Prime Medicine, Inc. 10-K

ITEM 1. Business Overview We are a biotechnology company committed to delivering a new class of differentiated one-time curative genetic therapies to address the widest spectrum of diseases. We are deploying Prime Editing technology, which we believe is a versatile, precise, and efficient gene editing technology. In the past forty years, the genetic disorders causing many diseases have become more clear. Genetic mutations implicated in disease are diverse and can range from a single base error, which are known as point mutations, to errors that extend from two bases to several to thousands of bases, including multi-base insertions, deletions, duplications, or combinations thereof. Some mutations affect the coding regions of genes while others affect regulatory sequences that control the function of genes and can affect the function of larger biochemical and genetic pathways. Furthermore, as revealed by population-level genomic studies, natural genetic variations are known to protect against or to increase risk of disease. Given these insights, we believe that gene editing has the potential to treat and even cure many human diseases. The field of genetic medicine has evolved tremendously over the last decade, with groundbreaking advances in gene therapy, cell therapy, ribonucleic acid, or RNA, therapy, and, more recently, gene editing. This past year saw the first CRISPR/Cas9-based gene editing therapy (CASGEVY™) approval by the U.S. Food and Drug Administration, or the FDA, for the treatment of sickle cell disease. These technologies represent significant advancements for genetic therapies but we believe Prime Editing is the only gene editing technology that, by itself, can edit, correct, insert and delete deoxyribonucleic acid, or DNA, sequences in any target tissue. We believe Prime Editing technology has transformative potential that could change the course of how many diseases is treated and overcome the challenges associated with current genetic therapies. Prime Editing, originally developed by Dr. Liu and Dr. Anzalone and first described in a Nature publication in 2019, has potentially broad therapeutic applications. Prime Editing is the only gene editing technology that can edit, correct, insert and delete DNA sequences in any target tissue. It can correct mutations across many tissues, organs, and cell types, in dividing and non-dividing human cells. For example, Prime Editing technology has the ability to repair diverse mutations, including all types of point mutations, deletion mutations, insertion and duplication mutations and insertion-deletion mutations. Our analysis of more than 75,000 pathological, or disease-causing, mutations found in the National Center for Biotechnology Information ClinVar Database shows that those addressable by Prime Editing technology account for approximately 90 percent of genetic variants associated with disease. As such, we believe Prime Editing technology has the theoretical potential for repairing approximately 90 percent of known disease-causing mutations across many tissues, organs and cell types. In addition, we believe our Prime Assisted Site-Specific Integrase Gene Editing, or PASSIGE TM technology, may enable Prime Editing to insert gene-sized sequences precisely, potentially addressing large patient markets. PASSIGE uses Prime Editing to insert one or more recombinase recognition sequences at precisely chosen locations in the genome. In our preclinical studies, we have shown that a site-specific recombinase can locate the recombinase recognition sequence and carries out DNA recombination, resulting in the desired large DNA sequence insertion at the desired location in the genome. We believe that such a technology has the potential to precisely insert “gene-sized” pieces of DNA, at a predetermined and specific site in the genome. Taken together, Prime Editing’s versatile gene editing capabilities have the potential to unlock opportunities across thousands of potential indications. Prime Editors also have the ability to create permanent modifications at their natural genomic location, resulting in durable edits that are passed on to daughter cells, and retain their native physiological control. Our next generation gene editing technology is designed to produce a wide variety of precise, predictable and efficient genetic outcomes at the targeted sequence, while minimizing unwanted bystander edits and off-target edits and avoiding double-stranded DNA breaks. Our Prime Editors are designed to make only the right edit at the right position within a gene. If nuclease gene editing approaches are “scissors” for the genome, and base editors are “pencils,” erasing and rewriting a subset of single letters in the gene, then Prime Editing is a “word processor,” searching for the correct location and replacing or repairing a wide variety of target DNA. 1 To maximize the potential of our Prime Editing technology to provide one-time curative genetic therapies to the broadest set of diseases possible, we have built a diversified portfolio of investigational therapeutic programs organized around core areas of focus: hematology and immunology, liver, lung, ocular, and neuromuscular. We are advancing additional programs as potential partnership opportunities. Recent highlights of the programs in our portfolio include the following: • PM359, our first product candidate within our hematology area of focus, targets the p47phox variant of chronic granulomatous disease, or CGD, a serious life-threatening disease that presents in childhood. PM359 is comprised of autologous hematopoietic stem cells, or HSC, modified ex vivo using Prime Editors that have been designed to correct a high percentage of cells containing the disease-causing mutation. We plan to submit an investigational new drug, or IND, application with the FDA and/or clinical trial application, or CTA, in the first half of 2024. We believe Prime Editing is uniquely well-suited to address this form of CGD. We have completed our preliminary clinical trial design and selected global trial sites to maximize access to patients and expedite enrollment for PM359 clinical trials. In August 2023, we received rare pediatric drug designation, or RPDD, from the FDA for PM359. In addition, in January 2024, we received orphan drug designation, or ODD, from the FDA for PM359. • Also in our hematology and immunology area of focus, in June 2023, we entered into a research collaboration with Cimeio Therapeutics, Inc., or Cimeio, to combine our Prime Editing platform and Cimeio’s Shielded Cell and Immunotherapy Pairs, or SCIP, platform to develop Prime Edited SCIP for genetic diseases, acute myeloid leukemia, and myelodysplastic syndrome. The overall goal of the research is to reduce the toxicity of conditioning regimens and introduce new therapeutic options to meaningfully expand the utility of HSC transplant and enable the in vivo selection of edited HSCs to potentially remove the need for transplantation entirely. • We have demonstrated Prime Editing of cells preclinically at predicted therapeutically relevant levels for all of our leading programs, including Wilson’s Disease and Glycogen Storage Disease 1b, or GSD1b, in our liver area of focus, Retinitis Pigmentosa/Rhodopsin, or RHO, in our ocular area of focus, and Friedreich’s Ataxia in our neuromuscular area of focus. In 2023, we presented preclinical research across multiple programs, including proof-of-concept data from in vivo rodent and large animal studies. Specifically: ▪ In October 2023, we reported preclinical data demonstrating the ability of liver-targeted Prime Editors to precisely correct with high efficiency one of the most prevalent disease-causing mutations of GSD1b in non-human primates, or NHPs, and mouse models. These data are the first Prime Editing data in NHPs, which we believe provide further proof-of-concept for our Prime Editing approach to potentially address a wide range of diseases. ▪ We presented additional in vivo data in October 2023, demonstrating that Prime Editors can efficiently and precisely correct the predominant mutations that cause RHO associated autosomal dominant retinitis pigmentosa. These data suggest that our proprietary dual adeno-associated virus, or AAV, platform can effectively deliver Prime Editors to the eye, with the potential to treat a range of retinal diseases. • In our lung area of focus, we have expanded our efforts to develop Prime Editors for the treatment of Cystic Fibrosis, or CF, and in January 2024, we entered into a therapeutic development agreement with the Cystic Fibrosis Foundation, or CFF, in which CFF agreed to provide Prime Medicine with up to $15 million to support development of hotspot editing and PASSIGE in CF, as well as our ongoing efforts to develop lipid nanoparticles, or LNPs, for delivery to the lung. Through hotspot editing, we aim to address multiple mutations at mutational hotspots using a small number of Prime Editors, potentially addressing a large percentage of individuals with CF with only a few Prime Editors. In parallel, using PASSIGE, we aim to address nearly all people with CF using a single superexon insertion strategy. • In our chimeric antigen receptor T cell, or CAR-T, program, we presented preclinical data in December 2023, demonstrating that PASSIGE was greater than 80 percent efficient for non-viral, site-specific delivery of chimeric antigen receptor to primary human T-cells to generate CAR-T cells, and can be 2 multiplexed with Prime Editing at other target sites by non-viral one-step delivery with no loss of efficiency. • Lastly, our comprehensive suite of assays used to identify potential off-target events has been expanded to include new, unbiased genome-wide tools. These analyses have continued to demonstrate minimal to no detectable off-target edits, chromosomal rearrangements or translocations. No off-target activity has been detected in any of our leading programs, including CGD, Wilson’s Disease, GSD1b, and RHO. We believe these preliminary analyses, across multiple editing programs, suggest a potentially best-in-class safety profile. • We believe our Prime Editing programs are well-positioned to leverage the clinical, regulatory, and manufacturing advancements made to date across gene therapy, gene editing, and delivery modalities to accelerate progression to clinical trials and potential approval. To unlock the full potential of our Prime Editing technology across a wide range of therapeutic applications, we are pursuing a comprehensive suite of clinically validated delivery modalities in parallel. For a given tissue type, we intend to use the delivery modality with the most compelling biodistribution. Our initial programs rely on three distinct delivery methodologies: (a) electroporation for efficient delivery to blood cells and immune cells ex vivo ; (b) lipid nanoparticle, or LNP, for non-viral in vivo delivery to the liver and potentially other organs in the future; and (c) AAV for viral delivery in vivo to the eye, ear, and the central nervous system, or CNS, and muscle. • We believe the modularity of our platform means that we will be able to accelerate our ongoing efforts and enable rapid generation of new product candidates. We believe the core components, such as Prime Editors, delivery, manufacturing, off-target assays, clinical, and regulatory can be leveraged to drive acceleration, efficiency and execution of our pipeline. Team We began operations in the summer of 2020, after being co-founded by David Liu, Ph.D., a world-renowned leader in the field of gene editing, along with co-founder Andrew Anzalone, M.D., Ph.D., who conceived of and developed Prime Editing along with Dr. Liu and others. Dr. Anzalone joined as our Head of Platform Development with years of experience in Prime Editing. Keith Gottesdiener, M.D., joined in 2020 as our President and Chief Executive Officer. Drawn by the promise of Prime Editing’s ability to transform the field of gene editing, we have since assembled a diverse and growing team that has grown to approximately 230 as of December 31, 2023, with all key functional leadership and employees in place. Our research, technical, and clinical development teams consist of experts in gene editing and Prime Editing, computational biology, automation, data sciences, off-target biology, structural biology, RNA chemistry, protein engineering and molecular evolution, genetics, pharmacology, translational medicine, the manufacturing and delivery of genetic medicines, and clinical medicine and regulatory affairs. Relationship with David Liu, Ph.D. We benefit from a close working relationship with Dr. Liu. In addition to being a co-founder, Dr. Liu is the chair of our Scientific Advisory Board and a Board observer, meets regularly with Company representatives, and provides consulting services to us pursuant to a consulting agreement, or the Liu Consulting Agreement, related to gene editing and related technology for human therapeutic or prophylactic uses. We have also licensed certain improvements to Prime Editing from Dr. Liu’s laboratory at Broad Institute and Dr. Liu has entered into an agreement with us pursuant to which he is obligated to assign to us any inventions with respect to the services he performs for us. Our Strategy Our goal is to transform the lives of patients with debilitating diseases through the application of our ground-breaking Prime Editing platform and technology. We are committed to developing safe and efficient therapeutics using Prime Editing approaches to address high unmet need across a broad spectrum of diseases, from rare genetic 3 diseases to severe, chronic and acute diseases, and ultimately to prevent disease before it occurs. Key components of our strategy are as follows: • Deliver the broadest potential of Prime Editing in the service of patients. We believe our Prime Editing technology and capabilities represent the future of gene editing and could unlock broad applications in medicine and life sciences. As a result of our access to proprietary rights in groundbreaking technology and our continued investment to enhance this gene-editing approach, we have established a clear leadership position in Prime Editing. We have built a cross-disciplinary team consisting of dedicated, scientifically curious individuals and experts in Prime Editing and drug development who are passionate about our common goal of helping patients live longer, healthier lives. • Deploy our technology to extend the application of one time potentially curative therapeutics to areas that we believe were not addressable before. To unlock the full potential of our Prime Editing technology across a wide range of therapeutic applications, we intend to advance multiple therapeutic programs into the clinic, initially focused on genetic diseases that we believe have a fast, direct path to treating patients, and those with high unmet need not currently addressable using other gene-editing approaches. Within our neuromuscular programs, for example, our initial focus on repeat expansion diseases is one of many potential areas of differentiation from other gene therapy and editing approaches, and was chosen to demonstrate where we believe Prime Editing has a unique genetic approach that could be applied to a large set of related diseases with high unmet need: the precise removal of pathogenic repeats at the natural gene location, returning the patient’s genome to wild-type genetics. Over time, we intend to push new and innovative technological developments to maximize Prime Editing’s versatile therapeutic potential, and unlock broad opportunities beyond the genetic diseases in our initial pipeline, potentially including immunological diseases, cancers, infectious diseases, and targeting genetic risk factors in common diseases. • Advance our pipeline while simultaneously enhancing, validating and enabling our modular platform. We have established a diverse pipeline of investigational therapeutic programs organized around core areas of focus: hematology and immunology, liver, lung, ocular, and neuromuscular. In addition, we are advancing additional programs, such as CAR-T, as potential partnership opportunities. We have designed a modular platform within each core area, which we believe will accelerate our ongoing efforts and enable rapid generation of new product candidates. We believe the core components, such as Prime Editors, off-target assays, delivery, manufacturing, clinical, and regulatory can be leveraged to accelerate our pipeline to clinical trials and potential approval. To unlock the full potential of our Prime Editing technology across our areas of focus, we are pursuing numerous clinically validated delivery modalities in parallel. For a given tissue type, we intend to use the delivery modality with the most compelling biodistribution and Prime Editing efficiency. We are currently focusing on three delivery modalities: (a) electroporation for delivery to blood cells and immune cells ex vivo ; (b) LNP for non-viral in vivo delivery to the liver, lung and potentially other organs in the future; and (c) AAV for viral in vivo delivery to the eye, ear, and potentially the central nervous system, lung and muscle. Our goal is to develop highly modular delivery systems that allow us to rapidly develop new products targeting the same cells/tissues/organs by leveraging the approaches and data that precedes them. • Continue to push the frontier of innovation in gene editing by optimizing and expanding our Prime Editing technology and capabilities. We plan to continue investing in our technology, team and intellectual property with a focus on reinforcing our leadership position and making fundamental progress towards better therapies for patients. • Opportunistically evaluate synergistic and value-creating partnerships to maximize the broad potential of our platform. Our pipeline programs have been internally generated, and we retain worldwide development and commercialization rights to all of our programs. Given the broad potential of our technology, we intend business development to play an important role in building Prime Medicine, with the goal of accelerating our pipeline, bolstering our financial resources, and maximizing the potential of Prime Editing. Our overall partnership strategy includes: 1) partnering within our core areas to accelerate and globalize our current pipeline programs at the “right” stage of development; 2) outside our core areas, 4 entering into collaboration or license agreements for programs now that we would not otherwise pursue in the near term; and 3) accessing enabling innovations, such as delivery and manufacturing capabilities. • Lead with our culture of integrity, ethics, innovation and respect in everything we do. We believe the potential of Prime Editing can only be achieved through the coordinated effort of our team and the support of our partners across academia and industry. To push the boundaries of where gene editing can go, we are committed to jointly defining and maintaining a culture that is transparent, develops trust, values integrity and ethics, puts patients first, is science and data driven, and encourages innovation. Prime Editors: A Next Generation Gene Editing Technology We are developing Prime Editors as a potentially new class of therapeutics with transformative potential to expand the application of curative precision genetic medicines to the broadest spectrum of diseases. Genetic mutations implicated in disease are diverse and can range from errors of a single base, known as point mutations, to errors that extend beyond a single base, such as insertions, deletions, duplications, or combinations thereof. Other mutations can affect regulatory sequences that control the function of genes and can affect the function of larger biochemical and genetic pathways. Furthermore, natural genetic variations, revealed by population-level genomic studies, are known to protect against or to increase risk of disease. To maximize the impact of these genetic insights, we believe the ability to alter the human genome at the foundational level in a versatile, precise, efficient and broad manner may confer the greatest therapeutic impact on human disease. Over the last decade, groundbreaking advances in gene therapy, cell therapy and RNA therapeutics have resulted in several approvals for genetic medicines that have transformed the treatment of certain severe genetic diseases and cancers as well as the prevention of infectious diseases, such as the mRNA vaccine for COVID-19. More recently, the first generation of CRISPR-Cas based gene editing approaches for gene disruption have demonstrated evidence of the ability to address diseases caused by genetic mutations, via either in vivo or ex vivo delivery to humans. In 2023, the first CRISPR/Cas9-based therapy (CASGEVY™) was approved by the FDA for the treatment of sickle cell disease, followed soon after by its approval for use in beta-thalassemia. In addition to first generation CRISPR approaches, several base editing investigational medicines, which enable targeted introduction of certain point mutations, have received IND clearance by the FDA, and clinical trials have begun. Current Challenges for the Field of Genetic Medicines Despite significant progress within gene therapy, cell therapy, and RNA therapeutics, there remain considerable limitations to current genetic medicine approaches that impede their ability to truly deliver on the promise of a curative, one-time therapy to the broadest set of patients. Non-Targeted Gene Therapy Non-targeted gene therapy includes using viral vectors, such as AAV, or retroviruses such as lentiviruses, to deliver new copies of genes, or transgenes, to cells. It also includes the broad field of mobile gene elements, such as retrotransposons and transposons. These approaches generally do not correct genes but insert new copies of genes or parts of genes into cells in a non-targeted manner. While having some important benefits, non-targeted gene therapy approaches have many key limitations. Certain non-integrating viral vectors, such as AAV, may have limited durability, and pre-existing immunity to the vectors could limit their use and ability to be re-dosed. For approaches that integrate genes, including transposons, retrotransposons, and retroviral vectors, gene integration may occur randomly at hundreds or thousands of sites in the human genome because it is not currently possible to direct their integration to a specific, desired genetic location. Randomly integrating approaches also carry the risk of insertional mutagenesis. In addition, non-targeted gene therapy approaches do not take advantage of normal endogenous regulation of gene expression, and instead lead to variable gene expression due to an inability to fine tune the vector copy number per cell. Nuclease Gene Editing and Base Editing First generation gene editing methods rely on a class of enzymes called nucleases, such as CRISPR, ZFNs, engineered meganucleases and TALENs, to create double-stranded breaks in DNA at a targeted location. The DNA 5 can then be repaired by one of two naturally occurring DNA repair pathways: (1) non-homologous end joining, or NHEJ, which patches the broken ends of the chromosomes back together and randomly creates indels, or insertions and deletions; or (2) homologous directed repair, or HDR, which can more precisely replace DNA at the target cut site with the delivery of a template of corrected DNA. However, given NHEJ is typically the dominant repair pathway in cells and due to the low efficiency of repair and complexity associated with HDR, most nuclease-based editing programs in the clinic have focused on an NHEJ-directed knock out approach to alter or silence gene expression. Nuclease based gene editing approaches have several key limitations. First, there is a lack of predictability in genetic outcomes at the target site in NHEJ, such as randomly creating indels (efficient if the goal is to disrupt or knock out a gene). Using HDR to make corrections, replacements, or insertions has low percentage editing efficiency, does not have the ability to correct genes in non-dividing cells because HDR DNA repair machinery is only expressed in dividing cells, and requires a DNA template with the desired, corrected gene sequence to be delivered simultaneously, which increases complexity. Nuclease editing also leads to unwanted DNA modifications associated with double-stranded breaks, including cell death response, genomic instability, off-target editing and the potential for oncogenesis. Finally, making multiple edits with nucleases that generate double-stranded breaks at multiple genomic locations has the potential to lead to unwanted large scale translocations and rearrangements, potentially limiting applicability to multiplex editing. Base editing is an emerging gene editing technology that harnesses CRISPR-Cas9 to deliver a deaminase to a target DNA site, which can edit a single base efficiently. Base editing avoids double-stranded breaks and the deleterious effects associated with first generation nuclease editing, while enabling C-to-T or A-to-G base substitutions edits using either a Cytosine Base Editor, or CBE, or Adenine Base Editor, or ABE, respectively. Base editing has several key limitations. Currently, base editing can reliably correct only four out of 12 possible single base mutations, and base editing cannot make or correct insertion or deletions, which limits the number of diseases base editing can address. Further, each base editor (CBE or ABE) has the ability to correct or introduce only a single point mutation at a specific location. Base editing also has been shown to make certain types of unwanted on-target by-products, called bystander edits, near the targeted site, e.g., modifying nearby bases which are not being targeted but fall within the editing window. Finally, base editing may have limited optionality for targeting mutations due to its smaller editing window. Prime Editing: A Next Generation Gene Editing Approach Prime Editing is a next generation gene editing approach that we believe can address the genetic cause of disease and potentially provide patients with long-lasting cures. Although Prime Editing is a developing technology and is not yet validated in clinical studies, it was first described in a Nature publication in December 2019 and has since been extensively validated in vitro and in animal studies, both by our company and in over 150 papers published in the primary scientific literature to date. Advantages of our Prime Editing Platform We believe Prime Editing is a versatile, precise, efficient and broad gene editing technology with the following key advantages: Versatility: Deep and highly differentiated toolbox of editing capabilities to enable a wide variety of therapeutic applications • Applicable to a wide range of target mutations or alterations of DNA, including all twelve types of single base pair corrections, as well the ability to insert and delete DNA sequences. • Direct correction of DNA with no requirement for delivery of the corrected DNA sequence in most applications of Prime Editing. • Greater optionality with respect to editing site availability than other approaches due to a larger editing window. 6 • Programmable, which means that both the specified target location in the genome and the directed type of edit can be easily modified by replacing the Prime Editing guide RNA, or pegRNA, element of a Prime Editor. • Modular for targeting a broad set of mutations, meaning that by redesigning the pegRNA a new mutation can be targeted for correction. • Multiple potential therapeutic applications, including but not limited to targeted gene correction, gene silencing or activation such as by altering the regulatory regions of genes, inserting or creating premature stop codons, or by modifying splicing sequences, hotspot region replacement, multiplex editing of several genes simultaneously, and wild-type variant modification to protect against or modify risk for a disease. • Capable of inserting, deleting or inverting kilobase amounts of genomic DNA by combining Prime Editing with proprietary recombinase technology in an approach we call PASSIGE. Precision: Highly specific and predictable gene editing • Designed to specifically make only the directed type of Prime Edit at the desired target location. • Avoidance of the potential negative impacts associated with double-stranded breaks, which results in minimal to potentially no unwanted on-target or off-target by-products and preservation of cell viability. • Limited potential for bystander editing at the target site, a potential unwanted effect of base editing. Efficiency: Durable gene edits with potential for superior therapeutic activity • Single treatment resulting in permanent corrections of disease-causing mutations by restoring the targeted gene back to its wild-type sequence. • Permanent, durable edits that persist in a cell and are passed along to daughter cells, creating potential for a life-long, “once and done” therapeutic outcome. • Preservation of natural regulation and a normal number of copies of the gene in the cell by modification of genes in situ, or in their native genomic setting. • Highly efficient, effecting therapeutically relevant levels of precise gene correction generally unachievable by nuclease-based methods. Breadth: Able to address a wide range of diseases in multiple tissue types • Applicability in a wide range of human cells, including both dividing and non-dividing human cells, a wide range of organs and cell types, as well as in a wide variety of other organisms, as well as including primary cells such as hepatocytes, hematopoietic stem cells and neurons. • Potential ability to repair approximately 90 percent of all types of mutations known to cause genetically driven disease. • Broad therapeutic potential extending beyond rare genetic diseases to also potentially include severe, chronic, and acute diseases. In addition to correcting disease-causing mutations, potential for gene modification to edit naturally occurring variations within genes known to protect against or modify risk for a disease. Mechanism Prime Editors have at least two major components, a Prime Editor protein and a pegRNA. Our Prime Editor proteins contain two protein domains. The first domain is a programmable DNA binding domain, often a CRISPR-Cas domain, or Cas domain. Cas proteins enable targeting of specific DNA sequences, and they have been adapted and engineered to target desired genomic locations in human cells with high specificity. In Prime Editors, programmable DNA binding domains, such as Cas domains, for example Cas9 proteins, are modified such that they do not cause a double-stranded break in the DNA. The second protein domain of Prime Editors is a reverse transcriptase enzyme domain, or RT domain. Reverse transcriptases are DNA polymerase enzymes that write new DNA sequences by 7 copying from an RNA template. In Prime Editing, the RT domain copies the edited DNA sequence directly into the target genomic site where the edit is made. The other main component in Prime Editing is the pegRNA. The pegRNA contains a search sequence, also known as a spacer, which provides a target genomic address for the Prime Editor. This enables the Prime Editor to specifically target a desired gene sequence. The pegRNA also contains a second sequence unique to Prime Editing, a replace sequence, or edit template, which provides a blueprint for the edit that will be made to the target DNA sequence. As shown in the second panel in the figure below, our Prime Editor protein, exemplified using a Cas protein, and the pegRNA locate the DNA target site using the pegRNA’s search sequence. When the correct DNA target is found (referred to as “edit check 1,” as described below), the Prime Editor’s Cas domain cleaves, or nicks, one of the two DNA strands, creating a single-stranded 3’ flap. The other DNA strand remains intact and is not cleaved by the Prime Editor, thus avoiding the formation of double-stranded DNA breaks. Next, the 3’ flap binds to a region of the replace sequence in the pegRNA (“edit check 2”) and “primes” the DNA synthesis, which is shown in the third panel below. The Prime Editor’s RT domain copies the pegRNA’s replace sequence, directly writing the corrected DNA sequence into the gene, as shown in the fourth panel. After the corrected sequence is fully copied, cellular DNA repair preferentially incorporates the corrective 3’ flap (“edit check 3”) while removing the excess original DNA sequence. The complementary DNA strand is also corrected, using the Prime-Edited DNA strand as a template. Incorporation of the correction into the complementary DNA strand can be made more efficient by adding a nicking guide RNA, or ngRNA, where the Prime Editor also transiently nicks the complementary strand. The overall result is a target gene sequence that is corrected on both strands of DNA. As highlighted above, there are three distinct steps in the Prime Editing pathway that require exact matches between the target DNA and pegRNA sequences. Thus, the process of Prime Editing efficiently institutes three “edit checks,” or three sequential steps where only if the match is exact does the next step occur. In addition to the lack of double-stranded DNA breaks, we believe that these “edit checks” are also important in helping to ensure that the right sequence in the genome is precisely edited in the desired manner, thereby minimizing both on- target and off-target mis-editing. Illustration of Editing Mechanism by Prime Editor – No Double-Stranded DNA Breaks Further Enhancing the Prime Editing Platform Over the last four years since Prime Editing was first described, an increase in efficiency as well as an expansion in the scope of applications have been demonstrated and reported in multiple publications and abstracts as well as contributions from our team. The versatile nature of Prime Editing allows for the selection of the right tools for a specific gene edit from up to ten thousand potential choices to optimize for desired effects with high efficiency and precision at the targeted site, while minimizing off-target edits at more distant chromosomal sites. Multiple enhancements to our Prime Editing platform, including engineered pegRNAs, enhanced Prime Editors, and DNA mismatch repair modulation, provide us with a versatile toolbox for applying Prime Editing to a wide range of diseases. In addition, our focus on high-throughput screening and machine learning are allowing us to grow our internal technical expertise for Prime Editing optimization and are being used to develop Prime Editors that are both 8 more efficient and more precise. Finally, we are broadening the types of edits that we can make by incorporating recent innovations in Prime Editing, including dual-flap Prime Editing, long-flap Prime Editing, and PASSIGE. Dual-flap Prime Editing and long-flap Prime Editing We have in-licensed certain dual-flap Prime Editing technology developed by David Liu’s laboratory at Broad Institute, and expanded and improved on its uses. Compared to traditional Prime Editing, dual-flap Prime Editing uses two Prime Editors instead of one. In different places on a target gene, each of the Prime Editors creates a nick in the DNA and creates a flap; the two flaps are often designed to bind tightly to each other. This results in the looping out of the DNA between the Prime Editors, with replacement by new DNA. Dual-flap Prime Editing is designed to achieve efficient editing of a broader range of edit types, including the precise replacement or insertion of DNA sequences that are a hundred bases or more in length with potentially higher efficiency than standard Prime Editing. In addition, dual-flap Prime Editing can precisely delete up to thousands of bases of DNA, as shown in the data for repeat expansion diseases (see below in Portfolio section). In addition to its high efficiency, it achieves the same level of precision, and we believe it results in minimal off-target editing, as shown in preclinical studies, similar to the more standard forms of Prime Editing. Dual-flap Prime Editing could be used to delete expanded repeat sequences like those that occur in repeat expansion diseases, to replace mutation hotspots with corrected sequences, or to insert sequences at safe harbor or other locations in the genome, as can be applied to our PASSIGE approach. Additionally, we have developed a long-flap Prime Editing approach that, compared to standard Prime Editing, is designed to more efficiently insert or replace larger stretches of DNA that are a hundred bases or more in length, while also enabling precise deletions of up to thousands of base pairs. Long-flap Prime Editing can be applied for similar applications as dual-flap Prime Editing, including editing of hotspot regions in DNA, insertions of recombinase sites for PASSIGE, and the excision of expanded repeats. Together, dual-flap Prime Editing and long-flap Prime Editing broaden the capabilities of our Prime Editing platform. PASSIGE – Precise introduction of gene-sized pieces of DNA into the genome We have in-licensed from the Broad Institute and are developing a technology that allows us to expand our gene editing toolbox to include programmable insertion, deletion, or inversion of thousands of bases of DNA. By combining Prime Editing with an integrase or site-specific recombinase enzyme, we can harness the precision of Prime Editing with the ability to introduce large gene-sized cargo into the genome as a potential one-time therapy for patients. This proprietary approach expands the versatility of Prime Editing and we believe broadens the range of permanent genomic edits that Prime Editing can make to encompass the ability to insert entire genes precisely into a patient’s genome to treat disease. Although site-specific recombinases have been used as biology research tools to perform insertions, deletions or inversions of large pieces of DNA in the genome, their use in therapeutic applications has been limited by the extremely challenging task of engineering site-specific recombinases to be programmable or to target specific sequences in a gene or the genome. PASSIGE technology complements dual-flap Prime Editing, which is able to delete large pieces of DNA up to many kilobases in size, but which currently can only precisely insert a smaller piece of DNA. Therefore, in circumstances where a larger modification is required, this programmable technique can be used to insert or invert multi-kilobase-sized pieces of DNA. PASSIGE leverages the programmability of Prime Editing to insert recombinase recognition sequences at precisely chosen targeted locations in the genome, as shown in the figure below. A site-specific recombinase, either fused to the Prime Editor or transiently delivered as a separate enzyme into target cells, locates the recognition sequence or sequences and carries out DNA recombination at those recognition sequences, resulting in the desired large DNA sequence edit at the desired location in the genome. We believe that such a technology has the potential to precisely insert “gene-sized” pieces of DNA at a predetermined and specific site in the genome. As shown in the figure below, PASSIGE may be used to insert DNA that contains a therapeutic gene, potentially such as a chimeric antigen receptor, or CAR, or the open reading frame of any other gene. Alternatively, using multiplex Prime Editing, two recombinase DNA target sequences can be inserted so that site-specific recombinases can replace, delete, or invert the intervening DNA sequences. These editing capabilities enable therapeutic opportunities to potentially treat genetic mutations occurring across a large region of DNA sequences within a single gene, and enable therapeutic opportunities to engineer cell therapies to treat disease. 9 PASSIGE™ – Extending Prime Editing to insert gene sized sequences precisely in the genome Translating Prime Editors into Product Candidates - Multiple Modalities for Prime Editors The optimal design and efficient generation of our Prime Editors are fundamental for the development of our pipeline. We have established capabilities to design and optimize our Prime Editors, and to design and develop the components needed for LNPs, vector genomes, Prime Editing of ex vivo cells, as well as to develop the manufacturing processes and analytical assays to ensure robust, scalable production of quality intermediates and products to support our programs. Many of these workflows are automated to allow rapid machine learning and/or artificial intelligence-based data analysis, correlation, visualization, and iterative optimization and innovation. For each program in our pipeline, we determine the best option for delivering the Prime Editor and select the delivery technology with the most compelling biodistribution for a given tissue type. Our initial programs rely on three distinct delivery modalities: (a) electroporation for delivery to blood cells and immune cells ex vivo ; (b) LNPs, for non-viral in vivo delivery to the liver, lung and potentially other organs in the future; and (c) AAVs for viral in vivo delivery to the eye and ear, and potentially the central nervous system, lung and muscle. A key feature of Prime Editing and associated delivery methods is the modularity of the technology platforms. Once the first program for each delivery platform is established, the design algorithms, workflows, non-clinical and CMC data, as well as the manufacturing process and majority of assays can be leveraged and applied to the next program which differs only in the pegRNA. We believe these delivery technologies are foundational to successfully advancing our pipeline programs to the clinic and we are strategically developing our delivery platforms and generating data to accelerate our pipeline progress. Moreover, we continue to assess the many advancements in novel and experimental delivery approaches that are being made in the cell and gene therapy field and intend to license innovative delivery technologies that prove to provide a breakthrough. We are designing Prime Editing product candidates to provide a “once and done” treatment. Our multi-pronged approach to enable our portfolio includes the following: • pegRNA Design, High Throughput Screening and Synthesis: An important element of our capability is leveraging high throughput automated screening and design algorithms to identify optimal pegRNA sequences. The data is also used to develop proprietary machine learning algorithms for pegRNA activity prediction. Internal chemistry capabilities facilitate high-throughput optimization and manufacture of oligonucleotides for in vivo studies. We have established internal high-throughput pegRNA synthesis, pegRNA modifications with structure-activity-relationship to improve drug candidate properties, and pegRNA process chemistry. 10 • Optimization of Prime Editing proteins and recombinase proteins: We have developed internal protein engineering capabilities to optimize the Prime Editor proteins and recombinase proteins (for PASSIGE) for human therapeutic use, and have developed internal mRNA design and optimization, enzymatic chemistry, and process development capabilities to enhance drug candidate properties and characterize the mRNA for efficient, tolerable, and consistent delivery and translation of the Prime Editor protein. • Prime Editing Specificity and Assays: A robust and unbiased evaluation of all potential off-target activities is a critical element of our efforts. Our approach to minimizing off-target editing is to start by screening for Prime Editor candidates with very low off-target activity. We then use comprehensive, sensitive, and state-of-the-art methods to identify all putative off-target sites by identifying places where a Prime Editor has a possibility (no matter how small) to nick the DNA. We have developed multiple, complementary, but distinct, methods to measure such possible events. Our approach includes evaluation of: (a) off-target activity in the genome that is specific to the sequence of a particular pegRNA or the ngRNA; (b) similar activity that is independent of the pegRNA or ngRNA sequences; and (c) genomic rearrangements. • Electroporation: Electroporation is a clinically and commercially validated technology for ex vivo delivery to CD34+ cells which utilizes electrical pulses to increase the cell membrane permeability to deliver the Prime Editing components. Electroporation is being used in our CGD program with ex vivo CD34+ cells. We have established a modular cell processing manufacturing platform process that can be used for autologous CD34+ cells, and it can be leveraged for the next ex vivo HSC programs, as well as for allogeneic T-cells with multiplexing. In the future, we plan to transition to in vivo editing of stem cells and other lymphocytes. • LNP: LNP delivery has initially focused on in vivo delivery of Prime Editing to the liver. We have established end-to-end capabilities across our R&D organization consisting of lipid design, lipid synthesis, high throughput LNP discovery from our proprietary lipid library using screening with bar coding technology, LNP formulation process development for tissue targeted delivery, and manufacturing to support our preclinical and IND enabling studies. We are developing a universal liver targeting LNP comprised of 5 components and plan to leverage its modularity for our various programs aimed at Prime Editing in the liver, as well as to address additional mutations within the same indication. Similar approaches are being taken for developing modular LNPs to lung, and HSCs and T cells. • Viral Delivery: We are using viral delivery to tissues and locations that can currently only be reached with AAV. To enable this delivery approach, we have developed capabilities to design and optimize the vector genome to efficiently deliver Prime Editors to the target tissue. We use our internal AAV Reagent Production Core, analytical development team, as well as outsourced resources and partners to generate AAV Prime Editors, quality control test as well as characterize them. • Strategic Manufacturing Partnerships: Our overall strategy is to design manufacturing platforms to make the Prime Editing components and associated delivery systems with high throughput, high quality, high purity, modularity, and scalability. We are developing manufacturing processes and analytical methods both internally and partnering with suppliers to ensure the quality and consistency of the Prime Editor components and Prime Edited drug products needed for preclinical studies, IND application submission, and future clinical studies. Our Pipeline To maximize the potential of our Prime Editing technology, we have built a diversified portfolio of investigational therapeutic programs organized around core areas of focus: hematology and immunology, liver, lung, ocular, and 11 neuromuscular. We are advancing additional programs as potential partnership opportunities. The following table summarizes the status of certain of our programs: Our Blood Programs Chronic Granulomatous Disease The Disease Chronic granulomatous disease, or CGD, is a rare inherited hematologic disorder characterized by susceptibility to severe, difficult-to-treat infections, and inflammatory/autoimmune complications. CGD is caused by mutations in any one of the subunits comprising the NADPH oxidase complex, which is required for phagocytic cells, in particular neutrophils, to destroy many invasive microorganisms. CGD causative mutations are estimated to occur between one in 100,000 and one in 200,000 births in the United States, and most children are diagnosed within the first three years of life. Beginning in childhood, patients with CGD develop infections from a range of both typical and unsual bacteria, fungi and mycobacteria. These infections may present in various organ systems, and protracted infections can lead to long-term organ damage and failure. In addition, patients have non-infectious inflammatory disease, most commonly presenting as inflammatory bowel disease, soft tissue granulomas, and strictures of the urinary or digestive tract. Undiagnosed or untreated, the infectious manifestations of CGD are rapidly fatal. Approximately 60 percent of patients with CGD reach age 30 and refractory or antimicrobial resistant infection is the leading cause of mortality. The NADPH oxidase complex has five domains encoded by five separate genes. Loss-of-function mutations in any of these genes can present as CGD. The second most common form, which represents approximately 25 percent of cases, is caused by biallelic loss-of-function mutations, in both copies of the NCF1 gene encoding the p47phox protein. More than 78 percent of p47phox CGD patients have a specific, 2-nucleotide deletion, or ΔGT, in the NCF1 gene. The NCF1 gene location is complex, and also contains pseudogenes, or copies of the NCF1 gene that in most healthy individuals, and in individuals with CGD, are inactivated by the ΔGT mutation. Preclinical studies have demonstrated that correcting just one copy of the ΔGT mutation in either the NCF1 gene or any pseudogene restores protein expression and full NADPH oxidase activity. Our Approach and Results: Direct correction of prevalent CGD mutations or hotspots PM359, our first product candidate within our hematology and immunology area of focus, targets the p47phox variant of CGD. We have been able to demonstrate that Prime Editing precisely corrects the ΔGT mutation in the NCF1 gene to restore p47phox protein expression and NADPH oxidase activity. PM359 is comprised of autologous HSCs modified ex vivo using Prime Editors that have been designed to correct a high percentage of cells containing 12 the disease-causing mutation. PM359 is delivered as an autologous HSC transplant, and is designed to restore normal immunologic function in individuals with p47phox CGD, without the risks of graft-versus-host disease, or GVHD, graft rejection and post-transplant immunosuppression associated with allogeneic transplantation. In order to develop PM359, a therapeutic product candidate to treat patients with p47phox CGD, we screened pegRNA and ngRNA to identify Prime Editing guides and guide pairs that have high activity and perform precise editing at the NCF1 locus. Because healthy donors have NCF1 pseudogenes bearing the same ΔGT mutation, we have been able to utilize healthy donor CD34+ HSCs to demonstrate precise editing of the ΔGT mutation. Using healthy donor CD34+ HSCs we also have been able to demonstrate a very low off-target potential, and robust engraftment and hematopoietic functionality of Prime Edited HSCs in mouse models. We have confirmed these findings using p47phox CGD patient-derived HSCs, and in addition have demonstrated that Prime Editing is able to restore NADPH oxidase activity in patient-derived cells. The overall process for generating PM359 follows a similar paradigm to that employed by other investigational ex vivo HSC CRISPR-Cas9 therapeutics that have been validated in the clinic, with a few notable modifications. The Prime Editor complex is delivered to CD34+ HSCs using electroporation. The Prime Editor mRNA is generated by in vitro transcription, and the pegRNA and ngRNA are generated by solid phase RNA synthesis. The Prime Editor complex is delivered by simultaneously electroporating mRNA encoding the Prime Editor protein along with pegRNA and ngRNA. We believe the mRNA is translated into the Prime Editor protein during a period of incubation, then the Prime Editor protein assembles with pegRNA or ngRNA, and the complex enters the nucleus with Prime Editing commencing at the target site in the genome. We have identified a Prime Editor complex that is able to correct over 80% of healthy donor CD34+ cells or CGD patient CD34+ cells at at least one ΔGT locus (pseudogene in healthy donor; pseudogene or NCF1 in patient). In order to be able to understand the effects of Prime Editing on the functionality of modified CD34+ cells and to determine the ability of Prime Edited cells to persist in vivo , we administered Prime Edited CD34+ cells to a specialized immunocompromised mouse model, the NBSGW mouse, which is capable of supporting engraftment of human HSCs as shown in the figure below. Mice are typically followed for 16 weeks in these experiments to allow for engraftment of the long-term HSCs, repopulation of the immune system by long-term HSCs, and evaluate durability of effect. When Prime Edited healthy donor or CGD patient CD34+ cells are administered to NBSGW mice, they were able to engraft, and edited cells proliferated to repopulate the hematopoietic system. The left and middle panels in the figure below demonstrate results from a representative experiment in which healthy donor CD34+ cells, either Prime Edited or mock treated, were administered to NBSGW mice. In the left panel of the figure below, human hematopoietic cells, distinguished by the human CD45+ surface marker, were able to successfully engraft at high efficiency, with no differences between mock treated and Prime Edited cells. In the middle panel, after 16 weeks in the mice, long-term engrafted human CD34+ HSCs retained a very high degree of editing: over 80% of cells exhibited correction of the ΔGT mutation at at least one locus, compared to 0% of mock edited cells. Based on natural history studies of carriers of CGD-causative mutations, restoration of p47phox function in a minimum of 20% of neutrophils is believed to be sufficient to confer protection from serious infection with CGD-associated pathogens. Together these data suggest that Prime Editing is able to correct the ΔGT mutation at an efficiency many-fold above the lower bound of the projected threshold for therapeutic benefit, and that Prime Edited cells may effectively home to and stably engraft in the marrow after infusion. CD34+ HSCs from an individual with p47phox CGD were Prime Edited ex vivo , and these cells were differentiated ex vivo to allow assessment of NADPH oxidase activity in myeloid progeny. The panel on the right in the figure below demonstrates the results of one commonly used measure of NADPH oxidase activity, the dihyrorhodamine (DHR) assay. Mock edited CGD patient-derived and differentiated cells produced negligible amounts of NADPH oxidase, reflected in the absence of any DHR positive cells. In contrast, NADPH oxidase activity was restored in 13 approximately 80 percent of Prime Edited CGD patient cells, very closely corresponding to the editing rate observed in healthy donor CD34+ cells in the middle panel. This level significantly exceeds the projected therapeutic minimum threshold of DHR activity in 20 percent of neutrophils thought to be sufficient to prevent serious infection based on natural history studies. Additionally, these results confirm that editing rates in CGD patient derived CD34+ cells are similar to those in healthy donor cells, and that healthy donor cells are a useful proxy for understanding the Prime Editing reagents used to generate PM359. __________ HSC = hematopoietic stem cell; LT-HSC = long term HSC; DHR = dihydrorhodamine; normalized to healthy donor control. Data presented at ASGCT and ESGCT 2023. Prime Editing has exhibited a very low level of undesirable genetic changes. Extensive in silico, ex vivo and in vivo analyses have been performed. The figure below demonstrates representative analyses. In the left panel, 550 of the most likely candidate off-target sites were nominated based on in silico assessment, and interrogated for off-targeting editing in Prime Edited healthy donor CD34+ cells; no significant off-target editing was detected. In the middle panel, the marrow of NBSGW mice receiving either mock or Prime Edited human CD34+ cells was assessed for large deletions or translocations 16 weeks after engraftment; there was no difference between mock treated and Prime Edited cells, and neither had any detectable evidence of deletions or translocation above the level of significance. In the right panel, a human cell line was transfected with spCas9 targeting NCF1 without the Prime Editing machinery. Unlike Prime Editing, spCas9 introduces double strand breaks in DNA as part of its expected mechanism of action. In contrast to the Prime Editor, spCas9 by itself introduced a high rate of translocations. __________ 1 Analysis of edited CD34+ cells from CGD program: Targeted in vitro Analysis of 550 potential off-target sites of off-target editing. 2 Data from in vivo analysis from mouse bone marrow harvested 16 weeks after engraftment was complete. 3 Positive control. Overall, the data presented in the two figures above strongly support the clinical evaluation of PM359 in patients with p47phox CGD. We believe these data suggest that PM359 has the potential to meet and exceed the projected mutation correction rate sufficient to achieve disease amelioration, and that PM359 has a low probability of safety events potentially associated with ex vivo gene-edited HSC products. 14 Next Steps Based on these results, we have selected a development candidate, designated PM359 and are in the process of completing IND-enabling studies with this candidate. We plan to submit an IND and/or CTA with the the FDA, in the first half of 2024. We have completed our preliminary clinical trial design and selected leading CGD transplant centers across the United States and other countries as clinical trial sites to maximize access to patients and expedite enrollment for PM359 clinical studies. Study Prime-0101 is a planned, multinational, first-in-human trial designed to assess the safety, biological activity and preliminary efficacy of PM359 in adult and pediatric study participants who have p47phox CGD due to the ΔGT mutation in NCF1, and are medically suitable to undergo autologous HSCT. Autologous CD34+ cells will be collected by mobilization and apheresis and transferred to a centralized manufacturing facility, where they will be electroporated with Prime Editing reagents, cryopreserved and quality control tested, to generate PM359. PM359 will be infused after myeloablative conditioning, and study participants will be followed for three years in the primary study, and an additional 12 years as part of the long-term follow-up period. Initial study participants will be adults with stable disease. Once safety and biological activity has been demonstrated in initial participants, the study will enroll participants with active infection or inflammation, as well as adolescent and pediatric participants, under the supervision of a Data Monitoring Committee. Participants will be followed for safety, including engraftment and reconstitution of the hematopoietic system, as well as early biological markers of restored immune function including the DHR assay, and for the long-term resolution and prevention of infectious and inflammatory complications of CGD. We believe PM359 is uniquely well-suited to restore immune function and resolve infectious and inflammatory disease in patients with p47phox CGD. In August 2023, we received RPDD from the FDA for PM359 for the treatment of CGD. Companies that receive approval for a New Drug Application, or NDA, or Biologics License Application, or BLA, for a rare pediatric disease may be eligible to receive a voucher for priority review of a subsequent marketing application for a different product. If we receive a priority review voucher, it may be used by us or sold to a third party. In addition, in January 2024, we received Orphan Drug designation from the FDA for PM359 for the treatment of CGD. Other Programs in Discovery We continue to make progress in other programs in our hematology and immunology area of focus. We are exploring cell shielding to expand our HSC area of focus beyond rare diseases. In June 2023, we entered into a research collaboration with Cimeio to combine our Prime Editing platform and Cimeio’s SCIP platform to develop Prime Edited SCIP for genetic diseases, acute myeloid leukemia, and myelodysplastic syndrome. The overall goal of the research is to reduce the toxicity of conditioning regimens and introduce new therapeutic options to meaningfully expand the utility of HSC transplant and enable the in vivo selection of edited HSCs to potentially remove the need for transplantation entirely. Additionally, we are also researching Fanconi anemia, a rare and life-threatening DNA repair disorder that arises from loss-of-function mutations in any of 23 genes. Our Liver Programs Non-Viral Delivery In Vivo with Lipid Nanoparticles LNPs are multicomponent and encapsulate the Prime Editor cargo to prevent its degradation by the ubiquitous endonucleases present in biological fluids, thereby enabling the transient delivery and expression of the Prime Editor in cells. We are investing strategically to build our LNP formulations for delivery as a platform technology to enable target tissue delivery. Specifically, we are establishing end-to-end capabilities including design and synthesis of proprietary lipids, high-throughput LNP screening in vivo using complementary and orthogonal approaches such as DNA bar coding and next generation sequencing, LNP formulation process development, manufacturing of preclinical formulations, and in vivo evaluation of LNP delivered Prime Editors. We are integrating automation, analytical quality control, and characterization data, in vitro and in vivo preclinical data, along with data knowledge management tools such as machine learning to develop correlative analyses that we believe can expedite LNP discovery and inform drug product formulation development and drug product specification setting. We believe that building an iterative and integrated system will increase efficiencies in identifying potent and safe LNPs capable of delivering Prime Editors to extra-hepatic tissues. 15 For our first in vivo Prime Editor programs, we are building upon learnings from existing LNP technologies to develop a Universal Targeted LNP delivery system that is targeted to the liver, and specifically targets the LNP to the hepatocytes. This approach, we believe, will improve biodistribution to the target cell type. The LNP system will be modular in that simply swapping out the pegRNA (and ngRNA where required) will result in a new product. This approach will allow us to move the existing liver programs in to the clinic quickly and establish proof of concept, and potentially bring forward additional liver programs, quickly thereafter. To develop and optimize the LNP platform, Prime has developed a model system in mice to iteratively study and optimize the properties of our LNP formulations and the Prime Editor cargo. In this system, we inactivate the PCSK9 gene by precisely introducing a stop codon into the gene. PCSK9 protein is a factor controlling lipoprotein uptake into cells from the blood. This system enables us to look at levels of PCSK9 protein in the blood in response to editing. Following optimizations in this system, simply swapping the guide RNAs for PCSK9 Prime Editing for program specific guide RNAs will result in test articles that can be evaluated in humanized mice or in NHPs for the liver programs. Optimization of Prime Editors containing three different mRNA lots were formulated with one of our LNP formulations. One of our optimized mRNA lots showed more than 40 percent editing in whole liver, resulting in more than 90 percent reduction in circulating PCSK9 protein levels. __________ Panel shows an experiment delivering LNPs to the liver containing a Prime Editor precisely introducing a stop codon into the mouse PCSK9 gene. The experiment tested 3 different mRNA lots. Left graph shows precise editing of PCSK9 at seven days with optimized lots of mRNA. PCSK9 protein levels in the blood dropped by more than 90% of normal following editing, right graph. Note that LNPs deliver primarily to hepatocytes in liver. Therefore, maximum editing possible is predicted to be no more than 60%. 16 __________ Panel shows a schematic of the Universal targeted LNP encapsulating the Prime Editor drug components (left) and dose responsive whole liver in vivo Prime Editing of the mouse PCSK9 gene using 2 different leading LNP formulations. on experiment delivering LNPs to the liver containing a Prime Editor precisely introducing a stop codon into the mouse PCSK9 gene. Note that the targeted LNPs deliver to hepatocytes in liver. Therefore, maximum editing possible is predicted to be no more than 60%. Leading Prime Editor LNP formulations resulted in dose responsive Prime Editing of whole liver mouse PCSK9. Following optimizations of the components and their formulations in this system, by swapping only the guide RNAs (pegRNA and ngRNA) for PCSK9 Prime Editor for program specific guide RNAs test articles that can be evaluated in humanized mice or in NHPs for the liver programs, Wilson’s Disease and Glycogen Storage Disease. Wilson’s Disease The Disease Wilson’s disease, or WD, is a devastating rare disease of the liver, with manifestations throughout the body, that is caused by copper accumulation. Most people are diagnosed with WD between ages five and 35 years and with reported prevalence rates ranging between 1 in 10,000 and 1 in 30,000, it is expected to affect upwards of 35,000 to 100,000 patients in the United States and Europe. It is also understood that there may be significant under-diagnosis of WD. Normally, excessive copper is excreted through the liver as bile. For patients with WD, copper is not eliminated correctly and accumulates to toxic levels. While the key site of pathology is the liver, and many patients present with liver disease, patients often show persistent neurological problems including involuntary movements, tremor, gait disturbance, and kidney, hematological or psychiatric problems. WD is caused by mutations in both genomic copies of the ATP7B gene, which encodes a copper transporter that removes excess copper. Two predominant mutations have been described in WD: 1. H1069Q, found in approximately 40 percent of all patients in the United States and 18 to 72 percent in Europe; and 2. R778L, frequently found in Asian patients and those of Asian ancestry, reported in 46 percent of Chinese, 38 percent of Korean, and 25 percent of Japanese WD patients. Both of these mutations lie adjacent to hotspots or areas with other pathogenic mutations, for which we are currently designing Prime Editors. 17 Genotyping of ATP7B is not routinely performed during diagnosis and is used to confirm the symptomatic diagnosis when necessary. Our Approach and Results: Direct correction of prevalent ATP7B mutations Our initial approach to WD is to correct the prevalent mutations ATP7B H1069Q and R778L in hepatocytes of the liver at their genomic location. A Prime Editor that corrects R778L will also correct R778W and R778G mutations, rarer mutations that are seen in the U.S. and Europe. We are also evaluating hotspot editors in the ATP7B gene region around R778L that could address additional patients. We have performed pegRNA and ngRNA screens and identified guide combinations that correct the disease-causing point mutations. Correction of the gene in the liver should address all aspects of the disease by normalizing the process in which the body removes copper in the liver. In a hepatocyte cell line with the human WD mutation, we have identified Prime Editors that demonstrate precise correction of H1069Q ATP7B in approximately 80 percent of cells as shown in the figure below on the left. We have further demonstrated precise correction of approximately 40 percent in primary humanized mouse hepatocytes bearing the human ATP7B gene with the H1069Q mutation, which is shown in the figure below in the middle, and we have also observed approximately 50 percent precise correction using a surrogate Prime Editor in primary NHP hepatocytes, which is shown in the figure below on the right. __________ Note that each data point in the figure on the left represents the result from a different, individual Prime Editor, and the red circle highlights the best performing Prime Editor, with the average percent precise correction of cells shown in the bar graphs. This high level of precise editing in primary hepatocytes meets our threshold of 25 to 50 percent for predicted clinically relevant effects. To support this, we performed a copper toxicity challenge in liver cells that are normal and liver cells with a pathogenic H1069Q mutation with varying degrees of precise editing correction. As shown in the figure below, we observed a marked difference in cell survival in the presence of high levels of copper between healthy cells (WT; left bar) and liver cells with a pathogenic mutation that are unedited (0 percent; 2nd bar). The third and fourth bars show that with different degrees of precise correction, such as 14 percent and 55 percent, the ability of Prime Edited cells to survive copper toxicity returns towards normal levels the greater the level of correction. 18 Initial genome-wide studies using patient cells and human hepatocytes have not identified any detectable off-target editing. Next Steps Leveraging our modular universal targeted LNP delivery platform, we are currently conducting preclinical studies to optimize our H1069Q and R778L Prime Editors in humanized mouse models and NHP. Glycogen Storage Disease 1b In October 2023, we reported new preclinical data demonstrating the ability of liver-targeted Prime Editors to efficiently and precisely correct one of the most prevalent disease-causing mutations of GSD1b in NHPs and mouse models. These data are the first Prime Editing data in NHPs and we believe provide further proof-of-concept for our Prime Editing approach to potentially address a wide range of diseases. The Disease GSD1b is a rare, serious progressive and fatal disease affecting approximately 1,500 patients and caused by impaired glycogen metabolism. This autosomal recessive disease is caused by mutations in the glucose-6-phosphate transporter, G6PT also known as SLC37A4. Deficiencies in this transporter result in hypoglycemia or low blood glucose levels which can be fatal if patients do not adhere to a strict regimen of slow-release glucose including overnight feeding. Most patients experience symptoms within the first six months of life presenting with hypoglycemia, lactic acidosis or with a large liver. They also can manifest seizures and low white blood cell levels, resulting in recurrent bacterial infections and oral and intestinal mucosa ulceration. Many patients have liver tumors, which can progress to liver carcinoma. Multiple other serious manifestations can occur. Our Approach and Results: Direct correction of prevalent mutations in SLC37A4 Our initial approach to treating patients with GSD1b is to use our Universal Targeted LNP platform to deliver Prime Editor complex to hepatocytes in the liver to correct the two most prevalent mutations that cause the disease, which are located very close to each other in the gene: L348fs, and G339C. In Caucasian populations, these two predominant mutations together are found in 45 percent of patients. Based on prevalence data we estimate there are approximately 650 patients in the United States and 1,450 patients in Europe with GSD1b, and we estimate there are 19 approximately 950 patients with these mutations. While heterozygote carriers have no disease and animal studies of GSD1b suggest that as little as 11 percent of normal activity has the potential to restore normoglycemia, we use an estimate that 20 percent of activity normalizes fasting glucose. As shown in the left figure below, we have identified Prime Editors that demonstrate precise correction of the first mutation with approximately 80 percent efficiency in primary hepatocytes harboring the L348fs mutation. We formulated Prime Editors in our Universal Targeted LNP platform and, as shown in the right figure below, also demonstrated in vivo editing of the first mutation with approximately 80 percent efficiency in the livers of humanized SLC37A4 mice where the mouse gene has been replaced with the human gene harboring the L347fs mutation. __________ The NHP Prime Editor is directed to the same location in the SLC37A4 gene as the human Prime Editor, but the NHP genomic sequence is slightly different from the human sequence, hence the use of a surrogate. To further evaluate our Universal Targeted LNP platform, we were also able demonstrate in vivo editing with approximately 70 percent efficiency in NHPs using surrogate SLC37A4 Prime Editor, as shown in the figure below. In our preliminary safety studies, the Universal Targeted LNPs were well tolerated in both rats and NHPs. Initial genomewide studies using patient cells and human hepatocytes have not identified any detectable off-target editing. Next Steps We are currently performing lead optimization of our GSD1b Prime Editors, establishing an efficacy and safety data package including genotype-phenotype biomarker response, and off-target, safety. In addition, we have developed a series of Prime Editors that precisely correct the G339C mutation with high levels of editing efficiency and are evaluating them in in vivo humanized mouse studies. Expansion Opportunities in the Liver Pipeline To accelerate our liver programs, we are continuing to develop our proprietary universal targeted LNP platform in liver. Now that we have established the ability to deliver Prime Editors via LNPs to hepatocytes in vivo , we could potentially advance other Prime Editing liver programs more quickly, reflecting the versatility and modularity of our platform, which potentially enables the rapid creation of new product candidates by merely swapping out pegRNAs. Our Lung Programs Cystic Fibrosis The Disease CF is a progressive lung disease characterized by production of thick mucus lung secretions which lead to blockage of airways, inflammation, and lung infection, progressing ultimately to lung failure. It also affects the pancreas gland and biliary system of the liver in a similar way, leading to exocrine pancreatic failure and mild to moderate cholestatic liver disease in some patients. Most patients are diagnosed before two years of age through newborn screening or because of symptoms of lung disease, combined by salty skin which can be confirmed using a sweat test. Through supportive care and antibiotic therapies patient median survival has increased to early thirties before lung failure necessitates lung transplantation, if available. Overall CF prevalence in the United States and Europe is 20 approximately 70,000 to 90,000 people (~40,000 in the United States), and while significant progress in the last decade has created therapeutic options for many patients (e.g. Trikaftor), there is no cure and existing treatments are ineffective or not tolerated for approximately 15 percent of patients. The disease is inherited recessively and caused by loss-of-function mutations in a chloride protein transporter called CF transmembrane conductance regulator, or CFTR. Approximately 65 to 75 percent of CF patients have a three-nucleotide deletion in the CFTR gene known as F508del. The vast majority of remaining patients have one of several prevalent mutations in a small number of genetic hotspots in the CFTR gene, including mutations such as N1303K, W1282X, G542X, or G553X / G551D and I507del. F508del and several other mutations result in misfolding of the CFTR protein which fails to reach the plasma membrane, whereas other mutations lead to complete absence of protein or a protein which does not function even though it is localized at the correct site in the cell. The failure of CFTR to function at the cell surface leads to cell secretions that lack sufficient salt and water, resulting in high viscosity and inability to clear secretions from lung and pancreas. Our Approach: Correct prevalent mutations and mutational hotspots in the CFTR gene We intend to progress two distinct strategies for applying Prime Editing to treat CF: hotspot editing and PASSIGE. Through hotspot editing, we aim to address multiple mutations at CFTR mutational hotspots with a small number of Prime Editors. This strategy has the potential to address a large percentage of individuals having CF with only a few Prime Editors, with a particular focus on the 15 percent of patients who cannot be treated with current therapy. Preclinical data generated by us suggest that using only eight hotspot Prime Editors could benefit more than 93 percent of all people with CF, including those living with nonsense and rare mutations whose disease is not amenable to treatment with currently approved therapies, as well as those who do not tolerate existing therapies. In parallel, with PASSIGE, we aim to address nearly all people with CF with a single CFTR superexon insertion strategy. Our preliminary screens have identified hotspot Prime Editors that achieve high levels of precise correction. As shown in the figure below, we observed approximately 70 percent precise editing of the G542X mutational hotspot (left bar), and approximately 50 percent precise editing of the hotspot encompassing I507del and prevalent F508del mutations (right bar) in patient cells. _________ 1 G542X and I507del are “high unmet need” mutations; F508del is one of the most prevalent CF mutations; 2 data show correction in patient induced pluripotent stem cells. Each dot shows a different Prime Editor. In initial proof of concept studies, we developed an intestinal organoid swelling assay that enabled us to test the impact of our Prime Editors on CFTR protein function. As shown in the figure below, healthy donor intestinal organoids swell when stimulated as a result of the CFTR channel pumping salt and water into the organoid (top left image). Organoids from CF patients do not swell (top right image). We then edited the organoids from patients with 21 the G542X mutation and demonstrated that our Prime Editors restore swelling to levels seen in healthy donor organoids (bottom right image). Next Steps With CFF’s support, pursuant to the therapeutic development agreement with the Cystic Fibrosis Foundation, or CFF, we are aiming to deliver one-time, non-viral therapy that offers first cure to all patients living with CF. We will perform optimizations of the hotspot Prime Editors from the early screens to increase efficiency and optimize Prime Editors for additional mutations. In addition, and in parallel we are developing a superexon insertion approach using Prime’s PASSIGE technology. Screening for Prime Editors and superexon templates for PASSIGE is underway and we are building a series of assays to evaluate our Prime Editors on restoration of CFTR protein function. We are testing Prime Editors in patient-derived cells, including iPSCs, intestinal organoids, and human bronchial epithelium. Humanized mice with part of the mouse CFTR gene replaced with human CFTR gene containing the human mutation, have been developed for us to deliver Prime Editors initially to the lung epithelial basal cells which contain a population of lung stem cells. We are developing and optimizing LNP formulations to efficiently deliver our Prime Editors to human bronchial epithelial cells in vitro and to lung basal cells in vivo . Our Ocular Programs Retinitis Pigmentosa Caused by Rhodopsin Mutations: Our first eye indication using AAV delivery technology The Disease Retinitis pigmentosa, or RP, is a subset of related inherited retinal diseases, or IRDs, where disease progression is characterized by loss of night vision in childhood or early adulthood, followed by loss of peripheral vision and eventual loss of central vision leading to blindness later in life. One of the most common IRDs is autosomal dominant RP, or adRP, caused by mutations in the RHO gene which encodes the light sensitive Rhodopsin protein, or RhoP, expressed by rod photoreceptors of the retina. The disease is dominant, or manifests even with mutations to just one of the two gene copies in the genome, because mutant RhoP is toxic to rod photoreceptors, resulting in loss of function followed by rod death. Approximately 6,000-7,000 patients have adRP in the United States caused by RHO mutations. We are initially focused on the predominant mutations of P23H and two mutations V345L and P347L which occur in a mutational hotspot. These three mutations are highly prevalent in the United States and have been identified as causing disease in approximately 60 percent of all patients (approximately 3,000-4,000 patients). As we advance our portfolio, we believe that other frequent mutations may also be suitable targets for Prime Editing. 22 Our Approach and Results: Directly correct prevalent mutations in the RHO gene in photoreceptors of the retina Our initial approach to adRP is to develop two Prime Editors to correct the RHO P23H point mutation and a mutational hotspot in RHO in rod photoreceptors of the retina at their natural genomic location. We believe a Prime Editor that corrects the P23H mutation will also correct rarer, nearby P23L and P23A mutations, while a single hotspot editor could correct 18 different pathogenic mutations in that genomic location, including the most prevalent mutations V345L and P347L. Natural history studies suggest that correction of only 25 percent of rod photoreceptors would have an important clinical impact, because when 25 percent or more of rods are preserved, there is full preservation of cone photoreceptors that are critical to central vision. Similarly to the liver programs, we have developed a modular delivery platform for delivery of Prime Editors to the retina. In the case of retina, our modular delivery platform is a dual AAV system. We have optimized the AAV genomes to precisely and efficiently deliver the Prime Editor protein and the Prime Editor guide RNAs, and have optimized the AAV capsid for delivery to photoreceptors. As shown in the figure below, we have identified Prime Editors that demonstrate up to 65 to 70 percent percent precise correction of photoreceptors in vivo and that were generally well-tolerated with no detectable immune response. In regions of the retina delivered to, Prime Editors prevented retinal degeneration in vivo . There were also no off-target edits detected in human photoreceptors and no detectable evidence of viral vector integration into retinal cells. Next Steps For our ocular programs, we are optimizing the modular dual-AAV system comprised of an optimized AAV capsid to improve transduction of photoreceptors, optimized AAV genome to increase expression of Prime Editor components, and novel AAV production processes that we believe will enable us to efficiently support multiple products. We are evaluating the modular dual-AAV in humanized RHO adRP mice including studies to evaluate preservation of the retina following Prime Editor delivery, and we plan to evaluate our approach in NHP studies where the Prime Editors will be delivered by subretinal injections or suprachoroidal injections to mimic the anticipated route of administration in the clinic. While we are advancing the RHO program with two Prime Editors for P23H and V345L-P347L, we are also identifying additional Prime Editors that can correct other prevalent mutations in the RHO adRP gene. Other Programs in Discovery Additionally, in our ocular area of focus, building on the modularity of our ocular platform and learnings from Rhodopsin program, we are also researching RP caused by mutations in USH2A resulting in Usher syndrome. By 23 simply swapping out the pegRNA and ngRNA in our retinal AAV delivery system we have the potential to accelerate the Usher syndrome program as well as advance additional retinal degeneration programs in the future. In addition, we are researching Fuch’s endothelial corneal dystrophy, a common repeat expansion disease affecting the cornea leading to progressive corneal opacification and blindness. We continue to make progress in both of these programs. Our Neuromuscular Programs Friedreich’s Ataxia The Disease Friedreich’s Ataxia, or FRDA, is a multisystem, autosomal recessive neurodegenerative disorder affecting the central and peripheral nervous system as well as the heart and other organs. FRDA significantly reduces survival for patients, with the mean age of death being 39 years. FRDA is characterized by progressive ataxia, or lack of muscle control or coordination of voluntary movements, with mean age at onset of approximately five to 16 years. A vast majority of patients progress to loss of unsupported sitting within two years and loss of ambulation on average 10 to 15 years from diagnosis. In addition, patients develop cardiomyopathy, or heart failure or dysfunction, which is the most common cause of premature death. In the United States, it is estimated that around 4,000 individuals are affected by FRDA, while there are estimated to be 15,000 to 19,000 patients globally. FRDA is a repeat expansion disease caused by GAA-repeat nucleotide sequence expansions in the 1st intron of the FXN gene encoding the frataxin protein, which plays important roles in mitochondria. The expanded repeats occur early in the gene, and cause disruptions in transcribing the FXN gene into RNA resulting in low levels of the frataxin protein, the pathogenesis of the clinical disease. Published literature shows that removal of expanded repeats can restore frataxin expression in vitro . Our Approach and Results: Directly and precisely remove the pathogenic GAA repeats in the FXN gene Our Prime Editing technology enables us to precisely remove the expanded repeat sequences that cause FRDA. Our goal is to precisely remove the pathological expanded GAA repeat sequence from intron 1 of the FXN gene to restore normal FXN regulation and normal expression of frataxin using dual-flap and long-flap Prime Editing technologies. The primary target tissues are for areas of the brain and spinal cord, but removal of repeats from FXN in the myocardium is also highly desirable to prevent cardiomyopathy and reduce mortality, and we plan to address cardiomyocytes as well. We have performed screens to identify the pegRNA pairs that achieve highly efficient and precise removal of the expanded repeats. We have demonstrated removal of pathological repeats from healthy donors, who have only a short length of repeats. We show up to 77 percent precise editing which results in the total removal of the pathogenic repeat region, without errors, as shown in the figure below on the left, where each dot represents an individual candidate Prime Editor. In addition, the figure on the right shows up to 66 percent precise editing in FRDA patient-derived induced Pluripotent Stem Cells, or iPSCs, which contain larger numbers of pathological repeats, numbering from 420 to 541 nucleotide triplet repeats. Remarkably, the total length of sequence precisely removed can be more than 7,000 nucleotides, or seven kilobase, using dual-flap Prime Editing. 24 Consistent with the high levels of precise correction observed in patient iPSCs, we have also observed a restoration of frataxin expression to levels that approach those observed in healthy donor iPSCs. This is shown in the figure below which illustrates restoration of frataxin protein expression after delivery of the Prime Editor to patient iPSCs. __________ FRDA = Friedreich’s Ataxia and GAPDH = a control housekeeping protein (glyceraldehyde-3-phosphate dehydrogenase). One of the hallmarks of Friedreich’s Ataxia is the degeneration of the dorsal root ganglia, or DRGs. These structures of the central nervous system contain sensory neurons transmitting information to the brain cortex. To evaluate the effect of Prime Editing on the ability of DRG sensory neurons to grow and function, we have developed DRG organoids derived from patient stem cells, a model for growth of the sensory nervous system. These DRGs are multicellular 3D structures and model the growth of a patient DRG. In the figure below, unedited patient DRG organoids (Patient) produce many fewer axons, shown as green fibers, than healthy donor organoids (Healthy Donor). 25 We next edited patient DRG organoids with one of our FXN Prime Editors. When we correct 100 percent of the copies of FXN gene there is complete restoration of the sensory axon growth from the patient DRGs (Patient 100% Corrected). Even, when we correct 50 percent of the copies of the FXN gene there is also complete restoration of the sensory axon growth from the DRGs. We believe these in vitro results indicate that Prime Editors may have the potential to restore normal function of patient sensory neurons. __________ Fluorescence microscopy images at low magnification of dorsal root ganglia, or DRG, from healthy donor or patient, showing cell nuclei (blue) and axons (green). Patient DRG shows very few axons compared to healthy donors. Following Prime Editing to remove the expanded repeats and precisely correct the FXN gene, patient DRGs show normal axon growth. We have established a preliminary dual-AAV delivery system for efficient delivery of Prime Editing to neurons and glial cells in viv o, as demonstrated in the figure below where we have observed robust transduction of over 95 percent of neurons within the injection site (left bar), and where we observed precise editing in approximately 80 percent of the transduced neurons (right bar); this high editing efficiency supports the robustness of the dual -AAV system. This system allows us to interrogate promising Prime Editors while we continue to develop an optimized dual-AAV delivery system as described in “Next Steps” below. 26 __________ Tool Prime Editors were packaged into our preliminary dual-AAV system and together with a reporter AAV were injected into the brains of healthy adult mice. Four weeks later, brain tissues were collected and fluorescent regions indicating successful AAV transduction were isolated and evaluated for editing of target site. Next Steps For our neuromuscular programs, we are establishing a modular dual-AAV system comprised of an optimized AAV capsid to improve transduction across key brain regions using minimally-invasive route of administration, optimized AAV genome to increase safety, specificity and expression of Prime Editor components, and novel AAV production that we believe will enable us to efficiently support multiple products. In addition to the dual-flap technology used in our preliminary experiments, we are also evaluating a long flap approach to precisely correct the expanded GAA repeats in FXN, and the most promising Prime Editors of either approach will be incorporated into our modular dual-AAV system to be further evaluated in humanized FXN mice containing expanded GAA repeats to confirm editing efficiency in vivo . We will also evaluate the modular dual-AAV approach using tool or surrogate Prime Editors in NHPs. Myotonic Dystrophy Type 1 The Disease Myotonic Dystrophy type I, or DM1, is a common autosomal dominant muscular dystrophy among people of European ancestry and is principally a muscle disease affecting skeletal and cardiac muscle with multisystem manifestations. Recent newborn screening studies indicate that the true prevalence of DM1 is 1 in 2,300 (approximately 140,000 patients in the United States). Patients can be clinically divided into three groups: congenital DM1; childhood/juvenile DM1, and adult-onset DM1. Congenital DM1, where patients typically have more than 800 repeats, presents at birth with severe weakness, hyporeflexia, or lack of reflexes, and respiratory insufficiency, and has a 40 percent mortality, with cardiac conduction abnormalities accounting for approximately 70 percent of that mortality. Survivors have distal weakness, cognitive impairment, and neuropsychological disorders. Childhood/juvenile DM1 is more similar to adult disease presenting at ages of five to 15 years with developmental delays and speech and learning difficulties. In adolescent patients, muscle weakness, myotonia, or the inability for muscles to relax, and gastrointestinal symptoms are most prominent. DM1 is a repeat expansion disease caused by expanded CTG repeats in the 3’ UTR of one copy of the DMPK gene. When transcribed into RNA, the expanded repeat nucleotides form toxic RNA foci in the nucleus that, sequester critical nuclear splicing factors, thereby preventing the correct function of many genes that regulate cell function. 27 Our Approach and Results: Directly and precisely remove the pathological repeats in the DMPK gene Our goal in DM1 is to leverage our Prime Editing technology to precisely remove the repeat sequence from the UTR region of the DMPK gene, to restore DMPK regulation and expression of DMPK protein back to normal levels. The primary target tissues are cardiac and skeletal muscle, which we believe could have a transformative effect on patients; CNS is an important secondary target tissue. We have performed screens to identify pegRNA pairs that achieve highly efficient and precise removal of the expanded repeats and have demonstrated precise removal of pathological repeats from the DMPK gene. In patient-derived iPSCs, which contain approximately 1,600 pathological repeats, we have demonstrated precise removal of repeats, with our best Prime Editors achieving more than 90 percent precise editing and removal of the pathological repeats. These data are shown in the figure below, with each dot representing the data of a different individual Prime Editor. As mentioned above, a hallmark of the disease is toxic RNA foci , formed from the repeats, that sequester key splicing factors in the cells with this disease. For example, muscleblind-1, or MBLN1, is a known splicing factor that is deficient in these patient cells. We have developed assays to identify these toxic RNA repeats. As shown in the left side of the figure below, toxic repeats of repetitive CUG sequence, or (CUG)n, can be identified in nuclei of patient cardiomyocytes (left column, top) but not seen in healthy donor cardiomyocytes (not shown). These toxic (CUG)n repeats sequester MBLN1, as expected (left column, bottom). We edited patient cardiomyocytes to remove the pathological repeats with one of our Prime Editors and evaluated the impact on the formation of toxic RNA repeats. As is also shown in the right side of the figure below, cardiomyocytes that have 100 percent of pathological DMPK gene corrected, RNA foci are no longer detectable (right column, top); nor is MBNL1 staining detectable (right column, bottom) with only background staining detectable. The right side shows a quantification and analysis of the results, with 100 percent correct patient cells showing levels of RNA foci similar to those in healthy donor cells. 28 __________ Left hand panel shows fluorescence microscopy images at high magnification of patient cardiomyocyte nuclei. The cardiomyocytes are co-stained to show the RNA (CUG)n repeats (red) and MBLN1 splicing factor (green) in toxic RNA foci. Cardiomyocytes without Prime Editing shown in far left column images or after Prime Editing shown in right column images. The arrows indicate (CUG)n RNA repeats co-localized with sequestered MBLN1 in the nuclei (blue). After Prime Editing the toxic RNA foci are not visible. The graph, right panel shows results of RNA foci per nucleus from automated high content imaging analysis of the cardiomyocytes. Columns showing patient cardiomyocytes 100% corrected or 0% corrected (unedited) and healthy donors. We have established a preliminary dual-AAV delivery system for efficient delivery of Prime Editing to muscle, as demonstrated in the figures below, left panel, where using tool Prime Editors we have observed precise editing of up to 90 percent in cardiomyocytes, and right panel, where we observed precise editing of up to 50 percent in skeletal myotubes. This system allows us to investigate promising DM1 Prime Editors while we continue to develop an optimized muscle delivery system as described in “Next Steps" below. __________ Human iPSC-derived cardiomyoctes (above left) and mouse skeletal myotubes differentiated from myoblasts (above right) were treated with tool Prime Editors packaged in dual-AAV system at various titers and evaluated for precise editing of target site. Next Steps We are evaluating the ability of Prime Editing to correct the mis-splicing of a panel of genes that are known to be mis-spliced as a result of the toxic RNA foci. In parallel, we plan to perform similar experiments in patient-derived skeletal muscle cells. To ultimately deliver Prime Editors to heart and skeletal muscle, we expect initially to rely on the tropism of AAV capsids, optimized to deliver our Prime Editors to the heart and skeletal muscle. We have established an AAV system for efficient delivery of Prime Editing in neurons and glial cells in vivo , as demonstrated 29 above in Friedreich’s Ataxia. We are optimizing this system for the DM1 program and planning to evaluate our Prime Editors in a disease model in mice which contain the human DMPK gene with pathological repeats. While AAV delivery is our primary route of delivery for early programs such as this, we are actively determining whether a non-viral delivery system could be used to efficiently deliver the Prime Editor to muscle. Other Programs in Discovery Within our neuromuscular area of focus, we are also exploring other repeat expansion diseases, including amyotrophic lateral sclerosis, a rapidly progressive neurodegenerative disease characterized by progressive motor neuron loss; Huntington’s disease, an autosomal dominant progressive neurodegenerative disease affecting teenagers through middle aged adults; Fragile X syndrome, an X chromosome-linked dominant rare disease that is the most common monogenic cause of childhood intellectual disability and autism; and oculopharyngeal muscular dystrophy, a rare autosomal dominant disease, characterized by progressive weakness in the muscles around the eyelids as well as in the tongue and pharynx. In addition to the repeat expansion diseases, we are also exploring Duchenne muscular dystrophy, an X chromosome-linked recessive disease affecting boys that is characterized by early onset progressive muscle weakness affecting limbs. Additional Programs As one part of our overall partnering strategy, we are advancing the following programs as partnering opportunities: Chimeric Antigen Receptor T-cell program (CAR-T) We are developing investigational CAR-T cell therapies for autoimmune and oncology indications. In combination with multiplex Prime Editing, we believe PASSIGE may be able to overcome existing challenges in developing CAR-T cells for human therapeutic use — such as manufacturing time, cost, yield for autologous cell therapy, cell quality issues, and safety risks associated with semi-random integration and double strand breaks at multiple genomic loci. Multiplex Prime Editing with PASSIGE has the potential to create a best-in-class allogeneic CAR-T cell product. In December 2023, we presented preclinical data suggesting PASSIGE is up to 80 percent efficient for non-viral, site-specific delivery of chimeric antigen receptor to primary human T-cells to generate CAR-T cells, and can be multiplexed with Prime Editing at other target sites by non-viral one-step delivery with no loss of efficiency. PASSIGE-generated CAR-T cells showed potent antigen-specific function and cytotoxicity ex vivo and in vivo against an established human B-cell tumor growing in immunodeficient mice. The potential advantages, we believe, of our CAR-T approach using Prime-Edited are shown in the table below. As shown in the figure below, we have achieved multiplex Prime Editing in T cells to knock out the B2M gene and the endogenous T cell receptor, or TRAC, without loss in efficiency compared to single site editing (left panel). We have also delivered Prime Editing components and DNA recombinase components (PASSIGE components) in a single step to human primary T cells, without the use of viruses. The short recombinase DNA target sequence, used by the site-specific recombinase enzyme known as Bxb1, was inserted into human primary T cells at the TRAC 30 locus with greater than 95 percent efficiency, and a 3.5 kilobase anti-CD19 CAR gene cassette was precisely inserted into that recombinase site location in up to 80 percent of the T cells, resulting in positive expression of the CAR by those T cells (middle panel). As a result, the T cells acquired CD19+ tumor cell killing activity that was dependent on cell dose in a cell assay, indicating that the integrated CAR was functional (right panel). PASSIGE and Multiplex Prime Editing Could Create Potentially Best-in-Class Allogenic CAR-T Cell Product Next steps This exploratory program is approaching lead optimization. Additional optimization of the Prime Editor and PASSIGE components is ongoing, and the scalable cell therapy process is being developed. A suite of assays to evaluate cell potency and cell fitness are currently being developed and we plan to evaluate CAR-T cell leads in vivo in established tumor killing studies. Other Programs in Discovery In addition to CAR-T, we are also exploring genetic hearing loss, including Usher’s syndrome type III, which is characterized by progressive post-lingual hearing loss, variable vestibular dysfunction, as well as adolescent-onset progressive vision loss due to retinitis pigmentosa caused by mutations in the Clarin 1 protein encoded by the CLRN1 gene; and non-syndromic hearing loss due to mutations in GJB2, the most commonly mutated gene in non-syndromic hearing loss, which accounts for two thirds of genetic hearing loss. Our License and Collaboration Agreements License agreements with Broad Institute In September 2019, we entered into a license agreement with Broad Institute, and in May 2020, February 2021 and December 2022, we entered into amendments to that license agreement. We refer to this amended license agreement as the Broad License Agreement. Under the Broad License Agreement, Broad Institute grants to us certain rights and licenses under certain patent rights it owns or controls related to editing of DNA sequences using a Prime Editor. Certain of the licensed patent rights are co-owned by Broad Institute with MIT and Harvard and certain are co-owned by Broad Institute with Harvard. In December 2022, following the timely exercise of an option under an existing option agreement with Broad Institute we entered into a second license agreement with Broad Institute, which we refer to as the 2022 Broad License Agreement. Under the 2022 Broad License Agreement, Broad Institute grants to us certain rights and licenses under certain patent rights it owns or controls related to MMR inhibition and prime editing improvements. The licensed patent rights are co-owned by Broad Institute with Harvard, The Trustees of Princeton University, or Princeton, and The Regents of the University of California, or University of California. 31 Broad License Agreement The licenses Broad Institute grants to us under the Broad License Agreement are limited to the field of prevention or treatment of human disease, and most licenses granted to us under the Broad License are further limited to the prevention or treatment of human disease by editing (including modifying or converting) or targeting DNA ex vivo , in vivo , or through xeno-transplantation methods. We refer to this field as the Prime Broad Field. 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In addition to the inclusive innovation model, our licenses are also subject to Broad Institute’s right to designate a single-digit number of gene targets per year in which it has a good faith interest in reserving for its own development of products covered by the patent rights directed to such gene targets. Such reserved gene targets are referred to as a reserved Broad Institute targets. If Broad Institute notifies us that it desires to exercise such right for a given gene target, and we do not, within a specified time period, evidence that we (ourselves or through an affiliate or sublicensee) have an on-going program or good faith interest in pursuing a program for Prime Editor products for such gene target, Broad Institute may terminate our license with respect to such gene target, with such gene target becoming a reserved Broad Institute target. 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Broad Institute is entitled to sales-based milestone payments up to a total of $3.0 million per royalty-bearing product, depending on the patient population to be treated by the royalty-bearing product achieving the applicable milestone. If we undergo a change of control at any time during the term of the 2022 Broad License Agreement, certain of the clinical and regulatory milestone payments will increase by a specified percentage. Broad Institute is entitled to lower payments to the extent the clinical and regulatory milestones or sales-based milestones are achieved by royalty-bearing products that are enabled products, rather than royalty-bearing products that are licensed products. Broad Institute is entitled to receive royalties of less than 0.2% on net sales of royalty-bearing products that are licensed products and lower royalties on net sales of for royalty-bearing products that are enabled products. Royalties payable to Broad Institute are subject to limited customary offsets and reductions. Broad Institute is entitled to a percentage of consideration that we receive from our sublicensees, with such percentage dependent on the development stage of products under the 2022 Broad License Agreement at the time of sublicense execution, all below 1%. The royalty term for a royalty-bearing product under the 2022 Broad License Agreement is determined in the same way as in the Broad License Agreement. Pledge to Broad Institute and Harvard In February 2021, we committed to donate $5.0 million to Broad Institute and Harvard annually for 14 years, commencing in 2021, or the Pledge. The Pledge is intended to be used for research and development related to new genome editing technologies, for example Prime Editing, improve on existing genome-editing technologies, identify delivery mechanisms for these technologies and apply these technologies to the understanding and treatment of rare genetic diseases. We can terminate the Pledge at our discretion, subject to providing one year of funding from the 34 date of termination. In August 2022, we amended and restated the Pledge to clarify that the funds may be used by the laboratory of David Liu, who is a member of Broad Institute and a faculty member at Harvard. Collaboration and License Agreement with Beam Therapeutics In September 2019, we entered into a collaboration and license agreement, which we refer to as the Beam Collaboration Agreement, with Beam Therapeutics Inc., or Beam. One of our founders, David Liu, is also a founder of Beam. Under the Beam Collaboration Agreement, we grant to Beam an exclusive (even as to us and our affiliates), worldwide license under (i) certain Prime Editing know-how that we control during the initial term, and improvements thereto that we control for a specified number of years following the initial term, and patent rights that cover such Prime Editing know-how during the term of the Agreement, and (ii) our interest in certain jointly-owned collaboration technology, in each case, solely to develop, make, have made, use, offer for sale, sell, import and commercialize licensed products only in the Beam field. The Beam field is limited to (a) the prevention, modification, improvement, amelioration or treatment of human disease, including cell-based therapies and the creation of one or more protective mutations, through administration of a licensed product that incorporates or contains a qualifying Prime Editing agent, which is a macromolecule or macromolecular complex that uses Prime Editing to make one or more transition point mutations (that is, C to T, T to C, A to G or G to A) in the sequence of one or more DNA targets, without intentionally making any non-transition mutations or other changes, including insertions, deletions, duplications, indels, transversions or combinations thereof, and does not incorporate or contain any other Prime Editing agent or other gene editing approach that is not a qualifying Prime Editing agent or (b) the prevention, modification, improvement, amelioration or treatment of sickle cell disease through administration of a licensed product that incorporates or contains a more broadly defined Prime Editing agent. We refer to each of clause (a) and clause (b) of the Beam field as subfields. We also grant to Beam a non-exclusive, worldwide license under certain CRISPR or delivery-related technology, know-how and patent rights that we control during the initial term, and improvements thereto that we control for a specified number of years following the initial term, solely to develop, make, have made, use, offer for sale, sell, import and commercialize licensed products only in the Beam field. Under the Beam Collaboration Agreement, Beam grants to us certain non-exclusive, worldwide licenses under certain technology, know-how and patent rights, including under certain CRISPR or delivery-related technology, know-how and patent rights, that it controls during the initial term, and improvements thereto that Beam controls for a specified number of years following the initial term, solely to develop, make, have made, use, offer for sale, sell, import and commercialize products only in the Prime field, which is limited to the prevention, modification, improvement, amelioration or treatment of human disease (excluding sickle cell disease), including cell-based therapies and the creation of one or more protective mutations, through administration of a product or service containing or incorporating a Prime Editing agent that is not a qualifying Prime Editing agent, but excluding (a) the Beam field, (b) the administration of any product or service containing or incorporating a base editor and (c) a field related to microbial cells in the human flora in certain Asia territories and the development of products targeting four named gene targets. For clarity, the Prime field includes products or services that contain or incorporate (x) at least one Prime Editing agent that is not a qualifying Prime Editing agent and (y) any other gene-editing approach, including other Prime Editing agents, which may include one or more qualifying Prime Editing agents, subject to the aforementioned exclusions. The licenses granted to us by Beam under the Beam Collaboration Agreement are subject to the terms of certain third-party agreements and certain rights retained by third parties. In addition to the ongoing licenses, under the Beam Collaboration Agreement, we are both obligated to adhere to a technology transfer plan, under which each of us agrees to disclose or otherwise share the technology, know-how and patent rights licensed to the other and to provide the other party with reasonable assistance in the exercise of its licenses. The licenses granted to each party under the Beam Collaboration Agreement are sublicensable to affiliates and third parties, subject to certain requirements, including providing the other party a copy of each executed sublicense agreement, and ensuring any sublicensee comply with the terms of the Beam Collaboration Agreement. 35 Unless we exercise our profit sharing option for a licensed product, as described below, Beam is solely responsible for the development and commercialization of licensed products in the Beam field under the Beam Collaboration Agreement. Beam is required to use commercially reasonable efforts to develop and seek marketing approval for at least one licensed product in each subfield of the Beam field in each of (a) the United States and (b) one other specified major market country, and to commercialize any such licensed product that achieves marketing approval. As described further below, we are entitled to receive ongoing milestone and royalty payments from Beam based on Beam’s development and commercialization of each licensed product. Subject to the provisions in the next paragraph, on a licensed product-by-licensed product basis, we have the right to elect to share equally with Beam in the profits and losses in the United States for Beam’s licensed products. We may exercise such right for each licensed product within a specified period of time. Any such licensed product for which we exercise such right we refer to as a collaboration product. If we exercise such right, we agree to share equally in the costs, profits and losses of each such collaboration product in the United States, rather than receiving milestones and royalties based on development and sales thereof by Beam in the United States. For clarity, we are still entitled to receive milestones and royalties on the development and sales of each such collaboration product outside of the United States. We also have the right to elect, within a specified time period, to co-promote with Beam each collaboration product in the United States, in addition to sharing in the profits and losses. To the extent we exercise our co-promote option with respect to a given collaboration product, we and Beam must use commercially reasonable efforts to commercialize such collaboration product, in each case, in the Beam field in the major markets in which marketing authorization has been obtained. After we have exercised our right to profit share on a collaboration product, we are able to, at any time during the term of the Beam Collaboration Agreement, on a collaboration product-by-collaboration product basis, opt-out of the profit and loss share and co-promotion activities with respect to any collaboration product with prior written notice to Beam within a certain time period. Notwithstanding the rights described above, at any time prior to or within 30 days of the filing of an IND for a licensed product, Beam may designate up to a mid-single digit number of licensed products for which (i) we are not permitted to exercise our profit sharing right, and (ii) Beam assumes sole control and decision-making authority and bears all costs and expenses, with respect to the development and commercialization of such products. Under the Beam Collaboration Agreement, a “protected product” is a licensed product for which either (a) we have not exercised our profit share option or (b) Beam has designated as a protected product pursuant to the foregoing sentence. For clarity, we are entitled to ongoing milestones and royalties from Beam based on its development and commercialization of protected products worldwide. Upon Beam’s designation of a licensed product as a protected product , Beam is required to pay us $5.0 million if the product is developed for non-sickle cell disease or $10.0 million if the product is developed for sickle cell disease. As partial consideration for the licenses and rights granted to each other under the Beam Collaboration Agreement, Beam issued to us $5.0 million in shares of its common stock and we issued to Beam an aggregate of 1,608,337 shares of our common stock. Beam was also entitled to appoint a representative to our board of directors, which right has expired. We are entitled to receive development milestone payments from Beam on Beam’s development of protected products (which, for clarity, includes any licensed product for which we have not exercised our profit share option) and collaboration products. For protected products, we are entitled to receive up to a total of $35.5 million on a protected product-by-protected product basis based on Beam’s development of such protected product and, for collaboration products, up to a total of approximately $17.8 million on a collaboration product-by-collaboration product basis based on Beam’s development of such collaboration product outside of the United States, in each case, with such amounts lowered if such licensed product achieves a given milestone for use in treating an orphan disease. We are also entitled to receive sales-based milestone payments from Beam based on net sales of licensed products. For protected products, we are entitled to receive up to a total of $84.5 million on a protected product-by-protected product basis based on net sales of such protected product worldwide, and, for collaboration products, up to a total of approximately $42.3 million on a collaboration product-by-collaboration product basis based on net sales of collaboration products outside of the United States. 36 The sickle cell disease product partnered with Beam is a licensed product under the Beam Collaboration Agreement. Beam has not designated this product as a protected product and we have not received any development or sales-based milestones with respect to Beam’s exploitation thereof. Beam is obligated to pay to us tiered royalties ranging from a high-single digit percentage to a low double-digit percentage, but less than teens on net sales of protected products worldwide on a protected product-by-protected product basis and net sales of collaboration products outside of the United States on a collaboration product-by-collaboration product basis. Our royalties are subject to customary offsets and reductions, to a floor that takes into account any royalties we are obligated to pay to our third-party licensors, including Broad Institute. In addition, certain of the rights licensed under the Beam Collaboration Agreement are sublicensed from third parties, and Beam agrees to reimburse us for certain payments we are required to make to our third-party licensors attributable to Beam’s exercise of any sublicense we grant to Beam, including payments we make to Broad Institute under the Broad License Agreement. If we develop a product that is covered by the technology, know-how or patent rights that Beam licenses to us under the Beam Collaboration Agreement, which we refer to as a Prime product, we are obligated to pay to Beam a low single digit percentage royalty on our worldwide net sales of any such product on a Prime product-by-Prime product and country-by-country basis, subject to certain customary reductions, to a floor. Each party’s obligation to pay the other royalties expires on a country-by-country and product-by-product basis on the latest of (a) the expiration of the last to expire valid claim of an issued patent or pending patent application within the applicable licensed patent rights that cover such product in such country, (b) the expiration of regulatory exclusivity for such product in such country or (c) ten (10) years after the first commercial sale of such product in such country. If we exercise our option to profit share on collaboration products, we share equally in the profits and losses of any such collaboration product in the United States and share in a lower portion of any development or commercialization costs attributable to such collaboration product outside of the United States. Under the Beam Collaboration Agreement, Beam assigns ownership to us of certain improvements Beam makes, itself or jointly with us or others, to certain technology, know-how and patent rights we license to Beam, and we assign to Beam ownership of all improvements we make, ourselves or jointly with Beam or others, certain technology, know-how and patent rights Beam licenses to us. Each party grants back to the other certain exclusive and non-exclusive licenses to such improvements. Except for any such improvements, each party owns any other inventions that it developed under the Beam Collaboration Agreement and an equal, undivided interest with the other party in any inventions jointly developed. We are responsible for prosecution and maintenance of the patent rights we license to Beam, while keeping Beam reasonably informed and providing Beam the opportunity to provide comments and make requests of us, in each case regarding the patent rights that we exclusively license to Beam in the field of the exclusive license. Beam has a step-in right to the extent we decline or fail to prosecute any patent rights that are exclusively licensed to Beam and applicable to the Beam field. Beam is responsible for prosecution and maintenance of the patent rights it licenses to us, while keeping us reasonably informed and providing us the opportunity to provide comments and make requests of us, in each case with respect to any patent rights that Beam exclusively licenses to us in the field of the exclusive license. Beam has the first right to enforce any patent rights we exclusively license to Beam in the Beam field against any third party developing a product in the Beam field that is competitive with a licensed product Beam is developing under the Beam Collaboration Agreement. We have a step-in right on any such enforcement to the extent Beam declines or fails to initiate such enforcement action. Unless earlier terminated in accordance with its terms, the Beam Collaboration Agreement will expire on the later of (a) expiration of the last royalty term for a product on which a party is obligated to pay royalties to the other party or (b) with respect to any collaboration product, the date on which neither party is developing or commercializing any such collaboration product in the United States. 37 After expiration of the initial term, Beam can terminate the Beam Collaboration Agreement for convenience in its entirety, or on a licensed product-by-licensed product or subfield-by-subfield basis, with ninety (90) days’ prior written notice to Prime. Each party may terminate the Beam Collaboration Agreement for (a) the other party’s uncured material breach within ninety (90) days of notice of such breach, (b) upon the insolvency or bankruptcy of the other party if such proceeding is not dismissed within ninety (90) days after the filing thereof or (c) immediately to the extent the other party (or its affiliates or sublicensees) challenges a patent right licensed to such party. Our Business Development and Partnering Strategy Our vision is to establish Prime Medicine as a leader in the field of gene editing by building a fully integrated biopharmaceutical company utilizing our Prime Editing platform to pioneer the discovery, development and commercialization of Prime Editing therapeutics that can have a transformative impact on the treatment of a wide spectrum of diseases with high unmet medical need. The potential therapeutic applications of our Prime Editing technology are broad, and we aspire to fully develop that potential. To achieve our vision, and in addition to independently discovering, developing, and commercializing Prime Editing products, we will seek to selectively enter strategic collaborations to maximize the potential of the Prime Editing platform. Such collaborations may also facilitate our entry into additional therapeutic or geographic areas by leveraging the established capabilities of our partners as well as by funding the development of new Prime Editing platform or corporate capabilities which we can then utilize for additional Prime Medicine products outside such partnerships. In certain cases, we may use partnerships to create value in areas which we may not intend to enter ourselves in the near term. In our collaborations, we may cooperatively develop and commercialize products with our partners, have options to do so, or out-license products for development and commercialization by our partners. In each case, we expect to receive value in the form of upfront payments and milestones which will provide us with additional capital in the nearer term as well as royalties and where applicable, profit sharing, to participate in the value created through commercializing Prime Editing products. We may also seek to access or develop enabling technologies or specific capabilities through licenses or partnerships. We will evaluate partnerships with both academic and corporate entities, and these potential collaborations may vary in both structure and scope. Technologies that may enable the application of Prime Editing may include viral and non-viral delivery modalities, manufacturing, and technologies that may be synergistic with Prime Editing or Prime Editing products. Competition The pharmaceutical and biotechnology industries, including the gene therapy and gene editing fields, are characterized by rapidly advancing technologies, intense competition and a strong defense of intellectual property. We believe that our Prime Editing technology is highly differentiated and that our considerable expertise in Prime Editing and expanding its capabilities, as well as our team’s extensive drug development and manufacturing experience, together with exclusive licenses to this technology have positioned us at the forefront of the field of advanced precision genetic medicines and provided us with significant competitive advantages. Nevertheless, we face potential competition from a variety of companies. There are several companies utilizing CRISPR/Cas9 nuclease technology, including Caribou Biosciences, Inc., Editas Medicine, Inc., CRISPR Therapeutics AG, Intellia Therapeutics, Inc. and Kamau Therapeutics, Inc., among others. Several additional companies such as Sangamo Therapeutics, Inc., Precision BioSciences, Inc. and bluebird bio, Inc. utilize alternative nuclease-based genome editing technologies, including ZFNs, engineered meganucleases and TALENs. Beam Therapeutics Inc. utilizes base editing technology. In addition, other private companies such as Tessera Therapeutics, Inc. and Tome Biosciences, Inc. have announced their work in recombinase DNA and RNA gene writers, although little is known publicly about their science or portfolio. Other companies have announced intentions to enter the gene editing field, such as Moderna, Inc. and Pfizer Inc. Most recently, new epigenetic editing companies have emerged, such as Chroma Medicine, Inc. and Tune Therapeutics, Inc. In addition, we face competition from companies utilizing gene therapy, oligonucleotides and cell therapy therapeutic approaches. Several companies such as Arbor Biotechnologies, Inc., Scribe Therapeutics Inc., Mammoth Biosciences, Inc. and Metagenomi, Inc. are actively searching for novel genome editing components, have reported the discovery of new DNA-cutting enzymes, and have announced gene editing programs. Other companies are active in LNP delivery technologies and advancing those into therapeutics using 38 genetic therapies, including Recode Therapeutics, Inc., Verve Therapeutics, Inc., Generation Bio Co. and Beam Therapeutics Inc., among others. Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future that are approved to treat the same diseases for which we may obtain approval for our product candidates. This may include gene editing companies with other approaches to editing, as well as other types of therapies, such as small molecule, RNAi, antibody and/or protein therapies. In addition, many of our current or potential competitors, either alone or with their collaboration partners, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials and approved products than we do today. Mergers and acquisitions in the pharmaceutical, biotechnology and gene therapy industries may result in resources becoming increasingly concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. We also compete with these companies in recruiting, hiring and retaining qualified scientific and management talent, establishing clinical trial sites and patient registration for clinical trials, obtaining manufacturing slots at contract manufacturing organizations and in acquiring technologies complementary to, or necessary for, our programs. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, particularly if they represent cures, have fewer or less severe side effects, are more convenient, or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. The key competitive factors affecting the success of all of our programs are likely to be their efficacy, safety, convenience and availability of reimbursement. Manufacturing We currently have no commercial manufacturing capabilities. For our initial wave of clinical programs, we intend to use qualified third-party contract manufacturing organizations, or CMOs, with relevant manufacturing experience in genetic medicines. We plan to partner with suppliers and CMOs to produce or process critical raw materials, bulk compounds, formulated compounds, viral vectors or engineered cells for IND-supporting activities and early-stage clinical trials. At the appropriate time in the product development process, we will determine whether to establish in-house GMP manufacturing capabilities for some core technologies or continue to rely on third parties to manufacture commercial quantities for any products that we may successfully develop. Intellectual Property Overview We achieved many major milestones in 2023, including the issuance of two in-licensed U.S. patents and the allowance of another in-licensed U.S. patent application, which has since issued as a U.S. patent, in addition to the U.S. patent issued in 2022, all of which cover Prime Editing methods and its components and systems. Our success depends in large part on our ability to obtain and maintain additional intellectual property protection for our platform technology, our programs and know-how related to our business, defend and enforce our intellectual property rights, in particular, our patent rights, preserve the confidentiality of our trade secrets and other confidential or proprietary information and operate without infringing, misappropriating or otherwise violating any intellectual property rights of others. We seek to protect our proprietary position by, among other things, exclusively licensing U.S. and certain foreign patent applications and issued patents and filing patent applications related to our platform technology, existing and planned programs and improvements that are important to the development of our business, where patent protection is available. While we in-license four issued patents, we do not currently own any issued patents in any jurisdiction covering our Prime Editing technology or product candidates. For information regarding the risks related to our intellectual property, please see “Risk Factors—Risks Related To Our Intellectual Property.” Our wholly owned patent applications and our in-licensed issued patents and patent applications cover various aspects of our Prime Editing platform and our programs, including: • Prime Editors 39 • Prime Editing guide RNA, or pegRNA, and modified pegRNAs • Prime Editing complexes and methods • Dual-Flap Prime Editing technology • Program-specific pegRNAs and therapeutic methods • Prime Editors with enhanced activities or properties • Engineered pegRNAs • Delivery modalities We intend to continue to pursue, when possible, additional patent protection, including composition of matter, method of use, delivery modality and process claims, directed to our platform technology and the programs in our portfolio. We also intend to expand and extend our Prime Editing platform and programs, as well as obtain rights to delivery modalities, through one or more licenses from third parties. Owned Patents As of February 28, 2024, we owned approximately 20 pending U.S. provisional patent applications, 20 pending PCT applications, nine pending U.S. non-provisional patent applications and 13 pending ex-U.S. patent applications. The patent applications outside of the United States were filed in the European Patent Office, Japan, China and certain other foreign jurisdictions. Our owned patent applications are generally related to our Prime Editing technology, including claims to modified pegRNAs; Prime Editors with enhanced activities or properties (e.g., improved Prime Editing efficiency or smaller Prime Editors) and methods of using such Prime Editors and pegRNAs; program-specific pegRNAs directed to targeting and correcting specific mutations and methods of using such pegRNAs therapeutically; PASSIGE systems including Prime Editors and integrases or recombinases, and methods of using PASSIGE; off-target testing methods; methods for synthesizing pegRNAs; and novel lipids and LNPs for delivery of Prime Editors. The provisional patent applications are not eligible to become issued patents until, among other things, we file non-provisional patent applications within 12 months of filing one or more of our related provisional patent applications. Any U.S. non-provisional patent applications timely filed based on any of these U.S. provisional patent applications, if issued, and if the appropriate maintenance or annuity fees are paid, are expected to expire as early as 2044, excluding any additional term for patent term adjustments or patent term extensions or similar provisions in foreign jurisdictions. Our current owned U.S. non-provisional and PCT patent applications, if issued and if the appropriate maintenance or annuity fees are paid, are expected to expire as early as 2042, excluding any additional term for patent term adjustments or patent term extensions or similar provisions in foreign jurisdictions. In-licensed Patents As of February 28, 2024, we have in-licensed four issued U.S. patents, one granted ex-U.S. patent, approximately 12 pending U.S. non-provisional patent applications, three pending PCT applications, one pending U.S. provisional applications and 83 pending ex-U.S. patent applications, in each case, related to Prime Editing, from Broad Institute. The patent applications outside of the United States were filed in the European Patent Office, Japan, China and certain other foreign jurisdictions. The issued patents and patent applications from our in-licensed portfolio for Prime Editing are generally related to Prime Editors, pegRNAs, Prime Editing complexes and systems; compositions including the Prime Editors, pegRNAs and Prime Editing complexes as a component; methods of using such Prime Editors, pegRNAs and Prime Editing complexes and systems, including methods for therapeutic indications; pegRNAs that target and correct therapeutically relevant DNA sequences; program-specific pegRNAs directed to targeting and correcting specific mutations; systems comprising Prime Editors and integrases or recombinases for use in PASSIGE; and delivery modalities for Prime Editing systems, including the use of AAV, in a split AAV system for viral delivery of a Prime Editor. The in-licensed issued patents and patent applications cover various aspects related to the Prime Editing platform technology, including Prime Editors that employ CRISPR-Cas protein domains, such as Cas9 nickases and DNA polymerase domains, such as reverse transcriptase domains. The exclusive in-licensed patents and patent applications also cover dual-flap Prime Editing technology, including dual-flap Prime Editing compositions and methods of using such technology for therapeutic indications, and engineered pegRNAs, including compositions and methods comprising such pegRNAs. Our current in-licensed U.S. and foreign patents and patent applications, if issued and if the appropriate maintenance or annuity fees are paid, are expected to 40 expire as early as 2040, excluding any additional term for patent term adjustments or patent term extensions or similar provisions in foreign jurisdictions. Additional Intellectual Property We also rely on trade secrets, know-how, continuing technological innovation and confidential information to develop and maintain our proprietary position and protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection. We seek to protect our proprietary technology and processes, in part, by confidentiality agreements with our employees, consultants, scientific advisors and contractors. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. Government Regulation In the United States, biological products, including gene editing products, are subject to regulation under the Federal Food, Drug, and Cosmetic Act, or FD&C Act, and the Public Health Service Act, or PHS Act, and other federal, state, local and foreign statutes and regulations. Both the FD&C Act and the PHS Act and their corresponding regulations govern, among other things, the research, development, clinical trials, testing, manufacturing, safety, efficacy, labeling, packaging, storage, record keeping, distribution, reporting, advertising and other promotional practices involving biological products. Each clinical trial protocol for a gene therapy product must be reviewed and approved by the FDA before initiating clinical trials. In addition, FDA approval must be obtained before the marketing of biological products in the United States. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources and we may not be able to obtain the required regulatory approvals. U.S. Biological Products Development Process The process required by the FDA before a biological product may be marketed in the United States generally involves the following: • completion of nonclinical laboratory tests and animal studies, including those requiring performance in accordance with good laboratory practices, or GLPs, unless justified and applicable requirements for the humane use of laboratory animals or other applicable regulations; • submission to the FDA of an application for an IND, which must become effective before human clinical trials may begin; • approval of the protocol and related documentation by an independent institutional review board, or IRB, or ethics committee at each clinical trial site before each study may be initiated; • performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as good clinical practices, or GCPs, and any additional requirements for the protection of human research subjects and their health information, to establish the safety, purity and potency of the proposed biological product for its intended use; • submission to the FDA of a BLA for marketing approval that includes sufficient evidence of establishing the safety, purity and potency of the proposed biological product for its intended indication, including from results of nonclinical testing and clinical trials; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product is produced to assess compliance with current good manufacturing practices, or cGMP, to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity and, if applicable, the FDA’s current good tissue practices, or CGTPs, for the use of human cellular and tissue products; • potential FDA audit of the nonclinical study and clinical trial sites that generated the data in support of the BLA; • review of the product candidate by an FDA advisory committee, where appropriate or if applicable; 41 • payment of user fees for FDA review of the BLA (unless a fee waiver applies); and • FDA review and approval, or licensure, of the BLA. Before testing any biological product, including a gene editing product, in humans, the product candidate enters the preclinical testing stage. Preclinical tests, also referred to as nonclinical studies, include laboratory evaluations of a product candidate’s biological characteristics, chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the product candidate. The conduct of the preclinical tests must comply with federal regulations and requirements, including GLPs for certain nonclinical studies. An IND is an exemption from the FD&C Act that allows an unapproved product candidate to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer such investigational product to humans. Such authorization must be secured before interstate shipment and administration of any product candidate that is not the subject of an approved BLA or existing IND. In support of a request for an IND, applicants must submit a protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND application. In addition, the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among other things, must be submitted to the FDA as part of an IND application. The FDA requires a 30-day waiting period after the filing of each IND before clinical trials may begin. This waiting period is designed to allow the FDA to review the IND to determine whether human research subjects will be exposed to unreasonable health risks. At any time during this 30-day period the FDA may raise concerns or questions about the conduct of the trials as outlined in the IND and impose a clinical hold, which may be full or partial. In this case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can begin. Following commencement of a clinical trial, the FDA may also place a full or partial clinical hold on that trial. A clinical hold is an order issued by the FDA to the sponsor to delay a proposed clinical investigation or to suspend an ongoing investigation. A partial clinical hold is a delay or suspension of only part of the clinical investigation conducted under the IND. No more than 30 days after imposition of a full or partial clinical hold, the FDA will provide the sponsor a written explanation of the basis for the hold. Following issuance of a full or partial clinical hold, an investigation may only resume after the FDA has notified the sponsor that the investigation may proceed. There also are requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public registries. Information about certain clinical trials, including clinical trial results, must be submitted within specific timeframes for publication on the www.clinicaltrials.gov website. A sponsor may choose, but is not required, to conduct a foreign clinical trial under an IND. When a foreign clinical trial is conducted under an IND, all FDA IND requirements must be met unless waived. When a foreign clinical trial is not conducted under an IND, the sponsor must ensure that the study complies with certain regulatory requirements of the FDA in order to use the study as support for an IND or application for marketing approval or licensing. In particular, such studies must be conducted in accordance with GCP, including review and approval by an independent ethics committee, or IEC, and informed consent from subjects. The FDA must be able to validate the data through an onsite inspection, if deemed necessary by the FDA. An IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the study at least annually. The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects. An IRB must operate in compliance with FDA regulations. An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients. Some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a data safety monitoring board or committee, or DSMB. This group provides advice to the sponsor as to whether or not a trial may move forward at designated check points based on pre-specified criteria and access to unblinded data from the study. In addition to the submission of an IND to the FDA before initiation of a clinical trial in the United States, certain human clinical trials involving recombinant or synthetic nucleic acid molecules are subject to oversight of institutional biosafety committees, or IBCs, as set forth in the National Institutes of Health, or NIH, Guidelines for 42 Research Involving Recombinant or Synthetic Nucleic Acid Molecules, or NIH Guidelines. Specifically, under the NIH Guidelines, supervision of human gene transfer trials includes evaluation and assessment by an IBC, a local institutional committee that reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at that institution. The IBC assesses the safety of the research and identifies any potential risk to public health or the environment, and such review may result in some delay before initiation of a clinical trial. While the NIH Guidelines are not mandatory unless the research in question is being conducted at or sponsored by institutions receiving NIH funding for recombinant or synthetic nucleic acid molecule research, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them. Clinical trials typically are conducted in three sequential phases that may overlap or be combined: • Phase 1. The biological product is initially introduced into healthy human subjects and tested for safety. In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. • Phase 2. The biological product is evaluated in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance, optimal dosage and dosing schedule. • Phase 3. The biological product undergoes more extensive clinical trials to further evaluate dosage, efficacy, potency and safety in an expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for approval and product labeling. Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These clinical trials are used to gather additional data from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow-up. The FDA generally recommends that sponsors of human gene therapy products integrating vectors such as gammaretroviral and lentiviral vectors and transposon elements as well as genome editing products observe subjects for potential gene therapy-related delayed adverse events for up to a 15-year period, including five years of annual examinations followed by ten years of annual queries, either by telephone or by questionnaire, of study subjects. Both the FDA and the European Medicines Agency, or the EMA, provide expedited pathways for the development of drug product candidates for treatment of rare diseases, particularly life-threatening diseases with high unmet medical need. Such drug product candidates may be eligible to proceed to registration following a single clinical trial in a limited patient population, sometimes referred to as a Phase 1/2 trial, but which may be deemed a pivotal or registrational trial following review of the trial’s design and primary endpoints by the applicable regulatory agencies. Determination of the requirements to be deemed a pivotal or registrational trial is subject to the applicable regulatory authority’s scientific judgement and these requirements may differ in the U.S. and the European Union, or EU. During all phases of clinical development, the FDA requires extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators. Annual progress reports detailing the results of the clinical trials must be submitted to the FDA. Written IND safety reports must be promptly submitted to the FDA, the NIH and the investigators for serious and unexpected adverse events, any findings from other studies, tests in laboratory animals or in vitro testing that suggest a significant risk for human subjects, or any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. The sponsor must submit an IND safety report within 15 calendar days after the sponsor determines that the information qualifies for reporting. The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor’s initial receipt of the information. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, if at all. The FDA or the sponsor, acting on its own or based on a recommendation from the sponsor’s data safety monitoring board may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the biological product has been associated with unexpected serious harm to patients. 43 Concurrent with clinical trials, companies usually complete additional animal studies and also must develop additional information about the physical characteristics of the biological product as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. To help reduce the risk of the introduction of adventitious agents with use of biological products, the PHS Act emphasizes the importance of manufacturing control for products whose attributes cannot be precisely defined. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the sponsor must develop methods for testing the identity, strength, quality, potency and purity of the final biological product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the biological product candidate does not undergo unacceptable deterioration over its shelf life. U.S. Review and Approval Processes After the completion of clinical trials of a biological product, FDA approval of a BLA must be obtained before commercial marketing of the biological product in the United States. The BLA must include results of product development, laboratory and animal studies, human studies, information on the manufacture and composition of the product, proposed labeling and other relevant information. Within 60 days following submission of the application, the FDA reviews a BLA to determine if it is substantially complete before the FDA accepts it for filing. The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information. In this event, the BLA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. In most cases, the submission of a BLA is subject to a substantial application user fee, although the fee may be waived under certain circumstances. Under the performance goals and policies implemented by the FDA under the Prescription Drug User Fee Act, or PDUFA, for original BLAs, the FDA targets 10 months from the filing date in which to complete its initial review of a standard application and respond to the applicant, and six months from the filing date for an application with priority review. The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification. This review typically takes 12 months from the date the BLA is submitted to the FDA because the FDA has approximately two months to make a ‘‘filing’’ decision. The review process and the PDUFA goal date may be extended by three months if the FDA requests or the BLA sponsor otherwise provides additional information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date. Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the BLA. The FDA reviews the BLA to determine, among other things, whether the proposed product is safe, pure and potent, for its intended use, and whether the product is being manufactured in accordance with cGMP to ensure the continued safety, purity and potency of such product. The FDA may refer applications for novel biological products or biological products that present difficult or novel questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. During its BLA review, the FDA also will determine whether a Risk Evaluation and Mitigation Strategy, or REMS, is necessary to assure the safe use of the biological product. If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS; the FDA will not approve the BLA without a REMS, if required. Before approving a BLA, the FDA typically will inspect the facilities at which the product is manufactured. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. For a gene therapy product, the FDA also will not approve the product if the manufacturer is not in compliance with the CGTPs. These are FDA regulations that govern the methods used in, and the facilities and controls used for, the manufacture of human cells, tissues and cellular and tissue-based products, or HCT/Ps, which are human cells or tissue intended for implantation, transplant, infusion, or transfer into a human recipient. The primary intent of the CGTP requirements is to ensure that cell and tissue-based products are manufactured in a manner designed to prevent the introduction, transmission and spread of communicable disease. FDA regulations also require tissue establishments to register and list their HCT/Ps with the FDA and, when applicable, to evaluate donors through appropriate screening and testing. Additionally, before approving a BLA, the FDA will typically 44 inspect one or more clinical sites to assure that the clinical trials were conducted in compliance with IND study requirements and GCP requirements. To assure cGMP, CGTP and GCP compliance, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production and quality control. Under the Pediatric Research Equity Act, or PREA, a BLA or supplement to a BLA for a novel product (e.g., new active ingredient, new indication, etc.) must contain data to assess the safety and effectiveness of the biological product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may grant deferrals for submission of data or full or partial waivers. Unless otherwise required by regulation, PREA does not apply to any biological product for an indication for which orphan designation has been granted. Notwithstanding the submission of relevant data and information, the FDA may ultimately decide that the BLA does not satisfy its regulatory criteria for approval and deny approval. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret the same data. If the FDA decides not to approve the BLA in its present form, the FDA will issue a complete response letter that usually describes all of the specific deficiencies in the BLA identified by the FDA. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials. Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval. If a complete response letter is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter or withdraw the application. If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, including to subpopulations of patients, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings precautions or interactions be included in the product labeling. The FDA may impose restrictions and conditions on product distribution, prescribing or dispensing in the form of a REMS, or otherwise limit the scope of any approval. In addition, the FDA may require post-approval clinical trials designed to further assess a biological product’s safety, purity or potency, and testing and surveillance programs to monitor the safety of approved products that have been commercialized. Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making a drug or biological product available in the United States for this type of disease or condition will be recovered from sales of the product. Orphan product designation must be requested before submitting a BLA. After the FDA grants orphan product designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan product designation does not convey any advantage in or shorten the duration of the regulatory review and approval process. Orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biological product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity. Competitors, however, may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity. If a drug or biological product designated as an orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan product exclusivity. Orphan drug status in the EU has similar, but not identical, benefits. 45 Rare Pediatric Disease Designation and Priority Review Vouchers Under the FD&C Act, the FDA incentivizes the development of drugs and biological products that meet the definition of a “rare pediatric disease,” defined to mean a serious or life-threatening disease in which the serious of life-threatening manifestations primarily affect individuals aged from birth to 18 years and the disease affects fewer than 200,000 individuals in the United States or affects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making in the United States a drug or biological product for such disease or condition will be received from sales in the United States of such drug or biological product. The sponsor of a product candidate for a rare pediatric disease may be eligible for a voucher that can be used to obtain a priority review for a subsequent human drug or biological product application after the date of approval of the rare pediatric disease drug or biological product, referred to as a priority review voucher, or PRV. A sponsor may request rare pediatric disease designation from the FDA prior to the submission of its BLA. A rare pediatric disease designation does not guarantee that a sponsor will receive a PRV upon approval of its BLA. Moreover, a sponsor who chooses not to submit a rare pediatric disease designation request may nonetheless receive a PRV upon approval of their marketing application if they request such a voucher in their original marketing application and meet all of the eligibility criteria. If a PRV is received, it may be sold or transferred an unlimited number of times. Congress has extended the PRV program through September 30, 2024, with the potential for PRVs to be granted through September 30, 2026. Expedited Development and Review Programs The FDA has various programs, including fast track designation, breakthrough therapy designation, accelerated approval and priority review, that are intended to expedite or simplify the process for the development and FDA review of drugs and biologics that are intended for the treatment of serious or life-threatening diseases or conditions. These programs do not change the standards for approval but may help expedite the development or approval process. To be eligible for fast track designation, new drugs and biological products must be intended to treat a serious or life-threatening condition and demonstrate the potential to address unmet medical needs for the condition. Fast track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a new drug or biologic may request the FDA to designate the drug or biologic as a fast track product at any time during the clinical development of the product. One benefit of fast track designation, for example, is that the FDA may consider for review sections of the marketing application for a product that has received fast track designation on a rolling basis before the complete application is submitted. Under the FDA’s breakthrough therapy program, products intended to treat a serious or life-threatening disease or condition may be eligible for the benefits of the fast track program when preliminary clinical evidence demonstrates that such product may have substantial improvement on one or more clinically significant endpoints over existing therapies. Additionally, the FDA will seek to ensure the sponsor of a breakthrough therapy product receives timely advice and interactive communications to help the sponsor design and conduct a development program as efficiently as possible. Any product is eligible for priority review if it has the potential to provide safe and effective therapy where no satisfactory alternative therapy exists or a significant improvement in the treatment, diagnosis or prevention of a disease compared to marketed products. The FDA will attempt to direct additional resources to the evaluation of an application for a new drug or biological product designated for priority review in an effort to facilitate the review. Under priority review, the FDA’s goal is to review an application in six months once it is filed, compared to ten months for a standard review. Additionally, a product may be eligible for accelerated approval. Drug or biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval, which means that they may be approved on the basis of adequate and well-controlled clinical trials establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on the basis of an effect on an intermediate clinical endpoint other than survival or irreversible morbidity. As a condition of approval, the FDA may require that a sponsor of a drug or biological product receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials with due diligence, and, under the Food and Drug Omnibus Reform Act of 2022, or FDORA, the FDA is permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the 46 date of approval for a product granted accelerated approval. Under FDORA, the FDA has increased authority for expedited procedures to withdraw approval of a product or indication approved under accelerated approval if, for example, the confirmatory trial fails to verify the predicted clinical benefit of the product. In addition, for products being considered for accelerated approval, the FDA generally requires, unless otherwise informed by the agency, that all advertising and promotional materials intended for dissemination or publication be submitted to the agency for review, which could adversely affect the timing of the commercial launch of the product. Under FDORA, a platform technology incorporated within or utilized by a drug or biological product is eligible for designation as a designated platform technology if certain conditions are met. A sponsor may request the FDA to designate a platform technology as a designated platform technology concurrently with, or at any time after, submission of an IND application for a drug that incorporates or utilizes the platform technology that is the subject of the request. If so designated, the FDA may expedite the development and review of any subsequent original NDA or BLA for a drug that uses or incorporates the platform technology. Designated platform technology status does not ensure that a drug will be developed more quickly or receive FDA approval. In addition, the FDA may revoke a designation if the FDA determines that a designated platform technology no longer meets the criteria for such designation. RMAT Designation Congress amended the FD&C Act to facilitate an efficient development program for, and expedite review of regenerative medicine advanced therapy, or RMAT, which include cell and gene therapies, therapeutic tissue engineering products, human cell and tissue products and combination products using any such therapies or products. RMAT do not include those HCT/Ps regulated solely under section 361 of the PHS Act and 21 CFR Part 1271. This program is intended to facilitate efficient development and expedite review of regenerative medicine therapies, which are intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition and qualify for RMAT designation. A drug sponsor may request that FDA designate a drug as a RMAT concurrently with or at any time after submission of an IND. FDA has 60 calendar days to determine whether the drug meets the criteria, including whether there is preliminary clinical evidence indicating that the drug has the potential to address unmet medical needs for a serious or life-threatening disease or condition. A BLA for a regenerative medicine therapy that has received RMAT designation may be eligible for priority review or accelerated approval through use of surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites. Benefits of RMAT designation also include early interactions with FDA to discuss any potential surrogate or intermediate endpoint to be used to support accelerated approval. A regenerative medicine therapy with RMAT designation that is granted accelerated approval and is subject to post-approval requirements may fulfill such requirements through the submission of clinical evidence from clinical trials, patient registries, or other sources of real world evidence, such as electronic health records; the collection of larger confirmatory data sets; or post-approval monitoring of all patients treated with such therapy prior to its approval. Like some of the FDA’s other expedited development programs, RMAT designation does not change the standards for approval but may help expedite the development or approval process. Post-Approval Requirements Maintaining substantial compliance with applicable federal, state and local statutes and regulations requires the expenditure of substantial time and financial resources. Rigorous and extensive FDA regulation of biological products continues after approval, particularly with respect to cGMP. We currently rely, and may continue to rely, on third parties for the production of clinical and commercial quantities of any products that we may commercialize. Manufacturers of our products are required to comply with applicable requirements in the cGMP regulations, including quality control and quality assurance and maintenance of records and documentation. Other post-approval requirements applicable to biological products, include reporting of cGMP deviations that may affect the identity, potency, purity and overall safety of a distributed product, record-keeping requirements, reporting of adverse effects, reporting updated safety and efficacy information, and complying with electronic record and signature requirements. After a BLA is approved, the product also may be subject to official lot release. As part of the manufacturing process, the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution. If the product is subject to official release by the FDA, the manufacturer submits samples of each lot of product to the FDA together with a release protocol showing a summary of the history of manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot. The FDA also may perform certain confirmatory 47 tests on lots of some products before releasing the lots for distribution by the manufacturer. In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity, potency and effectiveness of biological products. We also must comply with the FDA’s advertising and promotion requirements, such as those related to direct-to-consumer advertising, the prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet. Discovery of previously unknown problems or the failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market as well as possible civil or criminal sanctions. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant or manufacturer to administrative or judicial civil or criminal sanctions and adverse publicity. FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical holds, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications with doctors or other stakeholders, debarment, restitution, disgorgement of profits, or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us. Biological product manufacturers and other entities involved in the manufacture and distribution of approved biological products, and those supplying products, ingredients, and components of them, are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance. Discovery of problems with a product after approval may result in restrictions on a product, manufacturer, or holder of an approved BLA, including withdrawal of the product from the market. In addition, changes to the manufacturing process or facility generally require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval. U.S. Patent Term Restoration and Marketing Exclusivity Depending upon the timing, duration and specifics of any FDA approval of the use of our product candidates, some U.S. patents that may issue from our pending patent applications may be eligible for limited patent term extension under the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of a BLA plus the time between the submission date of a BLA and the approval of that application, except that the review period is reduced by any time during which the applicant failed to exercise due diligence. Only one patent applicable to an approved biological product is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent. In addition, only those claims covering the approved product, a method for using it, or a method for manufacturing it may be extended, and a patent can only be extended once and only for a single product. The USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we may apply for restoration of patent term for one of the patents that may issue from our pending patent applications, if and as applicable, to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant BLA. However, there can be no assurance that our pending patent applications will issue or that we will benefit from any patent term extension or favorable adjustments to the terms of any patents we may own or in-license in the future. A biological product can obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods for all formulations, dosage forms, and indications of the biologic. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study, provided that at the time pediatric exclusivity is granted there is not less than nine months of term remaining. 48 The ACA created an abbreviated approval pathway for biological products shown to be similar to, or interchangeable with, an FDA-licensed reference biological product. This amendment to the PHS Act attempts to minimize duplicative testing. Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity and potency, can be shown through analytical studies, animal studies and a clinical trial or trials. Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product and, for products administered multiple times, the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic. A reference biological product is granted four- and 12-year exclusivity periods from the time of first licensure of the product. The FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product, and the FDA will not approve an application for a biosimilar or interchangeable product based on the reference biological product until 12 years after the date of first licensure of the reference product. “First licensure” typically means the initial date the particular product at issue was licensed in the United States. Date of first licensure does not include the date of licensure of (and a new period of exclusivity is not available for) a biological product if the licensure is for a supplement for the biological product or for a subsequent application by the same sponsor or manufacturer of the biological product (or licensor, predecessor in interest, or other related entity) for a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength, or for a modification to the structure of the biological product that does not result in a change in safety, purity, or potency. Therefore, one must determine whether a new product includes a modification to the structure of a previously licensed product that results in a change in safety, purity, or potency to assess whether the licensure of the new product is a first licensure that triggers its own period of exclusivity. Whether a subsequent application, if approved, warrants exclusivity as the “first licensure” of a biological product is determined on a case-by-case basis with data submitted by the sponsor. Additional Regulation In addition to the foregoing, state and federal laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health Act, the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business. These and other laws govern our use, handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated by, our operations. If our operations result in contamination of the environment or expose individuals to hazardous substances, we could be liable for damages and governmental fines. We believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on our business. We cannot predict, however, how changes in these laws may affect our future operations. U.S. Foreign Corrupt Practices Act The U.S. Foreign Corrupt Practices Act, to which we are subject, prohibits corporations and individuals from engaging in certain activities to obtain or retain business or to influence a person working in an official capacity. It is illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity. Government Regulation Outside of the United States In addition to regulations in the United States, we are subject to a variety of regulations in other jurisdictions governing, among other things, research and development, clinical trials, testing, manufacturing, safety, efficacy, labeling, packaging, storage, record keeping, distribution, reporting, advertising and other promotional practices involving biological products as well as authorization and approval of our products. Because biologically sourced raw materials are subject to unique contamination risks, their use may be restricted in some countries. The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In all cases, the clinical trials must be conducted in accordance with GCP and the 49 applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki. If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution. EU Clinical Trials Regulation In April 2014, the EU overhauled the system of approvals for clinical trials in the EU. The transitory provisions of the new Clinical Trials Regulation provide that, by January 31, 2025, all ongoing clinical trials must have transitioned to the new Regulation. Specifically, the new Regulation, which is directly applicable in all Member States (meaning that no national implementing legislation in each EU Member State is required), aims at simplifying and streamlining the approval of clinical trials in the EU. For instance, the new Clinical Trials Regulation provides for a streamlined application procedure via a single entry point and strictly defined deadlines for the assessment of clinical trial applications. EU Drug Review and Approval In the EU, medicinal products can only be commercialized after obtaining a marketing authorization. To obtain regulatory approval of a medicinal product in the EU, we must submit a marketing authorization application, or MAA. A centralized marketing authorization is issued by the European Commission through the centralized procedure, based on the opinion of the Committee for Medicinal Products for Human Use, or CHMP, of the EMA, and is valid throughout the EU, and in the additional Member States of the EEA (Norway, Iceland and Liechtenstein). The centralized procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products, advanced-therapy medicinal products (gene-therapy, somatic cell-therapy or tissue-engineered medicines), and medicinal products containing a new active substance indicated for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and other immune dysfunctions, and viral diseases. The centralized procedure is optional for products containing a new active substance not yet authorized in the EU, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU. Under the centralized procedure the maximum timeframe for the evaluation of an MAA by the EMA is 210 days, excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP. Clock stops may extend the timeframe of evaluation of an MAA considerably beyond 210 days. Where the CHMP gives a positive opinion, it provides the opinion together with supporting documentation to the European Commission, who make the final decision to grant a marketing authorization, which is issued within 67 days of receipt of the EMA’s recommendation. Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of major public health interest, particularly from the point of view of therapeutic innovation. The timeframe for the evaluation of an MAA under the accelerated assessment procedure is 150 days, excluding clock stops, but it is possible that the CHMP may revert to the standard time limit for the centralized procedure if it determines that the application is no longer appropriate to conduct an accelerated assessment. Periods of Authorization and Renewals A marketing authorization is valid for five years, in principle, and it may be renewed after five years on the basis of a re-evaluation of the risk benefit balance by the EMA for a centrally authorized product, or by the competent authority of the authorizing Member State for a nationally authorized product. Once renewed, the marketing authorization is valid for an unlimited period, unless the European Commission or the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal period. Any authorization that is not followed by the placement of the product on the EU market (in the case of the centralized procedure) or on the market of the authorizing Member State (for a nationally authorized product) within three years after authorization, or if the product is removed from the market for three consecutive years, ceases to be valid (the so-called sunset clause). 50 Data and Marketing Exclusivity The EU also provides opportunities for market exclusivity. Upon receiving marketing authorization in the EU, innovative medicinal products generally receive eight years of data exclusivity and an additional two years of market exclusivity. If granted, data exclusivity prevents generic or biosimilar applicants from referencing the innovator’s preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the EU, during a period of eight years from the date on which the reference product was first authorized in the EU. During the additional two-year period of market exclusivity, a generic or biosimilar marketing authorization can be submitted and the innovator’s data may be referenced, but no generic or biosimilar product can be marketed until the expiration of the market exclusivity period. The overall ten-year period will be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to authorization, is held to bring a significant clinical benefit in comparison with existing therapies. Even if an innovative medicinal product gains the prescribed period of data exclusivity, another company may market another version of the product if such company obtained a marketing authorization based on an MAA with a complete independent data package of pharmaceutical tests, preclinical tests and clinical trials. There is, however, no guarantee that a product will be considered by the EU’s regulatory authorities to be an innovative medicinal product, and products may therefore not qualify for data exclusivity. Orphan Drug Designation and Exclusivity The criteria for designating an “orphan medicinal product” in the EU are similar in principle to those in the United States. Orphan medicinal products are eligible for financial incentives such as reduction of fees or fee waivers. The application for orphan designation must be submitted before the application for marketing authorization. The applicant will receive a fee reduction for the MAA if the orphan designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted. Orphan designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. Products with an orphan designation in the EU can receive 10 years of market exclusivity, during which time no “similar medicinal product” for the same indication may be placed on the market. A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication. An orphan medicinal product can also obtain an additional two years of market exclusivity in the EU where an agreed pediatric investigation plan for pediatric studies has been complied with. No extension to any supplementary protection certificate, or SPC, can be granted on the basis of pediatric studies for orphan indications. The 10-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity. Otherwise, orphan medicinal product marketing exclusivity may be revoked only in very select cases, such as if: • a second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; • the marketing authorization holder of the authorized orphan medicinal product consents to a second orphan medicinal product application; or • the marketing authorization holder of the authorized orphan medicinal product cannot supply enough orphan medicinal product. Pediatric Development In the EU, companies developing a new medicinal product must agree upon a Pediatric Investigation Plan, or PIP, with the EMA’s Pediatric Committee, or PDCO, and must conduct pediatric clinical trials in accordance with that PIP, unless a waiver applies, (e.g., because the relevant disease or condition occurs only in adults). The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the product for which marketing authorization is being sought. The marketing authorization application for the product must include the 51 results of pediatric clinical trials conducted in accordance with the PIP, unless a waiver applies or a deferral has been granted by the PDCO of the obligation to implement some or all of the measures of the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults, in which case the pediatric clinical trials must be completed at a later date. Products that are granted a marketing authorization with the results of the pediatric clinical trials conducted in accordance with the PIP are eligible for a six month extension of the protection under an SPC, even where the trial results are negative, provided an application for such extension is made at the same time as filing the SPC application for the product, or at any point up to two years before the SPC expires. In the case of orphan medicinal products, a two year extension of the orphan market exclusivity may be available. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted. PRIME Designation In March 2016, the EMA launched an initiative to facilitate development of product candidates in indications, often rare, for which few or no therapies currently exist. The PRIority MEdicines, or PRIME, scheme is intended to encourage product development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation, where the MAA will be made through the centralized procedure. Eligible products must target conditions for which there is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the EEA or, if there is, the new medicine will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods of therapy or improving existing ones. Applicants will typically be at the exploratory clinical trial phase of development and will have preliminary clinical evidence in patients to demonstrate the promising activity of the medicine and its potential to address, to a significant extent, an unmet medical need. Products from small- and medium-sized enterprises may qualify for earlier entry into the PRIME scheme than larger companies if the applicant has compelling non-clinical data and tolerability data from initial clinical trials of the product. Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements and accelerated MAA assessment once a dossier has been submitted. Importantly, a dedicated Agency contact and rapporteur from the CHMP or CAT are appointed early in the PRIME scheme facilitating increased understanding of the product at EMA’s Committee level. A kick-off meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies. Where, during the course of development, a medicine no longer meets the eligibility criteria, support under the PRIME scheme may be withdrawn. Post-Approval Controls Following approval, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of the medicinal product. These include the following: • The holder of a marketing authorization must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, who is responsible for oversight of that system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports, or PSURs. • All new MAAs must include a risk management plan, or RMP, describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the marketing authorization. Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs or the conduct of additional clinical trials or post-authorization safety studies. RMPs and PSURs are routinely available to third parties requesting access, subject to limited redactions. • All advertising and promotional activities for the product must be consistent with the approved Summary of Product Characteristics and therefore all off-label promotion is prohibited. Direct-to-consumer advertising of prescription medicines is also prohibited in the EU. Although general requirements for advertising and 52 promotion of medicinal products are established under EU directives, the details are governed by regulations in each EU Member State and can differ from one country to another. The aforementioned EU rules are generally applicable in the EEA. Reform of the Regulatory Framework in the EU The European Commission introduced legislative proposals in April 2023 that, if implemented, will replace the current regulatory framework in the EU for all medicines (including those for rare diseases and for children). The European Commission has provided the legislative proposals to the European Parliament and the European Council for their review and approval. In October 2023, the European Parliament published draft reports proposing amendments to the legislative proposals, which will be debated by the European Parliament. Once the European Commission’s legislative proposals are approved (with or without amendment), they will be adopted into EU law. Brexit and the Regulatory Framework in the United Kingdom The United Kingdom, or UK, formally left the EU on January 31, 2020, and the EU and the UK have concluded a trade and cooperation agreement, or TCA, which has been formally applicable since May 1, 2021. The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of GMP, inspections of manufacturing facilities for medicinal products, and GMP documents issued, but does not foresee wholesale mutual recognition of UK and EU pharmaceutical regulations. At present, Great Britain has implemented EU legislation on the marketing, promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as amended) (under the Northern Ireland Protocol, the EU regulatory framework continues to apply in Northern Ireland). Except with respect to the new EU Clinical Trials Regulation, the regulatory regime in Great Britain therefore aligns in many ways with current EU medicines regulations, although it is possible that these regimes will diverge more significantly in the future now that Great Britain’s regulatory system is independent from the EU, and the TCA does not provide for mutual recognition of UK and EU pharmaceutical legislation. However, notwithstanding that there is no wholesale recognition of EU pharmaceutical legislation under the TCA, under a new framework by the Medicines and Healthcare Products Regulatory Agency, or MHRA, the MHRA has stated that it will take into account decisions on the approval of marketing authorizations from the EMA (and certain other regulators) when considering an application for a Great Britain marketing authorization. The UK and the European Commission announced a political agreement in principle to replace the Northern Ireland Protocol with a new set of arrangements, known as the “Windsor Framework,” to be effective as of January 1, 2025. This new framework fundamentally changes the existing system under the Northern Ireland Protocol, including with respect to the regulation of medicinal products in the UK. In particular, the MHRA will be responsible for approving all medicinal products destined for the UK market (i.e., Great Britain and Northern Ireland), and the EMA will no longer have any role in approving medicinal products destined for Northern Ireland. A single UK-wide marketing authorization will be granted by the MHRA for all medicinal products to be sold in the UK, enabling products to be sold in a single pack and under a single authorization throughout the UK. Other Healthcare Laws and Compliance Requirements Insurance and Coverage In the United States and markets in other countries, patients generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to new product acceptance. Our ability to successfully commercialize our product candidates will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. The availability of coverage and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford treatments such as gene therapy products. Sales of these or other product candidates that we may identify will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates will be paid by health 53 maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If coverage and adequate reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment. There is also significant uncertainty related to the insurance coverage and reimbursement of newly approved products and coverage may be more limited than the purposes for which the medicine is approved by the FDA or comparable foreign regulatory authorities. In the United States, the principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services, or HHS. CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree. Factors payors consider in determining reimbursement are based on whether the product is: • a covered benefit under its health plan; • safe, effective and medically necessary; • appropriate for the specific patient; • cost-effective; and • neither experimental nor investigational. In addition, many third-party payors are increasingly limiting both coverage and the level of reimbursement of new drugs. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. We cannot be sure that reimbursement will be available for any product candidate that we commercialize and, if reimbursement is available, the level of reimbursement. In addition, many pharmaceutical manufacturers must calculate and report certain price reporting metrics to the government, such as average sales price, or ASP, and best price. Penalties may apply in some cases when such metrics are not submitted accurately and timely. Further, these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs. Net prices for drugs may be also reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Other healthcare laws and compliance requirements In the United States, our current and future operations are subject to regulation by various federal, state and local authorities in addition to the FDA, including but not limited to, CMS, other divisions of HHS (such as the Office of Inspector General, Office for Civil Rights and the Health Resources and Service Administration), the U.S. Department of Justice, or DOJ, and individual U.S. Attorney offices within the DOJ, and state and local governments. For example, our clinical research, sales, marketing and scientific/educational grant programs may have to comply with the anti-fraud and abuse provisions of the Social Security Act, the false claims laws, the privacy and security provisions of the Health Insurance Portability and Accountability Act of 1996, or HIPAA, and similar state laws, each as amended, as applicable: • the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order, arrangement or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs; a person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation. Violations are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment, and exclusion from government healthcare programs. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim 54 for purposes of the federal False Claims Act or federal civil monetary penalties. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers and formulary managers, among others, on the other. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act or federal civil money penalties statute; • the federal civil and criminal false claims laws and civil monetary penalty laws, including the False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by, Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government. A claim that includes items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim under the False Claims Act. Manufacturers can be held liable under the False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. The False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the False Claims Act and to share in any monetary recovery; • HIPAA, which created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; • the federal transparency requirements under the Affordable Care Act, or ACA, including the provision commonly referred to as the Physician Payments Sunshine Act, and its implementing regulations, which require applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed healthcare practitioners and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; • federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers or patients; state laws that require pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or 55 otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state and local laws that require the licensure of sales representatives; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; data privacy and security laws and regulations in foreign jurisdictions that may be more stringent than those in the United States (such as the EU, which adopted the General Data Protection Regulation, which became effective in May 2018); state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect; and • state laws related to insurance fraud in the case of claims involving private insurers. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. Law enforcement authorities are increasingly focused on enforcing fraud and abuse laws, and it is possible that some of our practices may be challenged under these laws. Efforts to ensure that our current and future business arrangements with third parties, and our business generally, will comply with applicable healthcare laws and regulations will involve substantial costs. If our operations, including our arrangements with physicians and other healthcare providers, are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, administrative, criminal and/or civil penalties, damages, fines, disgorgement, reputational harm, imprisonment, the exclusion or suspension from federal and state healthcare programs such as Medicare and Medicaid and debarment from contracting with the U.S. government, and/or the 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. If any of the physicians or other healthcare providers or entities with whom we expect to do business are found to be not in compliance with applicable laws, they may be subject to similar penalties. The risk of our being found in violation of these laws is increased by the fact that many of these laws have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. The shifting compliance environment and the need to build and maintain a robust system to comply with multiple jurisdictions with different compliance and reporting requirements increases the possibility that a healthcare company may violate one or more of the requirements. Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial cost. Healthcare reform In the United States and some foreign jurisdictions, there have been, and likely will continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system directed at broadening the availability of healthcare, improving the quality of healthcare, and containing or lowering the cost of healthcare. For example, in 2010, the ACA was enacted which includes changes to the coverage and payment for products under government health care programs. Among other things, the ACA: • expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program; • extended the Medicaid Drug Rebate Program to utilization of prescriptions of individuals enrolled in Medicaid managed care plans; • established annual fees and taxes on manufacturers of certain branded prescription drugs; • created a Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70 percent point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.; and • expanded the entities eligible for discounts under the 340B Drug Pricing Program. 56 In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, on March 22, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100 percent of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024. Further, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress that include aggregate reductions of Medicare payments to providers of up to 2 percent per fiscal year, which will remain in effect through 2031. The American Taxpayer Relief Act of 2012 further reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Due to the Statutory Pay-As-You-Go Act of 2010, estimated budget deficit increases resulting from the American Rescue Plan Act of 2021, and subsequent legislation, Medicare payments to providers will be further reduced starting in 2025 absent further legislation. These laws and regulations may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used. Further, in 2018, the Right to Try Act, was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act. The prices of prescription pharmaceuticals in the United States and foreign jurisdictions are subject to considerable legislative and executive actions and could impact the prices we obtain for our products, if and when licensed. In August 2022, the Inflation Reduction Act, or the IRA, was signed into law. The IRA includes several provisions that will affect our business to varying degrees, including provisions that create a $2,000 out-of-pocket cap for Medicare Part D beneficiaries, impose new manufacturer financial liability on all drugs in Medicare Part D, allow the U.S. government to negotiate Medicare Part B and Part D pricing for certain high-cost drugs and biologics without generic or biosimilar competition, require companies to pay rebates to Medicare for drug prices that increase faster than inflation, and delay the rebate rule that would require pass through of pharmacy benefit manager rebates to beneficiaries. Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one orphan designation and for which the only approved indication is for that disease or condition. If a product receives multiple orphan designations or has multiple approved indications, it may not qualify for the orphan drug exemption. The implementation of the IRA is currently subject to ongoing litigation challenging the constitutionality of the IRA’s Medicare drug price negotiation program. The effects of the IRA on our business and the healthcare industry in general is not yet known. In addition to pricing regulations, reforms of regulatory approval frameworks may adversely affect our pricing strategy. For example, the current administration has issued multiple executive orders that have sought to reduce prescription drug costs. In February 2023, HHS also issued a proposal in response to an October 2022 executive order from the current administration that includes a proposed prescription drug pricing model that will test whether targeted Medicare payment adjustments will sufficiently incentivize manufacturers to complete confirmatory trials for drugs approved through the FDA’s accelerated approval pathway. Although a number of these and other proposed measures may require authorization through additional legislation to become effective, and the current administration may reverse or otherwise change these measures, both the current administration and Congress have indicated that they will continue to seek new legislative measures to control drug costs. Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. State legislatures have also been increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, 57 discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. It is difficult to predict the future legislative landscape in healthcare and the effect on our business, results of operations, financial condition and prospects. However, we expect that additional state and federal healthcare reform measures will be adopted in the future. Employees and Human Capital Resources As of December 31, 2023, we had 234 full-time employees, of which 112 have M.D. or Ph.D. degrees. Within our workforce, 202 employees are engaged in research and development and 32 are engaged in business development, finance, legal, and general management and administration. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants. The principal purposes of our equity incentive plans are to attract, retain and reward personnel through the granting of equity-based compensation awards in order to increase shareholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives. Our Corporate Information We were incorporated under the laws of the state of Delaware in September 2019 under the name Prime Medicine, Inc. Our principal executive offices are located at 21 Erie Street, Cambridge, MA 02139. Our telephone number is (617) 564-0013 and our website is located at www.primemedicine.com. References to our website are inactive textual references only and the content of our website should not be deemed incorporated by reference into this Annual Report on Form 10-K. Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our website located at www.primemedicine.com as soon as reasonably practicable after they are filed with or furnished to the Securities and Exchange Commission, or SEC. These reports are also available at the SEC’s website at www.sec.gov. Our Code of Business Conduct and Ethics is posted on our website located at https://investors.primemedicine.com/corporate-governance/documents-charters. A copy of our Corporate Governance Guidelines, and the charters of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee are posted on our website, www.primemedicine.com, under the heading “Investors—Corporate Governance” and are available in print to any person who requests copies by contacting us by calling (617) 564-0013 or by writing to Prime Medicine, Inc., 21 Erie Street, Cambridge, Massachusetts 02139. 58