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Item 7. Management’s Discussion and Analysis

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The forward-looking statements contained in this Annual Report on Form 10-K are made as of the date of this Annual Report on Form 10-K,and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

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

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

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

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 induced human pluripotent stem cells that are subsequently differentiated into effector cells, such as natural killer (“NK”) 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 CEP290-related retinal degenerative disorder for which we are not aware of any available therapies.

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 initially planned to enroll up to 18 patients in the United States and Europe in up to five cohorts, and in 2021 completed dosing of the first three cohorts, the adult low-, mid- and high-dose cohorts.

We are expanding enrollment in one or more of the previously completed adult cohorts to explore dose response and support establishment of registrational trial endpoints.

We anticipate establishing these registrational trial endpoints by the end of 2022.

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

In the third quarter of 2021, we released preliminary clinical data from the first six patients with LCA10 treated with EDIT-101 demonstrating a favorable safety profile and encouraging signals of clinical benefit.

For additional

information regarding these clinical data, please see “Business—Our Gene Editing Medicine Programs—In Vivo Gene Editing Medicines - Ocular —Leber Congenital Amaurosis 10.” We expect to provide a clinical update on the BRILLIANCE trial in the second half of 2022, including safety and efficacy assessments on all patients who have had at least six months of follow-up evaluations.

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 transfusion-dependent beta-thalassemia (“TDT”).

In January 2021, the U.S.

Food and Drug Administration (the “FDA”) cleared the start of enrollment and dosing of patients in the first phase of our Phase 1/2 clinical trial of EDIT-301, which we refer to as our RUBY trial, for the treatment of sickle cell disease.

This study is designed to validate the safety and beneficial effects of the cell editing process.

The RUBY trial is currently enrolling study participants and is on track to begin dosing in the first half of 2022 with initial clinical results expected by the end 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.

In November 2021, we filed an IND application for a Phase 1/2 clinical trial of EDIT-301 for the treatment of TDT, which was cleared by the FDA in December 2021.

We expect to initiate dosing in this trial during 2022.

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 have advanced development of engineered iPSC-derived NK (“iNK”) cell medicines for solid tumors and generated edited NK cells from iPSCs with significantly increased anti-cancer activity.

In December 2021, we declared a development candidate, referred to as EDIT-202, a highly differentiated iNK investigational medicine with double knock-in and double knock-out gene edits that are intended to enhance adaptive immune response and improve cell proliferation, cytolytic activity and persistence, as well as overcome suppressive tumor microenvironments.

We expect to advance EDIT-202 in preclinical development during 2022.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.

Our product development strategy is to target diseases where gene editing can be used to enable or enhance therapeutic outcomes for patients, while maximizing probability of technical, regulatory and commercial success.

W e are focused on advancing gene editing medicines to treat hemoglobinopathies, beginning with the continued development of our current ex vivo EDIT-301 program and leveraging the insights gained from this program to pursue next generation in vivo gene editing medicines targeting hematopoietic stem cells (“HSCs”).

In parallel, we are pursuing the development of in vivo gene editing medicines for other organs and tissues that we believe will significantly differentiate our genome editing approach from the current standards of care for serious diseases.

As part of these efforts, we are using existing strategic partnerships and collaborations and pursuing further opportunities to extend the reach of our intellectual property portfolio and access complementary technologies to expedite our drug discovery and clinical execution objectives.

Our lead program, EDIT-301, is an experimental ex vivo gene-edited medicine to treat sickle cell disease (“SCD”), a severe inherited blood disease that causes premature death, and transfusion-dependent beta thalassemia (“TDT”), the most severe form of beta-thalassemia, another inherited blood disorder characterized by severe anemia.

In the second quarter of 2022, we dosed the first patient in our Phase 1/2 clinical trial of EDIT-301, which we refer to as our RUBY trial, for the treatment of severe SCD, and in December 2022, announced initial clinical data from the first two patients treated in the RUBY trial.

This clinical data supports human proof of concept by showing that EDIT-301 could safely increase expression of fetal hemoglobin to clinically meaningful levels and correct anemia in SCD patients.

For additional information regarding these clinical data, please see “Business—Our Gene Editing Medicine Programs—Hemoglobinopathies.” After completing sequential dosing of the first two patients, we have commenced parallel patient dosing in this trial and are on track to dose 20 total patients by the end of 2023.

We expect to provide clinical updates from the RUBY trial in mid-2023 and end of 2023.

In December 2021, the FDA cleared our Investigational New Drug (“IND”) application for a Phase 1/2 clinical trial of EDIT-301 for the treatment of TDT.

This trial, referred to as our EDITHAL trial, is designed to assess the safety, tolerability, and preliminary efficacy of EDIT-301 for the treatment of TDT.

We are on track to dose the first patient in this trial in the first quarter of 2023.

We expect to provide data on this patient by the end of 2023.

We are also pursuing the development of next generation in vivo administered gene editing medicines, in which the medicine is injected or infused into the patient to edit the cells inside their body.

We are initially focused on editing HSCs through targeted delivery of our AsCas12a enzyme to our clinically validated HBG1 and HBG2 promotor site.

We are also in the discovery stage in developing in vivo gene editing medicines for other organs and tissues.

We previously achieved human proof of concept for our most advanced in vivo gene editing medicine for inherited retinal diseases, EDIT-101 to treat Leber congenital amaurosis.

In November 2022 we announced updated clinical data from our Phase 1/2 BRILLIANCE trial of EDIT-101.

This data demonstrated a favorable safety profile and provided proof of concept.

However, we were not able to identify any baseline characteristics of the treatment responder patients that could pre-select a responder patient population other than zygosity.

The identified responder patient population was determined to be too small to progress the program independently.

We have since paused patient enrollment in this program.

We are pursuing the right combination of gene editing and targeted delivery tools through internal development and the in-licensing of complementary technologies, while also leveraging our intellectual property portfolio to drive potential out-licensing and partnership discussions that can accelerate the achievement of our goal of delivering lifesaving medicines to patients with previously untreatable or under-treated diseases.

In cellular therapy medicines, we are leveraging new and existing partnerships to progress engineered cell medicines to treat various cancers.

We are advancing alpha-beta T-cell experimental medicines for the treatment of solid and liquid tumors in collaboration with Bristol Myers Squibb Company (“BMS”) through its wholly owned subsidiary, Juno Therapeutics, Inc.

(“Juno Therapeutics”).

This collaboration, which leverages our Cas9 and AsCas12a platform technologies, has resulted in 11 programs.

We have also entered into a non-exclusive collaboration and licensing agreement with Immatics N.V.

to combine gamma-delta T cell adoptive cell therapies and gene editing to develop medicines for the treatment of cancer.

In January 2023, we announced the sale of our wholly owned oncology assets to Shoreline Biosciences, Inc.

(“Shoreline”).

Under the agreement, Shoreline acquired EDIT-202, our preclinical multiplexed edited induced human pluripotent stem cell (“iPSC”)-derived natural killer (“iNK”) cell medicine for the treatment of solid tumors, as well as an additional iNK program under development and certain related manufacturing technologies.

We also exclusively licensed to Shoreline our rights to a proprietary knock-in gene editing technology referred to as SLEEK (SeLection by Essential-gene Exon Knock-in) for use in Shoreline’s iNK platform and for oncology in Shoreline’s iPSC-derived macrophage platform, as well as a non-exclusively licensed our AsCas12a gene editing technology.

We believe that this transaction will enable this oncology program to more rapidly move towards clinical applications.

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-301, all of our ongoing 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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Our net losses were $220.4 million, $192.5 million, and $116.0 million for the years ended December 31, 2022, 2021 and 2020 respectively.

As of December 31, 2021, we had an accumulated deficit of $857.7 million.

As of December 31, 2022, we had an accumulated deficit of $1.1 billion.

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

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We anticipate that our expenses will increase substantially as we continue our current research programs and our preclinical development activities;

progress the clinical development of EDIT-101 and EDIT-301;

progress the clinical development of EDIT-301;

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 preparing for and initiating the clinical development of EDIT-301 for the treatment of transfusion-dependent beta-thalassemia;

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;

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We do not expect to be profitable for the year ending December 31, 2023 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 year ended December 31, 2021, the pandemic has continuously evolved with new, more contagious, variants emerging from time to time, and near-term risks to our business remain.

In response to COVID-19 and these variants, governments have implemented a variety of responses, including government-imposed quarantines, travel restrictions and other public health safety measures.

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.

We have taken steps in line with guidance from the U.S.

Centers for Disease Control and Prevention, the Commonwealth of Massachusetts and the State of Colorado, the jurisdictions in which we primarily operate our business, to protect the health and safety of our employees and the community.

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 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.

However, in response to the recent spread of the Omicron variant, for January and a portion of February we temporarily reimposed the work from home policy and on-site activity restrictions.

We did not experience any significant impact on our financial condition, results of operations or liquidity due to the COVID-19 pandemic during the year ended December 31, 2022.

At its height, the COVID-19 pandemic had a significant negative effect on the global economy, supply chains and labor force participation, and created significant volatility in financial markets.

The extent of the future impact of the COVID-19 pandemic on our operational and financial performance, including our ability to timely advance our clinical trials and preclinical actvtivies, will depend on future developments, including the duration, spread and severity of the pandemic, any evolution of the virus, government restrictions imposed in response, and the availability and effectiveness of vaccines and treatment options, all of which are uncertain and cannot be predicted.

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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For additional information about our revenue recognition policy related to the BMS collaboration or the Allergan strategic alliance, see “—Critical Accounting Policies and Estimates—Revenue Recognition” included in this Annual Report on Form 10-K.

For the foreseeable future we expect substantially all of our revenue will be generated from our collaboration with Juno Therapeutics, and any other collaborations or agreements we may enter into.

For the foreseeable future we expect substantially all of our revenue will be generated from our collaboration with BMS, and any other collaborations or agreements we may enter into.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research, preclinical development, process and scale-up development, manufacture and clinical development of our product candidates, and the performance of development activities under our collaboration agreements.

the performance of development activities under our collaboration agreements.

These costs are expensed as incurred and include:

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Research and development activities are central to our business model.

We expect research and development costs to increase significantly for the foreseeable future as our development programs progress, including as we progress the clinical development of EDIT-101 and EDIT-301 as well as supporting preclinical studies for our other research programs.

We expect research and development costs to increase significantly for the foreseeable future as our development programs progress, including as we continue to progress our clinical trials as well as support preclinical studies for our other research programs.

General and Administrative Expenses

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These increases will include increased costs related to the hiring of additional personnel and fees to outside consultants.

We also anticipate increased expenses related to reimbursement of third-party patent-related expenses and expenses associated with operating as a public company, including costs for audit, legal, regulatory, and tax-related services,

director and officer insurance premiums, and investor relations costs.

With respect to reimbursement of third-party intellectual property-related expenses specifically, given the ongoing nature of the opposition and interference proceedings involving the patents licensed to us under our license agreement with The Broad Institute, Inc.

(“Broad”) and the President and Fellows of Harvard College (“Harvard”), we anticipate general and administrative expenses will continue to be significant.

Other (Expense) Income, Net

For the year ended December 31, 2021, other (expense) income, net consisted primarily of changes in interest income and accretion of discounts associated with other marketable securities.

For the year ended December 31, 2020, other (expense) 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 years ended December 31, 2022, and 2021, other income (expense), net consisted primarily of changes in interest income and accretion of discounts associated with other marketable securities.

Critical Accounting Policies and Estimates

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We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer.

At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and whether each promised good or service is distinct.

At contract inception, once the contract is determined to be within the scope of ASC 606, we

assess the goods or services promised within each contract and determine those that are performance obligations, and whether each promised good or service is distinct.

We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

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Other income, net

Other (expense) income, net

Other income (expense), net

Interest income, net

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Collaboration and other research and development revenues decreased by $5.8 million, to $19.7 million for the year ended December 31, 2022, from $25.5 million for the year ended December 31, 2021.

This decrease was primarily attributable to $70.6 million of revenue recognized in the year ended December 31, 2020 as a result of the termination of our strategic alliance with Allergan, as well as to $7.6 million in revenue recognized in 2020 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 an increase of $13.5 million in revenue recognized pursuant to our research collaboration with Juno Therapeutics during the year ended December 31, 2021 compared to the year ended December 31, 2020.

The decrease was primarily attributable to fewer programs licensed under our collaboration with BMS in 2022 than in 2021.

Research and Development Expenses

Research and development expenses decreased by $15.5 million, to $142.5 million for the year ended December 31, 2021 from $158.0 million for the year ended December 31, 2020.

Research and development expenses increased by $32.5 million, to $175.0 million for the year ended December 31, 2022 from $142.5 million for the year ended December 31, 2021.

The following table summarizes our research and development expenses for the years ended December 31, 2022 and December 31, 2021, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

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Employee related expenses

Stock-based compensation expenses

Facility expenses

Sublicense and license fees

Stock-based compensation expenses

Other expenses

Sublicense and license fees

Total research and development expenses

The decrease in research and development expenses for the year ended December 31, 2021 compared to the year ended December 31, 2020 was primarily attributable to:

● approximately $21.3 million in decreased sublicense and license fees resulting from success payments that were triggered during the fourth quarter of 2020 in connection to a license and sponsored research agreement with Broad which was partially offset by a success payment that was triggered during the first quarter of 2021;

● approximately $9.8 million in decreased external research and development expenses related to expenses incurred in the year ended December 31, 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 $0.6 million in decreased other expenses.

These decreases were partially offset by the following increases in research and development expenses:

● approximately $8.1 million in increased employee-related expenses due to an increase in the size of our workforce;

● approximately $5.0 million in increased stock-based compensation expenses primarily due to expense recognized in relation to an increase in restricted stock units granted to employees;

● approximately $3.1 million in increased facility and other related expenses primarily related to an increase in lab space.

The increase in research and development expenses for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily attributable to:

● approximately $25.9 million in increased external research and development expenses primarily attributable to the clinical and manufacturing development of EDIT-301 as well as expenses related to the pause in internal investments in EDIT-101;

● approximately $6.8 million in increased employee related expenses primarily due to an increase in the size of our workforce, including a new Chief Medical Officer, to support clinical programs;

● approximately $5.6 million in increased other expenses related primarily to a COVID-19 employee retention tax credit recognized in the third quarter of 2021, which reduced research and development expenses and did not repeat in 2022, and increased consulting expenses in 2022;

● approximately $4.6 million in increased facility related expenses primarily related to increased lab and manufacturing space.

These increases were partially offset by the following decreases in research and development expenses:

● approximately $6.3 million in decreased 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 for which there were no similar fees in 2022, partially offset by license fees owed to certain of our licensors in 2022 in connection with receiving milestone and other payments from our licensees;

● approximately $4.1 million in decreased stock-based compensation expenses primarily due to equity awards granted in 2021, for which there were no similar awards in 2022, as well as decreased stock-based compensation expense recognized related to the performance-based awards that were granted to certain employees in 2021.

General and Administrative Expenses

General and administrative expenses increased by approximately $8.6 million, to $76.2 million for the year ended December 31, 2021 from $67.6 million for the year ended December 31, 2020.

General and administrative expenses decreased by approximately $5.5 million, to $70.7 million for the year ended December 31, 2022 from $76.2 million for the year ended December 31, 2021.

The following table summarizes our general and administrative expenses for the years ended December 31, 2022 and December 31, 2021, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

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Percentage Change

Stock-based compensation expenses

Employee related expenses

Stock-based compensation expenses

Intellectual property and patent related fees

Facility and other expenses

Professional service expenses

Facility and other expenses

Total general and administrative expenses

The increase in general and administrative expenses for the year ended December 31, 2021 compared to the year ended December 31, 2020 was primarily attributable to:

● approximately $15.3 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 current Chief Executive Officer and certain other employees in 2021;

● approximately $1.2 million in increased employee-related expenses primarily due to an increase in the size of our workforce and the timing of hiring key executives;

● approximately $0.4 million in increased facility and other expenses.

These increases were partially offset by the following decreases in general and administrative expenses:

● approximately $6.1 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;

The decrease in general and administrative expenses for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily attributable to:

● approximately $10.0 million in decreased 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 related to the performance-based awards that were granted to our succeeding Chief Executive Officer and

other employees in 2021, under which a single performance obligation was achieved in 2021, for which there were no similar expenses recognized in 2022;

● approximately $1.8 million in decreased intellectual property and patent related fees.

These decreases were partially offset by the following increases in general and administrative expenses:

● approximately $3.9 million in increased professional service expenses to support infrastructure and expanding operations;

● approximately $1.9 million in increased facility and other expenses.

Total Other Income, Net

For the year ended December 31, 2021, total other income, net was $0.6 million, which was primarily attributable to interest income and accretion of discounts associated with marketable securities.

For the year ended December 31, 2020, total other income, net was $18.9 million, which was primarily attributable to the realized gains related to the sale of corporate equity securities, interest income and accretion of discounts associated with marketable securities.

For the years ended December 31, 2022, and 2021, total other income, net was $5.5 million and $0.6 million, respectively, which was primarily attributable to interest income and accretion of discounts associated with marketable securities.

Comparison of Years Ended December 31, 2021 and 2020

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Sources of Liquidity

In January 2021, we completed a public offering in which 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 December 31, 2022, 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 former strategic alliance with Allergan.

We also have funded our business from payments received under our research collaboration with BMS and our former strategic alliance with Allergan.

As of December 31, 2022, we had cash, cash equivalents and marketable securities of $437.4 million.

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We have not sold any shares of our common stock under this ATM Facility as of the date of this Annual Report on Form 10-K.

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.

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 BMS.

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

As of December 31, 2022, our right to contingent payments under our collaboration agreement with BMS is our only significant committed potential external source of funds.

The following table provides information regarding our cash flows for the years ended December 31, 2022 and 2021, respectively (in thousands):

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Financing activities

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

Net (decrease) 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 $177.3 million for the year ended December 31, 2022, which primarily consisted of operating expenses that relate to our on-going preclinical and clinical activities, sublicense and license fees, and increased personnel costs to support our expanding operations.

Net cash used in operating activities was approximately $163.8 million for the year ended December 31, 2021, which primarily consisted of operating expenses that relate to our on-going preclinical and clinical activities, a success payment that was settled in cash during the year, patent costs and license fees, rent expenses 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 $179.8 million for the year ended December 31, 2020, which primarily consisted of our net loss which was adjusted for a non-cash research and development expense of $27.5 million related to a success payment that was triggered during the year that was subsequently settled in shares of common stock.

The changes in working capital relate to our on-going preclinical and clinical activities, patent costs and license fees, rent expenses and increased costs as a result of staffing needs due to our expanding operations.

These expenses were partially offset by the recognition of deferred revenue relating to the Allergan termination and a milestone payment.

Net Cash Used in Investing Activities

Net Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities was approximately $114.1 million for the year ended December 31, 2022, primarily related to proceeds from maturities of marketable securities of $433.4 million, partially offset by costs used to acquire marketable securities of $315.2 million and purchases of property and equipment of $4.1 million.

Net cash used in investing activities was approximately $54.5 million for the year ended December 31, 2021, primarily related to costs to acquire marketable securities of $409.0 million and purchases of property and equipment of $8.0 million, partially offset by proceeds from maturities of marketable securities of $362.4 million.

Net cash used in investing activities was approximately $140.5 million for the year ended December 31, 2020, primarily related to the costs to acquire marketable securities of $458.4 million and costs to acquire property and equipment of $7.2 million, partially offset by proceeds from maturities of marketable securities of $305.0 million and proceeds from the sale of corporate equity securities of $20.0 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was approximately $1.3 million for the year ended December 31, 2022 primarily related to proceeds received from issuance of common stock under our employee stock purchase plan and exercises of options for our common stock.

Net cash provided by financing activities was approximately $282.1 million for the year ended December 31, 2021 and consisted of $249.5 million in net proceeds received from the offering of our common stock in the first quarter 2021 and $31.5 million in proceeds received from exercises of options for our common stock.

Net cash provided by financing activities was approximately $224.1 million for the year ended December 31, 2020, primarily related to $203.7 million in net proceeds received from the offering of our common stock in the second quarter, and $19.5 million in proceeds received from exercises of options for our common stock.

For a discussion of our cash flows for the year ended December 31, 2020, see Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 24, 2022.

Funding Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we progress the clinical development of EDIT-101 and EDIT-301;

further advance our current research programs and our preclinical development activities;

We expect our expenses to increase in connection with our ongoing activities, particularly as we progress the clinical development of EDIT-301;

further advance our research programs and our preclinical development activities;

seek to identify product candidates and additional research programs;

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 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 at December 31, 2021 will enable us to fund our operating expenses and capital expenditure requirements through 2023.

We expect that our existing cash, cash equivalents and marketable securities at December 31, 2022 will fund our operating expenses and capital expenditure requirements into 2025.

Our forecast of the period of time through which our existing cash and cash equivalents and investments will be adequate to support our operations is a forward-looking statement and involves significant risks and uncertainties.

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● the scope, progress, results, and costs of drug discovery, preclinical development, laboratory testing, and clinical or natural history study trials for the product candidates we develop;

● the costs of progressing the clinical development of EDIT-101 to treat LCA10, including expanding trial enrollment to explore dose response and support establishment of registrational trial endpoints;

● the costs of progressing the clinical development of EDIT-301 to treat sickle cell disease and preparing for and initiating the clinical development of EDIT-301 to treat transfusion-dependent beta-thalassemia;

● the costs of progressing the clinical development of EDIT-301 to treat sickle cell disease and to treat transfusion-dependent 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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● the costs of future activities, including product sales, medical affairs, marketing, manufacturing, and distribution, for any product candidates for which we receive regulatory approval;

● the success of our collaboration with Juno Therapeutics;

● whether Juno Therapeutics exercises any of its options to extend the research program term and/or to additional research programs under our collaboration;

● the success of our collaboration with BMS;

● whether BMS exercises any of its options to extend the research program term and/or to additional research programs under our collaboration;

● our ability to establish and maintain additional collaborations on favorable terms, if at all;

22 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis