What changed in this filing

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Item 9A. Controls and Procedures

2025-02-28 compared with 2024-03-01 · 498 added, 368 removed, 644 unchanged (57% of the section changed)

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Our management is responsible for establishing and maintaining adequate internal control over our financial reporting.

Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with United States GAAP.

purposes in accordance with United States GAAP.

Our internal control over financial reporting includes those policies and procedures that:

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become

inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024.

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Attestation Report of the Registered Public Accounting Firm

This Annual Report does not include an attestation report of out registered public accounting firm due to an exemption provided by the JOBS Act for “emerging growth companies.”

This Annual Report does not include an attestation report of out registered public accounting firm regarding our internal control over financial reporting due to an exemption provided by the JOBS Act for “emerging growth companies.”

Changes in Internal Control over Financial Reporting

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Other Information

From time to time, our officers (as defined in Rule 16a–1(f)) and directors may enter into Rule 10b5-1 or non-Rule 10b5-1 trading arrangements (as each such term is defined in Item 408 of Regulation S-K).

During the three months ended December 31, 2024, none of the Company’s directors or officers adopted , modified or terminated a plan or other arrangement intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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(incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 24, 2022)

3.2 Amended and Restated Bylaws of Prime Medicine, Inc.

(incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 24, 2022)

Certificate of Amendment to Third Amended and Restated Certificate of Incorporation of Prime Medicine, Inc.

(incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on June 12, 2024).

Second Amended and Restated Bylaws of Prime Medicine, Inc.

(incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on May 21, 2024).

4.1 Amended and Restated Investors’ Rights Agreement among the Registrant and certain of its stockholders, dated April 20, 2021 (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

4.2 Form of Common Stock Certificate (incorporated by reference to Exhibit 4.2 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

4.3* Description of Securities (in corporated by reference t o Ex hibit 4.3 of the Registrant ’ s 2022 Annual Report on Form 10-K , filed with the SEC on March 9, 2023)

333-267579) filed with the SEC on October 17, 2022)

Description of Securities (incorporated by reference to Exhibit 4.3 of the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 9, 2023)

Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K, filed with the SEC on February 16, 2024)

10.1# 2019 Stock Option and Grant Plan, as amended, and forms of award agreements thereunder (incorporated by reference to Exhibit 10.1 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

10.2# 2022 Stock Option and Incentive Plan and forms of award agreements thereunder (incorporated by reference to Exhibit 10.2 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

10.3# 2022 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.3 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

10.4# Senior Executive Cash Incentive Bonus Plan (incorporated by reference to Exhibit 10.4 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

10.5# Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.5 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

10.5# Amended and Restated Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.

1 of the Registrant’s Q uarterly Report on Form 10-Q, filed with the SEC on A u gust 8, 2024)

10.6# Form of Officer Indemnification Agreement (incorporated by reference to Exhibit 10.6 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

10.7# Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.7 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

Exhibit number Description of exhibit

10.8# Amended and Restated Employment Agreement, dated July 7, 2022, between the Registrant and Keith Gottesdiener (incorporated by reference to Exhibit 10.8 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

10.9# Amended and Restated Employment Agreement, dated July 20, 2022, between the Registrant and Jeremy Duffield (incorporated by reference to Exhibit 10.9 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

10.10# Amended and Restated Employment Agreement, dated July 11, 2022, between the Registrant and Ann Lee (incorporated by reference to Exhibit 10.10 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

Exhibit number Description of exhibit

333-267579) filed with the SEC on October 17, 2022)

Amended and Restated Employment Agreement, dated July 7, 2022, between the Registrant and Carman Alenson (incorporated by reference to Exhibit 10.11 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022

333-267579), filed with the SEC on October 17, 2022

Amended and Restated Employment Agreement, dated July 7, 2022, between the Registrant and Meredith Goldwasser (incorporated by reference to Exhibit 10.12 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

Employment Agreement, effective as of January 17, 2024 , betwee n the Registrant and Allan Reine (i ncorporated by referen ce to Ex hibit 10.1 of the Registra nt ’ s Cur rent Report on Form 8-K f iled with the SEC on January 5, 202 4 )

333-267579), filed with the SEC on October 17, 2022)

Employment Agreement, effective as of January 17, 2024, between the Registrant and Allan Reine (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on January 5, 2024)

Collaboration and License Agreement, dated September 26, 2019, between Beam Therapeutics Inc.

and the Registrant (incorporated by reference to Exhibit 10.13 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

License Agreement, dated September 26, 2019, between The Broad Institute, Inc.

and the Registrant, as amended (incorporated by reference to Exhibit 10.14 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

Amendment No.

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and the Registrant (incorporated by reference to Exhibit 10.15 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

Amendment No.

1 unchanged sentence

and the Registrant (incorporated by reference to Exhibit 10.16 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

Amendment No.

3 to License Agreement, dated December 22, 2022, between The Broad Institute, Inc.

and the Registrant (incorporated by reference to Exhibit 10 .

17 of the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 9, 2023)

and the Registrant (incorporated by reference to Exhibit 10.17 of the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 9, 2023)

Amendment No.

4 to License Agreement, dated September 27, 2024, between The Broad Institute, Inc.

and the Registrant (incorporated by reference to Exhibit 10.3 of the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 12, 2024)

License Agreement, dated December 22, 2022, between The Broad Institute, Inc.

2 unchanged sentences

and the Registrant (incorporated by reference to Exhibit 10.17 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

License Agreement, dated March 16, 2020, between MIL 21E, LLC and the Registrant, as amended (incorporated by reference to Exhibit 10.18 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

Amendment No.

12 to License Agreement, dated October 2, 2023, between MIL 21E, LLC and the Registrant

Consulting Agreement between the Registrant and David Liu, dated September 13, 2019 (incorporated by reference to Exhibit 10.19 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

Amendment No.

1 to the Consulting Agreement between the Registrant and David Liu, dated October 22, 2021 (incorporated by reference to Exhibit 10.20 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

333-267579) filed with the SEC on October 17, 2022)

Andrew Anzalone Offer Letter, dated December 20, 2019 (incorporated by reference to Exhibit 10.21 of the Registrant’s Registration Statement on Form S-1/A (File No.

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Form of Executive Employment Agreement (incorporated by reference to Exhibit 10.23 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022

333-267579) filed with the SEC on October 17, 2022

Amendment No.

1 to Amended and Restated Employment Agreement, dated July 6, 2023, between Registrant and Keith Gottesdiener (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 3, 2023).

Lease Agreement, dated as of November 22, 2021, between NW Cambridge Property Owner, LLC and the Registrant (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 7, 2023)

Exhibit number Description of exhibit

21.1 Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 of the Registrant’s Registration Statement on Form S-1/A (File No.

333-267579) filed on October 17, 2022)

Securities Purchase Agreement, dated September 28, 2024, by and between Juno Therapeutics, Inc.

and the Registrant (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November 12, 2024)

Research Collaboration and License Agreement, dated September 28, 2024, by and between Juno Therapeutics, Inc.

and the Registrant (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 12, 2024)

P rime Medicine, Inc .

Amended and Restated Insider Trading Policy

Subsidiaries of the Registrant

Consent of PricewaterhouseCoopers, LLP, Independent Registered Public Accounting Firm

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Prime Medicine, Inc.

Compensation Recovery Policy, dated September 15, 2023

Compensation Recovery Policy, dated September 15, 2023 (incorporated by reference to Exhibit 97.1 of the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 1, 2024)

101.INS* Inline XBRL Instance Document

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Prime Medicine, Inc.

March 1, 2024

February 28, 2025

/s/ Keith Gottesdiener

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(Principal Executive Officer)

March 1, 2024

February 28, 2025

Keith Gottesdiener

/s/ Allan Reine

Chief Financial Officer

/s/ Allan Reine Chief Financial Officer

(Principal Financial Officer)

March 1, 2024

February 28, 2025

/s/ Carman Alenson Chief Accounting Officer

(Principal Accounting Officer)

March 1, 2024

February 28, 2025

Carman Alenson

/s/ Thomas Cahill Director March 1, 2024

/s/ Thomas Cahill Director February 28, 2025

Thomas Cahill

/s/ Wendy Chung Director March 1, 2024

/s/ Kaye Foster Director March 1, 2024

/s/ Wendy Chung Director February 28, 2025

/s/ Kaye Foster Director February 28, 2025

/s/ Michael Kelly

Director March 1, 2024

Director February 28, 2025

Michael Kelly

/s/ Jeff Marrazzo

Director March 1, 2024

/s/ Jeff Marrazzo Director February 28, 2025

Jeff Marrazzo

/s/ Robert Nelsen Director March 1, 2024

/s/ Robert Nelsen Director February 28, 2025

Robert Nelsen

/s/ David Schenkein

Director March 1, 2024

Director February 28, 2025

David Schenkein

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Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Redeemable Convertible and Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of Prime Medicine, Inc.

and its subsidiary (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, of redeemable convertible and convertible preferred stock and stockholders' equity (deficit) and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiary (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, stockholders' equity and of cash flows for the years then ended, including the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt About the Company's Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company has incurred recurring losses from operations, has an accumulated deficit, and needs to raise additional capital to fund future operations, which raises substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, the Company will require additional financing to fund future operations.

Management’s evaluation of the events and conditions and management’s plans to mitigate these matters are also described in Note 1.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

March 1, 2024

February 28, 2025

We have served as the Company's auditor since 2021.

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Accrued expenses and other current liabilities 15,904 14,110

14,110 10,688

Accrued settlement payment — related party — 13,500

Deferred revenue — related party 7,092 —

Operating lease liability 3,614 9,276

Total current liabilities 37,961 56,423

Deferred revenue, net of current — related party 63,218 —

Operating lease liability, net of current 37,180 4,357

Non current deferred tax liability — 279

Research and development funding liability 6,000 —

Total liabilities 144,359 60,780

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Total liabilities and stockholders’ equity $ 297,508 $ 193,851

_____________________

(1) Includes related party amount of $ 0.3 million as of December 31, 2022.

The accompanying notes are an integral part of these consolidated financial statements.

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(in thousands, except share and per share amounts) 2024 2023

Collaboration revenue — related party $ 1,609 $ —

Collaboration revenue 1,374 —

Total revenue 2,983 —

Operating expenses:

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Loss from operations ( 202,467 ) ( 204,792 )

Other income (expense):

Other income:

Interest income 3,522 2,811

Accretion (amortization) of investments 3,507 5,677

Change in fair value of short-term investment — related party ( 485 ) ( 2,382 )

Other income, net 41 274

Total other income (expense), net 6,380 ( 6,225 )

Total other income, net 6,585 6,380

Net loss before income taxes ( 195,882 ) ( 198,412 )

Benefit from income taxes — 279

Net loss $ ( 198,133 ) $ ( 121,821 )

Cumulative dividend on preferred stock — ( 20,193 )

Net loss attributable to common stockholders $ ( 195,882 ) $ ( 198,133 )

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PRIME MEDICINE, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE AND CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Redeemable Convertible Preferred Stock Convertible Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity (Deficit)

(in thousands, except share amounts) Shares Amount Shares Amount Shares Amount

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity

(in thousands, except share amounts) Shares Amount

Balances at December 31, 2022 97,209,213 $ 2 $ 609,849 $ ( 384 ) $ ( 293,197 ) $ 316,270

Issuance of common stock upon exercise of stock options 167,908 — 655 — — 655

Reclassification of forward contract — related party — — — — 1,101,525 — 12,020 — — 12,020

Conversion of convertible preferred stock to common stock upon closing of initial public offering ( 115,761,842 ) ( 196,157 ) ( 45,658,957 ) ( 199,643 ) 51,923,758 1 395,800 — — 395,801

Issuance of common stock from initial public offering, net of issuance costs and underwriting fees of $ 5.1 million

— — — — 11,721,456 1 180,188 — — 180,189

Repurchase of unvested restricted common stock — — — — ( 11,160 ) — — — — —

Stock-based compensation expense — — 13,910 — — 13,910

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Balances at December 31, 2023 97,377,121 $ 2 $ 624,414 $ ( 15 ) $ ( 491,330 ) $ 133,071

Issuance of common stock upon exercise of stock options — — — — 167,908 — 655 — — 655

Issuance of common stock from public offering, net of issuance costs of $ 8.9 million

22,560,001 — 132,055 — — 132,055

Issuance of pre-funded warrants, net of issuance costs of $ 1.2 million

— — 18,800 — — 18,800

Issuance of common stock under the Securities Purchase Agreement to BMS — related party (Note 9) 11,006,163 — 38,081 — — 38,081

Issuances of common stock under the employee stock purchase plan 189,509 — 837 — — 837

Issuances of common stock upon exercise of stock options 28,048 — 103 — — 103

Stock-based compensation expense — — 26,068 — — 26,068

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Accrued settlement payment — related party ( 13,500 ) 13,500

Deferred revenue — related party 70,310 —

Lease liability ( 6,461 ) ( 12,296 )

Net cash used in operating activities ( 122,865 ) ( 165,412 )

Cash flows provided by (used in) investing activities:

Cash flows provided by investing activities:

Maturities of investments 204,200 132,556

1 unchanged sentence

Purchases of property and equipment ( 7,294 ) ( 8,724 )

Payments of security deposits ( 170 ) ( 665 )

Net cash provided by (used in) investing activities 18,711 ( 47,096 )

Return (payment) of security deposit 1,000 ( 170 )

Net cash provided by investing activities 68,457 18,711

Cash flows provided by financing activities:

Proceeds from follow-on offering, net of issuance costs 132,055 —

Proceeds from issuance of pre-funded warrants, net of issuance costs 18,800 —

Proceeds from issuance of common stock under the BMS Securities Purchase Agreement — related party 38,081 —

Proceeds from research and development funding liability 6,000 —

Proceeds from ESPP offerings 837 —

Net proceeds from stock option exercises 103 655

Proceeds from initial public offering, net of underwrites discounts and commissions and deferred offering costs — 185,317

Payments of deferred offering costs — ( 4,042 )

Net cash provided by financing activities 195,876 655

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Cash, cash equivalents, and restricted cash at end of period $ 196,538 $ 55,070

Reconciliation of cash, cash equivalents and restricted cash:

Cash, cash equivalents, and restricted cash at end of period $ 55,070 $ 201,116

Restricted cash 13,496 13,496

Total cash, and cash equivalents $ 41,574 $ 187,620

The accompanying notes are an integral part of these consolidated financial statements.

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(in thousands) 2024 2023

Reconciliation of cash, cash equivalents and restricted cash:

Cash, cash equivalents, and restricted cash at end of period $ 196,538 $ 55,070

restricted cash 14,062 13,496

Total cash, and cash equivalents $ 182,476 $ 41,574

Supplemental cash flow information:

Decrease in right-of-use assets due to lease termination $ 6,081 $ —

Right-of-use assets obtained in exchange for new operating lease liabilities $ 44,935 $ 3,265

Decrease in right-of-use assets due to lease termination $ — $ 6,081

Supplemental disclosure of non-cash investing and financing activities:

Purchases of property and equipment included in accounts payable and accrued expenses $ 1,154 $ 575

Conversion of convertible preferred stock to common stock upon closing of initial public offering $ — $ 395,800

Settlement of related party forward contract $ — $ 12,020

Cash taxes paid $ — $ 141

The accompanying notes are an integral part of these consolidated financial statements.

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Nature of the Business and Basis of Presentation

Prime Medicine, Inc., together with its consolidated subsidiary (the “Company”) is a biotechnology company committed to delivering a new class of differentiated one-time curative genetic therapies to address the widest spectrum of diseases.

The Company is deploying Prime Editing technology, which it believe is a versatile, precise, and efficient gene editing technology.

Prime Medicine, Inc., together with its consolidated subsidiary (the “Company”) is a biotechnology company committed to delivering a new class of differentiated one-time curative treatments.

The Company is deploying Prime Editing technology, which it believes is a versatile, precise, and efficient gene editing technology.

The Company was incorporated in the State of Delaware in September 2019.

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Further, in lieu of common stock to certain investors, the Company sold pre-funded warrants to purchase 3,200,005 shares of common stock at a public offering price of $ 6.24999 per pre-funded warrant, which represents the per share public offering price of each share of common stock less the $ 0.00001 per share exercise price for each pre-funded warrant.

As a result of the offering, the Company received approximately $ 150.9 million in net proceeds, after deducting underwriting discounts, commissions and estimated offering costs of $ 10.1 million.

As a result of the offering, the Company received approximately $ 150.9 million in net proceeds, after deducting underwriting discounts, commissions and offering costs of $ 10.1 million.

On September 28, 2024 (the “Effective Date”), the Company entered into a Research Collaboration and License Agreement (the “BMS Collaboration Agreement”) with Juno Therapeutics, Inc., a wholly-owned subsidiary of the Bristol-Myers Squibb Company (“BMS”).

Additionally, on the Effective Date, the Company entered into a Securities Purchase Agreement (the “BMS Purchase Agreement”) with BMS, pursuant to which the Company agreed to sell and issue shares of its common stock to BMS.

The BMS Collaboration Agreement and the BMS Purchase Agreement are discussed in greater detail in Note 9, License and Collaboration Agreements .

Under the BMS Collaboration Agreement, the Company received a $ 55.0 million equity investment and a $ 55.0 million upfront payment.

Since its inception, the Company has incurred substantial losses.

As of December 31, 2024, the Company had an accumulated deficit of $ 687.2 million and expects to generate operating losses and negative operating cash flows for the foreseeable future.

As of December 31, 2023, the Company maintains cash, cash equivalents, short-term investments, and related party short-term investments of $ 121.7 million and expects that this, together with the net proceeds from the February equity offering of approximately $ 150.9 million, will be sufficient to fund operations for at least the next twelve months from the date of issuance of this Annual Report on Form 10-K.

The Company will need additional financing to support its continuing operations and pursue its growth strategy.

Until such time as the Company can generate significant revenue from product sales, if ever, it expects to finance its operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements.

The Company may be unable to raise additional funds or enter into such other agreements when needed on favorable terms or at all.

The inability to raise capital as and when needed would have a negative impact on the Company’s financial condition and its ability to pursue its business strategy.

The Company will need to generate significant revenue to achieve profitability, and it may never do so.

As of December 31, 2024, the Company maintains cash, cash equivalents, short-term investments, and related party short-term investments of $ 190.4 million.

Going Concern

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern , ("ASC 205-40") the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date on which this Annual Report on Form 10-K is filed.

Based on the Company's cash, cash equivalents, short-term investments, and related party short-term investments as of December 31, 2024, the Company's current and forecasted level of operations, and its forecasted cash flows, the Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

Management plans to provide for the Company’s capital requirements through financing or other transactions, and selling shares under the Company's “at the market offering” program.

There can be no assurance that the Company will be able to raise additional capital to fund operations with terms acceptable to the Company, or at all.

Because certain elements of management’s plans to mitigate the conditions that raised substantial doubt about the Company’s ability to continue as a going concern are outside of the Company’s control, including the ability to raise capital through an equity or other financing, those elements cannot be considered

probable according to ASC 205-40, and therefore cannot be considered in the evaluation of mitigating factors.

As a result, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for 12 months from the date these consolidated financial statements are issued.

The consolidated financial statements as of December 31, 2024 have been prepared under the assumption that the Company will continue as a going concern for the next 12 months and that contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business.

The Company’s ability to continue as a going concern is dependent upon its uncertain ability to obtain additional capital, reduce expenditures and/or execute on its business plan.

These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Risks and Uncertainties

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Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

The Company will need to raise additional capital to support its continuing operations and to pursue its growth strategy.

The Company may be unable to raise additional capital or enter into such other agreements when needed on favorable terms or at all.

The inability to raise capital as and when needed would have a negative impact on the Company’s financial condition and its ability to pursue its business strategy.

The Company will need to generate significant revenue to achieve profitability, and it may never do so.

Basis of Presentation

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The Company’s consolidated financial statements include the accounts of Prime Medicine, Inc.

and its wholly owned subsidiary Prime Medicine Massachusetts Securities Corp., a Massachusetts securities corporation.

and its wholly owned subsidiary Prime Medicine Securities Corp., a Massachusetts securities corporation.

All significant intercompany balances and transactions have been eliminated in consolidation.

Reverse Stock Split

On October 12, 2022, in connection with the Company’s initial public offering (“IPO”), the Company effected a 1-3.10880 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios of each series of the Company’s preferred stock.

Accordingly, all share and per share amounts for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split and adjustment of the preferred stock conversion ratios.

Change in Presentation

For the year ended December 31, 2024, “Other income, net” as presented on the consolidated statements of operations and comprehensive loss was disaggregated into “Accretion (amortization) of investments,” “Interest income,” and “Other income, net”.

In addition, the Company updated its presentation of accrued expenses footnote to better represent the nature of the accrued expense.

As a result, a portion of “Accrued professional fees” was disaggregated into “Facility related” and the remaining amounts were included as “Other”.

These presentations have been conformed for all previous periods presented and had no impact on previously reported results.

Summary of Significant Accounting Policies

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods.

The preparation of the Company’s consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

Significant estimates and assumptions reflected within these consolidated financial statements include, but are not limited to, the valuation of the Company’s stock-based awards.

The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

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Actual results may differ materially from those estimates or assumptions.

Significant estimates, as determined by the Company, are discussed in greater detail in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations .

Concentrations of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and restricted cash.

The Company invests in U.S.

Treasury securities and maintains its cash and cash equivalents at high-quality and accredited financial institutions in amounts that could exceed federally insured limits.

Under its investment policy, the Company invests in U.S.

Treasury, government securities, and corporate debt and maintains its cash and cash equivalents at high-quality and accredited financial institutions in amounts that could exceed federally insured limits.

Cash equivalents are invested in money market funds.

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Restricted cash consists of letters of credit that are required to be maintained in connection with the Company’s lease arrangements.

The Company classifies its restricted cash as current or non-current on the consolidated balance sheets based on the expected release dates of the restrictions.

Short-term Investments and Related Party Short-Term Investment

The Company’s short-term investments consist of investments in U.S.

Treasury securities with remaining maturities beyond three months at the date of purchase and one year or less from the balance sheet date.

The Company’s short-term investments consist of investments in securities with remaining maturities beyond three months at the date of purchase and one year or less from the balance sheet date.

The Company classifies its investments as available-for-sale and carries them at fair market value.

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Expenditures for repairs and maintenance that do not improve or extend the life of the respective assets are charged to expense as incurred.

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property and equipment, and operating lease right-of-use assets.

Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets.

If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value.

An impairment loss would be recognized in loss from operations when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount.

If such asset group is considered to be impaired, the impairment loss to be recognized is measured based on the excess of the carrying value of the impaired asset group over its fair value.

The Company accounts for leases in accordance with ASC 842, Leases .

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A lease qualifies as a finance lease if any of the following criteria are met at the inception of the lease:

(i) there is a transfer of ownership of the leased asset to the Company by the end of the lease term, (ii) the Company holds an option to purchase the leased asset that it is reasonably certain to exercise, (iii) the lease term is for a major part of the remaining economic life of the leased asset, (iv) the present value of the sum of lease payments equals or exceeds substantially all of the fair value of the leased asset, or (v) the nature of the leased asset is specialized to the point that it is expected to provide the lessor no alternative use at the end of the lease term.

point that it is expected to provide the lessor no alternative use at the end of the lease term.

All other leases are recorded as operating leases.

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The amounts determined for the Company’s right-of-use assets and lease liabilities generally do not assume that renewal options or early-termination provisions, if any, are exercised, unless it is reasonably certain that the Company will exercise such options.

If initially determined that it is not reasonably certain but subsequently the Company

determines that it is reasonably certain to exercise its renewal options or early-termination provisions, the Company would reassess the lease classification, remeasure the lease liability, and adjust the right-of-use asset.

If initially determined that it is not reasonably certain but subsequently the Company determines that it is reasonably certain to exercise its renewal options or early-termination provisions, the Company would reassess the lease classification, remeasure the lease liability, and adjust the right-of-use asset.

In addition to evaluating arrangement that are leases, the Company examines other contracts with suppliers, vendors and outside parties to identify whether such contracts contain an embedded lease and, as applicable, records such embedded leases in accordance with ASC 842.

Segment Information

The Company operates and manages its business as a single segment for the purposes of assessing performance and making operating decisions.

The Company’s chief executive officer, who is the chief operating decision maker, reviews the Company’s financial information on a consolidated basis for purposes of evaluating financial performance and allocating resources.

All of the Company’s long-lived assets are located in the United States and all of the Company’s revenue was derived in the United States.

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property and equipment, and operating lease right-of-use assets.

Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

An impairment loss would be recognized in loss from operations when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount.

If such asset group is considered to be impaired, the impairment loss to be recognized is measured based on the excess of the carrying value of the impaired asset group over its fair value.

Revenue recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers , (“ASC 606”).

This standard applies to all contracts with customers, except for contracts that are within the scope of other standards.

Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

The Company enters into collaboration and licensing agreements with partners under which it may exclusively license rights to research, develop, manufacture, and commercialize product candidates to third parties.

The terms of these arrangements typically include payment to the Company of one or more of the following:

(1) non-refundable, upfront fees;

(2) equity investment;

(3) reimbursement of certain costs;

(4) customer option fees for additional goods or services;

(5) milestone payments;

and (6) royalties on net sales of licensed products.

In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps:

(i) identification of the promised goods or services in the contract;

(ii) determination of whether the promised goods or services are performance obligations including

whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the performance obligations;

and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

As part of the accounting for these arrangements, the Company must use its judgment to determine:

(a) the number of performance obligations based on the determination under step (ii) above;

(b) the transaction price under step (iii) above;

(c) the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above;

and (d) the contract term and pattern of satisfaction of the performance obligations under step (v) above.

The Company also uses judgment to determine whether milestones or other variable consideration, except for royalties, should be included in the transaction price as described further below.

The transaction price is allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied.

The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Amounts due to the Company for satisfying the revenue recognition criteria or that are contractually due based upon the terms of the collaboration agreements are recorded as collaboration receivable in the Company’s consolidated balance sheet.

Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the Company’s consolidated balance sheets.

Deferred revenue expected to be recognized as revenue within 12 months following the balance sheet date are classified as current deferred revenue.

Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current.

Milestone payments

At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price.

Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received.

The Company evaluates factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the particular milestone in making this assessment.

There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur.

At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

Research and Development Expenses

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Research and development expenses may consist of costs incurred in connection with acquired in-process research and development and performing research and development activities, including amounts incurred under agreements with external vendors and consultants engaged to perform preclinical studies and to manufacture research and development materials for use in such studies, salaries and related personnel costs, stock-based compensation, consultant fees, and third-party license fees.

Upfront payments under license agreements are expensed upon receipt of the license, and annual maintenance fees under license agreements are expensed over the maintenance period.

Milestone payments under license agreements are accrued, with a corresponding expense being recognized, in the period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable.

Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses.

Upfront payments payable by the Company under license agreements are expensed upon receipt of the license, and annual maintenance fees under license agreements are expensed over the maintenance period.

Milestone payments payable by the Company under license agreements are accrued, with a corresponding expense being recognized, in the period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable.

Nonrefundable advance payments made by the Company for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses.

The prepaid amounts are expensed as the related goods are delivered or the services are performed.

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If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability on the consolidated balance sheets.

Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible, but not probable;

The Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible, but not probable;

however, it discloses the range of reasonably possible losses.

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The Company recognizes forfeitures as they occur.

Prior to the IPO, the fair value of common stock underlying stock-based awards was based on an estimate at each grant date by the Company’s board of directors.

The Company determined the estimated per share fair value of its common stock at various dates considering contemporaneous and retrospective valuations in accordance with the guidance outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation.

Each of these inputs is subjective and generally requires judgment and estimation by management.

Subsequent to the IPO, the fair value of the common stock underlying shared based awards is the quoted market price of the Company’s common stock on the date of the grant.

The fair value of the common stock underlying shared based awards is the quoted market price of the Company’s common stock on the date of the grant.

The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period of the awards for service-based awards, which is generally the vesting period.

Stock-based compensation expense is classified in the consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

Management assesses warrants under ASC 480, Distinguishing Liabilities from Equity , to determine whether they should be classified as equity or liability.

If the classification is determined to be equity, proceeds received for the warrants are recorded as an increase to additional paid-in capital in the consolidated balance sheets.

If classified as a

liability, the Company records the warrant as a liability on its consolidated balance sheet and remeasures this liability to fair value at each reporting date and recognizes changes in the fair value of the warrant liability as a component of other expense in the consolidated statements of operations and comprehensive loss.

Comprehensive Loss

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Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, excluding potentially dilutive common shares and of unvested restricted common stock.

Diluted net loss per share attributable

to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities.

Diluted net loss per share attributable to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities.

Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, including potential dilutive common shares.

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The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.

Segment Information

Under ASC 280, Segment Reporting , operating segment is a component of a public entity that 1) engages in business activities from which it may recognize revenues and incur expenses, 2) its operating results are regularly reviewed by the entity’s chief operating decision maker, or CODM, to make decisions about resource allocation or performance assessment, and 3) its discrete financial information is available.

The Company operates and manages its business as a single segment for the purposes of assessing performance and making operating decisions.

Our chief executive officer, who is the CODM, manages and allocates resources to the operations of our company on a total company basis by assessing the overall level of resources available and how to best deploy these resources across functions and research and development projects that are in line with our long-term company-wide strategic goals.

In making these decisions, the CODM uses consolidated financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets.

The CODM performs this assessment based on the Company’s consolidated net loss.

Through this analysis, the CODM assesses performance by comparing actual net loss verses the budget, and then decides how to allocate resources to invest in the Company’s research and development programs.

The measure of segment assets is reported on the consolidated balance sheets as total assets.

The following table contains additional information on our consolidated net loss, including significant segment expenses:

Year Ended December 31,

(in thousands)

Total revenue $ 2,983 $ —

Operating expenses:

Research and development expenses

Personnel expenses 59,988 51,095

Research costs 41,678 59,609

Facility related 35,509 24,221

General and administrative expenses:

Personnel expenses 26,569 17,076

Other segment items (1)

41,706 52,791

Total operating expenses

205,450 204,792

Total other income, net 6,585 6,380

Benefit from income taxes — 279

Net loss $ ( 195,882 ) $ ( 198,133 )

(1) Other segment items consist of professional and consultant fees, license and intellectual property fees, general and administrative facility costs, and settlement costs.

Recently Issued Accounting Pronouncements Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date.

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company.

As a result of this election, the Company’s financial statements may not be comparable to those public companies that comply with new or revised accounting pronouncements as of public company effective dates.

The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for nonpublic companies.

As of December 31, 2023, there are no new accounting pronouncements that are expected to have a material impact on the Company’s financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires enhanced income tax disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations.

This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently in the process of evaluating the impact of this pronouncement on its related disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , and in January 2025, issued ASU 2025-01, Clarifying the Effective Date , which requires more detailed information about specified categories of expenses included in certain expense captions presented on the face of the income statement.

This ASU is effective for the first annual reporting period beginning after December 15, 2026, and for interim reporting

periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact this ASU will have on its disclosures.

Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption.

Fair Value Measurements

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Money market funds $ — $ 178,212 $ — $ 178,212

Short-term investment:

Corporate debt securities — 3,793 — 3,793

Short-term investments:

Treasury and government securities — 2,998 — 2,998

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Total cash equivalents and investments $ 5,452 $ 98,848 $ — $ 104,300

Money market funds were valued by the Company based on observable inputs, which represent a Level 2 measurement within the fair value hierarchy.

The Company classifies its U.S.

Treasury securities as short-term based on each instrument’s underlying contractual maturity date.

The fair value of the Company’s U.S.

Treasury and government securities are classified as Level 2 because they are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency and U.S.

Treasury securities.

The Company classifies its investments as short-term based on each instrument’s underlying contractual maturity date.

The fair value of investments classified as Level 2 are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency.

Investments in Debt Securities

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Treasury and government securities $ 2,997 $ 1 $ — $ 2,998

Total short-term investments in debt securities $ 74,654 $ 7 $ ( 22 ) $ 74,639

December 31, 2023

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Treasury and government securities $ 74,654 $ 7 $ ( 22 ) $ 74,639

Total short-term investments in debt securities:

$ 98,851 $ — $ ( 384 ) $ 98,467

The contractual maturities of the Company’s investments in debt securities held were as follows:

(in thousands) December 31,

2024 December 31,

Due within one year $ 2,998 $ 74,639

Marketable securities in unrealized loss positions consisted of the following:

December 31, 2023

(in thousands, except number of securities) Number of Securities Fair Value Gross Unrealized Losses

Investments in continuous loss position for less than 12 months:

Treasury and government securities 11 $ 28,348 $ ( 22 )

There were no marketable securities in unrealized loss positions as of December 31, 2024.

Based on factors such as historical experience, market data, issuer-specific factors, and current economic conditions, the Company did not record an allowance for credit losses as of December 31, 2024 related to these investments.

Further, given the lack of significant change in the credit risk, the Company does not consider these investments to be impaired.

Property and Equipment, Net

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Accrued expenses and other current liabilities

Accrued employee compensation and benefits

Employee compensation and benefits

$ 8,976 $ 8,270

Accrued professional fees 2,273 2,162

Lab-related supplies and services 1,962 1,219

Accrued research and development expense – related party

Facility related

License fee 1,938 —

Research and clinical costs 907 1,962

Other 1,272 2,639

Total accrued expenses and other current liabilities $ 15,904 $ 14,110

21 Erie Street, Cambridge, Massachusetts Lease

In March 2020, the Company entered into an operating lease to sublease office and laboratory space located at 21 Erie Street, Cambridge, Massachusetts.

This lease was subject to various amendments and the amended lease agreement provided for escalating monthly rental payments with fixed costs for expenses and property taxes included in each payment.

In November 2023, the Company exercised its option to terminate this lease with a seven-month notice.

38 Sidney Street, Cambridge, Massachusetts Lease

In July 2021, the Company entered into a non-cancelable operating lease to sublease office space in Cambridge, Massachusetts.

The lease commenced in August 2021 and contained escalating monthly rental payments.

The lease expired in December 2024 and the Company did not exercise its right to extend the lease for one additional six-month period.

64 Sidney Street, Cambridge, Massachusetts Lease

In July 2021, the Company entered into a non-cancelable operating lease to sublease office space located at 64 Sidney Street, Cambridge, Massachusetts .

The lease commenced in April 2022 and contained escalating monthly rental payments.

The lease term expires in April 2025.

The Company has a right to extend the lease for one additional six-month period at a market rate, which is not probable of being exercised by the Company.

The lease requires the Company to share in prorated expenses and property taxes based on actual amounts incurred .

60 First Street, Cambridge, Massachusetts Lease

In November 2021, the Company entered into a lease for three floors of office and laboratory space at 60 First Street, Cambridge, Massachusetts, with rent commencing in March 2024, subject to any credits pursuant to the terms of the lease (the “60 First Street Lease”).

Subsequent to the initial non-cancelable term of the lease of ten years , the Company has an option to extend the lease for an additional period of ten years with the rent during the extension term being the then fair market rent.

The Company secured the lease with a $ 13.1 million security deposit, which was recorded as restricted cash on the consolidated balance sheets as of December 31, 2024 and December 31, 2023.

Accounting Considerations

The Company determined that the lease contained three separate lease components, each of which represents a right of use that the Company can benefit from on its own and are neither highly dependent nor highly related to each other.

The Company allocated the consideration among the three lease components based on their relative fair market values.

In accordance with ASC 842, Leases , the lease commenced for one of the lease components in March 2024 and the Company recorded a right-of-use asset of $ 44.9 million, and a corresponding lease liability of $ 33.6 million on the lease commencement date;

this includes a reclass of $ 11.3 million from prepaid expenses to right-of-use asset related to build out costs which were determined to be owned by the lessor.

As the exercise of the option to extend the lease term is not reasonably certain, the Company will recognize lease expense for this lease component through February 2034.

The lease commencement for the other two lease components is expected to occur in the first half of 2025.

Any consideration paid to lease components for which the lease has not commenced are recorded as prepaid expense on the consolidated balance sheets.

In June, 2024, the Company filed a complaint in Massachusetts Superior Court against NW Cambridge Property Owner, LLC (“NWC”), the Company’s landlord at 60 First Street, alleging that NWC had breached the 60 First Street Lease by, among other reasons, refusing to provide the Company with certain rental credits for the late delivery of the leased space.

While this lawsuit is pending, the Company has and is expecting to continue to make certain disputed payments under the 60 First Street Lease under protest.

As the Company expects this lawsuit to be resolved in its favor and for the payments made under protest to be refunded to the Company, these payments are recorded within other current assets on the Company’s consolidated balance sheets.

As of December 31, 2024, total payments made under dispute was $ 10.8 million.

Arsenal Street, Watertown, Massachusetts Lease

In August 2024, the Company entered into the third amendment to its existing lease for approximately 16,000 square feet of combined laboratory and office space at 480 Arsenal Street, Watertown Massachusetts (the “480 Arsenal Amendment”).

In September 2024, the Company entered into a new lease for approximately 48,500 square feet of combined laboratory and office space at 500 Arsenal Street, Watertown, Massachusetts (the “500 Arsenal Lease”).

The landlords of the spaces at 480 Arsenal Street and 500 Arsenal Street are affiliates.

The 480 Arsenal Amendment provides the Company with an additional 9,400 square feet of combined laboratory and office space (the “Expansion Space”) at no additional cost and also provides an early termination date for the existing space and the Expansion Space as the later of:

1) the date occurring 150 days after the lease commencement of 500 Arsenal Lease, or 2) 30 days after substantial completion of tenant improvements at 500 Arsenal Street.

The 500 Arsenal Lease term commenced in December 2024 with a base term of 11 months.

Subsequent to the base term, the Company has an option to extend the lease through August 2028.

The Company secured the lease with a $ 0.6 million security deposit, which was recorded as restricted cash on the consolidated balance sheets as of December 31, 2024.

The 500 Arsenal Lease also provides a tenant improvement allowance of $ 2.4 million and an additional tenant improvement allowance of $ 1.2 million, which the Company would be obligated to repay to the landlord.

Accounting Considerations

As the 480 Arsenal Amendment and the 500 Arsenal Lease meet the criteria for combining contracts under ASC 842, the Company determined that both 480 Arsenal Amendment and the 500 Arsenal Lease are modifications to its existing lease at 480 Arsenal Street.

Within the combined contract the Company identified two separate lease components, each of which represents a right of use that the Company can benefit from on its own and which are neither highly dependent nor highly related to the other.

The Company allocated the consideration under the combined contract among the two lease components based on their relative fair market value.

In calculating the allocable consideration and the fair market value of each lease component, the Company determined it is probable that it will exercise the option to extend the lease term provided under the 500 Arsenal Lease.

In accordance with ASC 842, the Company possessed the ability to control and derive the economic benefit for its leased space at 480 Arsenal on the effective date of the modification.

Therefore, on the effective date, the Company recorded a right-of-use asset and a corresponding lease liability, which were not materially different from the existing right-of-use asset and lease liability as of the modification date.

For accounting purposes, the lease commencement for 500 Arsenal is expected to occur in the first quarter of 2025.

Consideration paid for this lease component is recorded as prepaid expense on the consolidated balance sheets and is not recognized until lease commences.

Summary of lease costs recognized

The following tables contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases for the years ended December 31, 2024 and December 31, 2023 .

The components of lease cost were as follows:

Year Ended December 31,

(in thousands) 2024 2023

Operating lease cost $ 15,175 $ 13,664

Variable lease cost 5,716 2,145

Short-term lease cost 3,512 2,816

Sublease income ( 168 ) ( 168 )

Total lease cost $ 24,235 $ 18,457

The weighted-average remaining lease term and discount rate were as follows:

Weighted average remaining lease term (in years) 8.4 years 1.9 years

Weighted average discount rate 12.83 % 6.92 %

Future annual lease payments under non-cancelable operating leases as of December 31, 2024 w ere as follows:

(in thousands) Undiscounted

Undiscounted lease payments:

2025 $ 19,773

Thereafter 96,601

Total undiscounted lease payments 206,454

payments related to leases not commenced ( 136,637 )

imputed interest ( 29,023 )

Total operating lease liability $ 40,794

Stockholder’s Equity

Reverse Stock Split

As described in Note 1, Nature of the Business and Basis of Presentation , in connection with the Company’s IPO in October 2022, the Company effected a 1-for-3.10880 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios of each series of the Company’s preferred stock.

Under the Third Amended and Restated of Certificate of Incorporation, the Company’s common stock had a par value of $ 0.0001 and each share of common stock entitles the holder to one vote on all matters submitted to the stockholders for a vote.

The holders of common stock are entitled to receive dividends, if any, as declared by the Company’s board of directors.

As previously discussed, in February 2024, the Company issued and sold 22,560,001 shares of its common stock, including 3,360,000 shares pursuant to the exercise of the underwriters’ option to purchase additional shares, at a price to the public of $ 6.25 per share.

In September 2024, the Company entered into the BMS Purchase Agreement pursuant to which the Company issued, and BMS purchased, in an unregistered offering (the “Offering”), 11,006,163 shares (the “Shares”) of the Company’s common stock for an aggregate purchase price of $ 55.0 million pursuant to the terms and conditions thereof.

The BMS Purchase Agreement includes lock-up restrictions with respect to the Shares.

Pursuant to the terms of the BMS Purchase Agreement, BMS has agreed not to, directly or indirectly, sell or transfer any of the Shares until September 30, 2027 subject to specified conditions and exceptions.

In December 2024, the Company filed a registration statement with the Securities and Exchange Commission (the “SEC”) covering the resale of the Shares.

Please refer to Note 9, License and Collaboration Agreements , for additional discussion of the BMS Collaboration Agreement.

Pre-funded Warrants

As discussed in Note 1, Nature of the Business and Basis of Presentation , in February 2024, the Company sold pre-funded warrants to purchase 3,200,005 shares of common stock at a public offering price of $ 6.24999 per pre-funded warrant, which represents the per share public offering price of each share of common stock less the $ 0.00001 per share exercise price for each pre-funded warrant.

Subject to certain requirements, the pre-funded warrants can be exercised by the holder at any time.

As of December 31, 2024, there have not been any exercises of the pre-funded warrants.

The pre-funded warrants meet the definition of an equity instrument under ASC 815-40 and funds received were recorded as an increase in additional paid-in capital in the consolidated balance sheets.

Funds received upon exercise of warrants will be recorded as common stock in the consolidated balance sheets as the exercise price represents the par value of the underlying common stock.

At-The-Market Equity Program

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2019 Equity Incentive Plan

The Company’s 2019 Stock Option and Grant Plan (the “2019 Plan”) provides for the Company to grant incentive stock options (“ISO”), non-qualified stock options, unrestricted stock awards, restricted stock awards (“RSA”) and other stock-based awards (collectively, the “Awards”) to the officers, employees, consultants and other key persons of the Company.

The Company’s 2019 Stock Option and Grant Plan (the “2019 Plan”) provides for the Company to grant incentive stock options, non-qualified stock options, unrestricted stock awards, restricted stock awards and other stock-based awards to the officers, employees, consultants and other key persons of the Company.

The 2019 Plan is administered by the board of directors, or at the discretion of the board of directors, by a committee of the board of directors.

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In October 2022, the Company completed its IPO, and in connection with the closing, the board of directors determined that no further awards would be granted under the 2019 Plan.

Upon effectiveness of the 2022 Stock Option and Incentive Plan (the “2022 Plan”), shares remaining available for grant under the 2019 Plan were included in the 2022 Plan.

Additionally, shares of unused common stock underlying any Awards that are forfeited, canceled or reacquired by the Company prior to vesting will again be available for the grant of awards under the 2022 Plan.

2022 Stock Option and Incentive Plan

On February 9, 2022, the Company’s board of directors adopted, and on October 10, 2022 its stockholders approved, the 2022 Plan, which became effective immediately preceding the date on which the registration statement for the Company’s IPO was declared effective by the SEC.

In February 2022, the Company’s board of directors adopted, and in October 2022 its stockholders approved, the 2022 Plan, which became effective immediately preceding the date on which the registration statement for the Company’s IPO was declared effective by the SEC.

The 2022 Plan allows the Company to make equity-based and cash-based incentive awards to its officers, employees, directors, and consultants.

The 2022 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted common stock awards, restricted stock units and other stock-based awards.

The 2022 Plan provides for an automatic increase in the number of shares reserved and available for issuance on January 1, 2023 and each January 1 thereafter, by five percent of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the compensation committee.

The 2022 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted common stock

awards, restricted stock units and other stock-based awards.

Stock options awarded under the 2022 Plan expire 10 years after the grant date and typically vest over four years .

The shares of common stock underlying any awards under the 2022 Plan and the 2019 Plan that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of stock, expire, or are otherwise terminated (other than by exercise) will be added back to the shares of common stock available for issuance under the 2022 Plan.

The number of shares reserved and available for issuance under the 2022 Plan will increase on January 1 of each year, by five percent of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Compensation Committee.

On January 1, 2025, the annual increase for the 2022 Plan resulted in an additional 6,558,042 shares authorized for issuance being added to the 2022 Plan.

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2022 Employee Stock Purchase Plan

On February 9, 2022, the Company’s board of directors adopted, and on October 10, 2022 its stockholders approved, the 2022 Employee Stock Purchase Plan (the “2022 ESPP”), which became effective immediately preceding the date on which the registration statement for the Company’s IPO was declared effective by the SEC.

The 2022 ESPP provides for an annual increase beginning on January 1, 2023 and each January 1 thereafter through January 1, 2032, by the least of (i) 971,350 shares of common stock, (ii) one percent of the outstanding number of shares of common stock on the immediately preceding December 31, or (iii) such number of shares of common stock as determined by the administrator of the 2022 ESPP.

In February 2022, the Company’s board of directors adopted, and in October 2022 its stockholders approved, the 2022 Employee Stock Purchase Plan (the “2022 ESPP”).

The 2022 ESPP provides for an annual increase on January 1 each year through January 1, 2032, by the least of (i) 971,350 shares of common stock, (ii) one percent of the outstanding number of shares of common stock on the immediately preceding December 31, or (iii) such number of shares of common stock as determined by the administrator of the 2022 ESPP.

There was no annual increase for the 2022 ESPP on January 1, 2025.

As of December 31, 2024, the Company had 1,753,191 shares available for issuance under the 2022 ESPP.

No shares of the Company’s common stock were issued during the years ended December 31, 2023 and 2022 under the 2022 ESPP.

Under the 2022 ESPP, the Company issued 189,509 shares of the Company’s common stock during the year ended December 31, 2024.

No shares of the Company’s common stock were issued during the year ended December 31, 2023 under the 2022 ESPP.

Stock Option Valuation

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Performance-Based Stock Options

The Company has granted stock options to certain employees to purchase shares of common stock that contain certain performance-based vesting criteria related to corporate milestones.

The performance-based stock options were granted “at-the-money” and have a term of 10 years.

The Company has granted stock options to certain employees to purchase shares of common stock that contain performance-based vesting criteria related to corporate milestones.

The fair value of each option grant under the performance share option plan was estimated on the date of grant.

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Outstanding at December 31, 2023 411,730 $ 6.65 8.15 $ 1,362

Granted 650,000 7.74

Exercised — —

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Time-Based Restricted Common Stocks Awards

The majority of the restricted common stock have time-based vesting conditions and vest over a four-year period, subject to the employee’s continued employment with, or service to, the Company on such vesting date.

Restricted common stock that have time-based vesting conditions vest over a four-year period, subject to the employee’s continued employment with, or service to, the Company on such vesting date.

Compensation expense is recognized on a straight-line basis over the vesting period.

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Unvested restricted common stock at December 31, 2024 24,931 $ 0.16

As of December 31, 2023 , there was $ 0.2 million of total unrecognized compensation cost related to unvested time-based restricted common stock which the Company expects to recognize over a weighted-average period of 0.7 years.

Performance-Based Restricted Common Stock Awards

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Unvested restricted common stock at December 31, 2023 3,832,769 $ 0.07

Vested ( 360,226 ) 0.18

Repurchased — —

Unvested restricted common stock at December 31, 2024 3,472,543 $ 0.06

As of December 31, 2023 , there was $ 0.3 million of total unrecognized compensation cost related to unvested performance-based restricted common stock.

Stock-Based Compensation

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Total stock-based compensation expense $ 26,068 $ 13,910

Income tax (benefit) expense consists of the following:

Year Ended December 31,

(in thousands) 2023 2022

Current provision:

Federal $ — $ —

Total current provision — 16

Deferred income tax benefit:

Federal 279 314

Total deferred income tax benefit 279 964

Total benefit from income taxes $ 279 $ 948

A reconciliation of the U.S.

federal statutory income tax rate to the Company’s effective income tax rate is as follows:

Year Ended December 31,

Federal income tax expense at statutory rate 21.0 % 21.0 %

State income taxes, net of federal benefit 7.3 % 7.7 %

Tax credits 2.0 % 2.9 %

Permanent differences ( 0.9 ) % ( 0.9 ) %

Other ( 0.4 ) % — %

Change in valuation allowance ( 28.9 ) % ( 30.0 ) %

Effective income tax rate 0.1 % 0.7 %

Net deferred tax assets (liabilities) consisted of the following:

(in thousands) 2023 2022

Deferred tax assets:

Capitalized research and development costs $ 49,990 $ 19,974

and state net operating loss carryforwards 35,977 20,427

Depreciation and amortization 13,204 13,307

Tax credits 12,863 7,268

Accrual 5,817 1,649

Lease Liability 3,711 7,853

Stock Compensation 1,473 122

Total deferred tax assets 123,044 70,600

Deferred tax liabilities:

Right of Use Asset ( 3,794 ) ( 8,072 )

Other — ( 675 )

Total deferred tax liabilities ( 3,794 ) ( 8,747 )

Valuation allowance ( 119,250 ) ( 62,132 )

Net deferred tax assets (liabilities) $ — $ ( 279 )

The following is a summary of the Company’s net operating loss and tax credit carryforwards, both of which may be available to reduce future tax liabilities:

(in thousands) 2023 2022

federal net operating loss - do not expire $ 131,608 $ 75,202

State net operating loss - expire at various dates beginning in 2039

132,009 73,339

Federal research and development tax credits - expire at various dates beginning in 2040

State research and development tax credits - expire at various dates beginning in 2036

Utilization of the U.S.

federal and state net operating loss carryforwards and research and development tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, and corresponding provisions of state law, due to certain ownership changes that have occurred previously or that could occur in the future.

These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income and tax liabilities.

In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percent over a three-year period.

The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study.

If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments.

Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before their utilization.

Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position.

The Tax Cuts and Jobs Act requires taxpayers to capitalize and amortize research and development expenditures under section 174 for tax years beginning after December 31, 2021.

This rule became effective for the Company for the year ended December 31, 2022.

For the years ended December 31, 2023 and 2022, the Company capitalized R&D costs of $ 137.2 million and $ 80.7 million, respectively.

The Company will amortize these costs for tax purposes over 5 years if the R&D was performed in the U.S.

and over 15 years if the R&D was performed outside the U.S.

The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets.

Management has considered the Company’s history of cumulative net losses incurred since inception, expectation of future losses and lack of other positive evidence.

For the years ended December 31, 2023 and 2022, the Company was in a net deferred tax asset position and therefore recorded a valuation allowance against the portion of its deferred tax assets that cannot be fully supported by the future reversal of existing deferred tax liabilities.

The Company has determined that the indefinite nature of the deferred tax liability related to its unrealized gain on its short-term investment — related party can only support 80 percent of the federal deferred tax assets and none of the state deferred tax assets.

The Company reevaluates the positive and negative evidence at each reporting period.

For the year ended December 31, 2023, the valuation allowance increased primarily due to the increases in net operating loss carryforwards, capitalized research and development costs, and research and development tax credit carryforwards.

The changes in the valuation allowance were as follows:

Year Ended December 31,

(in thousands) 2023 2022

Valuation allowance at beginning of year $ 62,132 $ 25,253

Increases (decreases) recorded to income tax provision 57,118 36,879

Valuation allowance at end of year $ 119,250 $ 62,132

The Company assesses the uncertainty in its income tax positions to determine whether a tax position of the Company is more likely than not to be sustained upon examination, including resolution of any related appeals of litigation processes, based on the technical merits of the position.

For tax positions meeting the more-likely-than-not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50 percent likelihood of being realized upon the ultimate settlement with the relevant taxing authority.

As of December 31, 2023, the Company had not recorded any reserves for uncertain tax positions or related interest and penalties.

The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates.

In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable.

Since the Company is in a loss carryforward position, the Company is generally subject to examination by the U.S.

federal, state and local income tax authorities for all years in which a loss carryforward is available.

As of December 31, 2023, there were no pending tax examinations.

The Company is open to future tax examination under statute from 2019 to the present.

21 Erie Street, Cambridge, Massachusetts Lease

In March 2020, the Company entered into an operating lease to sublease office and laboratory space located at 21 Erie Street, Cambridge, Massachusetts.

This lease was subject to various amendments with the last material amendment entered into in April 2023 for additional office and laboratory space and to extended the term of the sublease through March 2025.

The amended lease agreement provides for escalating monthly rental payments with fixed costs for expenses and property taxes included in each payment.

Under the terms of the amended lease, the security deposit was increased to $ 0.7 million, which is classified as other assets on the consolidated balance sheet as of December 31, 2023.

In November 2023, the Company exercised its option to terminate this lease with a seven-month notice.

This termination was deemed reasonably certain during the year ended December 31,2023, and the Company reassessed the lease and recorded a $ 6.1 million reduction to the Company’s operating lease liability and its operating lease right-of-use asset on the condensed consolidated balance sheet.

38 Sidney Street, Cambridge, Massachusetts Lease

In July 2021, the Company entered into a non-cancelable operating lease to sublease office space in Cambridge, Massachusetts.

The lease commenced in August 2021 and expires in December 2024.

The Company has a right to extend the lease for one additional six-month period at a market rate as determined by the sublandlord and agreed to by the Company.

The option to extend the lease term is not included in the right-of-use asset and lease liability as it is not reasonably certain of being exercised.

The lease requires the Company to share in prorated expenses and property taxes based on actual amounts incurred;

those amounts are not fixed for future periods and, therefore, are not included in the measurement of the lease.

64 Sidney Street, Cambridge, Massachusetts Lease

In July 2021, the Company entered into a non-cancelable operating lease to sublease office space located at 64 Sidney Street, Cambridge, Massachusetts .

The lease commenced in April 2022 and will expire in April 2025.

The Company has a right to extend the lease for one additional six-month period at a market rate as determined by the sublandlord and agreed to by the Company.

The lease requires the Company to share in prorated expenses and property taxes based on actual amounts incurred;

t hose amounts are not fixed for future periods and, therefore, these amounts will not be included in the measurement of the lease.

60 First Street, Cambridge, Massachusetts Lease

In November 2021, the Company entered into a lease for office and laboratory space in Cambridge, Massachusetts, with rent commencing in March 2024, subject to any credits pursuant to the terms of the lease.

Also subject to any credits pursuant to the terms of the lease, the Company expects to pay up to approximately $ 208.7 million over the initial non-cancelable term of the lease of ten years , and the Company has an option to extend the lease for an additional period of ten years with the rent during the option period being the then fair market rent.

secured the lease with a $ 13.1 million security deposit, which was recorded as restricted cash on the consolidated balance sheets as of December 31, 2023 and December 31, 2022.

Under ASC 842, the Company expects that the lease will commence in March 2024.

480 Arsenal Street, Watertown, Massachusetts Lease

In May 2022, the Company entered into a non-cancelable operating lease to sublease office space located at 480 Arsenal Street, Watertown, Massachusetts.

The lease commenced in May 2022 and will expire in April 2027.

The lease requires the Company to share in prorated expenses and property taxes based on actual amounts incurred;

those amounts are not fixed for future periods and, therefore, these amounts will not be included in the measurement of the lease.

The Company secured the lease with a $ 0.4 million security deposit, which was recorded as restricted cash on the consolidated balance sheet as of December 31, 2023 and December 31, 2022.

In conjunction with the lease, the Company entered into a sublease agreement to sublet a portion of the office space at 480 Arsenal Street Watertown, Massachusetts (the “Arsenal Street Sublease”).

The Arsenal Street Sublease commenced in May 2022 and will expire in April 2025.

The Company was not relieved of its primary obligation under the operating lease as a result of the sublease.

Summary of lease costs recognized

The components of lease cost were as follows:

Year Ended December 31,

(in thousands) 2023 2022

Operating lease cost $ 13,664 $ 10,999

Variable lease cost 2,145 1,111

Short-term lease cost 2,816 1,401

Sublease income ( 168 ) ( 294 )

Total lease cost $ 18,457 $ 13,217

The weighted-average remaining lease term and discount rate were as follows:

Weighted average remaining lease term (in years) 1.9 years 2.7 years

Weighted average discount rate 6.92 % 4.92 %

Future annual lease payments under non-cancelable operating leases as of December 31, 2023 w ere as follows:

(in thousands) Undiscounted

Undiscounted lease payments:

Total undiscounted lease payments 14,575

imputed interest ( 942 )

Total operating lease liability $ 13,633

As the lease for the office and laboratory space at 60 First Street, Cambridge , Massachusetts had not commenced as of December 31, 2023 , the table above excludes any amounts related to this lease.

Subject to any credits pursuant to the terms of the lease, the Company expects to pay up to approximately $ 208.7 million over the initial non-cancelable term of the lease of ten years .

License and Collaboration Agreements

For a more detailed discussion of our license and collaboration agreements, please refer to Item 1, Business — Our License and Collaboration Agreements , of this Annual Report on Form 10-K.

License Agreements with Broad Institute

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In September 2019, the Company entered into a license agreement with Broad Institute, Inc.

(“Broad Institute”), and in May 2020, February 2021 and December 2022, the Company entered into amendments to this license agreement, for certain patents related to the field of prevention or treatment of human disease by editing or targeting DNA (the “Broad License Agreement”).

(“Broad Institute”) for certain patents related to the field of prevention or treatment of human disease by editing or targeting DNA (the “Broad License Agreement”).

In subsequent periods, the Broad License Agreement has been subject to amendments.

Under the Broad License Agreement, Broad Institute granted the Company (i) an exclusive, worldwide license under the licensed patent rights solely to offer for sale, sell, have sold and import products covered by such licensed patent rights, or licensed products, solely for use within the Prime Broad Field (subject to certain specified limitations and exclusions with respect to certain applications), (ii) a non-exclusive, worldwide license under the licensed patent rights solely to make, have made, offer for sale, sell, have sold, and import licensed products solely for use in the Prime Broad Field, (iii) a non-exclusive, worldwide license under the licensed patent rights solely to make, have made, offer for sale, sell, have sold and import other products that are enabled by (a) the licensed patent rights or (b) the use of certain materials transferred to the Company by Broad Institute, solely for the prevention or treatment of human diseases and (iv) a non-exclusive, worldwide license solely for internal research.

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As partial consideration for the license, the Company made a upfront payment of $ 0.5 million to Broad Institute.

Concurrently with the Broad License Agreement, the Company entered into a subscription agreement with Broad Institute (the “Broad Subscription Agreement”), under which the Company issued 623,529 shares of common stock, with a fair value of $ 39,000 .

In April 2021, Broad Institute purchased an additional 761,844 shares of Series A preferred stock, at a price of $ 1.00 per share for gross proceeds of $ 0.8 million.

Under the Broad License Agreement, the Company is obligated to pay Broad Institute an annual license maintenance fee of low six-figures dollar amount beginning in 2022.

Broad Institute is also entitled to receive clinical and regulatory milestone payments up to a total of $ 20.0 million and sales-based milestone payments up to a total of $ 54.0 million per licensed product.

Further, the Broad Institute is entitled to receive mid-single digit percentage royalties, subject to customary offsets and reductions, on net sales of licensed products, and low single-digit percentage royalties of enabled products.

Further, the Broad Institute is entitled to receive mid-single digit

percentage royalties, subject to customary offsets and reductions, on net sales of licensed products, and low single-digit percentage royalties of enabled products.

Unless earlier terminated, the Broad License Agreement will remain in effect until the later of (i) the last to expire valid claim of an issued patent or pending patent application within the licensed patent rights covering the Company’s licensed products or (ii) the expiration of the last royalty term for a licensed product in a country.

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Broad Institute may also immediately terminate the 2022 Broad License Agreement (i) to the extent we (or our affiliates or sublicensees) challenge a licensed patent right, (ii) upon our bankruptcy or insolvency or (iii) if we fail to procure and maintain insurance.

Amendment No.

4 to The Broad Institute License Agreement

In connection with the BMS Collaboration Agreement, discussed below, the Company entered into a Letter Agreement (the “2024 Broad Amendment”) with Broad Institute in September 2024, which amends the Broad License Agreement to modify certain obligations of Company and rights of Broad Institute in relation to the BMS Collaboration Agreement as a sublicense under the Broad License Agreement.

The 2024 Broad Amendment, among other things, modifies the royalty and certain commercial milestones that the Company is obligated to pay to Broad Institute on net sales of products under the BMS Collaboration Agreement.

Except as expressly stated in the 2024 Broad Amendment, all other terms and provisions of the Broad License Agreement remain in full force and effect.

Amounts due to Broad Institute as a result of the BMS Collaboration Agreement are recorded as accrued expenses on the consolidated balance sheet as of December 31, 2024.

In February 2021, the Company committed to donate $ 5.0 million to Broad Institute and Harvard University annually for 14 years, commencing in 2022 (the “Pledge”).

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In September 2019, the Company entered into a collaboration agreement with Beam (the “Beam Collaboration Agreement”) to collaborate on the research, development, manufacture and commercialization of certain Prime Editing products within a specified field and provide each other with access and licenses to certain proprietary technology to advance the other’s progress.

Under the Beam Collaboration Agreement, the Company granted Beam an exclusive (even as to the Company and its affiliates), worldwide license under (i) certain Prime Editing

technology, know-how and patent rights that the Company controls during the initial term, and improvements thereto that the Company controls for a specified number of years following the initial term, and (ii) the Company’s 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.

Under the Beam Collaboration Agreement, the Company granted Beam an exclusive (even as to the Company and its affiliates), worldwide license under (i) certain Prime Editing technology, know-how and patent rights that the Company controls during the initial term, and improvements thereto that the Company controls for a specified number of years following the initial term, and (ii) the Company’s 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.

Beam granted to the Company 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 Company’s field.

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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 prior written notice to the Company.

Each party may terminate the Beam Collaboration Agreement for (a) the other party’s uncured material

breach, (b) upon the insolvency or bankruptcy of the other party or (c) immediately to the extent the other party (or its affiliates or sublicensees) challenges a patent right licensed to such party.

Each party may terminate the Beam Collaboration Agreement for (a) the other party’s uncured material breach, (b) upon the insolvency or bankruptcy of the other party or (c) immediately to the extent the other party (or its affiliates or sublicensees) challenges a patent right licensed to such party.

On the first anniversary of the Beam Collaboration Agreement, the Company received 200,307 shares of Beam common stock, with a fair value of $ 5.5 million and, in return, the Company issued to Beam 1,608,337 shares of the Company’s common stock, with a fair value of $ 0.2 million.

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The Company concluded that the Beam Collaboration Agreement and the Beam Mutual Subscription Agreement should be combined and treated as a single arrangement for accounting purposes as the agreements were entered into contemporaneously and in contemplation of one another.

The Company determined that the combined agreements are accounted for under Topic 606, Revenue recognition.

The Company determined that the combined agreements are accounted for under ASC 606, Revenue Recognition.

The Company identified the following performance obligations:

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At each reporting period, the Company evaluates whether milestones are considered probable of being reached and, to the extent that a significant reversal would not occur in future periods, estimates the amount to be included in the transaction price.

During the years ended December 31, 2023 and 2022 the Company did not receive any milestone payments and all variable consideration related to the Beam Collaboration Agreement remained fully constrained.

During the years ended December 31, 2024 and 2023 the Company did not receive any milestone payments and all variable consideration related to the

Beam Collaboration Agreement remained fully constrained.

The Company assessed the above promises and determined that the exclusive license for certain Prime products and non-exclusive licenses to CRISPR technology represent performance obligations within the scope of Topic 606.

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The joint research committee performance promise is immaterial in the context of the contract.

The Company determined the transaction price under Topic 606 at the inception of the Beam Collaboration Agreement to be $ 5.2 million, consisting of the value of the Beam equity investment under the Beam Mutual Subscription Agreement, when measured at fair value, less the value of the Prime shares issued to Beam of $ 0.2 million.

The Company determined the transaction price under ASC 606 at the inception of the Beam Collaboration Agreement to be $ 5.2 million, consisting of the value of the Beam equity investment under the Beam Mutual Subscription Agreement, when measured at fair value, less the value of the Prime shares issued to Beam of $ 0.2 million.

The shares Prime issued to Beam represents a payment to a customer and is therefore a reduction of the transaction price.

The Company recognizes revenue for the license performance obligations at a point in time, as control of these licenses are transferred upon issuance and Beam could begin to use and benefit from the licenses.

There was no revenue recognized during the years ended December 31, 2023 or 2022.

There was no revenue recognized under the Beam Collaboration Agreement during the years ended December 31, 2024 or 2023.

The change fair value of the related party short-term investment consisting of Beam shares are recognized as unrealized gain (loss) i n the consolidated statements of operations and comprehensive loss.

Research Collaboration, Option and License Agreement with Myeloid — Related Party

In December 2021, the Company and Myeloid, a related party, entered into the Myeloid Agreement.

Upon entering into the Myeloid Agreement, Myeloid was entitled to receive an upfront payment of $ 30.0 million in cash and an aggregate of 1,101,525 shares of the Company’s com mon stock, with a then fair value of $ 12.0 million, both of which Myeloid received in January 2022.

During the second quarter of 2023, the Company provided notice to Myeloid of its intent to terminate the Myeloid Agreement, which became effective during the third quarter of 2023.

In September 2023, Myeloid filed an arbitration claim with the American Arbitration Association alleging that the Company breached its obligations under the Myeloid Agreement by failing to pay a $ 17.5 million milestone payment and seeking, among other things, damages in the amount of $ 17.5 million.

In October 2023, the Company filed an arbitration claim with the American Arbitration Association alleging that Myeloid breached numerous obligations under the Agreement and seeking, among other things, a declaration that Myeloid breached the Agreement, rescission of the Agreement and damages in the amount of $ 43.5 million.

In January 2024, the Company and Myeloid entered into a settlement agreement resolving the two arbitration proceedings.

Under the terms of the settlement agreement, the parties agreed to resolve and settle all disputes between the parties and release all claims between them relating to the License Agreement and the arbitrations in exchange for the Company's payment to Myeloid of $ 13.5 million, certain mutual covenants, and other consideration.

Accordingly, for the year ended December 31, 2023, the Company recorded a charge of $ 13.5 million within its consolidated balance sheets and consolidated statement of operations.

Commitments and Contingencies

The Company’s commitments under its operating leases are described in Note 9, Leases .

License and Collaboration Agreements

The Company entered into various license and collaboration agreements under which it is obligated to make fixed and contingent payments as described in Note 10, License and Collaboration Agreements .

Legal Proceedings

From time to time, the Company may become involved in legal proceedings or other litigation relating to claims arising in the ordinary course of business.

The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated.

Significant judgment is required to determine both probability and estimated exposure amount.

Legal fees and other costs associated with such proceedings are expensed as incurred.

As discussed in Note 10, License and Collaboration Agreements , for the year ended December 31, 2023 the Company recognized $ 13.5 million under its settlement agreement with Myeloid.

As of December 31, 2022, the Company was not a party to any material legal proceedings or claims.

Bristol-Myers Squibb — Related Party

In September 2024, the Company entered into the BMS Collaboration Agreement with Juno Therapeutics, Inc., a wholly-owned subsidiary of BMS.

Under the terms of the BMS Collaboration Agreement, the Company granted to BMS an exclusive worldwide license to certain Prime Editing technology for developing, manufacturing and commercializing ex vivo T-cell therapeutic products directed to select targets.

Additionally, on the Effective Date, the Company entered into the BMS Purchase Agreement with BMS, pursuant which the Company agreed to sell and issue shares of its common stock to BMS.

Research Collaboration and License Agreement

Pursuant to the BMS Collaboration Agreement, the Company will design Prime Editing reagents to be used by BMS to develop, manufacture and commercialize ex vivo T-cell therapeutic products directed to specific targets selected by BMS.

Under the BMS Collaboration Agreement, the Company received a $ 55.0 million upfront payment and received a $ 55.0 million equity investment from BMS (as described below).

The Company is also eligible to receive more than $ 3.5 billion in milestones, including up to $ 185 million in preclinical milestones, up to $ 1.2 billion in development milestones, and up to $ 2.1 billion in commercialization milestones, along with royalties on net sales.

Unless earlier terminated, the term of the BMS Collaboration Agreement continues until expiration of the last royalty term for the applicable product in the applicable country.

The BMS Collaboration Agreement is subject to customary termination provisions, including termination by a party for the other party’s uncured, material breach.

Stock Purchase Agreement

On the Effective Date, the Company entered into the BMS Purchase Agreement with BMS, pursuant to which the Company agreed to issue and sell, and BMS agreed to purchase, in the Offering, 11,006,163 Shares of the Company’s Common Stock for an aggregate purchase price of $ 55.0 million pursuant to the terms and conditions thereof.

The BMS Collaboration Agreement and Stock Purchase Agreement were accounted for as a combined contract.

The Common Stock were recorded at their fair value as permanent equity.

Accounting Considerations

The Company assessed the BMS Collaboration Agreement and concluded that BMS is a customer.

The Company identified the following promises under the contract:

(i) a license to develop, manufacture and commercialize the ex vivo T-cell therapeutic products to select targets, (ii) obligation to perform research services, (iii) participation in various committees, (iv) technology transfer services, and (v) regulatory support services.

The Company assessed the promised goods and services to determine if they are distinct.

Based on this assessment, the Company determined that BMS cannot benefit from the promised goods and services separately from the others as they are highly interrelated and interdependent and therefore not distinct.

Accordingly, the promised goods and services represent one combined performance obligation and the entire transaction price will be allocated to that single combined performance obligation.

At contract inception, the transaction price was determined to be $ 72.0 million, which represents the aggregate of the upfront nonrefundable payment for the BMS Collaboration Agreement and the premium paid by BMS on its equity investment in the Company.

Development milestones were fully constrained.

The Company recognizes the portion of the transaction price as the single performance obligation is satisfied, using an input method, in proportion to costs incurred to date as compared to total costs incurred and expected to be incurred in the future to satisfy the underlying obligation.

The transfer of control occurs over this period and, in management’s judgment, is the best measure of progress towards satisfying the performance obligation.

Cost to perform the Company’s obligations under the BMS Collaboration Agreement will be recognized as research and development expenses in the period incurred.

Revenue recognized from the BMS Collaboration Agreement was as follows:

Year Ended December 31,

(in thousands) 2024 2023

Collaboration revenue — related party $ 1,609 $ —

Supplemental information related to the BMS Collaboration Agreement consisted of the following:

(in thousands) 2024 2023

Deferred revenue — related party $ 7,092 $ —

Deferred revenue, net of current — related party 63,218 —

Net Loss per Share

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(in thousands, except share and per share data) 2024 2023

Net loss $ ( 198,133 ) $ ( 121,821 )

Cumulative dividend on preferred stock — ( 20,193 )

Net loss attributable to common stockholders $ ( 195,882 ) $ ( 198,133 )

1 unchanged sentence

Net loss per share attributable to common stockholders, basic and diluted $ ( 1.65 ) $ ( 2.18 )

The weighted-average number of common shares outstanding used in the basic and diluted net loss per share calculations includes the weighted-average effect of pre-funded warrants sold by the Company to purchase 3,200,005 shares of the Company's common stock.

The shares of common stock underlying the pre-funded warrants are considered outstanding for the purposes of computing earnings per share, because the shares may be issued for little or no consideration, they are fully vested, and the pre-funded warrants are immediately exercisable upon their issuance date.

Income tax (benefit) expense consists of the following:

Year Ended December 31,

(in thousands) 2024 2023

Deferred income tax benefit:

Federal $ — $ ( 279 )

Total deferred income tax benefit — ( 279 )

Total provision (benefit) from income taxes $ — $ ( 279 )

A reconciliation of the U.S.

federal statutory income tax rate to the Company’s effective income tax rate is as follows:

Year Ended December 31,

Federal income tax expense at statutory rate 21.0 % 21.0 %

State income taxes, net of federal benefit 7.4 % 7.3 %

Tax credits 2.6 % 2.0 %

Permanent differences ( 0.9 ) % ( 0.9 ) %

Other 0.8 % ( 0.4 ) %

Change in valuation allowance ( 30.8 ) % ( 28.9 ) %

Effective income tax rate — % 0.1 %

Net deferred tax assets (liabilities) consisted of the following:

(in thousands) 2024 2023

Deferred tax assets:

Capitalized research and development costs $ 74,605 $ 49,990

and state net operating loss carryforwards 61,501 35,977

Depreciation and amortization 12,829 13,204

Tax credits 22,986 12,863

Accrual 2,334 5,817

Lease Liability 12,228 3,711

Stock Compensation 6,005 1,473

Total deferred tax assets 192,629 123,044

Deferred tax liabilities:

Right of Use Asset ( 12,852 ) ( 3,794 )

Total deferred tax liabilities ( 12,852 ) ( 3,794 )

Valuation allowance ( 179,777 ) ( 119,250 )

Net deferred tax assets (liabilities) $ — $ —

The following is a summary of the Company’s net operating loss and tax credit carryforwards, both of which may be available to reduce future tax liabilities:

(in thousands) 2024 2023

federal net operating loss - do not expire $ 226,904 $ 131,608

State net operating loss - expire at various dates beginning in 2039

219,351 132,009

Federal research and development tax credits - expire at various dates beginning in 2040

State research and development tax credits - expire at various dates beginning in 2036

Utilization of the U.S.

These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income and tax liabilities.

Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before their utilization.

Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position.

The Tax Cuts and Jobs Act requires taxpayers to capitalize and amortize research and development expenditures under section 174 for tax years beginning after December 31, 2021.

This rule became effective for the Company for the year ended December 31, 2022.

For the years ended December 31, 2024 and 2023, the Company capitalized

R&D costs of $ 141.1 million and $ 137.2 million, respectively.

The Company will amortize these costs for tax purposes over five years if the R&D was performed in the U.S.

and over 15 years if the R&D was performed outside the U.S.

The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets.

Management has considered the Company’s history of cumulative net losses incurred since inception, expectation of future losses and lack of other positive evidence.

For the years ended December 31, 2024 and 2023, the Company was in a net deferred tax asset position and therefore recorded a valuation allowance against the portion of its deferred tax assets that cannot be fully supported by the future reversal of existing deferred tax liabilities.

The Company reevaluates the positive and negative evidence at each reporting period.

For the year ended December 31, 2024, the valuation allowance increased primarily due to the increases in net operating loss carryforwards, capitalized research and development costs, and research and development tax credit carryforwards.

The changes in the valuation allowance were as follows:

Year Ended December 31,

(in thousands) 2024 2023

Valuation allowance at beginning of year $ 119,250 $ 62,132

Increases (decreases) recorded to income tax provision 60,527 57,118

Valuation allowance at end of year $ 179,777 $ 119,250

As of December 31, 2024, the Company had not recorded any reserves for uncertain tax positions or related interest and penalties.

The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates.

In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable.

Since the Company is in a loss carryforward position, the Company is generally subject to examination by the U.S.

federal, state and local income tax authorities for all years in which a loss carryforward is available.

As of December 31, 2024, there were no pending tax examinations.

The Company is open to future tax examination under statute from 2019 to the present.

Commitments and Contingencies

The Company’s commitments under its operating leases are described in Note 6, Leases .

License and Collaboration Agreements

The Company entered into various license and collaboration agreements under which it is obligated to make fixed and contingent payments as described in Note 9, License and Collaboration Agreements .

Legal Proceedings

From time to time, the Company may become involved in legal proceedings or other litigation relating to claims arising in the ordinary course of business.

The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated.

Significant judgment is required to determine both probability and estimated exposure amount.

Legal fees and other costs associated with such proceedings are expensed as incurred.

Except as described in Note 6, Leases , as it relates to our facility at 60 First Street, Cambridge, we do not have any ongoing legal proceedings that, based on our estimates, could have a material effect on our consolidated financial statements.

Related Party Transactions

Founder Consulting Services

For the years ended December 31, 2023, and 2022 the Company made payments of $ 0.2 million in each period to one of the co-founder shareholders for scientific consulting and other expenses.

For the years ended December 31, 2024, and 2023 the Company made payments of $ 0.1 million and $ 0.2 million, respectively, to one of the co-founder shareholders for scientific consulting and other expenses.

As of December 31, 2024 and 2023 , there were no amounts included within accounts payable.

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In 2023, the Company terminated the Myeloid Collaboration Agreement.

In January 2024, the Company and Myeloid entered into a settlement agreement resolving two arbitration proceedings, which are described in Note 10, Licenses and Collaboration Agreements .

In January 2024, the Company and Myeloid entered into a settlement agreement resolving two arbitration proceedings.

The Company recognized the following amounts related to Myeloid:

(in thousands) 2023 2022

Expense incurred

Settlement $ 13,500 $ —

Research and development 560 688

Amounts accrued

Settlement 13,500 —

Research and development — 329

Subsequent Events

Cystic Fibrosis Foundation

In January 2024, the Company entered into an agreement with the Cystic Fibrosis Foundation to develop therapies for the treatment of Cystic Fibrosis.

Under the term of the agreement, the Company is entitled to received up to $ 15 million.

Funding from the Cystic Fibrosis Foundation will allow Prime Medicine to progress two distinct strategies for applying Prime Editing to treat Cystic Fibrosis.

If successful, Cystic Fibrosis Foundation is entitled to receive royalties on net sales.

Public Offering

In February 2024, the Company issued and sold 22,560,001 shares of its common stock, including 3,360,000 shares pursuant to the exercise of the underwriters’ option to purchase additional shares, at a price to the public of $ 6.25 per share.

As a result of the offering, the Company received approximately $ 150.9 million in net proceeds, after deducting underwriting discounts, commissions and estimated offering costs of $ 10.1 million.

The settlement was accrued on the Company’s consolidated balance sheet as of December 31, 2023 and paid during the year ended December 31, 2024.

As of December 31, 2024, there were no amounts included within accounts payable or accrued expenses.

Advisory Services Agreement with Jeffrey Marrazzo

In February 2024, the Company entered into an advisory services agreement (“Marrazzo Agreement”) with Jeffrey Marrazzo, a member of the Board of Directors.

Under the Marrazzo Agreement, Mr.

Marrazzo agreed to provide certain professional services to the Company separate from and in addition to his service as a Board member.

For his services, the Company agreed to pay Mr.

Marrazzo an annual fee of $ 50,000 per year in addition to the grant of an option to purchase 250,000 shares of the Company’s common stock, which has a grant date fair value of $ 1.5 million.

The term of the Marrazzo Agreement runs through February 2025 and may be terminated or extended by mutual written agreement.

If the Company terminates the Marrazzo Agreement without “Cause,” the administrator of the 2022 Plan will accelerate the vesting of the option such that the pro rata portion of the option will vest and be immediately exercisable.

Bristol-Myers Squibb

In September 2024, the Company and BMS, a related party, entered into the BMS Collaboration Agreement and the BMS Purchase Agreement.

BMS is a related party due to its share of ownership of the Company.

For amounts recognized under the BMS Collaboration Agreement, refer to Note 9, Licenses and Collaboration Agreements .

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

What changed 10-K

Item 9A. Controls and Procedures