Intellia Therapeutics, Inc. 10-Q

Item 1. Financial Statements INTELLIA THERAPEUTICS, INC. Condensed Consolidated Balance Sheets (unaudited) (Amounts in thousands except share and per share data) September 30, 2020 December 31, 2019 ASSETS Current Assets: Cash and cash equivalents $ 179,746 $ 57,226 Marketable securities 228,201 222,500 Accounts receivable 1,217 4,620 Prepaid expenses and other current assets 7,086 5,135 Total current assets 416,250 289,481 Marketable securities - noncurrent - 4,746 Property and equipment, net 15,612 17,996 Operating lease right-of-use assets 22,210 19,137 Other assets 4,483 2,920 Total Assets $ 458,555 $ 334,280 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 7,775 $ 3,941 Accrued expenses 19,348 13,273 Current portion of operating lease liability 6,198 5,745 Current portion of deferred revenue 22,544 12,674 Total current liabilities 55,865 35,633 Deferred revenue, net of current portion 57,070 16,136 Long-term operating lease liability 16,000 12,630 Commitments and contingencies (Note 6) Stockholders’ Equity: Common stock, $ 0.0001 par value; 120,000,000 shares authorized; 58,792,212 and 50,198,044 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively 6 5 Additional paid-in capital 722,500 570,493 Accumulated other comprehensive income 31 261 Accumulated deficit ( 392,917 ) ( 300,878 ) Total stockholders’ equity 329,620 269,881 Total Liabilities and Stockholders’ Equity $ 458,555 $ 334,280 See notes to condensed consolidated financial statements. 3 INTELLIA THERAPEUTICS, INC. Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) (Amounts in thousands except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Collaboration revenue $ 22,220 $ 10,616 $ 51,399 $ 32,167 Operating expenses: Research and development 39,756 27,513 112,177 76,682 General and administrative 10,566 8,431 33,406 32,082 Total operating expenses 50,322 35,944 145,583 108,764 Operating loss ( 28,102 ) ( 25,328 ) ( 94,184 ) ( 76,597 ) Interest income 262 1,694 2,145 5,340 Net loss $ ( 27,840 ) $ ( 23,634 ) $ ( 92,039 ) $ ( 71,257 ) Net loss per share, basic and diluted $ ( 0.47 ) $ ( 0.49 ) $ ( 1.70 ) $ ( 1.53 ) Weighted average shares outstanding, basic and diluted 58,754 48,554 54,218 46,547 Other comprehensive (loss) income: Unrealized (loss) gain on marketable securities ( 124 ) 81 ( 230 ) 364 Comprehensive loss $ ( 27,964 ) $ ( 23,553 ) $ ( 92,269 ) $ ( 70,893 ) See notes to condensed consolidated financial statements. 4 INTELLIA THERAPEUTICS, INC. Condensed Consolidated Statements of Cash Flows (unaudited) (Amounts in thousands) Nine Months Ended September 30, 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 92,039 ) $ ( 71,257 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 4,709 4,021 Equity-based compensation 14,321 12,075 Accretion of investment discounts ( 195 ) ( 3,297 ) Changes in operating assets and liabilities: Accounts receivable 3,403 3,948 Prepaid expenses and other current assets ( 1,951 ) ( 3,043 ) Operating right-of-use assets 4,866 1,648 Other assets 348 110 Accounts payable 3,445 1,910 Accrued expenses 6,719 1,043 Deferred revenue 50,804 ( 20,788 ) Operating lease liabilities ( 4,116 ) ( 948 ) Net cash used in operating activities ( 9,686 ) ( 74,578 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment ( 2,579 ) ( 4,222 ) Purchases of marketable securities ( 244,790 ) ( 263,986 ) Maturities of marketable securities 243,800 265,500 Net cash used in investing activities ( 3,569 ) ( 2,708 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock through follow-on offering, net of issuance costs of $ 0.4 million 107,732 - Proceeds from issuance of common stock through at-the-market offerings, net of issuance costs of $ 0.1 million and $ 0.3 million, respectively 14,722 54,120 Proceeds from issuance of common stock to Regeneron 12,580 - Proceeds from options exercised 1,967 2,216 Issuance of shares through employee stock purchase plan 685 534 Net cash provided by financing activities 137,686 56,870 Net increase (decrease) in cash and cash equivalents and restricted cash equivalents 124,431 ( 20,416 ) Cash and cash equivalents and restricted cash equivalents, beginning of period 57,226 58,856 Cash and cash equivalents and restricted cash equivalents, end of period $ 181,657 $ 38,440 Reconciliation of cash, cash equivalents and restricted cash equivalents to condensed consolidated balance sheet: Cash and cash equivalents $ 179,746 $ 38,440 Restricted cash equivalents, included in other assets 1,911 - Total cash, cash equivalents and restricted cash equivalents $ 181,657 $ 38,440 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Purchases of property and equipment unpaid at period end $ 545 $ 1,016 Right-of-use assets acquired under operating leases 7,939 2,554 See notes to condensed consolidated financial statements. 5 INTELLIA THERAPEUTICS, INC. Notes to Condensed Consolidated Financial Statements (unaudited) 1. Overview and Basis of Presentation Intellia Therapeutics, Inc. (“Intellia” or the “Company”) is a leading genome editing company, focused on the development of proprietary, potentially curative therapeutics using a biological tool known as CRISPR/Cas9, which stands for C lustered, R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”)/CRISPR associated 9 (“Cas9”) . This is a technology for genome editing, the process of altering selected sequences of genomic deoxyribonucleic acid (“DNA”). The Company believes the CRISPR/Cas9 technology has the potential to transform medicine by both producing therapeutics that permanently edit and/or correct disease-associated genes in the human body with a single treatment course, and creating enhanced engineered cells that can treat oncological and immunological diseases. The Company’s combination of deep scientific, technical and clinical development experience, along with its intellectual property (“IP”) portfolio, puts it in a position to unlock broad therapeutic applications of the CRISPR/Cas9 technology and create new classes of therapeutic products. The condensed consolidated financial statements of the Company included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K (“Annual Report”) for the year ended December 31, 2019. The unaudited condensed 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. The preparation of financial statements in conformity with 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 condensed consolidated financial statements have been made in connection with the calculation of revenues, research and development expenses and equity-based compensation expense. The Company bases its estimates on historical experience and various other assumptions that management believes to be reasonable under the circumstances at the time such estimates are made. Actual results could differ from those estimates. The Company periodically reviews its estimates in light of changes in circumstances, facts and experience. The extent of the impact of the coronavirus disease 19 (“COVID-19”) pandemic on the Company’s operational and financial performance will depend on certain developments, including the length and severity of this pandemic, as well as its effect on our employees, collaborators and vendors, all of which are uncertain and cannot be predicted. The Company cannot reasonably estimate the extent to which the disruption may materially impact its consolidated results of operations or financial position. The effects of material revisions in estimates are reflected in the condensed consolidated financial statements prospectively from the date of the change in estimate. Certain prior year amounts have been reclassified in order to conform to the current year presentation. In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the results for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period. 6 Liquidity Since its inception through September 30, 2020, the Company has raised an aggregate of $ 893.6 million to fund its operations, of which $ 272.6 million was through its collaboration agreements, $ 170.5 million was from its initial public offering (“IPO”) and concurrent private placements, $ 249.1 million was from follow-on public offerings, $ 116.4 million was from at-the-market offerings and $ 85.0 million was from the sale of convertible preferred stock. The Company expects that its cash, cash equivalents and marketable securities as of September 30, 2020, as well as research and cost reimbursement funding from its collaboration agreement with Regeneron (see Note 7), 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 condensed consolidated financial statements. 2. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies” to the consolidated financial statements included in the Annual Report for the year ended December 31, 2019. There have been no material changes during the nine months ended September 30, 2020, other than as noted below . Restricted Cash Equivalents Restricted cash equivalents are money market funds held in collateral accounts that are restricted to secure a letter of credit in accordance with the lease for 281 Albany Street that the Company entered into in March of 2020 (see Note 8). The letter of credit is required to be maintained throughout the term of the lease, which is ten years. These restricted cash equivalents amount to $ 1.9 million and are included in “Other Assets” in the Company’s condensed consolidated balance sheet . Recent Accounting Pronouncements – Adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”) . The new standard modifies disclosure requirements related to fair value measurement. The Company adopted ASU 2018-13 on January 1, 2020. The adoption did not have a material impact on the Company’s condensed consolidated financial statements as of and for the three or nine months ended September 30, 2020. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The standard changes how credit losses are measured for most financial assets and certain other instruments. For trade and other receivables, the standard requires the use of a new forward-looking “expected credit loss” model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. With certain exceptions, the guidance is applied using a modified retrospective approach by reflecting adjustments through a cumulative-effect impact to retained earnings as of the beginning of the fiscal year of adoption. The Company adopted ASU 2016-13 on January 1, 2020. The adoption did not have a material effect on the Company’s condensed consolidated financial statements as of and for the three or nine months ended September 30, 2020 . Recent Accounting Pronouncements – Issued but not yet adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify the accounting for income taxes . ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in ASU 2019-12 are effective for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted. The Company does not anticipate that the adoption of ASU 2019-12 will have a material effect on the Company’s condensed consolidated financial statements. 7 3. Marketable Securities The following table summarizes the Company’s available-for-sale marketable securities as of September 30, 2020 and December 31, 2019 at net book value: September 30, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In thousands) Marketable securities: U.S. Treasury securities $ 79,962 $ 5 $ - $ 79,967 Financial institution debt securities 111,265 35 ( 5 ) 111,295 Corporate debt securities 31,832 - ( 6 ) 31,826 Other asset-backed securities 5,111 2 - 5,113 Total $ 228,170 $ 42 $ ( 11 ) $ 228,201 December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In thousands) Marketable securities: U.S. Treasury securities $ 159,361 $ 142 $ ( 1 ) $ 159,502 Financial institution debt securities 40,173 105 - 40,278 Corporate debt securities 18,966 1 - 18,967 Other asset-backed securities 8,485 14 - 8,499 Total $ 226,985 $ 262 $ ( 1 ) $ 227,246 The amortized cost of available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity. At September 30, 2020 and December 31, 2019, the balance in the Company’s accumulated other comprehensive income was composed of activity related to the Company’s available-for-sale marketable securities. There were no material realized gains or losses in the nine months ended September 30, 2020 or for the year ended December 31, 2019. The Company did not reclassify any amounts out of accumulated other comprehensive income during this period. The Company did not have any securities in a material unrealized loss position at September 30, 2020. The Company's available-for-sale securities that are classified as short-term marketable securities in the condensed consolidated balance sheet mature within one year or less as of the balance sheet date. Available-for-sale securities that are classified as noncurrent in the condensed 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 September 30, 2020 and December 31, 2019, the Company did no t hold any investments that matured beyond five years of the balance sheet date. 4 . Fair Value Measurements The Company classifies fair value-based measurements using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1, quoted market prices in active markets for identical assets or liabilities; Level 2, observable inputs other than quoted market prices included in Level 1, such as quoted market prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data; and Level 3, unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. 8 As of September 30, 2020 and December 31, 2019, the Company’s financial assets recognized at fair value on a recurring basis consisted of the following: Fair Value as of September 30, 2020 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents $ 172,407 $ 172,407 $ - $ - Marketable securities: U.S. Treasury securities 79,967 79,967 - - Financial institution debt securities 111,295 - 111,295 - Corporate debt securities 31,826 - 31,826 - Other asset-backed securities 5,113 - 5,113 - Total marketable securities 228,201 79,967 148,234 - Total $ 400,608 $ 252,374 $ 148,234 $ - Fair Value as of December 31, 2019 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents $ 46,917 $ 46,917 $ - $ - Marketable securities: U.S. Treasury securities 159,502 159,502 - - Financial institution debt securities 40,278 - 40,278 - Corporate debt securities 18,967 - 18,967 - Other asset-backed securities 8,499 - 8,499 - Total marketable securities 227,246 159,502 67,744 - Total $ 274,163 $ 206,419 $ 67,744 $ - The Company’s financial assets, which include cash equivalents and marketable securities, have been initially valued at the transaction price, and subsequently revalued at the end of each reporting period, utilizing third-party pricing services or other observable market data. The pricing services utilize industry standard valuation models and observable market inputs to determine value . After completing our validation procedures, the Company did not adjust or override any fair value measurements provided by the pricing services as of September 30, 2020 or December 31, 2019. Other financial instruments, including accounts receivable, accounts payable and accrued expense, are carried at cost, which approximate fair value due to the short duration and term to maturity. 5 . Accrued Expenses Accrued expenses consisted of the following: September 30, 2020 December 31, 2019 (In thousands) Employee compensation and benefits $ 8,642 $ 6,311 Accrued research and development 6,396 4,208 Accrued legal and professional expenses 2,024 1,563 Accrued other 2,286 1,191 Total accrued expenses $ 19,348 $ 13,273 9 6. Commitments and Contingencies Litigation There have been no material changes to any of the outstanding litigation, nor is the Company a party to any new litigation, since December 31, 2019. For further information please see the notes to the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2019. 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 September 30, 2020, the satisfaction and timing of the contingent payments is uncertain and not reasonably estimable . 7 . Collaborations 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 September 30, 2020, the Company’s accounts receivable and contract liabilities were related to the Company’s collaboration with Regeneron Pharmaceuticals, Inc. (“Regeneron”). As of September 30, 2019, the Company’s accounts receivable and contract liabilities were related to the Company’s collaborations with Regeneron and Novartis Institutes for BioMedical Research (“Novartis”). The following table presents changes in the Company’s accounts receivable and contract liabilities during the nine months ended September 30, 2020 and 2019 (in thousands): Balance at Beginning of Period Additions Deductions Balance at End of Period Nine Months Ended September 30, 2020 Accounts receivable $ 4,620 $ 102,203 $ ( 105,606 ) $ 1,217 Contract liabilities: Deferred revenue $ 28,810 $ 87,477 $ ( 36,673 ) $ 79,614 Balance at Beginning of Period Additions Deductions Balance at End of Period Nine Months Ended September 30, 2019 Accounts receivable $ 7,547 $ 11,379 $ ( 15,327 ) $ 3,599 Contract liabilities: Deferred revenue $ 55,932 $ 3,000 $ ( 23,788 ) $ 35,144 During the nine months ended September 30, 2020 and 2019, the Company recognized the following revenues as a result of changes in the contract liability balance (in thousands): Nine Months Ended September 30, Revenue recognized in the period from: 2020 2019 Amounts included in the contract liability at the beginning of the period $ 10,249 $ 23,788 Costs to obtain and fulfill a contract The Company did not incur any expenses to obtain collaboration agreements and costs to fulfill those contracts do not generate or enhance resources of the Company. As such, no costs to obtain or fulfill a contract have been capitalized in any period. 10 Regeneron Pharmaceuticals, Inc. In April 2016, the Company entered into a license and collaboration agreement with Regeneron (the “2016 Regeneron Agreement”). The 2016 Regeneron Agreement has two principal components: i) a product development component under which the parties will research, develop and commercialize CRISPR/Cas-based therapeutic products primarily focused on genome editing in the liver, and ii) a technology collaboration component, pursuant to which the Company and Regeneron will engage in research-related activities aimed at discovering and developing novel technologies and improvements to CRISPR/Cas technology to enhance the Company’s genome editing platform. Under this agreement, the Company also may access the Regeneron Genetics Center and proprietary mouse models to be provided by Regeneron for a limited number of the Company’s liver programs. On May 30, 2020, the Company entered into (i) amendment no. 1 (the “2020 Regeneron Amendment”) to the 2016 Regeneron Agreement, (ii) co-development and co-funding agreements for the treatment of hemophilia A and hemophilia B (the “Hemophilia Co/Co”) agreements and (iii) a stock purchase agreement (the “2020 Stock Purchase Agreement”). 2016 Regeneron Agreement: Scope. Under the initial six-year term of the 2016 Regeneron Agreement , Regeneron obtained exclusive rights for up to ten targets (the “Regeneron Target Cap”) to be chosen by Regeneron during the Technology Collaboration Term, as defined in the 2016 Regeneron Agreement, subject to a target selection process and various adjustments and limitations set forth in the 2016 Regeneron Agreement. Of these ten total targets, Regeneron may select up to five non-liver targets, while the remaining targets must be focused in the liver. The Company retains the exclusive right to solely develop certain in vivo products directed against specified genetic targets as well as certain non-liver targets from the Company’s ongoing and planned research activities. During the collaboration term, and subject to a target selection process, the Company has the right to choose additional liver targets for its own development using commercially reasonable efforts. Certain targets that either the Company or Regeneron select during the collaboration term may be subject to co-development and co-promotion (“Co/Co”) agreements at the Company or Regeneron’s option. Regeneron has the option to enter into Co/Co agreements for up to five liver targets (other than the Company’s reserved liver targets) and the Company has the option to enter into one Intellia Independent Co/Co Option (as defined in the 2016 Regeneron Agreement). At the inception of the 2016 Regeneron Agreement, Regeneron selected the first of its ten targets, transthyretin amyloidosis (“ATTR”), which is subject to a Co/Co agreement between the Company and Regeneron (the “ATTR Co/Co”). The general terms and conditions for the ATTR Co/Co were outlined within the 2016 Regeneron Agreement. In addition, the Company granted Regeneron a non-exclusive, worldwide license, 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. 2016 Regeneron Agreement: Financial Terms. 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 low- to mid-single-digit royalty obligations under a license agreement with Caribou Biosciences, Inc. (“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 . 2020 Regeneron Amendment: Scope . The 2020 Regeneron Amendment, among other things, (i) extends the Technology Collaboration Term until April 11, 2024, with a further option to extend an additional twenty-four months upon notice and a $ 30.0 million nonrefundable payment to the Company, (ii) increases the Regeneron Target Cap from ten to fifteen (with the additional five targets focused only in the liver) and (iii) allows for a second Intellia Independent Co/Co Option. The Company also granted a non-exclusive license to Regeneron under certain CRISPR/Cas platform IP for the commercialization of up to ten ex vivo edited CRISPR Products (as defined in the 2020 Regeneron Amendment) made using certain cell types, subject to certain limitations on Regeneron’s activities in T cells. The ex vivo license does not include access to the Company’s IP directed to its ex vivo targets, programs, or cell engineering processes. This non-exclusive license is subject to royalty obligations such that the Company is eligible to earn royalties on ex vivo edited CRISPR Products ranging from the high-single 11 digits to low teens, in each case, on a per-product basis, subject to various reductions and offsets and the Company’s existing royalty obligations to Caribou . The Company transferred the license to develop the Factor VIII target for the treatment of hemophilia A to Regeneron . In addition, a target that was previously a Regeneron evaluation target was transferred back to the Company as an Intellia reserved liver target with certain reserved rights for Regeneron . In connection with the 2020 Regeneron Amendment, the Company and Regeneron also entered into the Hemophilia Co/Co agreements, which are directed to Factor VIII and Factor IX for the treatment of hemophilia A and hemophilia B. Factor VIII and Factor IX do not count toward the Regeneron Target Cap. Under the Hemophilia Co/Co agreements, which are substantially based upon the terms and conditions as outlined under the 2016 Regeneron Agreement, the Company and Regeneron will collaborate to research, develop, manufacture, and commercialize CRISPR Products for the treatment of hemophilia A and hemophilia B, for which Regeneron will be the Lead Party (as discussed below). Further, worldwide development costs and profits of any future products will be split between the Company and Regeneron, 35 % and 65 %, respectively, subject to certain deductions. 2020 Regeneron Amendment: Financial Terms. 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 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. Research Collaboration. Research activities under the 2016 Regeneron Agreement and the 2020 Regeneron Amendment (collectively the “Amended Agreements”) will be governed by evaluation and research and development plans that will outline the parties’ responsibilities under, anticipated timelines of and budgets for, the various programs. The Company will assist Regeneron with the preliminary evaluation of its selected in vivo targets, and Regeneron will be responsible for preclinical research, conducting clinical development and manufacturing and commercialization of CRISPR Products directed to each of its exclusive selected targets. The Company may assist, as requested by Regeneron, with the later discovery and research of product candidates directed to any selected target. For each selected target, Regeneron is required to use commercially reasonable efforts to submit regulatory filings necessary to achieve investigational new drug (“IND”), or other regulatory acceptance for at least one product directed to each applicable target and, following IND or other regulatory acceptance, to develop and commercialize at least one such product. Governance. Pursuant to the 2016 Regeneron Agreement, the parties formed a joint steering committee, which is responsible for setting research objectives and overseeing the general strategies and research and development activities undertaken by the parties. Term and Termination . Under the Amended Agreements, the Technology Collaboration Term ends in April 2024, except that Regeneron may make a one-time payment of $ 30.0 million to extend the Technology Collaboration Term for an additional two-year period. The Amended Agreements will continue until the date when no royalty or other payment obligations are due, unless earlier terminated in accordance with the terms of the Amended Agreements. Regeneron’s royalty payment obligations expire on a country-by-country and product-by-product basis upon the later of (i) the expiration of the last valid claim of the royalty-bearing patents covering such product in such country, (ii) twelve years from the first commercial sale of such product in such country, or (iii) the expiration of regulatory exclusivity for such product. The Company may terminate the Amended Agreements on a target-by-target basis if Regeneron or any of its affiliates institutes a patent challenge against the Company’s CRISPR/Cas or certain other background patent rights or does not proceed with the development of a product directed to a selected target within specified periods of time. Regeneron may terminate the Amended Agreements, without cause, upon 180 days written notice to the Company, either in its entirety or on a target-by-target basis, in which event, certain rights in the terminated targets and associated IP revert to the Company, as described in the Amended Agreements. Following such termination, the Company may owe Regeneron royalties, in certain circumstances, up to mid-single digits on any terminated targets that the Company subsequently commercializes on a product-by-product basis for a period of twelve years after the first commercial sale of any such products. Either party may terminate the Amended Agreements, either in their entirety or with 12 respect to the research collaboration or one or more of the targets selected by Regeneron, in the event of the other party’s uncured material breach . Co-Development and Co-Promotion Agreements. In July 2018, the Company and Regeneron finalized the form of the Co/Co agreement that will be used as the basis for each Co/Co agreement directed to a target. Simultaneously, the Company and Regeneron executed the ATTR Co/Co agreement, for which the Company is the clinical and commercial Lead Party and Regeneron is the Participating Party (each, as defined in the Co/Co agreements, as applicable, and described below). In May 2020, the Company and Regeneron executed the Hemophilia Co/Co agreements, for which Regeneron is the clinical and commercial Lead Party and the Company is the Participating Party. Co-Development and Co-Promotion: Agreement Structure. Under the 2016 Regeneron Agreement, Regeneron had the right to exercise at least four options, after ATTR, to enter into a Co/Co agreement for the Company’s liver targets (other than the Company’s reserved liver targets), while the Company had the opportunity to exercise at least one option to enter into a Co/Co agreement for Regeneron’s liver targets, the exact number of options being subject to certain conditions of the target selection process. In connection with the 2020 Regeneron Amendment, the Company received one additional option to enter into a Co/Co agreement, while Regeneron’s number of Co/Co options remained the same. Each option to enter into a Co/Co agreement must be exercised (or forfeited) once a target reaches a defined preclinical stage. One party will be the “Lead Party” and the other party the “Participating Party.” The Lead Party will have control and primary responsibility for the development, manufacturing, regulatory, and commercial activities. The Participating Party will have the right to consult on these activities through its participation on the joint development and commercialization committees and will have the right to co-fund development and commercialization activities in exchange for a share of profits. In general, under each Co/Co agreement, the parties will share equally in worldwide development costs and profits of any future products. Prior to reaching a specific development milestone, the Participating Party may elect to reduce its share of worldwide development costs and profits by 50 %. Pursuant to the ATTR Co/Co, on December 13, 2019, Regeneron informed the Company that it would exercise its rights under the ATTR Co/Co agreement to modify its share of worldwide development costs and profits from 50 % to 25 %, effective in mid-June 2020. As noted above, in connection with the 2020 Regeneron Amendment, the Company and Regeneron entered into two Hemophilia Co/Co agreements. Under the Hemophilia Co/Co agreements, which are substantially based upon the Company and Regeneron’s previously agreed-upon form of Co/Co agreement, but do not count toward Regeneron’s total number of Co/Co options, the Company and Regeneron will collaborate to research, develop, manufacture, and commercialize CRISPR Products for the treatment of hemophilia A and hemophilia B. Regeneron will be the clinical and commercial lead for such activities. Co-Development and Co-Promotion: Governance. The parties formed j oint development and commercialization committees to oversee all profit share products under the Co/Co agreements as discussed below. The committees are responsible for overseeing the development, manufacture, regulatory matters, and commercialization (including pricing and reimbursement) efforts under the ATTR Co/Co and the Hemophilia Co/Co agreements. Co-Development and Co-Promotion: Termination. Either party may terminate a particular Co/Co agreement by providing 180 days written notice. If the Company terminates, the product subject to the Co/Co agreement becomes a Regeneron product, and is subject to all future milestone and royalty payment obligations under the 2016 Regeneron Agreement. If Regeneron terminates and has contributed at least $ 5.0 million in development costs under the particular Co/Co agreement, the Company will pay low- to mid-single-digit royalties on the net sales of the product, depending on co-funding percentage, stage at termination and, if any, Regeneron IP incorporated into the relevant product. 2016 Regeneron Agreement: Accounting Analysis. The Company determined that the 2016 Regeneron Agreement is within the scope of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and its related amendments (collectively known as “ASC 606”). The Company evaluated the promised goods and services under the 2016 Regeneron Agreement and determined that it included three performance obligations: (i) a combined performance obligation including the licenses to targets and the associated research activities and evaluation plans; (ii) a combined performance obligation including the technology collaboration and associated research activities; and (iii) the common stock. 13 Under the 2016 Regeneron Agreement, the Company determined that the transaction price was $ 125.0 million, consisting of the following consideration: (i) the nonrefundable upfront payment of $ 75.0 million; and (ii) the payment of the common stock of $ 50.0 million. None of the clinical or regulatory milestones were included in the transaction price, as all milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt of the milestones is outside the control of the Company and contingent upon success in future regulatory progress and the licensee’s efforts. Any consideration related to sales-based milestones and royalties will be recognized when the related sales occur as they were determined to relate predominantly to the licenses granted to Regeneron and therefore have also been excluded from the transaction price. The Company first allocated $ 50.0 million of the transaction price to the common stock. The common stock was sold at its standalone selling price and the Company concluded that the total discount inherent in the arrangement is entirely attributable to the combined performance obligation 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. As such, the remaining $ 75.0 million of the transaction price was allocated to the combined performance obligation 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. The Company estimated the standalone selling price of each combined performance obligation by taking into consideration internal estimates of research and development personnel needed to perform the research and development services, estimates of expected cash outflows to third parties for services and supplies, selling prices of comparable transactions and typical gross profit margins. As a result of this evaluation, the Company allocated $ 63.8 million to the combined performance obligation including the licenses to targets and associated research activities and evaluation plans and $ 11.2 million to the combined performance obligation including the technology collaboration and associated research activities. The $ 63.8 million allocated to the combined performance obligation including the licenses to targets and associated research activities and evaluation plans is being recognized using a time elapsed inputs method over a period of six years , which, in management’s judgment, is the best measure of progress towards satisfying the performance obligation as this method provides the most faithful depiction of the entity’s performance in transferring control of the goods and services promised to Regeneron and represents the Company’s best estimate of the period of the obligation. The $ 11.2 million allocated to the combined performance obligation including the technology collaboration and associated research activities is being recognized using a time elapsed inputs method over a period beginning with the inception of the technology collaboration in September 2016 through the end of the arrangement, which, in management’s judgment, is the best measure of progress towards satisfying the performance obligation as this method provides the most faithful depiction of the entity’s performance in transferring control of the goods and services promised to Regeneron and represents the Company’s best estimate of the period of the obligation. 2020 Regeneron Amendment: Accounting Analysis. The Company concluded that the accounting for the 2020 Regeneron Amendment is within the scope of ASC 606. The Company evaluated the promised goods and services under the 2020 Regeneron Amendment and determined that it included three performance obligations: (i) a combined performance obligation including the licenses to targets and the associated research activities and evaluation plans; (ii) a combined performance obligation including the technology collaboration and associated research activities; and (iii) the transfer of the license to develop the Factor VIII target for hemophilia A. The 2020 Regeneron Amendment represents a contract modification. The modification of the license to targets and the associated research activities and evaluation plans and the license to the technology collaboration and associated research activities are accounted for as if they were part of the original agreement and therefore form part of a performance obligation that was partially satisfied at the date of modification. The Company therefore recorded a cumulative catch-up adjustment of $ 8.4 million on the modification date. The Company accounted for the distinct performance obligation – specifically the obligation to transfer the license to develop the Factor VIII target for hemophilia A - as if it were a separate component of the modified contract. The transaction price of the 2020 Regeneron Amendment was determined to be $ 110.9 million, which is comprised of the $ 23.5 million remaining consideration from the 2016 Regeneron Agreement transferred at the inception of the arrangement, the $ 70.0 million upfront payment received upon the execution of the 2020 Regeneron Amendment and $ 17.4 million on the sale of shares under the 2020 Stock Purchase Agreement. The Company applied equity accounting guidance to measure the $ 12.6 million fair value recorded in the condensed consolidated statement of stockholders’ equity upon issuance of the shares. All variable consideration will be fully constrained, until such point where the constraints can be lifted, at which point the Company will allocate the consideration to the performance obligations in the arrangement accordingly. 14 The $ 110.9 million transaction price was allocated to the performance obligations including the licenses to targets and associated research activities and evaluation plans, the combined performance obligation including the technology collaboration and associated research activities and the transfer of the license to develop the Factor VIII target for hemophilia A, on a relative standalone selling price basis. The Company estimated the standalone selling price of the transfer of the license to develop the Factor VIII target for hemophilia A using the adjusted market assessment approach, whereby the Company estimated the market in which it sells goods or services and estimated the price that a customer in that market would be willing to pay for those goods or services. The Company estimated the standalone selling price of the combined performance obligation of the technology collaboration and associated research activities by taking into consideration internal estimates of research and development personnel needed to perform the research and development services. The estimated standalone selling price of the combined performance obligation, including the licenses to targets and the associated research activities and evaluation plans, was determined using selling prices of comparable transactions. As a result of this evaluation, the Company allocated $ 91.9 million to the combined performance obligation including the licenses to targets and associated research activities and evaluation plans, $ 3.7 million to the combined performance obligation including the technology collaboration and associated research activities, and $ 15.3 million to the transfer of the license to develop the Factor VIII target for hemophilia A. The $ 91.9 million allocated to the combined performance obligation, including the licenses to targets and associated research activities and evaluation plans, as well as the $ 3.7 million allocated to the combined performance obligation, including the technology collaboration and associated research activities, are being recognized using a time elapsed inputs method over the remaining period of the collaboration which, in management’s judgment, is the best measure of progress towards satisfying the performance obligation as this method provides the most faithful depiction of the entity’s performance in transferring control of the goods and services promised to Regeneron and represents the Company’s best estimate of the period of the obligation. The Company will re-evaluate the measure of progress in each reporting period and when events whose outcome are resolved or other changes in circumstances occur. The $ 15.3 million allocated to the transfer of the license to develop the Factor VIII target for hemophilia A was recognized when the Company transferred control of the hemophilia A target during the quarter ended September 30, 2020. 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 Accounting Standards Codification 808, Collaborative Arrangements (“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 condensed 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. Revenue Recognition – Collaboration Revenue. Through September 30, 2020, excluding amounts allocated to Regeneron’s purchase of the Company’s common stock, the Company recorded $ 145.0 million in upfront payments under the Amended Agreements and $ 33.8 million primarily for research and development services under the ATTR Co/Co agreement. Through September 30, 2020 , the Company has recognized $ 116.7 million of collaboration revenue under all arrangements, including $ 22.2 million and $ 46.4 million during the three and nine months ended September 30, 2020, respectively, and $ 5.8 million and $ 17.8 million during the three and nine months ended September 30, 2019, respectively, in the condensed consolidated statements of operations and comprehensive loss. This includes $ 1.2 million and $ 9.8 million during the three and nine months ended September 30, 2020, respectively, and $ 2.6 million and $ 8.4 million during the three and nine months ended September 30, 2019, respectively, primarily representing payments due from Regeneron pursuant to the ATTR Co/Co agreement. As of September 30, 2020, there was approximately $ 79.6 million of the aggregate transaction price of the Amended Agreements remaining to be recognized, which the Company expects to be recognized ratably through April 2024 . As of September 30, 2020 and December 31, 2019, the Company had accounts receivable of $ 1.2 million and $ 3.6 million, respectively, and deferred revenue of $ 79.6 million and $ 28.8 million, respectively, related to the Amended Agreements. 15 Novartis Institutes for BioMedical Research , Inc. In December 2014, the Company entered into a strategic collaboration agreement with Novartis (the “2014 Novartis Agreement”), primarily focused on the research of new ex vivo CRISPR/Cas9-edited therapies using chimeric antigen receptor T (“CAR-T”) cells and hematopoietic stem cells (“HSCs”). The agreement was amended in December 2018 (the “Novartis Amendment”) to also include research on ocular stem cells (“OSCs”). In December 2019, per the terms of the 2014 Novartis Agreement, the research term ended, although the 2014 Novartis Agreement remains in effect, for which the Company will be eligible to receive milestone and royalty payments in the future. Since December 31, 2019, there have been no material changes to the key terms of the 2014 Novartis Agreement and the Novartis Amendment. For further information on the terms and conditions of these agreements, please see the notes to the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2019. Revenue Recognition – Collaboration Revenue. Through September 30, 2020, excluding amounts allocated to Novartis’ purchase of the Company’s Class A-1 and Class A-2 Preferred Units, the Company had recorded a total of $ 62.4 million in cash under the 2014 Novartis Agreement and the Novartis Amendment. Through September 30, 2020 , the Company recognized $ 62.4 million of collaboration revenue. No revenue was recognized during the three or nine months ended September 30, 2020 related to the 2014 Novartis Agreement and the Novartis Amendment. The Company recognized $ 4.8 million and $ 14.3 million during the three and nine months ended September 30, 2019, in the condensed consolidated statements of operations and comprehensive loss related to the 2014 Novartis Agreement and the Novartis Amendment. As of December 31, 2019, the aggregate transaction price had been recognized in full. Revenue Recognition – Milestone . During the nine months ended September 30, 2020, the U.S. Food and Drug Administration (“FDA”) accepted the IND application submitted by Novartis for a CRISPR/Cas9-based engineered cell therapy for the treatment of sickle cell disease. As a result of meeting this milestone, the Company recognized $ 5.0 million as collaboration revenue within the condensed consolidated statement of operations and comprehensive loss. No other milestones under the 2014 Novartis Agreement and the Novartis Amendment were achieved during the three or nine months ended September 30, 2020 or 2019. The Company is eligible to receive additional downstream success-based milestones and royalties. As of September 30, 2020, the Company had no accounts receivable related to the 2014 Novartis Agreement and the Novartis Amendment. As of December 31, 2019, the Company had accounts receivable of $ 1.0 million related to the 2014 Novartis Agreement and the Novartis Amendment. As of September 30, 2020 and December 31, 2019, the Company had no deferred revenue related to the 2014 Novartis Agreement and the Novartis Amendment. 8 . Leases In October 2014, the Company entered into an agreement to lease office and laboratory space at 130 Brookline Street (the “130 Brookline Lease”) in Cambridge, Massachusetts under an operating lease agreement with a term through January 2020 , with an option to extend the term of the lease for an additional five-year period. In April 2019, the Company executed an amendment to the lease to extend the term of the lease for the additional five-year period, through January 2025 . Upon the execution of the original lease, the Company provided a $ 0.3 million security deposit. The Company has recorded this security deposit in other assets on the condensed consolidated balance sheets. In March 2020, the Company entered into a second amendment to the 130 Brookline Lease (the “Second Amendment”). The Second Amendment amends certain terms of the Company’s existing lease, dated October 21, 2014, as amended on April 5, 2019. The Second Amendment extends the term of the 130 Brookline Lease by approximately six years through January 31, 2031 . This extended term is included as part of the lease liability and right-of-use asset at September 30, 2020. The Second Amendment also provides an option to extend the lease for two consecutive five-year terms . In the first quarter of 2020, the Company recognized a right-of-use asset and lease liability of approximately $ 7.3 million related to the Second Amendment. 16 In March 2020, the Company entered into an agreement to lease approximately 39,000 square feet of office and laboratory space at 281 Albany Street in Cambridge, Massachusetts under an operating lease agreement (the “281 Albany Lease”). The Company’s obligation to pay rent will start on the date that is six months after the commencement date or the date on which the Company occupies the premises, whichever occurs earlier (the “Rent Commencement Date”). The initial term of the 281 Albany Lease is ten years following the Rent Commencement Date. As of September 30, 2020 the Company determined, in accordance with Accounting Standards Codification 842, “Leases (Topic 842)” , that the lease commencement date has not been met as the Company does not control the underlying asset. The base rent under the 281 Albany Lease is $ 99.00 per square foot per year during the first year of the term, which is subject to scheduled annual increases up to $ 128.87 per square foot per year during the last year of the initial term, plus certain operating expenses and taxes. In addition, the landlord will contribute an aggregate of $ 4.4 million toward the cost of construction and tenant improvements for the premises. In accordance with the 281 Albany Lease, the Company is required to maintain a letter of credit in the amount of $ 1.9 million that is restricted for the term of the lease. These restricted cash equivalents are reported in “Other Assets” in the Company’s condensed consolidated balance sheet. The Company has the option to extend the 281 Albany Lease for two successive five-year terms. 9. Equity-Based Compensation 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, restricted stock units (“RSUs”) and other stock-based awards. Recipients of incentive stock options and non-qualified stock options are eligible to purchase shares of the Company’s common stock at an exercise price equal to the fair value of such stock on the grant date. Stock options granted under the 2015 Plan generally vest 25 % on the first anniversary of the original vesting date, with the balance vesting monthly over the remaining three years , unless they contain specific performance-based vesting provisions. The maximum term of stock options granted under the 2015 Plan is ten years . As of September 30, 2020, there were 2,144,877 shares available for future issuance. The number of shares reserved for issuance under the 2015 Plan shall be cumulatively increased by four percent of the number of shares of stock issued and outstanding on the immediately preceding December 31 or such lesser number of shares of stock as determined by the board of directors. Equity-based compensation expense is classified in the condensed consolidated statements of operations and comprehensive loss as follows : Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (In thousands) Research and development $ 2,775 $ 1,513 $ 7,325 $ 5,392 General and administrative 2,625 1,566 6,996 6,683 Total $ 5,400 $ 3,079 $ 14,321 $ 12,075 Restricted Stock Restricted stock is measured at fair value based on the quoted price of the Company’s common stock. The following table summarizes the Company’s restricted stock activity for the nine months ended September 30, 2020: Number of Shares Weighted Average Grant Date Fair Value per Share Unvested restricted stock as of December 31, 2019 71,875 $ 22.88 Granted 181,020 15.05 Vested - - Cancelled ( 28,369 ) 21.66 Unvested restricted stock as of September 30, 2020 224,526 $ 16.72 17 As of September 3 0 , 20 20 , there was $ 1.7 million of unrecognized equity-based compensation expense related to restricted stock that is expected to vest. These costs are expected to be recognized over a weighted average remaining vesting period of 1 . 5 years . As of September 3 0 , 2020, 47,916 of the unvested restricted stock outstanding are performance-based RSUs that vest upon obtaining certain scientific and regulatory milestones through 2020. During the three months ended September 30, 2020, 23,959 performance-based RSUs were cancelled as the performance criteria had not been met as of the milestone measurement date. The outstanding performance-based RSUs are not included in computing the diluted loss per share because the performance criteria had not been met as of the end of the reporting period . In January 2020, the Company granted 181,020 RSUs to certain non-executive employees that include a performance condition in addition to a service condition. The RSUs vest over a period of three years and are subject to accelerated vesting based on the Company’s programs achieving certain development milestones before December 1, 2022. The fair value of the RSUs at date of grant was $ 15.05 . As of September 30, 2020, the Company had not accelerated the vesting of the RSUs. 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 $ 13.38 and $ 8.55 per option for those options granted during the three and nine months ended September 30, 2020 and $ 9.66 and $ 9.21 per option for those options granted during the three and nine months ended September 30, 2019, respectively. The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during the three and nine months ended September 30, 2020 was $ 0.9 million and $ 1.7 million, respectively, and during the three and nine months ended September 30, 2019 was $ 0.2 million and $ 1.6 million, respectively. Key assumptions used to apply this pricing model were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Risk-free interest rate 0.4 % 1.6 % 0.9 % 2.2 % Expected life of options 6.0 years 6.0 years 5.5-6.0 years 5.5-6.0 years Expected volatility of underlying stock 70.8 % 67.5 % 67.6 % 68.3 % Expected dividend yield 0.0 % 0.0 % 0.0 % 0.0 % Risk-free Interest Rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with maturities approximately equal to the option’s expected term. Expected Dividend Yield. The expected dividend yield assumption is based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. Expected Volatility. The expected volatility was derived from a blend of average historical stock volatilities of several peer companies within the Company’s industry and the Company’s historical volatility, both over a period equivalent to the expected term of the stock option grants. Expected Term. The expected term represents the period that stock option awards are expected to be outstanding. For option grants that are considered to be “plain vanilla,” the Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate the expected term. 18 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 nine months ended September 3 0 , 20 20 : 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, 2019 5,365,971 $ 15.67 Granted 2,797,065 14.20 Exercised ( 205,184 ) 9.64 Forfeited ( 430,998 ) 18.21 Outstanding at September 30, 2020 7,526,854 $ 15.14 7.93 $ 40,456 Exercisable at September 30, 2020 3,296,341 $ 14.95 6.63 $ 19,191 As of September 30, 2020, there was $ 35.5 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 2.6 years. Of the unvested stock options outstanding as of September 30, 2020, 135,832 are performance-based stock options that vest upon obtaining certain scientific and regulatory milestones through 2020 . During the nine months ended September 30, 2020, 77,918 performance-based options were cancelled as the performance criteria had not been met as of the milestone measurement date. At September 30, 2020, 95,832 performance-based options are not included in computing the diluted loss per share because the performance criteria had not been met as of the end of the reporting period. 10 . Loss Per Share The Company calculates basic loss per share by dividing net loss for each respective period by the weighted average number of common shares outstanding for each respective period. The Company computes diluted loss 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. Basic and diluted loss per share was calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (In thousands) Net loss $ ( 27,840 ) $ ( 23,634 ) $ ( 92,039 ) $ ( 71,257 ) Weighted average shares outstanding, basic and diluted 58,754 48,554 54,218 46,547 Net loss per share, basic and diluted $ ( 0.47 ) $ ( 0.49 ) $ ( 1.70 ) $ ( 1.53 ) The following common stock equivalents were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive: Three and Nine Months Ended September 30, 2020 2019 (In thousands) Unvested restricted stock 225 72 Stock options 7,527 5,408 7,752 5,480 19 11 . Stockholders’ Equity The following tables present changes in stockholders’ equity for the nine-month periods ended September 30, 2020 and 2019 (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, 2019 50,198,044 $ 5 $ 570,493 $ 261 $ ( 300,878 ) $ 269,881 Issuance of common stock through at-the-market offerings, net of issuance costs of $ 48 351,252 - 5,079 - - 5,079 Exercise of stock options 53,579 - 336 - - 336 Equity-based compensation - - 4,157 - - 4,157 Other comprehensive income - - - 112 - 112 Net loss - - - - ( 31,806 ) ( 31,806 ) Balance at March 31, 2020 50,602,875 5 580,065 373 ( 332,684 ) 247,759 Issuance of common stock through follow-on offering, net of issuance costs of $ 369 6,301,370 1 107,731 - - 107,732 Issuance of common stock in private placement with Regeneron 925,218 - 12,580 - - 12,580 Issuance of common stock through at-the-market offerings, net of issuance costs of $ 23 755,848 - 9,643 - - 9,643 Exercise of stock options 83,631 - 1,035 - - 1,035 Issuance of shares under employee stock purchase plan 55,296 - 685 - - 685 Equity-based compensation - - 4,764 - - 4,764 Other comprehensive loss - - - ( 218 ) - ( 218 ) Net loss - - - - ( 32,393 ) ( 32,393 ) Balance at June 30, 2020 58,724,238 6 716,503 155 ( 365,077 ) 351,587 Exercise of stock options 67,974 - 597 - - 597 Equity-based compensation - - 5,400 - - 5,400 Other comprehensive loss - - - ( 124 ) - ( 124 ) Net loss - - - - ( 27,840 ) ( 27,840 ) Balance at September 30, 2020 58,792,212 $ 6 $ 722,500 $ 31 $ ( 392,917 ) $ 329,620 Additional Accumulated Other Total Common Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Capital (Loss) Income Deficit Equity Balance at December 31, 2018 45,224,480 $ 5 $ 478,968 $ ( 28 ) $ ( 201,025 ) $ 277,920 Retroactive adjustment to beginning accumulated deficit for adoption of ASC 842 - - - - ( 320 ) ( 320 ) Issuance of common stock through at-the-market offerings, net of issuance costs of $ 120 223,818 - 3,639 - - 3,639 Exercise of stock options 30,800 - 360 - - 360 Equity-based compensation - - 4,592 - - 4,592 Other comprehensive income - - - 87 - 87 Net loss - - - - ( 21,940 ) ( 21,940 ) Balance at March 31, 2019 45,479,098 5 487,559 59 ( 223,285 ) 264,338 Issuance of common stock through at-the-market offerings, net of issuance costs of $ 3 1,986,579 - 31,413 - - 31,413 Exercise of stock options 203,072 - 1,664 - - 1,664 Issuance of shares under employee stock purchase plan 45,826 - 534 - - 534 Equity-based compensation - - 4,404 - - 4,404 Other comprehensive income - - - 196 - 196 Net loss - - - - ( 25,683 ) ( 25,683 ) Balance at June 30, 2019 47,714,575 5 525,574 255 ( 248,968 ) 276,866 Issuance of common stock through at-the-market offerings, net of issuance costs of $ 199 1,141,411 - 19,068 - - 19,068 Exercise of stock options 21,311 - 192 - - 192 Equity-based compensation - - 3,079 - - 3,079 Other comprehensive gain - - - 81 - 81 Net loss - - - - ( 23,634 ) ( 23,634 ) Balance at September 30, 2019 48,877,297 $ 5 $ 547,913 $ 336 $ ( 272,602 ) $ 275,652 20 Follow-on Offering On June 1, 2020, the Company entered into an underwriting agreement related to a public offering of 6,301,370 shares of its common stock, par value $ 0.0001 per share, including the exercise in full by the underwriters of their option to purchase an additional 821,917 shares, at the public offering price of $ 18.25 per share. The offering closed on June 5, 2020 and the Company received net proceeds of $ 107.7 million, after deducting the underwriting discount, commissions and approximately $ 0.4 million in offering expenses. Shares Issued in Private Placement to Regeneron As described in Note 7 above, in May 2020 the Company entered into an amendment to its collaboration agreement with Regeneron that was entered into in April 2016. Simultaneously, the Company and Regeneron entered into the 2020 Stock Purchase Agreement , under which the Company sold to Regeneron 925,218 shares of its common stock, par value $ 0.0001 per share, for aggregate cash consideration of $ 30.0 million, or $ 32.42 per share, representing a 100 % premium over the volume-weighted average trading price of the Company’s common stock during the 30-day period prior to the closing. Under the 2020 Stock Purchase Agreement, Regeneron will not dispose of any shares of common stock it beneficially owns in the Company until the termination of the Technology Collaboration Term (see Note 7). After applying equity accounting guidance to measure the issuance of the shares, $ 12.6 million was recorded as fair value in the condensed consolidated statement of stockholders’ equity for the shares. At-the-Market Offering Programs I n October 2018, the Company entered into an Open Market Sale Agreement (the “2018 Sales Agreement”) with Jefferies LLC (“Jefferies”), under which Jefferies was able to offer and sell, from time to time in “at-the-market” offerings, shares of its common stock having aggregate gross proceeds of up to $ 100.0 million. The Company paid to Jefferies cash commissions of 3.0 % of the gross proceeds of sales of common stock under the 2018 Sales Agreement. T he Company issued 5,890,648 shares of its common stock at an average price of $ 16.98 per share in accordance with the 2018 Sales Agreement for aggregate net proceeds of $ 96.4 million, after payment of cash commissions to Jefferies and approximately $ 0.6 million related to legal, accounting and other fees in connection with the sales. All shares related to the 2018 Sales Agreement had been sold as of December 31, 2019 . I n August 2019, the Company entered into an Open Market Sale Agreement (the “2019 Sales Agreement”) with Jefferies, under which Jefferies was able to offer and sell, from time to time in “at-the-market” offerings, common stock having aggregate gross proceeds of up to $ 150.0 million. The Company agreed to pay Jefferies cash commissions of 3.0 % of the gross proceeds of sales of common stock under the 2019 Sales Agreement. During the year ended December 31, 2019, the Company issued 287,231 shares of its common stock, in a series of sales, at an average price of $ 16.48 per share, in accordance with the 2019 Sales Agreement for aggregate net proceeds of $ 4.4 million, after payment of cash commissions to Jefferies and approximately $ 0.2 million related to legal, accounting and other fees in connection with the sales. During the nine months ended September 30, 2020, the Company issued 1,107,100 shares of its 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 Jefferies and approximately $ 0.1 million related to legal, accounting and other fees in connection with the sales. As of September 30, 2020, $ 130.0 million in shares of common stock remain eligible for sale under the 2019 Sales Agreement. 1 2 . 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 condensed consolidated financial statements. 21