What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-08-05 compared with 2021-05-06 · 149 added, 78 removed, 183 unchanged (55% of the section changed)

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expectations for regulatory approvals to conduct trials or to market products and availability of funding sufficient for our foreseeable and unforeseeable operating expenses and capital expenditure requirements.

These and other risks are described in greater detail in our Annual Report under the captions “Risk Factor Summary” and “Risk Factors,” and in other filings that we may make with the SEC in the future.

These and other risks are described in greater detail in our Annual Report under the captions “Risk Factor Summary” and “Risk Factors,” in this Quarterly Report on Form 10-Q under the caption “Risk Factors,” and in other filings that we may make with the SEC in the future.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

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We plan to enroll approximately 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 limiting toxicity in adults treated in the first cohort, the inclusion criteria of the protocol were 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 from the first two cohorts by the end of 2021.

We have completed dosing of the first two cohorts, the adult low-dose and mid-dose cohorts.

I n the second quarter of 2021, we

began enrolling patients in the adult high-dose cohort and, following the endorsement by an independent data monitoring committee, the first of two planned pediatric cohorts .

We expect to complete dosing of both the adult high-dose cohort and the pediatric mid-dose cohort in the first half of 2022.

Initial clinica l data from the first two cohorts is planned for presentation in September 2021.

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.

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

The RUBY trial is active and recruiting patients for enrollment.

We expect to begin dosing in the RUBY trial by the end of 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 submit an IND for EDIT-301 for the treatment of beta-thalassemia by the end of 2021 .

In parallel, the FDA 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.

The RUBY trial is currently screening patients for enrollment, and we expect to begin dosing in the trial by the end of 2021.

We remain on track to submit an IND for EDIT-301 for the treatment of beta-thalassemia by the end of 2021.

In cellular therapy medicines, we continue to develop our capabilities to generate cells from induced pluripotent stem cells to develop engineered cell medicines to treat cancer and are also advancing alpha-beta T cell experimental medicines.

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In March 2017, we entered into a strategic alliance and option agreement with Allergan Pharmaceuticals International Limited (together with its affiliates, “Allergan”) to discover, develop, and commercialize new gene editing medicines for a range of ocular disorders.

In July 2018, Allergan exercised its option to develop and commercialize EDIT-101 and paid us $15.0 million in connection with such exercise (the “EDIT-101 Option Exercise Payment”).

We received an aggregate of $130.0 million in payments under this agreement, which consisted of the initial upfront payment, an option exercise payment, and a milestone payment.

We and Allergan subsequently entered into a co-development and commercialization agreement under which we agreed to co-develop and equally split profits and losses for EDIT-101 in the United States.

In December 2018, we also received a $25.0 million payment from Allergan in connection with the acceptance of the IND for EDIT-101 (the “EDIT-101 Milestone Payment”).

In August 2020, we and Allergan terminated the strategic alliance and option agreement and the co-development and commercialization agreement, and we assumed full rights to EDIT-101 and responsibility for conducting the clinical trial.

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We have not generated any revenue from product sales.

We have primarily financed our operations through various equity financings and payments received under our research collaboration with Juno Therapeutics, our strategic alliance with Allergan, and our license agreement with Beam Therapeutics.

We have primarily financed our operations through various equity financings and payments received under our research collaboration with Juno Therapeutics and our strategic alliance with Allergan.

Since inception, we have incurred significant operating losses.

Our net losses were $56.7 million and $37.7 million for the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021, we had an accumulated deficit of $721.9 million.

Our net losses were $112.0 million and $61.3 million for the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, we had an accumulated deficit of $777.2 million.

We expect to continue to incur significant expenses and operating losses for the foreseeable future.

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seek to identify additional research programs and additional product candidates;

initiate preclinical testing and clinical trials for other product candidates we identify and develop;

maintain, expand, and

protect our intellectual property portfolio, including reimbursing our licensors for such expenses related to the intellectual property that we in-license from such licensors;

further develop our genome editing platform;

initiate preclinical testing and clinical trials for other product candidates we identify and develop, including EDIT-301 for the treatment of beta-thalassemia;

maintain, expand, and protect our intellectual property portfolio, including reimbursing our licensors for such expenses related to the intellectual property that we in-license from such licensors;

further develop our genome

editing platform;

hire additional clinical, quality control, and scientific personnel;

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We do not expect to be profitable for the year ending December 31, 2021 or the foreseeable future.

Although we did not experience any significant impact on our financial condition, results of operations or liquidity due to the ongoing COVID-19 pandemic during the three months ended March 31, 2021, we did experience slowed enrollment in the EDIT-101 clinical trial as a result of the COVID-19 pandemic.

The ultimate impact of the COVID-19 pandemic is highly uncertain and we do not yet know the full extent of potential delays or impacts on our business, our ability to continue to raise additional capital, the EDIT-101 or EDIT-301 clinical trials, ongoing preclinical activities, or the global economy as a whole.

Although we did not experience any significant impact on our financial condition, results of operations or liquidity due to the ongoing COVID-19 pandemic during the six months ended June 30, 2021, the pandemic continues to be dynamic and near-term risks to our business remain.

Vaccines are being distributed and administered, but utilization of the vaccines has been varied and new variants of the virus are emerging that have shown to be more contagious, which has resulted in increased infection rates and may result in re-imposed governmental restrictions to reduce the spread of COVID-19.

As a result, the ultimate impact of the COVID-19 pandemic continues to be highly uncertain and we do not yet know the full extent of potential delays or impacts on our business, our ability to continue to raise additional capital, the EDIT-101 or EDIT-301 clinical trials, ongoing preclinical activities, or the global economy as a whole.

In March 2020, we implemented a work from home policy, and restricted on-site activities at our facilities in Massachusetts and Colorado to certain manufacturing, laboratory and related support activities in light of the COVID-19 pandemic.

Under our return to onsite work plans, we have resumed manufacturing, laboratory and related support activities at our facilities in Massachusetts and Colorado using capacity-limiting measures to comply with social distancing guidelines.

As such, it is uncertain as to the full magnitude that the pandemic will have directly or indirectly on our financial condition, liquidity and future results of operations.

Under our return to onsite work plans, we have gradually resumed manufacturing, laboratory and related support activities at our facilities in Massachusetts and Colorado, and anticipate a full reopening of our facilities in the third quarter of 2021 using a hybrid work model.

We will continue to monitor and respond to the changing conditions created by the pandemic, with focus on prioritizing the health and safety of our employees and maintaining safe and reliable operations of our facilities.

Financial Operations Overview

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We no longer receive research funding support.

As of March 31, 2021, we recorded $85.0 million of deferred revenue in relation to our collaboration with Juno Therapeutics, of which $56.7 million is classified as long-term on our condensed consolidated balance sheet.

During the three months ended March 31, 2021, we recognized $5.7 million of previously deferred revenue related to our collaboration with Juno Therapeutics.

As of June 30, 2021, we recorded $85.0 million of deferred revenue in relation to our collaboration with Juno Therapeutics, of which $51.0 million is classified as long-term on our condensed consolidated balance sheet.

During the six months ended June 30, 2021, we recognized $5.7 million of previously deferred revenue related to our collaboration with Juno Therapeutics.

Under this collaboration, we will recognize revenue upon delivery of option packages to Juno Therapeutics or upon receipt of development milestone payments.

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General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation for personnel in executive, finance, investor relations, business development, legal, corporate affairs, information technology, facilities and human resource functions.

Other significant costs include corporate facility costs not otherwise included in research and development expenses, legal fees related to intellectual property and corporate matters, and fees for accounting and consulting services.

Other significant costs include corporate facility costs

not otherwise included in research and development expenses, legal fees related to intellectual property and corporate matters, and fees for accounting and consulting services.

We anticipate that our general and administrative expenses will increase in the future to support continued research and development activities and potential commercialization of any product candidates we identify and develop.

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Other Income, Net

For the three months ended March 31, 2021, other income, net consisted primarily of interest income and accretion of discounts associated with other marketable securities.

For the three months ended March 31, 2020, other income, net consisted primarily of interest income and accretion of discounts associated with marketable securities, partially offset by loss on disposal of property and equipment.

For the six months ended June 30, 2021, other income, net consisted primarily of interest income and accretion of discounts associated with other marketable securities.

For the six months ended June 30, 2020, other income, net consisted primarily of changes in the fair value of equity securities, interest income and accretion of discounts associated with other marketable securities.

Critical Accounting Policies and Estimates

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Results of Operations

Comparison of the Three Months ended March 31, 2021 and 2020

The following table summarizes our results of operations for the three months ended March 31, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Comparison of the Three Months ended June 30, 2021 and 2020

The following table summarizes our results of operations for the three months ended June 30, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Three Months Ended

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Other income, net:

Other income, net

Other (expense) income, net

Interest income, net

Total other income, net

For our results of operations, we have included the respective percentage of changes, unless greater than 100% or less than (100)%, in which case we have denoted such changes as not meaningful (n/m).

Collaboration and other research and development revenues

Collaboration and other research and development revenues increased by $0.8 million, to $6.5 million for the three months ended March 31, 2021 from $5.7 million for three months ended March 31, 2020.

This increase was primarily attributable to the recognition of $5.7 million of previously deferred revenue related to Juno Therapeutics in the three months ended March 31, 2021, compared to no revenue recognized related to Juno Therapeutics for the three months ended March 31, 2020, and the recognition in the three months ended March 31, 2020 of $4.4 million of previously deferred revenue in connection with our strategic alliance with Allergan, which was terminated in August 2020, and for which no revenue was recognized in connection with such alliance in the three months ended March 31, 2021.

Collaboration and other research and development revenues decreased by $10.3 million, to $0.4 million, for the three months ended June 30, 2021 from $10.7 million for three months ended June 30, 2020.

This decrease was primarily attributable to $7.6 million in revenue recognized pursuant to an out-license agreement we entered into during the second quarter of 2020 and a $0.8 million increase in revenue recognized in the second quarter of 2020 related to our strategic alliance with Allergan for which there was no similar revenue recognized in the second quarter 2021.

Research and development expenses

Research and development expenses increased by $7.3 million, to $41.9 million for the three months ended March 31, 2021 from $34.6 million for the three months ended March 31, 2020.

The following table summarizes our research and development expenses for the three months ended March 31, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Research and development expenses increased by $5.8 million, to $33.8 million, for the three months ended June 30, 2021 from $28.0 million for the three months ended June 30, 2020.

The following table summarizes our research and development expenses for the three months ended June 30, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Three Months Ended

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Employee related expenses

Facility expenses

Stock-based compensation expenses

Sublicense and license fees

Other expenses

Total research and development expenses

The increase in research and development expenses for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily attributable to:

● approximately $4.8 million in increased external research and development expenses related primarily to the clinical and manufacturing development of EDIT-101, EDIT-301, and our other programs;

● approximately $1.8 million in increased employee related expenses primarily due to an increase in the size of our workforce, including the expansion of our research and development organization;

● approximately $1.5 million in increased stock-based compensation expenses primarily due to the hiring of our new Chief Scientific Officer and Chief Regulatory Officer in the second quarter 2021;

● approximately $0.8 million in increased facility related expenses.

These increases were partially offset by approximately $3.1 million in decreased sublicense and license fees related to fees owed to our licensors in connection with an out-license agreement entered into during the second quarter of 2020 and for which there was no similar fees owed in the second quarter 2021.

General and administrative expenses

General and administrative expenses increased by $7.9 million, to $22.0 million, for the three months ended June 30, 2021 from $14.1 million for the three months ended June 30, 2020.

The following table summarizes our general and administrative expenses for the three months ended June 30, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Three Months Ended

Dollar Change

Percentage Change

Stock-based compensation expenses

Intellectual property and patent related fees

Employee related expenses

Other expenses

Professional service expenses

Total general and administrative expenses

The increase in general and administrative expenses for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily attributable to:

● approximately $6.6 million in increased stock-based compensation expenses related primarily to the performance awards granted in 2021 to our Chief Executive Officer that were achieved or deemed probable in the second quarter of 2021;

● approximately $1.1 million in increased intellectual property and patent related fees;

● approximately $0.6 million in increased employee related expenses primarily attributable to the separation of our former Chief Executive Officer from our company in February 2021 as well as the hiring of our new Chief Executive Officer in 2021;

● approximately $0.3 million in increased other expenses.

These increases were partially offset by approximately $0.7 million in decreased professional service expenses primarily due to decreased use of consulting services.

Other income, net

For the three months ended June 30, 2021, other income, net was $0.1 million, which was primarily attributable to interest income offset by accretion of discounts associated with other marketable securities.

For the three months ended June 30, 2020, other income, net was $7.8 million, which was primarily attributable to the unrealized gains related to corporate equity securities, interest income and accretion of discounts associated with marketable securities.

Comparison of the Six Months ended June 30, 2021 and 2020

The following table summarizes our results of operations for the six months ended June 30, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Six Months Ended

Dollar Change

Percentage Change

Collaboration and other research and development revenues

Operating expenses:

Research and development

General and administrative

Total operating expenses

Other income, net

Other (expense) income, net

Interest income, net

Total other income, net

Collaboration and other research and development revenues

Collaboration and other research and development revenues decreased by $9.6 million, to $6.9 million, for the six months ended June 30, 2021 from $16.5 million for six months ended June 30, 2020.

This decrease was primarily attributable to $7.6 million in revenue recognized pursuant to an out-license agreement we entered into during the second quarter 2020 and $7.4 million in revenue recognized related to our strategic alliance with Allergan during the six months ended June 30, 2020, for which there was no similar revenue recognized during 2021.

This was partially offset by $6.3 million in revenue recognized pursuant to our research collaboration with Juno Therapeutics during the six months ended June 30, 2021.

Research and development expenses

Research and development expenses increased by $13.1 million, to $75.7 million, for the six months ended June 30, 2021 from $62.6 million for the six months ended June 30, 2020.

The following table summarizes our research and development expenses for the six months ended June 30, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Six Months Ended

Dollar Change

Percentage Change

External research and development expenses

Employee related expenses

Sublicense and license fees

Stock-based compensation expenses

Facility expenses

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Total research and development expenses

For our results of operations, we have included the respective percentage of changes, unless greater than 100% or less than (100)%, in which case we have denoted such changes as not meaningful (n/m).

The increase in research and development expenses for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily attributable to:

● approximately $9.0 million in increased sublicense and license fees primarily related to the payment of success payments under certain of our license agreements upon the achievement of market capitalization-based milestones in the first quarter of 2021;

The increase in research and development expenses for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was primarily attributable to:

● approximately $5.7 million in increased sublicense and license fees primarily related to the triggering of success payments under certain of our license agreements upon the achievement of market capitalization-based milestones in the first quarter of 2021;

● approximately $3.2 million in increased employee related expenses primarily due to an increase in the size of our workforce, including the expansion of our research and development organization;

● approximately $0.9 million in increased stock-based compensation expenses;

● approximately $0.8 million in increased facility related expenses;

● approximately $2.4 million in increased stock-based compensation expenses primarily due to the hiring of our new Chief Scientific Officer and Chief Regulatory Officer in the second quarter 2021;

● approximately $1.7 million in increased facility related expenses primarily related to increased lab and manufacturing space;

● approximately $0.6 million in increased other expenses.

These increases were partially offset by approximately $5.2 million in decreased external research and development expenses related to expenses incurred in the three months ended March 31, 2020 under our profit-sharing arrangement with Allergan and expenses incurred related to an in-license arrangement entered into during the first quarter of 2020 for which there were no similar expenses in the first quarter of 2021.

These decreases were partially offset by increases in external research and development expenses related primarily to the clinical and manufacturing development of EDIT-101 and our other programs.

As a result of the termination of our agreements with Allergan, our research and development costs have increased, and we expect will continue to increase as we are now obligated to fund all of the costs related to developing and commercializing the LCA10 program in the United States.

In addition, we will increase headcount in our clinical and development organization as a result of the transfer from Allergan to us of the Phase 1/2 clinical trial of EDIT-101 for the treatment of LCA10 as part of the termination of the arrangement with Allergan.

These increases were partially offset by approximately $0.4 million in decreased external research and development expenses related to expenses incurred in the six months ended June 30, 2020 under our profit-sharing arrangement with Allergan and expenses incurred related to an in-license arrangement entered into during the first quarter of 2020 for which there were no similar expenses in the six months ended June 30, 2021.

General and administrative expenses

General and administrative expenses increased by $3.7 million, to $21.4 million for the three months ended March 31, 2021 from $17.8 million for the three months ended March 31, 2020.The following table summarizes our general and administrative expenses for the three months ended March 31, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Three Months Ended

General and administrative expenses increased by $11.6 million, to $43.5 million, for the six months ended June 30, 2021 from $31.9 million for the six months ended June 30, 2020.

The following table summarizes our general and administrative expenses for the six months ended June 30, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Six Months Ended

Dollar Change

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Total general and administrative expenses

The increase in general and administrative expenses for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily attributable to approximately $5.1 million in increased stock-based compensation expenses related to the acceleration of vesting of certain equity awards held by our former Chief Executive Officer in connection with her separation from our company in February 2021 as well as stock-based

compensation expense recorded on equity awards granted in connection with the hiring of our new Chief Executive Officer in February 2021.

The increase was partially offset by:

● approximately $1.1 million in decreased professional service expenses primarily due to decreased use of consulting services;

● approximately $0.3 million in decreased intellectual property and patent related fees.

The increase in general and administrative expenses for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was primarily attributable to:

● approximately $11.7 million in increased stock-based compensation expenses related to the acceleration of vesting of certain equity awards held by our former Chief Executive Officer in connection with her separation from our company in February 2021, as well as stock-based compensation expense recognized

on the market and performance-based awards that were granted to our new Chief Executive Officer and other certain employees in 2021;

● approximately $0.9 million in increased intellectual property and patent related fees;

● approximately $0.3 million in increased other expenses.

These increases were partially offset by approximately $1.8 million in decreased professional service expenses primarily due to decreased use of consulting services.

Other income, net

For the three months ended March 31, 2021, other income, net was $0.2 million, which was primarily attributable to interest income.

For the three months ended March 31, 2020, other income, net was income of $8.9 million, which was primarily attributable to the unrealized gains related to corporate equity securities, interest income and accretion of discounts associated with marketable securities.

For the six months ended June 30, 2021, other income, net was $0.3 million, which was primarily attributable to interest income offset by accretion of discounts associated with other marketable securities.

For the six months ended June 30, 2020, other income, net was $16.7 million, which was primarily attributable to the unrealized gains related to corporate equity securities, interest income and accretion of discounts associated with marketable securities.

Liquidity and Capital Resources

Sources of Liquidity

In January 2021, we completed a public offering whereby we sold 3,500,000 shares of our common stock and received net process of approximately $216.9 million.

In May 2021, we entered into a common stock sales agreement with Cowen and Company, LLC (“Cowen”), under which we from time to time can issue and sell shares of our common stock through Cowen in at-the-market offerings for aggregate gross sale proceeds of up to $300.0 million (the “ATM Facility”).

As of June 30, 2021, we have not sold any shares of our common stock under the ATM Facility.

In January 2021, we completed a public offering whereby we sold 3,500,000 shares of our common stock and received net proceeds of approximately $216.9 million.

In February 2021, the underwriters in the public offering exercised their option to purchase an additional 525,000 shares, resulting in additional net proceeds to us of approximately $32.6 million.

As of March 31, 2021, we have raised an aggregate of $898.0 million in net proceeds through the sale of shares of our common stock in public offerings and at-the-market offerings.

We also have funded our business from payments received under our research collaboration with Juno Therapeutics, our strategic alliance with Allergan, which was terminated in August 2020, and our license agreement with Beam Therapeutics.

As of March 31, 2021, we had cash, cash equivalents and marketable securities of $723.2 million.

As of June 30, 2021, we have raised an aggregate of $898.0 million in net proceeds through the sale of shares of our common stock in public offerings and at-the-market offerings.

We also have funded our business from payments received under our research collaboration with Juno Therapeutics and our strategic alliance with Allergan, which was terminated in August 2020.

As of June 30, 2021, we had cash, cash equivalents and marketable securities of $698.1 million.

In addition to our existing cash, cash equivalents and marketable securities, we are eligible to earn milestone and other payments under our collaboration agreement with Juno Therapeutics.

Our ability to earn the milestone payments and the timing of earning these amounts are dependent upon the timing and outcome of our development, regulatory and commercial activities and, as such, are uncertain at this time.

As of March 31, 2021, our right to contingent payments under our collaboration agreement with Juno Therapeutics is our only significant committed potential external source of funds.

The following table provides information regarding our cash flows for the three months ended March 31, 2021 and 2020 (in thousands):

Three Months Ended

As of June 30, 2021, our right to contingent payments under our collaboration agreement with Juno Therapeutics is our only significant committed potential external source of funds.

The following table provides information regarding our cash flows for the three months ended June 30, 2021 and 2020 (in thousands):

Six Months Ended

Net cash (used in) provided by:

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Financing activities

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

Net increase in cash, cash equivalents, and restricted cash

Net Cash Used in Operating Activities

The use of cash in all periods resulted primarily from our net losses adjusted for non-cash charges and changes in components of working capital.

Net cash used in operating activities was approximately $49.5 million for the three months ended March 31, 2021, which primarily consisted of operating expenses that relate to our on-going preclinical and clinical activities, patent costs and license fees, and increased costs as a result of staffing needs due to our expanding operations.

Net cash used in operating activities was approximately $88.4 million for the six months ended June 30, 2021, which primarily consisted of operating expenses that relate to our on-going preclinical and clinical activities, patent costs and license fees, and increased costs as a result of staffing needs due to our expanding operations.

These expenses were partially offset by cash inflows from license fees received in the period.

Net cash used in operating activities was approximately $54.1 million for the three months ended March 31, 2020, which primarily consisted of operating expenses that relate to our on-going preclinical and clinical activities, patent costs and license fees, and increased costs as a result of staffing needs due to our expanding operations.

These expenses were partially offset by unrealized gains associated with our corporate equity securities.

Net Cash Used in Investing Activities

Net cash provided by investing activities was approximately $3.2 million for the three months ended March 31, 2021, primarily related to proceeds from maturities of marketable securities of $130.8 million partially offset by costs used to acquire marketable securities of $127.4 million.

Net cash provided by investing activities was approximately $46.5 million for the three months ended March 31, 2020, primarily related to proceeds from maturities of marketable securities of $115.0 million, partially offset by costs to acquire marketable securities of $66.4 million and costs to acquire property and equipment of $2.2 million.

Net cash used in operating activities was approximately $84.9 million for the six months ended June 30, 2020, which primarily consisted of operating expenses that relate to our on-going preclinical and clinical activities, patent costs and license fees, and increased costs as a result of staffing needs due to our expanding operations.

These expenses were partially offset by cash inflows from license fees received in the period.

Net Cash Provided by Investing Activities

Net cash provided by investing activities was approximately $8.0 million for the six months ended June 30, 2021, primarily related to proceeds from maturities of marketable securities of $205.0 million, partially offset by costs used to acquire marketable securities of $194.2 million and purchases of property and equipment of $2.8 million.

Net cash provided by investing activities was approximately $120.6 million for the six months ended June 30, 2020, primarily related to proceeds from maturities of marketable securities of $191.0 million, partially offset by costs to acquire marketable securities of $66.4 million and costs to acquire property and equipment of $4.0 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was approximately $261.5 million for the three months ended March 31, 2021 and consisted of $249.5 million in net proceeds received from the offering of our common stock and $12.0 million in proceeds received from exercises of options for our common stock.

Net cash provided by financing activities was approximately $3.0 million for the three months ended March 31, 2020 and consisted of $3.0 million in proceeds received from exercises of options for our common stock.

Net cash provided by financing activities was approximately $278.6 million for the six months ended June 30, 2021 and consisted of $249.5 million in net proceeds received from the offering of our common stock and $28.6 million in proceeds received from exercises of options for our common stock.

Net cash provided by financing activities was approximately $214.2 million for the six months ended June 30, 2020 and consisted of $204.0 million in net proceeds received from offerings of common stock, of which $0.3 million in offering expenses was unpaid at June 30, 2020, and $9.9 million in proceeds received from exercises of options for our common stock.

Funding Requirements

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seek to identify product candidates and additional research programs;

initiate preclinical testing and clinical trials for other product candidates we identify and develop;

initiate preclinical testing

and clinical trials for other product candidates we identify and develop, including EDIT-301 for the treatment of beta-thalassemia;

maintain, expand, and protect our intellectual property portfolio, including reimbursing our licensors for expenses related to the intellectual property that we in-license from such licensors;

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If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts.

We expect that our existing cash, cash equivalents and marketable securities as of March 31, 2021 and anticipated interest income will enable us to fund our operating expenses and capital expenditure requirements well into 2023.

We expect that our existing cash, cash equivalents and marketable securities as of June 30, 2021 and anticipated interest income will enable us to fund our operating expenses and capital expenditure requirements well into 2023.

We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect.

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● the costs of progressing the clinical development of EDIT-301 to treat sickle cell disease;

● the costs of IND-enabling studies for EDIT-301 to treat beta-thalassemia;

● the costs of IND-enabling studies and initiating any clinical trial for EDIT-301 to treat beta-thalassemia;

● the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights, and defending intellectual property-related claims;

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Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive, and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales.

In addition, any product candidate that we identify and develop, if approved, may not achieve commercial success.

In addition, any product

candidate that we identify and develop, if approved, may not achieve commercial success.

Our commercial revenues, if any, will be derived from sales of genomic medicines that we do not expect to be commercially available for many years, if at all.

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To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders.

Debt financing, if available, may involve agreements that

include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

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

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Contractual Obligations

During the three months ended March 31, 2021, there were no material changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report.

The following table summarizes our significant contractual obligations as of payment due date by period at June 30, 2021 (in thousands):

Operating lease obligations (1)

(1) Represents future minimum lease payments under our non-cancelable operating leases.

The minimum lease payments above exclude our share of the facility operating expenses and other costs that are reimbursable to the landlord under the leases.

The table above does not include potential milestone and success fees, sublicense fees, royalty fees, licensing maintenance fees, and reimbursement of patent maintenance costs that we may be required to pay under agreements we have entered into with certain institutions to license intellectual property.

Our agreements to license intellectual property include potential milestone payments that are dependent upon the development of products using the intellectual property licensed under the agreements and contingent upon the achievement of development or regulatory approval milestones, as well as commercial milestones.

We have not included such potential obligations in the table above because they are contingent upon the occurrence of future events and the timing and likelihood of such potential obligations are not known with certainty.

For further information regarding these agreements, please see “Business—Our Collaborations and Licensing Strategy” in our Annual Report.

We enter into contracts in the normal course of business with contract research organizations and other vendors to assist in the performance of our research and development activities and other services and products for operating purposes.

These contracts generally provide for termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations and commitments.

Off-Balance Sheet Arrangements

We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.

We did not have, during the periods presented, and we do not currently have, any off-balance sheet

arrangements, as defined under applicable SEC rules.

Effects of Inflation

Inflation would generally affect our business by increasing our cost of labor and clinical trial costs.

We do not believe that inflation had a material effect on our business, financial condition or results of operations during the three months ended March 31, 2021 or 2020.

We do not believe that inflation had a material effect on our business, financial condition or results of operations during the six months ended June 30, 2021 or 2020.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis