What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-03 compared with 2025-02-28 · 70 added, 63 removed, 181 unchanged (42% of the section changed)

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You should review "Item 1A, Risk Factors" of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a biotechnology company committed to delivering a new class of differentiated one-time curative genetic therapies.

We are deploying Prime Editing technology, which we believe is a versatile, precise, and efficient gene editing technology.

In September 2024, we announced that we are strategically focusing our pipeline on a set of high value programs organized around the following core areas of focus:

hematology, immunology and oncology, liver, and lung.

Each program is targeting a disease with well-understood biology and a clearly defined clinical development and regulatory path and the programs are expected to provide the foundation for expansion into additional opportunities.

Each prioritized program is also intended to serve as a beachhead, in that the modularity of the Prime Editing platform is expected to allow Prime Medicine to generate follow-on candidates rapidly and efficiently.

In addition, we are identifying partnership opportunities to advance other programs.

CGD, is our most advanced blood program, and we have designated PM359 as our candidate in the treatment of this disease.

We believe our Prime Editing programs are well-positioned to leverage the clinical, regulatory, and manufacturing advancements made to date across gene therapy, gene editing, and delivery modalities to accelerate progression to clinical trials and potential approval.

We are a biotechnology company focused on developing a new class of genetic medicines designed to provide durable, and potentially curative, treatment options for patients with diseases driven by defined genetic alterations, acquired cellular dysfunction, or dysregulated gene expression.

We are focused on advancing our in vivo liver franchise, where we are advancing programs to cure two of the largest genetic liver diseases, Wilson Disease and AATD.

Both programs are currently in late stages of pre-clinical development and are on track for IND and/or CTA filings in the first half of 2026 for Wilson Disease and the middle of 2026 for AATD.

We intend to leverage the modularity of our platform to expeditiously and efficiently develop these programs supported by our universal liver lipid nanoparticle along with potential regulatory, clinical and other synergies from our modular technology.

We also continue to advance our in vivo Cystic Fibrosis program with support from CFF, and our efforts to develop Prime Edited CAR-T products for hematology, immunology and oncology in partnership with BMS.

In addition, we will continue to pursue additional business development opportunities to accelerate innovation, ensure the broadest application of Prime Editing, and further bolster our financial resources.

In August 2025, we announced additional data from the first patient dosed and initial data from the second patient dosed in our Phase 1/2 trial in CGD.

Discussions are underway with the FDA to explore a potential accelerated path to approval in the United States.

Components of Our Results of Operations

To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products for the foreseeable future.

Our revenues to date have been generated through research collaboration and license agreements.

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We expect that our revenue for the next several years will be derived primarily from our current collaboration agreements and any additional collaborations that we may enter into in the future.

To date, we have not generated any revenue from product sales or royalties and do not expect to generate any revenue from the sale of products or royalties for the foreseeable future.

To date, we have not received any royalties under any of our existing collaboration agreements.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates.

Research and development expenses consist primarily of costs incurred in connection with the development and research of our immediate target indications and our differentiation target indications.

These expenses include:

• personnel-related expenses, including salaries, bonuses, benefits, and stock-based compensation for employees engaged in manufacturing, research and development functions;

• personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation for employees engaged in manufacturing, and research and development functions;

• expenses incurred in connection with continuing our current research programs and preclinical and clinical development of any product candidates we may identify, including under agreements with third parties, such as consultants and contractors;

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Most of our research and development expenses have been related to early stage development activities.

External research and development costs for any individual product candidate will be tracked upon the FDA’s clearance of the IND application for that product candidate.

In the future, external research and development costs for any individual product candidate will be tracked commencing upon product candidate nomination.

We do not allocate employee costs, costs associated with our discovery efforts, laboratory supplies, and facilities expenses, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple programs and our platform and, as such, are not separately classified.

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Milestone payments made upon regulatory approval will be capitalized and amortized over the remaining useful life of the related product.

We expect our research and development expenses to continue to increase substantially for the foreseeable future with our planned research and development activities related to developing any future product candidates, including investments in manufacturing, as we advance any product candidates we may identify and conduct clinical trials, and with our obligations under the BMS Collaboration Agreement.

We expect our research and development expenses may continue to increase in the future with our planned research and development activities related to developing any future product candidates, including investments in manufacturing, as we advance any product candidates we may identify and begin to conduct clinical trials, and with our obligations under the BMS Collaboration Agreement.

General and Administrative Expenses

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and facilities, depreciation and other general and administrative expenses, which include direct or allocated expenses for rent and maintenance of facilities and utilities.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support research and development activities;

We anticipate that our general and administrative expenses will increase in the future if we increase our headcount to support research and development activities;

increased accounting, legal, insurance, and investor and public relations costs as we continue to operate as a public company;

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Other income (expense), net consists of:

• interest and other income earned on our short-term investments;

• the change in the fair value of our short-term investment in Beam Therapeutics Inc., or Beam, a related party, in connection with the Beam Collaboration Agreement, which is discussed in greater detail in Item 1.

• interest and amortization related to our short-term investments;

• the change in the fair value of our short-term investment in Beam, a related party, in connection with the Beam Collaboration Agreement, which is discussed in greater detail in Item 1.

Business , of this Annual Report on Form 10-K.

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The $5.3 million increase in research and development expense for the year ended December 31, 2025 as compared to the year ended December 31, 2024 is primarily driven by:

• $11.3 million increase in facility-related expense primarily due to the expansion and build out of our laboratory space.

• $8.9 million increase in personnel expense, including an increase in stock-based compensation expense of $4.8 million, driven by the higher headcount of our research and development function as compared to the prior year;

• $4.1 million increase in clinical expenses related to PM359, our candidate to treat chronic granulomatous disease;

• $1.9 million increase in license fees for amounts due to the Broad resulting from the BMS Collaboration Agreement.

This is offset by a $17.9 million decrease in lab supplies expense as materials used in the current year for our ongoing Phase 1 clinical trial were purchased in advance in 2023.

Settlement Payment — Related Party

In January 2024, we entered into a settlement agreement with Myeloid Therapeutics, Inc., or Myeloid, to resolve two arbitration proceedings.

Under the terms of the agreement, the parties agreed to resolve and settle all disputes between the parties and release all claims between them relating to the parties’ license agreement and the arbitrations in exchange for our payment to Myeloid of $13.5 million, certain mutual covenants, and other consideration.

• $11.0 million increase in facility-related expense primarily due to the expansion and build out of our laboratory space at 60 First Street and 500 Arsenal Street and due to a higher amount of facility costs being allocated to our research and development function;

• $6.9 million increase in license and IP costs, primarily due to the issuance of restricted stock units;

• $1.8 million increase in professional and consultant fees, primarily related to our in-house vivarium;

• $1.2 million increase in clinical expense as we advance our Wilson Disease and AATD programs, both of which are on track for IND and/or CTA filings in 2026.

These were offset by:

• $9.3 million decrease in personnel expenses resulting from the workforce reduction announced in May 2025;

• $6.2 million decrease in research costs, primarily due to the deprioritization of our CGD programs as we strategically focus our internal efforts on advancing our in vivo liver franchise.

General and Administrative Expenses

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Total general and administrative expenses $ 52,346 $ 50,161 $ 2,185

The $6.8 million increase in general and administrative expense for the year ended December 31, 2024 as compared to the year ended December 31, 2023 is primarily driven by:

• $9.5 million increase in personnel expense, a majority of which was an increase in non-cash stock-based compensation expense of $7.4 million;

• $1.5 million increase in facility related and other primarily related to the ongoing build out of our facility at 60 First Street.

This was offset by a $4.2 million decrease in professional and consultant fees for legal services.

The $2.2 million increase in general and administrative expense for the year ended December 31, 2025 as compared to the year ended December 31, 2024 is primarily driven by a $7.0 million increase in professional and consultant fees due to an increase in corporate legal expenses.

This is offset by:

• $3.5 million decrease in personnel expense, due to a decrease in non-cash stock-based compensation expense of $3.5 million;

• $1.3 million decrease in facility related and other primarily due to a higher proportion of our facility space being utilized in research and development activities.

Other Income (Expense)

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Total other income, net $ 7,208 $ 6,585 $ 623

Accretion of investments

Accretion (amortization) of investments for each of the periods presented is a result of the price at which our investments are purchased.

If the investments are purchased at a price different from their par value, the difference is accreted, if lower than par, or amortized, if higher than par, until the investment matures or is sold.

Change in Fair Value of Related Party Short-Term Investment

The change in fair value of related party short-term investment for each of the periods presented is a result of Beam’s stock price movement.

Accretion (amortization) of investments

Accretion (amortization) of investments for each of the periods presented is a result of increase (decrease) in the value of the our marketable securities purchased at a discount (premium) to their face value.

Liquidity and Capital Resources

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To date, we have funded our operations primarily with proceeds from sales of preferred stock, public offerings of our common stock, and through payments from our collaboration partners.

As of December 31, 2024, we had cash and cash equivalents, short-term investments, and related party short-term investments of $190.4 million, excluding our restricted cash, or $204.5 million, including restricted cash.

As of December 31, 2025, we had cash and cash equivalents, and short-term investments of $177.7 million, excluding our restricted cash, or $191.4 million, including restricted cash.

In November 2023, we filed a shelf registration statement on Form S-3 (File No.

333-275321), including a base prospectus and sales agreement prospectus, or the Prior Registration Statement, for the issuance and sale of up to $500.0 million of our common stock, preferred stock, debt securities, warrants and/or units, as declared effective by the SEC on November 13, 2023.

In November 2025, we filed an automatic shelf registration statement on Form S-3ASR (File No.

333-291348), including a base prospectus and sales agreement prospectus, or the New Registration Statement, to replace the Prior Registration Statement that was set to expire on November 13, 2026, for the registration of an unspecified amount of our common stock, preferred stock, debt securities, warrants and/or units or any combination thereof.

The New Registration Statement became automatically effective upon filing, and in accordance with Rule 415(a)(6) under the Securities Act, the offering of securities under the Prior Registration Statement is deemed terminated as of the date of effectiveness of the New Registration Statement.

Concurrently with the filing of this Annual Report on Form 10-K, we plan to convert the New Registration Statement on Form S-3ASR to Form S-3 by post-effective amendments.

In November 2023, we entered into an Open Market Sale Agreement SM , or the Sales Agreement, with Jefferies LLC, or Jefferies, under which we may, from time to time, issue and sell shares of our common stock having an aggregate sales proceeds of up to $300.0 million, in a series of one or more at-the-market equity offerings, or the 2023 ATM Program.

Any shares will be sold pursuant to the New Registration Statement and the sales agreement prospectus filed therewith, which covers the offer and sale of shares of our common stock under the 2023 ATM Program having an aggregate offering price of up to $200.0 million of the $300.0 million authorized under the Sales Agreement.

we wish to offer and sell additional shares of our common stock under the Sales Agreement in excess of the $200.0 million registered under the New Registration Statement, for up to an additional $100.0 million, we must file with the SEC one or more additional prospectus supplements to register under the Securities Act, the offer and sale of any such additional shares of our common stock we wish to offer and sell from time to time under the Sales Agreement.

Jefferies is not required to sell any specific share amounts but acts as our sales agent, using commercially reasonable efforts consistent with its normal trading and sales practices.

We will pay Jefferies a commission equal to 3.0% of the aggregate gross proceeds we receive from each sale of our shares of common stock.

Pursuant to the Sales Agreement, any shares will be sold pursuant to our shelf registration statement on Form S-3 (File No.

333-275321) filed with the SEC on November 3, 2023, including the base prospectus contained therein, as declared effective by the SEC on November 13, 2023.

Our common stock will be sold at prevailing market prices at the time of the sale, and as a result, prices may vary.

As of December 31, 2025, we have not sold any shares of common stock under the 2023 ATM Program.

In February 2024, we issued and sold 22,560,001 shares of our 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.

Further, in lieu of common stock to certain investors, we 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, we received approximately $150.9 million in net proceeds, after deducting underwriting discounts, commissions and estimated offering costs of $10.1 million.

In August 2025, we issued and sold 43,700,000 shares of our common stock, including 5,700,000 shares pursuant to the exercise of the underwriters’ option to purchase additional shares, at a price to the public of $3.30 per share.

As a result of the offering, we received approximately $138.4 million in net proceeds, after deducting underwriting discounts, commissions and offering costs of approximately $5.8 million.

Going Concern

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In accordance with Accounting Standards Codification, or ASC, 205-40, Going Concern , or ASC 205-40, we evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our 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 our cash, cash equivalents, short-term investments, and related party short-term investments as of December 31, 2024, our current and forecasted level of operations and forecasted cash flows, our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due.

Based on the our cash, cash equivalents, and short-term investments as of December 31, 2025, our current and forecasted level of operations and forecasted cash flows, our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due.

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

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Net cash used in operating activities $ (162,564) $ (122,865)

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

Net cash (used in) provided by investing activities (108,763) 68,457

Net cash provided by financing activities 151,512 195,876

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• $201.1 million net loss;

• $15.9 million change in prepaid expenses and other current assets;

• $13.5 million change in accrued settlement payment — related party;

• $5.4 million change in lease liabilities;

• $5.3 million change in accounts payable.

These were offset by:

• $4.4 million change in deferred revenue;

• $41.9 million of non-cash amounts included in net loss, which consisted primarily of stock-based compensation expense, non-cash lease expense, depreciation and amortization expense, and change in fair value of short-term investment — related party;

• $1.2 million change in accrued expenses and other assets.

These were offset by:

• $43.9 million of non-cash amounts included in net loss, which consisted primarily of stock-based compensation expense, non-cash lease expense, and depreciation and amortization expense;

• $4.5 million change in prepaid expenses and other current assets;

Net cash used in operating activities for the year ended December 31, 2024 was driven primarily by the following uses of cash:

• $195.9 million net loss;

• $12.3 million change in lease liabilities;

• $15.9 million change in prepaid expenses and other current assets;

These were offset by:

• $30.1 million of non-cash amounts included in net loss, which primarily consisted of change in non-cash lease expense, fair value of short-term investment — related party, and stock-based compensation expense;

• $13.5 million change in accrued settlement payment — related party;

• $6.5 million change in lease liabilities;

• $5.3 million change in accounts payable.

• $1.8 million change in accrued expenses and other current liabilities.

These were offset by:

• $70.3 million change in deferred revenue;

Investing Activities

Net cash provided by investing activities for the year ended December 31, 2024 was driven primarily by the following:

• $74.8 million of maturities of short-term investments, net of purchases;

Net cash used in investing activities for the year ended December 31, 2025 was driven primarily by the following:

• $109.6 million of purchases of short-term investments, net of maturities;

• $4.5 million of purchases of property and equipment.

These were offset by $5.4 million from sales of investments — related party.

Net cash provided by investing activities for the year ended December 31, 2024 was driven primarily by the following:

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Net cash provided by financing activities for the year ended December 31, 2025 was driven primarily by the following:

• $138.4 million of proceeds from issuances of common stock with our August 2025 public offering;

• $12.0 million of proceeds received under the CFF Agreement.

Net cash provided by financing activities for the year ended December 31, 2024 was driven primarily by the following:

• $132.1 million of proceeds from issuances of common stock with our February 2024 public offering;

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• $18.8 million of proceeds from issuance of pre-funded warrants contemporaneous with our February 2024 public offering;

• $6.0 million of proceeds received under our agreement with Cystic Fibrosis Foundation.

• $6.0 million of proceeds received under the CFF Agreement.

Funding Requirements

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For more information, see “ Risk Factors—Risks Related To Our Financial Position and Need for Additional Capital .”

We believe our existing cash, cash equivalents, and investments will be sufficient to fund our operating expenses and capital expenditure requirements into the first half of 2026.

We believe our existing cash, cash equivalents, and investments will be sufficient to fund our operating expenses and capital expenditure requirements into 2027.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

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• identify product candidates;

• evaluate strategic alternatives and potential partnership opportunities for PM359, including our ability to execute and realize the anticipated benefits of any strategic alternatives we may pursue;

• develop, maintain, expand and protect our intellectual property portfolio and defend intellectual property-related claims;

• maintain existing collaborations or strategic relationships and identify and enter into future license agreements and collaborations with third parties;

• initiate preclinical testing and clinical trials for our future product candidates we identify;

• develop, maintain, expand and protect our intellectual property portfolio;

• further develop our Prime Editing platform;

• hire additional research, clinical and scientific personnel.

• hire additional personnel to support our strategic priorities.

If we receive regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize ourselves.

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If we raise funds through collaborations, strategic alliances or marketing, or distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, any future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, reduce or eliminate our product development or future

commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, reduce or eliminate our product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Contractual Obligations and Other Commitments

Refer to Note 6, Leases, to our consolidated financial statements appearing within this Annual Report on Form 10-K for information on our lease obligations.

Refer to Note 6, Leases, to our consolidated financial statements appearing elsewhere within this Annual Report on Form 10-K for information on our lease obligations.

Under our license and collaboration agreements, we are potentially obligated to pay certain milestones, royalty fees, licensing maintenance fees, and reimbursement of patent maintenance costs.

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These estimates of the expenses incurred are based on facts and circumstances known to us at that time.

Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative

to the actual status and timing of services performed may vary and could have a significant impact on reported amounts.

Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could have a significant impact on reported amounts.

If the payments made exceed the expenses incurred, the excess amount is reflected as prepaid expenses and other current assets.

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A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2, Summary of Significant Accounting Policies , to our consolidated financial statements appearing within this Annual Report on Form 10-K.

Emerging Growth Company Status

Emerging Growth Company and Smaller Reporting Company Status

The JOBS Act permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies.

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We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year.

We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million.

If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

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 7. Management’s Discussion and Analysis