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Item 1. Business

2021-02-26 compared with 2020-02-26 · 328 added, 331 removed, 807 unchanged (45% of the section changed)

We are a leading, clinical stage genome editing company dedicated to developing potentially transformative genomic medicines to treat a broad range of serious diseases.

The promise of genomic medicines is supported by the advancing knowledge of the human genome, and harnessing the progress in technologies for cell therapy, gene therapy, and, most recently, genome editing.

We believe this progress sets the stage for us to create unprecedented medicines with the potential to have a durable benefit for patients.

At Editas Medicine, our core capability in genome editing uses the technology known as CRISPR (clustered, regularly interspaced, short palindromic repeats) with which we can create molecules that efficiently and specifically edit DNA.

Our mission is to translate the promise of genome editing into a broad class of differentiated, transformational medicines for diseases of high unmet need.

We are a leading, clinical stage gene editing company dedicated to developing potentially transformative gene-editing medicines to treat a broad range of serious diseases.

The promise of genomic medicines is supported by the advancing knowledge of the human genome and by harnessing the progress in technologies for cell therapy, gene therapy, and, most recently, gene editing.

We believe this progress sets the stage for us to create medicines with the potential to have a durable benefit for patients.

Our core capability in gene editing uses the technology known as CRISPR (clustered, regularly interspaced, short palindromic repeats) to allow us to create molecules that efficiently and specifically edit DNA.

Our mission is to translate the promise of gene editing into a broad class of differentiated, transformational medicines for diseases with high unmet need.

We have developed a proprietary genome editing platform based on CRISPR technology and we continue to expand its capabilities.

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We believe we are the only human genome editing company with a platform that includes CRISPR/Cas9, CRISPR/Cas12a, and engineered forms of both of these CRISPR systems.

Because of the broad nature of this platform, we believe we can create genome editing molecules for over 95% of the human genome.

Because of the broad nature of this platform, we believe we can create gene editing molecules for over 95% of the human genome.

Our product development strategy is to target diseases of high unmet need where we aim to make differentiated, transformational medicines using our gene editing platform.

We are advancing both in vivo CRISPR medicines, in which the medicine is injected or infused into the patient to edit the cells inside their body, and engineered cell medicines, in which cells are edited with our technology and then administered to the patient.

While our discovery efforts have ranged across several diseases and therapeutic areas, the two areas where our programs are more mature are ocular diseases and engineered cell medicines to treat hemoglobinopathies and cancer.

For our in vivo CRISPR medicines, we are leveraging an adeno-associated virus (“AAV”)-mediated editing platform with our proprietary Staphylococcus aureus Cas9 (“SaCas9”) to develop these medicines.

In ocular diseases, our most advanced program is designed to address a specific genetic form of retinal degeneration called Leber congenital amaurosis 10 (“LCA10”), a disease for which we are not aware of any available therapies and only one other potential treatment in clinical trials in the United States and Europe.

In mid-2019, we initiated a Phase 1/2 clinical trial for EDIT-101 (also known as AGN-151587), an experimental medicine to treat LCA10, pursuant to an investigational new drug application (“IND”) that we filed in October 2018 and which was accepted by the United States Food and Drug Administration (“FDA”) in November 2018 .

We and our partner Allergan Pharmaceuticals International Limited (together with its affiliates, “Allergan”) began patient screening and expect to announce patient dosing by the end of the first quarter of 2020.

We expect to enroll approximately 18 patients in the United States and Europe .

In addition, we initiated a clinical natural history study in 2017 to evaluate the clinical course and characteristics of LCA10 more extensively.

We believe preclinical results to date with EDIT-101 validate our platform technology, including its potential application to other ocular diseases, such as Usher syndrome 2A (“USH2A”) and autosomal dominant retinitis pigmentosa 4 (“adRP4”), as well as diseases of other organs and tissues.

We are advancing both in vivo gene-editing medicines, in which the medicine is injected or infused into the patient to edit the cells inside their body, and ex vivo gene-edited cell medicines, in which cells are edited with our technology and then administered to the patient.

While our discovery efforts have ranged across several diseases and therapeutic areas, the two areas where our programs are more mature are our in vivo medicines to treat ocular diseases and ex vivo gene-edited cell medicines to treat hemoglobinopathies and cancer.

For our in vivo gene-editing medicines, we are leveraging an adeno-associated virus (“AAV”)-mediated editing platform with our proprietary Staphylococcus aureus Cas9 (“SaCas9”) to develop these medicines.

In ocular diseases, our most advanced program is designed to address a specific genetic form of retinal degeneration called Leber congenital amaurosis 10 (“LCA10”), a disease that leads to blindness and for which we are not aware of any available therapies and only one other potential treatment is in clinical trials in the United States and Europe.

In mid-2019, we initiated our Phase 1/2 BRILLIANCE clinical trial for EDIT-101, an experimental gene-editing medicine to treat LCA10 .

We plan to enroll up to 18 patients in the United States and Europe in up to five cohorts.

We completed dosing of the first cohort, the adult low-dose cohort, in 2020.

Due to an absence of severe adverse events or dose limited toxicity in adults treated in the first cohort, the inclusion criteria of the protocol was modified to allow inclusion of subjects with better than light perception vision only.

Although we experienced slowed enrollment in 2020 for subsequent cohorts due to the ongoing impact of the COVID-19 pandemic, in the first quarter of 2021 we initiated dosing of the second cohort, the adult mid-dose cohort.

We expect to announce initial clinical data in 2021 .

We believe our preclinical results to date with EDIT-101 validate our platform technology, including its potential application to other ocular diseases, such as Usher syndrome 2A (“USH2A”) , a form of retinitis pigmentosa that also includes hearing loss, and autosomal dominant retinitis pigmentosa 4 (“adRP4”) , a progressive form of retinal degeneration characterized by initial night blindness early in life followed by loss of peripheral vision and eventual complete blindness , as well as diseases of other organs and tissues.

In 2019, we achieved in vivo preclinical proof of concept and declared a development candidate, referred to as EDIT-102, for USH2A.

In 2019, we also advanced preclinical studies for our adRP4 program.

We have also advanced preclinical studies for our adRP4 program , and expect to declare a development candidate for the treatment of adRP4 by the end of 2021 .

We are leveraging our AAV-mediated editing platform and expertise in ocular therapies to pursue additional therapeutic areas to treat other organ and tissues that are accessible by AAV.

For example, in 2019, we entered into a strategic research collaboration with Asklepios BioPharmaceutical, Inc., a fully integrated AAV gene therapy company (“AskBio”), to explore the use of our AAV-mediated editing platform to treat neurological diseases.

In addition to developing in vivo CRISPR medicines, the development of engineered cell medicines is a core part of our research effort and product pipeline.

For example, in 2019, we entered into a research collaboration with Asklepios BioPharmaceutical, Inc., a fully integrated AAV gene therapy company (“AskBio”) that was acquired by Bayer AG in December 2020, to explore the use of our AAV-mediated editing platform to treat neurological diseases.

In addition to developing in vivo gene-editing medicines, the development of ex vivo gene-edited cell medicines is a core part of our research effort and product pipeline.

We believe that advances in genome editing will both improve the characteristics of current cellular medicines and also expand the universe of cellular medicines that can be developed.

To this end, we have established capabilities to efficiently and specifically edit hematopoietic stem cells (“HSCs”), natural killer (“NK”) cells and T cells, which we believe can lead to best-in-class medicines for hemoglobinopathies and cancer.

For our engineered cell medicines, our lead program is EDIT-301, an experimental medicine to treat sickle cell disease and beta-thalassemia.

We have initiated IND-enabling studies for EDIT-301 and aim to file an IND for EDIT-301 for sickle cell disease by the end of 2020.

For our ex vivo gene-edited cell medicines, our lead program is EDIT-301, an experimental medicine to treat sickle cell disease , a severe inherited blood disease that causes premature death, and beta-thalassemia, another inherited blood disorder characterized by severe anemia.

In December 2020, we submitted an investigational new drug application (“IND”) to the U.S.

Food and Drug Administration (“FDA”) for the initiation of a Phase 1/2 clinical trial of EDIT-301, which we refer to as our RUBY trial, for the treatment of sickle cell disease.

In January 2021, the FDA cleared the start of enrollment and dosing of patients in the first phase of the study (which will validate the safety and beneficial effects of the cell editing process).

Dosing of the first subject is expected to occur in 2021.

In parallel, the FDA has imposed a partial clinical hold and requested we develop a potency assay to ensure that the characteristics of the product released are as expected and confirmed by clinical data collected in the first patients treated.

We also aim to file an IND for EDIT-301 for the treatment of beta-thalassemia by the end of 2021 .

The CRISPR nuclease used in our EDIT-301 program is a proprietary engineered form of Cas12a for which we have exclusively licensed the foundational intellectual property to develop and commercialize human therapeutics.

We believe our editing approach, including targeting the HBG1/2 gene and the use of Cas12a, differentiates us from other genome editing companies working on sickle cell disease and positions us to develop a potentially best-in-class medicine to treat sickle cell disease and beta-thalassemia.

We have also continued to develop our capabilities to generate cells from induced pluripotent stem cells (“iPSCs”) and to edit cells obtained from healthy donors to develop engineered cell medicines to treat cancer.

For example, in 2019, we advanced engineered iPSC-derived NK (“iNK”) cell medicines for solid tumors using technology from BlueRock Therapeutics LP (“BlueRock”) and generated edited NK cells from both healthy donors and iPSCs with significantly increased anti-cancer activity.

We are also advancing alpha-beta T cell medicines in collaboration with Juno Therapeutics, Inc., a wholly owned subsidiary of Bristol-Myers Squibb Company (“Juno Therapeutics”).

We believe these approaches and expertise will allow us to develop allogenic, off-the-shelf engineered cell medicines, as opposed to relying on the need to obtain cells directly from a patient.

For our allogeneic, off the shelf medicines, we edit cells from a pool of healthy donors or from iPSCs which are subsequently differentiated into effector cells, such as NK cells or T cells.

We believe our editing approach, including targeting the HBG1 and HBG2 promoters in the beta-globin locus where naturally occurring fetal hemoglobin inducing mutations reside (“ HBG1/2”) as well as the use of Cas12a, differentiates us from other genome editing companies with sickle cell disease programs and positions us to develop a potentially best-in-class medicine to treat sickle cell disease and beta-thalassemia.

We have also continued to develop our capabilities to generate cells from induced pluripotent stem cells (“iPSCs”) to develop engineered cell medicines to treat cancer.

For example, in 2019, we advanced development of engineered iPSC-derived NK (“iNK”) cell medicines for solid tumors using technology from BlueRock Therapeutics LP (“BlueRock”) and generated edited NK cells from iPSCs with significantly increased anti-cancer activity.

We aim to accelerate the development of iNK cell medicines for the treatment of solid tumor cancers in 2021.

We are also advancing alpha-beta T cell experimental medicines in collaboration with Juno Therapeutics, Inc., a wholly owned subsidiary of Bristol-Myers Squibb Company (“Juno Therapeutics”).

For our allogeneic, off-the-shelf medicines, we edit cells from iPSCs that are subsequently differentiated into effector cells, such as NK cells or T cells.

The engineered cells are then administered to the patient.

We believe these approaches and expertise will allow us to develop allogeneic, off-the-shelf engineered cell medicines, as opposed to relying on obtaining cells directly from a patient.

These allogeneic cell medicines have the potential to greatly reduce the costs and complexity of engineered cells and increase the number and type of cancers that we can potentially address.

Our Core Capability — Genome Editing

Genome editing is the process of revising, removing, or repairing defective DNA in situ .

In general, genome editing corrects the defective DNA in its native genomic location, and consequently the repaired genetic region retains the cell’s normal control and feedback mechanisms.

Genome editing typically takes advantage of naturally occurring DNA repair mechanisms, including non-homologous end joining (“NHEJ”) and homology directed repair (“HDR”), to achieve its desired therapeutic outcome.

Our Core Capability — Gene Editing

Gene editing is the process of revising, removing, or repairing defective DNA in situ .

In general, gene editing corrects the defective DNA in its native genomic location, and consequently the repaired genetic region retains the cell’s normal control and feedback mechanisms.

Gene editing typically takes advantage of naturally occurring DNA repair mechanisms, including non-homologous end joining (“NHEJ”) and homology directed repair (“HDR”), to achieve its desired therapeutic outcome.

Edits that are repaired by NHEJ typically disrupt a gene or eliminate a disease-causing mutation.

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The diversity of genetic drivers of disease demands a variety of solutions.

Genome editing has the potential to deliver a variety of types of genome modification to address a broad range of diseases.

Gene editing has the potential to deliver a variety of types of genome modification to address a broad range of diseases.

CRISPR technology uses a protein-RNA complex composed of a type of enzyme, referred to as a DNA endonuclease, bound to an RNA molecule, referred to as a guide RNA, that has been designed to recognize a particular DNA sequence.

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This allows for the flexible design, synthesis, and testing of hundreds of guide RNA/endonuclease combinations for each genetic target in order to find those that cut the DNA target with the optimal efficiency and specificity.

In contrast, other commonly used DNA nucleases for genome editing have inherently limited flexibility.

For example, zinc finger nucleases, engineered meganucleases, and transcription activator-like effector nucleases use proteins

for DNA sequence recognition to bring the endonuclease to the site of the genome where cleavage is desired, requiring the creation of an entirely new protein for each target site.

In contrast, other commonly used DNA nucleases for gene editing have inherently limited flexibility.

For example, zinc finger nucleases, engineered meganucleases, and transcription activator-like effector nucleases use proteins for DNA sequence recognition to bring the endonuclease to the site of the genome where cleavage is desired, requiring the creation of an entirely new protein for each target site.

● Simultaneous and efficient targeting of multiple sites.

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This ability to target multiple DNA sequences expands the applicability of CRISPR technology and also creates the potential for self-regulating systems that control exposure to the editing machinery.

To address more than one target, other genome editing technologies require the engineering, characterization, manufacture, and delivery of distinct nuclease proteins for each target.

To address more than one target, other gene editing technologies require the engineering, characterization, manufacture, and delivery of distinct nuclease proteins for each target.

● Ability to achieve a range of different types of edits.

The inherent differences in Cas9 and Cas12a and the availability of different engineered variants of both enzymes allow for different types of cuts for genome editing.

The inherent differences in Cas9 and Cas12a and the availability of different engineered variants of both enzymes allow for different types of cuts for gene editing.

We are able to make a blunt cut, cut either strand of the DNA, or create overhangs of differing length.

This may be a critical component of improved HDR-driven approaches because the type of DNA cut can influence the type of repair mechanism used by a cell in response to that cut.

We believe the ability to modify CRISPR technology to allow for different types of cuts will expand the potential of our genome editing platform.

Our Genome Editing Platform

We have developed a proprietary genome editing platform that includes different natural and engineered variants of Cas9 and Cas12a.

We believe the ability to modify CRISPR technology to allow for different types of cuts will expand the potential of our gene editing platform.

Our Gene Editing Platform

We have developed a proprietary gene-editing platform that includes different natural and engineered variants of Cas9 and Cas12a.

We have characterized different Cas9 and Cas12a enzymes for several reasons.

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pyogenes Cas9 can target approximately 1 in 10 bases in the human genome, we have the potential to hit over 95% of all bases due to the wide range of endonucleases at our disposal.

The guide RNA molecule is another component of our genome editing platform.

The guide RNA molecule is another component of our gene editing platform.

We have made substantial advances in the design, synthesis, modification, analysis, and characterization of guide RNAs.

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These covalently coupled, dual-guide RNAs retain the advantages afforded by a single guide RNA and we believe are of higher quality than a guide RNA made by a single synthesis reaction.

We believe this method will lead to higher quality genome editing medicines.

Our genome editing platform includes multiple modular delivery modes that can be efficiently adapted to deliver different CRISPR genome editing components to address the specific needs of each disease targeted.

We believe this method will lead to higher quality gene editing medicines.

Our gene editing platform includes multiple modular delivery modes that can be efficiently adapted to deliver different CRISPR gene editing components to address the specific needs of each disease targeted.

Our strategy is to leverage existing delivery technologies to target cell types of interest while developing next generation capabilities as warranted.

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aureus Cas9 and existing AAV technology to construct an “all-in-one” viral vector that is able to deliver the DNA coding for the nuclease protein and one or two guide RNAs directly to cells.

We believe our ability to configure all the components for genome editing in an “all-in-one” AAV vector has substantial advantages for manufacturing and delivery compared to approaches that rely on multiple vectors.

We believe our ability to configure all the components for gene editing in an “all-in-one” AAV vector has substantial advantages for manufacturing and delivery compared to approaches that rely on multiple vectors.

In addition, we have also made substantial advances in the ex vivo delivery of CRISPR systems to a number of cell types.

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To optimize the specificity of our product candidates, there are a number of different aspects of the product configuration that we customize in addition to the sequence and quality of the guide RNA, including the length of the guide RNA, the type of Cas9 or Cas12a enzyme, including engineered forms, the delivery vector, the use of tissue-selective promoters, and the duration of exposure all contribute to overall specificity.

For example, to reduce the potential persistence of genome editing activity, we are developing self-regulating genome editing systems designed to deliver not only the endonuclease-guide RNA complex, but also an “off switch” that reduces the presence of the endonuclease-guide RNA complex over time.

For example, to reduce the potential persistence of gene editing activity, we are developing self-regulating gene editing systems designed to deliver not only the endonuclease-guide RNA complex, but also an “off switch” that reduces the presence of the endonuclease-guide RNA complex over time.

We have completed studies of these systems that demonstrate the ability to both maintain on-target editing and also reduce levels of editing components once the on-target edit is expected to have been completed.

Our Genomic Medicine Programs

Our Gene Editing Medicine Programs

We have initiated a diversified range of research programs across multiple therapeutic and disease areas.

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We believe the therapeutic programs and delivery technologies we have chosen to date will demonstrate the depth and breadth of our ability to deploy our genome editing platform to develop differentiated, transformational medicines for patients with high unmet need.

The following summarizes our research programs, product candidates and disease areas:

In Vivo CRISPR Medicines - Ocular

We have granted Allergan an exclusive option to exclusively license from us up to five collaboration development programs for the treatment of ocular disorders, including EDIT-101.

As discussed below, Allergan has exercised its option with respect to EDIT-101 and entered into a profit-sharing arrangement with us in the United States for such program.

See “ Our Collaboration and Licensing Strategy "

below for more information.

The following summarizes our product candidates, research programs and disease areas:

In Vivo Gene Editing Medicines - Ocular

Our initial focus for our in vivo gene-edited medicines is ocular diseases.

We estimate that over 5 million people worldwide suffer from autosomal recessive inherited retinal diseases.

In ocular diseases, our most advanced in vivo gene-edited medicine, EDIT-101, is designed to treat LCA10.

We are leveraging our experience with the LCA10 program to support the development of therapies for other eye diseases, including USH2A and adRP4.

Leber Congenital Amaurosis 10

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Decreased CEP290 protein leads to loss of the outer segments of photoreceptor cells and function over time, which leads to blindness.

We believe there are between 2,000 and 5,000 LCA10 patients in the United States and Europe.

We believe there are approximately 4,000 LCA10 patients in the United States and Europe and over 30,000 in the rest of the world.

EDIT-101 uses an AAV5 vector to deliver the DNA encoding SaCas9 and two guide RNAs to photoreceptor cells in the eye.

This experimental CRISPR medicine is designed to eliminate a disease-causing A to G nucleotide change in a non-coding region, or intron, of the CEP290 gene by cutting out that nucleotide and surrounding DNA.

EDIT-101 is designed to eliminate a disease-causing A to G nucleotide change in a non-coding region, or intron, of the CEP290 gene by cutting out that nucleotide and surrounding DNA.

We believe this genome editing approach has the potential to restore normal protein expression and function of the remaining photoreceptor cells, which could improve vision or arrest the further loss of vision in LCA patients.

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Based on these studies, we have prespecified a therapeutic target of 10% productive editing of photoreceptors with the assumption that each productively edited photoreceptor will be fully functional.

We have tested EDIT-101 in preclinical studies by delivering several dose quantities of EDIT-101 subretinally in mice that had a humanized CEP290 gene.

We tested EDIT-101 in preclinical studies by delivering several dose quantities of EDIT-101 subretinally in mice that had a humanized CEP290 gene.

Subretinal delivery of EDIT-101 in humanized CEP290 mice showed rapid and sustained CEP290 gene editing.

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Furthermore, these doses were shown in subsequent studies to be well tolerated in non-human primates based on visual and immunohistochemical analysis.

Similar studies in mice showed that editing was rapid, achieving maximum levels by 6 weeks, and stable with changes maintained for the 26 weeks of the study.

In 2017, we initiated a natural history study of LCA10 patients.

In this study, we are assessing the manifestations and course of the LCA10 disease in approximately 40 patients across a range of ages and disease severity at seven sites in the United States and Europe.

Patients are evaluated six times over the course of a year.

The purpose of the study was to inform the clinical trial design and enrollment for our Phase 1/2 clinical trial of EDIT-101 through the characterization of patients’ baseline status and the rate of change of the disease, as well as to validate endpoints of the Phase 1/2 clinical trial for EDIT-101.

In mid-2019, we and Allergan initiated an initial Phase 1/2 clinical trial which is an open-label, single ascending dose trial of EDIT-101 in adult and pediatric (i.e., ages 3 to 17 years) patients with retinal degeneration caused by a homozygous or compound heterozygous mutation of the CEP290 gene, which is referred to as an IVS26 mutation.

Similar studies in mice showed that editing was rapid, achieving maximum levels by six weeks, and stable with changes maintained for the 26 weeks of the study at an AAV dose that has been safely administered to humans .

In mid-2019, we and our then-partner Allergan Pharmaceuticals International Limited (together with its affiliates, “Allergan”) initiated an initial Phase 1/2 clinical trial which is an open-label, single ascending dose trial of EDIT-101 in adult and pediatric (i.e., ages 3 to 17 years) patients with retinal degeneration caused by a homozygous or compound heterozygous mutation of the CEP290 gene, which is referred to as an IVS26 mutation.

Patients will receive a single dose of EDIT-101 administered via subretinal injection in one eye.

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Up to five cohorts across three doses will be enrolled in this clinical trial.

The primary endpoint of the trial is an assessment of safety and tolerability, and the secondary endpoint is to evaluate the efficacy of a single dose of EDIT-101 on change from baseline in various parameters.

The primary endpoint of the trial is an assessment of safety and tolerability, and the secondary endpoint is to evaluate and identify endpoints of efficacy of a single dose of EDIT-101 on change from baseline in various parameters.

Efficacy will be evaluated at multiple timepoints, including core measures every three months for the first year and then less frequently thereafter.

We and Allergan began patient screening for the Phase 1/2 clinical trial for EDIT-101 and expect to announce patient dosing by the end of the first quarter of 2020.

In March 2020, we announced the first patient in this clinical trial was dosed, and we completed dosing of the adult low-dose cohort by the end of 2020.

To date, there have been no reported severe adverse events or dose limited toxicity with respect to the patients in the first cohort.

We experienced slowed enrollment for subsequent cohorts due to the ongoing impact of the COVID-19 pandemic.

However, we initiated dosing of the adult mid-dose cohort in the first quarter of 2021.

We expect to announce initial clinical data in 2021.

As a result of the termination of our collaboration with Allergan in August 2020, we have regained full responsibility for this clinical trial.

Other Eye Diseases

We are also pursuing the development of therapies for eye diseases other than LCA10, including USH2A and autosomal dominant retinitis pigmentosa 4.

We believe that our experience with the LCA10 program will support the development of therapies for these other eye diseases.

For example, the successful construction and testing of the components of the AAV vector we are pursuing for EDIT-101 will continue to inform our approach to treating the most common cause of USH2A.

We are also pursuing the development of therapies for eye diseases other than LCA10, including USH2A and adRP4.

We believe that our experience with the LCA10 program supports the development of therapies for these other eye diseases.

For example, the successful construction and testing of the components of the AAV vector we are pursuing for EDIT-101 continue to inform our approach to treating the most common cause of USH2A.

Usher Syndrome 2A

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Our initial goal in this research program is to address mutations within exon 13, which contains the highest percentage of USH2A gene mutations.

We believe there are approximately 14,000 USH2A patients including up to approximately 4,000 Usher syndrome patients

with the mutation we aim to correct.

We believe there are over 4,500 USH2A patients with the mutation we aim to correct in the United States and Europe and over 40,000 in the rest of the world .

We have declared a development candidate, EDIT-102, to treat USH2A patients.

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We tested EDIT-102 in preclinical studies of human cell lines and demonstrated approximately 47% productive editing in the cells that resulted in such cells expressing 60% more USH2A messenger RNA as compared to the unedited cells.

In other preclinical studies, we tested EDIT-102 in humanized retinal organoids, which are three-dimensional structures derived from human pluripotent stem cells and can serve as an in vitro model of retinas, and demonstrated noticeable increases in the proper localization of the usherin complex in the photoreceptor cells at 120-140 days, as compared to retinal organoids formed from cells that contained a patient-derived mutation in exon 13.

These studies demonstrated noticeable increases in the proper localization of the usherin complex in the photoreceptor cells at 120-140 days, as compared to retinal organoids formed from cells that contained a patient-derived mutation in exon 13.

Retinitis Pigmentosa

Mutations in the human rhodopsin (“RHO”) gene accounts for 25% of all forms of adRP4, a progressive form of retinal degeneration characterized by initial night blindness early in life followed by loss of peripheral vison and eventual complete blindness.

More than 150 mutations in the RHO gene have been identified, with the most prevalent allele in the United States representing approximately 10 percent of all patients with adRP4.

We believe there are approximately 26,000 adRP4 patients with mutations in the RHO gene.

Mutations in the human rhodopsin (“RHO”) gene account for 25% of all forms of adRP4, a progressive form of retinal degeneration characterized by initial night blindness early in life followed by loss of peripheral vision and eventual complete blindness.

More than 150 mutations in the RHO gene have been identified, with the most prevalent allele in the United States representing approximately 10% of all patients with adRP4.

We believe there are over 18,000 adRP4 patients with mutations in the RHO gene in the United States and Europe and over 15,000 in the rest of the world.

Leveraging our EDIT-101 and EDIT-102 learnings, we are developing a novel approach to treat all forms of adRP4 resulting from mutations in the RHO gene and aim to declare a development candidate, potentially using the same enzyme and vector as EDIT-101, by the end of 2021.

In Vivo CRISPR Medicines – Early Discovery Programs

In addition to our ocular programs, we hope to leverage our expertise in developing genomic medicines utilizing AAV delivery to expand our in vivo programs to treat additional diseases and therapeutic areas, including DMD, peripheral nervous system, neuromuscular, liver, the central nervous system and cardiology.

Under our strategic research collaboration with AskBio, we are aiming to develop a therapy to treat a neurological disease.

Engineered Cell Medicines

Our most advanced engineered cell medicine, EDIT-301, is designed to treat sickle cell disease and beta-thalassemia.

We are also developing multiple engineered cell medicines for the potential treatment of different cancers, including solid tumors.

In Vivo Gene Editing Medicines – Early Discovery Programs

We believe the curative potential for gene editing is significant in light of the over 6,000 human genetic disorders.

In addition to our ocular programs, we hope to leverage our expertise in developing gene-editing medicines utilizing AAV delivery to expand our in vivo programs to treat additional diseases and therapeutic areas, including neuromuscular, liver, hematological, central nervous system and cardiological disorders.

Under our research collaboration with AskBio, we are aiming to develop a therapy to treat a neurological disease.

Ex Vivo Gene Editing Cell Medicines

Our most advanced ex vivo gene-edited cell medicine, EDIT-301, is designed to treat sickle cell disease and beta-thalassemia.

We are also developing multiple ex vivo gene-edited cell medicines for the potential treatment of different cancers, including solid tumors.

In our collaboration with Juno Therapeutics, we are researching and developing engineered alpha-beta T cell therapies to treat cancer and autoimmune diseases.

In our wholly-owned oncology programs, we are further developing our capabilities to generate certain engineered NK cells from iPSCs and healthy donor derived NK cells that we edit to treat solid tumors.

We are also collaborating with Bluerock and Sandhill Therapeutics, Inc.

to increase our technical capabilities in such programs.

Engineered Cell Medicines – Hemoglobinopathies

We are developing an approach for genome editing in HSCs to support the advancement of research programs to treat non-malignant hematological diseases, including sickle cell disease and beta thalassemia.

Patients suffering from sickle cell disease have a median life expectancy of 42-47 years and there are over 100,000 sickle cell disease hospitalizations in the United States annually.

In our wholly owned oncology programs, we are further developing our capabilities to generate certain engineered NK cells from iPSCs that we edit to treat solid tumors.

We are also collaborating with BlueRock to increase our technical capabilities in such programs.

Ex Vivo Gene Editing Cell Medicines – Hemoglobinopathies

We are developing an approach for gene editing in HSCs to support the advancement of research programs to treat non-malignant hematological diseases, including sickle cell disease and beta thalassemia.

There are over 165,000 sickle cell disease patients, and over 15,000 beta-thalassemia patients, in the United States and Europe.

Patients suffering from sickle cell disease have a median life expectancy of 42-47 years, while those with beta-thalassemia typically suffer from chronic anemia, often requiring lifelong blood transfusions that can result in iron overload that requires separate treatment.

We are actively pursuing a distinct gene editing approach to treating these hemoglobinopathies.

Our primary criteria for a successful product candidate include high and pancellular fetal hemoglobin (“HbF”) with a best-in-class safety profile.

To this end, we have developed EDIT-301, an experimental, autologous cell therapy that targets the HBG1/2 promoter in the beta-globin gene to stimulate HbF production, to treat sickle cell disease and plan to file an IND with the FDA by the end of 2020.

Our primary criteria for a successful product candidate include high and pancellular fetal hemoglobin ("HbF") with a best-in-class safety profile.

To this end, we have developed EDIT-301, an experimental, autologous cell therapy that targets the HBG1/2 promoter in the beta-globin gene to stimulate HbF production, to treat sickle cell disease.

EDIT-301 is the first experimental medicine in development generated using CRISPR/Cas12a (also known as Cpf1) gene editing.

We have focused our efforts on editing a site within the beta-globin locus that we believe has the potential to create superior expression of fetal hemoglobin since patients with elevated fetal hemoglobin levels have better clinical outcomes.

We believe that EDIT-301 has the potential to impact beta-globin expression by increasing HbF and decreasing sickle globin.

In particular, preclinical data shows that EDIT-301 induces more HbF than the targeting the BCL11A erythroid enhancer (“BC11Ae”).

In particular, our preclinical data shows that EDIT-301 induces more HbF than the approach of targeting the BCL11A erythroid enhancer (“BC11Ae”).

Likewise, we believe our approach will reduce the sickle globin and, therefore, not have to compete for alpha globin in the same cell unlike lentiviral gene therapy approaches.

human genetic studies support editing at the beta-globin locus, but not at the BC11Ae locus.

Our preclinical studies also identified one potential concern for BC11Ae editing as we found deleterious lineage skewing when editing the BCL11Ae locus.

Finally, gene editing is more specific that lentiviral expression.

Our preclinical studies identified the potential that BC11Ae might result in deleterious lineage skewing when editing the BCL11Ae locus.

Finally, gene editing is more specific than lentiviral expression.

To get the high levels of beta-globin required for an efficacious therapy, there will be cells in the CD34+ population, which are cells that contain the long-term stem cells that repopulate the hematopoietic lineages, that carry more than twenty copies of the viral genome.

These random integration events have the potential to inadvertently activate or inactivate genes involved in cell function and tumorigenesis.

As such, we believe our approach to editing the beta-globin locus provides the highest likelihood of providing clinical benefit in patients while working to minimize potential safety risks.

Based on our belief that editing the beta-globin locus is the preferred therapeutic approach, we conducted a comprehensive screen of the beta-globin locus for sites that would elevate fetal hemoglobin.

In particular, we screened over 26,000 guide RNAs spanning a 300 kb region of the beta-globin locus.

This screen was successful in identifying several sites, including those predicted by human genetics, that elevate HbF.

We then examined whether Cas9 or Cas12a was the preferred editing enzyme.

We found that indels, which are small insertions and deletions at the cut site, larger than three nucleotide deletions induced more HbF than smaller deletions and that indels created by NHEJ repair process are preferentially retained in vivo compared to indels created by microhomology-mediated end joining repair process.

Finally, we found that Cas12a makes more larger deletions by NHEJ than Cas9.

Using our approach in preclinical studies, we edited human CD34+ cells at the HBG1/2 promoter site and then infused these edited cells into immuno-compromised mice.

Following such infusion, we collected bone marrow from the mice at eight- and 16-weeks post-infusion.

Such studies demonstrated that the edited cells were able to repopulate all hematopoietic lineages, including red blood cell precursors, in the mice, resulting in increased production of fetal hemoglobin.

In contrast, we found that cells edited at the BCL11A erythroid enhancer site were not able to fully repopulate the erythroid lineage in mice.

If these results are seen in humans, then editing at such site may not be an effective approach to treat sickle cell disease or beta-thalassemia.

For this reason, we believe our approach of editing the hemoglobin locus to increase fetal hemoglobin has the potential to generate differentiated medicines to benefit patients with sickle cell disease and beta thalassemia.

We also tested that ability of cells edited at the beta-globin locus to induce fetal hemoglobin.

As we had predicted from our in vitro studies, editing at the beta-globin site with Cas12a caused a robust induction of HbF with approximately 45% above the background levels and HbF induction was pancellular.

Engineered Cell Medicines – Alpha-Beta T Cells

These random integration

events have the potential to inadvertently activate or inactivate genes involved in cell function and tumorigenesis.

As such, we believe our approach to editing the beta-globin locus provides the highest likelihood of providing clinical benefit in patients while minimizing potential safety risks.

Using our approach in preclinical studies, we tested the ability of CD34+ cells obtained from healthy donors and edited at the beta-globin locus to induce fetal hemoglobin.

As predicted from our preclinical in vitro studies, editing at the beta-globin site with Cas12a caused a robust, pancellular induction of HbF of approximately 45% above the background levels.

We also tested CD34+ cells obtained from sickle cell patients, which we edited at the beta-globin locus.

These studies showed that editing was highly efficient and reproducible, with approximately 90% editing in multiple sickle patient donors.

We found that EDIT-301 derived red blood cells had more than 50% HbF expression.

Further, EDIT-301 derived red blood cells had a significant improvement in deformability, which could aid red blood cell transit without sickling, and a four-fold decrease in sickling, when subjected to reduced oxygen levels compared to unedited control cells.

These data suggest EDIT-301 can provide potential clinical benefit for sickle patients.

In vivo studies revealed editing was highly efficient with greater than 90% editing in bone marrow cells from mice infused with edited CD34+ cells 16 weeks post-infusion.

In these mice, HbF expression was increased by approximately 50% in the red blood cells derived from these edited cells.

We also observed that approximately 90% of these cells were HbF positive, demonstrating that HbF expression was pan-cellular, which we believe is likely a critical property for potential clinical benefit.

For these reasons, we believe our approach of editing the hemoglobin locus to increase fetal hemoglobin has the potential to generate differentiated medicines to benefit patients with sickle cell disease and beta thalassemia.

In January 2021, the FDA cleared the initiation of the safety phase of our Phase 1/2 RUBY clinical trial for EDIT-301 for sickle cell disease, and permitted us to begin dosing patients, which we expect to occur in 2021.

This trial is a single-arm, open-label, multi-center Phase 1/2 study designed to assess the safety and efficacy of EDIT-301 in patients with sickle cell disease.

Enrolled patients will receive a single administration of EDIT-301.

We are manufacturing components of the clinical trial materials.

We also aim to file an IND for EDIT-301 for the treatment of beta-thalassemia by the end of 2021.

Our IND for EDIT-301 permits us to proceed with the safety portion of our Phase 1/2 RUBY clinical trial.

Prior to commencing the efficacy portion of the RUBY clinical trial, we will be required to resolve the partial clinical hold on EDIT-301 related to developing a potency assay to ensure that the characteristics of the product released are as expected and confirmed by clinical data collected in the first patients treated .

We do not expect that the overall timing for clinical development of EDIT-301 will be affected by the partial clinical hold.

Further, the partial clinical hold does not impact our ability to conduct our clinical development activities of EDIT-301 for the safety portion of the trial.

If the partial clinical hold is not lifted on the Phase 1/2 RUBY clinical trial, we will not be able to collect the efficacy data of EDIT-301 necessary to support an application for approval.

Ex Vivo Gene Edited Cell Medicines – Oncology

Natural Killer Cells

We are developing gene-edited NK cell medicines to treat solid tumors.

The American Cancer Society estimates that there are over 1.3 million new cases of solid tumor cancers, linked to over 400,000 deaths, annually in the United States.

NK cells are innate immune cells that can recognize tumor cells by a variety of mechanisms, including multiple innate receptors that recognize cells that do not express T cell antigens and cells that express stress ligands.

NK cells are also part of a process known as antibody-directed cellular cytotoxicity (“ADCC”) by which therapeutic antibodies are directed to and kill tumor cells.

Further, NK cells have a lower risk of causing graft versus host disease.

If we are successful, genome-edited NK cells have the potential to increase the signaling power of ADCC pathways, improve the persistence of NK cells and/or increase tumor microenvironment resistance.

Genome-edited NK cells may be further engineered with one or more chimeric antigen receptors (“CARs”) or innate receptors to further improve one or more of these properties.

For example, gene-edited engineered NK cells could be used to improve recognition of tumor cells lacking T cell antigens, including PD-1 non-responding tumors.

We obtain NK cells by differentiating iPSCs into such cells.

Once we have obtained the cells, we then edit them to increase certain of the natural properties of the cell to better enable them to treat solid tumors, such as the cells persistence in vivo, its ability to withstand the tumor micro-environment, improved ability to cause ADCC and improved recognition of tumor cells.

In preclinical studies, we achieved 70-100% editing in five genes in iPSCs.

For one such edited iPSC, the resulting edited iNKs killed 74% of cultured cells while unedited cells only killed 2% of cultured cells.

We aim to accelerate the development of iNK cell medicines for the treatment of solid tumor cancers in 2021.

Alpha-Beta T Cells

Engineered T cells, including alpha-beta T cells, have shown encouraging clinical activity against multiple cancers, culminating in the recent approval of two such therapies in the United States.

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We believe that our genome editing technology has the potential to improve multiple properties of these alpha-beta T cell therapies.

Alpha-beta cells are part of the adaptive immune system and recognize tumors with endogenous alpha-beta T cell receptors or chimeric antigen receptors (“CARs”) or engineered T cell receptors (“Engineered TCRs”).

Alpha-beta cells are part of the adaptive immune system and recognize tumors with endogenous alpha-beta T cell receptors or CARs or engineered T cell receptors (“Engineered TCRs”).

If we are successful, genome-edited engineered alpha-beta T cells have the potential to significantly expand the types of cancers treatable by CAR/ Engineered TCR alpha-beta T cells and to improve the outcomes of these therapies.

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In addition, we have optimized genome editing components and delivery methods compatible with engineered alpha-beta T cell manufacturing methods developed by Juno Therapeutics.

See “ Our Collaboration and Licensing Strategy "

below for more information regarding our collaboration with Juno Therapeutics.

Engineered Cell Medicines – Natural Killer Cells and Gamma Delta T Cells

We are developing engineered NK cell medicines to treat solid tumors.

NK cells are also part of process known as antibody-directed

cellular cytotoxicity (“ADCC”) by which therapeutic antibodies are directed to and kill tumor cells.

Further, NK cells have a lower risk of causing graft versus host disease.

Genome-edited NK cells may be further engineered with one or more CARs or innate receptors to further improve one or more of these properties.

For example, genome-edited engineered NK cells could be used to improve recognition of tumor cells lacking T cell antigens, including PD-1 non-responding tumors.

Our two primary approaches to obtaining NK cells are obtaining such cells from healthy donors or differentiating iPSCs into such cells.

Once we have obtained the cells, we then edit them to increase certain of the natural properties of the cell to better enable them to treat solid tumors, such as the cells persistence in vivo , its ability to withstand the tumor micro-environment, improved ability to cause ADCC and improved recognition of tumor cells.

In preclinical studies, we have demonstrated our ability to efficiently edit healthy donor derived NK cells which resulted in a 54% increase in the amount of cytolysis in cultured cells, as compared to unedited NK cells.

Additionally, we have performed highly efficient editing of iPSCs that we differentiated into NK cells to treat cancer.

We have also begun researching and developing gamma delta T cell therapies to treat cancer.

Gamma Delta T Cells

Like NK cells, gamma delta T cells are part of the innate immune system.

We hope to leverage our capabilities and expertise in alpha-beta T cells and our natural killer cell programs to develop such therapies.

We have retained rights to develop gamma delta T cell therapies to treat cancer, and we hope to leverage our capabilities and expertise in alpha-beta T cells and our NK cell programs to develop such therapies.

Our Collaborations and Licensing Strategy

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In May 2015, we entered into a collaboration and license agreement with Juno Therapeutics for the research and development of engineered T cells with CARs and Engineered TCRs that have been genetically modified to recognize and kill other cells.

We and Juno Therapeutics amended and restated this agreement in May 2018 and November 2019 (the “Juno Collaboration Agreement”) and, in connection with the amendment and restatement in November 2019, we entered into a license agreement with Juno Therapeutics (such agreement, the “Juno License Agreement,” and collectively Juno Collaboration Agreements, the “Juno Agreements”).

Under the terms of the Juno Collaboration Agreement, we received an upfront payment of $25.0 million, amendment fees totaling $75.0 million and have received four milestone payments totaling $10.0 million.

We and Juno Therapeutics amended and restated this agreement in May 2018 and November 2019 (the “Juno Collaboration Agreement”) and, in connection with the amendment and restatement in November 2019, we entered into a license agreement with Juno Therapeutics (such agreement, the “Juno License Agreement,” and together with the Juno Collaboration Agreement, the “Juno Agreements”).

Under the terms of the Juno Collaboration Agreement, we received an upfront payment of $25.0 million, amendment fees totaling $75.0 million and have received five milestone payments totaling $15.0 million, in addition to certain opt-in fees.

The Juno Agreements relate to technology used to edit or modify the genome of a cell in connection with the research, development, manufacture, commercialization or other exploitation of T cells that express or have ever expressed T cell receptor dimers consisting of an alpha (α) chain and a beta (β) chain (such cells, “Alpha-beta T Cells”), and T cells derived from pluripotent stem cells or any other precursor cell (such cells, “Other Derived T Cells”), subject to certain exclusions for certain of our existing obligations.

The exploitation of Alpha-beta T Cells and Other Derived T Cells specifically excludes the exploitation of T Cells that express a T cell receptor dimer consisting of a gamma (γ) chain and a delta (δ) chain, which we refer to as gamma-delta T Cells, and therefore, as a result of the entry into the Juno Agreements, we may develop such gamma delta T Cells, which were previously subject to Juno Therapeutics’ exclusive rights under our prior collaboration.

During the research term under the Juno Collaboration Agreement, we may research ribonucleoprotein complexes comprising an RNA-guided engineered nuclease paired with an oligonucleotide (“RNP Complexes”) that recognize or modulate the expression of up to twenty gene targets selected by Juno Therapeutics (each, a “Research Program”) for the purpose of identifying the RNP Complexes that may be used in the creation of potential drug development candidates.

As such, we may develop such gamma delta T Cells.

recognize or modulate the expression of up to twenty gene targets selected by Juno Therapeutics (each, a “Research Program”) for the purpose of identifying the RNP Complexes that may be used in the creation of potential drug development candidates.

The initial research term is five years from the effective date of the Juno Collaboration Agreement.

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Under the Juno Collaboration Agreement, if Juno Therapeutics elects to opt-in with respect to a Research Program, it shall make a mid-six digit dollar payment to us and we shall amend the Juno License Agreement to include such Research Program by executing a licensed program addendum for such Research Program.

Following Juno’s opt-in

for each program we shall grant to Juno Therapeutics an exclusive (even as to us), royalty-bearing worldwide right and license under specified intellectual property rights to research, develop, manufacture commercialize or otherwise exploit the RNP Complexes in such Research Program to create products containing, incorporating, comprising or containing Alpha-beta T Cells and/or Other Derived T Cells, in each case modified using the RNP Complexes in such Research Program (each, a “Juno Licensed Product”).

Following Juno Therapeutic’s opt-in for each program we shall grant to Juno Therapeutics an exclusive (even as to us), royalty-bearing worldwide right and license under specified intellectual property rights to research, develop, manufacture commercialize or otherwise exploit the RNP Complexes in such Research Program to create products containing, incorporating, comprising or containing Alpha-beta T Cells and/or Other Derived T Cells, in each case modified using the RNP Complexes in such Research Program (each, a “Juno Licensed Product”).

We are entitled to receive high single-digit to low double-digit percentage royalties on net sales made by Juno Therapeutics, its affiliates and sublicensees of any Juno Licensed Products, subject to reductions in certain circumstances.

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We have the right to terminate the Juno License Agreement on a program-by-program basis in the event that Juno Therapeutics fails to make any undisputed payment to us and has not cured such payment breach within the cure period.

Other than Juno Therapeutics’ right to wind-down its operations with respect to Juno Licensed Products during the twelve months following the date of effectiveness of termination, all licenses and other exclusive rights granted under the Juno License Agreement shall terminate.

Allergan Strategic Alliance and Option Agreement and Co-Development and Commercialization Agreement

Other than Juno Therapeutics’ right to wind-down its operations with respect to

Juno Licensed Products during the twelve months following the date of effectiveness of termination, all licenses and other exclusive rights granted under the Juno License Agreement shall terminate.

Allergan Agreement

In March 2017, we entered into a strategic alliance and option agreement with Allergan to discover, develop, and commercialize new gene editing medicines for a range of ocular disorders.

Over a seven-year research term, Allergan will have an exclusive option to exclusively license from us up to five collaboration development programs for the treatment of ocular disorders (each, a “Collaboration Development Program”), including EDIT-101, for which Allergan has exercised its option.

We will use commercially reasonably efforts to develop at least five Collaboration Development Programs and deliver preclinical results and data meeting specified criteria with respect to each

Collaboration Development Program (each, an “Option Package”) to Allergan.

We will generally have responsibility for the conduct of each Collaboration Development Program and sole responsibility for all development costs of each Collaboration Development Program prior to any exercise by Allergan of its option to acquire an exclusive license to such Collaboration Development Program under the terms of the agreement.

If at the end of the seven-year research term we have not delivered five Collaboration Development Programs that satisfy the Option Package criteria for each such program, the research term shall automatically extend by one-year increments until such obligation is satisfied, up to three additional years (the “Research Term”).

Pursuant to this agreement, we granted Allergan an exclusive option to exclusively license from us up to five collaboration development programs for the treatment of ocular disorders, including EDIT-101.

In July 2018, Allergan exercised its option to develop and commercialize EDIT-101 and we subsequently entered into a co-development and commercialization agreement with Allergan under which we agreed to co-develop and equally split profits and losses for EDIT-101 in the United States.

In connection with entering into this agreement, Allergan paid us a one-time up-front payment of $90.0 million.

Allergan has also paid us $15.0 million in connection with Allergan exercising its option for the LCA10 program and $25.0 million in connection with the acceptance of the IND for the LCA10 program.

Upon delivery of an Option Package with respect to a Collaboration Development Program to Allergan, Allergan is entitled, for specified periods of time thereafter (each, an “Initial Option Period”), to exercise an option (an “Option”) to acquire from us an exclusive (even as to us and our affiliates) world-wide right and license to our background intellectual property and our interest in the Collaboration Development Program intellectual property to develop, commercialize, make, have made, use, offer for sale, sell, and import any gene editing therapy product that results from such Collaboration Development Program during the term of the agreement (an “Allergan Licensed Product”) in any category of human diseases and conditions other than the diagnosis, treatment or prevention of any cancer in humans through the use of engineered T cells and subject to specified other limitations.

Following the exercise of an Option, Allergan will have the right to grant sublicenses subject to specified terms, under Allergan’s exclusive license to our background intellectual property and our interest in the Collaboration Development Program intellectual property, to develop, commercialize, make, have made, use, offer for sale, sell, and import Allergan Licensed Products.

Upon the exercise of an Option within the Initial Option Period, Allergan is required to pay to us an option exercise fee of $15.0 million.

At any time during the Initial Option Period, Allergan may also elect to extend the period of time in which it may exercise the Option to permit additional development work with respect to the Collaboration Development Program, and in connection with such extension Allergan will be required to pay us an option extension fee of $5.0 million.

If, following such an extension, Allergan exercises the Option following the Initial Option Period, Allergan will be required to pay us a higher option exercise fee of $22.5 million plus specified costs incurred by us in connection with the additional development work.

If Allergan does not exercise an Option within a specified option exercise period and any extension thereof, such Option will terminate.

In addition, subject to specified limitations, at the end of the Research Term, Allergan will have the right, for a specified period of time, to exercise an Option with respect to each Collaboration Development Program for which we have not yet delivered an Option Package.

Upon the exercise by Allergan of any such option, Allergan is required to pay to us an option exercise fee in the low-seven digits.

Following the exercise by Allergan of an Option with respect to a Collaboration Development Program, Allergan will be responsible for the development, manufacturing and commercialization of any Allergan Licensed Products thereunder and will be required to use commercially reasonable efforts to develop, obtain regulatory approval for and commercialize at least one Allergan Licensed Product thereunder.

We are entitled to receive clinical, regulatory, and launch milestone payments from Allergan up to a low-nine-digit amount in the aggregate and further commercial milestone payments up to a high-eight-digit amount in the aggregate with respect to each Collaboration Development Program for which Allergan exercises its Option, with certain of such milestone payments subject to reduction under certain circumstances.

In the aggregate, we are eligible to receive clinical, regulatory, launch, and commercial milestone payments that could exceed $200.0 million for an indication in the first field per Collaboration Development Program, as well as the potential for additional regulatory milestones for indications in up to two additional fields.

We are also entitled to receive royalties in the high-single digit percentages with respect to net sales of Allergan Licensed Products, subject to certain reductions under specified circumstances, and we will remain obligated to pay all license fees, milestone payments, and royalties due to its upstream licensors based on Allergan’s exercise of its license rights with respect to Allergan Licensed Products.

Allergan’s obligation to pay royalties will expire on a country-by-country/Allergan Licensed Product-by-Allergan Licensed Product basis upon the latest of the expiration of patent-based exclusivity with respect to the applicable Allergan Licensed Product in the applicable

country, expiration of regulatory-based exclusivity with respect to the applicable Allergan Licensed Product in the applicable country and the tenth anniversary of the first commercial sale by Allergan of the applicable Allergan Licensed Product in the applicable country.

We are generally required to pay to Allergan royalties in the low- to mid-single digit percentages on net sales of products developed under Collaboration Development Programs that Allergan terminated following exercise of its Option, in each case over royalty terms equivalent to those for the royalties due to us under the agreement.

We have the right to elect to participate in a profit-sharing arrangement with Allergan in the United States for one additional Collaboration Development Program that Allergan exercises its option with respect to, on terms mutually agreed by us and Allergan and subject to a right of Allergan to reject such election under certain circumstances.

If we make such an election, we and Allergan would share equally in net profits and losses on specific terms to be agreed between us and Allergan, in lieu of Allergan paying royalties on net sales of any applicable Allergan Licensed Products in the United States and in such event Allergan’s milestone payment obligations would be reduced, with our being eligible to receive clinical, regulatory, and launch milestone payments up to a low nine-digit amount in the aggregate and further commercial milestone payments up to a high-eight digit amount in the aggregate, subject to reduction under certain circumstances.

If we elect to participate in a profit-sharing arrangement, we are obligated to reimburse Allergan for half of the development costs incurred by Allergan with respect to the applicable Collaboration Development Program and Allergan will retain control of all development and commercialization activities for the applicable Allergan Licensed Products.

Under the agreement, we and Allergan will establish an alliance steering committee (“ASC”) comprised of three members from each of us and Allergan, which will have review, oversight and decision-making responsibility for selecting the targets and indications and certain Option Package criteria for the Collaboration Development Programs and determining whether the Option Package criteria for a Collaboration Development Program have been satisfied.

With respect to a given Collaboration Development Program, all decisions of the ASC will be made by consensus, subject to specified final decision-making rights, with each of us and Allergan having one vote.

During the Research Term, neither we nor any of our affiliates will, subject to specified exceptions in the agreement, develop, manufacture or commercialize any gene editing therapy in the ocular field, or grant a license or sublicense to develop, manufacture or commercialize any gene editing therapy in the ocular field.

During the Research Term, neither Allergan nor any of its affiliates will, subject to specified exceptions in the agreement, develop, manufacture or commercialize, or grant a license or sublicense to develop, manufacture or commercialize, any gene editing therapy in the ocular field directed to any ocular indication to which any gene editing therapy in any non-terminated Collaboration Development Program is directed or the same target to which any gene editing therapy in any non-terminated Collaboration Development Program is directed.

After the Research Term, neither we, Allergan nor any of their respective affiliates will, subject to specified exceptions in the agreement, develop, manufacture or commercialize, or grant a license or sublicense to develop, manufacture or commercialize, any gene editing therapy in the ocular field directed to any ocular indication to which any Allergan Licensed Product is directed or any target to which any Allergan Licensed Product is directed.

Unless earlier terminated, the term of the agreement will expire upon (i) the expiration of the Research Term if Allergan does not exercise any Option or (ii) the expiration of all payment obligations under the agreement.

In addition to other termination rights, Allergan has the right to terminate the agreement (i) in its entirety for an uncured material breach by us and (ii) in its entirety for any reason on a program-by-program basis for the Collaboration Development Programs for which Allergan has exercised its Option with 90 days’ written notice.

Additionally, Allergan may terminate the Research Term (i) on a Collaboration Development Program-by-Collaboration Development Program basis upon written notice to us in the event of a change of control of us or (ii) for all Collaboration Development Programs, provided that, Allergan will not have any right to exercise any Option for any such Collaboration Development Program following any such termination.

If Allergan terminates the Agreement for our material breach, subject to Allergan’s continued payment, reporting, and audit obligations under the agreement, Allergan has the right to retain all licenses granted under the agreement and Allergan will no longer have any diligence obligations with respect to the Allergan Licensed Products.

In February 2019, we entered into the LCA10 Co-Development and Commercialization Agreement with Allergan Sales, LLC (“Allergan Sales”).

Under this agreement, we and Allergan Sales have agreed to share in the costs

and certain development responsibilities for products arising under the program to treat LCA10 and the profits and losses resulting from the commercialization of any products arising under such program, in each case, in the United States.

Allergan also paid us $15.0 million in connection with Allergan exercising its option for the LCA10 program and $25.0 million in connection with the acceptance of the IND for the LCA10 program.

Allergan was acquired by AbbVie Inc.

On August 5, 2020, we entered into a termination agreement with Allergan pursuant to which, among other things, we and Allergan terminated the strategic alliance and option agreement and the co-development and commercialization agreement.

As a result of the termination of our collaboration with Allergan, we regained full global rights to research, develop, manufacture, and commercialize our ocular product candidates, including EDIT-101 for the treatment of LCA10.

Under the termination agreement, Allergan granted us a non-exclusive, royalty-bearing right and license, including the right to grant sublicenses (through multiple tiers), to certain Allergan know-how that is necessary to develop, manufacture and commercialize EDIT-101.

In addition, we are obligated to use commercially reasonable efforts to develop and commercialize a product directed to each of four collaboration targets, one of which is LCA10.

In connection with our entry into the termination agreement, we made a one-time aggregate payment of $20.0 million to Allergan.

In addition, we will make certain payments on achievements of clinical and regulatory milestones up to $20.0 million for each target program and aggregated sales milestones for all products covered by the termination agreement up to $90.0 million.

We are also obligated to pay royalties in a low-single digit percentage, subject to reduction under specified circumstances, on net sales of specified products.

Our obligation to pay royalties will expire on a country-by-country and product-by-product basis upon the later of the expiration of regulatory-based exclusivity with respect to such product in such country and the tenth anniversary of the first commercial sale of such product.

Intellectual Property Licenses

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and providing Harvard and Broad with certain rights to designate, and reserve all rights to, gene targets for which the designating institution has an interest in researching and developing products that would otherwise be covered by rights licensed to us.

The licenses granted to us under the Cas9-I License Agreement include rights to certain patents solely owned by Harvard (the “Harvard Cas9-I Patent Rights”), certain patents co-owned by the Massachusetts Institute of Technology (“MIT”) and Broad, certain patents co-owned by MIT, The Rockefeller University (“Rockefeller”), and Broad, and certain patents co-owned by MIT, Broad and Harvard.

of Technology (“MIT”) and Broad, certain patents co-owned by MIT, The Rockefeller University (“Rockefeller”), and Broad, and certain patents co-owned by MIT, Broad and Harvard.

We refer to all the patents and patent applications licensed to us under the Cas9-I License Agreement as the Harvard/Broad Cas9-I Patent Rights.

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Moreover, the license granted by Broad is non-exclusive with respect to the treatment of medullary cystic kidney disease 1 and three other specified targets, subject to the limitation that for such three targets, each of Broad and Harvard is only permitted to grant a non-exclusive license to one third party at a time with respect to each such target within the field of exclusive license granted to us.

Harvard and Broad also granted us a non-exclusive, worldwide, royalty-bearing, sublicensable license to the Harvard/Broad Cas9-I Patent Rights for all purposes, with the

exception that the non-exclusive license to certain Harvard Cas9-I Patent Rights excludes the modification of animals or animal cells for the creation and sale of organs suitable for xenotransplantation into humans and the development and commercialization of products or services in the field of livestock applications.

Harvard and Broad also granted us a non-exclusive, worldwide, royalty-bearing, sublicensable license to the Harvard/Broad Cas9-I Patent Rights for all purposes, with the exception that the non-exclusive license to certain Harvard Cas9-I Patent Rights excludes the modification of animals or animal cells for the creation and sale of organs suitable for xenotransplantation into humans and the development and commercialization of products or services in the field of livestock applications.

In addition to the exclusions described above, the following are excluded from the scope of both the exclusive and non-exclusive licenses granted to us under the Cas9-I License Agreement:

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If a third party requests a license under the Harvard/Broad Cas9-I Patent Rights for the development and commercialization of a product that would be subject to our exclusive license grant from Harvard and Broad under the Cas9-I License Agreement, Harvard and Broad may notify us of the request (the “Cas9-I Third Party Proposed Product Requests”).

Beginning in December 2018, our process to address Cas9-I Third Party Proposed Product Requests has been conformed to the same process established in our Cpf1 license agreement described below.

Our process to address Cas9-I Third Party Proposed Product Requests has been conformed to the same process established in our Cpf1 license agreement described below.

The Cas9-I License Agreement also provides Broad with the right, after a specified period of time and subject to certain limitations, to designate gene targets for which Broad, whether alone or together with an affiliate or third party, has an interest in researching and developing products that would otherwise be covered by rights licensed to us under the Cas9-I License Agreement.

Broad may not so designate any gene target for which we, directly or through any of our affiliates, sublicensees, or collaborators, are researching, developing, or commercializing a product, or for which we can demonstrate to Broad’s reasonable satisfaction that we are interested in researching, developing, and commercializing a product, that we have a commercially reasonable research, development, and commercialization plan to do so, and we commence and continue reasonable commercial efforts under such plan.

If we directly or through any of our affiliates, sublicensees, or collaborators, are not researching, developing, or commercializing a product directed toward the gene target designated by Broad and are not able to develop and implement a plan reasonably satisfactory to Broad, Broad is entitled to reserve all rights under the Cas9-I License Agreement, including the right to grant exclusive or non-exclusive licenses to third parties, to develop and commercialize products directed to such gene target and our

license granted with respect to such gene target will terminate, and we will not be entitled under the Cas9-I License Agreement to develop and commercialize products directed to that gene target.

Under the Cas9-I License Agreement, we paid Broad and Harvard an upfront license fee in the low six figures and issued a single-digit percentage of shares of our common stock to Broad (with Broad holding a right to request re-issuance to its designees, including MIT or MIT’s designee) and Harvard.

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We are also obligated to make additional payments to Broad and Harvard, collectively, of up to an aggregate of $54.0 million upon the occurrence of certain sales milestones per licensed product for the prevention or treatment of a human disease that afflicts at least a specified number of patients in the aggregate in the United States.

Broad and Harvard are collectively entitled to receive clinical and regulatory milestone payments totaling up to $4.1 million in the aggregate per licensed product approved in the United States and at least one jurisdiction outside the United States for the prevention or treatment of a human disease that afflicts fewer than a specified number of patients in the aggregate in the United States or a specified number of patients per year in the United States, which we refer to as an ultra-orphan disease.

Broad and Harvard are collectively

entitled to receive clinical and regulatory milestone payments totaling up to $4.1 million in the aggregate per licensed product approved in the United States and at least one jurisdiction outside the United States for the prevention or treatment of a human disease that afflicts fewer than a specified number of patients in the aggregate in the United States or a specified number of patients per year in the United States, which we refer to as an ultra-orphan disease.

We are also obligated to make additional payments to Broad and Harvard, collectively, of up to an aggregate of $36.0 million upon the occurrence of certain sales milestones per licensed product for the prevention or treatment of an ultra-orphan disease.

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If an interference is declared or a derivation proceeding is initiated, with respect to any Harvard/Broad Cas9-I Patent Rights, then our prosecution related rights, including our right to receive correspondence from a patent office, will be suspended with respect to the patent rights involved in the interference or derivation proceeding until, under some circumstances, we enter into a common interest agreement with that institution.

Nevertheless, we remain responsible for the cost of such

interference or derivation proceeding.

Nevertheless, we remain responsible for the cost of such interference or derivation proceeding.

We are responsible for the cost of the interference proceeding and appeal with respect to these patents and this patent application.

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patent applications and we may not have any rights under any foreign patents that issue from any foreign equivalents thereof.

Pursuant to the Cpf1 License Agreement, and as of December 31, 2019, we have certain rights under one U.S.

Pursuant to the Cpf1 License Agreement, and as of December 31, 2020, we have certain rights under three U.S.

patent, 12 pending U.S.

patent applications, two European patents and related validations, nine pending European patent applications, and other related patent applications in jurisdictions outside of the United States and Europe.

patent applications, five European patents and related validations, six pending European patent applications, and other related patent applications in jurisdictions outside of the United States and Europe.

We are obligated to use commercially reasonable efforts to research, develop, and commercialize licensed products in the Exclusive Cpf1 Field.

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Under the Cpf1 License Agreement, Broad also retained rights to grant further licenses under specified circumstances to third parties that wish to develop and commercialize products that target a particular gene and that otherwise would fall within the scope of our exclusive license from Broad.

Beginning in December 2018, if a third party requests a license under the Cpf1 Patent Rights for the development and commercialization of a product that would be subject to our exclusive license grant from Broad (a “Cpf1 Third Party Proposed Product Request”), Broad may notify us of such request.

If a third party requests a license under the Cpf1 Patent Rights for the development and commercialization of a product that would be subject to our exclusive license grant from Broad (a “Cpf1 Third Party Proposed Product Request”), Broad may notify us of such request.

A Cpf1 Third Party Proposed Product Request must be accompanied by a research, development and commercialization plan reasonably satisfactory to Broad, including evidence that the third party has, or reasonably expects to have, access to any necessary intellectual property and funding.

Broad may not grant a Cpf1 Third Party Proposed Product Request (i) if we, directly or through any of our affiliates, sublicensees, or collaborators are researching, developing, or commercializing a product directed to the same gene target that is the subject of the Cpf1Third Party Proposed Product Request (“Cpf1 Licensee Product”) and we can demonstrate such ongoing efforts to Broad’s reasonable satisfaction, or (ii) if we, directly or through any of our affiliates or sublicensees, wish to do so either alone or with a collaboration partner, and we can demonstrate to Broad’s reasonable satisfaction that we are interested in researching, developing, and commercializing a Cpf1 Licensee Product, that we have a commercially reasonable research, development, and commercialization plan to do so, and we commence and continue reasonable commercial efforts under such plan.

Broad may not grant a Cpf1 Third Party Proposed Product Request

(i) if we, directly or through any of our affiliates, sublicensees, or collaborators are researching, developing, or commercializing a product directed to the same gene target that is the subject of the Cpf1Third Party Proposed Product Request (“Cpf1 Licensee Product”) and we can demonstrate such ongoing efforts to Broad’s reasonable satisfaction, or (ii) if we, directly or through any of our affiliates or sublicensees, wish to do so either alone or with a collaboration partner, and we can demonstrate to Broad’s reasonable satisfaction that we are interested in researching, developing, and commercializing a Cpf1 Licensee Product, that we have a commercially reasonable research, development, and commercialization plan to do so, and we commence and continue reasonable commercial efforts under such plan.

If we, directly or through any of our affiliates, sublicensees, or collaborators, are not researching, developing, or commercializing a Cpf1 Licensee Product nor able to develop and implement a plan reasonably satisfactory to Broad, Broad may grant an exclusive or non-exclusive license to the third party on a gene target-by-gene target basis.

The Cpf1 License Agreement also provides Broad with the right, beginning in December 2017 and subject to certain limitations, to designate gene targets for which Broad, whether alone or together with a Cpf1 Institution, affiliate or third party, has an interest in researching and developing products that would otherwise be covered by rights licensed to us under the Cpf1 License Agreement.

The Cpf1 License Agreement also provides Broad with the right, subject to certain limitations, to designate gene targets for which Broad, whether alone or together with a Cpf1 Institution, affiliate or third party, has an interest in researching and developing products that would otherwise be covered by rights licensed to us under the Cpf1 License Agreement.

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Our obligation to pay royalties will expire on a product-by-product and country-by-country basis upon the later of the expiration of the last to expire valid claim of the Cpf1 Patent Rights that covers each licensed product or licensed service in each country or the tenth anniversary of the date of the first commercial sale of the product or service.

If we sublicense any of the Cpf1 Patent Rights to a third party, Broad and Wageningen, collectively, have the right to receive high single-digit to low double-digit percentages of the sublicense income, depending on the stage of development of the products or services in question at the time of the sublicense.

If we sublicense any of the Cpf1 Patent Rights to a third party, Broad and Wageningen, collectively, have the right to

receive high single-digit to low double-digit percentages of the sublicense income, depending on the stage of development of the products or services in question at the time of the sublicense.

Under the Cpf1 License Agreement, Broad and Wageningen are also entitled, collectively, to receive success payments in the event our market capitalization reaches specified thresholds ascending from a high nine digit dollar amount to $10.0 billion (“Market Cap Success Payments”) or sale of our company for consideration in excess of those thresholds, (“Company Sale Success Payments,” which with the Market Cap Success Payments, the “Success Payments”).

Market Cap Success Payments are payable by us in cash or in the form of promissory notes (the “Promissory Notes”).

Market Cap Success Payments are payable by us in cash, in shares of our common stock, with such shares being valued for such purpose at the closing price of our common stock as reported the Nasdaq Stock Market for the trading day immediately preceding the date of such payment if our common stock was then listed on the Nasdaq Stock Market, or in the form of promissory notes (the “Promissory Notes”).

The Promissory Notes bear interest at 4.8% per annum.

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In 2017, two Market Cap Success Payments of $5.0 million each became due and payable and we issued Promissory Notes in such amounts, which we fully settled by issuing shares of our common stock in 2017 and 2018.

In December 2020, an additional Market Cap Success Payment of $15.0 million became due and payable, which we settled through the issuance of shares of our common stock in January 2021.

The remaining Success Payments that may be paid to Broad and Wageningen range from a low-eight digit dollar amount to a mid-eight digit dollar amount, and collectively will not exceed, in aggregate, $100.0 million, which maximum would be payable only if we achieve a market capitalization threshold of $10.0 billion and have at least one product candidate covered by a claim of a patent right licensed to us under either the Cpf1 License Agreement or the Cas9-I License Agreement that is or was the subject of a clinical trial pursuant to development efforts by us or any of our affiliates or sublicensees.

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However, our royalty obligations, discussed above, may survive expiration or termination.

We have the right to terminate the Cpf1 License Agreement at will upon four months’ written notice to Broad.

We have the right to terminate the Cpf1 License

Agreement at will upon four months’ written notice to Broad.

Either party may terminate the Cpf1 License Agreement upon a specified period of notice in the event of the other party’s uncured material breach of a material obligation, such notice period varying depending on the nature of the breach.

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We seek to protect our proprietary technology and processes, in part, by confidentiality agreements with our employees, consultants, scientific advisors, and contractors.

We also seek to

preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.

We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.

Our in-licensed patents and patent applications cover various aspects of our genome editing platform technology, including CRISPR systems that employ Cas9 including S.

aureus Cas9, high-fidelity Cas9 nucleases and Cas9 PAM variants, self-inactivating forms of Cas9, Cas9 nickases, CRISPR systems that employ Cas12a including Cas12a nickases and other variants and self-inactivating forms of Cas12a, and also CRISPR systems that employ viral vectors for delivery, single guide RNAs, or modified guide RNAs.

We also have filed patent applications and have in-licensed rights to filed patent applications directed to each of the four components of our genome editing platform technology.

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The term of individual patents depends upon the legal term for patents in the countries in which they are granted.

In most countries, including the United States, the patent term is 20 years from the earliest claimed filing date of a non-provisional patent application in the applicable country.

In most countries, including the United States, the patent term is 20 years from the earliest claimed filing date of

a non-provisional patent application in the applicable country.

In the United States, a patent’s term may, in certain cases, be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over a commonly owned patent or a patent naming a common inventor and having an earlier expiration date.

The Drug Price Competition and Patent Term Restoration Act of 1984 extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent applicable to each regulatory review period may be extended and only those claims covering the approved drug or a method for using it may be extended.

As of December 31, 2019, we owned eight U.S.

As of December 31, 2020, we owned nine U.S.

patents, 64 pending U.S.

non-provisional patent applications, four European patents and related validations, 40 pending European patent applications, seven pending U.S.

provisional patent applications, 19 pending PCT patent applications, and other related patent applications in jurisdictions outside the United States and Europe that are related to our CRISPR technology and which include claims directed to our genome editing platform, including our directed editing component, as well as composition of matter and method of use claims for our therapeutic programs, including LCA10 and other genetic and infectious eye disorders, and engineered T cells.

One of these U.S.

non-provisional patent applications, seven European patents and related validations, 56 pending European patent applications, five pending U.S.

provisional patent applications, seven pending PCT patent applications, and other related patent applications in jurisdictions outside the United States and Europe that are related to our CRISPR technology and which include claims directed to our genome editing platform, including our directed editing component, as well as composition of matter and method of use claims for our therapeutic programs, including LCA10 and other genetic and infectious eye disorders, and engineered T cells.

Three of these U.S.

patents, one of these European patents and their U.S., European and foreign counterpart applications are co-owned with Broad and Iowa and we have obtained an exclusive license to such co-ownership rights from these third parties in the field of prevention or treatment of human disease using gene therapy or genome editing.

In addition, eight of these pending PCT patent applications and three of these pending U.S.

In addition, one of these pending PCT patent applications and 12 of these pending U.S.

non-provisional patent applications are co-owned with certain of our collaborators because they encompass inventions developed under our collaborations.

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As of December 31, 2020, we in-licensed 88 U.S.

patents, 27 European patents and related validations, and over 550 pending patent applications, including approximately 89 pending U.S.

non-provisional patent applications, 59 pending European patent applications, and other related patents and patent applications in jurisdictions outside the United States and Europe that are related to our CRISPR technology collectively from various universities and

institutions.

patents, 44 European patents and related validations, and approximately 500 pending patent applications, including 92 pending U.S.

non-provisional patent applications, 58 pending European patent applications, and other related patents and patent applications in jurisdictions outside the United States and Europe that are related to our CRISPR technology collectively from various universities and institutions.

The patents and patent applications outside of the United States and Europe are held primarily in Canada, Japan, and Australia, although some of our in-licensed patent families were filed in a larger number of countries.

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As of December 31, 2020, we owned two U.S.

patents, four pending U.S.

non-provisional patent applications, one European patent and related validations, two pending European patent applications, five pending foreign patent applications, and one pending PCT patent application which are directed to compositions of matter, including guide RNAs directed to CEP290, and methods of use for the treatment of LCA10.

patents, five pending U.S.

non-provisional patent applications, one European patent and related validations, two pending European patent applications, and seven pending foreign patent applications, which are directed to compositions of matter, including guide RNAs directed to CEP290, and methods of use for the treatment of LCA10.

Our current issued U.S.

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There are additional companies that are working to develop therapies in areas related to our research programs.

and product focus is the development of therapies using CRISPR technology.

Our platform and product focus is the development of therapies using CRISPR technology.

Other companies developing CRISPR technology or therapies using CRISPR technology include Arbor Biotechnologies, Caribou Biosciences, CRISPR Therapeutics, ERS Genomics, Intellia Therapeutics, Locus Biosciences, ToolGen Inc.

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The companies developing these other genome editing technologies include Beam Therapeutics, Prime Medicine, bluebird bio, Cellectis, Poseida Therapeutics, Precision Biosciences and Sangamo Therapeutics.

Additional companies developing gene therapy products include Abeona Therapeutics, Adverum Biotechnologies, AGTC Therapeutics, Audentes Therapeutics, Homology Medicines, REGENXBIO, Sarepta Therapeutics, Solid Biosciences, Spark Therapeutics, uniQure and Voyager Therapeutics.

Additional companies developing cell and gene therapy products include Abeona Therapeutics, Adverum Biotechnologies, AGTC Therapeutics, Audentes Therapeutics, Fate Therapeutics, Inc., Graphite Bio, Homology Medicines, Nkarta, Inc., REGENXBIO, Sarepta Therapeutics, Solid Biosciences, Spark Therapeutics, uniQure and Voyager Therapeutics.

In addition to competition from other genome editing therapies, gene therapies or cell medicine therapies, any products that we may develop may also face competition from other types of therapies, such as small molecule, antibody, protein, oligonucleotide, or ribonucleic acid therapies.

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Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient

registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop.

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Manufacturing

We currently perform some manufacturing activities internally such as the production of guide RNA for our various internal and partner programs and some pre-clinical toxicology and Phase 1 production for our engineered cell medicines and contract with third parties for the manufacturing of all other materials for preclinical studies and our planned clinical trials.

We currently perform some manufacturing activities such as the production of guide RNA for our various internal and partner programs and some pre-clinical and early-phase clinical production for our ex vivo gene edited cell medicines.

These activities are performed on site at our existing facilities or, in the case of EDIT-301 for sickle cell disease, at current good manufacturing practice-compliant space leased by us and staffed by our employees.

We contract with third parties for the manufacturing of all other materials for preclinical studies and our clinical trials.

We have limited manufacturing operations and do not own or operate any substantial manufacturing facilities for the production of our program materials.

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The commercial infrastructure for orphan products typically consists of a targeted, specialty sales force that calls on a limited and focused group of physicians supported by sales management, medical liaisons, internal sales support, an internal marketing group, and distribution support.

Additionally, under the LCA10 Co-Development and Commercialization Agreement, Allergan will be responsible for all commercialization efforts with respect to EDIT-101.

Additional capabilities important to the orphan marketplace include the management of key accounts such as managed care organizations, group purchasing organizations, specialty pharmacies, and government accounts.

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In particular, some of our research programs target potentially larger indications.

Data, the size of the development programs, the size of the target market, the size of a commercial infrastructure, and manufacturing needs may all influence our strategies in the United States, Europe, and the rest of the world.

Government Regulation

Data, the size of the development programs, the size of the

target market, the size of a commercial infrastructure, and manufacturing needs may all influence our strategies in the United States, Europe, and the rest of the world.

Government Regulation and Licensure of Products

Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the European Union, extensively regulate, among other things, the research, development, testing, manufacture, pricing, reimbursement, sales, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products, including biological products.

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requirements at any time during the product development process, including non-clinical testing, clinical testing, the approval process or post-approval process, may subject an applicant to delays in the conduct of the study, regulatory review and approval, and/or administrative or judicial sanctions.

These sanctions may include, but are not limited to, the FDA’s refusal to allow an applicant to proceed with clinical testing, refusal to approve pending applications, license suspension, or revocation, withdrawal of an approval, warning letters, adverse publicity, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, and civil or criminal investigations and penalties brought by the FDA or the Department of Justice (“DOJ”) and other governmental entities, including state agencies.

An applicant seeking approval to market and distribute a new biologic in the United States generally must satisfactorily complete each of the following steps:

● preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s Good Laboratory Practice regulations;

● preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s Good Laboratory Practice (“GLP”) regulations;

● completion of the manufacture, under current Good Manufacturing Practices (“cGMP”) conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required analytical and stability testing;

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As a result, submission of the IND may result in the FDA not allowing the trials to commence or allowing the trial to commence on the terms originally specified by the sponsor in the IND.

If the FDA raises concerns or questions

either during this initial 30-day period, or at any time during the IND process, it may choose to impose a partial or complete clinical hold.

If the FDA raises concerns or questions either during this initial 30-day period, or at any time during the IND process, it may choose to impose a partial or complete clinical hold.

Clinical holds are imposed by the FDA whenever there is concern for patient safety and may be a result of new data, findings, or developments in clinical, nonclinical, and/or chemistry, manufacturing, and controls.

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This could cause significant delays or difficulties in completing planned clinical studies in a timely manner.

With gene therapy protocols, if the FDA allows the IND to proceed, but the Recombinant DNA Advisory Committee (“RAC”) of the NIH decides that full public review of the protocol is warranted, the FDA will request at the completion of its IND review that sponsors delay initiation of the protocol until after completion of the RAC review process.

The FDA also may impose clinical holds on a biologic product candidate at any time before or during clinical trials due to safety concerns or non-compliance.

If the FDA imposes a clinical hold, trials may not recommence without FDA authorization and then only under terms authorized by the FDA.

Expanded Access to an Investigational Drug for Treatment Use

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Although these requirements were rolled out over time, they have now come into full effect.

This provision requires drug and biologic companies to make publicly available their policies for expanded access for individual patient access to products intended for serious diseases.

Sponsors are required to make such policies publicly available upon the earlier of initiation of a Phase 2 or Phase 3 study;

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Human Clinical Trials in Support of a BLA

Clinical trials involve the administration of the investigational product candidate to healthy volunteers or patients with the disease to be treated under the supervision of a qualified principal investigator in accordance with GCP

requirements.

Clinical trials are conducted under study protocols detailing, among other things, the objectives of the study, inclusion and exclusion criteria, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.

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Additional studies may be required after approval.

● Phase 1 clinical trials are initially conducted in a limited population to test the product candidate for safety, including adverse effects, dose tolerance, absorption, metabolism, distribution, excretion, and pharmacodynamics in healthy humans or, on occasion, in patients, such as cancer patients.

● Phase 2 clinical trials are generally conducted in a limited patient population to identify possible adverse effects and safety risks, evaluate the efficacy of the product candidate for specific targeted indications and determine dose tolerance and optimal dosage.

Multiple Phase 2 clinical trials may be conducted by the sponsor to obtain information prior to beginning larger and more costly Phase 3 clinical trials.

● Phase 3 clinical trials proceed if the Phase 2 clinical trials demonstrate that a dose range of the product candidate is potentially effective and has an acceptable safety profile.

● Phase 3 clinical trials may proceed if the Phase 2 clinical trials demonstrate that a dose range of the product candidate is potentially effective and has an acceptable safety profile.

Phase 3 clinical trials are undertaken within an expanded patient population to further evaluate dosage, provide substantial evidence of clinical efficacy, and further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites.

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In some cases, the FDA may approve a BLA for a product candidate but require the sponsor to conduct additional clinical trials to further assess the product candidate’s safety and effectiveness after approval.

post-approval trials are typically referred to as Phase 4 clinical trials.

Such post-approval trials are typically referred to as Phase 4 clinical trials.

These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of biologics approved under accelerated approval regulations.

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Failure to exhibit due diligence with regard to conducting Phase 4 clinical trials could result in withdrawal of approval for products.

Information about clinical trials must be submitted within specific timeframes to the NIH for public dissemination on its ClinicalTrials.gov website.

Pediatric Studies

Under the Pediatric Research Equity Act of 2003, a BLA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

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The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

Additional requirements and procedures relating to deferral requests and requests for extension of deferrals are contained in FDASIA.

Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation.

Information about clinical trials must be submitted within specific timeframes to the NIH for public dissemination on its ClinicalTrials.gov website.

Additional requirements and procedures relating to deferral requests and requests for extension of

deferrals are contained in the Food and Drug Administration Safety and Innovation Act, or FDASIA.

The FDA maintains a list of diseases that are exempt from PREA requirements due to low prevalence of disease in the pediatric population.

Congress amended the FDA Reauthorization Act of 2017, or FDARA.

Previously, drugs that had been granted orphan drug designation were exempt from the requirements of the Pediatric Research Equity Act.

Under the amended section 505B, beginning on August 18, 2020, the submission of a pediatric assessment, waiver or deferral will be required for certain molecularly targeted cancer indications with the submission of an application or supplement to an application.

Special Regulations and Guidance Governing Gene Therapy Products

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The FDA and the NIH have published guidance documents with respect to the development and submission of gene therapy protocols.

The FDA has issued various guidance documents regarding gene therapies, including recent final guidance documents released in January 2020 relating to chemistry, manufacturing and controls information for gene therapy INDs, long-term follow-up after the administration of gene therapy products, gene therapies for rare diseases and gene therapies for retinal disorders.

Although the FDA has indicated that these and other guidance documents it previously issued are not legally binding, compliance with them is likely necessary to gain approval for any gene therapy product

The guidance documents provide additional factors that the FDA will consider at each of the above stages of development and relate to, among other things, the proper preclinical assessment of gene therapies;

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Such resubmissions are classified under PDUFA as either Class 1 or Class 2.

The classification of a resubmission is based on the information submitted by an applicant in response to an action letter.

The classification of a resubmission is based on the information submitted by

an applicant in response to an action letter.

Under the goals and policies agreed to by the FDA under PDUFA, the FDA has two months to review a Class 1 resubmission and six months to review a Class 2 resubmission.

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The FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition.

These programs are referred to

as fast track designation, breakthrough therapy designation, priority review designation and regenerative advanced therapy designation.

These programs are referred to as fast track designation, breakthrough therapy designation, priority review designation and regenerative advanced therapy designation.

Specifically, the FDA may designate a product for fast track review if it is intended, whether alone or in combination with one or more other products, for the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition.

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imposition of post-market studies or clinical trials to assess new safety risks;

imposition of distribution or other restrictions under a REMS program.

or imposition of distribution or other restrictions under a REMS program.

Other potential consequences include, among other things:

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Promotional claims about a drug’s safety or effectiveness are prohibited before the drug is approved.

After approval, a drug product generally may not be promoted for uses that are not approved by the FDA, as reflected in the product’s prescribing information.

After approval, a drug product generally may not be promoted for uses that

are not approved by the FDA, as reflected in the product’s prescribing information.

In the United States, health care professionals are generally permitted to prescribe drugs for such uses not described in the drug’s labeling, known as off-label uses, because the FDA does not regulate the practice of medicine.

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It may be permissible, under very specific, narrow conditions, for a manufacturer to engage in nonpromotional, non-misleading communication regarding off-label information, such as distributing scientific or medical journal information.

If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the DOJ, or the Office of the Inspector General of the Department of Health and Human Services, as well as state authorities.

If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the Department of Justice, or the Office of the Inspector General of the Department of Health and Human Services, as well as state authorities.

This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products.

The federal government has levied large civil and criminal fines against companies for alleged improper promotion, and has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

Orphan Drug Designation

Orphan Drug Designation and Exclusivity

Orphan drug designation in the United States is designed to encourage sponsors to develop products intended for rare diseases or conditions.

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An application for designation as an orphan product can be made any time prior to the filing of an application for approval to market the product.

A product becomes an

orphan when it receives orphan drug designation from the Office of Orphan Products Development at the FDA based on acceptable confidential requests made under the regulatory provisions.

A product becomes an orphan when it receives orphan drug designation from the Office of Orphan Products Development at the FDA based on acceptable confidential requests made under the regulatory provisions.

The product must then go through the review and approval process like any other product.

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Under the BPCIA, a manufacturer may submit an application for licensure of a biologic product that is “biosimilar to” or “interchangeable with” a previously approved biological product or “reference product.” In order for the FDA to approve a biosimilar product, it must find that there are no clinically meaningful differences between the reference product and proposed biosimilar product in terms of safety, purity, and potency.

For the FDA to approve a

biosimilar product as interchangeable with a reference product, the agency must find that the biosimilar product can be expected to produce the same clinical results as the reference product, and (for products administered multiple times) that the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

For the FDA to approve a biosimilar product as interchangeable with a reference product, the agency must find that the biosimilar product can be expected to produce the same clinical results as the reference product, and (for products administered multiple times) that the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date of approval of the reference product.

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Only one patent applicable to an approved product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent in question.

A patent that covers multiple products for which approval is sought can only be extended in connection with one of the approvals.

A patent that covers multiple products for which approval is sought can only be extended in connection with one of the

The USPTO reviews and approves the application for any patent term extension or restoration in consultation with the FDA.

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In July 2016, the FDA issued a draft guidance intended to assist sponsors of the drug therapeutic and in vitro companion diagnostic device on issues related to co-development of the products.

The 2014 guidance also explains that a companion diagnostic device used to make treatment decisions in clinical trials of a biologic product candidate generally will be considered an investigational device, unless it is employed for an intended use for which the device is already approved or cleared.

If used to make critical treatment decisions, such as patient selection, the diagnostic device generally will be considered a significant risk device under the FDA’s Investigational Device Exemption (“IDE”) regulations.

Thus, the sponsor of the diagnostic device will be required to comply with the IDE regulations.

According to the guidance, if a diagnostic device and a product are to be studied together to support their respective approvals, both products can be studied in the same investigational study, if the study meets both the requirements of the IDE regulations and the IND regulations.

The guidance provides that depending on the details of the study plan and subjects, a sponsor may seek to submit an IND alone, or both an IND and an IDE.

Under the FDCA, in vitro diagnostics, including companion diagnostics, are regulated as medical devices.

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It involves a rigorous premarket review during which the applicant must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling.

applications are subject to an application fee.

PMA applications are subject to an application fee.

For federal fiscal year 2021, the standard fee is $365,657 and the small business fee is $91,414.

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Device manufacturers must also establish registration and device listings with the FDA.

A medical device manufacturer’s manufacturing processes and those of its suppliers are required to comply with the applicable portions of the Quality System Regulation, which covers the methods and documentation of the design, testing, production, processes, controls, quality assurance, labeling, packaging and shipping of medical devices.

A medical device manufacturer’s manufacturing

processes and those of its suppliers are required to comply with the applicable portions of the Quality System Regulation, which covers the methods and documentation of the design, testing, production, processes, controls, quality assurance, labeling, packaging and shipping of medical devices.

Domestic facility records and manufacturing processes are subject to periodic unscheduled inspections by the FDA.

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The clinical trial application must be accompanied by an investigational medicinal product dossier with supporting information prescribed by Directive 2001/20/EC and Directive 2005/28/EC and corresponding national laws of the member states and further detailed in applicable guidance documents.

In April 2014, the European Union adopted a new Clinical Trials Regulation (EU) No 536/2014, but it has not yet become effective.

It will overhaul the current system of approvals for clinical trials in the European Union.

Specifically, the new legislation, which will be directly applicable in all member states, aims at simplifying and streamlining the approval of clinical trials in the European Union.

For instance, the new Clinical Trials Regulation

provides for a streamlined application procedure via a single-entry point and strictly defined deadlines for the assessment of clinical trial applications.

As of January 1, 2020, the website of the European Commission reported that the implementation of the new Clinical Trials Regulation was dependent on the development of a fully functional clinical trials portal and database, which would be confirmed by an independent audit, and that the new legislation would come into effect six months after the European Commission publishes a notice of this confirmation.

In April 2014, the EU adopted a new Clinical Trials Regulation (EU) No 536/2014, which is set to replace the current Clinical Trials Directive 2001/20/EC.

The new Clinical Trials Regulation will become directly applicable to and binding in all 28 EU Member States without the need for any national implementing legislation.

It will overhaul the current system of approvals for clinical trials in the EU.

Specifically, the new legislation aims at simplifying and streamlining the approval of clinical trials in the EU.

Under the new coordinated procedure for the approval of clinical trials, the sponsor of a clinical trial will be required to submit a single application for approval of a clinical trial to a reporting EU Member State (RMS) through an EU Portal.

The submission procedure will be the same irrespective of whether the clinical trial is to be conducted in a single EU Member State or in more than one EU Member State.

The Regulation was published on June 16, 2014 but has not yet become effective.

As of January 1, 2020, the website of the European Commission reported that the implementation of the Clinical Trials Regulation was dependent on the development of a fully functional clinical trials portal and database, which would be confirmed by an independent audit, and that the new legislation would come into effect six months after the European Commission publishes a notice of this confirmation.

The website indicated that the audit was expected to commence in December 2020.

In late 2020, the EMA indicated that it plans to focus on the findings of a system audit;

improving the usability, quality and stability of the clinical trial information system;

and knowledge transfer to prepare users and their organizations for the new clinical trial system.

The EMA has indicated that the system will go live in December 2021.

Parties conducting certain clinical studies must, as in the U.S., post clinical trial information in the European Union at the EudraCT website:

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A kick-off meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies.

Pediatric Studies

Applicants developing a new medicinal product must agree upon a Pediatric Investigation Plan (“PIP”) with the EMA’s pediatric committee (“PDCO”), and must conduct pediatric clinical trials in accordance with that PIP, unless a waiver applies (e.g., because the relevant disease or condition occurs only in adults).

The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the drug for which marketing authorization is being sought.

The marketing authorization application for the product must include the results of pediatric clinical trials conducted in accordance with the PIP, unless a waiver applies, or a deferral has been granted by the PDCO of the obligation to implement some or all of the measures of the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults, in which case the pediatric clinical trials must be completed at a later date.

Marketing Authorization

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A marketing authorization may be granted only to an applicant established in the European Union.

Regulation (EC) No 1901/2006 provides that prior to obtaining a marketing authorization in the European Union, an applicant must demonstrate compliance with all measures included in an EMA-approved Pediatric Investigation Plan (“PIP”), covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, class waiver, or a deferral for one or more of the measures included in the PIP.

Regulation (EC) No 1901/2006 provides that prior to obtaining a marketing authorization in the European Union, an applicant must demonstrate compliance with all measures included in an EMA-approved PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, class waiver, or a deferral for one or more of the measures included in the PIP.

The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all EU member states.

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Regulation 1394/2007/EC lays down specific rules concerning the authorization, supervision, and pharmacovigilance of gene therapy medicinal products, somatic cell therapy medicinal products, and tissue engineered products.

Manufacturers of advanced therapy medicinal products must

demonstrate the quality, safety, and efficacy of their products to EMA which provides an opinion regarding the application for marketing authorization.

Manufacturers of advanced therapy medicinal products must demonstrate the quality, safety, and efficacy of their products to EMA which provides an opinion regarding the

application for marketing authorization.

The European Commission grants or refuses marketing authorization in light of the opinion delivered by EMA.

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The European Union also provides for patent term extension through Supplementary Protection Certificates, or SPCs.

The rules and requirements for obtaining a SPC are similar to those in the United States.

The rules and requirements for obtaining an SPC are similar to those in the United States.

An SPC may extend the term of a patent for up to five years after its originally scheduled expiration date and can provide up to a maximum of fifteen years of marketing exclusivity for a drug.

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Periods of Authorization and Renewals

A marketing authorization is valid for five years, in principle, and it may be renewed after five years on the basis of a reevaluation of the risk-benefit balance by the EMA or by the competent authority of the authorizing member

To that end, the marketing authorization holder must provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy, including all variations introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases to be valid.

To that end, the marketing authorization holder must provide the EMA or the competent authority with a

consolidated version of the file in respect of quality, safety and efficacy, including all variations introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases to be valid.

Once renewed, the marketing authorization is valid for an unlimited period, unless the European Commission or the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal period.

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The market exclusivity period for the authorized therapeutic indication may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan drug designation because, for example, the product is sufficiently profitable not to justify market exclusivity.

Pediatric Exclusivity

Products that are granted a marketing authorization with the results of the pediatric clinical trials conducted in accordance with the PIP are eligible for a six month extension of the protection under a supplementary protection certificate (if any is in effect at the time of approval) even where the trial results are negative.

In the case of orphan medicinal products, a two year extension of the orphan market exclusivity may be available.

This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted.

Brexit and the Regulatory Framework in the United Kingdom

On June 23, 2016, the electorate in the United Kingdom voted in favor of leaving the European Union, commonly referred to as Brexit.

Following protracted negotiations, the United Kingdom left the European Union on January 31, 2020.

Under the withdrawal agreement, there is a transitional period until December 31, 2020 (extendable up to two years).

Discussions between the United Kingdom and the European Union have so far mainly focused on finalizing withdrawal issues and transition agreements but have been extremely difficult to date.

To date, only an outline of a trade agreement has been reached.

Much remains open but the Prime Minister has indicated that the United Kingdom will not seek to extend the transitional period beyond the end of 2020.

If no trade agreement has been reached

before the end of the transitional period, there may be significant market and economic disruption.

The Prime Minister has also indicated that the United Kingdom will not accept high regulatory alignment with the European Union.

Since the regulatory framework for pharmaceutical products in the United Kingdom covering the quality, safety, and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales, and distribution of pharmaceutical products is derived from European Union directives and regulations, Brexit could materially impact the future regulatory regime that applies to products and the approval of product candidates in the United Kingdom.

On June 23, 2016, the electorate in the United Kingdom voted in favor of leaving the EU, commonly referred to as Brexit.

Following protracted negotiations, the United Kingdom left the EU on January 31, 2020.

Under the withdrawal agreement, there is a transitional period until December 31, 2020 (extendable by up to two years).

On December 24, 2020, the United Kingdom and the European Union entered into a Trade and Cooperation Agreement.

The agreement sets out certain procedures for approval and recognition of medical products in each jurisdiction.

Since the regulatory framework for pharmaceutical products in the United Kingdom covering quality, safety and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales and distribution of pharmaceutical products is derived from EU directives and regulations, Brexit could materially impact the future regulatory regime which applies to products and the approval of product candidates in the UK, as the UK legislation now has the potential to diverge from EU legislation.

It remains to be seen how Brexit will impact regulatory requirements for product candidates and products in the UK in the long-term.

The MHRA has recently published detailed guidance for industry and organizations to follow from January 1, 2021 now the transition period is over, which will be updated as the UK’s regulatory position on medicinal products evolves over time.

Furthermore, while the Data Protection Act of 2018 in the United Kingdom that “implements” and complements the European Union’s General Data Protection Regulation, or GDPR, has achieved Royal Assent on May 23, 2018 and is now effective in the United Kingdom, it is still unclear whether transfer of data from the European Economic Area, or EEA, to the United Kingdom will remain lawful under GDPR.

The Trade and Cooperation Agreement provides for a transitional period during which the United Kingdom will be treated like an European Union member state in relation to processing and transfers of personal data for four months from January 1, 2021.

This may be extended by two further months.

After such period, the United Kingdom will be a “third country” under the GDPR unless the European Commission adopts an adequacy decision in respect of transfers of personal data to the United Kingdom.

The United Kingdom has already determined that it considers all of the EU 27 and EEA member states to be adequate for the purposes of data protection, ensuring that data flows from the United Kingdom to the EU/EEA remain unaffected .

General Data Protection Regulation

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Additionally, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.

Further, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ

significantly from payor to payor.

Third-party reimbursement and coverage may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

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For example, the European Union provides options for its member states to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.

European Union member states may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market.

European Union member states may approve a specific price for a product or it may instead adopt a system

of direct or indirect controls on the profitability of the company placing the product on the market.

Other member states allow companies to fix their own prices for products, but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions.

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healthcare industry and elsewhere is cost containment.

There have been a number of federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical

products, limiting coverage and reimbursement for drugs and other medical products, government control and other changes to the healthcare system in the United States.

There have been a number of federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for drugs and other medical products, government control and other changes to the healthcare system in the United States.

By way of example, the United States and state governments continue to propose and pass legislation designed to reduce the cost of healthcare.

In March 2010, the United States Congress enacted the PPACA, which, among other things, includes changes to the coverage and payment for products under government health care programs.

Among the provisions of the PPACA of importance to our potential product candidates are:

● an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications;

● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;

● expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price” for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability to prescriptions for individuals enrolled in Medicare Advantage plans;

● addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for products that are inhaled, infused, instilled, implanted or injected;

● expanded the types of entities eligible for the 340B drug discount program;

● established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 50% point-of-sale-discount off the negotiated price of applicable products to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient products to be covered under Medicare Part D;

● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;

● the Independent Payment Advisory Board (“IPAB”), which has authority to recommend certain changes to the Medicare program to reduce expenditures by the program that could result in reduced payments for prescription products.

However, the IPAB implementation has been not been clearly defined.

The PPACA provided that under certain circumstances, IPAB recommendations will become law unless Congress enacts legislation that will achieve the same or greater Medicare cost savings;

● established the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription product spending.

Funding has been allocated to support the mission of the Center for Medicare and Medicaid Innovation from 2011 to 2019.

Other legislative changes have been proposed and adopted in the United States since the PPACA was enacted.

For example, in August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted.

In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress.

A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.

This includes aggregate reductions of Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2029 unless additional Congressional action is taken.

The American Taxpayer Relief Act of 2012, which was enacted in

January 2013, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers, and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Since enactment of the PPACA, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the law.

For example, with enactment of the Tax Cuts and Jobs Act of 2017 (the “TCJA”), Congress repealed the “individual mandate,” effective January 1, 2019.

The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019.

Additionally, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the PPACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminates the health insurer tax.

Further, the Bipartisan Budget Act of 2018, among other things, amended the PPACA, effective January 1, 2019, to increase from 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.” In addition, the Trump administration has also taken executive actions to undermine or delay implementation of the PPACA.

Since January 2017, President Trump has signed two Executive Orders designed to delay the implementation of certain provisions of the PPACA or otherwise circumvent some of the requirements for health insurance mandated by the PPACA.

One Executive Order directs federal agencies with authorities and responsibilities under the PPACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.

The second Executive Order terminates the cost-sharing subsidies that reimburse insurers under the PPACA.

Several state Attorneys General filed suit to stop the administration from terminating the subsidies, but their request for a restraining order was denied by a federal judge in California on October 25, 2017.

In addition, CMS has recently proposed regulations that would give states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces.

Further, on June 14, 2018, U.S.

Court of Appeals for the Federal Circuit ruled that the federal government was not required to pay more than $12 billion in PPACA risk corridor payments to third-party payors who argued were owed to them.

This decision is under review by the U.S.

Supreme Court during its current term.

The full effects of this gap in reimbursement on third-party payors, the viability of the PPACA marketplace, providers, and potentially our business, are not yet known.

In addition, on December 14, 2018, a U.S.

District Court judge in the Northern District of Texas ruled that the individual mandate portion of the PPACA is an essential and inseverable feature of the PPACA, and therefore because the mandate was repealed as part of the TCJA, the remaining provisions of the ACA are invalid as well.

The Trump administration and CMS have both stated that the ruling will have no immediate effect, and on December 30, 2018 the same judge issued an order staying the judgment pending appeal.

The Trump administration recently represented to the Court of Appeals considering this judgment that it does not oppose the lower court’s ruling.

On July 10, 2019, the Court of Appeals for the Fifth Circuit heard oral argument in this case.

On December 18, 2019, that court affirmed the lower court’s ruling that the individual mandate portion of the PPACA is unconstitutional and it remanded the case to the district court for reconsideration of the severability question and additional analysis of the provisions of the PPACA.

On January 21, 2020, the U.S Supreme Court declined to review this decision on an expedited basis.

Litigation and legislation over the PPACA are likely to continue, with unpredictable and uncertain results.

Further, there have been several recent U.S.

congressional inquiries and proposed federal and proposed and enacted state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products.

For example, there have been several recent U.S.

At the federal level, Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.

For example, on May 11, 2018, the Administration issued a plan to lower drug prices.

Under this blueprint for action, the Administration indicated that the Department of Health and Human Services will take steps to end the gaming of regulatory and patent processes by drug makers to

unfairly protect monopolies;

advance biosimilars and generics to boost price competition;

evaluate the inclusion of prices in drug makers’ ads to enhance price competition;

speed access to and lower the cost of new drugs by clarifying policies for sharing information between insurers and drug makers;

avoid excessive pricing by relying more on value-based pricing by expanding outcome-based payments in Medicare and Medicaid;

work to give Part D plan sponsors more negotiation power with drug makers;

examine which Medicare Part B drugs could be negotiated for a lower price by Part D plans, and improving the design of the Part B Competitive Acquisition Program;

update Medicare’s drug-pricing dashboard to increase transparency;

prohibit Part D contracts that include “gag rules” that prevent pharmacists from informing patients when they could pay less out-of-pocket by not using insurance;

and require that Part D plan members be provided with an annual statement of plan payments, out-of-pocket spending, and drug price increases.

In addition, on December 23, 2019, the Trump administration published a proposed rulemaking that, if finalized, would allow states or certain other non-federal government entities to submit importation program proposals to the FDA for review and approval.

Applicants would be required to demonstrate their importation plans pose no additional risk to public health and safety and will result in significant cost savings for consumers.

At the same time, the FDA issued draft guidance that would allow manufacturers to import their own FDA-approved drugs that are authorized for sale in other countries (multi-market approved products).

These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2030 under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act.

The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

These laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.

Since enactment of the ACA, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the law.

For example, with enactment of the Tax Cuts and Jobs Act of 2017, which was signed by President Trump on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019.

Further, on December 14, 2018, a U.S.

District Court judge in the Northern District of Texas ruled that the individual mandate portion of the ACA is an essential and inseverable feature of the ACA, and therefore because the mandate was repealed as part of the Tax Cuts and Jobs Act, the remaining provisions of the ACA are invalid as well.

On December 18, 2019, the Court of Appeals for the Fifth Circuit court affirmed the lower court’s ruling that the individual mandate

portion of the ACA is unconstitutional and it remanded the case to the district court for reconsideration of the severability question and additional analysis of the provisions of the ACA.

Thereafter, the U.S.

Supreme Court agreed to hear this case.

Oral argument in the case took place on November 10, 2020.

On February 10, 2021, the Biden Administration withdrew DOJ’s support for this lawsuit.

A ruling by the Court is expected sometime this year.

Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.

The Trump Administration also took executive actions to undermine or delay implementation of the ACA, including directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.

On January 28, 2021, however, President Biden rescinded those orders and issued a new Executive Order which directs federal agencies to reconsider rules and other policies that limit Americans’ access to health care, and consider actions that will protect and strengthen that access.

Under this Order, federal agencies are directed to re-examine:

policies that undermine protections for people with pre-existing conditions, including complications related to COVID-19;

demonstrations and waivers under Medicaid and the ACA that may reduce coverage or undermine the programs, including work requirements;

policies that undermine the Health Insurance Marketplace or other markets for health insurance;

policies that make it more difficult to enroll in Medicaid and the ACA;

and policies that reduce affordability of coverage or financial assistance, including for dependents.

The costs of prescription pharmaceuticals have also been the subject of considerable discussion in the United States To date, there have been several recent U.S.

congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products.

To those ends, President Trump issued five executive orders intended to lower the costs of prescription drug products but it is unclear whether, and to what extent, these orders will remain in force under the Biden Administration.

Further, on September 24, 2020, the Trump Administration finalized a rulemaking allowing states or certain other non-federal government entities to submit importation program proposals to the FDA for review and approval.

Applicants are required to demonstrate that their importation plans pose no additional risk to public health and safety and will result in significant cost savings for consumers.

The FDA has issued draft guidance that would allow manufacturers to import their own FDA-approved drugs that are authorized for sale in other countries (multi-market approved products).

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

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We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

There have been, and likely will continue to be, additional legislative and regulatory proposals at the foreign, federal, and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare.

Such reforms could have an adverse effect on anticipated revenues from product candidates that we may successfully develop and for which we may obtain marketing approval and may affect our overall financial condition and ability to develop product candidates.

Additional Regulations

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Equivalent laws have been adopted in third countries that impose similar obligations.

Human Capital

As of February 1, 2021, we had 235 full-time employees, including 61 employees with M.D.

Of these full-time employees, 185 employees are engaged in research and development activities.

None of our employees is represented by a labor union or covered by a collective bargaining agreement.

We consider our relationship with our employees to be good.

None of our employees are represented by a labor union or covered by a collective bargaining agreement.

We experienced significant growth in the number of our employees in 2020, particularly in our research and development organization.

We anticipate that we will continue to increase headcount in our clinical and development organization as we progress the clinical development of EDIT-101 to treat LCA10 and EDIT-301 to treat sickle cell disease, and further advance our current research programs and our preclinical development activities.

Our values – community, innovation, and results – are built on the foundation that our people and the way we treat one another promote creativity in all aspects of our work and drive us as a team to achieve our mission of translating the promise of gene editing into a broad class of differentiated, transformational medicines for diseases with high unmet need .

Our human capital is integral to our future success.

For that reason, our human capital resources objectives include attracting, retaining, developing and motivating a diverse team of highly skilled employees at all levels.

We value our employees and provide them with competitive salaries and bonuses, opportunities for equity ownership, including stock-based compensation awards and an employee stock purchase plan, development programs that enable continued learning and growth and an employment package that promotes well-being across all aspects of their lives, including health care, retirement planning and paid time off.

We regularly benchmark these total rewards against our industry peers to ensure we remain competitive and attractive to potential new hires.

In addition, we regularly conduct employee surveys to gauge employee engagement and solicit feedback, and enhance our understanding of the views of our employees, work environment and culture.

The results from engagement surveys are used to implement programs and processes designed to enhance employee engagement and improve the employee experience.

Our Corporate Information

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in November 2013.

Our executive offices are located at 11 Hurley St., Cambridge, Massachusetts, 02141, and our telephone number is (617) 401-9000.

Our principal executive offices are located at 11 Hurley St., Cambridge, Massachusetts, 02141, and our telephone number is (617) 401-9000.

Available Information

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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-K

Item 1. Business