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, 2023. 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, 2023. 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, 2023, our internal control over financial reporting is effective based on those criteria. 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, 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 101 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, 2023, 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, 2023, 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, 2023, of the Company and our report dated February 22, 2024, 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 22, 2024 102 Item 9B. Other Information Rule 10b5-1 Trading Plans During the three months ended December 31, 2023, none of the Company’s directors or officers adopted , materially modified , or terminated any contract, instruction, or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 103 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 2024 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 29, 2024. 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 2024 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 2024 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 2024 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 2024 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 2024 Annual Meeting of Stockholders under the caption “Audit Committee Matters — Principal Accounting Firm Fees” and is incorporated herein by reference. 104 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. 105 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) F- 1 Consolidated Balance Sheets F- 3 Consolidated Statements of Operations and Comprehensive Loss F- 4 Consolidated Statements of Stockholders’ Equity F- 5 Consolidated Statements of Cash Flows F- 6 Notes to Consolidated Financial Statements F- 7 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, 2023 and 2022, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, 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, 2023, 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 22, 2024, 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. F- 1 Revenue Recognition — Collaboration Arrangements – Refer to Note 9 to the financial statements . Critical Audit Matter Description The Company recognizes collaboration revenue on license and collaboration agreements as they fulfill their performance obligations and transfer control of goods and services to the customer. During 2023, a customer exercised an extension (the “Extension”) for one of the customer's collaboration agreements, which resulted in management applying judgment in determining the accounting for the modified agreement, and in particular, in identifying if the promised performance obligations were distinct. Auditing the Company’s accounting for revenues pertaining to the Extension required an increased extent of effort and a high degree of auditor judgment, due to the complex and judgmental nature of evaluating the terms and assumptions of the related Extension and the appropriate accounting for the modification under the guidance in ASC 606, Revenue from Contracts with Customers . How the Critical Audit Matter Was Addressed in the Audit Our principal audit procedures related to the Company’s revenue recognition for the Extension included the following: • We tested the effectiveness of controls over the Company’s processes for assessing the accounting treatment of modifications to existing collaboration agreements. • Obtained and read the Extension agreement along with the original and amended collaboration agreements and the Company’s accounting position paper for the Extension. • We tested and evaluated, among other things, the performance obligations identified and the Company’s conclusion that the promised goods and services under the Extension are not distinct from the combined performance obligations identified in the existing arrangement. • Performed corroborative inquiries with those overseeing the work relating to the Extension. • We tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements. /s/ Deloitte & Touche LLP Boston, Massachusetts February 22, 2024 We have served as the Company’s auditor since 2015. F- 2 INTELLIA THERAPEUTICS, INC. CONSOLIDATED BA LANCE SHEETS (Amounts in thousands except share and per share data) December 31, 2023 December 31, 2022 ASSETS Current Assets: Cash and cash equivalents $ 226,748 $ 523,506 Marketable securities 685,475 669,116 Accounts receivable ($ 0.2 million and $ 0.3 million, respectively, from related party) 36,456 3,768 Prepaid expenses and other current assets 49,651 20,407 Total current assets 998,330 1,216,797 Marketable securities - noncurrent 99,864 69,338 Property and equipment, net 32,760 27,921 Operating lease right-of-use assets 115,375 133,076 Equity method investment 11,765 32,455 Investments and other assets 42,883 40,527 Total Assets $ 1,300,977 $ 1,520,114 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 7,452 $ 5,154 Accrued expenses ($ 1.0 million and $ 1.6 million, respectively, from related party) 67,017 60,876 Current portion of operating lease liability 18,599 16,685 Current portion of deferred revenue ($ 0 and $ 19.9 million, respectively, from related party) 22,140 43,839 Total current liabilities 115,208 126,554 Deferred revenue, net of current portion 38,853 19,932 Long-term operating lease liability 96,747 114,018 Contingent consideration liability - 24,026 Total liabilities 250,808 284,530 Commitments and contingencies (Note 8) Stockholders’ Equity: Common stock, $ 0.0001 par value; 240,000,000 and 120,000,000 shares authorized at December 31, 2023 and December 31, 2022, respectively; 92,997,158 and 87,103,007 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively 9 9 Additional paid-in capital 2,710,797 2,420,223 Accumulated other comprehensive loss ( 2,258 ) ( 7,461 ) Accumulated deficit ( 1,658,379 ) ( 1,177,187 ) Total stockholders’ equity 1,050,169 1,235,584 Total Liabilities and Stockholders’ Equity $ 1,300,977 $ 1,520,114 The accompanying notes are an integral part of these consolidated financial statements. F- 3 INTELLIA THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF OP ERATIONS AND COMPREHENSIVE LOSS (Amounts in thousands except per share data) Year Ended December 31, 2023 2022 2021 Collaboration revenue (1) $ 36,275 $ 52,121 $ 33,053 Operating expenses: Research and development 435,069 419,979 229,807 General and administrative 116,497 90,306 71,096 Total operating expenses 551,566 510,285 300,903 Operating loss ( 515,291 ) ( 458,164 ) ( 267,850 ) Other income (expense), net: Interest income 49,832 8,542 1,283 Loss from equity method investment ( 15,633 ) ( 11,079 ) ( 1,325 ) Change in fair value of contingent consideration ( 100 ) ( 13,485 ) - Total other income (expense), net 34,099 ( 16,022 ) ( 42 ) Net loss $ ( 481,192 ) $ ( 474,186 ) $ ( 267,892 ) Net loss per share, basic and diluted $ ( 5.42 ) $ ( 6.16 ) $ ( 3.78 ) Weighted average shares outstanding, basic and diluted 88,770 76,972 70,894 Other comprehensive loss: Unrealized gain (loss) on marketable securities 3,635 ( 1,637 ) ( 2,126 ) Other comprehensive gain (loss) from equity method investment 1,568 ( 3,192 ) ( 507 ) Comprehensive loss $ ( 475,989 ) $ ( 479,015 ) $ ( 270,525 ) (1) Including the following revenue from related party (see Notes 9 and 16): $ 12,832 $ 21,134 $ 6,072 The accompanying notes are an integral part of these consolidated financial statements. F- 4 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 Income (Loss) Deficit Equity 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 Stock-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 Issuance of common stock through follow-on offerings, net of issuance costs of $ 253 7,532,751 1 337,891 - - 337,892 Issuance of common stock through at-the-market offerings, net of issuance costs of $ 164 - 2019 Sale Agreement 579,788 1 38,885 - - 38,886 Issuance of common stock through at-the-market offerings, net of issuance costs of $ 125 - 2022 Sale Agreement 3,395,339 - 189,011 - - 189,011 Exercise of stock options 883,954 - 14,517 - - 14,517 Vesting of restricted stock units 147,674 - - - - - Issuance of shares under employee stock purchase plan 77,618 - 2,649 - - 2,649 Stock-based compensation - - 91,400 - - 91,400 Other comprehensive loss - unrealized loss on marketable securities - - - ( 1,637 ) - ( 1,637 ) Other comprehensive loss - equity method investment - - - ( 3,192 ) - ( 3,192 ) Net loss - - - - ( 474,186 ) ( 474,186 ) Balance at December 31, 2022 87,103,007 9 2,420,223 ( 7,461 ) ( 1,177,187 ) 1,235,584 Issuance of common stock through at-the-market offerings, net of issuance costs of $ 376 - 2022 Sale Agreement 4,122,824 - 121,870 - - 121,870 Contingent consideration paid to Rewrite Holders 567,045 - 24,126 - - 24,126 Exercise of stock options 385,130 - 6,599 - - 6,599 Vesting of restricted stock units 677,055 - - - - - Issuance of shares under employee stock purchase plan 142,097 - 3,929 - - 3,929 Stock-based compensation - - 134,050 - - 134,050 Other comprehensive gain - unrealized gain on marketable securities - - - 3,635 - 3,635 Other comprehensive gain - equity method investment - - - 1,568 - 1,568 Net loss - - - - ( 481,192 ) ( 481,192 ) Balance at December 31, 2023 92,997,158 $ 9 $ 2,710,797 $ ( 2,258 ) $ ( 1,658,379 ) $ 1,050,169 The accompanying notes are an integral part of these consolidated financial statements. F- 5 INTELLIA THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) Year Ended December 31, 2023 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 481,192 ) $ ( 474,186 ) $ ( 267,892 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 8,976 7,572 6,891 Loss (gain) on disposal of property and equipment 72 ( 162 ) - Stock-based compensation 134,050 91,400 47,009 (Accretion) amortization of investment discounts and premiums ( 25,897 ) 4,003 7,604 Loss from equity method investment 15,633 11,079 1,325 Deferral of equity method investment intra-entity profit on sales 6,624 11,405 2,937 Change in fair value of contingent consideration 100 13,485 - In-process research and development expense - 55,990 - Changes in operating assets and liabilities: Accounts receivable ( 32,688 ) ( 1,737 ) 99 Prepaid expenses and other current assets ( 27,168 ) ( 2,160 ) ( 9,798 ) Operating lease right-of-use assets 19,011 13,121 9,349 Other assets ( 707 ) ( 1,091 ) 117 Accounts payable 2,522 ( 4,584 ) 529 Accrued expenses 6,024 15,924 17,260 Deferred revenue ( 2,778 ) ( 63,464 ) ( 31,355 ) Operating lease liabilities ( 16,668 ) ( 9,882 ) ( 9,105 ) Net cash used in operating activities ( 394,086 ) ( 333,287 ) ( 225,030 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment ( 13,985 ) ( 13,558 ) ( 12,756 ) Purchases of marketable securities ( 904,464 ) ( 429,032 ) ( 1,020,620 ) Maturities of marketable securities 887,102 647,581 485,598 Proceeds from sale of property and equipment - 150 - Acquired in-process research and development, net of cash acquired of $ 287 - ( 44,832 ) - Investment in Kyverna Therapeutics, Inc. - - ( 3,000 ) Net cash (used in) provided by investing activities ( 31,347 ) 160,309 ( 550,778 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of common stock through follow-on offerings, net of issuance costs - 337,892 648,315 Net proceeds from issuance of common stock through at-the-market offerings, net of issuance costs 119,795 227,897 45,255 Proceeds from options exercised 6,599 14,517 41,094 Issuance of shares through employee stock purchase plan 3,929 2,649 2,024 Net cash provided by financing activities 130,323 582,955 736,688 Net (decrease) increase in cash and cash equivalents and restricted cash equivalents ( 295,110 ) 409,977 ( 39,120 ) Cash, cash equivalents and restricted cash equivalents, beginning of period 535,463 125,486 164,606 Cash, cash equivalents and restricted cash equivalents, end of period $ 240,353 $ 535,463 $ 125,486 Reconciliation of cash, cash equivalents and restricted cash equivalents to consolidated balance sheet: Cash and cash equivalents $ 226,748 $ 523,506 $ 123,406 Restricted cash equivalents, included in investments and other assets 13,605 11,957 2,080 Total cash, cash equivalents and restricted cash equivalents $ 240,353 $ 535,463 $ 125,486 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Purchases of property and equipment unpaid at period end $ 1,525 $ 1,623 $ 667 Shares issued for Rewrite contingent consideration 24,126 - - Right-of-use assets acquired under operating leases 1,311 67,053 49,378 Proceeds from at-the-market offerings unpaid at period end 2,075 - - Contingent consideration liability assumed in asset acquisition - 10,541 - Non-cash trade-in of property and equipment - 200 - 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 The accompanying notes are an integral part of these consolidated financial statements. F- 6 INTELLIA THERAPEUTICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of Operations Organization Intellia Therapeutics, Inc. (“Intellia” or the “Company”) is a leading clinical-stage gene editing company, focused on developing potentially curative therapeutics using CRISPR/Cas9-based technologies. CRISPR/Cas9, an acronym for C lustered, R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”)/ C RISPR a ssociated 9 (“Cas9”), is a technology for genome editing, the process of altering selected sequences of genomic deoxyribonucleic acid (“DNA”). To fully realize the transformative potential of CRISPR/Cas9-based technologies, the Company is building a full-spectrum gene editing company, by leveraging its modular platform, to advance in vivo and ex vivo therapies for diseases with high unmet need by pursuing two primary approaches. For in vivo applications to address genetic diseases, the Company deploys CRISPR/Cas9 as the therapy. The Company’s in vivo programs use CRISPR to enable precise editing of disease-causing genes directly inside the human body. In addition, the Company is advancing ex vivo applications to address immuno-oncology and autoimmune diseases, where it uses CRISPR/Cas9 as the tool to create the engineered cell therapy. For its ex vivo programs, CRISPR/Cas9 is used to engineer human cells outside the body. The Company’s deep scientific, technical and clinical development experience, along with its robust intellectual property (“IP”) portfolio, have enabled 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 2014. The Company will require substantial additional capital to fund its research and development. The Company is subject to risks and uncertainties common to clinical-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, 2023, the Company has raised an aggregate of $ 2,534.1 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, 2023 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. In February 2022, the Company entered into an agreement to acquire Rewrite Therapeutics, Inc., a Delaware corporation (“Rewrite”). On the effective date of the agreement, Rewrite became a wholly owned subsidiary of the Company. In September 2022, Rewrite merged into Intellia, with Intellia the surviving entity. 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 and determination of impairment of equity and fair value method investments, contingent consideration and stock-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- 7 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, restricted cash equivalents, marketable securities, accounts receivable, non-marketable securities, accounts payable and accrued expenses. Certain of the Company’s financial assets, including cash equivalents, restricted 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. Investments in non-marketable securities are accounted for using the measurement alternative at cost minus impairment, adjusted for changes in observable prices. 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, 2023, cash equivalents consisted of interest-bearing money market accounts, U.S. Treasury bills and other government securities. As of December 31, 2022, cash equivalents consisted of interest-bearing money market accounts and reverse purchase agreements. 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 certain of its leases. As of December 31, 2023, these restricted cash equivalents amounted to $ 13.6 million. As of December 31, 2022, these restricted cash equivalents amounted to $ 12.0 million. The letters of credit are required to be maintained throughout the term of the leases; in some cases, the Company is able to reduce the amounts held over time. These restricted cash equivalents are long-term in nature and are included in “Investments and other assets” in the Company’s consolidated balance sheets. 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. Asset Acquisitions At the time of acquisition, the Company determines if a transaction should be accounted for as a business combination or acquisition of assets. The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs, and the consideration is allocated to the items acquired based on a relative fair value methodology. Goodwill is not recognized in asset acquisitions. In an asset acquisition, the cost allocated to acquire in-process research and development with no alternative future use is charged to research and development expense at the acquisition date. Non-Marketable Equity Securities The Company periodically 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 there are any indicators of impairment, and if so determines the fair value of the investment and compares to the recorded balance, to determine if there is an impairment, 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. F- 8 Concentrations of Credit Risk The Company’s cash, cash equivalents, restricted 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, 2023, the Company’s accounts receivable were related to its collaborations with Regeneron Pharmaceuticals, Inc. (“Regeneron”), SparingVision SAS (“SparingVision”), AvenCell Therapeutics, Inc. (“AvenCell”), and Kyverna Therapeutics, Inc. (“Kyverna”). As of December 31, 2022, the Company’s accounts receivable were related to its collaborations with Regeneron, AvenCell, SparingVision and ONK Therapeutics, Ltd. (“ONK”) . 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 Shorter of useful life or remaining lease term 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. 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. Contingent Consideration The Company accounts for contingent consideration identified in an asset acquisition, that is payable in cash and does not meet the definition of a derivative under Accounting Standard Codification (“ASC”) 815, Derivatives and Hedging , when the contingency is resolved and the consideration is paid or becomes payable. The Company accounts for contingent consideration identified in an asset acquisition that is settled in shares of common stock under ASC 480, Distinguishing Liabilities from Equity (“ASC 480”). The contingent consideration liability will be recorded at fair value at the end of each reporting period with changes in estimated fair values recorded in other (expense) income in the consolidated statements of operations and comprehensive loss. 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. F- 9 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 “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. 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, 2023 or 2022 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 F- 10 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, 2023, the Company’s revenue recognized is solely 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. 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 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 costs consist of expenses incurred in performing research and development activities, such as salaries, stock-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. F- 11 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. Stock-Based Compensation The Company’s stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period. The fair value of stock option grants is estimated using the Black-Scholes option pricing model. Use of the valuation model requires management to make certain assumptions with respect to selected model inputs. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for a term consistent with the expected life of the stock options. Volatility assumptions are calculated based on historical volatility of the Company’s stock. The Company estimates the expected term of options using the simplified method. In addition, an expected dividend yield of zero is used in the option valuation model because the Company does not pay cash dividends and does not expect to pay any cash dividends in the foreseeable future. Forfeitures are recorded as they occur. The fair value of market-based restricted stock units is determined using a Monte Carlo simulation model, which uses multiple input variables to determine the probability of satisfying the market condition requirements. For awards with service conditions only, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period. For awards with service and performance-based conditions, the Company recognizes stock-based compensation expense using the graded vesting method over the requisite service period. For awards with market-based conditions, the Company recognizes stock-based compensation expense using the accelerated attribution method over the requisite service period. Estimates of stock-based compensation expense for an award with performance conditions are based on the probable outcome of the performance conditions and the cumulative effect of any changes in the probability outcomes are recorded in the period in which the changes occur. The Company classifies stock-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’s chief executive officer, its chief operating decision maker, manages the Company’ s operations as a single segment for the purpose 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. F- 12 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. 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, 2023 and 2022, the Company accounted for its investment in AvenCell under the equity method of accounting and no impairment charges were recognized during the years ended December 31, 2023 or 2022. Refer to Note 10 for further details. Recently Adopted Accounting Pronouncements There were no accounting pronouncements adopted by the Company in 2023. Recent Issued Accounting Pronouncements Not Yet Effective In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting - Improvements to Reportable Segment Disclosures.” The amendments require disclosure of incremental segment information on an annual and interim basis. The amendments also require companies with a single reportable segment to provide all disclosures required by this amendment and all existing segment disclosures in ASC 280, “Segment Reporting.” The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures. In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU updates income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 and is applicable to the Company’s fiscal year beginning January 1, 2025, with early application permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures. F- 13 3. Marketable Securities The following table summarizes the Company’s available-for-sale marketable securities: December 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In thousands) Marketable securities: U.S. Treasury and other government-backed securities $ 382,260 $ 302 $ ( 254 ) $ 382,308 Financial institution debt securities 246,270 92 ( 243 ) 246,119 Corporate debt securities 97,490 53 ( 135 ) 97,408 Other asset-backed securities 59,453 75 ( 24 ) 59,504 Total $ 785,473 $ 522 $ ( 656 ) $ 785,339 December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In thousands) Marketable securities: U.S. Treasury and other government-backed securities $ 244,562 $ 62 $ ( 1,938 ) $ 242,686 Financial institution debt securities 380,891 - ( 1,030 ) 379,861 Corporate debt securities 102,059 - ( 509 ) 101,550 Other asset-backed securities 14,703 - ( 346 ) 14,357 Total $ 742,215 $ 62 $ ( 3,823 ) $ 738,454 The amortized cost of available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity. At December 31, 2023 and 2022, the balance in the Company’s accumulated other comprehensive loss 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, 2023, 2022 or 2021. The Company did not reclassify any amounts out of accumulated other comprehensive loss 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 unrealized losses as temporary in nature. The Company’ s available-for-sale securities that are classified as current 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 marketable securities 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, 2023 and 2022, the Company did no t hold any investments that matured beyond five years of the balance sheet date. Accrued interest on marketable securities is included in “Prepaid expenses and other current assets” on the Company's consolidated balance sheets. 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. F- 14 The Company’s financial assets and liabilities recognized at fair value on a recurring basis consisted of the following: Fair Value as of December 31, 2023 Total Level 1 Level 2 Level 3 Assets (In thousands) Cash equivalents and restricted cash equivalents $ 136,254 $ 136,254 $ - $ - Marketable securities: U.S. Treasury and other government-backed securities 382,308 120,556 261,752 - Financial institution debt securities 246,119 - 246,119 - Corporate debt securities 97,408 - 97,408 - Other asset-backed securities 59,504 - 59,504 - Total marketable securities 785,339 120,556 664,783 - Total $ 921,593 $ 256,810 $ 664,783 $ - Fair Value as of December 31, 2022 Total Level 1 Level 2 Level 3 Assets (In thousands) Cash equivalents and restricted cash equivalents $ 534,581 $ 534,581 $ - $ - Marketable securities: U.S. Treasury and other government-backed securities 242,686 172,939 69,747 - Financial institution debt securities 379,861 - 379,861 - Corporate debt securities 101,550 - 101,550 - Other asset-backed securities 14,357 - 14,357 - Total marketable securities 738,454 172,939 565,515 - Total $ 1,273,035 $ 707,520 $ 565,515 $ - Liabilities Contingent consideration $ 24,026 $ - $ - $ 24,026 Certain of the Company’s financial assets, including cash equivalents, restricted 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. Other financial instruments, including accounts receivable, accounts payable and accrued expense, are carried at cost, which approximates fair value due to the short duration and term to maturity. Level 3 Assets and Liabilities Equity-Method Investments The Company’s equity-method investment in AvenCell is classified as a Level 3 asset and is not included in the fair value table above as it is not valued at fair value on a recurring basis. Refer to Note 10 for further details. The carrying value of the Company’s equity-method investment as of December 31, 2023 and 2022 was $ 11.8 million and $ 32.5 million, respectively. Other Investments The Company’s other investments are classified as Level 3 assets and are not included in the fair value table above as they are not valued at fair value on a recurring basis . The Company’s investment in SparingVision was initially recorded at fair value, determined according to Level 3 inputs in the fair value hierarchy described above. The SparingVision investment is included in “Investments and other assets” on the consolidated balance sheets. This investment is accounted for using the measurement alternative at cost minus impairment adjusted for changes in observable prices. There were no changes in observable prices or impairment of this investment as of December 31, 2023 or 2022. The carrying value of the SparingVision investment was $ 14.8 million as of December 31, 2023 and 2022. Refer to Note 10 for further details. The Company’s investment in Kyverna was initially recorded at cost, which is representative of fair value. The Kyverna investment is included in “Investments and other assets” on the consolidated balance sheets. This investment is accounted for using the measurement alternative at cost minus impairment adjusted for changes in observable prices. There were no changes in observable prices or impairment of this investment as of December 31, 2023 or 2022. The carrying value of the Kyverna investment was $ 10.0 million as of December 31, 2023 and 2022. Refer to Note 10 for further details. F- 15 Contingent Consideration As discussed further in Note 11, as part of its acquisition of Rewrite, the Company made a $ 25.0 million research milestone payment in February of 2023, payable in a combination of $ 0.9 million in cash and the remainder in the Company’s common stock. The milestone payable in the Company’s common stock resulted in liability classification under ASC 480. This contingent consideration liability was carried at fair value which was estimated by applying a probability-based model, which utilized inputs based on timing of achievements that were unobservable in the market. The contingent consideration liability was classified within Level 3 of the fair value hierarchy until it was settled in February of 2023. The following table reconciles the change in fair value of the contingent consideration liability based on the level 3 inputs listed below for the years ended December 31, 2023 and 2022 (in thousands): Balance at February 2, 2022 (at inception) $ 10,541 Change in fair value 13,485 Balance at December 31, 2022 24,026 Change in fair value 100 Payment of contingent consideration ( 24,126 ) Balance at December 31, 2023 $ - As of inception (February 2, 2022) As of December 31, 2022 Discount rate 7 % 10.1 % Probability of achievement 50 % 100 % Projected year of achievement 2024 2023 5. Property and Equipment, Net Property and equipment, net consisted of the following: December 31, 2023 2022 (In thousands) Laboratory equipment $ 63,970 $ 51,911 Office furniture and equipment 2,633 2,633 Computer equipment 982 1,785 Leasehold improvements 3,134 3,066 Computer software 1,902 1,725 Total property and equipment 72,621 61,120 Less: accumulated depreciation and amortization ( 39,861 ) ( 33,199 ) Property and equipment, net $ 32,760 $ 27,921 Depreciation and amortization expense was $ 9.0 million, $ 7.6 million and $ 6.9 million for the years ended December 31, 2023, 2022 and 2021, respectively. 6. Accrued Expenses Accrued expenses consisted of the following: December 31, 2023 2022 (In thousands) Accrued research and development $ 27,411 $ 32,684 Employee compensation and benefits 26,615 21,778 Accrued legal and professional expenses 2,063 1,457 Accrued construction costs 6,891 - Accrued other 4,037 4,957 Total accrued expenses $ 67,017 $ 60,876 F- 16 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, 2023 2022 2021 Federal statutory income tax rate ( 21.0 )% ( 21.0 )% ( 21.0 )% State income taxes ( 8.6 ) ( 8.3 ) ( 16.6 ) Research and development tax credits ( 6.9 ) ( 5.3 ) ( 8.7 ) Stock-based compensation 1.6 ( 0.1 ) ( 16.8 ) Non-deductible officers' compensation - 0.1 0.2 In-process research and development - 2.5 - Change in valuation allowance 34.9 32.1 62.9 Effective income tax rate — % — % — % The Company’s net deferred tax assets (liabilities) consisted of the following: December 31, 2023 2022 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 258,664 $ 229,375 Research and development credit carryforwards 151,333 101,326 Section 174 capitalized research 150,993 78,873 Operating lease liability 31,183 35,386 Deferred revenue 9,633 13,189 Stock-based compensation 30,408 22,512 Accruals and allowances 6,244 4,968 Prepaid rent 1,190 1,367 Equity investment adjustments 7,580 3,358 Intangibles, including in-process research and development 1,017 930 Capitalized start-up costs 249 296 Gross deferred tax assets 648,494 491,580 Deferred tax asset valuation allowance ( 616,082 ) ( 454,793 ) Total deferred tax assets 32,412 36,787 Deferred tax liabilities: Fixed assets ( 1,221 ) ( 759 ) Operating lease right-of-use assets ( 31,191 ) ( 36,028 ) Total deferred tax liabilities ( 32,412 ) ( 36,787 ) Net deferred tax asset (liability) $ - $ - The Tax Cuts and Jobs Act (“TCJA” ) requires taxpayers to capitalize and amortize, rather than deduct, research and development expenditures under section 174 for tax years beginning after December 31, 2021. These rules became effective for the Company during the year ended December 31, 2022. As a result, the Company has capitalized research and development costs of $ 322.6 million and $ 365.8 million for the years ended December 31, 2022 and December 31, 2023, respectively. The Company will amortize these costs for tax purposes over 5 years if the research and development was performed in the U.S. and over 15 years if the research and development was performed outside the U.S. As of December 31, 2023 and 2022, the Company had federal net operating loss carryforwards of $ 954.0 million and $ 852.1 million, respectively, which may be available to offset future income tax liabilities. Approximately $ 36.9 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 $ 917.1 million will be carried over indefinitely, but will generally F- 17 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. As of December 31, 2023 and 2022, the Company also had state net operating loss carryforwards of $ 922.8 million and $ 797.8 million, respectively, which may be available to offset future income tax liabilities and begin to expire in 2034 . As of December 31, 2023 and 2022, the Company had federal tax credit carryforwards of approximately $ 100.7 million and $ 63.4 million, respectively, which begin to expire in 2034 . As of December 31, 2023 and 2022, the Company had state research and development and other credit carryforwards of approximately $ 64.1 million and $ 48.0 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 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, 2023 and 2022. The valuation allowance increased by $ 161.3 million in 2023, $ 150.0 million in 2022, and $ 163.9 million in 2021. Ownership changes may limit the amount of net operating loss carryforwards or research and development tax credit carryforwards that can be utilized to offset future taxable income or tax liability. In general, an ownership change, as defined by Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period. If the Company has experienced a change of control, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382 and 383 of the Code. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization. During 2022, the Company completed an assessment of the available net operating loss carryforwards and other tax attributes under Section 382 that covered the period from inception through December 31, 2022. The analysis did not result in a material limitation to the Company’s tax attributes and the results of this analysis are reflected herein. The Company has not completed an analysis through December 31, 2023. To the extent there was a change in control during 2023, the Company's tax attributes could be subject to limitation. However, a full valuation allowance has been provided against the deferred tax assets related to 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. As of December 31, 2023 , the Company had no t identified any unrecognized tax benefits. The Company will recognize interest and/or penalties related to uncertain tax benefits in income tax expense if they arise. 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 2020 through present. To the extent that the Company has tax attribute carryforwards, the tax year in which the attributes were generated may still be adjusted upon examination by the Internal Revenue Service or State taxing authorities to the extent utilized in a future period. The returns in these jurisdictions since inception remain open for examination; however, there are currently no pending tax examinations. 8. Commitments and Contingencies Litigation From time to time, the Company is involved in legal and administrative proceedings and claims of various types. In some actions, the claimants seek damages, as well as other relief, which, if granted, would require significant expenditures. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews these estimates each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in a liability to the Company and the amount of the loss can be reasonably estimated, the Company estimates and discloses the possible loss or range of loss. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in its consolidated financial statements. During the year ended December 31, 2023, there have been no material changes to any outstanding litigation, nor is the Company a party to any significant new litigation. F- 18 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, 2023, 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, 2023, the Company’s accounts receivable were related to its collaborations with Regeneron, SparingVision, AvenCell and Kyverna and the Company’s contract liabilities were related to its collaborations with Regeneron and SparingVision. As of December 31, 2022, the Company’s accounts receivable were related to its collaborations with Regeneron, AvenCell, SparingVision and ONK and the Company’s contract liabilities were related to its collaborations with Regeneron, AvenCell, SparingVision and Kyverna. The following table presents changes in the Company’s accounts receivable and contract liabilities (in thousands): Balance at Beginning of Period Additions Deductions Balance at End of Period Year Ended December 31, 2023 Accounts receivable $ 3,768 $ 51,421 $ ( 18,733 ) $ 36,456 Contract liabilities - deferred revenue $ 63,771 $ 40,312 $ ( 43,090 ) $ 60,993 Balance at Beginning of Period Additions Deductions Balance at End of Period Year Ended December 31, 2022 Accounts receivable $ 2,031 $ 12,453 $ ( 10,716 ) $ 3,768 Contract liabilities - deferred revenue $ 127,235 $ - $ ( 63,464 ) $ 63,771 T he 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, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Amounts included in the contract liability at the beginning of the period $ 23,462 $ 52,060 $ 22,544 Costs to obtain and fulfill a contract The Company has not incurred significant 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 (as amended from time to time, 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, 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”). In connection with the 2016 Regeneron Agreement, the Company received a nonrefundable upfront payment of $ 75.0 million. In addition, on Regeneron programs that are not subject to Co/Co agreements, the Company may be eligible to earn, on a per-licensed target basis, (i) up to $ 25.0 million in development milestones, including for the dosing of the first patient in each of Phase I, Phase II and Phase III clinical trials, (ii) up to $ 110.0 million in regulatory milestones, including for the acceptance of a regulatory filing in the U.S., and for obtaining regulatory approval in the U.S. and in certain other identified countries, and (iii) up to $ 185.0 million in sales-based milestone payments. The Company is also eligible to earn royalties ranging from the high-single digits to low teens, in each case, on a per-product basis, which royalties are potentially subject to various reductions and offsets and incorporate the Company’s existing F- 19 low- to mid-single-digit royalty obligations under a license agreement with Caribou. In connection with the 2016 Regeneron Agreement, Regeneron purchased $ 50.0 million of the Company’s common stock in a private placement under a stock purchase agreement concurrent with the Company’s IPO. In May 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 technology collaboration was extended until April 2024, at which point Regeneron would have an option to renew for an additional two years. The 2020 Regeneron Amendment also granted 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. As part of the consideration for the 2020 Regeneron Amendment, Regeneron paid the Company an upfront payment of $ 70.0 million, which included the $ 25.0 million fee to extend the Technology Collaboration Term, as defined in the 2016 Regeneron Agreement, to April 2024 . The potential future milestones and royalties remain unchanged from the 2016 Regeneron Agreement. In addition, on May 30, 2020 , the Company and Regeneron entered into the 2020 Stock Purchase Agreement. Under the 2020 Stock Purchase Agreement, 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 (the “Equity Transaction”), 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 of the Equity Transaction. 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. In October 2023, Regeneron notified the Company that it was exercising its one-time option to extend the Technology Collaboration Term for an additional two years (the “2024 Technology Collaboration Extension”) , until April 2026 , in exchange for a nonrefundable payment of $ 30.0 million due in April 2024. 2024 Technology Collaboration Extension: Accounting Analysis. The 2024 Technology Collaboration Extension was accounted for as a contract modification. The promised goods and services under the 2024 Technology Collaboration Extension are not distinct from the combined performance obligations identified in the 2020 Regeneron Amendment, which was only partially satisfied at the date of option exercise. A cumulative catch-up adjustment was recorded during the fourth quarter of 2023 resulting in a charge of $ 10.3 million against revenue previously recognized. The transaction price of the 2024 Technology Collaboration Extension was determined to be $ 51.7 million, which is comprised of the $ 11.4 million remaining consideration under the 2020 Regeneron Amendment as of the modification date, the $ 30.0 million extension fee and the $ 10.3 million cumulative catch-up adjustment. The $ 51.7 million transaction price was allocated to the performance obligations including the licenses to targets and associated research activities and evaluation plans and the combined performance obligation including the technology collaboration and associated research activities, on a relative standalone selling price basis. As a result of this evaluation, the Company allocated $ 48.3 million to the combined performance obligation including the licenses to targets and associated research activities and evaluation plans and $ 3.4 million to the combined performance obligation including the technology collaboration and associated research activities, which are being recognized using a time elapsed inputs method from the October 2023 extension date through April 2026, the remaining period of the collaboration. ATTR and Hemophilia Co/Co Agreements: Accounting Analysis. The Company concluded that the ATTR Co/Co and Hemophilia Co/Co agreements meet 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 ATTR Co/Co and the Hemophilia Co/Co agreements 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. In September 2023, Regeneron and Intellia further expanded the research collaboration (the “2023 Regeneron Amendment”) to develop additional in vivo CRISPR-based gene editing therapies focused on neurological and muscular diseases. The collaboration will leverage Intellia’s proprietary Nme2 CRISPR/Cas9 genome editing systems adapted for viral vector delivery and designed to precisely modify a target gene and Regeneron’s proprietary antibody-targeted adeno-associated virus vectors and delivery systems. Under the terms of the expanded research collaboration, the companies will initially research two in vivo non-liver targets. Intellia will lead the design of the editing methodology and Regeneron will lead the design of the targeted viral vector delivery approach and the parties will share research costs equally. Each party will have the opportunity to lead potential development and commercialization for one product candidate, and F- 20 the party that is not leading development and commercialization will have the option to enter into a co-development and co-promotion agreement for the target. 2023 Regeneron Amendment: Accounting Analysis . The Company concluded that the accounting for the 2023 Regeneron Amendment is within the scope of ASC 606. The Company identified one performance obligation, the transfer of the license and performance of collaborative research and development activities. There is no upfront consideration related to the 2023 Regeneron Amendment. As the 2023 Regeneron Amendment progresses, the Company and Regeneron will share research costs equally. Any cost reimbursements received from Regeneron will be recorded as a component of revenue and any payments made to Regeneron will be recorded as a reduction of revenue. Since December 31, 2022, there have been no material changes to the key terms of the 2016 Regeneron Agreement, ATTR Co/Co or Hemophilia Co/Co (the “Regeneron Agreements”), other than as described above. For further information on the terms and conditions of these agreements, see the notes to the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2022. Revenue Recognition: Collaboration Revenue. The Company recognized $ 21.0 million, $ 24.1 million and $ 25.7 million of collaboration revenue in the years ended December 31, 2023, 2022 and 2021, respectively, in the consolidated statements of operations and comprehensive loss. This includes $ 19.6 million, $ 11.9 million, and $ 5.9 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 approximately $ 10.7 million in the year ended December 31, 2023, $ 10.4 million in the year ended December 31, 2022 and $ 2.7 million in the year ended December 31, 2021. As of December 31, 2023, there was approximately $ 47.1 million of the aggregate transaction price remaining to be recognized that will be recognized through April 2026, the remaining period of the collaboration. As of December 31, 2023 and 2022, the Company had accounts receivable of $ 35.7 million and $ 3.2 million, respectively, and deferred revenue of $ 47.1 million and $ 28.8 million, respectively, related to the Regeneron Agreements. AvenCell Therapeutics, Inc. In July 2021, the Company entered into two agreements with AvenCell, a privately held chimeric antigen receptor T (“CAR-T”) cell therapy company formed on that date in a joint venture between the Company, Cellex Cell Professionals GmbH (“Cellex”) and funds managed by Blackstone Life Sciences Advisors L.L.C. (“BXLS”): (i) a license and collaboration agreement (the “AvenCell 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. In November 2022, the Company decided to re-prioritize its ex vivo programs and terminated the AvenCell Co/Co, effectively turning over control of the program to AvenCell. The Company’s obligations under the terminated agreement were completed in the second quarter of 2023. Since December 31, 2022, there have been no other material changes to the key terms of the AvenCell LCA and AvenCell Co/Co agreements. Revenue Recognition – Collaboration Revenue. The Company recognized $ 13.2 million, $ 22.8 million and $ 5.9 million in revenue related to the AvenCell LCA for the years ended December 31, 2023, 2022 and 2021, respectively, after eliminating $ 6.6 million, $ 11.4 million and $ 2.9 million in intra-entity profits during those respective periods, 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, this revenue is indefinitely deferred and excluded from the results of operations of the Company. The Company also recognized $ 0.2 million and $ 0.3 million related to materials shipped in accordance with the AvenCell LCA in the years ended December 31, 2023 and 2022, respectively. The Company recognized $ 0.6 million and $ 2.0 million in contra-revenue in the years ended December 31, 2023 and 2022, respectively, related to the AvenCell Co/Co agreement. The Company recognized $ 0.2 million in revenues related to the AvenCell Co/Co agreement for the year ended December 31, 2021. As of December 31, 2023, there was no remaining transaction price of the AvenCell LCA to be recognized. The Company had $ 0.2 million in accounts receivable and no deferred revenue related to the AvenCell agreements as of December 31, 2023. As of December 31, 2022 , the Company had $ 0.3 million in accounts receivable and deferred revenue of $ 19.9 million related to the AvenCell agreements. F- 21 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. Since December 31, 2022, there have been no material changes to the key terms of the SparingVision LCA. For further information on the terms and conditions of these agreements, see the notes to the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2022. Revenue Recognition: Collaboration Revenue. The Company recognized $ 1.8 million and $ 0.2 million in revenue related to the SparingVision LCA for the years ended December 31, 2023 and 2022, respectively. The Company did no t recognize collaboration revenue in the year ended December 31, 2021 related to the SparingVision LCA. As of December 31, 2023 and 2022, the Company had $ 0.5 million and $ 0.1 million in accounts receivable, respectively, related to the SparingVision LCA. As of December 31, 2023 and 2022, the Company had deferred revenue of $ 13.9 million and $ 14.7 million related to the SparingVision LCA, respectively, which is expected to be recognized over a six to nine year period from the signing of the agreement. 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. Since December 31, 2022, there have been no material changes to the key terms of the Kyverna LCA. For further information on the terms and conditions of this agreement, see the notes to the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2022. Revenue Recognition: Collaboration Revenue. The Company had recognized revenue from the Kyverna LCA in full as of March 31, 2023, including $ 0.4 million and $ 6.6 million in revenue for the years ended December 31, 2023 and 2022, respectively . The Company recognized approximately $ 0.1 million in revenue in the year ended December 31, 2023 related to materials shipped to Kyverna. The Company did no t recognize any revenue for the year ended December 31, 2021 re lated to the Kyverna LCA. As of December 31, 2023, the Company had $ 0.1 million in accounts receivable related to the Kyverna LCA. As of December 31, 2022, the Company did no t have accounts receivable related to the Kyverna LCA. As of December 31, 2023, the Company did no t have deferred revenue related to the Kyverna LCA. As of December 31, 2022 the Company had deferred revenue of $ 0.4 million related to the Kyverna LCA. ONK Therapeutics, Ltd. On February 12, 2022 the Company entered into a license, collaboration and option agreement (the “ONK LCA”) with ONK, an innovative company dedicated to developing optimally engineered natural killer (“NK”) cell therapies to cure patients with cancer. Since December 31, 2022, there have been no material changes to the key terms of the ONK LCA. Revenue Recognition: Collaboration Revenue. The Company recognized $ 0.2 million and $ 0.1 million in revenue for the years ended December 31, 2023 and 2022, respectively, related to materials shipped in accordance with the ONK LCA. As of December 31, 2023, the Company did no t have accounts receivable related to the ONK LCA. As of December 31, 2022, the Company had $ 0.1 million in accounts receivable related to the ONK LCA. 10. Equity-Method Investment and Other Investments AvenCell Therapeutics, Inc. In July 2021, 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- 22 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 records its share of losses from AvenCell on a quarterly basis on a one-quarter lag. The Company evaluates material events occurring during the quarter lag to determine whether the effects of any such events should be disclosed in the financial statements. The Company’s share of AvenCell ’s losses were $ 14.1 million, $ 14.3 million and $ 1.8 million for the years ended December 31, 2023, 2022 and 2021, respectively, and are reflected in its operating results and comprehensive loss. The Company eliminated intra-entity profit of $ 6.6 million, $ 11.4 million and $ 2.9 million for the years ended December 31, 2023, 2022 and 2021, respectively (see Note 9). The carrying value of the Company ’ s investment in AvenCell was $ 11.8 million and $ 32.5 million as of December 31, 2023 and 2022, respectively. In February 2024, AvenCell notified the Company that it is evaluating the valuation of its intangible assets for potential impairment which may result in the reduction of the Company’s equity method investment. AvenCell’s financial statements for the three months ended December 31, 2023, had not been finalized at the time the Company’s financial statements were issued. At December 31, 2023, the maximum exposure to loss is limited to the Company’s equity investment in the joint venture as adjusted for intra-entity profits that have been deferred to date. 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. The Company recorded the initial investment in SparingVision of $ 14.8 million in “Investments and other assets” on its consolidated balance sheet. There have been no changes in the valuation of the investment in SparingVision as of December 31, 2023. 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”). As of December 31, 2023, t he Company accounted for the Kyverna investments using the measurement alternative as Kyverna was a private company with no readily observable transaction price. The Company recorded the initial investment in Kyverna of $ 10.0 million in “Investments and other assets” on its condensed consolidated balance sheet. There have been no changes in the valuation of the investment in Kyverna as of December 31, 2023. In February 2024, Kyverna announced the completion of its IPO and its common stock began trading on the Nasdaq Global Select Market under the ticker symbol “KYTX” . 11. Rewrite Acquisition In February 2022, the Company entered into an Agreement and Plan of Merger by and among the Company, Rewrite, RW Acquisition Corp. and Shareholder Representative Services, LLC as Securityholder representative (the “Rewrite Merger Agreement”). Under the Rewrite Merger Agreement, the Company paid Company Securityholders (as defined in the Rewrite Merger Agreement) (the “Rewrite Holders”) upfront consideration in an aggregate amount of $ 45.0 million, excluding customary purchase price adjustments and closing costs, payable in cash. Pursuant to the Rewrite Merger Agreement, the Company acquired all of the issued and outstanding shares of Rewrite. The Rewrite transaction resulted in the acquisition of certain know-how and IP assets related to Rewrite’s proprietary DNA writing technology. The Company’s management determined that the acquired assets do not meet the definition of a business pursuant to ASC 805, Business Combinations , as substantially all of the fair value of the acquired assets is concentrated into one identifiable asset, the DNA writing technology. As of the date of closing of the transactions contemplated by the Rewrite Merger Agreement (the “Rewrite Merger Agreement Date”), the asset acquired had no alternative future use and had not reached a stage of technological feasibility. As a result, all payment obligations were recorded as research and development expense in the condensed consolidated statements of operations and other comprehensive loss in the amount of $ 56.0 million. The total transaction price was allocated to the assets acquired and liabilities assumed on a relative fair value basis. In addition, the Rewrite Holders are eligible to receive up to an additional $ 155.0 million, including $ 55.0 million upon the achievement of pre-specified research milestones and $ 100.0 million upon the achievement of a regulatory approval milestone, payable through a mixture of $ 130.0 million in cash and $ 25.0 million in a combination of cash and the Company’s common stock which would be valued using the volume-weighted average price of the Company’s Common Stock 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. In September 2022, Rewrite merged into Intellia, with Intellia the surviving entity. In January 2023, the $ 25.0 million research milestone noted above was achieved and, in February 2023, the Company paid the Rewrite Holders $ 0.9 million in cash and issued 567,045 shares of Intellia common stock in order to fulfill its obligation under the Rewrite Merger Agreement. The cash obligation was recorded as research and development expense in the consolidated statement of operations F- 23 and other comprehensive loss in the first quarter of 2023. The Company had determined that the research milestone settled in the Company’s common stock would be classified as a contingent consideration liability under ASC 480 and, therefore, the Company initially recorded a liability for this milestone payment as of the Rewrite Merger Agreement Date at its original fair value of $ 10.5 million. The contingent consideration liability was remeasured at fair value each financial reporting period, with the resulting impact reflected in the Company’s consolidated statements of operations and other comprehensive loss, presented within other income (expense). The remaining milestones to be settled in cash would be recorded when the contingency is resolved and the consideration is paid or becomes payable. The transaction price on the Rewrite Merger Agreement Date was determined and allocated as follows (in thousands): Transaction Price Upfront cash consideration $ 43,730 Research contingent consideration liabilities 10,541 Transaction costs 1,838 Total transaction price $ 56,109 Transaction Price Allocated In-process research and development $ 55,990 Cash acquired 287 Other current assets acquired 153 Other liabilities assumed ( 321 ) Total transaction price $ 56,109 12. Leases Property Leases - Commenced The Company leases approximately 230,000 square feet of real estate, including laboratory and office space in Cambridge, Massachusetts, and the surrounding areas. The Company’s leases have remaining terms ranging from one to approximately nine years. Certain leases include options to renew, exercised at the Company’s sole discretion, with varying renewal terms that can extend the lease term for an additional three to five years. All of the Company’s leases qualify as operating leases. In January 2023, the Company executed a sublease for approximately 13,000 square feet of space of laboratory and office space in Cambridge, Massachusetts for a term of approximately three years. The sublease agreement grants an option to renew the term for one additional year. Property Leases – Not Yet Commenced In February 2022, the Company entered into an agreement to lease approximately 140,000 square feet of office, general laboratory and planned good manufacturing practice (“GMP”) manufacturing space at 840 Winter Street in Waltham , Massachusetts (the “840 Winter Lease”). The Company has committed to making at least $ 146.0 million in rental payments over a lease term of 144 months estimated to begin in the second half of 2024. The Company has the option to extend the 840 Winter Lease for two five-year terms. In June 2023, the Company executed an amendment to the 840 Winter Lease, which outlines the Company’s and the landlord’s responsibilities regarding the construction of the leased space. The Company will be responsible for the oversight of the construction of the tenant improvements, which will be primarily funded by a tenant improvement allowance of up to $ 400 per rentable square foot, a portion of which would be repaid over the term of the lease with interest. The Company will also be responsible for certain future construction costs to the extent that they exceed the tenant improvement allowance. The Company anticipates a phased move-in process during the second half of 2024. As of December 31, 2023, the Company had not taken control of the premises and therefore there are no right of use assets or liabilities recorded related to the 840 Winter Lease under ASC 842, Leases (Topic 842) ( “ ASC 842 ” ). 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 costs. F- 24 The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases: Year Ended December 31, 2023 2022 (In thousands) Lease cost Operating lease cost $ 27,849 $ 18,031 Variable lease cost 6,991 4,443 Sublease income ( 1,439 ) - Net lease cost $ 33,401 $ 22,474 Year Ended December 31, 2023 2022 (In thousands) Other information Operating cash flows used for operating leases $ 25,456 $ 14,656 Operating lease liabilities arising from obtaining right-of-use assets 1,311 67,053 As Of December 31, 2023 2022 Lease term and discount rate Weighted average remaining lease term 6.2 years 6.9 years Weighted average discount rate 7.37 % 7.20 % 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, 2023: Future Operating Lease Payments Year Ending December 31, (in thousands) 2024 $ 26,395 2025 25,933 2026 25,110 2027 17,548 2028 12,300 Thereafter 39,260 Total lease payments $ 146,546 Less: imputed interest ( 31,200 ) Total operating lease liabilities at December 31, 2023 $ 115,346 13. Stock-Based Compensation Stock-based compensation expense is classified in the consolidated statements of operations and comprehensive loss as follows: Year Ended December 31, 2023 2022 2021 (In thousands) Research and development $ 82,211 $ 56,279 $ 26,712 General and administrative 51,839 35,121 20,297 Total $ 134,050 $ 91,400 $ 47,009 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. The Company maintains a retirement policy for equity awards granted to all employees (the “Retirement Policy”), which applies to all equity awards granted after July 1, 2022 to employees who meet certain retirement eligibility criteria set forth in the Retirement Policy F- 25 (the “Retirees”). Pursuant to the terms of the Retirement Policy, upon a Retiree’s eligible retirement: (i) all stock options held by the Retiree will continue to vest following the Retiree’s retirement date according to the original vesting schedule of the option until fully vested and all vested stock options held by such Retiree will remain exercisable until the earlier of the five-year anniversary of the Retiree’s retirement date or the original expiration date of the option, (ii) all unvested time-based RSUs held by the Retiree will vest in full on the Retiree’s retirement date and (iii) all unvested performance-based awards held by the Retiree will remain outstanding following the Retiree’s retirement date and the Retiree will remain eligible to earn a pro-rated portion of such performance-based awards at the end of the performance period based on actual performance during the performance period. As of December 31, 2023, there were 3,875,539 shares available for future issuance under the 2015 Plan. The number of shares reserved for issuance under the 2015 Plan will be cumulatively increased on each January 1 st by four percent of the number of shares of stock issued and outstanding on the immediately preceding December 31 st or such lesser number of shares of stock as determined by the board of directors. Restricted Stock Units The following table summarizes the Company’s RSU activity for the year ended December 31, 2023: Number of Shares Weighted Average Grant Date Fair Value per Share Unvested restricted stock units as of December 31, 2022 1,941,379 $ 70.70 Granted 3,047,544 41.30 Vested ( 677,055 ) 68.04 Cancelled ( 270,115 ) 49.41 Unvested restricted stock units as of December 31, 2023 4,041,753 $ 50.40 In March 2023, the Company granted 2,195,135 RSUs with a service condition to employees as part of their annual grant, which have the potential to vest over a period of three years . The weighted average grant date fair value of these RSUs was $ 40.75 and the vesting start date for these RSUs was January 1, 2023. Also in March 2023, 181,743 market-based RSUs were granted to senior executives as part of their annual grant. These RSUs have the potential to vest after a period of three years , with a vesting start date of January 1, 2023, and the number of shares to be delivered will depend on the Company’s Total Shareholder Return (“TSR”), a market condition, over that period relative to a defined group of biotechnology companies. The grant date fair value for these RSUs, calculated using a Monte Carlo valuation model, was $ 68.55 . The following assumptions were used to determine the grant date fair value: risk free interest rate: 4.60 %; expected dividend yield: 0.0 %; expected volatility: 84.34 %; expected term (in years): 2.84 . In March 2022, the Company granted 794,424 RSUs with a service condition to employees as part of their annual grant, which have the potential to vest over a period of three years . The weighted average grant date fair value of these RSUs was $ 79.85 and the vesting start date for these RSUs was January 1, 2022. Also in March 2022, 55,144 RSUs were granted to senior executives as part of their annual grant. These RSUs have the potential to vest after a period of 3 years , with a vesting start date of January 1, 2022, and the number of shares to be delivered will depend on the Company’s TSR, a market condition, over that period relative to a defined group of biotechnology companies. The grant date fair value for these RSUs, calculated using a Monte Carlo valuation model, was $ 126.49 . The following assumptions were used to determine the grant date fair value: risk free interest rate: 1.44 %; expected dividend yield: 0.0 %; expected volatility: 82.53 %; expected term (in years): 2.84 . The Company also granted 66,296 performance-based RSUs in March 2022 to certain non-executive employees that would vest upon obtaining certain scientific milestones. There were two separate tranches, each attached to a different set of milestones. The milestone related to the first tranche, made up of 21,878 RSUs, was achieved in the first quarter of 2023 and these RSUs vested. The remaining performance milestones were considered not probable of achievement as of December 31, 2023 and, therefore, no related stock-based compensation was recorded during the period then ending for those RSUs. RSUs granted under the 2015 Plan in 2023 generally vest as to one-third on the first anniversary of the original vesting date, with the balance vesting annually over the remaining two years. F- 26 The weighted-average grant date fair value of RSUs granted for the years ended December 31, 2023, 2022 and 2021 was $ 41.30 , $ 70.90 and $ 73.81 , respectively. The total fair value of RSUs vested (measured on the date of vesting) for the years ended December 31, 2023, 2022 and 2021 was $ 24.9 million, $ 10.4 million and $ 14.1 million, respectively. As of December 31, 2023, there was $ 125.2 million of unrecognized stock-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 1.7 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 $ 28.92 , $ 57.23 and $ 54.09 per option for options granted during the years ended December 31, 2023, 2022 and 2021, respectively. Weighted average assumptions used to apply this pricing model were as follows: Year Ended December 31, 2023 2022 2021 Risk-free interest rate 4.4 % 1.9 % 1.0 % Expected life of options 6.0 years 5.9 years 6.0 years Expected volatility of underlying stock 78.7 % 76.2 % 72.9 % 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 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. Expected Volatility. Beginning in the first quarter of 2023, expected volatility is estimated based on actual movements in the Company’s stock price over the most recent historical periods, over the expected term of their stock option grants. Prior to 2023, 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 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. Stock options granted under the 2015 Plan in 2023 generally vest as to one-third on the first anniversary of the original vesting date, with the balance vesting monthly over the remaining two years, unless they contain specific performance-based vesting provisions. The maximum term of stock options granted under the 2015 Plan is ten years. 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, 2023: 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, 2022 5,471,675 $ 49.86 Granted 569,821 41.00 Exercised ( 385,130 ) 17.13 Forfeited ( 197,367 ) 73.90 Outstanding at December 31, 2023 5,458,999 $ 50.38 6.65 $ 35,922 Exercisable at December 31, 2023 4,017,227 $ 43.63 6.14 $ 34,790 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, 2023, 2022 and 2021 was $ 7.6 million, $ 42.8 million, and $ 262.0 million, respectively. F- 27 As of December 31, 2023, there was $ 56.1 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 1.4 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, 2023, there were 1,077,487 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, 2023, 2022, and 2021, the Company issued 142,079 , 77,618 , and 30,897 shares of common stock under the 2016 Plan, respectively. The weighted-average purchase prices of shares issued under the 2016 Plan were $ 27.65 , $ 34.15 and $ 65.51 per share for the years ended December 31, 2023, 2022, and 2021, 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, 2023 2022 2021 Risk-free interest rate 4.7 %- 5.53 % 0.22 %- 2.52 % 0.05 %- 0.09 % Expected term (in years) 0.5 years 0.5 years 0.5 years Expected volatility of underlying stock 60.4 %- 69.2 % 63.6 %- 95.3 % 77.5 %- 109.2 % Expected dividend yield 0.0 % 0.0 % 0.0 % 14. Loss Per Share Basic and diluted loss per share was calculated as follows: Year Ended December 31, 2023 2022 2021 (In thousands) Net loss $ ( 481,192 ) $ ( 474,186 ) $ ( 267,892 ) Weighted average shares outstanding, basic and diluted 88,770 76,972 70,894 Net loss per share, basic and diluted $ ( 5.42 ) $ ( 6.16 ) $ ( 3.78 ) The following common stock equivalents were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive: Year Ended December 31, 2023 2022 2021 (In thousands) Unvested restricted stock units 4,042 1,941 453 Stock options 5,459 5,472 6,305 9,501 7,413 6,758 15. Stockholders’ Equity At-the-Market Offering Programs 2019 Sale Agreement In August 2019, the Company entered into an Open Market Sale Agreement (the “2019 Sale Agreement”) with Jefferies LLC (“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 cash commissions of 3.0 % of the gross proceeds of sales of common stock under the 2019 Sale Agreement. Under the 2019 Sale Agreement, the Company issued 3,778,889 shares of its common stock. F- 28 During the first quarter of 2022, the Company issued 579,788 shares of its common stock, in a series of sales, at an average price of $ 69.43 per share, in accordance with the 2019 Sale Agreement for aggregate net proceeds of $ 38.9 million, after payment of cash commissions and legal, accounting and other fees in connection with the sales. The 2019 Sale Agreement expired in the third quarter of 2022. 2022 Sale Agreement In March 2022, the Company entered into an Open Market Sale Agreement (the “2022 Sale Agreement”) with Jefferies, under which Jefferies is able to offer and sell, from time to time in “at-the-market” offerings, shares of the Company’s common stock having aggregate gross proceeds of up to $ 400.0 million. The Company agreed to pay cash commissions of 3.0 % of the gross proceeds of sales of common stock under the 2022 Sale Agreement. Through December 31, 2023, the Company issued 7,518,163 shares of its common stock under the 2022 Sale Agreement. During the year ended December 31, 2023, the Company issued 4,122,824 shares of its common stock, in a series of sales, at an average price of $ 30.57 per share, in accordance with the 2022 Sale Agreement for aggregate net proceeds of $ 121.9 million, after payment of cash commissions and legal, accounting and other fees in connection with the sales. During the year ended December 31, 2022, the Company issued 3,395,339 shares of its common stock, in a series of sales, at an average price of $ 57.43 per share, in accordance with the 2022 Sale Agreement for aggregate net proceeds of $ 189.0 million, after payment of cash commissions and legal, accounting and other fees in connection with the sales. As of December 31, 2023, $ 2.1 million of these proceeds are included in “Prepaid expenses and other current assets” on the Company’s consolidated balance sheet, representing offerings with trade dates in December 2023 that were settled in January 2024. As of December 31, 2023, $ 79.0 million in shares of common stock remain eligible for sale under the 2022 Sale Agreement. Follow-on Offerings 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. In November 2022, the Company entered into an underwriting agreement related to a public offering of 6,550,219 shares of its common stock, par value $ 0.0001 per share, at a public offering price of $ 45.80 per share. In addition, the Company granted the underwriter an option exercisable for 30 days from the date of the agreement to purchase, at the public offering price less any underwriting discounts and commissions, up to an additional 982,532 shares. The offering closed on December 2, 2022 and the Company received net proceeds of $ 337.9 million, including the exercise in full of the underwriters' option to purchase additional shares, after deducting the underwriting discount, commissions and offering expenses. Approval of Additional Authorized Shares In June 2023, the Company filed a Certificate of Amendment to the Company’s Second Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 120,000,000 to 240,000,000 . The increase in the number of authorized shares was approved by the holders of a majority of the outstanding shares of the Company’s common stock at its Annual Meeting of Stockholders held on June 14, 2023. 16. 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, 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. The Company recognized $ 13.2 million, $ 22.8 million and $ 5.9 million in revenue related to the AvenCell LCA for the years ended December 31, 2023, 2022 and 2021, respectively, after eliminating $ 6.6 million, $ 11.4 million and $ 2.9 million in intra-entity profits during those respective periods. The elimination of intra-entity profits results in the deferral of revenue that will be recognized if and when AvenCell commercializes a product with the Company ’ s license or abandons the related project. Until such time, this revenue is indefinitely deferred and excluded from the results of operations of the Company. The Company also recognized $ 0.2 million and $ 0.3 million related to materials shipped in accordance with the AvenCell LCA in the years ended December 31, 2023 and 2022, respectively. F- 29 The Company and AvenCell were also parties to the AvenCell Co/Co, under which the Company would co-develop and co-commercialize allogeneic universal CAR-T cell products for an immuno-oncology indication. This agreement was terminated by the Company, and all obligations under the terminated agreement were completed in the second quarter of 2023. The Company recognized $ 0.6 million and $ 2.0 million in contra-revenue in the years ended December 31, 2023 and 2022, respectively, related to the AvenCell Co/Co agreement. The Company recognized $ 0.2 million in revenues related to the AvenCell Co/Co agreement for the year ended December 31, 2021. As of December 31, 2023 , there was no remaining transaction price of the AvenCell LCA to be recognized. 17. 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 $ 3.3 million, $ 2.7 million and $ 1.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. 18. Subsequent Event On February 15, 2024, the Company announced a strategic collaboration with ReCode Therapeutics, Inc. (“ReCode”), a clinical-stage genetic medicines company, to develop novel genomic medicines for the treatment of cystic fibrosis (“CF”). CF is a genetic disease caused by mutations in the CFTR gene, leading to the accumulation of thick mucus in the lungs, digestive systems and other organs. CF can result in life-threatening infections, respiratory failure and other serious complications. The collaboration will leverage the Company’s proprietary CRISPR-based gene editing platform, including its DNA writing technology, and ReCode’s proprietary Selective Organ Targeting (“SORT” ) lipid nanoparticle delivery platform to precisely correct one or more CF disease-causing gene mutations. As part of the agreement, the companies will focus initial research efforts on therapeutic approaches that address CF for patients who have limited or no treatment options available, with the opportunity to expand the scope of the collaboration in later phases. The Company will be responsible for the design of the editing strategy and research-grade components for the investigational therapies. ReCode will lead the subsequent preclinical and clinical development. ReCode will also lead worldwide commercialization for certain programs arising from the collaboration. The Company will be eligible to receive pre-specified development and commercial milestone payments, as well as royalties on potential sales. The Company may also exercise an option to lead commercialization in the U.S. for certain programs. F- 30 EXHIBIT INDEX Exhibit No. Exhibit Index 3.1* Second Amended and Restated Certificate of Incorporation of the Registrant 3.2 Second Amended and Restated By-laws of the Registrant (1) 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# Form of Indemnification Agreement (3) 10.6 Lease Agreement, by and between the Registrant and MIT 130 Brookline LLC, dated as of October 21, 2014 (5) 10.7 Lease Agreement, by and between the Registrant and BMR-Sidney Research Campus LLC, dated as of January 6, 2016 (5) 10.8# 2016 Employee Stock Purchase Plan (3) 10.9† Amendment No. 1 to License Agreement dated as of February 2, 2016 by and between the Registrant and Caribou Biosciences, Inc. (5) 10.10† Addendum to License Agreement dated as of February 2, 2016 by and between the Registrant and Caribou Biosciences, Inc. (5) 10.11† License and Collaboration Agreement dated as of April 11, 2016 by and between the Registrant and Regeneron Pharmaceuticals, Inc. (2) 10.12 Common Stock Purchase Agreement dated as of April 26, 2016 between the Registrant and Regeneron Pharmaceuticals, Inc. (3) 10.13# Form of Employment Agreement for Executive Officers (3) 10.14† 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 (17) 10.15# Form of Amended and Restated Employment Agreement (7) 10.16† 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) 10.17 First Amendment to Lease, dated as of April 5, 2019, by and between the Company and MIT 130 Brookline Leasehold LLC. (10) 10.18# Fifth Amended and Restated Non-Employee Director Compensation Policy (4) 10.19 Lease Agreement, by and between the Registrant and 281-295 Albany Street Leasehold LLC, dated as of March 12, 2020 (12) 10.20 Second Amendment to Lease, dated as of March 12, 2020, by and between the Company and MIT 130 Brookline Leasehold LLC. (12) 10.21† 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) F- 31 10.22 Stock Purchase Agreement, dated as of May 30, 2020 by and between the Company and Regeneron Pharmaceuticals, Inc. (13) 10.23#* Second Amended and Restated Corporate Bonus Plan, effective November 30, 2023 10.24† 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 (17) 10.25 Lease Agreement by and between the Registrant and Are-Winter Street Property, LLC, dated as of February 22, 2022 (17) 10.26# Amended and Restated Retirement Policy for Equity Awards, effective December 6, 2022 (11) 10.27 Amendment to Lease Agreement by and between the Registrant and Are-Winter Street Property, LLC, dated as of June 20, 2023 (14) 10.28 Letter Agreement (Second Amendment) to License and Collaboration Agreement by and between Registrant and Regeneron Pharmaceuticals, Inc., dated November 22, 2022 . (18) 10.29 Third Amendment to License and Collaboration Agreement by and between Registrant and Regeneron Pharmaceuticals, Inc., dated September 29, 2023 . (18) 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 (19) 97.1#* Intellia Therapeutics, Inc. Compensation Recovery Policy 101.INS* Inline XBRL Instance Document. 101.SCH* Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. 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 (1) 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 7, 2020 (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 5, 2022 (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 F- 32 (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 Annual Report on Form 10-K (File No. 001-37766) filed with the Securities and Exchange Commission on February 23, 2023 (12) 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 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 Quarterly Report on Form 10-Q (File No. 001-37766) filed with the Securities and Exchange Commission on August 3, 2023 (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) 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 24, 2022 (18) 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 November 9, 2023 (19) 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- 33 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 22, 2024 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 22, 2024 John M. Leonard, M.D. (Principal Executive Officer) /s/ Glenn Goddard Executive Vice President, Chief Financial Officer February 22, 2024 Glenn Goddard (Principal Financial and Accounting Officer) /s/ Muna Bhanji Director February 22, 2024 Muna Bhanji /s/ Bill Chase Director February 22, 2024 Bill Chase /s/ Fred Cohen Director February 22, 2024 Fred Cohen, M.D. /s/ Jesse Goodman Director February 22, 2024 Jesse Goodman, M.D. /s/ Georgia Keresty Director February 22, 2024 Georgia Keresty /s/ Frank Verwiel Director February 22, 2024 Frank Verwiel, M.D. F- 34