What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-04 compared with 2024-08-07 · 99 added, 112 removed, 238 unchanged (47% of the section changed)

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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 previously completed enrollment of the adult cohort and continue to dose adult patients.

In the second quarter of 2024, we completed enrollment of the adolescent cohort and are concurrently manufacturing drug product and scheduling dosing for the initial adolescent cohort patients.

We continue to dose adult patients and have dosed 28 patients as of the date of this Quarterly Report on Form 10-Q.

We previously completed enrollment of the adult and adolescent cohorts and continue to manufacture drug product and schedule dosing for the initial adolescent cohort patients.

Based on our discussions to date with the U.S.

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In June 2024, we presented new safety and efficacy data as of a May 8, 2024 data cutoff date in 18 patients treated with reni-cel in the RUBY clinical trial and in seven patients treated with reni-cel in the EdiTHAL clinical trial.

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

In the RUBY clinical trial, all 18 patients were free of vaso-occlusive events since reni-cel infusion with follow-up ranging from 2.4 to 22.8 months.

Patients demonstrated early normalization of total hemoglobin (“Hb”) with a mean within the normal range at more than 14g/dL and rapid and sustained improvements in fetal hemoglobin (“HbF”) well above levels of over 40%.

Across patients with at least six months follow-up, at month six, the mean total Hb was 14.3 g/dL for nine patients with a mean HbF of 48.5% for 10 patients.

The mean percentage of F-cells increased early and were sustained at over 90% from month four through subsequent follow-ups for all 12 patients with at least four months follow-up.

Mean corpuscular fetal hemoglobin of HbF-containing red cells (F-cells) was sustained above the anti-sickling threshold of 10 pg/F-cell by month three after reni-cel infusion for all 14 patients with at least three months follow-up.

All patients in the RUBY trial showed sustained high levels of editing in the HBG1 and HBG2 promoter regions.

Markers of hemolysis had been normalized or improved in patients treated with reni-cel.

Reni-cel 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 all 18 evaluated RUBY trial patients.

Patients in the RUBY trial underwent a median of two apheresis and mobilization cycles.

After reni-cel infusion, all 18 patients demonstrated successful neutrophil and platelet engraftment.

Neutrophil engraftment occurred at a median of 23 days, and platelet engraftment occurred at a median of 24 days.

No serious adverse events related to reni-cel treatment in the RUBY trial have been reported.

In the EdiTHAL clinical trial, patients demonstrated early and robust total Hb and HbF increases, with total Hb rising above the transfusion independence threshold of 9.0 g/dL.

For the six patients with at least six months follow-up, the mean total Hb and HbF concentrations at month six were 12.1 g/dL and 10.9 g/dL, respectively, which were sustained at or above the transfusion threshold from six months through subsequent follow-ups.

All seven patients were transfusion free for a range of 4.1 to 12.8 months after receiving the last red blood cell transfusion at 0.5-2.2 months post-reni-cel infusion.

All patients in the EdiTHAL trial showed sustained high levels of editing in the HBG1 and HBG2 promoter regions.

Reni-cel was well-tolerated and demonstrated a safety profile consistent with myeloablative conditioning with busulfan and autologous hematopoietic stem cell transplant by all seven evaluated EdiTHAL trial patients.

All patients in the EdiTHAL trial underwent one apheresis and mobilization cycle.

After reni-cel infusion, all seven patients demonstrated successful neutrophil and platelet engraftment.

Neutrophil engraftment occurred at a median of 23 days, and platelet engraftment occurred at a median of 38 days.

No serious adverse events related to reni-cel treatment in the EdiTHAL trial have been reported.

We are on track to present additional safety and efficacy clinical data, including hematology parameters, vaso-occlusive events, and patient reported outcomes, from 28 patients in the RUBY trial in December 2024 at the American Society of Hematology Annual Meeting and Exposition, as well as additional clinical data from the EdiTHAL trial by year-end 2024.

In October 2024, we announced that we have initiated a global process to partner or out-license reni-cel to focus our resources on in vivo pipeline development.

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.

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Using this approach, we are pursuing an in vivo strategy aimed at driving functional upregulation of gene expression to address loss of function or deleterious mutations in genetic diseases in rare and orphan disease patient populations, from which we intend to expand to diseases with larger patient 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.

We are utilizing lipid nanoparticles for delivery of gene editing cargo into multiple tissue types, while also evaluating additional, next generation delivery technology.

In October 2024, we announced that we achieved in vivo preclinical proof of concept of HBG1/2 editing in hematopoietic stem and progenitor cells (“HSPC”) and fetal hemoglobin (“HbF”) induction in humanized mice engrafted with human hematopoietic stem cells and lacking their own hematopoietic cells.

Utilizing a hematopoietic stem cell targeting strategy and a novel, Editas-proprietary targeted lipid nanoparticle (“tLNP”) for extrahepatic tissue delivery, we enabled an editing level of 29% of HSPCs after a single dose.

Editing with our proprietary tLNP formulation resulted in the functional outcome of HbF induction, indicated by the presence of HbF expressing human red blood cells (on average 20%) that populate in the host by one month.

We expect to provide an update on our in vivo progress and pipeline development in the first quarter of 2025.

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 diseases.

medicines targeting the BCL11A gene in the fields of SCD and TDT, including Vertex’s CASGEVY TM (exagamglogene autotemcel).

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 CASGEVYTM (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.

The license agreement further provides for the payment by Vertex of a potential additional $50.0 million contingent upfront payment and 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.

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

In October 2024, we entered into an agreement (the “DRI Agreement”) with a wholly owned subsidiary of DRI Healthcare Trust (“DRI”) providing for an upfront cash payment by DRI to us of $57.0 million in exchange for the acquisition by DRI of up to 100% of certain of the annual license fees owed to us under the Vertex license agreement, which fees range from $5.0 million to $40.0 million per year (inclusive of certain sales-based annual license fees that may become due), and a mid-double-digit percentage of the $50.0 million contingent upfront payment, in each case after subtracting amounts owed by us to Broad and Harvard.

We have retained rights to our portions of certain other sales-based annual license fees and the contingent upfront payment that may become due under the license agreement with Vertex, and the amounts that correspond to our licensor obligations.

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

(“Vor Bio”), providing Vor Bio a non-exclusive license for the development of ex vivo Cas9 gene edited HSC therapies for the treatment and/or prevention of hematological malignancies.

(“Vor Bio”), providing Vor Bio a non-exclusive license for the development of ex vivo Cas9 gene edited HSC therapies for the treatment and/or prevention of

hematological malignancies.

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.

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Since inception, we have incurred significant operating losses.

Our net losses were $129.6 million and $89.3 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, we had an accumulated deficit of $1.4 billion.

Our net losses were $191.7 million and $134.3 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, we had an accumulated deficit of $1.4 billion.

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

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We no longer receive research funding support.

During the three months ended June 30, 2024 and three months ended June 30, 2023, we did not recognize revenue related to our collaboration with BMS.

As of June 30, 2024, we had $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.

During the three months ended September 30, 2024 and three months ended September 30, 2023, we did not recognize revenue related to our collaboration with BMS.

As of September 30, 2024, we had $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.

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Pursuant to the license agreement with Vertex, we received a $50.0 million upfront cash payment in the fourth quarter of 2023 upon execution of the agreement 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.

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Other Income, Net

For the six months ended June 30, 2024 and June 30, 2023, other income, net consisted primarily of interest income and the amortization of premiums or discounts on marketable securities.

For the nine months ended September 30, 2024 and September 30, 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 June 30, 2024 and 2023

The following table summarizes our results of operations for the three months ended June 30, 2024 and 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Comparison of the Three Months ended September 30, 2024 and 2023

The following table summarizes our results of operations for the three months ended September 30, 2024 and 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Three Months Ended

June 30, Dollar Change Percentage Change

September 30, Dollar Change Percentage Change

Collaboration and other research and development revenues $ 61 $ 5,336 $ (5,275) (99) %

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Collaboration and Other Research and Development Revenues

Collaboration and other research and development revenues were $0.5 million for the three months ended June 30, 2024 compared to $2.9 million for the same period in 2023.

The decrease from the three months ended June 30, 2023 is primarily attributable to reduced drug supply activity with collaborators.

Collaboration and other research and development revenues were $0.1 million for the three months ended September 30, 2024 compared to $5.3 million for the same period in 2023.

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

Research and Development Expenses

Research and development expenses increased by $24.4 million to $54.2 million for the three months ended June 30, 2024 compared to $29.8 million for the same period in 2023.

The following table summarizes our research and development expenses for the three months ended June 30, 2024 and 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Research and development expenses increased by $7.1 million to $47.6 million for the three months ended September 30, 2024 compared to $40.5 million for the same period in 2023.

The following table summarizes our research and development expenses for the three months ended September 30, 2024 and 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Three Months Ended

June 30, Dollar Change Percentage Change

September 30, Dollar Change Percentage Change

Employee related expenses $ 14,486 $ 11,198 $ 3,288 29 %

External research and development 27,025 7,117 19,908 n/m

External research and development 20,058 17,593 2,465 14 %

Facility expenses 7,229 5,073 2,156 42 %

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Sublicense and license fees 307 2,388 (2,081) (87) %

Other expenses 3,172 3,519 (347) (10) %

Other expenses 3,511 1,689 1,822 n/m

Total research and development expenses $ 47,639 $ 40,512 $ 7,127 18 %

The increase in research and development expenses for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily attributable to:

• approximately $19.9 million in increased external research and development expenses primarily related to clinical and manufacturing costs related to the accelerated progression of our reni-cel program as well as costs attributable to in vivo research and discovery;

The increase in research and development expenses for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily attributable to:

• approximately $3.3 million in increased employee-related expenses related to increased headcount to support manufacturing, quality, and clinical work related to our reni-cel program;

• approximately $2.5 million in increased external research and development expenses primarily related to clinical and manufacturing costs related to the accelerated progression of our reni-cel program as well as costs attributable to in vivo research and discovery;

• approximately $2.2 million in increased facility expenses primarily related to increased rent expense incurred in connection with a lease commencement for manufacturing space in the second quarter of 2024;

• approximately $1.8 million in increased other expenses related to external manufacturing cost savings realized in the third quarter of 2023.

These increases were partially offset by the following:

• approximately $0.4 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 $0.3 million in decreased other expenses;

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

• approximately $2.1 million in decreased sublicense and license fees related to reduced licensing activity in the third quarter of 2024 compared to 2023;

• approximately $0.5 million in decreased stock-based compensation expense.

General and Administrative Expenses

General and administrative expenses increased by $1.0 million to $18.2 million for the three months ended June 30, 2024 compared to $17.2 million for the three months ended June 30, 2023.

The following table summarizes our general and administrative expenses for the three months ended June 30, 2024 and 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

General and administrative expenses increased by $3.1 million to $18.1 million for the three months ended September 30, 2024 compared to $15.0 million for the three months ended September 30, 2023.

The following table summarizes our general and administrative expenses for the three months ended September 30, 2024 and 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Three Months Ended

June 30, Dollar Change Percentage Change

September 30, Dollar Change Percentage Change

Employee related expenses $ 5,902 $ 3,910 $ 1,992 51 %

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Total general and administrative expenses $ 18,088 $ 14,987 $ 3,101 21 %

The increase in general and administrative expenses for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily attributable to:

• approximately $1.0 million in increased intellectual property and patent related fees due to increased legal activity;

• approximately $0.3 million in increased facility and other expenses primarily related to increased facility operation costs and information technology costs;

• approximately $0.2 million in increased stock-based compensation expenses;

• approximately $0.2 million in increased employee related expenses.

These increases were partially offset by approximately $0.6 million in decreased professional service expenses related to expenses to support strategic initiatives and business development activities in 2023.

The increase in general and administrative expenses for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily attributable to:

• approximately $2.0 million in increased employee related expenses related to increased headcount to support business operations due to the progression of our reni-cel program;

• approximately $0.6 million in increased stock-based compensation expenses related to increased headcount;

• approximately $0.5 million in increased intellectual property and patent related fees;

• approximately $0.4 million in increased professional service expenses.

These increases were partially offset by approximately $0.4 million in decreased facility and other expenses.

Other Income, Net

For the three months ended June 30, 2024, and June 30, 2023 other income, net was $4.3 million and $3.8 million, respectively, which primarily relates to interest income and accretion of discounts and premiums associated with marketable securities.

The increase is attributable to favorable market rates.

Comparison of the Six Months ended June 30, 2024 and 2023

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Six Months Ended

June 30, Dollar Change Percentage Change

For the three months ended September 30, 2024, and September 30, 2023 other income, net was $3.5 million and $5.1 million, respectively, which primarily relates to interest income and accretion of discounts and premiums associated with marketable securities.

The decrease is attributable to a reduction in our investments for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Comparison of the Nine Months ended September 30, 2024 and 2023

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023, 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 $ 1,710 $ 18,074 $ (16,364) (91) %

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Other income, net

Other income (expense), net 5 (1,590) 1,595 n/m

Other income (expense), net — (1,590) 1,590 (100) %

Interest income, net 12,861 12,464 397 3 %

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Collaboration and Other Research and Development Revenues

Collaboration and other research and development revenues decreased by $11.1 million to $1.6 million for the six months ended June 30, 2024 compared to $12.7 million for six months ended June 30, 2023.

The decrease was primarily related to the sale of our wholly owned oncology assets and licenses in January 2023.

Collaboration and other research and development revenues decreased by $16.4 million to $1.7 million for the nine months ended September 30, 2024 compared to $18.1 million for nine months ended September 30, 2023.

The decrease was primarily related to the sale of our wholly owned oncology assets and licenses in January 2023 and the receipt of the upfront payment for the non-exclusive license to Vor Bio in the third quarter of 2023, for which there was no equivalent revenue in 2024 due to the decrease of collaboration license activity.

Research and Development Expenses

Research and development expenses increased by $35.4 million to $103.0 million for the six months ended June 30, 2024 compared to $67.6 million for the six months ended June 30, 2023.

The following table summarizes our research development expenses for the six months ended June 30, 2024 and 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Six Months Ended

June 30, Dollar Change Percentage Change

Research and development expenses increased by $42.5 million to $150.6 million for the nine months ended September 30, 2024 compared to $108.1 million for the nine months ended September 30, 2023.

The following table summarizes our research development expenses for the nine months ended September 30, 2024 and 2023, 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 $ 41,830 $ 34,970 $ 6,860 20 %

External research and development expenses 44,613 19,518 25,095 n/m

External research and development expenses 64,670 37,110 27,560 74 %

Facility expenses 19,818 16,053 3,765 23 %

Stock-based compensation expenses 7,081 7,182 (101) (1) %

Sublicense and license fees 6,753 2,312 4,441 n/m

Sublicense and license fees 7,060 4,700 2,360 50 %

Other expenses 10,177 8,080 2,097 26 %

Total research and development expenses $ 150,636 $ 108,095 $ 42,541 39 %

The increase in research and development expenses for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily attributable to:

The increase in research and development expenses for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily attributable to:

• approximately $27.6 million in increased external research and development expenses primarily related to clinical and manufacturing costs related to the accelerated progression of our reni-cel program as well as costs attributable to in vivo research and discovery;

• approximately $4.4 million in increased sublicense and license fees paid in connection with licensing activity;

• approximately $6.9 million in increased employee related expenses related to increased headcount to support manufacturing, quality, and clinical work related to our reni-cel program;

• approximately $3.8 million in increased facility expenses primarily related to increased rent expense incurred in connection with a lease commencement for manufacturing space;

• approximately $0.4 million in increased stock-based compensation expense;

• approximately $0.3 million in increased other expenses.

• approximately $2.4 million in increased sublicense and license fees paid in connection with licensing activity in 2024;

• approximately $2.1 million in increased other expenses related to increased consulting fees to support clinical and quality initiatives in connection with our reni-cel program.

These increases were partially offset by $0.1 million in decreased stock-based compensation expense.

General and Administrative Expenses

General and administrative expenses decreased by $2.7 million to $37.5 million for the six months ended June 30, 2024 compared to $40.2 million for the six months ended June 30, 2023.

The following table summarizes our general and administrative expenses for the six months ended June 30, 2024 and 2023, together with the changes in those items in dollars (in thousands) and the respective percentages of change:

Six Months Ended

June 30, Dollar Change Percentage Change

General and administrative expenses increased by $0.4 million to $55.6 million for the nine months ended September 30, 2024 compared to $55.2 million for the nine months ended September 30, 2023.

The following table summarizes our general and administrative expenses for the nine months ended September 30, 2024 and 2023, 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 $ 15,594 $ 12,663 $ 2,931 23 %

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Total general and administrative expenses $ 55,633 $ 55,198 $ 435 1 %

The decrease in general and administrative expenses for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily attributable to:

• approximately $6.7 million in decreased professional service expenses primarily related to one-time expenses to support strategic initiatives and business development activities in 2023;

• approximately $0.1 million in decreased intellectual property and patent related fees due to reduced legal activity related to reductions in intellectual property defense.

These decreases were partially offset by:

The increase in general and administrative expenses for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily attributable to:

• approximately $3.0 million in increased stock-based compensation expenses due primarily to the achievement of certain performance-based vesting of restricted stock units in 2024;

• approximately $0.9 million in increased employee related expenses related to increased headcount to support business operations;

• approximately $0.8 million in increased facility and other expense primarily related to increased facility operation costs and information technology costs.

• approximately $2.9 million in increased employee related expenses related to increased headcount to support business operations and progression of reni-cel program;

• approximately $0.4 million in increased intellectual property and patent related fees;

• approximately $0.3 million in increased facility and other expense;

These increases were partially offset by approximately $6.3 million in decreased professional service expenses primarily related to one-time expenses to support strategic initiatives and business development activities in the nine months ended September 30, 2023.

Other Income, Net

For the six months ended June 30, 2024 and June 30, 2023, other income, net was $9.3 million and $5.7 million, respectively, which was primarily attributable to interest income, partially offset by accretion of discounts associated with other marketable securities.

The increase for the six months ended June 30, 2024 is attributable to increased invested balances and favorable market rates.

For the nine months ended September 30, 2024 and September 30, 2023, other income, net was $12.9 million and $10.9 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, 2024 is attributable to increased invested balances throughout the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 and favorable market rates.

Liquidity and Capital Resources

Sources of Liquidity

As of June 30, 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 .

As of September 30, 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 June 30, 2024, we had cash, cash equivalents and marketable securities of $318.3 million.

As of September 30, 2024, we had cash, cash equivalents and marketable securities of $265.1 million.

Subsequently, in October 2024, we received the $57.0 million payment under the DRI Agreement.

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”).

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

As of June 30, 2024, we have not sold any shares of our common stock under the ATM Facility.

As of September 30, 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 June 30, 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 six months ended June 30, 2024 and 2023 (in thousands):

Six Months Ended

As of September 30, 2024, our right to contingent payments under our collaboration agreement with BMS and our license agreement with Vor Bio, as well as the retained portions of the contingent upfront payment and other amounts under our license agreement with Vertex, are 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, 2024 and 2023 (in thousands):

Nine Months Ended

September 30,

Net cash (used in) provided by:

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Financing activities 514 117,525

Net (decrease) increase in cash, cash equivalents, and restricted cash $ (59,211) $ 79,295

Net decrease in cash, cash equivalents, and restricted cash $ (27,820) $ (58,984)

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 $106.9 million for the six months ended June 30, 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 $74.5 million for the six months ended June 30, 2023, which primarily consisted of progressing our reni-cel program and supporting business operations.

Net cash used in operating activities was approximately $159.5 million for the nine months ended September 30, 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 $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 reni-cel, and supporting business operations.

Net Cash Provided by Investing Activities

Net cash provided by investing activities was approximately $47.2 million for the six months ended June 30, 2024, primarily related to the proceeds from the maturities of marketable securities of $138.8 million, and partially offset by the purchases of marketable securities of $86.2 million and purchases of property and equipment of $5.4 million.

Net cash provided by investing activities was approximately $36.2 million for the six months ended June 30, 2023, primarily related to proceeds from maturities of marketable securities of $107.6 million, partially offset by purchases of marketable securities of $68.2 million and purchases of property and equipment of $3.2 million.

Net cash provided by investing activities was approximately $131.2 million for the nine months ended September 30, 2024, primarily related to the proceeds from the maturities of marketable securities of $225.7 million, and partially offset by the purchases of marketable securities of $86.2 million and purchases of property and equipment of $8.3 million.

Net cash used in investing activities was approximately $66.6 million for the nine months ended September 30, 2023, primarily related to the 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 Financing Activities

Net cash provided by financing activities was approximately $0.5 million for the six months ended June 30, 2024, related to the proceeds received from issuance of common stock under the employee stock purchase plan of $0.3 million and exercises of options for our common stock of $0.2 million.

Net cash provided by financing activities was approximately $117.5 million for the six months ended June 30, 2023, primarily related to proceeds from 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 $0.5 million for the nine months ended September 30, 2024, related to the proceeds received from issuance of common stock under the employee stock purchase plan of $0.3 million and exercises of options for our common stock of $0.2 million.

Net cash provided by financing activities was approximately $117.5 million for the nine months ended September 30, 2023, primarily related to proceeds from 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

Funding Requirements

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

We expect that our existing cash, cash equivalents and marketable securities on June 30, 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 .

We expect that our existing cash, cash equivalents and marketable securities on September 30, 2024, together with the upfront cash payment from DRI in October 2024, and the retained portions of the payments payable under our license agreement with Vertex, will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 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.

We could utilize our available capital resources sooner than we currently expect.

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

We could utilize our available capital

resources sooner than we currently expect.

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

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

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

• the outcome of our process to partner or out-license reni-cel to focus our resources on in vivo pipeline development.

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.

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Contractual Obligations

As of June 30, 2024, we had operating leases with future minimum lease payments for a total of $44.6 million, of which $10.8 million will be payable in 2024.

As of September 30, 2024, we had operating leases with future minimum lease payments for a total of $44.0 million, of which $5.9 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.

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The lease commenced April 1, 2024.

We may terminate the license and service agreement at our discretion upon twelve months' prior written notice.

In September 2024, we modified the lease, and as a result of the modification the lease payments decreased and the notification period for the termination of the license and service agreement increased from 12 months’ prior written notice to 18 months’ prior written notice.

The termination of the license and service agreement continues to remain at our discretion.

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.

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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