What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-09 compared with 2021-08-05 · 118 added, 104 removed, 228 unchanged (49% 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,” 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.

These and other risks are described in greater detail in our Annual Report under the captions “Risk Factor Summary” and “Risk Factors,” as updated by our subsequent filings with the SEC.

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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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 in vivo gene-editing medicines, in which the medicine is injected or infused into the patient to edit the cells inside their body, ex vivo gene-edited cell medicines, in which cells collected from a patient are edited with our technology and then administered back to that same patient, and cellular therapy medicines, in which we use our technology to edit cells collected from a donor to develop medicines that can be administered to a separate patient.

We are advancing in vivo gene-editing medicines, in which the medicine is injected or infused into the patient to edit the cells inside their body, ex vivo gene-edited cell medicines, in which cells collected from a patient are edited with our technology and then administered back to that same patient, and cellular therapy medicines, in which we use our technology to edit induced human pluripotent stem cells that are subsequently differentiated into effector cells, such as natural killer cells, to develop medicines that can be administered to a patient.

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

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 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.

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 CEP290-related retinal degenerative disorder 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 of EDIT-101, an experimental gene-editing medicine to treat LCA10.

The BRILLIANCE trial is designed to assess the safety, tolerability, and efficacy of EDIT-101.

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

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.

have completed dosing of the first two cohorts, the adult low-dose and mid-dose cohorts, and in the third quarter of 2021 began dosing in the adult high-dose cohort.

We also are currently enrolling patients in the first of two planned pediatric cohorts .

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

In September 2021, we announced initial clinical data, consisting of preliminary patient safety and efficacy assessments, from the ongoing BRILLIANCE trial.

The initial data related to the first six patients dosed in the trial:

two in the adult low-dose cohort and four in the adult mid-dose cohort.

Patients received a single administration of EDIT-101 via subretinal injection in one eye and are monitored every three months for the first year after dosing, and less frequently in the following two years.

No dose-limiting toxicities, which are defined as vision-threatening toxicities or severe non-ocular adverse events that occur before or at the week four visit and assessed by the investigator as being related to EDIT-101 and not the administration procedure, or serious adverse events were reported in the first six adult patients treated.

Efficacy was assessed based on available data from five subjects treated in the low-dose and mid-dose cohorts who had at least three months of post-treatment follow-up, focusing on those measures demonstrated to be consistent and reproducible in subjects with CEP290-related retinal degeneration, including best corrected visual acuity (“BCVA”), full-field light sensitivity threshold (“FST”) testing and ability to navigate standardized navigation courses, or Visual Function Navigation (“VNC”).

Two of three subjects in the mid-dose cohort followed for up to six months showed early efficacy signals providing clinical evidence of gene editing and suggesting potential clinical benefits, including improvements in BCVA, FST, and/or mobility navigation.

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).

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.

In May 2015, we entered into a collaboration with Juno Therapeutics, Inc., a wholly-owned subsidiary of Bristol-Myers Squibb Company (“Juno Therapeutics”), a leader in the emerging field of immuno-oncology, to develop novel engineered alpha-beta T cell therapies for cancer and autoimmune diseases, which was amended and restated in each of May 2018 and November 2019, at which time we also entered into a related license agreement with Juno Therapeutics, which we collectively refer to as our collaboration with them.

The RUBY trial is currently enrolling study participants, and we expect to begin dosing in the trial in the first half of 2022.

Prior to initiating a registrational trial, we will be required to 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, in response to an FDA partial clinical hold.

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

In cellular therapy medicines, we continue to develop our capabilities to generate cells from induced human pluripotent stem cells to develop engineered cell medicines to treat cancer.

We are also advancing alpha-beta T cell experimental medicines in collaboration with Bristol-Myers Squibb Company (“BMS”).

In May 2015, we entered into a collaboration with Juno Therapeutics, Inc., a wholly-owned subsidiary of BMS (“Juno Therapeutics”), to develop novel engineered alpha-beta T cell therapies for cancer and autoimmune diseases, which was amended and restated in each of May 2018 and November 2019, at which time we also entered into a related license agreement with Juno Therapeutics, which we collectively refer to as our collaboration with them.

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.

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Since our inception in September 2013, our operations have focused on organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio, assembling our core capabilities in gene editing, seeking to identify potential product candidates, and undertaking preclinical studies.

Except for EDIT-101 and EDIT-301, all of our research programs are still in the preclinical or research stage of development and the risk of failure of all of our research programs is high.

Except for EDIT-101

and EDIT-301, all of our research programs are still in the preclinical or research stage of development and the risk of failure of all of our research programs is high.

We have not generated any revenue from product sales.

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Since inception, we have incurred significant operating losses.

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.

Our net losses were $151.1 million and $53.5 million for the nine months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021, we had an accumulated deficit of $816.3 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, including EDIT-301 for the treatment of beta-thalassemia;

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

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 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.

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 nine months ended September 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 have emerged, and may continue to emerge, that are more contagious, which can result in increased infection rates and 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 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.

Under our return to onsite work plans, we gradually resumed manufacturing, laboratory and related support activities at our facilities in Massachusetts and Colorado, and fully reopened 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.

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We no longer receive research funding support.

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.

As of September 30, 2021, we recorded $79.3 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 nine months ended September 30, 2021, we recognized $11.3 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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(“Broad”) and the President and Fellows of Harvard College (“Harvard”), we anticipate general and administrative expenses will continue to be significant.

Other Income, Net

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.

Other Income (Expense), Net

For the nine months ended September 30, 2021, other income (expense), net consisted primarily of interest income and accretion of discounts associated with other marketable securities.

For the nine months ended September 30, 2020, other income (expense), 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 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:

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

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

Three Months Ended

September 30,

Dollar Change

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Other income, net:

Other (expense) income, net

Other income (expense), net

Interest income, net

Total other income, net

Total other income (expense), net

Net (loss) income

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 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.

Collaboration and other research and development revenues decreased by $56.6 million, to $6.2 million for the three months ended September 30, 2021, compared to $62.8 million for three months ended September 30, 2020.

This decrease was primarily attributable to the termination of our strategic alliance with Allergan during the third quarter of 2020 in which we recognized $59.9 million of previously deferred revenue, for which there was no similar revenue recognized during the third quarter of 2021.

Research and development expenses

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:

Research and development expenses decreased by $4.7 million, to $29.2 million for the three months ended September 30, 2021, compared to $33.9 million for the three months ended September 30, 2020.

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

Three Months Ended

September 30,

Dollar Change

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Employee related expenses

Facility expenses

Stock-based compensation expenses

Facility expenses

Sublicense and license fees

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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;

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

● approximately $7.4 million in decreased external research and development expenses related primarily to a one-time in-process research and development expense of $5.0 million for re-acquiring the rights to EDIT-101 from Allergan in the third quarter of 2020 for which there was no similar expense in the third quarter of 2021;

● approximately $2.3 million in decreased expenses related to a COVID-19 employee retention tax credit recognized in the third quarter 2021 which is included in other expenses in the table above.

These decreases were partially offset by:

● approximately $2.1 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 $1.6 million in increased stock-based compensation expenses primarily due to an increase in restricted stock units granted to employees;

● approximately $0.9 million in increased sublicense and license fees;

● approximately $0.5 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:

General and administrative expenses decreased by $3.7 million, to $16.2 million for the three months ended September 30, 2021, compared to $19.9 million for the three months ended September 30, 2020.

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

Three Months Ended

September 30,

Dollar Change

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Stock-based compensation expenses

Intellectual property and patent related fees

Employee related expenses

Intellectual property and patent related fees

Other expenses

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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

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

● $4.8 million in decreased professional service expenses primarily due to additional professional service expenses incurred in the third quarter of 2020 in connection with the termination of the Allergan agreement for which there were no similar activities in the third quarter of 2021;

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

● approximately $0.5 million in decreased other expenses related to a COVID-19 employee retention tax credit recognized in the third quarter of 2021.

These decreases were partially offset by approximately $2.6 million in increased stock-based compensation

expenses which were primarily a result of market-based and performance-based awards that were granted to our Chief Executive Officer and certain other employees in 2021.

Other income (expense), net

For the three months ended September 30, 2021, other income, net was $0.2 million, which was primarily attributable to interest income, partially offset by accretion of discounts associated with other marketable securities.

For the three months ended September 30, 2020, other expense, net was $1.2 million, which was primarily attributable to the unrealized losses related to corporate equity securities, partially offset by interest income.

Comparison of the Nine Months ended September 30, 2021 and 2020

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

Nine Months Ended

September 30,

Dollar Change

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Other income, net

Other (expense) income, net

Other income, net

Interest income, net

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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.

Collaboration and other research and development revenues decreased by $66.2 million, to $13.1 million for the nine months ended September 30, 2021, compared to $79.3 million for the nine months ended September 30, 2020.

This decrease was primarily attributable to the recognition of $63.2 million of previously deferred revenue as a result of the termination of our strategic alliance with Allergan in 2020 as well as to $7.6 million in revenue recognized pursuant to an out-license agreement we entered into during the second quarter 2020, for which there was no similar revenue recognized during 2021.

This decrease was partially offset by $12.3 million in revenue recognized pursuant to our research collaboration with Juno Therapeutics during the nine months ended September 30, 2021, for which there was no similar revenue recognized in 2020.

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

Research and development expenses increased by $8.5 million, to $105.0 million for the nine months ended September 30, 2021, compared to $96.5 million for the nine months ended September 30, 2020.

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

Nine Months Ended

September 30,

Dollar Change

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Employee related expenses

Sublicense and license fees

Stock-based compensation expenses

Facility expenses

Sublicense and license fees

Other expenses

Total research and development expenses

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:

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

● approximately $6.5 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 $5.4 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 $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 $4.0 million in increased stock-based compensation expenses primarily due to expense recognized in relation an increase in restricted stock units granted to employees;

● approximately $2.1 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 $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.

These increases were partially offset by:

● approximately $7.9 million in decreased external research and development expenses related to expenses incurred in the nine months ended September 30, 2020 under our profit-sharing arrangement with Allergan, including a one-time in-process research and development expense of $5.0 million for re-acquiring the rights to EDIT-101 from Allergan in the third quarter of 2020, as well as a decrease in expenses incurred related to an in-license arrangement that we entered into during the first quarter 2020 for which there was no similar expense in 2021;

● approximately $1.7 million in decreased expenses related to a COVID-19 employee retention tax credit recognized in the nine months ended September 30, 2021, which is included in other expenses in the table above, offset by increased research and development related information technology expenses incurred during the nine months ended September 30, 2021.

General and administrative expenses

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

General and administrative expenses increased by $7.9 million, to $59.7 million for the nine months ended September 30, 2021, compared to $51.8 million for the nine months ended September 30, 2020.

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

Nine Months Ended

September 30,

Dollar Change

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Total general and administrative expenses

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.

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

● approximately $14.2 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 expenses as a result of market-based and performance-based awards that were granted to our new Chief Executive Officer and certain other employees in 2021;

● approximately $0.6 million in increased employee related expenses.

These increases were partially offset by:

● approximately $6.6 million in decreased professional service expenses primarily due to additional professional service expenses incurred in the third quarter of 2020 in connection with the termination of the Allergan agreement for which there were no similar activities in 2021;

● approximately $0.2 million in decreased intellectual property and patent related fees;

● approximately $0.2 million in decreased other expenses.

Other income, net

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.

For the nine months ended September 30, 2021, other income, net was $0.5 million, which was primarily attributable to interest income, partially offset by accretion of discounts associated with other marketable securities.

For the nine months ended September 30, 2020, other income, net was income of $15.5 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

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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.

As of September 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 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.

As of September 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.

As of September 30, 2021, we had cash, cash equivalents and marketable securities of $657.0 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 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

As of September 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 nine months ended September 30, 2021 and 2020 (in thousands):

Nine Months Ended

September 30,

Net cash (used in) provided by:

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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 $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.

Net cash used in operating activities was approximately $129.2 million for the nine months ended September 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 $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.

Net cash used in operating activities was approximately $139.7 million for the nine months ended September 30, 2020, which primarily consisted of operating expenses that relate to our on-going preclinical and clinical activities, including a $17.5 million termination fee related to the termination of our agreements with Allergan, 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 Used in Investing Activities

Net cash used in investing activities was approximately $31.6 million for the nine months ended September 30, 2021, primarily related to costs to acquire marketable securities of $304.6 million and purchases of property and equipment of $5.1 million, partially offset by proceeds from maturities of marketable securities of $278.1 million.

Net cash used in investing activities was approximately $31.6 million for the nine months ended September 30, 2020, primarily related to costs used to acquire marketable securities of $300.4 million and costs to acquire property and equipment of $5.8 million, partially offset by proceeds from maturities of marketable securities of $274.5 million.

Net Cash Provided by Financing Activities

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.

Net cash provided by financing activities was approximately $281.0 million for the nine months ended September 30, 2021 and consisted of $249.5 million in net proceeds received from the offering of our common stock and $31.1 million in proceeds received from exercises of options for our common stock.

Net cash provided by financing activities was approximately $215.0 million for the nine months ended September 30, 2020, and consisted of $203.8 million in net proceeds received from offering of common stock, of which $0.2 million of expenses related to the offering were unpaid at September 30, 2020, and $10.8 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, including EDIT-301 for the treatment of beta-thalassemia;

initiate preclinical testing and clinical trials for other product candidates we identify and develop, including EDIT-301 for the treatment of transfusion-dependent 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 June 30, 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 September 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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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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Contractual Obligations

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

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

Operating lease obligations (1)

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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 six months ended June 30, 2021 or 2020.

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

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis