What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-08 compared with 2023-11-03 · 126 added, 187 removed, 152 unchanged (67% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Securities and Exchange Commission (“SEC”) on February 22, 2023 (the “Annual Report”).

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the Securities and Exchange Commission (“SEC”) on February 28, 2024 (the “Annual Report”).

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties.

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The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, 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 clinical stage genome editing company dedicated to developing potentially transformative genomic medicines to treat a broad range of serious diseases.

We are a clinical stage gene 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 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.

After completing sequential dosing of the first two patients, we commenced parallel patient dosing in the first quarter of 2023.

Through November 3, 2023, we have enrolled 27 patients in the RUBY trial.

We expect to dose the 20th patient in the trial in the January 2024 timeframe.

We provided an update on the initial clinical data from the RUBY trial in June 2023 and expect to provide additional clinical updates in December 2023 and in the middle of 2024.

In October 2023, the U.S.

Food and Drug Administration (“FDA”) granted Regenerative Medicine Advanced Therapy designation to EDIT-301 for the treatment of SCD.

A product is eligible for this designation if it is a regenerative medicine therapy that is intended to treat, modify, reverse or cure a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product candidate has the potential to address unmet medical needs for such disease or condition.

The benefits of the designation include early interactions with the FDA to expedite development and review, benefits available to breakthrough therapies, potential eligibility for priority review and accelerated approval based on surrogate or intermediate endpoints.

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 dosed the first patient in this trial in the first quarter of 2023 and commenced parallel patient dosing in the second quarter of 2023.

Through November 3, 2023, we have enrolled eight patients in the EdiTHAL trial.

We provided an initial clinical data update on the first patient in the EdiTHAL trial in June 2023 and expect to provide an additional clinical update in December 2023.

In June 2023, we announced initial safety and efficacy data from the first four patients with SCD treated with EDIT-301 in the RUBY trial and from the first TDT patient treated in the EdiTHAL trial.

In the RUBY trial, Patients 1 (male) and 2 (female) reached normal hemoglobin levels five months post-treatment with EDIT-301 and maintained a normal hemoglobin level at the 10- and six-month follow-ups, respectively.

Each of these patients had fetal hemoglobin levels of greater than 40% persist during the same time frame.

Patient 1’s total hemoglobin returned to a normal physiological level of 16.4g/dL (male normal range:

13.6–18.0 g/dL) at five months after infusion of EDIT-301 and was maintained at this level at the 10-month follow-up.

In addition, Patient 1’s fetal hemoglobin fraction increased from 5% at baseline to 45.4% five months after treatment with EDIT-301 and 43.4% at the 10-month follow-up.

Patient 2’s total hemoglobin reached a normal physiological level of 12.7 g/dL (female normal range:

12.0–16.0 g/dL) at five months after infusion of EDIT-301 and fetal hemoglobin increased from 10.8% at baseline to 51.3% at the six-month follow-up.

Patients 3 (female) and 4 (male) in the RUBY trial saw increases in total hemoglobin and fetal hemoglobin fractions at three and two months of follow up, respectively, that followed similar trajectories as those seen in the first two patients at the same timepoints.

All four treated RUBY patients were free of vaso-occlusive events following infusion with EDIT-301.

In the EdiTHAL trial, the first patient (male) had successful neutrophil and platelet engraftment within 30 days of infusion, and, at one and a half months post-infusion, the patient’s response resembled that of the first four RUBY patients, achieving a fetal hemoglobin fraction of 34.9% representing 4 g/dL of total hemoglobin.

EDIT-301 was well-tolerated and demonstrated a safety profile consistent with myeloablative conditioning with busulfan, the regimen that is necessary for current gene editing therapies for SCD and TDT, and autologous hematopoietic stem cell transplant by the four patients in the RUBY trial and the first patient in the EdiTHAL trial.

After EDIT-301 infusion, no serious adverse events occurred, and no adverse events reported were related to treatment with EDIT-301.

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 the body.

We are focused on advancing gene editing medicines to treat hemoglobinopathies, beginning with the continued development of our current ex vivo renizgamglogene autogedtemcel (“reni-cel”) (formerly known as 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”).

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

As part of these efforts, we are using 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, reni-cel, 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.

We are investigating reni-cel in a single Phase 1/2/3 clinical trial, referred to as the RUBY trial, for the treatment of severe SCD.

In 2022, we dosed the first patient in the RUBY trial, and after completing sequential dosing of the first two patients, we commenced concurrent patient dosing in the first quarter of 2023.

We have completed enrollment of the adult cohort and continue to dose patients in the RUBY trial.

We also have enrolled multiple patients in the adolescent cohort in the trial.

In December 2021, the the U.S.

Food and Drug Administration (the “FDA”) cleared our Investigational New Drug (“IND”) application for a Phase 1/2 clinical trial of reni-cel for the treatment of TDT, which we refer to as our EdiTHAL

We dosed the first patient in this trial in the first quarter of 2023 and commenced concurrent patient dosing in the second quarter of 2023.

We continue to enroll and dose patients in the trial.

In December 2023, we presented new safety and efficacy data in 17 patients treated with reni-cel in both the RUBY and EdiTHAL trials.

This clinical data, which remained consistent with and further confirmed earlier clinical results shared in June 2023 and December 2022, supports our belief that reni-cel can be a clinically differentiated, one-time, durable medicine that can provide life-changing clinical benefits to patients with SCD and TDT, specifically driving early and robust correction of anemia and sustained increases in fetal hemoglobin.

For additional information regarding these clinical data, please see “Business—Our Gene Editing Medicine Programs—Ex Vivo Hemoglobinopathies” in the Annual Report.

We remain on track to present additional clinical data from both the RUBY and EdiTHAL trials in mid-2024 and further data by year-end 2024.

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 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.

Our internal development efforts leverage the indel CRISPR technology we use to upregulate gamma globin expression through direct editing of the HBG1/2 promotor site in our ex vivo reni-cel program.

Our in vivo approach is aimed at functional upregulation of gene expression in genetic diseases in rare and orphan disease patient populations, from which we intend to expand to more common disease populations.

We are evaluating lipid nanoparticles for delivery of gene editing cargo into multiple tissue types with multiple companies, and are also evaluating additional, next generation delivery technologies.

We are on track to establish in vivo preclinical proof-of-concept for an undisclosed indication by year-end 2024.

In December 2023, we and Vertex Pharmaceuticals Incorporated (“Vertex”) entered into a license agreement, under which Vertex obtained a non-exclusive license for our Cas9 gene editing technology for ex vivo gene editing medicines targeting the BCL11A gene in the fields of SCD and TDT, including Vertex’s CASGEVY TM (exagamglogene autotemcel).

We received a $50.0 million upfront cash payment in the fourth quarter of 2023 and the 2024 annual license fee of $10.0 million in the first quarter of 2024.

We are eligible to receive an additional $50.0 million contingent upfront payment.

We are also eligible to receive further annual license fees, ranging from $10.0 million to $40.0 million annually, inclusive of certain sales-based annual license fee increases, through 2034.

We are required to pay The Broad Institute, Inc.

(“Broad”) and the President and Fellows of Harvard College (“Harvard”) a mid-double-digit percentage of amounts received from Vertex under the license agreement as it relates to Cas9 technology licensed by us from Broad and Harvard.

In August 2023, we entered into a license agreement with Vor Biopharma Inc.

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Under this agreement, we received an upfront payment and will be eligible for future development, regulatory and commercial milestone payments, as well as royalties on medicines utilizing the related intellectual property.

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-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.

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

(“Juno Therapeutics”).

This collaboration, which leverages our Cas9 and AsCas12a platform technologies, has resulted in 13 total programs.

In March 2024, we entered into an amendment to extend the collaboration to November 2026, with options to extend the collaboration for up to an additional two years, and provided BMS the ability to select up to three new gene targets for research.

We are also party to 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.

Except for reni-cel, 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, payments received under our research collaboration with BMS, our former strategic alliance with Allergan Pharmaceuticals International Limited (together with its affiliates, “Allergan”), which was terminated in August 2020, and payments received in conjunction with our license agreement with Vertex.

Since inception, we have incurred significant operating losses.

Our net losses were $134.3 million and $159.7 million for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, we had an accumulated deficit of $1.2 billion.

Our net losses were $62.0 million and $49.0 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, we had an accumulated deficit of $1.3 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 progress the clinical development of EDIT-301;

scale our manufacturing capabilities and expand capacity, including capacity at third-party manufacturers, for EDIT-301;

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

seek to identify additional product candidates and additional research programs;

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 reni-cel;

seek to identify additional research programs and additional product candidates;

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

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

further develop our gene editing platform;

hire additional clinical, quality control, and scientific personnel;

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In connection with our collaboration with BMS, we have received an aggregate of $136.0 million in payments, which have primarily consisted of the initial upfront and amendment payments, development milestone payments, research funding support and certain opt-in fees.

We no longer receive research funding support from BMS.

As of September 30, 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.

We no longer receive research funding support.

During the three months ended March 31, 2024, we recognized $0.5 million of revenue related to our collaboration with BMS, none of which was previously deferred.

We did not recognize any revenue related to our collaboration with BMS during the three months ended March 31, 2023.

As of March 31, 2024, we recorded $56.7 million of deferred revenue in relation to our collaboration with BMS, of which $6.5 million was classified as short-term deferred revenue and $50.2 million was classified as long-term deferred revenue on our consolidated balance sheet.

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

We expect that our revenue will fluctuate from quarter-to-quarter and year-to-year as a result of the timing of when we deliver such option packages or receive such milestone payments.

For additional information about our revenue recognition policy related to the BMS collaboration, see Part II, “Item 7.

Upon execution of the license agreement with Vertex, we received a $50.0 million upfront cash payment in the fourth quarter of 2023 and the 2024 annual license fee of $10.0 million in the first quarter of 2024.

We are eligible to receive an additional $50.0 million contingent upfront payment.

We are also eligible to receive further annual license fees, ranging from $10.0 million to $40.0 million annually, inclusive of certain sales-based annual license fee increases, through 2034.

For additional information about our revenue recognition policy related to the Vertex license agreement and BMS collaboration, see Part II, “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Revenue Recognition” included in the Annual Report.

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

For the foreseeable future we expect substantially all of our revenue will be generated from our license agreements with Vertex and VorBio, collaboration with BMS, and any other collaborations or license 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 development activities under our collaboration agreements.

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.

These costs are expensed as incurred and include:

• employee related expenses including salaries, benefits, and stock-based compensation expense;

• costs under clinical trial agreements with investigative sites;

• costs incurred under clinical trial agreements with investigative sites;

• costs associated with conducting our preclinical, process and scale-up development, manufacturing, clinical and regulatory activities, including fees paid to third-party professional consultants, service providers and suppliers;

• costs of purchasing lab supplies and non-capital equipment used in our preclinical activities and in manufacturing preclinical and clinical study materials;

• costs for research and development activities under our collaboration agreements ;

• costs incurred for research and development activities under our collaboration agreements ;

• facility costs, including rent, depreciation, and maintenance 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.

and the President and Fellows of Harvard College, we anticipate general and administrative expenses will continue to be significant .

officer insurance premiums, and investor relations costs.

Other Income, Net

For the nine months ended September 30, 2023 and 2022, other income, net consisted primarily of interest income, partially offset by accretion of discounts associated with other marketable securities.

For the three months ended March 31, 2024 and March 31, 2023, other income, net consisted primarily of interest income and the amortization of premiums or discounts on marketable securities.

Critical Accounting Policies and Estimates

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Results of Operations

Comparison of the Three Months ended September 30, 2023 and 2022

The following table summarizes our results of operations for the three months ended September 30, 2023 and 2022, 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, 2024 and 2023

The following table summarizes our results of operations for the three months ended March 31, 2024 and 2023, 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

Collaboration and other research and development revenues $ 5,336 $ 42 $ 5,294 n/m

March 31, Dollar Change Percentage Change

Collaboration and other research and development revenues $ 1,135 $ 9,851 $ (8,716) (88) %

Operating expenses:

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Other income, net

Other income, net — 1 (1) (100) %

Interest income, net 5,144 1,793 3,351 n/m

Other income (expense), net 6 (1,584) 1,590 n/m

Interest income, net 5,035 3,509 1,526 43 %

Total other income, net 5,041 1,925 3,116 n/m

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Collaboration and other research and development revenues

Collaboration and other research and development revenues were $5.3 million for the three months ended September 30, 2023 compared to $42.0 thousand for the same period in 2022.

The increase from the three months ended September 30, 2022 is primarily attributable to an upfront payment for the non-exclusive license to Vor Bio in the third quarter of 2023.

Collaboration and other research and development revenues were $1.1 million for the three months ended March 31, 2024 compared to $9.9 million for the same period in 2023.

The decrease from the three months ended March 31, 2023 is primarily attributable to the sale of our wholly-owned oncology assets and related licenses in January 2023.

Research and development expenses

Research and development expenses decreased by $0.8 million to $40.5 million for the three months ended September 30, 2023 compared to $41.3 million for the same period in 2022.

The following table summarizes our research and development expenses for the three months ended September 30, 2023 and 2022, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Research and development expenses increased by $11.0 million to $48.8 million for the three months ended March 31, 2024 compared to $37.8 million for the same period in 2023.

The following table summarizes our research and development expenses for the three months ended March 31, 2024 and 2023, 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

March 31, Dollar Change Percentage Change

Employee related expenses $ 13,683 $ 13,459 $ 224 2 %

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Facility expenses 5,219 5,681 (462) (8) %

Stock-based compensation expense 2,571 3,045 (474) (16) %

Stock-based compensation expenses 2,908 2,086 822 39 %

Sublicense and license fees 5,896 1,305 4,591 n/m

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Total research and development expenses $ 48,787 $ 37,804 $ 10,983 29 %

The decrease in research and development expenses for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was primarily attributable to:

• approximately $0.9 million in decreased other expenses related to cost savings with external manufacturing support services;

• approximately $0.6 million in decreased employee-related expenses related to reduced headcount as a result of our strategic reprioritization;

• approximately $0.5 million in decreased stock-based compensation expenses;

• approximately $0.3 million in decreased facility expenses.

These decreases were partially offset by:

The increase in research and development expenses for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily attributable to:

• approximately $5.2 million in increased external research and development expenses primarily related to clinical and manufacturing costs related to the continued progression our reni-cel program;

• approximately $4.6 million in increased sublicense and license fees paid in connection with licensing activity;

• approximately $0.1 million increase in external research and development expenses.

• approximately $0.8 million in increased stock-based compensation expenses due to the achievement of certain performance-based vesting of restricted stock units;

• approximately $0.6 million in increased other expenses to support reni-cel, including medical affairs and patient advocacy initiatives;

• approximately $0.2 million in increased employee-related expenses.

These increases were partially offset by approximately $0.5 million in decreased facility expenses.

General and administrative expenses

General and administrative expenses decreased by $1.2 million to $15.0 million for the three months ended September 30, 2023 compared to $16.2 million for the three months ended September 30, 2022.

The following table

summarizes our general and administrative expenses for the three months ended September 30, 2023 and 2022, 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 $19.3 million for the three months ended March 31, 2024 compared to $23.0 million for the three months ended March 31, 2023.

The following table summarizes our

general and administrative expenses for the three months ended March 31, 2024 and 2023, 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

March 31, Dollar Change Percentage Change

Employee related expenses $ 4,889 $ 4,127 $ 762 18 %

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Total general and administrative expenses $ 19,339 $ 23,008 $ (3,669) (16) %

The decrease in general and administrative expenses for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was primarily attributable to:

The decrease in general and administrative expenses for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily attributable to:

• approximately $6.1 million in decreased professional service expenses related to one-time expenses to support strategic initiatives and business development activities in 2023;

• approximately $1.1 million in decreased intellectual property and patent related fees due to reduced legal activity.

• approximately $0.8 million in decreased employee related expenses related to reduced headcount as a result of our strategic reprioritization;

• approximately $0.7 million in decreased stock-based compensation expenses due to a reduction in the market price of our common stock, resulting in a lower valuation of equity awards granted;

• approximately $0.1 million in decreased facility and other expenses.

These decreases were partially offset by approximately $1.2 million in increased professional service expenses to support strategic initiatives and business development activities.

Other income, net

For the three months ended September 30, 2023 and September 30, 2022 other income, net was $5.1 million and $1.8 million, respectively, which was primarily attributable to interest income, partially offset by accretion of discounts associated with other marketable securities.

The increase for three months ended September 30, 2023 was attributable to increased invested balances as well as favorable market rates.

Comparison of the Nine Months ended September 30, 2023 and 2022

The following table summarizes our results of operations for the nine months ended September 30, 2023 and 2022, 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 $ 18,074 $ 13,176 $ 4,898 37 %

Operating expenses:

Research and development 108,095 122,960 (14,865) (12) %

General and administrative 55,198 52,720 2,478 5 %

Total operating expenses 163,293 175,680 (12,387) (7) %

Other income, net

Other (expense) income, net (1,590) 4 (1,594) n/m

Interest income, net 12,464 2,806 9,658 n/m

Total other income, net 10,874 2,810 8,064 n/m

Net loss $ (134,345) $ (159,694) $ 25,349 (16) %

Collaboration and other research and development revenues

Collaboration and other research and development revenues increased by $4.9 million to $18.1 million for the nine months ended September 30, 2023 compared to $13.2 million for nine months ended September 30, 2022.

The increase was primarily related to the sale of our wholly owned oncology assets and licenses in January 2023, as well as an upfront payment for a non-exclusive license to Vor Bio in the third quarter of 2023, partially offset by the exercises of a program opt-in under our collaboration with BMS in 2022 for which there was no similar activity in 2023.

Research and development expenses

Research and development expenses decreased by $14.9 million to $108.1 million for the nine months ended September 30, 2023 compared to $123.0 million for the nine months ended September 30, 2022.

The following table summarizes our research and development expenses for the nine months ended September 30, 2023 and 2022, 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

Employee related expenses $ 34,970 $ 35,502 $ (532) (1) %

External research and development expenses 37,110 52,073 (14,963) (29) %

Facility expenses 16,053 14,476 1,577 11 %

Stock-based compensation expenses 7,182 9,803 (2,621) (27) %

Sublicense and license fees 4,700 4,526 174 4 %

Other expenses 8,080 6,580 1,500 23 %

Total research and development expenses $ 108,095 $ 122,960 $ (14,865) (12) %

The decrease in research and development expenses for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was primarily attributable to:

• approximately $15.0 million in decreased external research and development expenses related to our reprioritization and targeted focus on our EDIT-301 program;

• approximately $2.6 million in decreased stock-based compensation expense due primarily to a reduction in the market price of our common stock, resulting in a lower valuation of equity awards granted ;

• approximately $0.5 million in decreased employee related expenses.

These decreases were partially offset by:

• approximately $1.6 million in increased facility expenses primarily related to increased rent expense incurred in connection with a lease extension for office, manufacturing and lab space;

• approximately $1.5 million in increased other expenses attributable to consulting and external fees to support patient advocacy and medical affairs initiatives;

• approximately $0.2 million in increased sublicense and license fees.

General and administrative expenses

General and administrative expenses increased by $2.5 million to $55.2 million for the nine months ended September 30, 2023 compared to $52.7 million for the nine months ended September 30, 2022.

The following table summarizes our general and administrative expenses for the nine months ended September 30, 2023 and 2022, 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

Employee related expenses $ 12,663 $ 13,067 $ (404) (3) %

Professional service expenses 17,190 7,075 10,115 n/m

Intellectual property and patent related fees 10,687 10,535 152 1 %

Stock-based compensation expenses 7,271 14,127 (6,856) (49) %

Facility and other expenses 7,387 7,916 (529) (7) %

Total general and administrative expenses $ 55,198 $ 52,720 $ 2,478 5 %

The increase in general and administrative expenses for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was primarily attributable to:

• approximately $10.1 million in increased professional service expenses to support strategic initiatives and business development activities;

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

These increases were partially offset by:

• approximately $6.9 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 ;

• approximately $0.5 million in decreased facility and other expenses;

• approximately $0.4 million in decreased employee related expenses.

These decreases were partially offset by the following:

• approximately $2.3 million in increased stock-based compensation expenses due to the achievement of certain performance-based vesting of restricted stock units;

• approximately $0.8 million in increased employee related expenses related to increased headcount;

• approximately $0.5 million in increased facility and other expenses primarily related to increased facility operation costs.

Other income, net

For the nine months ended September 30, 2023 and September 30, 2022, other income, net was $10.9 million and $2.8 million, respectively, which was primarily attributable to interest income, partially offset by accretion of discounts associated with other marketable securities.

The increase for the nine months ended September 30, 2023 is attributable to increased invested balances and favorable market rates.

For the three months ended March 31, 2024, and March 31, 2023 other income, net was $5.0 million and $1.9 million, respectively, which primarily relates to interest income and accretion of discounts and premiums associated with marketable securities.

The increase is attributable to increased invested balances and favorable market rates.

Liquidity and Capital Resources

Sources of Liquidity

In June 2023, we completed a public offering in which we sold 12,500,000 shares of our common stock and received net proceeds of approximately $117.1 million after deducting underwriting discounts and commissions and other offering costs.

As of September 30, 2023, we have raised an aggregate of $1.0 billion 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, 2023, we had cash, cash equivalents and marketable securities of $446.4 million.

As of March 31, 2024, we have raised an aggregate of $1.0 billion 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 our research collaboration with BMS, our former strategic alliance with Allergan, and payments received under the license agreement with Vertex.

As of March 31, 2024, we had cash, cash equivalents and marketable securities of $376.8 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, 2023, we have not sold any shares of our common stock under the ATM Facility.

We amended the common stock sales agreement with Cowen in February 2024 in connection with filing a new registration statement.

As of March 31, 2024, 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 and our other collaboration and license agreements.

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

As of September 30, 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 nine months ended September 30, 2023 and 2022 (in thousands):

Nine Months Ended

September 30,

Our ability to earn applicable milestone and other payments and the timing of earning these amounts are dependent upon the

timing and outcome of development, regulatory and commercial activities and, as such, are uncertain at this time.

As of March 31, 2024, our right to contingent payments under our collaboration agreement with BMS and our license agreement with Vor Bio, as well as our contingent upfront payment and annual license fees with Vertex, are 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, 2024 and 2023 (in thousands):

Three Months Ended

Net cash (used in) provided by:

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Financing activities 192 —

Net (decrease) increase in cash, cash equivalents, and restricted cash $ (58,984) $ 7,185

Net decrease in cash, cash equivalents, and restricted cash $ (54,425) $ (12,501)

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 $109.9 million for the nine months ended September 30, 2023, which primarily consisted of operating expenses that related to increasing our research efforts, the focused progression of clinical and manufacturing activities in support of the EDIT-301 program, and supporting business operations.

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 related to our preclinical and clinical activities, sublicense and license fees, and increased staffing costs to support various business operations.

Net Cash Used in Investing Activities

Net cash used in investing activities was approximately $66.6 million for the nine months ended September 30, 2023, primarily related to purchases of marketable securities of $219.8 million, partially offset by the proceeds from the maturities of marketable securities of $156.6 million.

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 operating activities was approximately $49.9 million for the three months ended March 31, 2024, which primarily consisted of operating expenses that related to increasing our research efforts, the focused progression of clinical and manufacturing activities in support of the reni-cel program, sublicense and license payments, and supporting business operations.

Net cash used in operating activities was approximately $35.8 million for the three months ended March 31, 2023, which primarily consisted of progressing our reni-cel program and supporting business operations.

Net Cash (Used in) Provided by Investing Activities

Net cash used in investing activities was approximately $4.7 million for the three months ended March 31, 2024, primarily related to purchases of marketable securities of $86.2 million, partially offset by the proceeds from the maturities of marketable securities of $83.4 million.

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 purchases of marketable securities of $40.8 million and purchases of property and equipment of $1.8 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was approximately $117.5 million for the nine months ended September 30, 2023, primarily related to proceeds from our June 2023 offering of common stock of $117.1 million after deducting underwriting discounts and commissions and other offering costs , and proceeds received from issuance of common stock under the employee stock purchase plan of $0.4 million.

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 $0.2 million for the three months ended March 31, 2024, related to the 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.

Funding Requirements

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

scale our manufacturing capabilities and expand capacity, including capacity at third-party manufacturers, for EDIT-301;

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

further advance our research programs and our preclinical development activities;

seek to identify additional research programs and additional product candidates;

seek to identify product candidates and additional research programs;

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

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and incur costs associated with operating as a public company.

In addition, if we obtain marketing approval for any product candidate that we identify and develop, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution to the extent that such sales, marketing, and distribution are not the responsibility of a collaborator.

In addition, if we

obtain marketing approval for any product candidate that we identify and develop, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution to the extent that such sales, marketing, and distribution are not the responsibility of a collaborator.

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

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, 2023, will enable us to fund our operating expenses and capital expenditure requirements into third quarter of 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 expect that our existing cash, cash equivalents and marketable securities on March 31, 2024, together with the near-term annual license fees and the contingent upfront payment payable under our license agreement with Vertex, will enable us to fund our operating expenses and capital expenditure requirements into 2026 .

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.

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 amount and timing of future funding requirements, both near- and long-term, will depend on many factors, including, but not limited to:

• 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-301 to treat SCD and TDT;

• the costs of progressing the clinical development of reni-cel to treat SCD and TDT;

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

• 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;

• the costs of establishing and maintaining a supply chain for the development and manufacture of our product candidates;

• 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 BMS;

• whether BMS 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, including 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;

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• the costs of reimbursing our licensors for the prosecution and maintenance of the patent rights in-licensed by us;

• the costs of operating as a public company.

• our ability to establish and maintain healthcare coverage and adequate reimbursement for any product candidates for which we receive regulatory approval.

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, even if we successfully identify and develop product candidates that are approved, we will require significant additional amounts in order to launch and commercialize our product candidates and may not achieve commercial success.

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

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

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

Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

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

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Contractual Obligations

As of September 30, 2023, we had non-cancelable operating leases with future minimum lease payments for a total of $41.9 million, of which $3.7 million will be payable in 2023.

As of March 31, 2024, we had non-cancelable operating leases with future minimum lease payments for a total of $40.3 million, of which $11.5 million will be payable in 2024.

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.

In the second quarter of 2023, we entered into a license and service agreement pursuant to which we will lease manufacturing space for our continued research and development activities.

As of September 30, 2023, the lease has not commenced for accounting purposes and it is not expected to commence until the second quarter of 2024.

As of March 31, 2024, the lease had not commenced for accounting purposes and it is not expected to commence until the second quarter of 2024.

The license and service agreement provides for total remaining lease payments of up to $85.4 million over a 10-year lease term.

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Business—Our Collaborations and Licensing Strategy” in the Annual Report.

We also enter into contracts in the normal course of business with contract research organizations, contract manufacturing organizations and other vendors to assist in the performance of our research and development activities and

other services and products for operating purposes.

These contracts generally provide for termination at any time upon prior notice.

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