What changed in this filing

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Item 1. Financial Statements

2020-08-07 compared with 2020-05-08 · 77 added, 38 removed, 279 unchanged (29% of the section changed)

30 unchanged sentences

195,000,000 shares authorized;

54,982,399 and 54,533,798 shares issued, and 54,802,399 and 54,355,798 shares outstanding at March 31, 2020 and December 31, 2019, respectively

62,265,649 and 54,533,798 shares issued, and 62,103,649 and 54,355,798 shares outstanding at June 30, 2020 and December 31, 2019, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Collaboration and other research and development revenues

8 unchanged sentences

Total other income, net

Net loss per share attributable to common stockholders, basic and diluted

Net loss per share basic and diluted

Weighted-average common shares outstanding, basic and diluted

4 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive income:

Unrealized gain on marketable debt securities

Unrealized gain (loss) on marketable debt securities

Comprehensive loss

11 unchanged sentences

Balance at March 31, 2020

Exercise of stock options

Issuance of common stock for public offering

Stock-based compensation expense

Vesting of restricted common stock awards

Purchase of common stock under benefit plans

Unrealized loss on marketable debt securities

Balance at June 30, 2020

Comprehensive

8 unchanged sentences

Balance at March 31, 2019

Exercise of stock options

Vesting of restricted common stock awards

Purchase of common stock under benefit plan

Stock-based compensation expense

Unrealized gain on marketable debt securities

Balance at June 30, 2019

The accompanying notes are an integral part of the condensed consolidated financial statements.

2 unchanged sentences

(amounts in thousands)

Three Months Ended

Six Months Ended

Cash flow from operating activities

21 unchanged sentences

Cash flow from financing activities

Proceeds from offering of common stock, net of issuance costs

Proceeds from exercise of stock options

Issuance of common stock under benefit plans

Net cash provided by financing activities

Net (decrease) increase in cash, cash equivalents, and restricted cash

Net increase in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash, beginning of period

3 unchanged sentences

Cash paid in connection with operating lease liabilities

Offering costs included in accounts payable and accrued expenses

Right-of-use assets obtained in exchange of operating lease obligations

8 unchanged sentences

Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and raising capital.

The Company has primarily financed its operations through various equity financings, payments received under a research collaboration with Juno Therapeutics, Inc., a wholly-owned subsidiary of the Bristol-Myers Squibb Company (“Juno Therapeutics”), and payments received under a strategic alliance with Allergan Pharmaceuticals International Limited (together with its affiliates, “Allergan”)

in May 2020 and is referred to together with its affiliates as “Allergan”).

In August 2020, the collaboration with Allergan was terminated.

See Note 11, “Subsequent Events”.

The Company is subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, dependence on key personnel, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations and ability to transition from pilot-scale manufacturing to large-scale production of products.

As of March 31, 2020, the Company has raised an aggregate of $ 444.8 million in net proceeds through the sale of shares of its common stock in public offerings and at-the-market offerings.

In May 2020, the Company entered into a sales agreement with Cowen and Company, LLC (“Cowen”), under which the Company from time to time can issue and sell shares of its common stock through Cowen in at-the-market offerings for aggregate gross sale proceeds of up to $ 150.0 million ( the “ATM Facility”).

As of June 30, 2020, the Company has not sold any shares of its common stock under the ATM Facility.

In June 2020, the Company completed a public offering whereby the Company sold 6,900,000 shares of its common stock, inclusive of 900,000 shares of common stock sold by the Company pursuant to the full exercise of an option granted to the underwriters in connection with the offering and received net proceeds of approximately $ 203.7 million.

As of June 30, 2020, the Company has raised an aggregate of $ 648.7 million in net proceeds through the sale of shares of its common stock in public offerings and at-the-market offerings.

The Company has incurred annual net operating losses in every year since its inception.

The Company expects that its existing cash, cash equivalents and marketable securities at March 31, 2020 and anticipated interest income will enable it to fund its operating expenses and capital expenditure requirements for at least 24 months following the date of this Quarterly Report on Form 10-Q.

The Company had an accumulated deficit of $ 586.9 million at March 31, 2020, and will require substantial additional capital to fund its operations.

The Company expects that its existing cash, cash equivalents and marketable securities at June 30, 2020 and anticipated interest income will enable it to fund its operating expenses and capital expenditure requirements into 2023 .

The Company had an accumulated deficit of $ 610.5 million at June 30, 2020, and will require substantial additional capital to fund its operations.

The Company has never generated any product revenue.

10 unchanged sentences

The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure.

The three months ended March 31, 2020 and 2019 are referred to as the first quarter of 2020 and 2019, respectively.

The three months ended June 30, 2020 and 2019 are referred to as the second quarter of 2020 and 2019, respectively.

The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.

16 unchanged sentences

When assessing financial assets for credit losses, the Company pools financial assets with similar risk characteristics and performs a collective evaluation.

However, the Company is not required to measure expected credit losses in which historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero.

However, the Company is not required to measure expected credit losses in which historical credit loss information adjusted for

current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero.

At each reporting date, the Company will record an allowance for credit losses and reports it as credit loss expense which is included in “Other income (expense), net” in the Company’s condensed consolidated statement of operations.

4 unchanged sentences

The Company therefore did not record an allowance for credit losses or doubtful accounts upon adoption or during the first quarter of 2020.

The adoption of ASU 2016-13 therefore had no impact on the Company’s condensed consolidated financial statements.

The adoption of ASU 2016-13 had no impact on the Company’s condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal Use Software:

10 unchanged sentences

Cash Equivalents, Marketable Securities and Equity Securities

Cash equivalents and marketable securities consisted of the following at March 31, 2020 (in thousands):

March 31, 2020

Cash equivalents and marketable securities consisted of the following at June 30, 2020 (in thousands):

June 30, 2020

Cash equivalents and marketable securities:

9 unchanged sentences

Corporate equity securities

As of March 31, 2020, the Company did not hold any marketable securities in an unrealized loss position.

As of June 30, 2020, the Company did not hold any marketable securities in an unrealized loss position.

Furthermore, the Company has determined that there were no material changes in the credit risk of the debt securities.

There were no realized gains or losses on available-for-sale securities during the three months ended March 31, 2020 or 2019.

There were no realized gains or losses on available-for-sale securities during the six months ended June 30, 2020 or 2019.

Fair Value Measurements

Assets measured at fair value on a recurring basis as of March 31, 2020 were as follows (in thousands):

Assets measured at fair value on a recurring basis as of June 30, 2020 were as follows (in thousands):

Quoted Prices

26 unchanged sentences

Upon the expiration of the transfer restrictions the Company expects to transfer the value of these equity securities from Level 2 to Level 1.

During the three months ended March 31, 2020, the Company recorded unrealized gains of $ 7.3 million in other income (expense), net on the Consolidated Statements of Operations.

During the three and six months ended June 30, 2020, the Company recorded unrealized gains of $ 7.2 million and $ 14.5 million, respectively in other income (expense), net on the consolidated statements of operations.

Accrued Expenses

1 unchanged sentence

Employee related expenses

Intellectual property and patent related fees

Process and platform development expenses

Other expenses

Professional service expenses

Intellectual property and patent related fees

Sublicensing expenses

Professional service expenses

Other expenses

Total accrued expenses

2 unchanged sentences

Laboratory equipment

Construction-in-progress

Leasehold improvements

Computer equipment

Construction-in-progress

Furniture and office equipment

12 unchanged sentences

As such, the Company anticipates that it has a substantial commitment in connection with these proceedings until such time as these proceedings have been resolved, but the amount of such commitment is not determinable.

The Company incurred an aggregate of $ 3.8 million and $ 3.4 million in expense during the three months ended March 31, 2020 and 2019,

respectively, for such reimbursement.

The Company incurred an aggregate of $ 2.8 million and $ 6.6 million in expense during the three and six months ended June 30, 2020, respectively, for such reimbursement.

The Company incurred an aggregate of $ 3.5 million and $ 6.9 million in expense during the three and six months ended June 30, 2019, respectively, for such reimbursement.

Collaboration and Profit-Sharing Agreements

3 unchanged sentences

Collaboration Revenue

As of March 31, 2020, the Company’s contract liabilities were primarily related to the Company’s collaboration with Juno Therapeutics and its strategic alliance with Allergan.

The following table presents changes in the Company’s accounts receivable and contract liabilities for the three months ended March 31, 2020 (in thousands):

For the three months ended March 1, 2020

As of June 30, 2020, the Company’s contract liabilities were primarily related to the Company’s collaboration with Juno Therapeutics and its strategic alliance with Allergan.

The following table presents changes in the Company’s accounts receivable and contract liabilities for the six months ended June 30, 2020 (in thousands):

For the six months ended June 30, 2020

Balance at December 31, 2019

Balance at March 31, 2020

Balance at June 30, 2020

Accounts receivable

1 unchanged sentence

Deferred revenue

During the three months ended March 31, 2020, the Company recognized the following collaboration revenue (in thousands):

During the three and six months ended June 30, 2020, the Company recognized the following collaboration revenue (in thousands):

Three Months Ended

Six Months Ended

Revenue recognized in the period from:

March 31, 2020

June 30, 2020

Amounts included in deferred revenue at the beginning of the period

3 unchanged sentences

Three Months Ended

Six Months Ended

Research and development

2 unchanged sentences

Restricted Stock and Restricted Stock Unit Awards

The following is a summary of restricted stock and restricted stock unit awards activity for the three months ended March 31, 2020:

The following is a summary of restricted stock and restricted stock unit awards activity for the six months ended June 30, 2020:

Unvested restricted stock and restricted stock unit awards as of December 31, 2019

Unvested restricted stock and restricted stock unit awards as of March 31, 2020

As of March 31, 2020, total unrecognized compensation expense related to unvested restricted stock and restricted stock unit awards was $ 13.3 million, which the Company expects to recognize over a remaining weighted-average period of 3.1 years.

Unvested restricted stock and restricted stock unit awards as of June, 30 2020

As of June 30, 2020, total unrecognized compensation expense related to unvested restricted stock and restricted stock unit awards was $ 12.0 million, which the Company expects to recognize over a remaining weighted-average period of 3.0 years.

Stock Options

The following is a summary of stock option activity for the three months ended March 31, 2020:

The following is a summary of stock option activity for the six months ended June 30, 2020:

Weighted Average

4 unchanged sentences

Outstanding at December 31, 2019

Outstanding at March 31, 2020

Exercisable at March 31, 2020

As of March 31, 2020, total unrecognized compensation expense related to stock options was $ 43.9 million, which the Company expects to recognize over a remaining weighted-average period of 2.9 years.

( 1,018,295 )

Outstanding at June 30, 2020

Exercisable at June 30, 2020

As of June 30, 2020, total unrecognized compensation expense related to stock options was $ 40.0 million, which the Company expects to recognize over a remaining weighted-average period of 2.8 years.

Net Loss per Share

6 unchanged sentences

The following common stock equivalents were excluded from the calculation of diluted net loss per share allocable to common stockholders because their inclusion would have been anti-dilutive:

As of March 31,

As of June 30,

Unvested restricted stock and restricted stock unit awards

Outstanding stock options

Subsequent Events

On August 5, 2020, the Company and Allergan Pharmaceuticals International Limited (which was acquired by AbbVie, Inc.

in May 2020 and is referred to together with its affiliates as “Allergan”) agreed to terminate the strategic alliance and option agreement that was entered into in May 2017 and the profit-sharing arrangement to equally split U.S profit and losses of EDIT-101, an experimental medicine for Leber congenital amaurosis 10 (“LCA10”) that was originally licensed to Allergan under the strategic alliance and option agreement (the “Termination Agreement”).

In addition, in connection with the termination, the Company entered into a transition services agreement with Allergan (together with the Termination Agreement, the “Termination Agreements”), primarily to facilitate the transfer of EDIT-101 back to the Company.

Pursuant to the Termination Agreements, the Company has regained full global rights to research, develop, manufacture, and commercialize its ocular medicines, including EDIT-101.

Allergan has no further obligations pursuant to the initial agreements, all unexercised options and contingent payments contemplated under the initial agreements have terminated, which includes their worldwide developmental and commercialization rights of EDIT-101.

Under the Termination Agreements, Allergan granted the Company a non-exclusive license to certain know-how that is necessary to develop, manufacture and commercialize EDIT-101 and will transfer to the Company certain materials produced under the initial agreement.

The Company expects the transition services to be completed within four months.

Pursuant to the Termination Agreements, the Company will continue to use commercially reasonable efforts to develop and commercialize a product directed at four collaboration targets, one of which is LCA10.

The Termination Agreements also obligate the Company to make a payment to Allergan, as well as certain payments based on the achievement of clinical and regulatory milestones for each target program, aggregated sales milestones for all products covered by the Termination Agreement, and pay royalties on net sales of specified products.

The Company is also obligated to pay for a portion of the transition services.

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 1. Financial Statements