What changed in this filing

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Item 1A. Risk Factors

2020-08-06 compared with 2020-05-07 · 132 added, 98 removed, 1200 unchanged (16% of the section changed)

29 unchanged sentences

Any product candidates we discover will require preclinical and clinical activities and studies, regulatory review and approval in each jurisdiction in which we intend to market the products, substantial investment, establishing manufacturing capabilities, access to sufficient commercial manufacturing capacity and significant marketing efforts before we can generate any revenue from product sales.

Before obtaining marketing approval from regulatory authorities for the sale of a product candidate, we must conduct extensive clinical trials to demonstrate the safety, purity and potency, as well as the efficacy, of the product candidates in humans.

Before obtaining marketing approval from regulatory authorities for the sale of a product candidate, we must conduct extensive clinical trials to demonstrate the safety, potency and efficacy of the product candidates in humans.

We cannot be certain that we will be successful on any of these endeavors, or that any of our product candidates will be successful in clinical trials and, even if successful, that we will receive regulatory approval.

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Because these are new therapeutic approaches, discovering, developing, manufacturing and commercializing our product candidates subject us to a number of challenges, including:

obtaining regulatory approval from the FDA and other similar regulatory authorities such as the European Medicines Agency (“EMA”), the Medicines and Healthcare products Regulatory Agency (“MHRA”), the Therapeutic Goods Administration (“TGA”) and Health Canada, which have very limited or no experience with the clinical development of CRISPR/Cas9 therapeutics, and which may require additional significant testing or data compared to more traditional therapies;

seeking and obtaining regulatory approval from the FDA and other similar regulatory authorities in light of no formal regulatory guidance specifically for CRISPR/Cas9-based in vivo therapeutics, including preclinical and clinical requirements for an Investigational New Drug application (“IND”) or corresponding applications outside the U.S., such as a Clinical Trial Application (“CTA”), Clinical Trial Notification (“CTN”) or Clinical Trial Exemption (“CTX”), and, as appropriate thereafter, a Biologics License Application (“BLA”), or corresponding applications outside the U.S., such as a Marketing Authorization Application (“MAA”);

obtaining regulatory clearance or approval to commence clinical trials in the U.S.

from the FDA through an investigational new drug application (“IND”) or from other national regulatory agencies outside the U.S., such as the United Kingdom’s Medicines and Healthcare products Regulatory Agency (“MHRA”), through corresponding applications, such as a Clinical Trial Application (“CTA”), a Clinical Trial Notification (“CTN”) or a Clinical Trial Exemption (“CTX”), because these agencies have very limited or no experience with the clinical development of CRISPR/Cas9 therapeutics, which may require additional significant testing or data compared to more traditional therapies;

obtaining ethical clearance from the relevant institutional review boards and ethics committees to commence clinical trials in the U.S.

and outside the U.S.

because these agencies have very limited or no experience with gene editing generally, CRISPR/Cas9 in particular or therapeutics based on the same;

obtaining regulatory approval for a Biologics License Application (“BLA”), or corresponding applications outside the U.S., such as a Marketing Authorization Application (“MAA”) from the United Kingdom (“UK”) and other similar regulatory authorities, such as the European Medicines Agency (“EMA”), which may have very limited or no experience with the clinical development of CRISPR/Cas9 therapeutics;

educating medical personnel, including clinical investigators, and patients regarding the potential benefits and side effect profile of each of our product candidates;

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sourcing clinical and, if approved, commercial supplies for the materials used to manufacture and process our product candidates , which may include importing or exporting materials between different jurisdictions ;

establishing process development and manufacturing capabilities that can produce sufficient clinical and, if approved, commercial quantities of product candidates in accordance with the FDA and other relevant regulatory agencies’ requirements;

establishing process development and manufacturing capabilities that can produce sufficient clinical and, if approved, commercial quantities of product candidates in accordance with the relevant FDA and other relevant regulatory agencies’ requirements;

developing a manufacturing process and distribution network with a cost of goods that allows for an attractive return on investment;

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to date, only a limited number of products that involve in vivo gene transfer have been approved globally;

improper modulation of a gene sequence, including insertion of a sequence into a patient’s chromosome, could lead to cancer, other aberrantly functioning cells or other diseases, including death;

transient expression of the Cas9 protein within patients’ cells could lead to patients having an immunological reaction towards those cells, which could be severe or life-threatening;

improper modulation of a gene sequence, including unintended editing events or insertion of a sequence into certain locations in a patient’s chromosome, could lead to cancer, other aberrantly functioning cells or other diseases, including death;

transient expression of the Cas9 protein could lead to patients having an immunological reaction towards those cells, which could be severe or life-threatening;

corrective expression of a missing protein in patients’ cells could result in the protein being recognized as foreign, and lead to a sustained immunological reaction against the expressed protein or expressing cells, which could be severe or life-threatening;

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Also, uncertainty exists regarding the future scope and effect of the FDA’s application of its regulatory framework to CRISPR/Cas9 therapies, in particular relating to the review and approval of human therapeutic products because the current U.S.

administration and federal legislators have publicly declared their intention to modify the current legal framework governing the FDA.

administration and federal legislators have publicly declared their intention to modify the current legal framework governing the FDA, as have candidates seeking federal executive and legislative positions in the U.S.

Any such changes to the FDA requirements could impact our ability to obtain approval for our products or sell them profitably.

Also, upon completing its transition period as it exits the EU, the United Kingdom (“UK”) may enact legislation related to the approval and oversight of human therapeutics in that nation.

Also, upon completing its transition period as it exits the EU, the UK may enact legislation related to the approval and oversight of human therapeutics in that nation.

Until any such legislation is enacted, we will be uncertain as to its effects on our business, including our ability to seek and obtain approval for our products in the UK.

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More restrictive statutory regimes, government regulations or negative public opinion would have an adverse effect on our business, financial condition, results of operations and prospects and may delay or impair the development and commercialization of our product candidates or demand for any products we may develop.

For example, earlier gene therapy trials led to several well-publicized adverse events, including cases of leukemia and death.

For example, certain gene therapy trials led to several well-publicized adverse events, including cases of leukemia and death.

Serious adverse events such as these in our clinical trials, or other clinical trials involving gene therapy or genome editing products or our competitors’ products, even if not ultimately attributable to the relevant product candidates, and the resulting publicity could result in increased government regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our product candidates, stricter labeling requirements for those product candidates that are approved and a decrease in demand for any such product candidate.

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If the results of our clinical studies or those of any other third parties, including with respect to genome editing technology or engineered cell therapies, are inconclusive, fail to show efficacy or if such clinical trials give rise to safety concerns or adverse events, we may:

be delayed in obtaining marketing approval for our future product candidates, if at all;

be prevented from, or delayed in, obtaining marketing approval for our future product candidates;

obtain approval for indications or patient populations that are not as broad as intended or desired;

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the FDA or other regulatory authorities may require us to submit additional data, such as long-term toxicology studies, or impose other requirements before permitting us to initiate or rely on a clinical trial.

In addition, disruptions caused by the COVID-19 pandemic may increase the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned clinical trials.

We could also encounter delays if a clinical trial is suspended or terminated by us, the IRBs of the institutions in which such trials are being conducted or the relevant ethics committee, the Data Safety Monitoring Board (“DSMB”) for such trial, or the FDA or other relevant regulatory authorities.

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If patients are unwilling to participate in our clinical studies because of concerns about, or negative publicity from, adverse events in the genome editing, gene therapy or engineered cell therapy fields, the novel nature of the CRISPR/Cas9 genome editing technology, the irreversibility of the effects of CRISPR/Cas9 or for other reasons, including competitive clinical studies for similar patient populations, then the timeline for recruiting patients, conducting studies and obtaining regulatory approval of potential products may be delayed.

Other events, such as the coronavirus disease 2019 (“COVID-19”) pandemic also could adversely impact the initiation, continuation and completion of our clinical trials by, for example, delaying the dosing of patients, reducing the number of patients, healthcare providers or clinical facilities available or willing to participate in the clinical trials.

Other events, such as the COVID-19 pandemic also could adversely impact the initiation, continuation and completion of our clinical trials by, for example, delaying the dosing of patients, reducing the number of patients, healthcare providers or clinical facilities available or willing to participate in the clinical trials.

These delays could result in increased costs, delays in advancing our product development, delays in testing the effectiveness of our technology or termination of the clinical studies altogether.

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If we fail to develop product candidates, our commercial opportunity, if any, will be limited.

Although we have selected our initial product candidates for clinical development for our transthyretin amyloidosis (“ATTR”), acute myeloid leukemia (“AML”) and hereditary angioedema (“HAE”) programs, we are at an early stage of development and our technology and approach has not yet led, and may never lead, to any product candidate deemed appropriate for clinical development by a regulatory agency or any approved or commercially successful products.

Although we have selected our initial product candidates for clinical development for our transthyretin amyloidosis (“ATTR”), acute myeloid leukemia (“AML”) and hereditary angioedema (“HAE”) programs, and have filed applications to commence clinical trials in relation to NTLA-2001 for ATTR, we are at an early stage of development and our technology and approach has not yet led, and may never lead, to any product candidate deemed appropriate for clinical development by a regulatory agency or any approved or commercially successful products.

Even if we are successful in building our pipeline of product candidates, completing clinical development, establishing the necessary manufacturing processes and capabilities, obtaining regulatory approvals and commercializing product candidates will require substantial additional funding and are prone to the risks of failure inherent in therapeutic product development.

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the market for a product candidate may change during our program so that the continued development of that product candidate is no longer reasonable;

we may be unable to manufacture the product candidates after transferring our manufacturing processes from our research and development facilities to larger-scale facilities operated by either a contract manufacturing organization (“CMO”) or by us, as well as delays or failure by our CMOs or us to make any changes to such manufacturing process to meet specifications for the product candidates’ specifications;

we may be unable to manufacture the product candidates after transferring our manufacturing processes from our research and development facilities to larger-scale facilities operated by either a contract manufacturing organization (“CMO”) or by us, as well as delays or failure by our CMOs or us, including as a result of the COVID-19 pandemic, to make any changes to such manufacturing process to meet specifications for the product candidates’ specifications;

a product candidate may not be capable of being produced in clinical and, if approved, commercial quantities at an acceptable cost, or at all;

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CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare, and private payors often follow CMS’ coverage decisions.

Other jurisdictions have agencies, such as the National Institute for Health and Care Excellence (“NICE”) in the UK, that evaluate the use and cost-effectiveness of therapies, which impact the utilization and price of the medicine in such jurisdiction.

Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a product is:

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It is difficult to predict at this time what third-party payors will decide with respect to the coverage and reimbursement for our product candidates.

Moreover, increasing efforts by governmental and third-party payors in the U.S.

and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates.

Moreover, increasing efforts by governmental and third-party payors in and outside the U.S.

to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates.

We expect to experience pricing pressures in connection with the sale of any of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, cost containment initiatives and additional legislative changes.

We intend to seek approval to market our product candidates in the U.S.

and in selected foreign jurisdictions, such as the UK and certain EU members.

We intend to seek approval to market our product candidates in different jurisdictions, which could include the U.S.

and other selected foreign jurisdictions, such as the UK, certain EU members, China, Japan, Mexico, Brazil, Colombia, Argentina, Canada and Australia.

If we obtain approval in any of these jurisdictions for our product candidates, we will be subject to rules and regulations in those jurisdictions.

In some markets, particularly those in the EU and the UK, the pricing of pharmaceutical products, including biologics, is subject to governmental control and other market regulations which could put pressure on the pricing and usage of our product candidates.

In some markets, such as, for example, in the EU and the UK, the pricing of pharmaceutical products, including biologics, is subject to governmental control and other market regulations which could put pressure on the pricing and usage of our product candidates.

In these countries, pricing negotiations with governmental authorities can take considerable time after obtaining marketing approval of a product candidate.

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Problems with the manufacturing process, even minor deviations from the normal process, could result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims and litigation, insufficient inventory or production interruption.

We may encounter problems achieving adequate quantities and quality of clinical grade materials that meet FDA or other applicable standards or specifications with consistent and acceptable production yields and costs.

We may encounter problems achieving adequate quantities and quality of clinical grade materials that meet the FDA or other relevant regulatory agency’s applicable standards or specifications with consistent and acceptable production yields and costs.

In addition, the FDA and other foreign regulatory authorities may require us to submit samples of any lot of any approved product together with the protocols showing the results of applicable tests at any time.

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Significant disruptions of these information technology systems or security breaches could adversely affect our business operations and/or result in the loss, misappropriation, and/or unauthorized access, use, or disclosure of, or the prevention of access to, confidential information (including but not limited to trade secrets or other intellectual property, proprietary business information, and personal information), and could result in financial, legal, business, and reputational harm to us and would adversely affect our operations, including our discovery and research and development programs.

For example, any such event that leads to unauthorized access, use, or disclosure of personal information, including personal information regarding our employees of future clinical trial participants, could harm our reputation, require us to comply with federal and/or state breach notification laws and foreign law equivalents, and otherwise subject us to liability, including financial penalties and fines, under laws and regulations that protect the privacy and security of personal information.

Also, the loss of preclinical or clinical trial data from completed or future preclinical or clinical trials, respectively, could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

To the extent that any disruption or security breach were to

result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of our product candidates could be delayed.

For example, any such event that leads to unauthorized access, use, or disclosure of personal information, including personal information regarding our employees of future clinical trial participants, could harm our reputation, require us to comply with federal and/or state breach notification laws and foreign law equivalents (such as the EU’s General Data Protection Regulation or the UK’s Data Protection Act), and otherwise subject us to liability, including financial penalties and fines, under laws and regulations that protect the privacy and security of personal information.

recover or reproduce the data.

To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of our product candidates could be delayed.

Security breaches and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above.

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Under the Withdrawal Agreement, the UK is subject to a transition period until December 31, 2020 (the “Transition Period”), during which EU rules will continue to apply.

Negotiations between the UK and the EU are expected to continue in relation to the customs and trading relationship between the UK and the EU following the expiry of the Transition Period.

Negotiations between the UK and the EU are on-going and are expected to continue in relation to the customs and trading relationship between the UK and the EU following the expiry of the Transition Period.

The uncertainty concerning the UK’s legal, political and economic relationship with the EU after the Transition Period may be a source of instability in the international markets, create significant currency fluctuations, and/or otherwise adversely affect trading agreements or similar cross-border co-operation arrangements (whether economic, tax, fiscal, legal, regulatory or otherwise).

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We are not profitable and have incurred losses in each period since our inception.

Our net loss was $31.8 million for the three months ended March 31, 2020.

As of March 31, 2020, we had an accumulated deficit of $332.7 million.

Our net loss was $64.2 million for the six months ended June 30, 2020.

As of June 30, 2020, we had an accumulated deficit of $365.1 million.

We expect these losses to increase as we continue to incur significant research and development and other expenses related to our ongoing operations, seek regulatory approvals for our future product candidates, scale-up manufacturing capabilities, maintain, expand and protect our intellectual property portfolio and hire additional personnel to support the development of our product candidates and to enhance our operational, financial and information management systems.

Although we believe that our cash, cash equivalents, and investments will enable us to fund our operating and capital expenditure requirements at least to the end of 2021, we cannot predict the impact of the COVID-19 pandemic on future results of operations and financial condition due to a variety of factors, including the health of our employees, the ability of suppliers to continue to operate and deliver, the ability of Intellia to maintain operations, continued access to transportation resources, any further government and/or public actions taken in response to the pandemic and ultimately the length of the pandemic.

Although we believe that our cash, cash equivalents, and marketable securities will enable us to fund our operating and capital expenditure requirements at least through the next twenty four months, we cannot predict the impact of the COVID-19 pandemic on future results of operations and financial condition due to a variety of factors, including the health of our employees, the ability of suppliers to continue to operate and deliver, the ability of Intellia to maintain operations, continued access to transportation resources, any further government and/or public actions taken in response to the pandemic and ultimately the length of the pandemic.

We expect to finance our operations through a combination of collaboration revenue, equity or debt financings or other sources, which may include collaborations with third parties.

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Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate, further political developments and financial market conditions could adversely impact our business.

Inadequate funding for, or change of priorities at, the FDA and other government agencies in or outside the U.S.

could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

Inadequate funding for, or change of priorities or disruptions at, the FDA and other government agencies in or outside the U.S.

could hinder their ability to hire , retain , or deploy key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA and other similar regulatory agencies to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and authorization to accept the payment of user fees, reallocation of resources to address unique or new healthcare issues (such as the COVID-19 pandemic), and statutory, regulatory, and policy changes.

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In addition, government funding of other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other similar agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

Disruptions at the FDA and other similar agencies may also slow the time necessary for new product applications to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

For example, over the last several years, including beginning on December 22, 2018, the U.S.

government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities.

If a prolonged government shutdown occurs (or if the regulatory agencies have to reallocate their resources to address unique or new healthcare related matters, such as the COVID-19 pandemic) in the U.S.

or another jurisdiction, it could significantly impact the ability of the relevant agency, such as the FDA, to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

If a prolonged government shutdown occurs (or if the COVID-19 pandemic continues to disrupt or prevent regular inspections, reviews, or other regulatory activities conducted by regulatory agencies) in the U.S.

or other jurisdictions where we plan to conduct our clinical trials, manufacturing, or other operations, it could significantly impact the ability of the relevant agency, such as the FDA, to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Risks Related to Our Reliance on Third Parties

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In April 2016, we entered into a collaboration agreement with Regeneron Pharmaceuticals, Inc.

(“Regeneron”) that includes a product component to research, develop and commercialize CRISPR/Cas-based therapeutic products primarily focused on genome editing in the liver as well as a technology collaboration component, pursuant to which we and Regeneron will engage in research and development activities aimed at discovering and developing novel technologies and improvements to CRISPR/Cas9 technology to enhance our genome editing platform.

Pursuant to the Regeneron collaboration agreement, we granted Regeneron exclusive rights to select up to 10 targets, subject to certain restrictions.

We retained the rights to solely develop certain indications, other than ATTR, which is subject to a Co-Development and Co-Promotion (“ Co/Co ”) agreement with Regeneron.

(“Regeneron”), which we amended in May 2020.

The collaboration agreement, as amended, includes a product component to research, develop and commercialize CRISPR/Cas-based therapeutic products primarily focused on genome editing in the liver as well as a technology collaboration component, pursuant to which we and Regeneron will engage in research and development activities aimed at discovering and developing novel technologies and improvements to CRISPR/Cas technology to enhance our genome editing platform.

Pursuant to the Regeneron collaboration agreement, as amended, we granted Regeneron exclusive rights to select up to 15 initial targets, subject to certain restrictions and modifications.

We have retained the rights to solely develop certain indications.

Other indications, such as ATTR, are subject to co-development and co-promotion (“Co/Co”) agreements with Regeneron.

We also have the right to choose additional liver targets for our own development during the collaboration term, which may be subject to additional Co/Co options by Regeneron.

In July 2018, we entered into the first Co/Co agreement directed to ATTR, under which we will be the clinical and commercial lead for ATTR activities.

On December 13, 2019, Regeneron informed us that it would exercise its right under the ATTR Co/Co agreement to modify its shares of worldwide developments costs and profits from 50% to 25%, effective six months after its notice.

Pursuant to the ATTR Co/Co agreement, Regeneron funded approximately 50% of the program’s development costs through 2019.

Starting June 2020 and thereafter, Regeneron will share approximately 25% of worldwide development costs and commercial profits for the ATTR program.

In July 2018, we entered into the first Co/Co agreement directed to ATTR (the “ATTR Co/Co”), under which we are the clinical and commercial lead for ATTR activities.

On December 13, 2019, Regeneron informed us that it would exercise its right under the ATTR Co/Co agreement to modify its share of worldwide development costs and profits from 50% to 25%, beginning in mid-June 2020.

We continue to lead the development and commercialization of any resulting ATTR products.

In May 2020, we entered into two co-development and co-funding agreements directed to each of hemophilia A and hemophilia B (the “Hemophilia Co-Co”) agreements, under which Regeneron will be the clinical and commercial lead, for such activities.

Under the Hemophilia Co-Co agreements, worldwide development costs and profits of any future products will be split between Regeneron and us, 65% and 35%, respectively.

Either Novartis or Regeneron may change its strategic focus or pursue alternative technologies in a manner that results in reduced, delayed or no revenue to us.

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We will depend upon third parties, including independent investigators, to conduct our clinical trials under agreements with universities, medical institutions, CROs, strategic partners and others.

We expect to have to negotiate budgets and contracts with CROs and trial sites, which may result in delays to our development timelines and increased costs.

We will rely heavily on third parties over the course of our clinical trials, and, as a result, will have limited control over the clinical investigators and limited visibility into their day-to-day activities, including with respect to their compliance with the approved clinical protocol and other legal, regulatory and scientific standards.

We expect to have to negotiate budgets and contracts with CROs, trial sites and other service and goods providers, which may result in delays to our development timelines and increased costs.

We will rely heavily on third parties over the course of our clinical trials, and, as a result, will have limited control over the clinical investigators and other service providers, and limited visibility into their day-to-day activities, including with respect to their compliance with the approved clinical protocol and other legal, regulatory and scientific standards.

Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, and our reliance on third parties does not relieve us of our legal responsibilities.

We and these third parties are required to comply with good clinical practice (“GCP”) requirements, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for product candidates in clinical development.

We and these third parties are required to comply with good clinical practice (“GCP”) requirements, which are regulations and guidelines enforced by the FDA, EU and comparable foreign regulatory authorities for product candidates in clinical development.

Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors, clinical investigators and trial sites.

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Moreover, our business may be implicated if any of these third parties violates applicable federal, state or local, as well as foreign, laws and regulations, such as the fraud and abuse or false claims laws and regulations or privacy and security laws.

In jurisdictions such as the UK and EU, penalties for violations of privacy laws and other regulations can be financially significant.

Further, if any of our CROs, clinical investigators or others involved in our clinical trials fail to comply with such laws and regulations, we could be held responsible for its actions or omissions and be negatively impacted.

In the event of non-compliance with General Data Protection Regulation (“GDPR”) in the EU and related data protection and privacy laws of the EU member states and the UK’s Data Protection Act 2018 (such laws being described as “European Data Protection Law”), we could be subject to substantial fines and other penalties, including fines of up to 10,000,000 Euros or up to 2% of our total worldwide annual turnover for certain comparatively minor offenses, or up to 20,000,000 Euros or up to 4% of our total worldwide annual turnover for more serious offenses.

Any third parties conducting our future clinical trials will not be our employees and, except for remedies that may be available to us under our agreements with such third parties, we cannot control whether they devote sufficient time and resources to our ongoing preclinical, clinical, and nonclinical programs.

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As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.

If any of our relationships with these third-party CROs or others terminate, we may not be able to enter into arrangements with alternative CROs or other third parties or to do so on commercially reasonable terms.

Switching or adding additional CROs involves additional cost and requires management time and focus.

The COVID-19 pandemic and government measures taken in response may have a significant impact on our CROs, clinical sites and other service and goods providers, which may affect our ability to initiate and complete our preclinical studies and clinical trials.

If any of our relationships with these third-party CROs, clinical sites or other third parties terminate, we may not be able to enter into arrangements with alternative CROs, clinical sites or other third parties or to do so on commercially reasonable terms.

Switching or adding additional CROs, clinical sites or other providers involves additional cost and requires management time and focus.

In addition, the transition to a new CRO may result in delays, which can materially impact our ability to meet our desired clinical development timelines.

Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter similar challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.

Risks Related to Employee Matters and Managing Growth

Though we carefully manage our relationships with these parties, there can be no assurance that we will not encounter similar challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.

Risks Related to Employee Matters and Managing Our Growth

We expect to expand our research, development, manufacturing, clinical and regulatory capabilities, and, as a result, we may encounter difficulties in hiring capable personnel and otherwise managing our growth, which could disrupt our operations.

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We are highly dependent on the research and development, clinical, legal, financial and business development expertise of John M.

Leonard, M.D., our President and Chief Executive Officer, Glenn Goddard, our Executive Vice President and Chief Financial Officer, José E.

Leonard, M.D., our President and Chief Executive Officer, Glenn Goddard, our Executive Vice President and Chief Financial Officer, David Lebwohl, our Executive Vice President and Chief Medical Officer, José E.

Rivera, our Executive Vice President, General Counsel, Andrew Schiermeier, our Executive Vice President and Chief Operating Officer and Laura Sepp-Lorenzino, our Executive Vice President and Chief Scientific Officer as well as the other principal members of our management, scientific and clinical teams.

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For example, we are not permitted to market any drug or biological product, including in vivo products or engineered cell therapies, until we receive regulatory approval from the relevant regulatory agency, such as the FDA in the U.S.

We have not previously submitted a BLA to the FDA, or similar approval filings to comparable foreign authorities.

A BLA or a MAA must include extensive preclinical and clinical data and supporting information to establish that the product candidate is safe and effective or, for biological products, safe, pure and potent for each desired indication.

or EMA in the EU.

We have not previously submitted a BLA to the FDA, or similar approval filings to comparable foreign authorities, such as an MAA in the UK or EU.

A BLA, a MAA or similar approval filings must include extensive preclinical and clinical data and supporting information to establish that the product candidate is safe and effective or, for biological products, safe, pure and potent for each desired indication.

The application must also include significant information regarding the chemistry, manufacturing and controls for the product, and the manufacturing facilities must complete a successful pre-approval inspection by the FDA, or otherwise applicable foreign authority, prior to the approval or licensure of the product.

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Accordingly, the regulatory approval pathway for such product candidates may be uncertain, complex, expensive and lengthy, as well as different in each jurisdiction, and approval may not be obtained in any, some or all jurisdictions.

In December 2018, the World Health Organization (“WHO”) established the Expert Advisory Committee on Developing Global Standards for Governance and Oversight of Human Genome Editing.

Other non-regulatory entities may impact the regulatory agencies and ethics committees’ evaluation and approval decision regarding our products.

For example, in December 2018, the World Health Organization (“WHO”) established the Expert Advisory Committee on Developing Global Standards for Governance and Oversight of Human Genome Editing.

While the standards are expected to focus primarily on germline modifications, the guidelines could impact somatic cell editing research programs.

In August 2019, the WHO Expert Advisory Committee recommended initiating the first phase of a new global registry to track research on human genome editing.

Accepting this recommendation, the WHO announced plans for an initial phase of the registry using the International Clinical Trials Registry Platform (“ICTRP”).

In March 2019, the WHO Expert Advisory Committee recommended initiating the first phase of a new global registry to track research on human genome editing.

Accepting this recommendation, the WHO announced plans in August 2019 for an initial phase of the registry using the International Clinical Trials Registry Platform (“ICTRP”).

This phase will include worldwide registries for both somatic cell editing and germline editing clinical trials.

Registration of these clinical trials in the WHO’s registry is voluntary.

Although registration of these clinical trials in the WHO’s registry currently is voluntary, failure to register could impact the evaluation by the regulators and ethics committees.

In addition, clinical trials can be delayed or terminated for a variety of reasons, including delays or failures related to:

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manufacturing qualified materials under cGMP regulations for use in clinical trials.

Patient enrollment is a significant factor in the timing of clinical trials and is affected by many factors.

Patient enrollment is a significant factor in the timing of clinical trials and is affected by many factors, including willingness of physicians to use a new therapy, the availability of existing treatments, and the geographic location of the trial.

In addition, even if the regulatory authority accepts our clinical trial application, the IRB or another ethics committee (whether local or national) may delay our ability to enroll and dose patients.

Further, a clinical trial may be suspended or terminated by us, the IRBs for the institutions in which such trials are being conducted, another ethics committee, the DSMB for such trial or the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

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In addition, if the FDA or a comparable foreign regulatory authority approves our product candidates, we will have to comply with their respective legal or regulatory requirements including submissions of safety and other post-marketing information and reports and registration.

The FDA may seek to impose consent decrees or withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

The FDA may seek to impose consent decrees, withdraw approval or prohibit the export or import of a product if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

The regulatory agencies in other jurisdictions could take similar action for noncompliance with their respective requirements and standards.

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and certain foreign jurisdictions, there have been, and are expected to continue to be, a number of legislative and regulatory changes to the health care system that could impact our ability to sell our products profitably.

In the U.S., however, significant uncertainty exists regarding the provision and financing of health care because the current administration and federal legislators have publicly declared their intention to significantly modify the current legal and regulatory framework for the health care system but details have not been agreed upon or disclosed.

In the U.S., however, significant uncertainty exists regarding the provision and financing of health care because the current administration and federal legislators, as well as candidates seeking federal executive and legislative offices in the November 2020 elections in the U.S., have publicly declared their intention to significantly modify the current legal and regulatory framework for the health care system but details have not been agreed upon or disclosed.

Current legislation at the U.S.

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At this time, the full effect that the Affordable Care Act would have on our business remains unclear.

S ome of the provisions of the Affordable Care Act have yet to be implemented, and there have been judicial and Congressional challenges to certain aspects of the Affordable Care Act, as well as recent efforts by the current administration to repeal or replace certain aspects of the Affordable Care Act.

Some of the provisions of the Affordable Care Act have yet to be implemented, and there have been judicial and Congressional challenges to certain aspects of the Affordable Care Act, as well as recent efforts by the current administration to repeal or replace certain aspects of the Affordable Care Act.

Since January 2017, the U.S.

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While Congress has not passed comprehensive repeal legislation, it has enacted laws that modify certain provisions of the Affordable Care Act.

Further, significant uncertainty exists regarding the future scope and effect of the Affordable Care Act because the current administration and federal legislators have publicly declared their intention to significantly modify or repeal the legislation, and there are conflicting judicial decisions regarding the constitutionality of the law which at least one federal court has ruled is unconstitutional.

Supreme Court.

We cannot predict the ultimate form or timing of any modification to, or repeal of, the Affordable Care Act or the effect that such modification or repeal would have on our business.

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This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013, and, due to subsequent legislative amendments, will remain in effect through 2030 unless additional Congressional action is taken.

However, pursuant to the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the Medicare sequester reductions under the Budget Contract Act of 2011 have been suspended from May 1, 2020 through December 31, 2020 due to the COVID-19 pandemic.

In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers, cancer centers and other treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

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Supreme Court for authorization to appeal the decision of the Fifth Circuit.

On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case, and allotted one hour for oral arguments, which are expected to occur in the fall of this year.

On March 2, 2020, the U.S.

Supreme Court granted the petitions for writs of certiorari to review this case, although it is unclear when or what it will decide.

Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.

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Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s attention from the business.

As of May 25, 2018, the General Data Protection Regulation (“GDPR”) regulates the collection and use of personal data in the EU.

The GDPR covers any business, regardless of its location, that provides goods or services to residents in the EU and, thus, could incorporate our activities in EU member states.

The GDPR imposes strict requirements on controllers and processors of personal data, including special protections for “sensitive information,” which includes health and genetic information of individuals residing in the EU.

GDPR grants individuals the opportunity to object to the processing of their personal information, allows them to request deletion of personal information in certain circumstances, and provides the individual with an express right to seek legal remedies in the event the individual believes his or her rights have been violated.

Further, the GDPR imposes strict rules on the transfer of personal data out of the EU to regions that have not been deemed to offer “adequate” privacy protections, such as the U.S.

Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU member states, which may deviate slightly from the GDPR, may result in warning letters, mandatory audits and financial penalties, including fines of up to 4% of global revenues, or 20,000,000 Euro, whichever is greater.

As a result of the implementation of the GDPR, we may be required to put in place additional mechanisms ensuring compliance with the new data protection rules.

There is significant uncertainty related to the manner in which data protection authorities will seek to enforce compliance with GDPR.

For example, it is unclear whether the authorities will conduct random audits of companies doing business in the EU, or act solely after complaints are filed claiming a violation of the GDPR.

The lack of compliance standards and precedent, enforcement uncertainty and the costs associated with ensuring GDPR compliance may be onerous and adversely affect our business, financial condition, results of operations and prospects.

Further, the UK’s exit from the EU, often referred to as Brexit, has created uncertainty with regard to data protection regulation in the UK.

In particular, it is unclear how data transfers to and from the UK will be regulated, and what other aspects of EU privacy laws will be adopted, rejected or modified by the UK.

California recently enacted the California Consumer Privacy Act (“CCPA”), which creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.

The CCPA will require covered companies to provide certain disclosures to consumers about its data collection, use and sharing practices, and to provide affected California residents with ways to opt-out of certain sales or transfers of personal information.

The CCPA went into effect on January 1, 2020, and the California Attorney General will commence enforcement actions against violators beginning July 1, 2020.

As currently written, the CCPA may impact our business activities.

The California Attorney General has proposed draft regulations, which have not been finalized to date, that may further impact our business activities if they are adopted.

The uncertainty surrounding the implementation of CCPA exemplifies the vulnerability of our business to the evolving regulatory environment related to personal data and protected health information.

Various laws regulate the collection and use of personal data in relevant jurisdictions outside the U.S., such as the European Data Protection Law.

The European Data Protection Law applies to any business, regardless of its location, that provides goods or services to individuals in the EU or UK and, thus, could apply to our data processing activities that involve the personal data of individuals in EU member states or the UK.

The European Data Protection Law imposes strict requirements on controllers and processors of personal data, including special protections for “sensitive information,” which includes health and genetic information of individuals in the EU or the UK, expanded disclosures about how personal data is to be used, limitations on retention of information, mandatory data breach notification requirements and additional obligations when we contract with third-party processors in connection with the processing of the personal data.

The European Data Protection Law grants individuals the right to object to the processing of their personal data, a strengthened right to request deletion of personal data in certain circumstances and other rights for individual data subjects.

Further, the European Data Protection Law imposes strict

rules on the transfer of personal data out of the EU or the UK to regions that have not been deemed to offer “adequate” privacy protections, such as the U.S.

and other third countries.

In addition, the European Data Protection Law provides that EU member states or the UK may make their own further laws and regulations limiting the processing of personal data, including genetic, biometric or health data.

Failure to comply with the requirements of the European Data Protection Law may result in warning letters, mandatory audits, orders to cease/change our use of data and financial penalties, including fines of up to 4% of global revenues, or 20,000,000 Euro, whichever is greater.

Moreover, data subjects can claim damages resulting from infringement of the European Data Protection Law.

The European Data Protection Law further grants non-profit organizations the right to bring claims on behalf of data subjects.

The costs associated with ensuring compliance with the European Data Protection Law may be onerous and adversely affect our business, financial condition, results of operations and prospects.

We may also need to rely on multiple third parties to comply with the European Data Protection Law, which could result in additional liability for us if they do not comply.

In addition, further to the UK’s exit from the EU on January 31, 2020, often referred to as Brexit, the GDPR will continue to apply in the UK until the end of the transition period on December 31, 2020.

Unless the transitional period is extended, as of January 1, 2021 the GDPR will be brought into UK law as the “UK GDPR”, but there may be further developments about the regulation of particular issues such as UK-EU data transfers.

We may be required to take steps to ensure the lawfulness of our data transfers, particularly if by the end of the transition period there will not be an EU Commission’s adequacy decision regarding the UK.

On June 28, 2018, the State of California enacted the California Consumer Privacy Act of 2018 (“CCPA”), which became effective on January 1, 2020.

The CCPA creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on covered entities (“businesses”) handling personal information of consumers or households.

The CCPA requires covered businesses to provide certain disclosures to consumers about their data collection, use and sharing practices, and to provide California residents with expanded rights to access and delete their personal information and ways to opt-out of certain sales or transfers of their personal information.

The CCPA became enforceable by the California Attorney General on July 1, 2020.

The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that may increase data breach litigation.

The CCPA may have a significant impact on our handling of personal information and existing privacy policies and procedures.

The uncertainty surrounding the implementation of CCPA exemplifies the vulnerability of our business to the evolving regulatory environment related to personal information and protected health information.

In addition, while the CCPA has been receiving a lot of attention, other U.S.

states have enacted and/or are considering laws that impose stringent privacy and/or data security requirements.

Addressing these diverse requirements may necessitate that we expend significant resources on compliance efforts.

Any failure to comply with these requirements may leave us exposed to possible enforcement actions and potential liability.

The increasingly global nature of our business operations subjects us to domestic and foreign anti-bribery and anti-corruption laws and regulations, such as the FCPA.

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federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, any of which could adversely affect our ability to operate our business and our results of operations.

Any action for violation of these laws, even if successfully defended, could cause a pharmaceutical manufacturer to incur significant legal expenses and divert management’s attention from the operation of the business.

If any of the physicians or other healthcare providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, that person or entity may be subject

to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Any action for violation of these laws, even if successfully defended, could cause a pharmaceutical manufacturer to incur significant legal expenses and divert

management’s attention from the operation of the business.

If any of the physicians or other healthcare providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, that person or entity may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Prohibitions or restrictions on sales or withdrawal of future marketed products could materially affect business in an adverse way.

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and in other countries.

government, as well as certain foreign governments, have restricted travel to or from the U.S., which may delay or prevent us from conducting our business in a timely and efficient manner.

The extent to which COVID-19 impacts our operations or those of our third-party partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, additional or modified government actions, new information that will emerge concerning the severity and impact of COVID-19 and the actions to contain COVID-19 or address its impact in the short and long term, among others.

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Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.

In the event we conduct clinical trials in the UK or European Economic Area (“EEA”), we may be subject to additional privacy laws.

For example, the GDPR became effective on May 25, 2018 and deals with the processing of personal data and on the free movement of such data.

The GDPR imposes a broad range of strict requirements on companies subject to the GDPR, including requirements relating to having legal bases for processing personal information relating to identifiable individuals and transferring such information outside the EEA, including to the U.S., providing details to those individuals regarding the processing of their personal information, keeping personal information secure, having data processing agreements with third parties who process personal information, responding to individuals’ requests to exercise their rights in respect of their personal information, reporting security breaches involving personal data to the competent national data protection authority and affected individuals, appointing data protection officers, conducting data protection impact assessments, and record-keeping.

The GDPR increases substantially the penalties to which we could be subject in the event of any non-compliance, including fines of up to 10,000,000 Euros or up to 2% of our total worldwide annual turnover for certain comparatively minor offenses, or up to 20,000,000 Euros or up to 4% of our total worldwide annual turnover for more serious offenses.

Given the new law, we face uncertainty as to the exact interpretation of the new requirements and we may be unsuccessful in implementing all measures required by data protection authorities or courts in interpretation of the new law.

In particular, national laws of member states of the EU are in the process of being adapted to the requirements under the GDPR, thereby implementing national laws which may partially deviate from the GDPR and impose different obligations from country to country, so that we do not expect to operate in a uniform legal landscape in the EU.

Also, as it relates to processing and transfer of genetic data, the GDPR specifically allows national laws to impose additional and more specific requirements or restrictions, and European laws have historically differed quite substantially in this field, leading to additional uncertainty.

In the event we conduct clinical trials in the UK or EEA, we must also ensure that we maintain adequate safeguards to enable the transfer of personal data outside of the UK or EEA, as applicable, in particular to the U.S., in compliance with the relevant national or Pan-European data protection laws.

We expect that we will continue to face uncertainty as to whether our efforts to comply with our obligations under European privacy laws will be sufficient.

Given our current and future request s for approval to conduct clinical trials in the UK and other jurisdictions outside the U.S.

, we may be subject to additional privacy laws.

For example, the European Data Protection Law applies extraterritorially, and we may be subject to the European Data Protection Law because of data processing activities that involve the personal data of individuals in the EU or the UK in connection with EU or UK clinical trials.

As discussed above, the European Data Protection Law regulates the processing of personal data of data subjects in the EU or the UK by imposing a broad range of strict requirements on companies subject to the European Data Protection Law, including requirements relating to having legal bases for processing personal data and transferring such information outside the EU or the UK, including to the U.S., providing robust disclosures to individuals regarding the processing of their personal data, keeping personal data secure, having data processing agreements with third parties who process personal data, responding to individuals’ requests to exercise their rights in respect of their personal data, reporting security breaches involving personal data to the competent national data protection authority and affected individuals, appointing data protection officers, conducting data protection impact assessments, and record-keeping.

In the event of non-compliance with the European Data Protection Law, we could be subject to substantial fines and other penalties, including fines of up to 10,000,000 Euros or up to 2% of our total worldwide annual turnover for certain comparatively minor offenses, or up to 20,000,000 Euros or up to 4% of our total worldwide annual turnover for more serious offenses.

We face uncertainty as to the exact interpretation of the new requirements and we may be unsuccessful in implementing all measures required by data protection authorities or courts in interpretation of the law.

In addition, as it relates to processing and transfer of health and genetic data, the European Data Protection Law specifically allows national laws to impose additional and more specific requirements or restrictions, and European laws have historically differed quite substantially in this field, leading to additional uncertainty.

Because we intend to conduct clinical trials in the UK and other jurisdictions outside the U.S., we must also ensure that we maintain adequate safeguards to enable the transfer of personal data outside of the relevant jurisdiction, in particular to the U.S., in compliance with the relevant data protection laws.

We expect that we will continue to face uncertainty as to whether our efforts to comply with our obligations under the European Data Protection Law will be sufficient.

If we are investigated by a European data protection authority, we may face fines and other penalties.

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Thus, solely with respect to the particular modified guide RNAs, the arbitration panel stated that it will declare that Caribou has an equitable “leaseback,” which it described as exclusive, perpetual and worldwide (the “Caribou Award”).

The panel instructed the parties to negotiate the terms of the Caribou Award, including Caribou’s future payments to us for the same, but the parties’ negotiations reached an impasse.

The panel instructed the parties to negotiate the terms of the Caribou Award, including Caribou’s future payments to us for the same.

On February 6, 2020, after considering additional submissions from the parties, the panel clarified that the Caribou Award is limited to a particular on-going Caribou program, which seeks to develop a CAR-T cell product directed at CD19.

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On August 26, 2019, the PTAB redeclared the interference to include additional UC/Vienna/Charpentier patent applications covering the invention that had also been found allowable by the USPTO.

As of June 30, 2020, the interference involves 14 allowable patent applications from the UC/Vienna/Charpentier eukaryotic patent family and 13 patents and one patent application from the Broad Institute patent family.

If it were to succeed in the interference, the Broad could seek to assert its issued patents against us based on our CRISPR/Cas9-based activities, including commercialization.

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On August 26, 2019, the PTAB redeclared the interference to include additional UC/Vienna/Charpentier patent applications covering the invention that had also been found allowable by the USPTO.

In this interference, the PTAB will seek to determine which research group first invented the use of the technology in eukaryotic cells and, therefore, is entitled to the patents covering the invention.

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Thus, solely with respect to the particular modified guide RNAs, the arbitration panel stated that it will declare that Caribou has an equitable award, which it described as exclusive, perpetual and worldwide.

Upon, and subject to the terms of, a final award, which will follow further legal proceedings between the parties, Caribou could be able to use the modified guide RNAs at issue for human therapeutics.

Upon, and subject to the terms of, a final award, which will follow further legal proceedings between the parties, Caribou could be able to use the modified guide RNAs at issue for certain human therapeutics.

Although the interim award has no effect on our rights or current programs nor on Caribou’s obligations under the Caribou License, we cannot predict the potential implications and impact the interim award may have on our business .

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The growth of our business will likely depend in part on our ability to acquire or in-license additional proprietary rights.

For example, our programs may involve additional product candidates, delivery systems or technologies that may require the use of additional proprietary rights held by third parties.

For example, our programs may involve additional product candidates, delivery systems or technologies that may require the use of additional proprietary rights held by third parties, including competitors.

Our ultimate product candidates may also require specific modifications or formulations to work effectively and efficiently.

These modifications or formulations may be covered by intellectual property rights held by others.

These modifications or formulations may be covered by intellectual property rights held by others, including competitors.

We may be unable to acquire or in-license any relevant third-party intellectual property rights that we identify as necessary or important to our business operations.

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The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the U.S.

There is a substantial amount of litigation as well as administrative proceedings for challenging patents, including interference, derivation, and reexamination proceedings before the USPTO and oppositions and other comparable proceedings in foreign jurisdictions, involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, and we expect this to be true for the CRISPR/Cas9 space as well.

There is a substantial amount of litigation as well as administrative proceedings for challenging patents, including interference, derivation, reexamination, and other post-grant proceedings before the USPTO and oppositions and other comparable proceedings in foreign jurisdictions, involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, and we expect this to be true for the CRISPR/Cas9 space as well.

For example, a number of third parties have filed oppositions challenging the validity, and seeking the revocation, of the CRISPR/Cas9 genome editing patents granted to UC/Vienna/Charpentier by the European Patent Office to date.

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Pursuing or defending against these legal claims, regardless of merits, would involve substantial legal expense and would be a substantial diversion of employee resources from our business.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or contractual litigation there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation or proceeding.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or contractual litigation there is a risk that some of our confidential

information could be compromised by disclosure during this type of litigation or proceeding.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments.

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Upon, and subject to the terms of, a final award, which will follow further legal proceedings between the parties, Caribou could be able to use the modified guide RNAs at issue to develop engineered CAR-T’s directed at CD19 as human therapeutics.

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Our principal stockholders and management own a significant percentage of our stock and, if they choose to act together, will be able to control or exercise significant influence over matters subject to stockholder approval.

As of December 31, 2019, our executive officers, directors, 5% or greater stockholders and their affiliates beneficially owned approximately 63% of our outstanding voting stock.

As of March 31, 2020, our executive officers, directors, 5% or greater stockholders and their affiliates beneficially owned approximately 66% of our outstanding voting stock.

These stockholders may have the ability to influence us through their ownership positions.

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Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of stockholders and could cause our stock price to fall.

We will need additional capital in the future to continue our planned operations in addition to the proceeds we received from our initial public offering (“IPO”) in May 2016 and follow-on public offering in November 2017.

To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution.

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In December 2019, we issued 287,231 shares of our common stock at an average price of $16.48 per share in accordance with the 2019 Sales Agreement for aggregate net proceeds of $4.4 million, after payment of cash commissions to the Sales Agent and approximately $0.2 million related to legal, accounting and other fees in connection with the sales.

During the three months ended March 31, 2020, we issued 351,252 shares of our common stock in a series of sales at an average price of $15.05 per share in accordance with the 2019 Sales Agreement, for aggregate net proceeds of $5.1 million after payment of cash commissions to the Sales Agent and approximately $0.1 million related to legal, accounting and other fees in connection with the sales.

During the six months ended June 30, 2020, we issued 1,107,100 shares of our common stock in a series of sales at an average price of $13.78 per share in accordance with the 2019 Sales Agreement, for aggregate net proceeds of $14.7 million after payment of cash commissions to the Sales Agent and approximately $0.1 million related to legal, accounting and other fees in connection with the sales.

In June 2020, we issued 6,301,370 shares of our common stock, including the exercise in full by the underwriters of their option to purchase an additional 821,917 shares, at the public offering price of $18.25 per share pursuant to the 2019 Shelf for aggregate cash consideration of $107.7 million, after payment of commissions and fees and approximately $0.4 million related to legal, accounting and other fees in connection with the sales.

In June 2020 we also issued 925,218 shares of our common stock to Regeneron in a private placement for an aggregate cash consideration of $30.0 million, or $32.42 per share, representing a 100% premium over the volume-weighted average trading price of the Company’s common stock during the 30-day period prior to the closing .

In addition, sales of a substantial number of shares of our outstanding common stock in the public market could occur at any time.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors