What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-05 compared with 2022-11-02 · 101 added, 163 removed, 169 unchanged (61% of the section changed)

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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 in up to five cohorts of patients.

We completed dosing of the first of the

three initially planned cohorts, the adult low-, mid- and high-dose cohorts in 2021, and earlier this year commenced dosing of the pediatric mid-dose cohort.

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 Part I, “Item 1.

Business—Our Gene Editing Medicine Programs—In Vivo Gene Editing Medicines - Ocular —Leber Congenital Amaurosis 10” in the Annual Report.

We remain on track to provide an update on the Phase 1/2 BRILLIANCE clinical trial in November 2022, including safety data on all dosed adult and pediatric patients and efficacy data on the adult mid- and high-dose cohorts.

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”), the most severe form of beta-thalassemia, another inherited blood disorder characterized by severe anemia.

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 severe sickle cell disease.

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

We recently dosed the second patient in the RUBY trial and continue to enroll study participants.

We remain on track to present initial preliminary clinical data for the RUBY trial by the end of 2022, which will include efficacy data from the first treated patient, as well as safety data from the first two treated patients.

In July 2022, the FDA removed the previously disclosed partial clinical hold on the RUBY trial, enabling us to include efficacy data from patients in a marketing application for EDIT-301 in the future.

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.

We 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” in the Annual Report.

After completing sequential dosing of the first two patients, we commenced parallel patient dosing in the first quarter of 2023 and remain on track to dose 20 total patients by the end of 2023, with 19 patients currently enrolled in the trial.

We expect to provide clinical updates from the RUBY trial in June 2023 and again by the end of 2023.

In April 2023, the U.S.

Food and Drug Administration (“FDA”) granted Orphan Drug Designation to EDIT-301 for the treatment of SCD.

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 have completed editing CD34+ hematopoietic stem cells for the first enrolled patient and are scheduling dosing.

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 currently in preclinical development 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 are advancing EDIT-202 towards IND-enabling studies.

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 BMS.

We dosed the first patient in this trial in the first quarter of 2023, and this patient had successful neutrophil and platelet engraftment.

We remain on track to present data from the EDITHAL trial 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 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.

We have primarily financed our operations through various equity financings and payments received under our research collaboration with BMS and our former strategic alliance with Allergan Pharmaceuticals International Limited (together with its affiliates, “Allergan”), which was terminated in August 2020.

We have primarily financed our operations through various equity financings and payments received under our research collaboration with BMS and

our former strategic alliance with Allergan Pharmaceuticals International Limited (together with its affiliates, “Allergan”), which was terminated in August 2020.

Since inception, we have incurred significant operating losses.

Our net losses were $159.7 million and $151.1 million for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, we had an accumulated deficit of $1.0 billion.

Our net losses were $49.0 million and $50.5 million for the three months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023, we had an accumulated deficit of $1.1 billion.

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

Our net losses may fluctuate significantly from quarter to quarter and from year to year.

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

development activities;

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

progress our clinical trials;

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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 nine months ended September 30, 2022, 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.

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

Centers for Disease Control and Prevention and 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.

After previously implementing a work from home policy and restricting on-site activities at our facilities in Massachusetts and Colorado, we fully reopened these facilities in the third quarter of 2021 using a hybrid work model.

We have when needed reimposed the work from home policy and on-site activity restrictions in response to local increases in COVID-19 cases, and may do so again in the future as appropriate.

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.

We did not experience any significant impact on our financial condition, results of operations or liquidity due to the COVID-19 pandemic during the quarter ended March 31, 2023.

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, or any future pandemic, on our operational and financial performance, including our ability to timely advance our clinical trials and preclinical activities, 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 and related impacts, 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 from BMS.

As of September 30, 2022, we recorded $56.7 million of deferred revenue in relation to our collaboration with BMS, all of which is classified as long-term on our condensed consolidated balance sheet.

As of March 31, 2023, we recorded $56.7 million of deferred revenue in relation to our collaboration with BMS, all of which is classified as long-term on our condensed consolidated balance sheet.

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

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Other Income, Net

For the nine months ended September 30, 2022, other income, net consisted primarily of interest income and accretion of discounts associated with marketable securities.

For the nine months ended September 30, 2021, other income, net consisted primarily of interest income, partially offset by accretion of discounts associated with marketable securities.

For the three months ended March 31, 2023 and 2022, other income, net consisted primarily of interest income, partially offset by 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 September 30, 2022 and 2021

The following table summarizes our results of operations for the three months ended September 30, 2022 and 2021, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Comparison of the Three Months ended March 31, 2023 and 2022

The following table summarizes our results of operations for the three months ended March 31, 2023 and 2022, 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 income, net

Other expense, net

Interest income, net

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Collaboration and other research and development revenues

Collaboration and other research and development revenues decreased by $6.1 million, to $42 thousand for the three months ended September 30, 2022, compared to $6.2 million for three months ended September 30, 2021.

This decrease was primarily attributable to BMS’s exercise in the third quarter of 2021 of its option for an additional program under our collaboration with BMS, for which there was no corresponding revenue in the third quarter of 2022.

Collaboration and other research and development revenues increased by $3.1 million, to $9.9 million for the three months ended March 31, 2023, compared to $6.8 million for three months ended March 31, 2022.

This increase is related to the sale of our wholly owned oncology assets and related licenses in January 2023.

Research and development expenses

Research and development expenses increased by $12.1 million, to $41.3 million for the three months ended September 30, 2022, compared to $29.2 million for the three months ended September 30, 2021.

The following table summarizes our research and development expenses for the three months ended September 30, 2022 and 2021, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Research and development expenses remained flat at $37.8 million for the three months ended March 31, 2023 compared to $38.0 million for the same period in 2022.

The following table summarizes our research and development expenses for the three months ended March 31, 2023 and 2022, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Three Months Ended

September 30,

Dollar Change

Percentage Change

External research and development expenses

Employee related expenses

External research and development expenses

Facility expenses

Stock-based compensation expenses

Other expenses

Stock-based compensation expenses

Sublicense and license fees

Total research and development expenses

The increase in research and development expenses for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was primarily attributable to:

● approximately $6.7 million in increased external research and development expenses related primarily to the clinical and manufacturing development of EDIT-301, EDIT-101 and our other programs;

● approximately $4.0 million in increased other expenses related primarily to a COVID-19 employee retention tax credit recognized in the third quarter of 2021 and increased consulting expenses;

● approximately $1.6 million in increased employee-related expenses primarily due to an increase in the size of our workforce, including a new Chief Medical Officer and the expansion of our research and development organization;

The slight decrease in research and development expenses for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was primarily attributable to:

● approximately $2.3 million in decreased external research and development expenses related to our reprioritization and targeted focus on our EDIT-301 program and;

● approximately $1.6 million in decreased stock-based compensation expenses due primarily to a reduction in the market price of our common stock, resulting in a lower valuation of equity awards granted in the three months ended March 31, 2023.

These decreases were offset by:

● approximately $1.5 million in increased employee-related expenses due to payments in connection with our reprioritization and related reduction in workforce;

● approximately $1.2 million in increased facility related expenses primarily related to increased lab and manufacturing space;

These increases were partially offset by approximately $1.5 million in decreased stock-based compensation expenses primarily due to one-time equity awards granted in 2021, for which there were no similar awards in 2022.

● approximately $0.8 million in increased other expenses related to increased consulting expenses.

General and administrative expenses

General and administrative expenses remained flat at $16.2 million for the three months ended September 30, 2022, and 2021.

The following table summarizes our general and administrative expenses for the three months ended September 30, 2022 and 2021, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

General and administrative expenses increased by $3.5 million to $23.0 million for the three months ended March 31, 2023 compared to $19.5 million for the three months ended March 31, 2022.

The following table summarizes our general and administrative expenses for the three months ended March 31, 2023 and 2022, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Three Months Ended

September 30,

Dollar Change

Percentage Change

Employee related expenses

Intellectual property and patent related fees

Stock-based compensation expenses

Facility and other expenses

Professional service expenses

Total general and administrative expenses

The increase in general and administrative expenses for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was primarily attributable to:

● approximately $1.0 million in increased professional service expenses;

● approximately $0.9 million in increased facility and other expenses;

● approximately $0.5 million in increased employee related expenses;

● approximately $0.2 million in increased intellectual property and patent related fees.

These increases were partially offset by approximately $2.6 million in decreased stock-based compensation expense primarily related to performance awards granted in 2021 to our former Chief Executive Officer that were achieved or deemed probable in the third quarter of 2021, for which there was no similar expense in the third quarter of 2022.

Other income, net

For the three months ended September 30, 2022, other income, net was $1.8 million, which was primarily attributable to interest income and accretion of discounts associated with marketable securities.

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 marketable securities.

Comparison of the Nine Months ended September 30, 2022 and 2021

The following table summarizes our results of operations for the nine months ended September 30, 2022 and 2021, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Nine Months Ended

September 30,

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

Interest income, net

Total other income, net

Collaboration and other research and development revenues

Collaboration and other research and development revenues increased by $0.1 million, to $13.2 million, for the nine months ended September 30, 2022 from $13.1 million for nine months ended September 30, 2021.

This increase was primarily attributable to a milestone payment received under one of our license agreements in the nine months ended September 30, 2022.

Research and development expenses

Research and development expenses increased by $18.0 million, to $123.0 million, for the nine months ended September 30, 2022 from $105.0 million for the nine months ended September 30, 2021.

The following table summarizes our research and development expenses for the nine months ended September 30, 2022 and 2021, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Nine Months Ended

September 30,

Dollar Change

Percentage Change

External research and development expenses

Employee related expenses

Facility expenses

Stock-based compensation expenses

Other expenses

Sublicense and license fees

Total research and development expenses

The increase in research and development expenses for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 was primarily attributable to:

● approximately $13.8 million in increased external research and development expenses primarily attributable to the clinical and manufacturing development of EDIT-301, EDIT-101 and our other programs;

● approximately $5.6 million in increased employee related expenses primarily due to an increase in the size of our workforce, including a new Chief Medical Officer and the expansion of our research and development organization;

● approximately $5.2 million in increased other expenses related primarily to a COVID-19 employee retention tax credit recognized in the third quarter of 2021 and increased consulting expenses;

● approximately $2.4 million in increased facility related expenses primarily related to increased lab and manufacturing space.

These increases were partially offset by:

● approximately $6.1 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;

● approximately $2.9 million in decreased stock-based compensation expenses primarily due to one-time equity awards granted in 2021, for which there were no similar awards in 2022.

General and administrative expenses

General and administrative expenses decreased by $6.9 million, to $52.7 million, for the nine months ended September 30, 2022 from $59.7 million for the nine months ended September 30, 2021.

The following table summarizes our general and administrative expenses for the nine months ended September 30, 2022 and 2021, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Nine Months Ended

September 30,

Dollar Change

Percentage Change

Stock-based compensation expenses

Employee related expenses

Intellectual property and patent related fees

Employee related expenses

Facility and other expenses

Professional service expenses

Stock-based compensation expenses

Total general and administrative expenses

The decrease in general and administrative expenses for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 was primarily attributable to:

● approximately $8.9 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 the next Chief Executive Officer and other certain employees in 2021, under which a single performance obligation was achieved and fully recognized in 2021, for which there were no similar expenses recognized in 2022;

● approximately $2.7 million in decreased intellectual property and patent related fees primarily resulting from decreased legal fees related to the prosecution and maintenance of our patents;

● approximately $0.2 million in decreased employee related expenses.

These decreases were partially offset by:

● approximately $2.8 million in increased professional service expenses;

● approximately $2.0 million in increased facility and other expenses.

The increase in general and administrative expenses for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was primarily attributable to:

● approximately $7.1 million in increased professional service expenses to support business development activities;

● approximately $1.6 million in increased intellectual property and patent related fees related to the prosecution and maintenance of our patents;

● approximately $0.2 million in increased employee related expenses and facility and other expenses.

These increases were partially offset by approximately $5.3 million in decreased stock-based compensation expense primarily related to performance awards granted in 2021 to our former Chief Executive Officer that were achieved or deemed probable in the first quarter of 2022, for which there was no similar expense in the first quarter of 2023.

Other income, net

For the nine months ended September 30, 2022, other income, net was $2.8 million, which was primarily attributable to 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 marketable securities.

For the three months ended March 31, 2023, other income, net was $1.9 million, which was primarily attributable to interest income, partially offset by accretion of discounts associated with other marketable securities.

For the three months ended March 31, 2022, 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.

Liquidity and Capital Resources

Sources of Liquidity

As of September 30, 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.

As of March 31, 2023, 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 BMS and our strategic alliance with Allergan, which was terminated in August 2020.

As of September 30, 2022, we had cash, cash equivalents and marketable securities of $478.5 million.

As of March 31, 2023, we had cash, cash equivalents and marketable securities of $401.8 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 September 30, 2022, we have not sold any shares of our common stock under the ATM Facility.

As of March 31, 2023, we have not sold any shares of our common stock under the ATM Facility.

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 September 30, 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 nine months ended September 30, 2022 and 2021 (in thousands):

Nine Months Ended

September 30,

As of March 31, 2023, 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 three months ended March 31, 2023 and 2022 (in thousands):

Three Months Ended

Net cash (used in) provided by:

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Financing activities

Net increase 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 $135.1 million for the nine months ended September 30, 2022, which primarily consisted of operating expenses that relate to our on-going preclinical and clinical activities, sublicense 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 Provided by (Used in) Investing Activities

Net cash provided by investing activities was approximately $141.6 million for the nine months ended September 30, 2022, primarily related to proceeds from maturities of marketable securities of $354.8 million, partially offset by costs used to acquire marketable securities of $209.8 million and purchases of property and equipment of $3.5 million.

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 operating activities was approximately $35.8 million for the three months ended March 31, 2023, which primarily consisted of operating expenses that related to increasing our research efforts, progressing our EDIT-301 program, and supporting business operations.

Net cash used in operating activities was approximately $49.2 million for the three months ended March 31, 2022, which primarily consisted of operating expenses that related to preclinical and clinical activities, patent costs and license fees, and increased costs as a result of staffing needs.

Net Cash Provided by Investing Activities

Net cash provided by investing activities was approximately $23.3 million for the three months ended March 31, 2023, primarily related to proceeds from maturities of marketable securities of $65.9 million, partially offset by costs used to acquire marketable securities of $40.8 million and purchases of property and equipment of $1.8 million.

Net cash provided by investing activities was approximately $56.4 million for the three months ended March 31, 2022, primarily related to proceeds from maturities of marketable securities of $119.0 million, partially offset by costs used to acquire marketable securities of $60.4 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was approximately $0.7 million for the nine months ended September 30, 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 $281.0 million for the nine months ended September 30, 2021 and consisted of $249.5 million in net proceeds received from a public offering of our common stock and $31.1 million in proceeds received from exercises of options for our common stock.

No cash was provided by or used in financing activities for the three months ended March 31, 2023.

Net cash provided by financing activities was approximately $0.2 million for the three months ended March 31, 2022 primarily related to proceeds received from exercises of options for our common stock.

Funding Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we progress our clinical trials;

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;

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;

hire additional clinical, quality control, and scientific personnel;

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We do not expect to generate significant recurring revenue unless and until we obtain regulatory approval for and commercialize a product candidate.

Furthermore, we expect to continue to incur significant costs associated with operating as a public company.

Furthermore, since 2016 we have incurred, and in future years we expect to continue to incur significant costs associated with operating as a public company.

Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.

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 September 30, 2022 will enable us to fund our operating expenses and capital expenditure requirements into 2024.

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

We expect that our existing cash, cash equivalents and marketable securities at March 31, 2023 will enable us to fund our operating expenses and capital expenditure requirements into 2025.

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

We have based this forecast on assumptions that may prove to be wrong, and actual results could vary materially from our expectations, which may adversely affect our capital resources and liquidity.

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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 our clinical trials;

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

● the costs of progressing the clinical development of EDIT-301 to treat SCD and TDT;

● the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our

intellectual property and proprietary rights, and defending intellectual property-related claims;

● the costs, timing, and outcome of regulatory review of the product candidates we develop;

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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.

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.

Accordingly, we will need to continue to rely on additional financing to achieve our business objectives.

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Contractual Obligations

As of September 30, 2022, we had non-cancelable operating leases with future minimum lease payments for a total of $23.0 million, of which $1.6 million will be payable in 2022.

As of March 31, 2023, we had non-cancelable operating leases with future minimum lease payments for a total of $46.1 million, of which $8.2 million will be payable in 2023.

These minimum lease payments exclude our share of the facility operating expenses, real-estate taxes and other costs that are reimbursable to the landlord under the leases.

Our agreements with certain institutions to license intellectual property include potential milestone payments and success fees, sublicense fees, royalty fees, licensing maintenance fees, and reimbursement of patent maintenance costs that we may be required to pay.

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.

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.

These potential obligations are contingent upon future events and the timing and likelihood of such potential obligations are not known with certainty.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis