generated approximately $150.1 million in aggregate net proceeds through 2021, from our initial public offering (“IPO”) in 2021, which generated approximately $321.0 million in net proceeds and from an underwritten follow-on public offering in 2023, which generated approximately $134.4 million in net proceeds.

from our initial public offering (“IPO”) in 2021, which generated approximately $321.0 million in net proceeds;

and from our underwritten follow-on public offering in 2023, which generated approximately $134.4 million in net proceeds.

We have also received approximately $88.4 million in net proceeds from the sale of Intellia common stock through 2020.

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

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).

Through September 30, 2024, we received approximately $99.8 million from licensing agreements, licensing and collaboration agreements, a service agreement, patent assignments, and government grants, including $36.7 million that we 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).

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

On August 9, 2022, we entered into an at-the-market Open Market Sale Agreement SM (“ATM Sales Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which, upon the terms and subject to the conditions and limitations set forth in the ATM Sales Agreement, we may, from time to time, in our sole discretion, issue and sell, through Jefferies, acting as sales agent, up to $100.0 million of our shares of common stock, by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act.

On August 9, 2022, we entered into an at-the-market Open Market Sale Agreement SM (“ATM Sales Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which, upon the terms and subject to the conditions and limitations set forth in the ATM Sales Agreement, we may, from time to time, in our sole discretion, issue and sell, through Jefferies, acting as sales agent, up to $100.0 million of our shares of common stock under the Shelf Registration Statement, by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act.

Jefferies uses commercially reasonable efforts consistent with its normal sales and trading practices to sell shares from time to time, based upon our instructions (including any price or size limits or other customary parameters or conditions we may impose).

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 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).

As of September 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.

The total net proceeds from the offering were approximately $134.4 million, after deducting underwriting discounts and commissions and offering expenses.

The total gross proceeds from the offering were approximately $143.7 million ($134.4 million net of underwriting discounts and commissions and offering expenses).

The shares were sold under the Shelf Registration Statement.

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

As of September 30, 2024, we had cash, cash equivalents, and marketable securities of $281.0 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.

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.

We have no current ongoing material contractual commitments that are expected to affect our liquidity over the next five years, except for our lease commitments and payments under certain of our agreements with CMOs, suppliers, CROs, clinical trial sites, licensors, assignors, and the like.

On April 22, 2024, we reached an agreement in principle with plaintiffs in the securities litigation to settle the case for $3.9 million and, on October 15, 2024, the court issued an order preliminarily approving the settlement pending a final settlement approval hearing.

For information regarding our material contractual obligations and commitments and other contingencies, refer to Notes 4, 8, and 9 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.

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Strategic Investment

On June 29, 2023, we entered into a Securities Purchase Agreement with Pfizer pursuant to which we issued and sold to Pfizer 4,690,431 shares of our common stock, par value $0.0001 per share, at a purchase price of $5.33 per share, for aggregate gross proceeds of approximately $25.0 million in a private placement transaction (“Pfizer Investment”).

On June 29, 2023, we entered into a Securities Purchase Agreement with Pfizer Inc.

(“Pfizer”) pursuant to which we issued and sold to Pfizer 4,690,431 shares of our common stock, par value $0.0001 per share, at a purchase price of $5.33 per share, for aggregate gross proceeds of approximately $25.0 million in a private placement transaction (“Pfizer Investment”).

The issuance and sale of the shares to Pfizer closed on June 30, 2023.

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On June 29, 2023, in connection with the Pfizer Investment, we and Pfizer also entered into an Information Rights Agreement, having a 36-month term.

Under the Information Rights Agreement, we granted Pfizer a 30 calendar day right of first negotiation (“ROFN”) if we commence or engage with any third party with respect to a potential grant of rights to develop and/or commercialize a BCMA Product Candidate, including, without limitation, a license agreement, a co-promotion/co-commercialization agreement, a profit share agreement, a joint venture agreement, or an asset sale agreement (a “Grant of Program Rights”).

Under the Information Rights Agreement, we granted Pfizer a 30 calendar day right of first negotiation if we commence or engage with any third party with respect to a potential grant of rights to develop and/or commercialize a BCMA Product Candidate, including, without limitation, a license agreement, a co-promotion/co-commercialization agreement, a profit share agreement, a joint venture agreement, or an asset sale agreement (a “Grant of Program Rights”).

If we and Pfizer do not reach an agreement with respect to a Grant of Program Rights within the 30-day period, then we may pursue negotiations and enter into an agreement with any third party.

If we and such third party do not reach agreement on the Grant of Program Rights within a specified time period, Pfizer’s right of first negotiation will be reinstated.

If we and such third party do not

reach agreement on the Grant of Program Rights within a specified time period, Pfizer’s right of first negotiation will be reinstated.

Under the Information Rights Agreement, we also granted Pfizer the right to designate one representative to serve on our scientific advisory board.

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.

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.

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.

Funding Requirements

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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 Six Months Ended June 30, 2024, and 2023

Comparison of the Nine Months Ended September 30, 2024, and 2023

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

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 Change

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Cash used in operating activities $ (102,730) $ (71,912) $ (30,818)

Cash provided by investing activities 44,156 31,767 12,389

Cash provided by (used in) investing activities 70,677 (36,709) 107,386

Cash provided by financing activities 12,861 154,341 (141,480)

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

Net (decrease) increase in cash, and cash equivalents, and restricted cash $ (19,192) $ 45,720 $ (64,912)

Cash Used in Operating Activities

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;

Net cash used in operating activities was $102.7 million and $71.9 million for the nine months ended September 30, 2024, and 2023, respectively.

Cash used in operating activities for the nine months ended September 30, 2024, was primarily due to our net loss of $113.6 million, adjusted by non-cash charges of $11.7 million and net changes in our operating assets and liabilities of $0.8 million.

Our non-cash charges were primarily comprised of (i) $12.8 million of stock-based compensation, (ii) $2.7 million of depreciation and amortization expense, (iii) $1.7 million of non-cash lease expense, and (iv) $1.6 million of acquired in-process research and development;

which were partially offset by (i) accretion of discounts on our marketable securities investments of $3.7 million, (ii) change in the fair value of the MSKCC success payments liability of $1.9 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.

The changes in our operating assets and liabilities were primarily due to (i) increases of $3.2 million in other assets and $0.4 million in prepaid expenses and other current assets, and (ii) decreases of $2.2 million in deferred revenue, current and long-term and $0.5 million in operating lease liabilities;

partially offset by (i) decreases of $0.6 million in other receivables and $0.6 million in contract assets, and (ii) an increase of $4.3 million in accrued expenses and other current liabilities.

Cash used in operating activities for the nine months ended September 30, 2023, was primarily due to our net loss of $67.6 million, adjusted by non-cash charges of $8.0 million and net changes in our operating assets and liabilities of $12.3 million.

Our non-cash charges were primarily comprised of (i) $10.2 million of stock-based compensation, (ii) $2.8 million of depreciation and amortization expense, and (iii) non-cash lease expense of $1.6 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.

which were partially offset by (i) accretion of discounts on investments of $6.0 million, and (ii) change in the fair value of the MSKCC success payments liability of $0.4 million.

The changes in our operating assets and liabilities were primarily due to an increase in accounts receivable of $0.9 million and decreases of $16.3 million in deferred revenue, current and long-term, and $0.3 million in operating lease liabilities;

partially offset by (i) decreases in prepaid expenses and other current assets of $0.9 million, contract assets of $0.6 million, and (ii) increases of $2.8 million in accrued expenses and other current liabilities, and $1.1 million in accounts payable.

Cash Provided by Investing Activities

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.

During the nine months ended September 30, 2024, cash provided by investing activities was $70.7 million, and during the nine months ended September 30, 2023, cash used in investing activities was $36.7 million.

Cash provided by investing activities for the nine months ended September 30, 2024, was primarily due to proceeds from the maturities of marketable securities of $325.6 million;

partially offset by purchases of marketable securities of $248.9 million, property and equipment of $4.4 million, and in-process research and development of $1.6 million.

Cash used in investing activities for the nine months ended September 30, 2023, was primarily due to purchases of marketable securities of $310.6 million and property and equipment of $9.3 million;

partially offset by proceeds from the sales and maturities of marketable securities of $283.2 million.

Cash Provided by Financing Activities

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.

During the nine months ended September 30, 2024, and 2023, cash provided by financing activities was $12.9 million and $154.3 million, respectively.

Cash provided by financing activities for the nine months ended September 30, 2024, was primarily due to net proceeds from our at-the-market equity offering program of $11.3 million, the issuances of common stock under the 2021 Employee Stock Purchase Plan (“ESPP”) of $0.9 million, and the exercises of stock options of $0.6 million.

Cash provided by financing activities for the nine months ended September 30, 2023, was primarily due to $134.5 million of net proceeds from our underwritten follow-on public offering, $17.3 million of net proceeds allocated to the issuances of common stock in a private placement transaction with Pfizer, net proceeds from our at-the-market equity offering program of $1.0 million, and the exercises of stock options and the issuances of common stock under the ESPP of $1.5 million.

Critical Accounting Policies and Significant Judgments and Estimates

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Quantitative and Qualitative Disclosures about Market Risk.

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

There have been no material changes to our market risk during the nine months ended September 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