Editas Medicine, Inc. 10-Q

Item 2. 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 fiscal year ended December 31, 2024, which was filed with the Securities and Exchange Commission (“SEC”) on March 5, 2025 (the “Annual Report”). This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. All statements addressing our future operating performance and development timelines that we expect or anticipate will occur in the future, as well as expectations for cash runway, are forward-looking statements. There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements, including uncertainties inherent in the initiation and completion of pre-clinical studies and clinical development of our product candidates; availability and timing of results from pre-clinical studies; expectations for regulatory approvals to conduct trials or to market products and availability of funding sufficient for our foreseeable and unforeseeable operating expenses and capital expenditure requirements. These and other risks are described in greater detail in the Annual Report under the captions “Risk Factor Summary” and Part I, “Item 1A. Risk Factors,” as updated by our subsequent filings with the SEC. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make. You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. 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. Overview We are a pioneering 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 the development of in vivo gene editing medicines utilizing functional upregulation, which aims to increase the expression and function of a normal gene copy and its normal protein function to treat diseases caused by genetic mutations that eliminate or disrupt normal function. We believe the ability to provide in vivo gene editing, in which the medicine is injected or infused into the patient to edit the cells inside their body, and functionally upregulates normal gene expression and normal protein function in the target tissues holds the potential to significantly expand the addressable therapeutic possibilities of CRISPR-based gene editing. To that end, our preclinical efforts are also focused on the creation of a “plug ‘n play” lipid nanoparticle (“LNP”) platform that enables delivery of the gene editing cargo to multiple cells and tissues, including hematopoietic stem cells (“HSCs”), the liver and other cells and tissues. We will select the lead development candidate to advance towards human proof-of-concept in September 2025 and are on track to submit an investigational new drug application by mid-2026 and achieve human proof-of-concept by year-end 2026. We previously demonstrated proof-of-concept of our functional upregulation strategy in our clinical trials of renizgamglogene autogedtemcel (“reni-cel”), an experimental ex vivo gene-edited medicine to treat sickle cell disease (“SCD”) and transfusion-dependent beta thalassemia (“TDT”). Despite the robust and clinically meaningful improvements observed in these trials, we determined in December 2024 not to pursue commercialization for reni-cel in order to optimize our cost structure and accelerate our intent to achieve human proof of concept of our in vivo gene editing medicines in approximately two years. However, leveraging our differentiated approach and the insights gained from these trials, we are pursuing next generation in vivo gene editing medicines targeting HSCs for the treatment of SCD and beta thalassemia. In January 2025, we announced in vivo preclinical proof of concept of editing HSCs in non-human primates (“NHPs”), and in June 2025 we shared new in vivo preclinical data demonstrating therapeutically relevant levels of HBG1/2 promoter editing in HSCs with a single dose of a novel targeted LNP (“tLNP”) in NHPs. 21 Table of Contents Beyond hemoglobinopathies, our discovery and development efforts are focused on in vivo gene editing medicines in liver cells and other cells and tissues. In May 2025, we shared preclinical proof-of-concept data for an undisclosed liver target using in vivo CRISPR editing to upregulate target protein expression and reduce a disease-associated biomarker in a relevant mouse model. We previously announced in vivo delivery to two additional cell types in humanized mice using our proprietary LNP targeting platform and remain on track to establish and disclose a further target cell type or tissue by the end 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 to build our preclinical pipeline and accelerate the achievement of our goal of delivering lifesaving medicines to patients with previously untreatable diseases. Through in-licensing of complementary technologies, we can expand our existing gene editing platform and further drive the development of our in vivo pipeline. This was recently demonstrated with our entry in 2024 into a collaboration and license agreement to access LNPs targeting the liver, which we used in our achievement of in vivo editing of liver cells in NHPs. We also actively seek opportunities to out-license and partner our robust intellectual property portfolio to drive the development of CRISPR-based medicines in therapeutic areas outside of our core focus and to provide non-dilutive capital. For example, in cellular therapy medicines, we are leveraging partnerships to progress engineered cell medicines to treat various cancers, including in our collaboration with Bristol Myers Squibb Company (“BMS”) through its wholly owned subsidiary, Juno Therapeutics, Inc. (“Juno Therapeutics”). This collaboration, which leverages our Cas9 and Cas12a platform technologies, seeks to advance alpha-beta T-cell experimental medicines for the treatment of solid and liquid tumors, and has resulted in 14 total programs to date. In addition, 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. The license agreement further provides for the payment by Vertex of a potential additional $50.0 million contingent upfront payment and further future fixed and sales-based 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 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. 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 and clinical trials. 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, payments received under our research collaboration with BMS through its wholly owned subsidiary Juno Therapeutics, our former strategic alliance with Allergan Pharmaceuticals International Limited (together with its affiliates, “Allergan”), which was terminated in August 2020, payments received under the DRI Agreement in connection with our license agreement with Vertex, and payments under the Vertex license agreement. Since inception, we have incurred significant operating losses. Our net losses were $129.3 million and $129.6 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had an accumulated deficit of $1.6 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 as we continue our current research programs and our preclinical development activities; nominate development candidates and initiate clinical trials for our current preclinical programs; seek to identify additional research programs and additional product candidates; initiate preclinical testing 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 22 Table of Contents intellectual property that we in-license from such licensors; further develop our gene editing platform; hire additional personnel; and incur additional costs associated with operating as a public company. We do not expect to be profitable for the year ending December 31, 2025 or the foreseeable future. Financial Operations Overview Revenue To date, we have not generated any revenue from product sales, and we do not expect to generate any revenue from product sales for the foreseeable future. In connection with our collaboration with BMS, we have received an aggregate of $146.5 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. During the three and six months ended June 30, 2025 and 2024 we did not recognize revenue related to our collaboration with BMS. As of June 30, 2025, we had $50.2 million of deferred revenue in relation to our collaboration with BMS, all of which 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. 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 and 2025 annual license fees of $10.0 million in each of the first quarters of 2024 and 2025. 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. 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 license agreement with Vertex, collaboration with BMS, and any other collaborations or license agreements we may enter into. Operating Expenses Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research, preclinical development, process and scale-up development, manufacture and clinical development of our product candidates, and the performance of development activities under our collaboration agreements. These costs are expensed as incurred and include: • employee-related expenses including salaries, benefits, and stock-based compensation expense; • costs incurred under clinical trial agreements with investigative sites for our former reni-cel program; • costs associated with conducting our preclinical, process and scale-up development, manufacturing, quality, 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 incurred for the research and development activities under our collaboration agreements; • facility costs including rent, depreciation, and maintenance expenses; and • fees for acquiring and maintaining licenses under our third-party licensing agreements, including any sublicensing or success payments made to our licensors. 23 Table of Contents At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of any product candidates we may identify and develop. This is due to the numerous risks and uncertainties associated with developing such product candidates, including the uncertainty of: • successful completion of preclinical studies, investigational new drug application-enabling studies and natural history studies; • successful initiation of, enrollment in, and completion of, clinical trials; • receipt of marketing approvals from applicable regulatory authorities; • establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers; • obtaining and maintaining patent and trade secret protection and non-patent exclusivity; • launching commercial sales of a product, if and when approved, whether alone or in collaboration with others; • acceptance of a product, if and when approved, by patients, the medical community, and third-party payors; • effectively competing with other therapies and treatment options; • a continued acceptable safety profile following approval; • enforcing and defending intellectual property and proprietary rights and claims; and • achieving desirable medicinal properties for the intended indications. A change in the outcome of any of these variables with respect to the development of any product candidates we develop would significantly change the costs, timing, and viability associated with the development of that product candidate. Research and development activities are central to our business model. We expect research and development costs to increase for the foreseeable future as our development programs progress, including as we continue to support preclinical studies and prepare for the clinical development of our research programs. General and Administrative Expenses General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation for personnel in executive, finance, investor relations, business development, legal, corporate affairs, information technology, facilities and human resource functions. Other significant costs include corporate facility costs not otherwise included in research and development expenses, legal fees related to intellectual property and corporate matters, and fees for accounting and consulting services. We anticipate that our general and administrative expenses will decrease or remain flat in the near future to support continued research and development activities. We anticipate that 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 relation costs will remain flat in the near future. 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 Broad and Harvard, we anticipate general and administrative expenses associated with reimbursement of third-party intellectual property-related expense will continue to fluctuate as the opposition and interference proceedings continue. Restructuring and Impairment Charges In December 2024, our board of directors approved the discontinuation of the clinical development of our ex vivo reni-cel program (the “Discontinuation”). As part of the Discontinuation, our board approved a reduction in our employee workforce by approximately 180 positions, or by approximately 65% (the “Reduction”). Restructuring charges consist 24 Table of Contents primarily of expenses in connection with the wind-down of various activities related to the clinical development of reni-cel, including contract termination costs, impairment charges and non-cash charges, and expenses related to the Reduction, primarily consisting of severance payments and employee benefit costs. We may also incur additional costs not currently contemplated due to events that may occur as a result of or that are associated with the Discontinuation and Reduction. We expect restructuring charges to be substantially incurred through the end of 2025, when the related activities are expected to be substantially complete. Other Income, Net For the six months ended June 30, 2025 and June 30, 2024, other income, net consisted primarily of interest income and the amortization of premiums or discounts on marketable securities and interest accretion related to the liability for the sale of future revenues. Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of our condensed consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in estimates, if any, will be reflected in the condensed consolidated financial statements prospectively from the date of change in estimates. During the three months ended March 31, 2025, we had the following material change to our critical accounting estimates as described in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the Annual Report: Restructuring We record liabilities for costs associated with restructuring activities in the period in which the liability is incurred. Typical costs associated with restructuring activities include, employee termination benefits, contract termination costs and on-going contract costs for which there is no economic benefit. For costs associated with employee terminations in which the employee is subject to an existing benefit arrangement, the post-employment benefits are recognized when probable and estimable. Other employee termination costs are measured and recognized on the communication date, unless there is a required future service period, in which case, the expense is recognized over the service period. Contract termination costs are recognized upon termination of the contract and costs for on-going contracts for which there is no future benefit, are recognized at fair value on the cease-use date. We have made estimates and judgments regarding the amount and timing of our restructuring expense and liability, including current and future period termination benefits and other exit costs to be incurred when related actions take place. Restructuring charges are reflected in our consolidated statements of income. Actual results may differ from these estimates. 25 Table of Contents Results of Operations Comparison of the Three Months ended June 30, 2025 and 2024 The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024, 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 2025 2024 Collaboration and other research and development revenues $ 3,578 $ 513 $ 3,065 n/m Operating expenses: Research and development 16,181 54,210 (38,029) (70) % General and administrative 12,859 18,206 (5,347) (29) % Restructuring and impairment charges 26,082 — 26,082 100 % Total operating expenses 55,122 72,416 (17,294) (24) % Other (expense) income, net Other expense, net (1,758) (1) (1,757) n/m Interest related to sale of future revenues (2,020) — (2,020) 100 % Interest income, net 2,087 4,297 (2,210) (51) % Total other (expense) income, net (1,691) 4,296 (5,987) n/m Net loss $ (53,235) $ (67,607) $ 14,372 (21) % For our results of operations, we have included the respective percentage of changes, unless greater than 100% or less than (100)%, in which case we have denoted such changes as not meaningful (n/m). Collaboration and Other Research and Development Revenues Collaboration and other research and development revenues were $3.6 million for the three months ended June 30, 2025 compared to $0.5 million for the same period in 2024. The increase from the three months ended June 30, 2024 is primarily attributable to the recognition of revenue related to specified deliverables that were achieved in the second quarter of 2025. Research and Development Expenses Research and development expenses decreased by $38.0 million to $16.2 million for the three months ended June 30, 2025 compared to $54.2 million for the same period in 2024. The following table summarizes our research and development expenses for the three months ended June 30, 2025 and 2024, 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 2025 2024 Employee related expenses $ 8,067 $ 13,661 $ (5,594) (41) % External research and development 2,595 27,025 (24,430) (90) % Facility expenses 3,390 7,370 (3,980) (54) % Stock-based compensation expenses 863 2,125 (1,262) (59) % Sublicense and license fees 95 857 (762) (89) % Other expenses 1,171 3,172 (2,001) (63) % Total research and development expenses $ 16,181 $ 54,210 $ (38,029) (70) % 26 Table of Contents The decrease in research and development expenses for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was primarily attributable to: • approximately $24.4 million in decreased external research and development expenses primarily resulting from reduced clinical and manufacturing costs under our reni-cel program due to the Discontinuation, partially offset by costs attributable to in vivo research and discovery; • approximately $5.6 million in decreased employee-related expenses related to reduced headcount associated with the Reduction; • approximately $4.0 million in decreased facility expense primarily due to the end of leases for manufacturing space; • approximately $2.0 million in decreased other expenses related to professional services to support our reni-cel program due to the Discontinuation; • approximately $1.3 million in decreased stock-based compensation expense primarily related to reduction in the market price of common stock year-over-year, resulting in a lower valuation of equity awards, along with reduced headcount as a result of the Reduction; and • approximately $0.8 million in decreased sublicense and license fees. General and Administrative Expenses General and administrative expenses decreased by $5.3 million to $12.9 million for the three months ended June 30, 2025 compared to $18.2 million for the three months ended June 30, 2024. The following table summarizes our general and administrative expenses for the three months ended June 30, 2025 and 2024, 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 2025 2024 Employee related expenses $ 3,132 $ 4,800 $ (1,668) (35) % Professional service expenses 3,550 3,893 (343) (9) % Intellectual property and patent related fees 3,221 3,845 (624) (16) % Stock-based compensation expenses 1,801 2,885 (1,084) (38) % Facility and other expenses 1,155 2,783 (1,628) (58) % Total general and administrative expenses $ 12,859 $ 18,206 $ (5,347) (29) % The decrease in general and administrative expenses for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was primarily attributable to: • approximately $1.7 million in decreased employee related expenses related to reduced headcount associated with the Reduction; • approximately $1.6 million in decreased facility and other expenses related to the end of a lease; • approximately $1.1 million in decreased stock-based compensation expenses primarily related to reduction in the market price of common stock year-over-year, resulting in a lower valuation of equity awards, along with reduced headcount as a result of the Reduction; • approximately $0.6 million in decreased intellectual property and patent related legal fees; and • approximately $0.3 million in decreased professional service expenses. 27 Table of Contents Restructuring and Impairment Charges Restructuring charges were $26.1 million for the three months ended June 30, 2025, with no equivalent charges for the three months ended June 30, 2024. The following table summarizes our restructuring charges for the three months ended June 30, 2025 and 2024, 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 2025 2024 Employee termination benefits $ 813 $ — $ 813 100 % Costs for ongoing contracts and terminated contracts 23,466 — 23,466 100 % Acceleration of expense for change in useful life estimate and lease termination 1,803 — 1,803 100 % Total restructuring and impairment charges $ 26,082 $ — $ 26,082 100 % During the three months ended June 30, 2025, we recorded $0.8 million, $23.5 million, and $1.8 million of expense related to employee termination benefits, reni-cel-related contract costs, and acceleration in expense due to changes in useful life estimates for leasehold improvements, software and a right of use asset, respectively, due to the Discontinuation and the Reduction. Other Income, Net For the three months ended June 30, 2025, and June 30, 2024 other (expense) income, net was $(1.7) million and $4.3 million, respectively, which primarily relate to interest income and accretion of discounts and premiums associated with marketable securities and interest accretion related to the liability for the sale of future revenues. The decrease is attributable to interest accretion related to the DRI Purchase and Sale Agreement and reductions in investment income due to a decrease in our investments for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. 28 Table of Contents Comparison of the Six Months ended June 30, 2025 and 2024 The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024, 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 2025 2024 Collaboration and other research and development revenues $ 8,236 $ 1,649 $ 6,587 n/m Operating expenses: Research and development 42,774 102,997 (60,223) (58) % General and administrative 26,234 37,545 (11,311) (30) % Restructuring and impairment charges 66,935 — 66,935 100 % Total operating expenses 135,943 140,542 (4,599) (3) % Other (expense) income, net Other (expense) income, net (2,183) 5 (2,188) n/m Interest related to sale of future revenues (4,236) — (4,236) 100 % Interest income, net 4,803 9,331 (4,528) (49) % Total other (expense) income, net (1,616) 9,336 (10,952) n/m Net loss $ (129,323) $ (129,557) $ 234 — % Collaboration and Other Research and Development Revenues Collaboration and other research and development revenues increased by $6.6 million to $8.2 million for the six months ended June 30, 2025 compared to $1.6 million for the six months ended June 30, 2024. The increase was primarily attributable to the recognition of the remaining deferred revenue upon the closing out of a collaboration agreement with a strategic partner, and the recognition of revenue related to specified deliverables under that collaboration agreement. Research and Development Expenses Research and development expenses decreased by $60.2 million to $42.8 million for the six months ended June 30, 2025 compared to $103.0 million for the six months ended June 30, 2024. The following table summarizes our research development expenses for the six months ended June 30, 2025 and 2024, 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 2025 2024 Employee related expenses $ 19,389 $ 27,344 $ (7,955) (29) % External research and development expenses 10,066 44,613 (34,547) (77) % Facility expenses 8,755 12,589 (3,834) (30) % Stock-based compensation expenses 1,770 5,033 (3,263) (65) % Sublicense and license fees 112 6,753 (6,641) (98) % Other expenses 2,682 6,665 (3,983) (60) % Total research and development expenses $ 42,774 $ 102,997 $ (60,223) (58) % The decrease in research and development expenses for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was primarily attributable to: • approximately $34.5 million in decreased external research and development expenses primarily resulting from reduced clinical and manufacturing costs under our reni-cel program due to the Discontinuation, partially offset by costs attributable to in vivo research and discovery; 29 Table of Contents • approximately $8.0 million in decreased employee-related expenses related to reduced headcount associated with the Reduction; • approximately $6.6 million in decreased sublicense and license fees related to the achievement of certain milestones in 2024 for which there was no equivalent achievement in 2025; • approximately $4.0 million in decreased other expenses related to professional services to support our reni-cel program due to the Discontinuation; and • approximately $3.8 million in decreased facility expenses primarily due to the end of leases for manufacturing space; • approximately $3.3 million in decreased stock-based compensation expense primarily related to expense in connection with the achievement of certain performance-based vesting milestones for restricted stock units recognized in 2024 for which there was no equivalent expense in 2025, a reduction in the market price of our common stock year-over-year resulting in lower fair value and a reduction in headcount associated with the Reduction. General and Administrative Expenses General and administrative expenses decreased by $11.3 million to $26.2 million for the six months ended June 30, 2025 compared to $37.5 million for the six months ended June 30, 2024. The following table summarizes our general and administrative expenses for the six months ended June 30, 2025 and 2024, 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 2025 2024 Employee related expenses $ 7,574 $ 9,690 $ (2,116) (22) % Professional service expenses 5,902 6,808 (906) (13) % Intellectual property and patent related fees 5,767 7,790 (2,023) (26) % Stock-based compensation expenses 3,873 7,562 (3,689) (49) % Facility and other expenses 3,118 5,695 (2,577) (45) % Total general and administrative expenses $ 26,234 $ 37,545 $ (11,311) (30) % The decrease in general and administrative expenses for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was primarily attributable to: • approximately $3.7 million in decreased stock-based compensation expense primarily related to expense in connection with the achievement of certain performance-based vesting milestones for restricted stock units recognized in 2024 for which there was no equivalent expense in 2025, a reduction in the market price of our common stock year-over-year resulting in lower fair value and a reduction in headcount associated with the Reduction; • approximately $2.6 million in decreased facility and other expense primarily related to the end of a lease; • approximately $2.1 million in decreased employee related expenses related to reduced headcount associated with the Reduction; • approximately $2.0 million in decreased intellectual property and patent related fees due to reduced legal activity related to intellectual property defense; and • approximately $0.9 million in decreased professional service expenses related to reduced licensing and strategic business activities in 2025 relative to 2024. 30 Table of Contents Restructuring and Impairment Charges Restructuring charges were $66.9 million for the six months ended June 30, 2025, with no equivalent charges for the six months ended June 30, 2024. The following table summarizes our restructuring charges for the six months ended June 30, 2025 and 2024, 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 2025 2024 Employee termination benefits $ 4,322 $ — $ 4,322 100 % Costs for ongoing contracts and terminated contracts 52,341 — 52,341 100 % Acceleration of expense for change in useful life estimate and lease termination 6,548 — 6,548 100 % Impairment charges 3,724 — 3,724 100 % Total restructuring and impairment charges $ 66,935 $ — $ 66,935 100 % During the six months ended June 30, 2025, we recorded $4.3 million, $52.3 million, $6.5 million and $3.7 million related to employee termination benefits, reni-cel-related contract costs, acceleration in expense due to changes in useful life estimates for leasehold improvements, software and a right of use asset, and impairment charges, respectively, due to the Discontinuation and the Reduction. Other Income, Net For the six months ended June 30, 2025 and June 30, 2024, other (expense) income, net was $(1.6) million and $9.3 million, respectively, which primarily relates to interest income and accretion of discounts and premiums associated with marketable securities and interest accretion related to the liability for the sale of future revenues. The decrease for the six months ended June 30, 2025 is attributable to the interest accretion related to the liability for the sale of future revenues and reductions in investment income due to a decrease in our investments. Liquidity and Capital Resources Sources of Liquidity As of June 30, 2025, 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 through its wholly owned subsidiary Juno Therapeutics, our former strategic alliance with Allergan (which was terminated in August 2020), payments received under the DRI Agreement in connection with our license agreement with Vertex, and payments under the Vertex license agreement. As of June 30, 2025, we had cash, cash equivalents and marketable securities of $178.5 million. In May 2021, we entered into a common stock sales agreement with TD Securities (USA) LLC (as successor to Cowen and Company, LLC) (“TD Cowen”), under which we from time to time can issue and sell shares of our common stock through TD Cowen in at-the-market offerings for aggregate gross sale proceeds of up to $300.0 million. We amended the common stock sales agreement with TD Cowen in February 2024 in connection with filing a new registration statement. In March 2025, we further amended our common stock sales agreement with TD Cowen in connection with amending our existing shelf registration statement following the loss of our status as a “well-known seasoned issuer” (as defined under Rule 405 of the Securities Act of 1933, as amended), reducing the amount of shares of common stock we may issue and sell through TD Cowen to aggregate gross sale proceeds of up to $150.0 million (the “ATM Facility”). As of June 30, 2025, we have sold 4,126,072 shares of our common stock under the ATM Facility at a weighted average price of $2.14 per share for aggregate gross proceeds of $8.6 million and have $141.4 million of shares of our common stock remaining available for issuance and sale 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, 2025, our right to contingent payments under our collaboration agreement with BMS, as well as the retained 31 Table of Contents 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. Cash Flows The following table provides information regarding our cash flows for the six months ended June 30, 2025 and 2024 (in thousands): Six Months Ended June 30, 2025 2024 Net cash (used in) provided by: Operating activities $ (98,011) $ (106,934) Investing activities 99,037 47,209 Financing activities 5,975 514 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 7,001 $ (59,211) 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 $98.0 million for the six months ended June 30, 2025, which primarily consisted of operating expenses that related to our ongoing research efforts, the wind-down of clinical and manufacturing activities in support of our former reni-cel program and supporting business operations. 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 our former reni-cel program, and supporting business operations. Net Cash Provided by Investing Activities Net cash provided by investing activities was approximately $99.0 million for the six months ended June 30, 2025, primarily related to the proceeds from the maturities of marketable securities of $99.0 million. 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 purchase of marketable securities of $86.2 million, and the purchase of property and equipment of $5.4 million. Net Cash Provided by Financing Activities Net cash provided by financing activities was approximately $6.0 million for the six months ended June 30, 2025, primarily related to proceeds from the issuance of common stock from our at the market offering program of $8.6 million and proceeds received from issuance of common stock under our employee stock purchase plan of $0.2 million. This was offset by the repayment of our liability for the sale of future revenues with DRI of $2.9 million. 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 our employee stock purchase plan of $0.3 million and exercises of options for our common stock of $0.2 million. Funding Requirements We expect our expenses to increase for the foreseeable future as our development programs progress, including as we continue to support preclinical studies and prepare for the clinical development of our research programs; seek to identify product candidates and additional research programs; initiate preclinical testing and clinical trials for other product candidates we identify and develop; maintain, expand, and project our intellectual property portfolio, including reimbursing our licensors for expenses related to the intellectual property that we in-license from such licensors; and incur costs 32 Table of Contents 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. We do not expect to generate significant recurring revenue unless and until we obtain regulatory approval for and commercialize a product candidate. 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 on June 30, 2025, 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 2027 . 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. The amount and timing of future funding requirements, both near- and long-term, will depend on many factors, including, but not limited to: • the restructuring costs associated with the Discontinuation and Reduction; • the scope, progress, results, and costs of drug discovery, preclinical development, laboratory testing, and any clinical or natural history study trials for 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, 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; • the extent to which we acquire or in-license other medicines and technologies; • the costs of reimbursing our licensors for the prosecution and maintenance of the patent rights in-licensed by us; and • 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, 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. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all . Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ 33 Table of Contents 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, 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. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Contractual Obligations As of June 30, 2025, we had operating leases with future minimum lease payments for a total of $24.4 million, of which $3.9 million will be payable in 2025. 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 2023, we entered into a license and service agreement pursuant to which we leased manufacturing space for our continued research and development activities. The lease commenced April 1, 2024. 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. In January 2025, we gave our termination notice on the license and service agreement, which resulted in the end of the term of the agreement being July 2026, and $8.9 million of remaining payments owed. In April 2025, we modified the lease to terminate on April 30, 2025 with a final fixed payment of $3.7 million. Our agreements with certain institutions to license intellectual property include potential milestone payments and success fees, sublicense fees, royalty fees, licensing maintenance fees, and reimbursement of patent maintenance costs that we may be required to pay. Our agreements to license intellectual property include potential milestone payments that are dependent upon the development of products using the intellectual property licensed under the agreements and contingent upon the achievement of development or regulatory approval milestones, as well as commercial milestones. These potential obligations are contingent upon future events and the timing and likelihood of such potential obligations are not known with certainty. For further information regarding these agreements, please see Part I, “Item 1. 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.