Intellia Therapeutics, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures The Company has established disclosure controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management, including the principal executive officer (our Chief Executive Officer) and principal financial officer (our Chief Financial Officer), to allow timely decisions regarding required disclosure. Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2021. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: • Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013 framework) (“COSO”). Based on its assessment, management believes that, as of December 31, 2021, our internal control over financial reporting is effective based on those criteria. 110 Deloitte & Touche LLP, our independent registered public accounting firm, has issued an attestation report on the effectiveness of our internal control over financial reporting, which is included below. Changes in Internal Controls over Financial Reporting No change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 111 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Intellia Therapeutics, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Intellia Therapeutics, Inc. and subsidiary (the “Company”) as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2021, of the Company and our report dated February 24, 2022, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Boston, Massachusetts February 24, 2022 112 Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 113 PART III Certain information required by Part III is omitted from this Annual Report on Form 10-K and is incorporated by reference from our definitive proxy statement to be filed with the SEC with respect to our 2022 Annual Meeting of Stockholders, pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, which we expect to file with the SEC no later than April 30, 2022. Item 10. Directors, Executive Of ficers and Corporate Governance Information regarding our directors, including the audit committee and audit committee financial experts, and executive officers and compliance with Section 16(a) of the Exchange Act will be included in our 2022 Proxy Statement and is incorporated herein by reference. We have adopted a Code of Business Conduct and Ethics for all of our directors, officers and employees as required by Nasdaq governance rules and as defined by applicable SEC rules. Stockholders may locate a copy of our Code of Business Conduct and Ethics on our website at www.intelliatx.com or request a copy without charge from: Intellia Therapeutics, Inc. Attention: Investor Relations 40 Erie Street, Suite 130 Cambridge, MA 02139 We will post to our website any amendments to the Code of Business Conduct and Ethics, and any waivers that are required to be disclosed by the rules of either the SEC or Nasdaq. Item 11. Executi ve Compensation The information required by this item regarding executive compensation will be included in our definitive proxy statement to be filed with the SEC with respect to our 2022 Annual Meeting of Stockholders and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Own ers and Management and Related Stockholder Matters The information required by this item regarding security ownership of certain beneficial owners and management and securities authorized for issuance under equity compensation plans will be included in our definitive proxy statement to be filed with the SEC with respect to our 2022 Annual Meeting of Stockholders and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item regarding certain relationships and related transactions and director independence will be included in our definitive proxy statement to be filed with the SEC with respect to our 2022 Annual Meeting of Stockholders and is incorporated herein by reference. Item 14. Principal Accoun ting Fees and Services Information about aggregate fees billed to us by our independent principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34), located in Boston, Massachusetts, will be presented in our definitive proxy statement to be filed with the SEC with respect to our 2022 Annual Meeting of Stockholders under the caption “Audit Committee Matters — Principal Accounting Firm Fees” and is incorporated herein by reference. 114 PART IV Item 15. Exhibits, Financ ial Statement Schedules (a) The following documents are included in this Annual Report on Form 10-K: 1. The following Report and Consolidated Financial Statements of the Company are included in this Annual Report: Report of Independent Registered Public Accounting Firm (PCAOB ID No.34) Consolidated Balance Sheets Consolidated Statements of Operations and Comprehensive Loss Consolidated Statements of Stockholders’ Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements 2. All financial schedules have been omitted because the required information is either presented in the consolidated financial statements or the notes thereto or is not applicable or required. 3. The exhibits required by Item 601 of Regulation S-K and Item 15(b) of this Annual Report on Form 10-K are listed in the Exhibit Index immediately preceding the signature page of this Annual Report on Form 10-K. The exhibits listed in the Exhibit Index are incorporated by reference herein. Item 16. Form 10-K Summary The Company has elected not to include summary information. 115 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) F- 2 Consolidated Balance Sheets F- 4 Consolidated Statements of Operations and Comprehensive Loss F- 5 Consolidated Statements of Stockholders’ Equity F- Error! Bookmark not defined. Consolidated Statements of Cash Flows F- 7 Notes to Consolidated Financial Statements F- 8 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Intellia Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Intellia Therapeutics, Inc. and subsidiary (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition – Collaboration Arrangements – Refer to Notes 2 and 9 to the financial statements and Investment Valuation – Refer to Notes 2, 4, and 10 to the financial statements. Critical Audit Matter Description The Company recognizes collaboration revenue on license and collaboration agreements as they satisfy performance obligations and transfer control of goods and services to the customer. During 2021, the Company entered into two new license and collaboration agreements with counterparties in exchange for a non-controlling equity ownership in each respective counterparty. This resulted in management applying judgments in determining the accounting for these arrangements. Specifically, management applied judgment in (1) identifying the performance obligations F- 2 within the arrangements and (2) measuring the arrangement consideration. Measuring the arrangement consideration required management to estimate the fair value of the equity interests received, which were equity interests in private entities that did not have readily determinable market values. The Company recognized $77.7 million of deferred revenue at the inception of the arrangements, which represented the fair value of the equity interests received. Auditing the Company’s accounting for revenues pertaining to the new arrangements required an increased extent of effort and a high degree of auditor judgment due to the complex and judgmental nature of evaluating the performance obligations included within the license and collaboration agreements. Additionally, given management used unobservable inputs to estimate the fair value of the equity interests received, performing audit procedures to evaluate these inputs required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our principal audit procedures related to the Company’s revenue recognition and valuation of the equity interests received included the following, among others: • We tested the effectiveness of controls over the Company’s processes for assessing the accounting treatment of new collaboration agreements and controls over the valuation of the equity interests received. • We obtained and read the contracts and other documents related to each arrangement. • We tested management’s identification of the promises for completeness, including the identification of distinct performance obligations. For each performance obligation identified, we held corroborative inquires with individuals involved in the negotiation of the agreement and those responsible for overseeing the arrangement to confirm our understanding of those performance obligations as well as the Company’s assertions regarding whether those performance obligations are distinct or combined. • We tested the fair value of the equity interests received in exchange for entering into each arrangement. For each equity interest received, and with the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) critical valuation and business assumptions and (3) tested the mathematical accuracy of the underlying valuations. /s/ Deloitte & Touche LLP Boston, Massachusetts February 24, 2022 We have served as the Company's auditor since 2015. F- 3 INTELLIA THERAPEUTICS, INC. CONSOLIDATED BA LANCE SHEETS (Amounts in thousands except share and per share data) December 31, 2021 December 31, 2020 ASSETS Current Assets: Cash and cash equivalents $ 123,406 $ 160,020 Marketable securities 625,282 437,351 Accounts receivable ($ 0.1 million and $ 0 million from related party) 2,031 2,130 Prepaid expenses and other current assets 18,584 17,016 Total current assets 769,303 616,517 Marketable securities - noncurrent 337,361 - Property and equipment, net 20,968 15,943 Operating lease right-of-use assets 79,143 39,114 Equity method investment 58,131 - Investments and other assets ($ 10.0 million and $ 0 million from related party) 29,558 4,748 Total Assets $ 1,294,464 $ 676,322 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 9,653 $ 10,460 Accrued expenses 43,309 25,554 Current portion of operating lease liability 9,112 5,696 Current portion of deferred revenue ($ 41.2 million and $ 0 million from related party) 63,759 22,544 Total current liabilities 125,833 64,254 Deferred revenue, net of current portion ($ 19.9 million and $ 0 million from related party) 63,476 51,387 Long-term operating lease liability 64,911 33,609 Commitments and contingencies (Note 8) Stockholders’ Equity: Common stock, $ 0.0001 par value; 120,000,000 shares authorized; 74,485,883 and 66,234,056 shares issued and outstanding at December 31, 2021 and 2020, respectively 7 7 Additional paid-in capital 1,745,870 962,173 Accumulated other comprehensive (loss)/income ( 2,632 ) 1 Accumulated deficit ( 703,001 ) ( 435,109 ) Total stockholders’ equity 1,040,244 527,072 Total Liabilities and Stockholders’ Equity $ 1,294,464 $ 676,322 See notes to consolidated financial statements. F- 4 INTELLIA THERAPEUTICS, INC. CONSOLIDATED STATEMENTS O F OPERATIONS AND COMPREHENSIVE LOSS (Amounts in thousands except per share data) Year Ended December 31, 2021 2020 2019 Collaboration revenue (1) $ 33,053 $ 57,994 $ 43,103 Operating expenses: Research and development 229,807 150,408 108,413 General and administrative 71,096 44,169 41,058 Total operating expenses 300,903 194,577 149,471 Operating loss ( 267,850 ) ( 136,583 ) ( 106,368 ) Other (expense) income, net: Loss from equity method investment ( 1,325 ) - - Interest income 1,283 2,352 6,835 Total other (expense) income, net ( 42 ) 2,352 6,835 Net loss $ ( 267,892 ) $ ( 134,231 ) $ ( 99,533 ) Net loss per share, basic and diluted $ ( 3.78 ) $ ( 2.40 ) $ ( 2.11 ) Weighted average shares outstanding, basic and diluted 70,894 55,987 47,247 Other comprehensive (loss) income: Unrealized (loss) gain on marketable securities ( 2,126 ) ( 260 ) 289 Other comprehensive loss from equity method investment ( 507 ) - - Comprehensive loss $ ( 270,525 ) $ ( 134,491 ) $ ( 99,244 ) (1) Including the following revenue from related party (see Notes 9 and 15): $ 6,072 $ - $ - See notes to consolidated financial statements. F- 5 INTELLIA THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Amounts in thousands, except share data) Additional Accumulated Other Total Common Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Capital (Loss) Income Deficit Equity Balance at December 31, 2018 45,224,480 $ 5 $ 478,968 $ ( 28 ) $ ( 201,025 ) $ 277,920 Retroactive adjustment to beginning accumulated deficit for adoption of ASC 842 - - - - ( 320 ) ( 320 ) Issuance of common stock through at-the-market offerings, net of issuance costs of $ 363 4,518,579 - 72,256 - - 72,256 Exercise of stock options 364,404 - 3,086 - - 3,086 Issuance of shares under employee stock purchase plan 90,581 - 1,092 - - 1,092 Equity-based compensation - - 15,091 - - 15,091 Other comprehensive income - unrealized gain on marketable securities - - - 289 - 289 Net loss - - - - ( 99,533 ) ( 99,533 ) Balance at December 31, 2019 50,198,044 5 570,493 261 ( 300,878 ) 269,881 Issuance of common stock through follow-on offerings, net of issuance costs of $ 669 11,815,069 2 296,605 - - 296,607 Issuance of common stock to Regeneron 925,218 - 12,580 - - 12,580 Issuance of common stock through at-the-market offerings, net of issuance costs of $ 151 2,270,161 - 49,461 - - 49,461 Exercise of stock options 840,824 - 11,574 - - 11,574 Vesting of restricted stock units 82,829 - - - - - Issuance of shares under employee stock purchase plan 101,911 - 1,557 - - 1,557 Equity-based compensation - - 19,903 - - 19,903 Other comprehensive loss - unrealized loss on marketable securities - - - ( 260 ) - ( 260 ) Net loss - - - - ( 134,231 ) ( 134,231 ) Balance at December 31, 2020 66,234,056 7 962,173 1 ( 435,109 ) 527,072 Issuance of common stock through follow-on offerings, net of issuance costs of $ 284 4,758,620 - 648,315 - - 648,315 Issuance of common stock through at-the-market offerings, net of issuance costs of $ 52 641,709 - 45,255 - - 45,255 Exercise of stock options 2,700,886 - 41,094 - - 41,094 Vesting of restricted stock units 119,715 - - - - - Issuance of shares under employee stock purchase plan 30,897 - 2,024 - - 2,024 Equity-based compensation - - 47,009 - - 47,009 Other comprehensive loss - unrealized loss on marketable securities - - - ( 2,126 ) - ( 2,126 ) Other comprehensive loss - equity method investment ( 507 ) ( 507 ) Net loss - - - - ( 267,892 ) ( 267,892 ) Balance at December 31, 2021 74,485,883 $ 7 $ 1,745,870 $ ( 2,632 ) $ ( 703,001 ) $ 1,040,244 F- 6 INTELLIA THERAPEUTICS, INC. CONSOLIDATED STATEM ENTS OF CASH FLOWS (Amounts in thousands) Year Ended December 31, 2021 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 267,892 ) $ ( 134,231 ) $ ( 99,533 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 6,891 6,311 5,587 Equity-based compensation 47,009 19,903 15,091 Amortization/(accretion) of investment premiums/(discounts) 7,604 538 ( 3,725 ) Loss from equity method investment 1,325 - - Deferral of equity method investment intra-entity profit on sales 2,937 - - Loss on disposal of property and equipment - 35 1 Changes in operating assets and liabilities: Accounts receivable 99 2,490 2,927 Prepaid expenses and other current assets ( 9,798 ) ( 9,206 ) ( 1,763 ) Operating lease right-of-use assets 9,349 6,457 5,728 Other assets 117 83 153 Accounts payable 529 5,060 1,880 Accrued expenses 17,260 13,031 2,310 Deferred revenue ( 31,355 ) 45,121 ( 27,122 ) Operating lease liabilities ( 9,105 ) ( 5,504 ) ( 4,774 ) Net cash used in operating activities ( 225,030 ) ( 49,912 ) ( 103,240 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment ( 12,756 ) ( 3,585 ) ( 6,794 ) Purchases of marketable securities ( 1,020,620 ) ( 473,702 ) ( 297,030 ) Maturities of marketable securities 485,598 262,800 329,000 Investment in Kyverna Therapeutics, Inc. ( 3,000 ) - - Net cash (used in) provided by investing activities ( 550,778 ) ( 214,487 ) 25,176 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock through follow-on offerings, net of issuance costs 648,315 296,607 - Proceeds from issuance of common stock through at-the-market offerings, net of issuance costs 45,255 49,461 72,256 Proceeds from issuance of common stock to Regeneron Pharmaceuticals, Inc. - 12,580 - Proceeds from options exercised 41,094 11,574 3,086 Issuance of shares through employee stock purchase plan 2,024 1,557 1,092 Net cash provided by financing activities 736,688 371,779 76,434 Net (decrease) increase in cash and cash equivalents and restricted cash equivalents ( 39,120 ) 107,380 ( 1,630 ) Cash and cash equivalents and restricted cash equivalents, beginning of period 164,606 57,226 58,856 Cash and cash equivalents and restricted cash equivalents, end of period $ 125,486 $ 164,606 $ 57,226 Reconciliation of cash and cash equivalents and restricted cash equivalents to consolidated balance sheet: Cash and cash equivalents $ 123,406 $ 160,020 $ 57,226 Restricted cash equivalents, included in investments and other assets 2,080 4,586 - Total cash and cash equivalents and restricted cash equivalents $ 125,486 $ 164,606 $ 57,226 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Purchases of property and equipment unpaid at period end $ 667 $ 1,508 $ 800 Right-of-use assets acquired under operating leases 49,378 26,432 2,554 Non-cash contribution of intellectual property to AvenCell Therapeutics, Inc. 62,900 - - Non-cash contribution of intellectual property to SparingVision SAS 14,759 - - Non-cash contribution of intellectual property to Kyverna Therapeutics, Inc. 7,000 - - See notes to consolidated financial statements. F- 7 INTELLIA THERAPEUTICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The Company Intellia Therapeutics, Inc. (“Intellia” or the “Company”) is a leading clinical-stage genome editing company, focused on developing novel, potentially curative CRISPR/Cas9-based therapeutics. CRISPR/Cas9, an acronym for C lustered, R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”)/CRISPR associated 9 (“Cas9”), is a technology for genome editing, the process of altering selected sequences of genomic deoxyribonucleic acid (“DNA”). To realize the transformative potential of CRISPR/Cas9-based technologies, Intellia is building a full-spectrum genome editing company, by leveraging its modular platform, to advance in vivo and ex vivo therapies for diseases with high unmet need. For the Company's in vivo programs to address genetic diseases, intravenously administered CRISPR is used as the therapy, in which the Company's proprietary delivery technology enables highly precise editing of disease-causing genes directly within specific target tissues. For the Company's ex vivo programs to address immuno-oncology and autoimmune diseases, CRISPR is used to create the therapy by engineering cells outside of the body. The Company's deep scientific, technical and clinical development experience, along with its robust intellectual property (“IP”) portfolio, enables it to unlock broad therapeutic applications of CRISPR/Cas9 and related technologies to create new classes of genetic medicine. The Company was founded and commenced active operations in mid-2014. The Company will require substantial additional capital to fund its research and development. The Company is subject to risks and uncertainties common to early stage companies in the biotechnology industry, including, but not limited to, development by competitors of more advanced or effective therapies, dependence on key executives, protection of and dependence on proprietary technology, compliance with government regulations and ability to secure additional capital to fund operations. Programs currently in development or moving into development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Liquidity Since its inception through December 31, 2021, the Company has raised an aggregate of $ 1,817.9 million to fund its operations through its initial public offering (“IPO”) and concurrent private placements, follow-on public offerings, at-the-market offerings and the sale of convertible preferred stock, as well as through its collaboration agreements. The Company expects that its cash, cash equivalents and marketable securities as of December 31, 2021 will enable the Company to fund its ongoing operating expenses and capital expenditure requirements for at least the twelve-month period following the issuance of these consolidated financial statements. 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Intellia Therapeutics, Inc. and its wholly owned, controlled subsidiary, Intellia Securities Corp. All intercompany balances and transactions have been eliminated in consolidation. Comprehensive loss is comprised of net loss and gain/loss on marketable securities and equity method investments. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates in these consolidated financial statements have been made in connection with the calculation of revenues, research and development expenses, valuation of equity and fair value method investments, and equity-based compensation expense. The Company bases its estimates on historical experience and various other assumptions that management believes to be reasonable under the circumstances at the time such estimates are made. Actual results could differ from those estimates. The Company periodically reviews its estimates in light of changes in circumstances, facts and experience. F- 8 The extent of the impact of the coronavirus disease 19 (“COVID-19”) pandemic on the Company’s operational and financial performance will depend on certain developments, including the length and severity of this pandemic, as well as its effect on the Company's employees, collaborators and vendors, all of which are uncertain and cannot be predicted. The Company cannot reasonably estimate the extent to which the disruption may materially impact its consolidated results of operations or financial position. The effects of material revisions in estimates are reflected in the consolidated financial statements prospectively from the date of the change in estimate. Fair Value Measurements The Company’s financial instruments include cash equivalents, marketable securities, accounts receivable, accounts payable and accrued expenses. Certain of the Company’s financial assets, including cash equivalents and marketable securities, have been initially valued at the transaction price, and subsequently revalued at the end of each reporting period, utilizing third-party pricing services or other observable market data. The pricing services utilize industry standard valuation models and observable market inputs to determine value. Refer to Note 4 for further information regarding the Company’s fair value measurements. Other financial instruments, including accounts receivable, accounts payable and accrued expenses, are carried at cost, which approximate fair value due to the short duration and term to maturity. Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. As of December 31, 2021 and 2020, cash equivalents consisted of interest-bearing money market accounts. Restricted Cash Equivalents The Company has restricted cash equivalents made up of money market funds held in collateral accounts that are restricted to secure letters of credit in accordance with the leases for 281 Albany Street and 17 Tudor Street, which the Company entered into in March of 2020 and July of 2021, respectively (see Note 11). The letters of credit, in the amount of $ 1.9 million and $ 0.2 million, respectively, are required to be maintained throughout the term of the leases. These restricted cash equivalents are long-term in nature and are included in “Investments and other assets” in the Company’s consolidated balance sheets. The Company has also received funds from certain grants that were restricted as to their use and were therefore classified as restricted cash equivalents. These funds amounted to approximately $ 2.7 million as of December 31, 2020 and were used in full prior to December 31, 2021. Accordingly, these funds were included in “Prepaid expenses and other current assets” in the Company’s consolidated balance sheet for the period ended December 31, 2020. Marketable Securities The Company’s marketable securities are accounted for as available-for-sale and recorded at fair value with the related unrealized gains and losses included in accumulated other comprehensive (loss)/income, a component of stockholders’ equity. The Company reviews its investment portfolio to identify and evaluate investments that have an indication of possible other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. Refer to Note 3 for further information regarding the Company’s marketable securities. F- 9 Non-Marketable Equity Securities The Company also invests in equity securities of companies whose securities are not publicly traded and where fair value is not readily available. These investments are accounted for using the measurement alternative at cost minus impairment adjusted for changes in observable prices. The Company monitors these investments to evaluate whether any increase or decline in their value has occurred, based on the implied value of recent company financings and general market conditions, or if the investment has a readily determinable fair value. These investments are included in “Investments and other assets” in the Company’s consolidated balance sheets. Refer to Note 10 for further information regarding the Company’s investments in non-marketable equity securities. Concentrations of Credit Risk The Company’s cash, cash equivalents and marketable securities may potentially be subject to concentrations of credit risk. The Company generally maintains balances in various accounts in excess of federally insured limits with financial institutions that management believes to be of high credit quality. Accounts receivable represents amounts due from collaboration partners and joint ventures. The Company monitors economic conditions to identify facts or circumstances that may indicate that any of its accounts receivable are at risk of collection. As of December 31, 2021, the Company’s accounts receivable were related to its collaborations with Regeneron Pharmaceuticals, Inc. (“Regeneron”) and AvenCell Therapeutics, Inc. (“AvenCell”), a new universal chimeric antigen receptor T (“CAR-T”) cell therapy joint venture and privately held company established by the Company, Cellex Cell Professionals GmbH (“Cellex”) and funds managed by Blackstone Life Sciences Advisors L.L.C. (“BXLS”) . As of December 31, 2020, Regeneron accounted for all of the Company’s accounts receivable. Property and Equipment The Company records property and equipment at cost and recognizes depreciation and amortization using the straight-line method over the following estimated useful lives of the respective assets: Asset Category Useful Life Laboratory equipment 5 years Office furniture and equipment 5 years Computer software 3 years Computer equipment 3 years Leasehold improvements 5 years or term of respective lease, if shorter Expenditures for repairs and maintenance of assets are expensed as incurred. Upon retirement or sale, the cost of assets disposed and the corresponding accumulated depreciation are removed from the related accounts and any resulting gain or loss is reflected in the results of operations. Impairment of Long-Lived Assets The Company tests long-lived assets to be held and used, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of assets or asset groups may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. F- 10 Evaluation of recoverability of the asset or asset group is based on an estimate of undiscounted future cash flows resulting from the use of the asset or asset group and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the asset or asset group, the assets are written down to their estimated fair values. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. To date, the Company has not recorded any material impairment losses on long-lived assets. Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes and for operating loss and tax credit carryforwards. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company’s deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which these temporary differences are expected to be recovered or settled. A valuation allowance is recorded to reduce deferred tax assets if it is determined that it is more likely than not that all or a portion of the deferred tax asset will not be realized. The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings results, expectations of future taxable income, carryforward periods available and other relevant factors. The Company records changes in the required valuation allowance in the period that the determination is made. The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available as of the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 % likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, the Company does not recognize a tax benefit in the financial statements. The Company records interest and penalties related to uncertain tax positions, if applicable, as a component of income tax expense. Revenue Recognition The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) and its related amendments (collectively known as Accounting Standard Codification (“ASC”) 606 (“ASC 606”). At inception, the Company determines whether contracts are within the scope of ASC 606 or other topics. For contracts that are determined to be within the scope of ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods and services. To achieve this core principle, the Company applies the following five steps: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when the Company determines that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. F- 11 Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract. To the extent a contract includes multiple promised goods and services, the Company applies judgment to determine whether promised goods and services are both capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method, depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Any estimates, including the effect of the constraint on variable consideration, are evaluated at each reporting period for any changes. Determining the transaction price requires significant judgment, which is discussed in further detail for each of the Company’s collaboration agreements in Note 9. In addition, none of the Company’s contracts as of December 31, 2021 contained a significant financing component. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The consideration to be received is allocated among the separate performance obligations based on relative standalone selling prices. The Company typically determines standalone selling prices using an adjusted market assessment approach model. The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized over time if either (i) the customer simultaneously receives and consumes the benefits provided by the entity’s performance, (ii) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or (iii) the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. If the entity does not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. As of December 31, 2021, the Company’s only revenue recognized is related to collaboration agreements with third parties which are either within the scope of ASC 606, under which the Company licenses certain rights to its product candidates to third parties, or within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) if it involves a joint operating activity pursuant to which the Company is an active participant and is exposed to significant risks and rewards with respect to the arrangement. For the collaboration arrangements under the scope of ASC 606, as discussed in further detail in Note 9, the terms of these arrangements typically include payment to the Company of one or more of the following: nonrefundable, upfront fees; development, regulatory, and commercial milestone payments; research and development funding payments; and royalties on the net sales of licensed products. Additionally, the terms of certain arrangements may include an equity interest in the other company. Each of these payments results in collaboration revenues, except for revenues from royalties on the net sales of licensed products, which are classified as royalty revenues. For arrangements within the scope of ASC 808, the terms of these arrangements typically include payments received or made under the cost sharing provisions which are recognized as a component of revenues in the consolidated statements of operations and comprehensive loss. Licenses of intellectual property: If the license to the Company’s IP is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from consideration allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the licenses. For licenses that are combined with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. F- 12 Milestone payments: At the inception of each arrangement that includes development milestone payments, the Company evaluates the probability of reaching the milestones and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur in the future, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore revenue recognized is constrained as management is unable to assert that a reversal of revenue would not be probable. The transaction price is then allocated to each performance obligation on a relative standalone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenues and earnings in the period of adjustment. Royalties: For arrangements that include sales-based royalties, including milestone payments based on levels of sales, if the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of its collaboration agreements. The Company receives payments from its customers based on billing schedules or upon the achievement of milestones established in each contract. The Company’s contract liabilities consist of deferred revenue. Upfront payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until the Company satisfies its obligations under these arrangements. The Company also considers the nature and contractual terms of an arrangement and assesses whether the arrangement involves a joint operating activity pursuant to which the Company is an active participant and is exposed to significant risks and rewards with respect to the arrangement. If the Company is an active participant and is exposed to the significant risks and rewards with respect to the arrangement, the Company accounts for the arrangement under ASC 808 . Based on this consideration, the Company accounts for its co-development and co-promotion (“Co/Co”) Agreements with Regeneron and AvenCell under ASC 808. Because ASC 808 does not provide recognition and measurement guidance for collaborative arrangements, the Company has analogized to ASC 606. Refer to Note 9 for additional information regarding the Company’s collaboration agreements. Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses consist of expenses incurred in performing research and development activities, such as salaries, equity-based compensation and benefits of employees, allocated facility-related expenses, overhead expenses, license, sublicense and milestone fees, contract research, clinical trial costs, development and manufacturing services, and other related costs. The Company records payments made for research and development services prior to the services being rendered as prepaid expenses on the consolidated balance sheet and expenses them as the services are provided. Contracts for multi-year research and development services are recorded on a straight-line basis over each annual contractual period based on the total contractual fee when the services rendered are expected to be substantially equivalent over the term of the arrangement. The cost of obtaining licenses for certain technology or IP is recorded to research and development expense when incurred if the licensed technology or IP has not yet reached technological feasibility and has no alternative future use. Equity-Based Compensation The Company measures employee equity-based compensation based on the grant date fair value of the equity awards using the Black-Scholes option pricing model. Equity-based compensation expense is recognized on a straight-line basis over the requisite service period of the awards and is adjusted for pre-vesting forfeitures in the period in which the forfeitures occur. For equity awards that have a performance condition, the Company recognizes stock-based compensation expense using the accelerated attribution method, based on its assessment of the probability that the performance condition will be achieved. F- 13 The Company classifies equity-based compensation expense in its consolidated statement of operations and comprehensive loss in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified. (Loss) Earnings per Share The Company calculates basic (loss) earnings per share by dividing net (loss) income for each respective period by the weighted average number of common shares outstanding for each respective period. The Company computes diluted (loss) earnings per share after giving consideration to the dilutive effect of stock options and unvested restricted stock that are outstanding during the period, except where such securities would be anti-dilutive. Segment Information The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s one business segment is the development of genome editing-based therapies. All of the Company’s assets are held in the U.S. and all of the Company’s revenue has been generated in the U.S. Variable Interest Entity The Company evaluates at the inception of each arrangement, and whenever a reconsideration event occurs, whether an entity in which the Company holds an investment or in which the Company has other variable interests is considered a variable interest entity (“VIE”) in accordance with FASB ASC Topic 810, Consolidation (“ASC 810”). If the entity meets the criteria to qualify as a VIE, the Company assesses whether or not the Company is the primary beneficiary of that VIE based on a number of factors, including (i) which party has the power to direct the activities that most significantly affect the VIE’s economic performance, (ii) the parties’ contractual rights and responsibilities pursuant to any contractual agreements and (iii) which party has the obligation to absorb losses or the right to receive benefits from the VIE. If the Company is deemed the primary beneficiary of a VIE, the Company consolidates such entity and reflects the non-controlling interest of other beneficiaries of that entity. If the Company is not the primary beneficiary, no consolidation is necessary, and the Company accounts for the investment or other variable interest in accordance with applicable U.S. GAAP. Equity Method of Accounting In circumstances where the Company has the ability to exercise significant influence, but not control, over the operating and financial policies of an entity in which the Company has a common stock or in-substance common stock investment, the Company utilizes the equity method of accounting for recording related investment activity. In assessing whether the Company exercises significant influence, the Company considers the nature and magnitude of the investment, the voting and protective rights the Company holds, any participation in the governance of the other entity and other relevant factors such as the presence of a collaborative or other business relationship. Under the equity method of accounting, the Company’s investments are initially recorded at cost on the consolidated balance sheets. Upon recording an equity method investment, the Company evaluates whether there are basis differences between the carrying value and fair value of the Company’s proportionate share of the investee’s underlying net assets. Typically, the Company amortizes basis differences identified on a straight-line basis over the underlying assets’ estimated useful lives when calculating the attributable earnings or losses, excluding the basis differences attributable to in-process research and development (“IPR&D”) that has no alternative future use. If the Company is unable to attribute all of the basis difference to specific assets or liabilities of the investee, the residual excess of the cost of the investment over the proportional fair value of the investee’s assets and liabilities is considered to be Equity Method Goodwill and is recognized within the equity investment balance, which is tracked separately within the Company’s memo accounts. The Company subsequently records in the consolidated statements of operations and comprehensive loss its share of income or loss of the other entity within other income/expense. If the share of losses exceeds the carrying value of the Company’s investment, the Company will suspend recognizing additional losses and will continue to do so unless it commits to providing additional funding; however, if there are intra-entity profits this can cause the investment balance to go negative. F- 14 The Company evaluates its equity method investments for impairment whenever events or changes in circumstance indicate that the carrying amounts of such investments may be impaired and considers qualitative and quantitative factors including the investee's financial metrics, product and commercial outlook and cash usage. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period and the investment is written down to fair value. At December 31, 2021, the Company accounted for its investment in AvenCell under the equity method of accounting and no impairment charges were recognized during the year ended December 31, 2021. Refer to Note 10 for further details. Recent Accounting Pronouncements – Adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify the accounting for income taxes . ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 on January 1, 2021. The adoption did not have a material effect on the Company’s consolidated financial statements . 3. Marketable Securities The following table summarizes the Company’s available-for-sale marketable securities as of December 31, 2021 and 2020 at net book value: December 31, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In thousands) Marketable securities: U.S. Treasury and other government securities $ 301,493 $ - $ ( 1,016 ) $ 300,477 Financial institution debt securities 441,068 - ( 652 ) 440,416 Corporate debt securities 62,500 - ( 151 ) 62,349 Other asset-backed securities 159,707 - ( 306 ) 159,401 Total $ 964,768 $ - $ ( 2,125 ) $ 962,643 December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In thousands) Marketable securities: U.S. Treasury and other government securities $ 245,666 $ 13 $ ( 11 ) $ 245,668 Financial institution debt securities 138,445 6 ( 8 ) 138,443 Corporate debt securities 41,765 3 ( 2 ) 41,766 Other asset-backed securities 11,474 1 ( 1 ) 11,474 Total $ 437,350 $ 23 $ ( 22 ) $ 437,351 The amortized cost of available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity. At December 31, 2021 and 2020, the balance in the Company’s accumulated other comprehensive (loss)/income was composed of activity related to the Company’s available-for-sale marketable securities and equity method investment. There were no material realized gains or losses in the years ended December 31, 2021, 2020 or 2019. The Company did not reclassify any amounts out of accumulated other comprehensive income during these periods. T he Company generally does not intend to sell any investments prior to recovery of their amortized cost basis for any investment in an unrealized loss position. As such, the Company has classified these losses as temporary in nature . F- 15 The Company's available-for-sale securities that are classified as short-term marketable securities in the consolidated balance sheet mature within one year or less as of the balance sheet date. Available-for-sale securities that are classified as noncurrent in the consolidated balance sheet are those that mature after one year but within five years from the balance sheet date and that the Company does not intend to dispose of within the next twelve months. At December 31, 2021 and 2020, the Company did no t hold any investments that matured beyond five years of the balance sheet date. 4. Fair Value Measurements The Company classifies fair value-based measurements using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1, quoted market prices in active markets for identical assets or liabilities; Level 2, observable inputs other than quoted market prices included in Level 1, such as quoted market prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data; and Level 3, unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. As of December 31, 2021 and 2020, the Company’s financial assets recognized at fair value on a recurring basis consisted of the following: Fair Value as of December 31, 2021 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents and restricted cash equivalents $ 124,636 $ 124,636 $ - $ - Marketable securities: U.S. Treasury and other government securities 300,477 280,085 20,392 - Financial institution debt securities 440,416 - 440,416 - Corporate debt securities 62,349 - 62,349 - Other asset-backed securities 159,401 - 159,401 - Total marketable securities 962,643 280,085 682,558 - Total $ 1,087,279 $ 404,721 $ 682,558 $ - Fair Value as of December 31, 2020 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents and restricted cash equivalents $ 163,805 $ 163,805 $ - $ - Marketable securities: U.S. Treasury and other government securities 245,668 241,664 4,004 - Financial institution debt securities 138,443 - 138,443 - Corporate debt securities 41,766 - 41,766 - Other asset-backed securities 11,474 - 11,474 - Total marketable securities 437,351 241,664 195,687 - Total $ 601,156 $ 405,469 $ 195,687 $ - Certain of the Company’s financial assets, including cash equivalents and marketable securities, have been initially valued at the transaction price, and subsequently revalued at the end of each reporting period, utilizing third-party pricing services or other observable market data. The pricing services utilize industry standard valuation models and observable market inputs to determine value. After completing its validation procedures, the Company did not adjust or override any fair value measurements provided by the pricing services as of December 31, 2021 or 2020. The Company's investment in AvenCell was recorded at fair value, determined according to Level 3 inputs in the fair value hierarchy described above. Refer to Note 10 for further details. The Company's investment in SparingVision SAS (“SparingVision”) was recorded at fair value, determined according to Level 3 inputs in the fair value hierarchy described above. The Company's investment in Kyverna Therapeutics, Inc. (“Kyverna”) was recorded at cost, which is representative of fair value. Refer to Note 10 for further details. The F- 16 SparingVision and Kyverna investments (the “investments”) are included in “Investments and other assets” on the consolidated balance sheet. There were no changes in observable prices of these investments as of December 31, 2021. 5. Property and Equipment, Net Property and equipment, net consisted of the following: December 31, 2021 2020 (In thousands) Laboratory equipment $ 39,840 $ 30,438 Office furniture and equipment 2,186 1,181 Computer equipment 1,318 1,076 Leasehold improvements 2,188 1,520 Computer software 1,550 1,059 Total property and equipment 47,082 35,274 Less: accumulated depreciation and amortization ( 26,114 ) ( 19,331 ) Property and equipment, net $ 20,968 $ 15,943 Depreciation and amortization expense was $ 6.9 million, $ 6.3 million and $ 5.6 million for the years ended December 31, 2021, 2020 and 2019, respectively. 6. Accrued Expenses Accrued expenses consisted of the following: December 31, 2021 2020 (In thousands) Employee compensation and benefits $ 20,359 $ 10,920 Accrued research and development 16,979 11,008 Accrued legal and professional expenses 3,100 1,876 Accrued other 2,871 1,750 Total accrued expenses $ 43,309 $ 25,554 7. Income Taxes The Company did not record net income tax benefits for the operating losses incurred during the periods presented due to the uncertainty of realizing a tax benefit from those losses. Accordingly, any benefit recorded related to these deferred tax assets was offset by a valuation allowance reflecting management’s conclusion that realization of those assets was not more likely than not. A reconciliation of the federal statutory income tax rate and the Company’s effective income tax rate is as follows: Year Ended December 31, 2021 2020 2019 Federal statutory income tax rate ( 21.0 )% ( 21.0 )% ( 21.0 )% State income taxes ( 16.6 ) ( 7.4 ) ( 8.9 ) Research and development tax credits ( 8.7 ) ( 1.8 ) ( 5.1 ) Stock-based compensation ( 16.8 ) ( 1.3 ) 1.2 162m 0.2 - - Change in valuation allowance 62.9 31.5 33.8 Effective income tax rate — % — % — % F- 17 The Company’s net deferred tax assets (liabilities) consisted of the following: December 31, 2021 2020 (in thousands) Deferred tax assets: Intangibles, including acquired in-process research and development $ 1,010 $ 981 Capitalized start-up costs 334 378 Net operating loss carryforwards 216,629 101,807 Research and development credit carryforwards 61,698 23,166 Operating lease liability 20,055 10,713 Deferred revenue 13,922 4,680 Equity-based compensation 7,774 8,574 Accruals and allowances 3,718 2,200 Prepaid rent 1,393 - Equity investment adjustments 359 - Gross deferred tax assets 326,892 152,499 Deferred tax asset valuation allowance ( 304,781 ) ( 140,868 ) Total deferred tax assets 22,111 11,631 Deferred tax liabilities: Fixed assets ( 669 ) ( 970 ) Operating lease right-of-use assets ( 21,442 ) ( 10,661 ) Total deferred tax liabilities ( 22,111 ) ( 11,631 ) Net deferred tax asset (liability) $ - $ - As of December 31, 2021 and 2020, the Company had federal net operating loss carryforwards of $ 800.5 million and $ 372.5 million, respectively, which may be available to offset future income tax liabilities. Approximately $ 37.2 million of the federal net operating losses generated prior to 2018 will begin to expire in 2034 , unless previously utilized. Losses incurred prior to 2018 will generally be deductible to the extent of the lesser of a corporation’s net operating loss carryover or 100 % of a corporation’s taxable income and be available for twenty years from the period the loss was generated. The federal net operating losses generated after 2017 of approximately $ 763.3 million will be carried over indefinitely, but will generally limit the net operating loss deduction to the lesser of the net operating loss carryforward or 80 % of a corporation’s taxable income (subject to Section 382 of the Internal Revenue Code of 1986, as amended). Also, there will be no carryback for losses incurred after 2017. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act, (the “CARES Act”) was enacted in the U.S. The CARES Act temporarily removes the 80 % limit for taxable years beginning before 2021 to allow an net operating loss carryforward to fully offset an organization’s income. The CARES Act allows a five-year carryback of any net operating loss generated in a taxable year beginning after December 31, 2017, and before January 1, 2021. The impact of the CARES Act was not material to the Company. As of December 31, 2021 and 2020, the Company also had state net operating loss carryforwards of $ 767.8 million and $ 373.1 million, respectively, which may be available to offset future income tax liabilities and begin to expire in 2034 . As of December 31, 2021 and 2020, the Company had federal tax credit carryforwards of approximately $ 37.9 million and $ 15.0 million, respectively, which begin to expire in 2034 . As of December 31, 2021 and 2020, the Company had state research and development and other credit carryforwards of approximately $ 30.2 million and $ 10.3 million, which begin to expire in 2029 . The Company evaluated the expected realizability of its net deferred tax assets and determined that there was significant negative evidence due to its net operating loss position and insufficient positive evidence to support the realizability of these net deferred tax assets. The Company concluded it is more likely than not that its net deferred F- 18 tax assets would not be realized in the future; therefore, the Company has provided a full valuation allowance against its net deferred tax asset balance as of December 31, 2021 and 2020. The valuation allowance increased by $ 163.9 million in 2021, $ 42.4 million in 2020, $ 34.5 million in 2019. Utilization of the net operating loss and research and development credit carryforwards may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986, as amended, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of net operating loss and research and development credit carryforwards that can be utilized annually to offset future taxable income and tax expense, respectively. The Company has not yet conducted a study to assess whether a change of control, as defined in Section 382, has occurred or whether there have been multiple changes in control since inception, due to the significant cost and complexity associated with such a study. Any limitation may result in expiration of a portion of the net operating loss carryforward or research credit carryforward before utilization. A full valuation allowance has been provided against the Company’s net operating loss and tax credit carryforwards and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the balance sheet or statement of operations if an adjustment is required. As of December 31, 2021 , the Company had no t identified any unrecognized tax benefits. The Company files income tax returns in the U.S. federal tax jurisdiction and Massachusetts and various other state tax jurisdictions. The Company is subject to examination by the Internal Revenue Service, Massachusetts taxing authorities and state taxing authorities for tax year 2018 through present. The returns in these jurisdictions since inception remain open for examination; however, there are currently no pending tax examinations. The Company will recognize interest and/or penalties related to uncertain tax benefits in income tax expense if they arise. 8. Commitments and Contingencies Caribou Arbitration On October 17, 2018, the Company initiated an arbitration proceeding against Caribou Biosciences, Inc. (“Caribou”) asserting that Caribou violated the terms and conditions of a license agreement the Company entered into with them in July 2014 related to certain IP (the “Caribou License”), as well as other contractual and legal obligations to the Company, by using and seeking to license to third parties two patent families relating to specific structural or chemical modifications of guide RNAs (“gRNAs”), that were purportedly invented or controlled by Caribou, in the Company’s exclusive human therapeutic field, before an agreed-upon cutoff date of January 30, 2018. On September 26, 2019, the Company announced that the arbitration panel issued an interim award concluding that both the structural and chemical gRNA modification technologies were exclusively licensed to the Company by Caribou pursuant to the Caribou License. Nevertheless, the arbitration panel, solely with respect to the clinically modified gRNAs, stated that it will declare that Caribou has an equitable “leaseback”, which it described as exclusive, perpetual and worldwide (the “Caribou Award”). The Caribou Award does not include the structural guide modifications IP also at issue in the arbitration, any other IP exclusively licensed or sublicensed by Caribou to the Company under the Caribou License (including but not limited to the foundational CRISPR/Cas9 IP co-owned by the Regents of the University of California, University of Vienna and Dr. Emmanuelle Charpentier), or any other of the Company’s IP. On February 6, 2020, the panel clarified that the Caribou Award is limited to a particular on-going Caribou program, which seeks to develop a CAR-T product directed at CD19. On June 16, 2021, the Company executed a Leaseback Agreement (“Leaseback”) with Caribou, which settled the ongoing arbitration. Under the Leaseback negotiated by the parties, in exchange for an upfront payment, potential future regulatory and sales milestones, and single-digit royalties payable by Caribou, the Company has agreed to leaseback or sublicense certain CRISPR/Cas9 IP, including the Company’s chemical gRNA modification technology and foundational CRISPR/Cas9 IP, to Caribou so that it can develop and commercialize CB-010. Caribou also will be responsible for any payments required in respect of the Company’s in-licensed IP. The Company recorded $ 1.0 million within “Collaboration Revenue” in the second quarter of 2021 on the condensed consolidated statements of operations and comprehensive loss for an upfront payment related to the Leaseback and received the payment in the third quarter of 2021 . F- 19 License Agreements The Company is party to license agreements, which include contingent payments. These payments will become payable if and when certain development, regulatory and commercial milestones are achieved. As of December 31, 2021, the satisfaction and timing of the contingent payments is uncertain and not reasonably estimable. 9. Collaborations and Other Arrangements To accelerate the development and commercialization of CRISPR/Cas9-based products in multiple therapeutic areas, the Company has formed, and intends to seek other opportunities to form, strategic alliances with collaborators who can augment its leadership in CRISPR/Cas9 therapeutic development. As of December 31, 2021, the Company’s accounts receivable were related to its collaborations with Regeneron and AvenCell . As of December 31, 2021 the Company's contract liabilities were related to its collaborations with Regeneron, AvenCell, SparingVision and Kyverna. As of December 31, 2020, the Company’s accounts receivable and contract liabilities were related to the Company’s collaboration with Regeneron. The following table presents changes in the Company’s accounts receivable and contract liabilities during the years ended December 31, 2021 and 2020 (in thousands): Balance at Beginning of Period Additions Deductions Balance at End of Period Year Ended December 31, 2021 Accounts receivable $ 2,130 $ 7,559 $ ( 7,658 ) $ 2,031 Contract liabilities: Deferred revenue $ 73,931 $ 84,659 $ ( 31,355 ) $ 127,235 Balance at Beginning of Period Additions Deductions Balance at End of Period Year Ended December 31, 2020 Accounts receivable $ 4,620 $ 103,116 $ ( 105,606 ) $ 2,130 Contract liabilities: Deferred revenue $ 28,810 $ 87,477 $ ( 42,356 ) $ 73,931 During the years ended December 31, 2021 and 2020, the Company recognized the following revenues as a result of changes in the contract liability balance (in thousands): Revenue recognized in the period from: Year Ended December 31, 2021 Year Ended December 31, 2020 Amounts included in the contract liability at the beginning of the period $ 22,544 $ 11,571 Costs to obtain and fulfill a contract The Company did no t incur any expenses to obtain collaboration agreements and costs to fulfill those contracts do not generate or enhance resources of the Company. As such, no costs to obtain or fulfill a contract have been capitalized in any period. Regeneron Pharmaceuticals, Inc. In April 2016, the Company entered into a license and collaboration agreement with Regeneron (the “2016 Regeneron Agreement”). The 2016 Regeneron Agreement has two principal components: i) a product development component under which the parties will research, develop and commercialize CRISPR/Cas-based therapeutic products primarily focused on genome editing in the liver, and ii) a technology collaboration component, pursuant to which the Company and Regeneron will engage in research-related activities aimed at discovering and developing novel technologies and improvements to CRISPR/Cas technology to enhance the Company’s genome editing platform. Under this agreement, the Company also may access the Regeneron Genetics Center and proprietary mouse models to be provided by Regeneron for a limited number of the Company’s liver programs. At the inception of the 2016 Regeneron Agreement, F- 20 Regeneron selected the first of its 10 targets, transthyretin (“ATTR”) amyloidosis, which is subject to a co-development and co-promotion agreement between the Company and Regeneron (the “ATTR Co/Co”). On May 30, 2020, the Company entered into (i) amendment no. 1 (the “2020 Regeneron Amendment”) to the 2016 Regeneron Agreement, (ii) co-development and co-funding agreements for the treatment of hemophilia A and hemophilia B (the “Hemophilia Co/Co”) agreements and (iii) a stock purchase agreement. The collaboration expansion builds upon the jointly developed targeted transgene insertion capabilities designed to durably restore missing therapeutic protein, and to overcome the limitations of traditional gene therapy. The collaboration was extended until April 2024, at which point Regeneron has an option to renew for an additional two years. The 2020 Regeneron Amendment also grants Regeneron exclusive rights to develop products for five additional in vivo CRISPR/Cas-based therapeutic liver targets and non-exclusive rights to independently develop and commercialize up to 10 ex vivo gene edited products made using certain defined cell types. Since December 31, 2020, there have been no material changes to the key terms of the 2016 Regeneron Agreement and the 2020 Regeneron Amendment (the “Amended Agreements”). For further information on the terms and conditions of these agreements, please see the notes to the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2020. Revenue Recognition: Collaboration Revenue. Through December 31, 2021, excluding amounts allocated to Regeneron’s purchase of the Company’s common stock, the Company recorded $ 145.0 million in upfront payments under the Amended Agreements and $ 37.9 million for research and development services, primarily under the ATTR Co/Co agreement. Through December 31, 2021 , the Company has recognized $ 149.0 million of collaboration revenue under all arrangements, including $ 25.7 million, $ 53.0 million and $ 24.6 million of collaboration revenue in the years ended December 31, 2021, 2020 and 2019, respectively, in the consolidated statements of operations and comprehensive loss. This includes $ 5.9 million, $ 10.7 million, and $ 12.0 million, respectively, primarily representing payments due from Regeneron pursuant to the ATTR Co/Co agreement. These revenues are offset in part by contra-revenue related to the Hemophilia Co/Co agreements amounting to $ 2.7 million in the year ended December 31, 2021 and $ 0 million in the years ended December 31, 2020 and 2019. As of December 31, 2021, there was approximately $ 51.4 million of the aggregate transaction price of the Amended Agreements remaining to be recognized, which the Company expects to be recognized during the research term through April 2024. As of December 31, 2021 and 2020, the Company had accounts receivable of $ 2.0 million and $ 2.1 million, respectively, and deferred revenue of $ 51.4 million and $ 73.9 million, respectively, related to the Amended Agreements. AvenCell Therapeutics, Inc. On July 30, 2021 (the “Effective Date”), the Company entered into two agreements with AvenCell, a privately held CAR-T cell therapy company formed on that date in a joint venture between the Company, Cellex and BXLS: (i) a license and collaboration agreement (the “LCA”), under which the Company will collaborate to develop allogeneic universal CAR-T cell therapies and which granted AvenCell a license to develop and commercialize genome edited universal CAR-T cell therapies (limited to its use with their switchable, universal CAR-T cell UniCAR and RevCAR platforms); and (ii) a co-development and co-funding agreement (the “AvenCell Co/Co”), under which the Company will co-develop and co-commercialize allogeneic universal CAR-T cell products for an immuno-oncology indication. Scope: The Company granted AvenCell an exclusive license to combine the Company’s CRISPR/Cas9 technology platform with AvenCell’s switchable, universal CAR-T cell technology platform and made available to AvenCell certain know-how and materials. For an eighteen-month period after the Effective Date, the Company will provide to AvenCell any improvements with respect to the underlying technology that are developed. For the two-year period immediately following the Effective Date, the Company will perform certain activities, at the Company’s cost and expense, including providing to AvenCell certain know-how and materials to enable AvenCell to use the Company's CRISPR/Cas9 technology platform, as well as making available employees with requisite knowledge and experience to provide advice and answer questions regarding such know-how and materials for a limited number of hours per year (the “Knowledge Transfer Period”). In addition, the Company and AvenCell will collaborate on at least seven F- 21 universal CAR-T ce ll products that combine the Company's allogeneic T cell technology with AvenCell's switchable, universal CAR-T cell technology, referred to as the (“Allo Collaboration”). AvenCell will pay the Company to provide supply and manufacturing services for them, including supplying GMP CRISPR reagents to support the research and development of all CRISPR Products (as defined in the LCA) under the Allo Collaboration until the completion of the first Pivotal Trial (as defined in the LCA) of the first such CRISPR Product. Financial Terms: In exchange for the license, the Company received a 33.33 % equity interest in AvenCell at the time of the initial closing and AvenCell is, therefore, considered to be a related party of the Company. Governance: The parties formed a joint steering committee (“JSC”), which is responsible for setting research objectives and overseeing the general strategies and research and development activities undertaken by the parties under the LCA. The JSC will meet quarterly until the expiration or termination of the Allo Collaboration. Term and Termination: The term of the Allo Collaboration is from the Effective Date of the LCA until the completion of all activities under the then-current Allo Collaboration with respect to all relevant CRISPR Products. The LCA contains termination provisions, including termination for insolvency, material breach, patent challenge, convenience, and cessation. Co-Development and Co-Promotion Agreement: Under the AvenCell Co/Co the parties will co-develop and co-commercialize in the U.S. and key European countries certain allogeneic universal CAR-T products directed to an immuno-oncology target. The Company is the lead commercialization party in the U.S., and AvenCell is the lead commercialization party in the European countries. The parties will share equally in the profits and development costs. The Company will have one additional option to enter into a second co-development and co-funding agreement from selected allogeneic universal CAR-T cell therapy products that the parties intend to develop under the Allo Collaboration for a payment of $ 30.0 million to AvenCell. AvenCell LCA - Accounting Analysis: The Company concluded that the accounting treatment for the LCA is within the scope of ASC 606 . The Company evaluated the promised goods and services under the LCA and determined that it included one performance obligation: a combined performance obligation including the license to the allogeneic technology, initial know-how and ongoing support services, including participation in the JSC during the two-year Knowledge Transfer Period. The transaction price was determined to be $ 62.9 million, which represents the fair value of the Company's equity interest in AvenCell as of the Effective Date. The Company allocated the full transaction price to the combined performance obligation including the license to allogeneic technology, the JSC, initial-know-how and ongoing support services. The Company will recognize the $62.9 million using a time elapsed input method over the Knowledge Transfer Period, which in management’s judgement is the best measure of progress towards satisfying the performance obligation as this method provides the most faithful depiction of the entity’s performance in transferring control of the goods and services promised to AvenCell. This represents the Company’s best estimate of the obligation, as after this period AvenCell will be able to fully benefit from the licensed IP on its own or with readily available resources. Revenue recorded during each period will be eliminated in part by an amount representing the Company's 33.33 % ownership interest in AvenCell at that time, as this represents the intra-entity profit related to the transaction. The Company will re-evaluate the measure of progress in each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. The Company completed the initial transfer of know-how in the third quarter of 2021. The Company recognized $ 5.9 million in revenue related to the LCA for the year ended December 31, 2021 after eliminating $ 2.9 million in intra-entity profits, which will be deferred and recognized if and when AvenCell commercializes a product with the Company's license or abandons the related project. Until such time, the $ 2.9 million of revenue is indefinitely deferred and excluded from the results of operations of the Company. As of December 31, 2021 the Company had deferred revenue of $ 54.1 million related to the AvenCell LCA, which the Company expects to recognize through July 2023 . F- 22 The payments attributable to the supply and manufacturing services are variable and are commensurate with the standalone selling prices of the services, and as such, will be attributed to those services. The Company did not record any consideration related to the supply and manufacturing services in 2021. AvenCell Co/Co - Accounting Analysis: The Company concluded that the AvenCell Co/Co agreement meets the definition of a collaborative arrangement per ASC 808, which is outside of the scope of ASC 606. Since ASC 808 does not provide recognition and measurement guidance for collaborative arrangements, the Company has analogized to ASC 606. As such, the Company classifies cumulative amounts paid or received under the cost sharing provisions of the AvenCell Co/Co as a component of revenues in the consolidated statements of operations and comprehensive loss, to the extent that this does not result in a cumulative “negative revenue” amount, in which case the cumulative shortfall would be reclassified as an expense. The Company recognized $ 0.2 million in revenues related to the AvenCell Co/Co agreement for the year ended December 31, 2021. SparingVision SAS In October 2021, the Company and SparingVision, a genomic medicine company developing vision saving treatments for ocular diseases, entered into a license and collaboration agreement (the “SparingVision LCA”), to develop novel genomic medicines utilizing CRISPR/Cas9 technology for the treatment of ocular diseases. Scope: The Company granted SparingVision exclusive rights to its proprietary in vivo CRISPR/Cas9-based genome editing technology for up to three ocular targets addressing diseases with significant unmet medical need. In addition, the parties will research and develop novel self-inactivating adeno-associated virus (“AAV”) vectors and lipid nanoparticle-based approaches to address delivery of CRISPR/Cas9 genome editing reagents to the retina. SparingVision will lead and fund the preclinical and clinical development for the genome editing product candidates pursued under the collaboration. The Company will have an option to obtain exclusive U.S. commercialization rights for product candidates arising from two of three collaboration targets. For product candidates the Company chooses to option, it will pay an opt-in fee between $ 10.0 million and $ 20.0 million depending on the stage of development of the target, reimburse certain costs, share in 50 % of development costs and pay royalties to SparingVision on U.S. sales. Financial Terms: In exchange for the license, the Company received 83,316 shares of Series A2 Preferred Stock (“Series A2”) which represented an equity ownership of approximately 11 % at the time of closing. Attached to each share of Series A2, the Company received three warrants for the right to purchase additional Series A2 shares at designated prices that are subject to certain vesting conditions. The Company will also be eligible to receive certain research, development and commercial milestone payments (up to approximately $ 200 million per product) as well as royalties on potential future sales of products arising from the collaboration. Governance : The parties formed a JSC, which is responsible for monitoring and managing the collaboration prior to program completion. SparingVision LCA - Accounting Analysis: The Company determined that the accounting for the SparingVision LCA is within the scope of ASC 606. The Company evaluated the promised goods and services and determined that it included one performance obligation: a combined performance obligation including the license to the CRISPR technology as well as ongoing research and support services, including participation in the JSC . The transaction price was determined to be $ 14.8 million, which represents the fair value of the Company's equity interest in SparingVision at the time of closing. See Note 10 for the determination of the fair value of the Company’s investment. The Company allocated the full transaction price to the combined performance obligation. The Company will use a costs-incurred input method to recognize revenue, measuring the progress of the programs based on the costs incurred against budget, which in management's judgment is the best measure of progress towards satisfying the performance obligation. These costs will be recorded as revenue when the expenses are incurred. There was no revenue recognized in the year ended December 31, 2021 related to the SparingVision LCA. As of December F- 23 31, 2021, the Company had deferred revenue of $ 14.8 million, which is expected to be recognized over a three to five year period. Kyverna Therapeutics, Inc. In December 2021, the Company and Kyverna, a cell therapy company engineering a new class of therapies for autoimmune and inflammatory diseases, entered into a licensing and collaboration agreement (the “Kyverna LCA”), for the development of an allogeneic CD19 CAR-T cell therapy for the treatment of a variety of B cell-mediated autoimmune diseases. Scope: The Company granted Kyverna rights to its proprietary ex vivo CRISPR/Cas9-based allogeneic platform for the development of KYV-201, an allogeneic CD19 CAR-T cell investigational candidate for the treatment of select autoimmune diseases. This is a novel approach aimed at targeting CD19 for inflammatory diseases as compared to traditional oncology indications. Kyverna will lead and fund preclinical and clinical development for KYV-201. The Company will have an option to lead U.S. commercialization for KYV-201 under a co-development and co-commercialization agreement. If the Company chooses to co-develop and co-commercialize KYV-201, it will pay an opt-in fee of $ 5.0 million and share in 50 % of development costs and future net profit and/or loss arising from commercializing KYV-201 in the U.S. Kyverna retains all rights outside of the U.S. , and the Company will receive low-to-mid-single-digit royalties on net sales generated outside of the U.S. Kyverna is considered to be a related party, as they have a board member in common with the Company. Financial Terms: In exchange for the license, the Company received an equity ownership of approximately 7% in Kyverna at the time of closing. The Company will be eligible to receive certain development and commercial milestone payments, as well as low-to-mid-single-digit royalties on potential future sales of KYV-201. Kyverna LCA – Accounting Analysis: The Company determined that the accounting for the Kyverna LCA is within the scope of ASC 606. The Company evaluated the promised goods and services and determined that it included one performance obligation: a combined performance obligation related to the transfer of the license related to the allogeneic platform technology, a technology transfer, and other supply and research and development activities. The transaction price was determined to be $ 7.0 million, which represents the fair value of the Company's equity interest in Kyverna at the time of closing. See Note 10 for the determination of the fair value of the Company's investment. The Company allocated the full transaction price to the combined performance obligation. Revenue will be recognized under a time-elapsed input model starting at the completion of the technology transfer, which in management's judgment is the best measure of progress towards satisfying the performance obligation. Progress will be measured and reassessed quarterly. There was no revenue recognized in the year ended December 31, 2021 related to the Kyverna LCA. As of December 31, 2021, the Company had deferred revenue of $ 7.0 million which is expected to be recognized over a nine to twelve month period. F- 24 Novartis Institutes for BioMedical Research, Inc. In December 2014, the Company entered into a strategic collaboration agreement with Novartis (the “2014 Novartis Agreement”), primarily focused on the research of new ex vivo CRISPR/Cas9-edited therapies using CAR-T cells and hematopoietic stem cells (“HSCs”). The agreement was amended in December 2018 (the “Novartis Amendment”) to also include research on ocular stem cells (“OSCs”). In December 2019, per the terms of the 2014 Novartis Agreement, the research term ended, although the 2014 Novartis Agreement remains in effect, for which the Company will be eligible to receive milestone and royalty payments in the future. In June 2021, the Company entered into Amendment No. 3 (the “Amendment”) to the 2014 Novartis Agreement. The Amendment amends Novartis’ rights with respect to all of the CAR-T Therapeutic Targets (as defined in the 2014 Novartis Agreement) that Novartis selected under the 2014 Novartis Agreement, including (a) making Novartis’ license non-exclusive for such CAR-T Therapeutic Targets, (b) removing Novartis’ diligence and related reporting obligations for such CAR-T Therapeutic Targets, and (c) refining the scope of Novartis’ sublicense rights for such CAR-T Therapeutic Targets. The Company made a one-time payment to Novartis of $ 10.0 million within 30 days after the effective date of the Amendment, which was recorded as research and development expense in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021. Since December 31, 2020, there have been no other material changes to the key terms of the 2014 Novartis Agreement and the Novartis Amendment. For further information on the terms and conditions of these agreements, please see the notes to the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2020. Revenue Recognition – Collaboration Revenue. Through December 31, 2021, excluding amounts allocated to Novartis’ purchase of the Company’s Class A-1 and Class A-2 Preferred Units, the Company had recorded a total of $62.4 million in cash under the 2014 Novartis Agreement and the Novartis Amendment. Through December 31, 2021, the Company recognized $ 62.4 million of collaboration revenue. No revenue was recognized during the years ended December 31, 2021 or 2020 related to the 2014 Novartis Agreement and the Novartis Amendment. The Company recognized $ 18.5 million during the year ended December 31, 2019, in the consolidated statement of operations and comprehensive loss, related to the 2014 Novartis Agreement and the Novartis Amendment. As of December 31, 2019, the aggregate transaction price had been recognized in full. Revenue Recognition – Milestone . In March 2020, the U.S. Food and Drug Administration (“FDA”) accepted the Investigational New Drug ( “ IND ” ) application submitted by Novartis for a CRISPR/Cas9-based engineered cell therapy for the treatment of sickle cell disease. As a result of meeting this milestone, the Company recognized $ 5.0 million as collaboration revenue within the consolidated statement of operations and comprehensive loss. In September 2021, an additional milestone was reached and, as a result, the Company recognized $ 0.3 million as collaboration revenue within the consolidated statement of operations and comprehensive loss. No other milestones under the 2014 Novartis Agreement and the Novartis Amendment were achieved during the years ended December 31, 2021, 2020 or 2019. The Company is eligible to receive additional downstream success-based milestones and royalties. As of December 31, 2021 and 2020, the Company had no accounts receivable or deferred revenue related to the 2014 Novartis Agreement and the Novartis Amendment. 10. Equity-Method Investment and Other Investments AvenCell Therapeutics, Inc. On July 30, 2021, the Company finalized a transaction in which the Company, Cellex and BXLS established AvenCell, a joint venture and privately held company. In exchange for contributing an exclusive license to the joint venture, the Company entered into a Preferred Stock Purchase Agreement with AvenCell for a 33.33 % equity interest in AvenCell at the time of the initial closing. Cellex and BXLS each equally owned the remaining 66.67 % at that time. The Company has significant influence over, but does not control, AvenCell through its noncontrolling representation on AvenCell’s Board of Directors and the Company’s equity interest in AvenCell. The Company has determined that the preferred stock it owns is in-substance common stock. The Company is not the primary beneficiary as it does not have the power to direct the activities of AvenCell that most significantly impact AvenCell’s economic performance. Accordingly, the Company does not consolidate the financial statements of AvenCell and accounts for its investment using the equity method of accounting. F- 25 As of the closing date, the fair value of the Company’s investment in AvenCell was $ 62.9 million which represents the fair value of the preferred stock received in exchange for the exclusive license to the Company’s CRISPR/Cas9 allogeneic platform (See Note 9). In determining the fair value of the Company’s investment, the Company used an option pricing model which requires the input of certain subjective assumptions. The key assumptions used in the option pricing model, which are level 3 inputs, include the anticipated holding period to an exit and liquidity event, the volatility of market participants ( 76 %), the probability of AvenCell achieving certain milestones to obtain subsequent financings ( 75 %) and the discount for lack of marketability ( 11 %). The Company recorded the initial investment in AvenCell of $ 62.9 million in “ Equity method investments ” on its consolidated balance sheet. Due to the timing and availability of AvenCell's financial information, the Company will record its share of losses from AvenCell on a quarterly basis on a one-quarter lag from July 30, 2021. Therefore, the Company recorded its share of two months of AvenCell ’s losses generated in the third quarter of 2021 in the Company's operating results and other comprehensive loss in the fourth quarter of 2021, resulting in a reduction of the Company's investment by $ 1.8 million. The Company will record its share of three months of AvenCell 's losses generated in the fourth quarter of 2021 in the Company's operating results in the first quarter of 2022. The Company is not aware of any material events or transactions during this period. The elimination of the intra-entity profit component of $ 2.9 million (See Note 9) resulted in a further reduction in the balance of the investment in AvenCell , bringing the carrying value of the investment to $ 58.1 million as of December 31, 2021. At December 31, 2021, the maximum exposure to loss is limited to the Company’s equity investment in the joint venture. SparingVision SAS In connection with the SparingVision LCA (See Note 9), the Company received 83,316 shares of Series A2 Preferred Stock (“Series A2”). Attached to each share of Series A2, the Company received three warrants for the right to purchase additional Series A2 shares at designated prices that are subject to certain vesting conditions (collectively referred to as the “SparingVision investments”). The Company accounts for the SparingVision investments using the measurement alternative as SparingVision is a private company and there is no readily observable transaction price. In determining the fair value of the SparingVision investments, the Company used an option pricing model which requires the input of certain subjective assumptions. The key assumptions used in the option pricing model, which are level 3 inputs, include the anticipated holding period to an exit and liquidity event, the volatility of market participants ( 90 %), and the rate of return ( 65 %). The Company recorded the initial investment in SparingVision of $ 14.8 million in “Investments and other assets” on its consolidated balance sheet. There was no change in the observable price of the SparingVision investments as of December 31, 2021. Kyverna Therapeutics, Inc. In connection with the Kyverna LCA (See Note 9), the Company received 3,739,515 shares of Series B Preferred Stock with a fair value of $ 7.0 million. The Company separately made an additional investment in Kyverna, purchasing 1,602,649 shares of Series B Preferred Stock in exchange for $ 3.0 million in cash (collectively referred to as the “Kyverna investments”). The Company accounts for the Kyverna investments using the measurement alternative as Kyverna is a private company and there is no readily observable transaction price. The Company recorded the initial investment in Kyverna of $ 10.0 million in “Investments and other assets” on its consolidated balance sheet. There was no change in the observable price of the Kyverna investment as of December 31, 2021. 11. Leases In October 2014, the Company entered into an agreement to lease office and laboratory space at 130 Brookline Street (the “130 Brookline Lease”) in Cambridge, Massachusetts under an operating lease agreement with a term through January 2020 , with an option to extend the term of the lease for an additional five-year period. In April 2019, the lease was amended to extend the term for the additional five-year period, through January 2025 . Upon the execution of the original lease, the Company provided a $ 0.3 million security deposit which is recorded in “Investments and other assets” on the Company's consolidated balance sheets. In March 2020, the Company entered into a second amendment to the 130 Brookline Lease (the “130 Brookline Lease Second Amendment”). The 130 Brookline Lease Second Amendment extends the term of the 130 Brookline Lease by F- 26 approximately six years through January 31, 2031 . This extended term is included as part of the lease liability and right-of-use asset at December 31, 2021. The 130 Brookline Lease Second Amendment also provides an option to extend the lease for two consecutive five-year terms. The option for these further extensions is not included as part of the lease liability and right-of-use asset at December 31, 2021, as it is not reasonably certain that it will be exercised. In the first quarter of 2020, the Company increased the right-of-use asset and liability related to this lease by approximately $ 7.3 million related to the 130 Brookline Lease Second Amendment. In March 2019, the Company entered into a separate agreement to sublease additional office and laboratory space at 130 Brookline Street in Cambridge, Massachusetts under an operating sublease agreement with a term through April 2021 , with two options to extend the agreement by one year each, for a total option period of up to two years . Upon commencement of the lease in April 2019, the Company recognized a right-of-use asset and lease liability of approximately $ 1.3 million. In September 2020, the Company amended the lease to extend the term until October 2021. An adjustment of $ 0.4 million to the right-of-use asset and lease liability was recorded upon the execution of the amendment. This sublease was terminated in September 2021. In January 2016, the Company entered into a ten-year agreement to lease office and laboratory space at 40 Erie Street (the “40 Erie Lease”) in Cambridge, Massachusetts under an operating lease agreement, with an option to terminate the lease at the end of the sixth year and an option to extend the term of the lease for an additional three years . Upon the execution of this lease, the Company provided a $ 2.2 million security deposit, which has been recorded in “Investments and other assets” on the consolidated balance sheets. In November 2020, the Company entered into a second amendment to the 40 Erie Lease (the “40 Erie Lease Second Amendment”) which provides the Company with a right of first offer with respect to any space that becomes available at the 40 Erie Street building, and in consideration for this right the Company agreed to nullify the option to terminate the lease at the end of the sixth year that was included in the 40 Erie Lease. In the fourth quarter of 2020, the Company increased the right-of-use asset and liability related to this lease by approximately $ 18.5 million related to the 40 Erie Lease Second Amendment. In March 2020, the Company entered into an agreement to lease approximately 39,000 square feet of office and laboratory spa ce at 281 Albany Street in Cambridge, Massachusetts under an operating lease agreement (the “281 Albany Lease”). The initial term of the 281 Albany Lease is ten years following the rent commencement date which was determined to be March 2021 in accordance with ASC 842, Leases (Topic 842) ( “ ASC 842 ” ), as that was when the facility was substantially complete and available for use. T he Company recognized a right-of-use asset and a lease liability of approximately $ 40.4 million and $ 34.8 million, respectively, in the first quarter of 2021 related to the 281 Albany Lease. In determining the lease liability, the Company used an incremental borrowing rate of 5.52 % based on a number of factors including the Company’s credit rating and the lease term. Included in the recognized right-of-use asset at the inception of the lease was approximately $ 5.6 million in lease payments that were prepaid under the terms of the lease. The Company modified the right-of-use asset in the second quarter of 2021 based on changes to the configuration of this space, resulting in an additional $ 1.4 million being added to the right-of-use asset. The base rent under the 281 Albany Lease is $ 99.00 per square foot per year during the first year of the term, which is subject to scheduled annual increases up to $ 128.87 per square foot per year during the last year of the initial term, plus certain operating expenses and taxes. In addition, the landlord contributed an aggregate of $ 4.4 million toward the cost of construction and tenant improvements for the premises. In a ccordance with the 281 Albany Lease, the Company is required to maintain a letter of credit in the amount of $ 1.9 million that is restricted for the term of the lease. These restricted cash equivalents are reported in “Investments and other assets” in the Company’s consolidated balance sheet. The Company has the option to extend the 281 Albany Lease for two successive five-year terms ; this option is not included as part of the lease liability and right-of-use asset at December 31, 2021, as it is not reasonably certain that it will be exercised . In July 2021, the Company entered into an agreement to lease 13,662 square feet of office space at 17 Tudor Street in Cambridge, Massachusetts under an operating lease agreement (the “17 Tudor Lease”). The Company’s obligation to pay rent began on November 1, 2021. The initial term of the 17 Tudor Lease is five years and the Company has an option to extend the 17 Tudor Lease for one three-year term. The option is not included as part of the lease liability and right-of-use asset at December 31, 2021, as it is not reasonably certain that it will be exercised. The base rent under the 17 Tudor Lease is $ 74.00 per square foot during the first year of the term, which is subject to scheduled annual increases throughout the term, resulting in a base rent of $ 83.29 per square foot during the last year of the initial term, plus certain operating expenses and taxes. In September 2021 the Company determined, in accordance with ASC 842, that the commencement date of the lease had been met as the Company had gained access to the facility F- 27 in order to begin work on lessee-owned tenant improvements and, accordingly, the Company recognized a right-of-use asset and a lease liability of approximately $ 4.9 million in the third quarter of 2021 related to the 17 Tudor Lease. In determining the lease liability, the Company used an incremental borrowing rate of 4.15 % based on a number of factors including the Company’s credit rating and the lease term. In accordance with the 17 Tudor Lease, the Company is required to maintain a letter of credit in the amount of $ 0.2 million that is restricted for the term of the lease. These restricted cash equivalents are reported in “Investments and other assets” in the Company’s consolidated balance sheet. In July 2021, the Company entered into an agreement to extend an existing lease for a clean room located in Waltham, Massachusetts under an operating lease agreement (the “Waltham Lease”) for an additional two years. The Company determined, in accordance with ASC 842, that the extension should be accounted for as a lease modification and, accordingly, recorded an adjustment to the right-of-use asset and lease liability of approximately $ 2.5 million in the third quarter of 2021 related to the Waltham Lease. Throughout the term of its leases, the Company is responsible for paying certain costs and expenses, in addition to the rent, as specified in the lease, including a proportionate share of applicable taxes, operating expenses and utilities. The variable portion of these costs are expensed as incurred and are disclosed as variable lease cost. The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases for the years ended December 31, 2021 and 2020: Year Ended December 31, 2021 2020 (In thousands) Lease cost Operating lease cost $ 12,871 $ 8,447 Short-term lease cost 31 56 Variable lease cost 3,339 2,918 Total lease cost $ 16,241 $ 11,421 Year Ended December 31, 2021 2020 (In thousands) Other information Operating cash flows used for operating leases $ 12,641 $ 7,495 Operating lease liabilities arising from obtaining right-of-use assets 49,378 26,432 As Of December 31, 2021 2020 Lease term and discount rate Weighted average remaining lease term 7.2 years 6.7 years Weighted average discount rate 5.50 % 5.80 % F- 28 The table below reconciles the undiscounted cash flows for each of the next five years and total of the remaining years to the operating lease liabilities recorded in the consolidated balance sheet as of December 31, 2021: Future Operating Lease Payments Year Ending December 31, (in thousands) 2022 $ 12,929 2023 13,398 2024 12,320 2025 12,838 2026 11,544 Thereafter 28,809 Total lease payments $ 91,838 Less: imputed interest ( 17,815 ) Total operating lease liabilities at December 31, 2021 $ 74,023 12. Equity-Based Compensation Equity-based compensation expense is classified in the consolidated statements of operations and comprehensive loss as follows: Year Ended December 31, 2021 2020 2019 (In thousands) Research and development $ 26,712 $ 10,202 $ 6,986 General and administrative 20,297 9,701 8,105 Total $ 47,009 $ 19,903 $ 15,091 Amended and Restated 2015 Stock Option and Incentive Plan In April 2016, the Company adopted the Amended and Restated 2015 Stock Option and Incentive Plan (the “2015 Plan”). The 2015 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and other stock-based awards. Recipients of incentive stock options and non-qualified stock options are eligible to purchase shares of the Company’s common stock at an exercise price equal to the fair value of such stock on the grant date. Stock options granted under the 2015 Plan generally vest 25 % on the first anniversary of the original vesting date, with the balance vesting monthly over the remaining three years , unless they contain specific performance-based vesting provisions. The maximum term of stock options granted under the 2015 Plan is ten years . As of December 31, 2021, there were 2,241,278 shares available for future issuance under the 2015 Plan. The number of shares reserved for issuance under the 2015 Plan shall be cumulatively increased by four percent of the number of F- 29 shares of stock issued and outstanding on the immediately preceding December 31 or such lesser number of shares of stock as determined by the board of directors . Restricted Stock Units RSUs are measured at fair value based on the quoted price of the Company’s common stock. The following table summarizes the Company’s RSU activity for the year ended December 31, 2021: Number of Shares Weighted Average Grant Date Fair Value per Share Unvested restricted stock units as of December 31, 2020 193,936 $ 23.98 Granted 451,272 73.81 Vested ( 119,715 ) 20.94 Cancelled ( 72,467 ) 45.14 Unvested restricted stock units as of December 31, 2021 453,026 $ 71.03 In January 2020, the Company granted 181,020 RSUs to certain non-executive employees that included a performance condition in addition to a service condition. These RSUs would vest over a period of three years and were subject to accelerated vesting based on the Company’s programs achieving certain development milestones before December 1, 2022. The fair value of the RSUs at date of grant was $ 15.05 . During the year ended December 31, 2020, the Company achieved one of its development milestones and 58,870 of these RSUs vested. During the year ended December 31, 2021, 26,235 of these RSUs vested based on the satisfaction of a service condition, and 64,290 vested due to the achievement of additional development milestones. At December 31, 2021, none of these RSUs are unvested. The weighted-average grant date fair value of RSUs granted for the years ended December 31, 2021, 2020 and 2019 was $ 73.81 , $ 21.70 and $ 0 . The total fair value of RSUs vested (measured on the date of vesting) for the years ended December 31, 2021 and 2020 was $ 14.1 million and $ 2.8 million, respectively. During the year ended December 31, 2019, RSAs that were granted prior to the Company's IPO vested with a total fair value (measured on the date of vesting) of $ 0.6 million. As of December 31, 2021, there was $ 27.1 million of unrecognized equity-based compensation expense related to RSUs that are expected to vest. These costs are expected to be recognized over a weighted average remaining vesting period of 2.8 years. Stock Options The weighted average grant date fair value of options, estimated as of the grant date using the Black-Scholes option pricing model, was $ 54.09 per option for options granted during the year ended December 31, 2021, $ 9.07 per option for options granted during the year ended December 31, 2020, and $ 9.21 per option for options granted during the year ended December 31, 2019. The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during the years ended December 31, 2021, 2020 and 2019 was $ 262.0 million, $ 20.3 million, and $ 2.3 million, respectively. Weighted average assumptions used to apply this pricing model were as follows: Year Ended December 31, 2021 2020 2019 Risk-free interest rate 1.0 % 0.8 % 2.1 % Expected life of options 6.0 years 6.0 years 6.0 years Expected volatility of underlying stock 72.9 % 67.8 % 68.1 % Expected dividend yield 0.0 % 0.0 % 0.0 % Risk-free Interest Rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with maturities approximately equal to the option’s expected term. Expected Dividend Yield. The expected dividend yield assumption is based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. F- 30 Expected Volatility. The expected volatility was derived from a blend of the Company’s historical volatility and an average of the historical stock volatilities of several peer companies within the Company’s industry, both over a period equivalent to the expected term of the stock option grants. Expected Term. The expected term represents the period that stock option awards are expected to be outstanding. For option grants that are considered to be “plain vanilla,” the Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate the expected term. The Company uses the market closing price of its common stock as reported on the Nasdaq Global Select Market to determine the fair value of the shares of common stock underlying stock options. The following is a summary of stock option activity for the year ended December 31, 2021: Number of Options Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at December 31, 2020 6,977,440 $ 15.43 Granted 2,729,302 84.16 Exercised ( 2,700,886 ) 15.22 Forfeited ( 700,700 ) 30.74 Outstanding at December 31, 2021 6,305,156 $ 43.57 7.38 $ 492,968 Exercisable at December 31, 2021 2,227,760 $ 16.37 5.43 $ 226,941 As of December 31, 2021, there was $ 130.3 million of unrecognized compensation cost related to stock options that have not yet vested. These costs are expected to be recognized over a weighted average remaining vesting period of 3.1 years. 2016 Employee Stock Purchase Plan In May 2016, the Company adopted the 2016 Employee Stock Purchase Plan (the “2016 Plan”). The 2016 Plan allows eligible employees to purchase shares of the Company’s common stock on the last day of each predetermined six-month offering period at 85 % of the lower of the fair market value per share at the beginning or end of the applicable offering period . The 2016 Plan provides for six-month offering periods beginning in January and July of each year. As of December 31, 2021, there were 1,297,202 shares available for future issuance under the 2016 Plan. The number of shares reserved for issuance under the 2016 Plan shall be cumulatively increased by the lesser of a) one percent of the number of shares of common stock issued and outstanding on the immediately preceding December 31, b) 500,000 shares of common stock, or c) such lesser number of shares of common stock as determined by the board of directors. During the years ended December 31, 2021, 2020, and 2019, the Company issued 30,897 , 101,911 , and 90,581 shares of common stock under the 2016 Plan, respectively. The weighted-average purchase prices of shares issued under the 2016 Plan were $ 65.51 , $ 15.28 , and $ 12.05 per share for the years ended December 31, 2021, 2020, and 2019, respectively. The fair value of the awards issued under the 2016 Plan to employees was estimated at the beginning of the offering period using a Black-Scholes option-pricing model with the following assumptions: Year Ended December 31, 2021 2020 2019 Risk-free interest rate 0.05 %- 0.09 % 0.17 %- 1.6 % 2.1 %- 2.5 % Expected term (in years) 0.5 years 0.5 years 0.5 years Expected volatility of underlying stock 77.5 %- 109.2 % 53.4 %- 98.3 % 62.9 %- 76.5 % Expected dividend yield 0.0 % 0.0 % 0.0 % F- 31 13. Loss Per Share Basic and diluted loss per share was calculated as follows: Year Ended December 31, 2021 2020 2019 (In thousands) Net loss $ ( 267,892 ) $ ( 134,231 ) $ ( 99,533 ) Weighted average shares outstanding, basic and diluted 70,894 55,987 47,247 Net loss per share, basic and diluted $ ( 3.78 ) $ ( 2.40 ) $ ( 2.11 ) The following common stock equivalents were excluded from the calculation of diluted loss per share in 2021, 2020 and 2019 because their inclusion would have been anti-dilutive: Year Ended December 31, 2021 2020 2019 (In thousands) Unvested restricted stock 453 194 72 Stock options 6,305 6,977 5,366 6,758 7,171 5,438 14. Stockholders’ Equity Follow-on Offerings On June 1, 2020, the Company entered into an underwriting agreement related to a public offering of 6,301,370 shares of its common stock, par value $ 0.0001 per share, including the exercise in full by the underwriters of their option to purchase an additional 821,917 shares, at the public offering price of $ 18.25 per share. The offering closed on June 5, 2020 and the Company received net proceeds of $ 107.7 million, after deducting the underwriting discount, commissions and offering expenses. On December 1, 2020, the Company entered into an underwriting agreement related to a public offering of 5,513,699 shares of its common stock, par value $ 0.0001 per share, including the exercise in full by the underwriters of their option to purchase an additional 719,178 shares, at the public offering price of $ 36.50 per share. The offering closed on December 4, 2020 and the Company received net proceeds of $ 188.9 million, after deducting the underwriting discount, commissions and offering expenses. On June 29, 2021, the Company entered into an underwriting agreement related to a public offering of 4,758,620 shares of its common stock , par value $ 0.0001 per share, including the exercise in full by the underwriters of their option to purchase an additional 620,689 shares at a public offering price of $ 145.00 per share. The offering closed on July 2, 2021 and the Company received net proceeds of $ 648.3 million, after deducting the underwriting discount, commissions and offering expenses. At-the-Market Offering Programs In October 2018, the Company entered into an Open Market Sale Agreement (the “2018 Sale Agreement”) with Jefferies LLC (“Jefferies”), under which Jefferies was able to offer and sell, from time to time in “at-the-market” offerings, shares of its common stock having aggregate gross proceeds of up to $ 100.0 million. The Company paid to Jefferies cash commissions of 3.0 % of the gross proceeds of sales of common stock under the 2018 Sale Agreement. The Company issued 5,890,648 shares of its common stock at an average price of $ 16.98 per share in accordance with the 2018 Sale Agreement for aggregate net proceeds of $ 96.4 million, after payment of cash commissions to Jefferies and approximately $ 0.6 million related to legal, accounting and other fees in connection with the sales. All shares related to the 2018 Sale Agreement had been sold as of December 31, 2019. In August 2019, the Company entered into an Open Market Sale Agreement (the “2019 Sale Agreement”) with Jefferies, under which Jefferies was able to offer and sell, from time to time in “at-the-market” offerings, common stock having aggregate gross proceeds of up to $ 150.0 million. The Company agreed to pay Jefferies cash commissions of 3.0 % of the gross proceeds of sales of common stock under the 2019 Sale Agreement. During the year ended F- 32 December 31, 2019, the Company issued 287,231 shares of its common stock, in a series of sales, at an average price of $ 16.48 per share, in accordance with the 2019 Sale Agreement for aggregate net proceeds of $ 4.4 million, after payment of cash commissions to Jefferies and approximately $ 0.2 million related to legal, accounting and other fees in connection with the sales. During the year ended December 31, 2020, the Company issued 2,270,161 shares of its common stock in a series of sales at an average price of $ 22.53 per share in accordance with the 2019 Sale Agreement, for aggregate net proceeds of $ 49.5 million after payment of cash commissions to Jefferies and approximately $ 0.2 million related to legal, accounting and other fees in connection with the sales. During the year ended December 31, 2021, the Company issued 641,709 shares of its common stock in a series of sales at an average price of $ 72.79 per share in accordance with the 2019 Sale Agreement, for aggregate net proceeds of $ 45.3 million after payment of cash commissions to Jefferies and approximately $ 0.1 million related to legal, accounting and other fees in connection with the sales. As of December 31, 2021, $ 47.4 million in shares of common stock remain eligible for sale under the 2019 Sale Agreement. Shares Issued in Private Placement to Regeneron As described in Note 9 above, in May 2020 the Company entered into an amendment to its collaboration agreement with Regeneron that was entered into in April 2016. Simultaneously, the Company and Regeneron entered into the 2020 Stock Purchase Agreement , under which the Company sold to Regeneron 925,218 shares of its common stock, par value $ 0.0001 per share, for aggregate cash consideration of $ 30.0 million, or $ 32.42 per share, representing a 100 % premium over the volume-weighted average trading price of the Company’s common stock during the 30-day period prior to the closing. Under the 2020 Stock Purchase Agreement, Regeneron will not dispose of any shares of common stock it beneficially owns in the Company until the termination of the Technology Collaboration Term (see Note 9). After applying equity accounting guidance to measure the issuance of the shares, $ 12.6 million was recorded as fair value in the consolidated statement of stockholders’ equity for the shares. 15. Related Party Transactions In the ordinary course of business, the Company may purchase materials or supplies from entities that are associated with a party that meets the criteria of a related party of the Company. These transactions are reviewed quarterly and to date have not been material to the Company’s consolidated financial statements. The Company and AvenCell are parties to the AvenCell LCA and AvenCell Co/Co, as described in Note 9. The Company’s relationship with AvenCell is considered to be as a related party due to the Company’s 33.33 % investment in AvenCell being accounted for under the equity method. T he Company recognized $ 5.9 million and $ 0.2 million in revenue u nder the AvenCell LCA and AvenCell Co/Co, respectively, for the year ended December 31, 2021. As of December 31, 2021 the Company had deferred revenue of $ 54.1 million, comprised of $ 34.2 million in current deferred revenue and $ 19.9 million in non-current deferred revenue, related to the AvenCell LCA. The Company and Kyverna are parties to the Kyverna LCA and are considered to be related parties because they have a common board member (see Note 9). The Company owns preferred stock of Kyverna, the value of which is included in “Investments and other assets” in the consolidated balance sheet. The value of this investment was $ 10.0 million as of December 31, 2021. There was no revenue recognized in the year ended December 31, 2021 related to the Kyverna LCA. As of December 31, 2021, the Company had deferred revenue of $7.0 million related to the Kyverna LCA. 16. 401(k) Plan In 2015, the Company established the Intellia Therapeutics, Inc. 401(k) Plan (the “401(k) Plan”) for its employees, which is designed to be qualified under Section 401(k) of the Internal Revenue Code. Eligible employees are permitted to contribute to the 401(k) Plan within statutory and 401(k) Plan limits. The Company makes matching contributions of 50 % of the first 6 % of employee contributions. The Company made matching contributions of $ 1.6 million, $ 1.1 million and $ 0.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. F- 33 17. Subsequent Events In January 2022, the Company entered into a Lease Agreement (the “Lease”) with the Massachusetts Institute of Technology (the “Landlord”) for office and laboratory space located at 730 Main Street, Cambridge, Massachusetts (the “Premises”). Under the terms of the Lease, the Company will lease approximately 38,000 square feet at the Premises, which will supplement the Company’s current leased premises in Cambridge, Massachusetts. The Lease, including the obligation to pay rent, is expected to commence on October 22, 2022 (the “Commencement Date”). The initial term of the Lease is ten years following the Commencement Date. The base rent under the Lease is $ 130.00 per square foot per year during the first year of the term, which is subject to scheduled annual increases up to $ 169.62 per square foot per year during the last year of the initial term, plus certain operating expenses and taxes. The Company has the option to extend the Lease for one five-year term . On February 2, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with RW Acquisition Corp., a Delaware corporation and a wholly-owned direct subsidiary of the Company (“Merger Sub”), Rewrite Therapeutics, Inc., a Delaware corporation (“Rewrite”) and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity as the representative of the Rewrite Holders (as defined below). On the effective date of the Merger Agreement, Merger Sub merged with and into Rewrite, with Rewrite surviving as a wholly-owned direct subsidiary of the Company. Pursuant to the Merger Agreement, and subject to the terms and conditions thereof, the Company paid Rewrite’s former stockholders and optionholders (the “Rewrite Holders”) upfront consideration in an aggregate amount of approximately $ 45.0 million payable in cash, excluding customary purchase price adjustments. In addition, the Rewrite Holders will be eligible to receive up to an additional $ 155.0 million in milestone payments upon the achievement of certain pre-specified research and regulatory approval milestones, payable through a mixture of $ 130.0 million in cash and $ 25.0 million in shares of common stock, par value $ 0.0001 per share (“Common Stock”). The shares of Common Stock will be valued using the volume-weighted average price of Common Stock of the Company over the ten consecutive trading day period ending on and including the trading day that is two trading days immediately prior to the issuance of the consideration issued in connection with the applicable milestone. On February 12, 2022 the Company entered into a license, collaboration and option agreement with ONK Therapeutics, Ltd. (“ONK”), an innovative company dedicated to developing optimally engineered natural killer (“NK”) cell therapies to cure patients with cancer. The agreement grants ONK a non-exclusive license to the Company's proprietary ex vivo CRISPR/Cas9-based genome editing platform and its LNP-based delivery technologies for development of up to five allogeneic NK cell therapies, which license is exclusive with respect to certain gRNAs. ONK will be responsible for preclinical and clinical development for the engineered NK cell therapies enabled by the agreement. The Company will be eligible to receive up to $ 184 million per product in development and commercial milestone payments, as well as up to mid-single digit royalties on potential future sales. In addition, the agreement grants the Company options to co-develop and co-commercialize up to two products developed through the collaboration worldwide with rights to lead commercialization in the U.S. In February 2022, the Company entered into a Lease Agreement (the “Winter Street Lease”) with ARE-Winter Street Property, LLC (the “Landlord”) for manufacturing space located at 840 Winter Street, Waltham, Massachusetts (the “Premises”). Under the terms of the Winter Street Lease, the Company will lease approximately 140,000 square feet at the Premises, which will provide the Company with the ability to manufacture its own products in a GMP compliant facility as well as to supplement the Company’s current leased premises in Cambridge, Massachusetts. The Winter Street Lease, including the obligation to pay rent, is expected to commence on February 1, 2024 (the “Commencement Date”). The initial term of the Winter Street Lease is twelve years following the Commencement Date. The base rent under the Winter Street Lease is $ 73.50 per square foot per year during the first year of the term, which is subject to scheduled 3% annual increases, plus certain operating expenses and taxes. The Company has the option to extend the Winter Street Lease for two five-year terms. F- 34 EXHIBIT INDEX Exhibit No. Exhibit Index 3.1 Second Amended and Restated Certificate of Incorporation of the Registrant (1) 3.2 Second Amended and Restated By-laws of the Registrant (1) 3.3 Amendment to the Second Amended and Restated By-laws of the Registrant (11) 4.1 Description of Certain Registrant’s Securities (15) 10.1# 2015 Amended and Restated Stock Option and Incentive Plan and forms of award agreements thereunder (3) 10.2# Senior Executive Cash Incentive Bonus Plan (5) 10.3† License Agreement dated as of July 16, 2014 by and between the Registrant (as successor in interest of Intellia Therapeutics, LLC) and Caribou Biosciences, Inc. (4) 10.4† Services Agreement dated as of July 16, 2014 by and between the Registrant (as successor in interest of Intellia Therapeutics, LLC) and Caribou Biosciences, Inc. (4) 10.5† License and Collaborative Research Agreement dated as of December 18, 2014 by and between the Registrant and Novartis Institutes for BioMedical Research, Inc. (2) 10.6# Form of Indemnification Agreement (3) 10.7 Lease Agreement, by and between the Registrant and MIT 130 Brookline LLC, dated as of October 21, 2014 (5) 10.8 Lease Agreement, by and between the Registrant and BMR-Sidney Research Campus LLC, dated as of January 6, 2016 (5) 10.9# 2016 Employee Stock Purchase Plan (3) 10.10† Amendment No. 1 to License Agreement dated as of February 2, 2016 by and between the Registrant and Caribou Biosciences, Inc. (5) 10.11† Addendum to License Agreement dated as of February 2, 2016 by and between the Registrant and Caribou Biosciences, Inc. (5) 10.12† License and Collaboration Agreement dated as of April 11, 2016 by and between the Registrant and Regeneron Pharmaceuticals, Inc. (2) 10.13 Common Stock Purchase Agreement dated as of April 26, 2016 between the Registrant and Regeneron Pharmaceuticals, Inc. (3) 10.14 Common Stock Purchase Agreement dated as of April 26, 2016 between the Registrant and Novartis Institutes for BioMedical Research, Inc. (3) 10.15# Form of Employment Agreement for Executive Officers (3) 10.16†* Consent to Assignments, Licensing and Common Ownership and Invention Management Agreement dated December 15, 2016 by and between the Registrant, CRISPR Therapeutics AG, The Regents of the University of California, University of Vienna, ERS Genomics Ltd., TRACR Hematology Ltd., Caribou Biosciences, Inc., and Dr. Emmanuelle Charpentier 10.17# Form of Amended and Restated Employment Agreement (7) 10.18 † Letter Agreement, dated as of July 20, 2018, by and between the Company and Regeneron Pharmaceuticals, Inc. and the corresponding Form of Co-Development and Co-Promotion Agreement, by and between the Company and Regeneron Pharmaceuticals, Inc. (8) F- 35 10.19 † Agreement and Amendment to License and Collaborative Research Agreement, dated as of December 3, 2018, by and between Novartis and the Company (9) 10.20 First Amendment to Lease, dated as of April 5, 2019, by and between the Company and MIT 130 Brookline Leasehold LLC. (10) 10.21# Fourth Amended and Restated Non-Employee Director Compensation Policy (4) 10.22 Lease Agreement, by and between the Registrant and 281-295 Albany Street Leasehold LLC, dated as of March 12, 2020 (12) 10.23 Second Amendment to Lease, dated as of March 12, 2020, by and between the Company and MIT 130 Brookline Leasehold LLC. (12) 10.24† Amendment No. 1 to the License and Collaboration Agreement, dated as of May 30, 2020 by and between the Company and Regeneron Pharmaceuticals, Inc. (13) 10.25 Stock Purchase Agreement, dated as of May 30, 2020 by and between the Company and Regeneron Pharmaceuticals, Inc. (13) 10.26 Corporate Bonus Plan, effective April 3, 2020 (14) 10.27† Amendment #3 to License and Collaborative Research Agreement, dated as of June 14, 2021, by and between the Registrant and Novartis (16) 10.28†* Agreement and Plan of Merger, by and among Intellia Therapeutics, Inc., Rewrite Therapeutics, Inc., RW Acquisition Corp., and Shareholder Representative Services, LLC, as securityholder representative, dated as of February 2, 2022 10.29* Lease Agreement by and between the Registrant and Are-Winter Street Property, LLC, dated as of February 22, 2022 21.1* Subsidiaries of the Registrant 23.1* Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm 31.1* Certification of Chief Executive Officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Chief Financial Officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, by John M. Leonard, M.D., President and Chief Executive Officer of the Company, and Glenn Goddard, Executive Vice President, Chief Financial Officer of the Company (17) 101.INS* Inline XBRL Instance Document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104* Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101*) † Portions of this exhibit (indicated by asterisks) have been omitted pursuant to Item 601(b)(10) of Regulation S-K. * Filed herewith. # Indicates a management contract or any compensatory plan, contract or arrangement F- 36 (1) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 001-37766) filed with the Securities and Exchange Commission on May 17, 2016 (2) Incorporated by reference to the Registration Statement on Form S-1 (File No. 333-210689) filed with the Securities and Exchange Commission on May 5, 2016 (3) Incorporated by reference to the Registration Statement on Form S-1 (File No. 333-210689) filed with the Securities and Exchange Commission on April 27, 2016 (4) Incorporated by reference to the Registration Statement on Registrant’s Quarterly Report on Form 10-Q (File No. 001-37766) filed with the Securities and Exchange Commission on May 6, 2021 (5) Incorporated by reference to the Registration Statement on Form S-1 (File No. 333-210689) filed with the Securities and Exchange Commission on April 11, 2016 (6) Incorporated by reference to the Registration Statement on Form S-1 (File No. 333-210689) filed with the Securities and Exchange Commission on April 12, 2016 (7) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 001-37766) filed with the Securities and Exchange Commission on April 17, 2018 (8) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37766) filed with the Securities and Exchange Commission on October 31, 2018 (9) Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 001-37766) filed with the Securities and Exchange Commission on February 27, 2019 (10) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37766) filed with the Securities and Exchange Commission on May 2, 2019 (11) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 001-37766) filed with the Securities and Exchange Commission on April 9, 2020 (12) Incorporated by reference to the Registrant’s Current Report on Form 10-Q (File No. 001-37766) filed with the Securities and Exchange Commission on May 7, 2020 (13) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 001-37766) filed with the Securities and Exchange Commission on June 1, 2020 (14) Incorporated by reference to the Registrant’s Current Report on Form 10-Q (File No. 001-37766) filed with the Securities and Exchange Commission on August 6, 2020 (15) Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 001-37766) filed with the Securities and Exchange Commission on February 27, 2020 (16) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 001-37766) filed with the Securities and Exchange Commission on June 17, 2021 (17) The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Annual Report on Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference. F- 37 SIGNA TURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INTELLIA THERAPEUTICS, INC. By: /s/ John M. Leonard John M. Leonard, M.D. President and Chief Executive Officer Dated: February 24, 2022 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated. Name Title Date /s/ John M. Leonard President, Chief Executive Officer and Director February 24, 2022 John M. Leonard, M.D. (Principal Executive Officer) /s/ Glenn Goddard Executive Vice President, Chief Financial Officer February 24, 2022 Glenn Goddard (Principal Financial and Accounting Officer) /s/ Fred Cohen Director February 24, 2022 Fred Cohen, M.D. /s/ John Crowley Director February 24, 2022 John Crowley /s/ Caroline Dorsa Director February 24, 2022 Caroline Dorsa /s/ Jean François Formela Director February 24, 2022 Jean François Formela, M.D. /s/ Jesse Goodman Director February 24, 2022 Jesse Goodman, M.D. /s/ Georgia Keresty Director February 24, 2022 Georgia Keresty /s/ Frank Verwiel Director February 24, 2022 Frank Verwiel, M.D. F- 38