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Item 1. Business

2023-03-16 compared with 2022-03-16 · 817 added, 973 removed, 892 unchanged (67% of the section changed)

We were founded on the belief that engineered cells will be one of the most important transformations in medicine over the next several decades.

The burden of diseases that can be addressed at their root cause through engineered cells is significant.

Damage to cells is the underlying pathology of almost every human disease, and we believe the ability to replace or repair damaged cells through cellular engineering can address the underlying root cause of a host of diseases.

We view engineered cells as having the potential to be as therapeutically disruptive as biologics to clinical practice.

Our long-term aspirations are to be able to control or modify any gene in the body, to replace any cell that is damaged or missing, and to markedly improve access to cellular and gene-based medicines.

We have brought together an experienced group of scientists, engineers, and company builders and combined them with the necessary technologies to move this vision forward.

We are developing ex vivo and in vivo cell engineering platforms to revolutionize treatment across a broad array of therapeutic areas with unmet treatment needs, including oncology, diabetes, central nervous system (CNS) disorders, cardiovascular diseases, and genetic disorders, among others.

Our platform progress, broad capabilities, and strong balance sheet enable us to execute on a broad vision, with a goal of submitting our first INDs in 2022, with the opportunity to submit multiple INDs per year beyond 2022.

We have brought together an experienced group of scientists, engineers, and company builders and equipped them with technologies to move this vision forward.

We expect initial clinical data from our CD19-targeted directed allogeneic chimeric antigen receptor (CAR) T program, SC291, in 2023, which, importantly, will tell us both about SC291 as a drug candidate and the translatability of our hypoimmune platform technology to patients.

We also continue to make progress developing our cell engineering platforms and advancing our product candidates through preclinical development, with the goal of submitting multiple Investigational New Drug applications (INDs) in 2023 and beyond.

We believe the time is right to develop engineered cell therapies across a broad range of therapeutic areas.

The field has seen initial clinical proof of concept for gene and cell replacement approaches across multiple diseases, including cancer and certain genetic disorders, through the application of adeno-associated virus (AAV) based gene therapies, autologous CAR T cell therapies, and autologous and allogeneic grafts/transplants.

While such existing approaches have limitations, they provide evidence that a broad range of ex vivo and in vivo engineered cells can have transformative clinical potential in at least a subset of patients.

Although such existing approaches have limitations, they provide evidence that a broad range of ex vivo and in vivo engineered cells can have transformative clinical potential in at least a subset of patients.

Substantial progress in the understanding of genetics, gene editing, gene control, protein engineering, stem cell biology, immunology, process analytics, and computational biology have converged to create an opportunity to markedly increase the breadth and depth of the potential impact of genetic and cellular medicines.

We are seeking to overcome these existing limitations of gene and cell therapy through our ex vivo and in vivo cell engineering platforms, both of which may facilitate the development of therapies that can transform the lives of patients by repairing cells in the body when possible and replacing them when needed.

For ex vivo therapies, where diseased cells are damaged or missing entirely and an effective therapy needs to replace the entire cell, a successful therapeutic requires large-scale manufacturing of cells that engraft, function, and persist in the body.

Of these, we view persistence as the greatest limitation to dramatically expanding the impact of this class of therapeutics.

We believe that product candidates developed with our ex vivo cell engineering platform, which utilizes hypoimmune allogeneic cells that can “hide” from the patient’s immune system, can address this fundamental limitation and unlock a wave of disruptive therapeutics.

For in vivo therapies, where the desire is to repair and control genes in the body, a successful product candidate requires both gene modification and in vivo delivery of the therapeutic payload.

Of these, we view effective in vivo delivery as the greatest limitation to dramatically expanding the impact of this class of therapeutics.

We seek to overcome several existing limitations of gene and cell therapy through our ex vivo and in vivo cell engineering platforms, both of which may facilitate the development of therapies that can transform the lives of patients by repairing cells in the body when possible and replacing them when needed.

For ex vivo therapies, when diseased cells are damaged or missing entirely and an effective therapy needs to replace the entire cell, a successful therapeutic requires large-scale manufacturing of cells that engraft, function, and persist in the body.

Of these, we view cell persistence as the greatest current limitation to dramatically expanding the impact of this class of therapeutics, and in particular, overcoming the barrier of immune rejection of transplanted allogeneic cells.

We believe that product candidates developed with our ex vivo cell engineering platform, which uses hypoimmune-modified allogeneic cells that can “hide” from the patient’s immune system, can address this fundamental limitation and unlock a wave of disruptive therapeutics.

For in vivo therapies that aim to repair and control genes in the body, a successful product candidate requires both gene modification and in vivo delivery of the therapeutic payload.

Of these, we view effective in vivo delivery as the greatest current limitation to dramatically expanding the impact of this class of therapeutics.

To this end, our initial focus is on cell-specific delivery as well as increasing the diversity and size of payloads.

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He is a physician-scientist with experience in basic research, clinical medicine, finance, company building, and operations.

Our Chairman of the Board and co-founder, Hans Bishop, is an experienced company builder and operator with success across a number of companies.

Our executive team is composed of multiple individuals with deep experience building high growth, disruptive companies, including Christian Hordo, Chief Business Officer, who previously ran Business Development and the Myeloma program at Juno Therapeutics, and Robin Andrulevich, Chief People Officer, who has held key senior leadership roles at Amazon, Google, and Juno Therapeutics.

Our Chairman of the Board and co-founder, Mr.

Hans Bishop, is an experienced company builder and operator with success across a number of companies.

Leading Scientists .

We believe that in order to be successful in drug development for engineered cells, significant investments in infrastructure and cross-functional capabilities need to be coupled with deep scientific expertise in the cell types of interest within each program.

We believe that in order to successfully develop engineered cells as medicines, significant investments in infrastructure and cross-functional capabilities need to be coupled with deep scientific expertise in the cell types of interest within each program.

Our leadership team includes multiple world-class scientists, including researchers who have made seminal discoveries in gene delivery, immunology, CAR T cells, gene editing, and stem cell biology.

These include Drs.

Richard Mulligan, Terry Fry, Ed Rebar, Chuck Murry, Sonja Schrepfer, Steve Goldman, and Jagesh Shah.

We have surrounded this team of discovery scientists with drug developers experienced in advancing product candidates through the development process with expertise in areas such as pharmacology, toxicology, regulatory, clinical

development, and clinical operations.

These include Drs.

Sunil Agarwal, Donna Dambach, Ke Liu, Paul Brunetta, and Ms.

Experienced Manufacturing Scientists, Engineers, and Operators .

Since our founding, we have proactively assembled manufacturing sciences and operations expertise on our board, on our executive team, and across the company.

Our manufacturing organization is led by Dr.

Stacey Ma, an experienced executive with over two decades of manufacturing leadership, contributing to the commercialization of over ten products across multiple modalities.

Board and Investors with Shared Long-Term Vision .

Our board of directors is composed of renowned company builders, scientists, drug developers, and investors who share our long-term vision of advancing engineered cells as medicine to change the lives of patients.

This has enabled our strategy of consolidating technologies, assets, and people to expand the potential impact of our long-term vision.

Our board of directors is a resource that has enabled our strategy of consolidating technologies, assets, and people to expand the potential impact of our long-term vision.

Our capabilities enable us to take a comprehensive approach to the most important and difficult aspects of engineering cells.

We are pursuing ex vivo and in vivo cell engineering and can leverage the synergistic proficiencies required to succeed in both approaches.

We believe we can capitalize on the shared expertise and infrastructure between the platforms to maximize the potential success and the reach of our transformative therapies.

We believe we can capitalize on the shared expertise and infrastructure between the platforms to maximize the potential success and the reach of each of our potentially transformative therapies.

We have built deep internal capabilities across a wide range of areas focused on solving the most critical limitations in engineering cells including:

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We are investing in technologies that allow payload delivery to specific cell types, increase the diversity and size of payloads, enable repeat dosing of patients, and increase the volume of distribution inside the body in order to target and access more diverse cells.

Gene Modification .

The ability to knock-out, knock-in, modify, and control expression of genes is fundamental to our platforms’ success.

We have hired world-class scientists with experience in all of these capabilities and across multiple modalities.

Genome Modification .

The ability to knock-out, knock-in, modify, disrupt, and control expression of genes is fundamental to the success of our platforms.

We have hired world-class scientists with experience in each of these capabilities and across multiple modalities.

We are building internal capabilities that enable high throughput cell engineering and gene editing and control using multiple technologies through use of natural systems, protein engineering, and synthetic biology.

We believe our capabilities across multiple modalities will allow us to utilize the appropriate system for the biologic problem of interest.

We believe our capabilities across multiple modalities will allow us to use the appropriate system for the biologic problem of interest.

We are developing proprietary gene editing capabilities as well as seeking strategic partnerships in key areas.

The immune system can be harnessed to treat multiple diseases, and it can also limit the therapeutic effect of most cell- and gene-based therapies.

The immune system can be harnessed to treat multiple diseases, and it can also limit the therapeutic effect of many cell- and gene-based therapies.

Understanding and harnessing the immune system can have a broad impact across our ex vivo and in vivo cell engineering portfolio.

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Furthermore, we are investing significantly in our people and the technologies that enable the differentiation of pluripotent stem cells into mature cells that can be used as therapeutics.

In each therapeutic area we intend to pursue, we have brought in-house senior world-class scientists to lead our efforts, and our research teams have significant experience in various areas of biology.

In each therapeutic area we intend to pursue, we have brought in-house senior world-class scientists to lead our efforts in these areas, and our research teams have significant experience in various areas of biology.

Our ex vivo and in vivo Cell Engineering Platforms

The advent of recombinant DNA technology in the 1970s ushered in a new era of therapeutics, enabling the synthetic manufacture of human protein therapies at scale for the first time.

However, the critical inflection point occurred when key technological advancements eventually enabled the broad development of monoclonal antibodies with suitable therapeutic properties.

The advent of recombinant DNA technology in the 1970s ushered in a new era of therapeutics, enabling the synthetic manufacture of human protein therapies at scale for the first time.A critical inflection point occurred when key technological advancements eventually enabled the broad development of monoclonal antibodies with suitable therapeutic properties.

These advancements, combined with progress in understanding disease biology, allowed biologics to become the second largest therapeutic class.

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Our goal for ex vivo cell engineering is to replace any cell in the body with cells that engraft, function, and persist over time, and to manufacture those cells cost-effectively at scale.

Our ex vivo cell engineering platform utilizes our hypoimmune technology to create cells that can “hide” from the patient’s immune system to enable persistence of allogeneic cells.

We are striving to make therapies utilizing pluripotent stem cells with our hypoimmune genetic modifications as the starting material, which we then differentiate into a specific cell type, such as a pancreatic beta cell, before treating the patient.

Additionally, for cell types for which effective differentiation protocols from a stem cell have not yet been developed, such as T cells, instead of starting from a pluripotent stem cell, we can utilize a fully differentiated allogeneic cell,

sourced from a donor, as the starting material to which we then apply our hypoimmune genetic modifications.

Our goal is to manufacture genetically modified cells that are capable of both replacing the missing cell and evading the patient’s immune system.

We are now applying our technologies to make cell products for the treatment of multiple diseases.

Our ex vivo cell engineering platform uses our hypoimmune technology to create cells that can “hide” from the patient’s immune system to enable persistence of allogeneic cells.

We are striving to make therapies using pluripotent stem cells with our hypoimmune genetic modifications as the starting material, which we then differentiate into a specific cell type, such as a pancreatic islet cell, before treating the patient.

Additionally, there are cell types for which effective differentiation protocols from a stem cell have not yet been developed, such as T cells.

For such cell types, instead of starting from a pluripotent stem cell, we can use a fully differentiated allogeneic cell, sourced from a donor, as the starting material to which we then apply our hypoimmune genetic modifications.

Our goal is to manufacture genetically modified cells that are capable of both replacing the missing cell and evading

the patient’s immune system.

We are now applying our ex vivo cell engineering technologies to make cell products for the treatment of multiple diseases.

We anticipate initial clinical data in 2023 from our CD19-targeted allogeneic CAR T program, SC291, as well as from an investigator sponsored trial using hypoimmune cadaveric primary human islet cells transplanted in type 1 diabetes patients, each of which we expect will provide opportunities to further understand these technologies.

In vivo cell engineering

Engineering cells in vivo requires the development of both an appropriate delivery vector as well as a payload to effectively modify the cell.

Engineering cells in vivo requires the development of both an appropriate delivery vector as well as a payload to effectively modify the target cell.

Our goal for in vivo cell engineering is to repair and control the genes of any cell in the body.

The ultimate aim is to achieve the delivery of any payload, to any cell, in a specific and repeatable way.

Our in vivo cell engineering platform harnesses fusogen technology, which targets cell surface receptors, and thereby can enable cell specific delivery for a meaningful number of different cell types.

Using our fusogen technology, we have shown in preclinical studies that we can specifically target numerous cell surface receptors that, when combined with delivery vehicles to form fusosomes, allow cell-specific delivery across multiple different cell types.

Our in vivo cell engineering platform harnesses fusogen technology, which targets cell surface receptors, enabling cell-specific delivery for a meaningful number of different cell types.

We have shown in preclinical studies that our fusogen technology can specifically target numerous cell surface receptors that, when combined with delivery vehicles to form fusosomes, allow cell-specific delivery across multiple different cell types.

Our Portfolio Strategy

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We are developing a broad pipeline of product candidates focused on creating transformative ex vivo and in vivo engineered cell therapies across a range of therapeutic areas.

We are in the early stages of development across a broad pipeline of product candidates, all of which are currently in the preclinical stage of development and are summarized below:

Each of our initial programs provides the potential for meaningful standalone value while also supporting our potential ability to further exploit our platforms into broadly applicable medicines.

Our most advanced hypoimmune product candidate is SC291, a CD19-directed allogeneic CAR T program for NHL, CLL, and ALL.

This program is designed to address the major limitation of existing allogenic CAR T cell therapies:

evasion of host versus

graft responses (HvGR) , which occurs when a patient’s immune system kills the transplanted T cells, limiting the potential benefit of the therapy.

One approach to avoid HvG R has been to effectively eliminate a patient’s immune system for a short period using chemotherapy, which puts the patient at risk for severe infections.

Further, the patient’s immune system will inevitably recover, which will lead to the immune system eliminating the CAR T cells, limiting the effectiveness of the therapy.

Our hypoimmune technology is designed to hide cells from the patient’s immune system, giving our allogeneic CAR T cell program the potential to create medicines that persist longer in patients and avoid the risk s associated with higher doses of chemotherapy.

Our goal is to submit an IND for SC291 in 2022, and initial clinical success would unlock meaningful standalone value in the development of SC291 in NHL/CLL/ALL which has the potential to address scalability challenges of autologous therapies.

Additionally, this initial clinical success would support and validate the expansion of our allogenic CAR T efforts, which include a CD22-targeting allogeneic CAR T which could be combined with targeting CD19 (SC276) and offers the potential benefit of higher and more durable complete response rates , and a BCMA directed CAR T (SC255) in multiple myeloma.

Furthermore, initial clinical success would also support the validation of the hypoimmune platform overall, which is being actively deployed internally across a number of other therapeutic areas beyond oncology.

Our next most advanced hypoimmune product candidate is SC451, PSC-derived pancreatic beta cells for the treatment of diabetes, with an initial focus on Type I diabetes mellitus (T1DM).

Almost 1.6 million people in the United States, and 2.4 million in Europe have T1DM.

We are in the early stages of development across a broad pipeline of product candidates, which are summarized below:

Each of our initial programs provides the potential for meaningful standalone value while also supporting our potential ability to further exploit our platforms in a manner that leads to the development of broadly applicable medicines.

Allogeneic T Cell Platform

We are first applying our hypoimmune technology to donor derived T cells to be used as allogeneic cell therapies for hematologic malignancies.

Our most advanced hypoimmune product candidate is SC291, a CD19-directed allogeneic CAR T program for the treatment of non-Hodgkin’s lymphoma ( NHL ) , chronic lymphocytic leukemia ( CLL ) , and acute lymphoblastic leukemia (ALL), for which we received IND clearance in January 2023.

We are also developing SC262, a CD22-directed allogeneic CAR T for the treatment of NHL, CLL, and ALL, as well as SC255, a B cell maturation antigen (BCMA)-directed allogeneic CAR T, for the treatment for multiple myeloma (MM).

These programs are designed to address a major limitation of existing allogeneic CAR T cell therapies:

the need to evade host versus graft responses (HvGR) that occur when a patient’s immune system kills the transplanted T cells, limiting the potential benefit of the therapy.

The rapid killing of the transplated cell is a major contributor to the short-lived responses seen in patients treated with allogeneic CAR Ts.

One approach to avoid HvGR has been to effectively eliminate a patient’s immune system for a short period using chemotherapy, which puts the patient at risk for severe infections.

Further, the patient’s suppressed immune system inevitably recovers, and eliminates the CAR T cells, limiting the effectiveness of the therapy.

Our hypoimmune technology is designed to enable cells to “hide” from the patient’s immune system, giving our allogeneic CAR T cell program the potential to create medicines that persist longer in patients and avoid the risks associated with higher doses of chemotherapy.

Cellular persistence of SC291 in patients for two months or greater would exceed the persistence seen by allogeneic CAR T product candidates that are currently in the clinic.

This persistence may potentially translate into higher rates of durable complete reponsesin treated patients.

Based upon data from other clinical trials, we estimate that cellular persistence of three to six months can lead to long-term complete reponse rates that are comparable to those seen with autologous CAR T cells to date, the current standard of care.

Average cell persistence of greater than six months has the potential to translate into durable complete response rates that create a new standard of care.

We expect initial clinical data with cellular persistence from early patients in 2023.

Our allogeneic T cell platform is designed to enable the substitution of CAR constructs in a modular fashion.

Initial clinical success with SC291 would support the expansion of our allogeneic CAR T efforts with additional product candidates targeting other patient populations.

For the near-term, we are prioritizing clinically-validated targets as well as CAR constructs that have shown promising safety and efficacy profiles in hematologic malignancies in the autologous context.

As noted above, SC262 is a CD22- directed allogeneic CAR T that offers the potential to treat both CD19 treatment-naïve patients as well as those that have experienced CD19 treatment failures in NHL, CLL, and ALL.

The CD22 CAR construct that we use in SC262, which we have licensed from the National Institutes of Health, has already been evaluated in multiple academic clinical trials, data from which have shown complete responses in a substantial number of patients that have relapsed following treatment with a CD19-directed CAR T therapy.

We intend to prioritize development for patients that have previously failed a CD19-directed CAR T therapy.

SC255 is a BCMA-directed allogeneic CAR T for the treatment of MM.

The BCMA CAR construct that we use in SC255, which we have licensed from IASO Biotherapeutics and Innovent Biologics, is currently being evaluated in Phase 1b/2 trials as part of an autologous CAR T candidate, CT103A, in heavily pretreated patients with relapsed and/or refractory MM.

Data from such trials presented at the American Society of Hematology Annual Meeting in December 2022 showed an overall response rate of 95.0%, a minimal residual disease (MRD) negativity rate of 95%, and a complete response/stringent complete response (CR/sCR) rate of 74% in 100 patients.

At one year, 80% of patients continue to be MRD negative.

In the future, additional candidates may be nominated to address hematological malignancies, solid tumors, and autoimmune disease.

Regenerative Pipeline for Allogeneic CAR T Therapy

Allogeneic CAR T development candidates are manufactured from T cells purified from donor PBMCs.

T cells undergo genome modification to disrupt MHC class I and class II expression (which inactivates adaptive immune responses), disrupt TCR expression (which minimizes graft vs.

host disease) and overexpress CD47 (which enables cells to evade the innate immune system, including macrophages and natural killer (NK) cells).

Development candidates principally differ in the CAR expressed by the cells.

Expansion during manufacturing allows production of hundreds of patient doses per donor (based on current scale and accounting for hold back necessary for testing and dose variability).

PSC-derived Pancreatic Islet Cells

Our most advanced stem cell-derived hypoimmune product candidate is SC451, PSC-derived pancreatic islet cells for the treatment of diabetes, with an initial focus on type I diabetes mellitus (T1DM).

Approximately 1.6 million people in the United States, and 2.4 million in Europe , have T1DM.

T1DM is a disease in which a patient’s immune system attacks and kills pancreatic beta cells, leading to complete loss of insulin production in affected individuals.

Patients need to take multiple insulin injections every day for life, and, while insulin has a profoundly positive impact on patients, people with T1DM have approximately 15 years shorter life expectancies than people without diabetes and are consistently at risk for complications such as coma, stroke, myocardial infarction, kidney failure, and blindness from poorly controlled blood glucose.

We and our collaborators have shown that we can develop high quality beta cells that, when transplanted, normalize blood glucose and cure diabetes in animal models.

We have also shown that our hypoimmune cells induce no systemic immune response, even in NHPs with a pre-existing immune response to non-hypoimmune cells.

As a result, we believe our stem cell derived hypoimmune pancreatic cells have the potential to create a disruptive treatment for T1DM, offering patients life-long normal blood glucose without immunosuppression.

We are working through the process development and IND-enabling studies to allow for an IND submission for SC451 as early as 2023.

Our most advanced fusosome product candidate is SG295, which targets CD19+ cancer cells, including NHL, CLL, and ALL.

This program provides us with an opportunity to develop potential product candidates to expand access to CAR T cell therapy to many more patients in need.

In addition, we believe the ability to deliver a payload encoding a CAR to a T cell without meaningful ex vivo manipulation has the potential to improve effectiveness over ex vivo manufactured CAR T cell products.

These approaches should result in the generation of therapeutically active CAR T cells without the complexities and delays associated with the process of T cell collection and ex vivo manufacturing.

Furthermore, the ex vivo expansion in the presence of high cytokine concentrations, while necessary for the manufacture of approved CAR T cell products, also contributes to marked changes in T cell quality that may not be therapeutically beneficial.

Patients typically need to take multiple insulin injections every day for life.

Although the introduction of insulin has had a profoundly positive impact on patients, people with T1DM have approximately 15 years shorter life expectancies than people without diabetes and are consistently at risk for complications such as coma, stroke, myocardial infarction, kidney failure, and blindness from poorly controlled blood glucose.

We and our collaborators have shown that we can develop high quality stem cell-derived islet cells that, when transplanted, normalize blood glucose and cure diabetes in animal models.

We have also shown that our hypoimmune cells induce no systemic immune response, even in non-human primates ( NHPs ) with a pre-existing immune response to non-hypoimmune cells , and that our allogeneic NHP hypoimmune islet cells survive for the duration of our NHP studies, the longest of which is about forty weeks.

To demonstrate applicability in the context of T1DM, we have developed a proprietary mouse model in-house, with humanized immune cells from a T1DM patient, and showed that hypoimmune modifications enabled T1DM patient-derived stem cell islet cells to evade both the autoimmune and allogeneic response .

As a result, we believe our stem cell - derived hypoimmune pancreatic islet cells have the potential to create a disruptive treatment for

T1DM, offering patients life-long normal blood glucose without immunosuppression.

We are working on process development and IND-enabling studies to allow for an IND submission for SC451 as early as 2024 .

We are planning to support the conduct of an investigator sponsored trial of allogeneic hypoimmune primary islet cells in T1DM patients in 2023 (the IST).

Human pancreatic islet transplantation from allogeneic donors into T1DM patients has been shown to reduce or even eliminate long-term exogenous insulin dependence, albeit when administered with immunosuppression which leads to toxicity.

Under the IST, a group of experienced pancreatic islet transplantation experts will transplant allogeneic primary islet cells that have been genetically modified with the hypoimmune modifications into T1DM patients without immunosuppression.

We believe that a stem cell-derived islet product candidate such as SC451 would likely maximize the benefit to patients, with superior manufacturing scalability and consistency when compared to primary islet cells.

However, we are optimistic that immunology insights gained from the IST, particularly whether the hypoimmune modifications lead to long-term survival and evasion of either allogeneic or autoimmune killing of the cells, may provide direct insights and learnings applicable to SC451, accelerating development of this product candidate.

Fusosome for Hematologic Malignancy

Our most advanced CAR T cell fusosome product candidate is SG299, a CD8-targeted fusosome that delivers a CD19 CAR to target CD19+ cancer cells, and we are developing it to treat patients with hematologic malignancies.

SG299 was previously referred to as SG295, and was renamed in connection with our transition to a new manufacturing process for this product candidate, as described elsewhere in this Annual Report.

This program is an opportunity to develop potential product candidates that can expand access to CAR T cell therapy to patients in need.

We believe the ability to deliver a payload encoding a CAR to a T cell without significant ex vivo manipulation has the potential to be more effective than ex vivo manufactured CAR T cell products.

We plan to generate therapeutically active CAR T cells without the complexities and delays associated with the processes of T cell collection and ex vivo manufacturing that are used in currently approved CAR T products .

Furthermore, the ex vivo expansion of cells in the presence of high cytokine concentrations, although necessary for the manufacture of currently approved CAR T cell products, also contributes to marked changes in T cell quality that may not be therapeutically beneficial.

The generation of a CAR T cell within the natural physiological environment in vivo has the potential to improve the quality of the CAR T cell generated, potentially improving both efficacy and the side effect profile.

Finally, the effectiveness of ex vivo manufactured CAR T cells is dependent on the administration of a lymphodepleting preparative regimen prior to infusion to facilitate expansion of the CAR T cell product, which can have meaningful adverse safety implications.

Finally, the effectiveness of ex vivo manufactured CAR T cells currently depends on the administration of a lymphodepleting preparative regimen prior to infusion to facilitate expansion of the CAR T cell product, which can have adverse safety implications.

We do not expect to need a lymphodepleting regimen prior to in vivo delivery of the CAR gene, as our goal is to expose our fusosomes to as many T cells in the body as possible.

Our goal is to submit an IND for SG295 in 2022 and initial clinical success would unlock meaningful standalone value in the development of SG295 in NHL/CLL/ALL Additionally, this initial clinical success would support and validate the expansion of our in vivo CAR T efforts and support the validation of our fusosome platform overall, which is being actively deployed internally across a number of other therapeutic areas beyond oncology with the goal of targeted delivery of DNA and gene editing machinery to specific cells in vivo.

Our goal is to submit an IND for SG 299 in 2023.

Initial clinical success would unlock meaningful standalone value in the development of SG 299 in NHL , CLL , and ALL , support and validate the expansion of our in vivo CAR T efforts, and support the validation of our fusogen platform overall, which we are pursuing in therapeutic areas beyond oncology with the goal of targeted delivery of DNA and gene editing machinery to specific cells in vivo.

Our ex vivo Cell Engineering Platform

Ex vivo cell engineering aims to treat human disease by engrafting new cells to replace diseased cells that are damaged or missing in patients.

Ex vivo cell engineering aims to treat human disease by engrafting new cells to replace damaged,diseased, or missing cells in patients.

Historically there have been four key challenges to ex vivo cell engineering:

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Our ex vivo cell engineering platform seeks to address these four challenges and is focused on engineering hypoimmune cells that engraft, function, and persist in patients by evading immune rejection.

These are derived from cell sources that are scalable and we believe that continued progress with this platform has the potential to create broad access for patients.

These cells are derived from sources that are scalable, and we believe that continued progress with this platform has the potential to create broad access for patients.

Our Approach to Building our ex vivo Cell Engineering Platform

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Stem cell and disease biology.

We believe that it is critical to have expertise in the developmental biology of stem cell differentiation and a deep understanding of the desired cell phenotype biology of stem cell differentiation in order to generate cells that function appropriately, as well as a deep understanding of the desired cell phenotype.

The latter requires expertise in normal and disease biology.

We believe that it is critical to have expertise in the developmental biology of stem cell differentiation and a deep understanding of the desired cell biology of stem cell differentiation in order to generate cells that function appropriately, as well as a deep understanding of the desired cell phenotype.

The latter requires expertise in

normal and disease biology.

Furthermore, clinical understanding of disease pathology and transplant medicine is required to determine how to engraft the right cell in the right environment.

Each of our programs is led by a prominent clinician-scientist with deep expertise in both cell therapy and disease biology, including Dr.

Terry Fry, our Senior Vice President, Head of T Cell Therapeutics, for T cells, Dr.

Steve Goldman, our Senior Vice President, Head of CNS Therapy, for glial cells, and Dr.

Chuck Murry, our Senior Vice President, Head of Cardiometabolic Cell Therapy, for cardiomyocytes and beta cells.

Immunology and gene modification.

Each of our programs is led by a prominent clinician-scientist with deep expertise in both cell therapy and disease biology.

Immunology and genome modification.

We believe that a deep understanding of the immunological response to engineered cells is essential to unlocking the potential of ex vivo therapies.

This effort is led by Dr.

Sonja Schrepfer, our Senior Vice President, Head of Hypoimmune Platform, and draws from decades of research.

We have licensed technologies from University of California San Francisco, Harvard University, Washington University, and others to enable this effort.

In addition, in order to create successful hypoimmune cells, we are investing in building out our gene editing, modification, and insertion capabilities, led by Dr.

Ed Rebar, our Senior Vice President, Chief Technology Officer.

We have licensed technologies from Harvard University, the University of California San Francisco, Washington University, and others to enable this effort.

In addition, in order to create successful hypoimmune cells, we are investing in building out our gene editing, genome modification, and gene insertion capabilities.

Manufacturing.

We are investing proactively in process development, including process optimization and scale up, analytical development, CMC regulatory, supply chain, quality, and other manufacturing sciences in order to develop processes that can enable scalable manufacturing of cell therapies and broad patient access.

We have also built a pilot manufacturing plant in South San Francisco, California and entered into a long-term lease agreement for a facility in Fremont, California, where we intend to build our own clinical trial and commercial Good Manufacturing Practice (GMP) manufacturing capabilities.

We are also investing to access high quality donor-derived T cells and GMP-grade pluripotent stem cell lines for our programs.

These manufacturing efforts are led by Dr.

Stacey Ma, our Executive Vice President, Technical Operations.

We have entered into agreements with a number of CDMOs and other partners for access to facilities and reagents in our supply chain necessary to manufacture our product candidates.

We have also built a pilot manufacturing plant in South San Francisco, California and entered into a long-term lease agreement for a facility in Bothell, Washington, where we intend to build our own clinical trial and commercial current Good Manufacturing Practice (cGMP) manufacturing capabilities.

We also entered into a lease agreement under which we have obtained access to manufacturing capabilities within University of Rochester Medical Center’s cell-based manufacturing facility to support manufacturing for early-stage clinical trials.

We are also investing to obtain and ensure access to high quality donor-derived T cells and GMP-grade pluripotent stem cell lines for our programs.

Our Approach to Building our ex vivo Cell Engineering Portfolio

We have prioritized cell types for our programs where:

We have prioritized cell types for our programs when:

high unmet need can be addressed by cell replacement;

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evidence exists that the cell type can be successfully differentiated from pluripotent stem cells and that such stem cell-derived cells can function appropriately in vivo;

there has been the ability to hire or partner with one of the world experts in the field to ensure our programs are rooted in a deep understanding of the underlying cell and disease biology;

evading immune system rejection via the hypoimmune technology is either not required initially, but would be disruptive over time (such as cardiomyocytes) or is the critical missing element to developing a cell therapy (such as beta cells).

Based on this prioritization, we are initially focused on four cell types:

T Cells, Beta cells, GPCs, and Cardiomyocytes.

there has been the ability to hire or partner with world experts in the field to ensure our programs are rooted in a deep understanding of the underlying cell and disease biology;

evading immune system rejection via the hypoimmune technology is either not required initially (such as for glial progenitor cells (GPCs)) or is the critical missing element to developing a cell therapy (such as islet cells).

Based on this prioritization, we are focused on three cell types:

T cells, islet cells, and GPCs.

Historical context of ex vivo therapy

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The first successful kidney transplant occurred in 1954, followed by the first successful heart transplant in 1967, demonstrating the transformative clinical potential of replacing damaged or missing cells in the body.

Surgical enhancements have improved the success of engraftment, but lack of organ access, a complex surgical procedure, and immune rejection of the donated organs have limited the impact of these procedures.

Surgical enhancements have improved the success of engraftment, but lack of organ access, complex surgical procedures, and immune rejection of the donated organs have limited the impact of these procedures.

Progress in immunosuppressive regimens, such as the development of cyclosporine, has improved organ survival rates.

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The advent of stem cell technology and subsequent improvements in methods to generate functional differentiated cells at scale have the potential to address the shortage of donor tissues and organs.

In addition, over the past decade a deeper understanding of the immunology of host versus graft responses, coupled with novel techniques to manipulate the immunological profile of cells via gene editing, have raised the prospect that ex vivo engineered cells can significantly benefit patients without the requirement for significant immunosuppression.

In addition, over the past decade, a deeper understanding of the immunology of host versus graft responses, coupled with novel techniques to manipulate the immunological profile of cells via gene editing, have raised the prospect that ex vivo engineered cells can benefit patients without the requirement for significant immunosuppression.

Sources of allogeneic cells

There are three main potential sources of allogeneic cells, or cells that do not originate from the patient, and therefore have the potential to be manufactured and supplied at scale.

These are embryonic stem cells (ESCs), iPSCs, and donor-derived cells.

These are embryonic stem cells (ESCs), induced pluripotent stem cells (iPSCs), and donor-derived cells.

Our portfolio currently reflects a mix of sources, with the ambition of transitioning primarily to iPSCs over time.

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The recognition that every cell in the body originates from a zygote, or fertilized egg, led to the research and ultimate discovery of human ESCs, with the derivation of the first human ESC line in 1998.

ESCs are pluripotent stem cells which can potentially differentiate into any cell type and are derived from the inner cell mass of a blastocyst or pre-implantation stage embryo.

They are typically cultured in vitro and grown through cycles of cell division, known as passages, until a line of cells is established that can proliferate without differentiating, and retain their pluripotency while remaining well characterized, including free from potentially deleterious genetic mutations.

ESCs are pluripotent stem cells which have the potential to differentiate into any cell type and are derived from the inner cell mass of a blastocyst or pre-implantation stage embryo.

They are typically cultured in vitro and grown through cycles of cell division, known as passages, until a line of cells is established that can proliferate without differentiating, and retain their pluripotency while remaining well characterized, including being free of potentially deleterious genetic mutations.

Because pluripotent stem cells can divide indefinitely without exhaustion, an ESC line can be used to generate cell banks, consisting of large numbers of well-characterized vials of cells, that can be frozen and stored for future use.

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The discovery that mature, differentiated cells can be reprogrammed to be the equivalent of an ESC and capable of generating any cell type in the body has led to the research and ultimate development of human iPSCs, providing an alternative option as a source of stem cells for use in ex vivo engineered cells.

A key scientific step was the breakthrough in 2006 demonstrating that mature cells could be reprogrammed via the expression of a small number of genes to result in pluripotent cells These iPSCs have similar potential to ESCs to be used as an indefinitely renewable cell bank for manufacturing of cell-based therapies.

A key breakthrough in 2006 demonstrated that mature cells could be reprogrammed via the expression of a small number of genes to result in pluripotent cells.

These iPSCs have similar potential to ESCs to be used as an indefinitely renewable cell bank for manufacturing of cell-based therapies.

Donor-Derived Allogeneic Cells

Another source of cells, which we utilize in our T cell program, comes from mature donor-derived allogeneic cells.

While these cells are neither pluripotent nor from an infinitely renewable source, T cells can be obtained as mature cells from human donors at scale.

The use of donor-derived cells for our T cell program should allow us to rapidly advance the program towards the clinic with the implementation of our hypoimmune technology.

Another source of cells, which we use in our T cell programs, comes from mature donor-derived allogeneic cells.

Although these T cells are neither pluripotent nor from an infinitely renewable source, they can be obtained as mature cells from human donors at scale.

The use of donor-derived cells for our T cell programs should allow us to rapidly advance the programs towards the clinic with the implementation of our hypoimmune technology.

Approach to Sources of Allogeneic Cells

We are focused on iPSCs as the starting material for our programs, which offers regulatory and cultural advantages to ESCs, and scale and product consistency advantages to donor-derived allogeneic cells.

The use of iPSCs as the starting material for our programs offers regulatory and cultural advantages over ESCs, and scale and product consistency advantages over donor-derived allogeneic cells.

Our portfolio currently reflects a mix of sources, which is primarily driven by historical factors as well as current better characterization of genomic stability through differentiation.

Our ambition is to transition primarily to iPSCs over time.

Crucial aspects of developing allogeneic cells from any source include the thorough characterization of the cells, a comprehensive understanding of the global regulatory environment, and an ability to maintain cells under the required conditions, such as current GMP (cGMP), at various stages of the manufacturing processes.

Crucial aspects of developing allogeneic cells from any source include a thorough characterization of the cells, a comprehensive understanding of the global regulatory environment, and an ability to maintain cells under the required conditions, such as cGMP, at various stages of the manufacturing processes.

We believe our early investment in building capabilities in the science and manufacturing of these cells will increase our likelihood of success.

This investment is anticipated to

yield sources of cells suitable for the global clinical development and commercialization of ex vivo engineered cells for a broad patient population, in line with our vision to democratize access.

This investment is anticipated to yield sources of cells suitable for the global clinical development and commercialization of ex vivo engineered cells for a broad patient population, in line with our vision to democratize access.

Background on Immunological Barriers to ex vivo Therapies and Current Limitations

Starting with studies in renal transplantation in the early 1900s, it became clear that there were immunological factors preventing successful transplantation.

Initially, it was suspected to be mediated by an antibody response, but in the 1950s it was discovered that cell-mediated immune pathways also play a critical role in transplant rejection.

Further studies established T cells as playing a key role in the host immune response to transplant.

Initially, transplant rejection was suspected to be mediated by an antibody response, but in the 1950s, it was discovered that cell-mediated immune pathways also play a critical role.

Further studies established that T cells play a key role in the host immune response to transplant.

T cells belong to the “adaptive” immune system, recognizing and eliminating “non-self” cells via recognition of differences in cell-surface proteins encoded by the major histocompatibility (MHC) locus.

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Expression of MHC class II is also induced in many additional cells in the context of inflammation.

MHC class I molecules typically display peptides on the cell surface from degraded intracellular proteins.

Cells display peptides from normal “self” proteins on MHC class I, which typically will not activate an immune response due to a process called tolerance, where the body recognizes these peptides as “self”.

However, if a cell displays a peptide from a foreign or mutated protein on MHC class I, for example as a result of a protein mutation, it may result in the activation of a cytotoxic T cell response specific to the peptide-MHC complex via the T cell receptor (TCR) on the T cell surface.

MHC class I molecules typically display peptides from degraded intracellular proteins on the cell surface.

for example, as a result of a protein mutation, it may result in the activation of a cytotoxic T cell response specific to the peptide-MHC complex via the T cell receptor (TCR) on the T cell surface.

The activated T cell then eliminates the cell.

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In allogeneic transplants, the cellular and humoral processes can recognize proteins from the donor as “foreign,” resulting in an immune response to the transplant, including potential elimination of the transplanted cells.

In the allogeneic setting, MHC proteins can be highly immunogenic due to their inherent polymorphism, increasing the risk of the recognition of transplants as “foreign”.

This underlies the basis for MHC typing and matching to assess and reduce the risk of organ transplant rejection.

In the allogeneic setting, MHC proteins can be highly immunogenic due to their inherent polymorphism, increasing the risk of the recognition of transplants as “foreign.” This immunogenicity underlies the basis for MHC typing and matching to assess and reduce the risk of organ transplant rejection.

Many groups have attempted to engineer cells that can evade the adaptive immune system, typically by downregulating or eliminating expression of MHC molecules on the surface of cells.

While this can reduce the adaptive immune response to donor cells, the human immune system has evolved so that parts of the innate immune system will recognize cells missing MHC molecules and eliminate them.

Although this approach can reduce the adaptive immune response to donor cells, the human immune system has evolved so that parts of the innate immune system will recognize cells missing MHC molecules and eliminate them.

For example, natural killer (NK) cells express receptors known as inhibitory killer-cell immunoglobulin-like receptors (inhibitory KIRs).

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Cells missing MHC class I molecules are correspondingly eliminated by NK cells because of the lack of inhibitory KIR signaling and a resulting cytolytic activation.

Known as the “missing self-hypothesis,” this important redundancy in immunology enables the elimination of virally infected or transformed cells that have downregulated MHC class I, but also has complicated the development of allogeneic cells as broadly applicable therapeutics.

Known as the “missing self-hypothesis,” this important redundancy in immunology enables the elimination of virally infected or transformed cells that have downregulated MHC class I, but has complicated the development of allogeneic cells as broadly applicable therapeutics.

Our hypoimmune technology seeks to engineer cells to avoid immune rejection by addressing both the adaptive and innate immune response.

There are three key strategies that have been utilized to date to overcome immune rejection, with limited success:

There are three key strategies that have been used to date to overcome immune rejection, with limited success:

Immune Suppression .

Cyclosporine and other molecules that suppress T cell responses are commonly used, and many patients have been helped by the approaches in areas such as an organ transplantation.

However, immune suppression often leads to significant systemic side effects, including a decreased ability to fight-off infections, increased susceptibility to cancer, and a wide variety of organ toxicities.

Furthermore, patients typically require these on a lifelong basis, and any disruption in immunosuppression can rapidly trigger rejection.

Cyclosporine and other molecules that suppress T cell responses are commonly used, and many patients have been helped by these approaches in areas such as an organ transplantation.

However, immune suppression often leads to significant systemic side effects, including a decreased ability to resist infections, increased susceptibility to cancer, and a wide variety of organ toxicities.

Furthermore, organ transplant recipients typically require immunosuppression on a lifelong basis, and any disruption in this immunosuppression can rapidly trigger transplant rejection.

Matching HLA Type .

A second approach to overcoming immune rejection is to find a donor with a matched HLA type.

HLA stands for human leukocyte antigen which, in humans, is a synonym for MHC.

A second approach to overcoming immune rejection is to find a donor with a matched human leukocyte antigen (HLA) type.

In humans, HLA is a synonym for MHC.

This approach addresses the root of the mechanism that the immune system uses to identify “non-self” cells and has achieved some success.

Finding a matched donor, however, can be difficult and is usually limited to close relatives who are willing and able to donate.

While some have advocated for creating large banks of cells that match a wide variety of HLA types, even with fully matched HLA class I and class II donors and recipients, there is a need for at least some immune suppression due to the presence of numerous minor antigen mismatches.

Although some have advocated for creating large banks of cells that match a wide variety of HLA types, even with fully matched HLA class I and class II donors and recipients, there is a need for at least some immune suppression due to the presence of numerous minor antigen mismatches.

Autologous Approaches .

More recently, researchers have pursued autologous approaches, where a patient’s own cells are modified and introduced back as a graft.

These cells may avoid immune rejection as they would be recognized as “self.” Autologous approaches have demonstrated effectiveness in certain diseases, such as autologous CAR Ts for hematological malignancies, but these are limited in their adoption due to manufacturing cost and complexity.

More recently, researchers have pursued autologous approaches, where a patient’s own cells are modified and introduced back into the patient as a graft.

These cells may avoid immune rejection as they would be recognized as “self.” Autologous approaches have demonstrated effectiveness in certain diseases, such as autologous CAR T cells for hematological malignancies, but these approaches are limited in their adoption due to manufacturing cost and complexity.

Furthermore, autologous approaches are generally limited to cells that exist in the patient in suspension, such as blood cells, and they cannot be applied to treat acute illnesses, such as myocardial infarction or stroke, due to the time it takes to prepare these cells for administration.

Our Solution – Hypoimmune Technology

To address the challenge of immune rejection with allogeneic cell transplantation, we are developing our hypoimmune technology, utilizing gene modification to introduce permanent changes to the cells.

We are applying the hypoimmune technology to both iPSCs, which can then be differentiated into multiple cell types, and to donor-derived allogeneic T cells, which has the goal of making potent CAR T cells at scale.

Our goal with this technology is to transplant allogeneic cells into patients without the need for systemic immune suppression.

To address the challenge of immune rejection with allogeneic cell transplantation, we are developing our hypoimmune technology, which uses genome modification to introduce permanent changes to the cells.

We are applying the hypoimmune technology to PSCs, which can then be differentiated into multiple cell types, and to donor-derived allogeneic T cells, with the goal of making potent CAR T cells at scale and transplanting allogeneic cells into patients without the need for systemic and prolonged immune suppression.

We believe that enabling this capability has the potential to enable ex vivo engineered cells to become an important therapeutic modality alongside small molecules, protein biologics, and in vivo engineered cells.

Some of our scientific founders, including Dr.

Sonja Schrepfer, our Senior Vice President, Head of Hypoimmune Platform, and their collaborators have worked on creating hypoimmune cells for well over a decade.

A key insight was focusing on the phenomenon of fetomaternal tolerance during pregnancy.

Some of our scientific founders, and their collaborators have worked on creating hypoimmune cells for well over a decade.

A key insight that informed their work is the phenomenon of fetomaternal tolerance during pregnancy.

The fetus, despite having half its genetic material from the father, is not rejected by the mother’s immune system.

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These scientists categorized the differences of the maternal-fetal border and systematically tested them to understand which, if any, of these were most important to immune evasion.

They have tested these changes in both in vitro and in vivo animal models.

They have tested these changes both in vitro and in vivo in animal models.

Designing Hypoimmune Cells

Our goal is to create a universal cell that is able to evade immune detection, regardless of cell type or transplant location.

Our first-generation technology, which is progressing through late-stage animal confirmatory studies, combines the three gene modifications below to hide these cells from the host immune system:

Our goal is to create a universal cell capable of evading immune detection, regardless of cell type or transplant location.

Our current clinical hypoimmune technology, which is being used in our SC291 product candidate, combines three genome modifications to “hide” these cells from the host immune system:

disruption of MHC class I expression;

disruption of MHC class II expression;

overexpression of CD47, a protein that hides cells from the innate immune system, including macrophages and NK cells.

overexpression of CD47, a protein that enables cells to evade the innate immune system, including macrophages and NK cells.

Once these modifications have been applied to a cell, we refer to that cell as a hypoimmune cell.

Preclinical Development of Hypoimmune Cells

We and our licensors have carried out a series of experiments in various model systems of increasing immunological complexity.

These included (i) transplanting undifferentiated mouse hypoimmune iPSCs- into MHC mismatched allogeneic mice, (ii) transplanting mouse hypoimmune iPSC-derived differentiated cells, such as endothelial cells, into MHC mismatched allogeneic mice, (iii) transplanting human hypoimmune iPSCs into MHC mismatched humanized allogeneic mice;

and (iv) transplanting human hypoimmune iPSCs into non-human primates (NHPs).

We are currently carrying out experiments transplanting NHP hypoimmune iPSC cells into NHPs as well as transplanting NHP hypoimmune iPSC-derived differentiated cells, such as cardiomyocytes, into allogeneic NHPs.

These included (i) transplanting undifferentiated mouse hypoimmune iPSCs into MHC mismatched allogeneic mice, (ii) transplanting mouse hypoimmune iPSC-derived differentiated cells, such as endothelial cells, into MHC mismatched allogeneic mice, (iii) transplanting human hypoimmune iPSCs into MHC mismatched humanized allogeneic mice, (iv) transplanting NHP hypoimmune iPSCs into MHC mismatched allogeneic NHPs;

and (v) and transplanting NHP hypoimmune iPSC-derived differentiated cells, such as cardiomyocytes, into MHC mismatched allogeneic NHPs.

Each mouse experiment evaluated:

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whether differentiated cells derived from our hypoimmune cells were successfully engrafted in the recipient without needing immunosuppression and without eliciting an immune response.

We are investigating both human iPSCs in NHPs as well as NHP iPSCs in NHPs, as we want insights into how the NHP immune system reacts to each of these species.

We have largely completed the study of human iPSCs and have early results from the NHP hypoimmune iPSC transplantation experiments.

We are encouraged by data to date across species, with the NHP immune system most closely resembling the human immune system, representing the strictest test outside of testing these cells in humans.

We are evaluating both iPSCs as well as differentiated cells transplanted into the microenvironment we intend to target in humans.

We have also investigated the NHP immune response to human iPSCs, NHP iPSCs, as well as NHP iPSC-derived differentiated cells.

We are encouraged by data given the similarity of the NHP immune system to the human immune system since they representthe strictest test outside of evaluating these cells in humans.

We are evaluating both iPSCs as well as differentiated cells transplanted into the microenvironments we intend to target in humans.

Based on the results of these NHP studies, we expect to test these hypoimmune cells in humans as a next step.

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Mouse hypoimmune iPSCs transplanted into an MHC mismatched allogeneic mouse were protected from the mouse immune system, and no evidence was seen of either adaptive or innate immune system activation.

The control arm transplanted non-edited mouse iPSCs into MHC mismatched allogeneic mice, and, as expected, these non-edited mouse iPSCs were rapidly rejected by the recipient’s immune system with a robust adaptive immune response.

In another experiment, the genes that code for MHC class I and MHC class II expression were knocked out.

These modifications protected the cells from the recipient mouse’s adaptive immune

system, but NK cells rapidly killed the transplanted cells.

These data highlight the importance of making all three gene modifications in order to protect cells from the immune system with an allogeneic transplant.

Next, to ensure that hypoimmune gene modifications protected differentiated cells and that these modifications did not impact the ability of iPSCs to differentiate into various cell types, commonly referred to as pluripotency, it was tested whether the hypoimmune iPSCs cells could be differentiate into three different cell types, function in vivo , and evade the host immune system.

The control arm transplanted unmodified mouse iPSCs into MHC mismatched allogeneic mice, and, as expected, these unmodified mouse iPSCs were rapidly rejected by the recipient mouse immune system with a robust adaptive immune response.

In another experiment, the genes that code for MHC class I and MHC class II expression were disrupted.

These modifications protected the cells from the recipient mouse’s adaptive immune system, but NK cells rapidly killed the transplanted cells.

These data highlight the importance of making all three genome modifications (MHC class I, MHC class II, and CD47 overexpression) to protect cells from the immune system following an allogeneic transplant.

Next, to ensure that hypoimmune genome modifications protected differentiated cells and that these modifications did not impact the ability of iPSCs to differentiate into various cell types, commonly referred to as pluripotency, the scientists tested whether the hypoimmune iPSCs cells could be differentiated into three different cell types, function in vivo , and evade the host immune system.

The three cell types were cardiomyocytes, endothelial cells, and smooth muscle cells.

It was observed that hypoimmune iPSCs could successfully differentiate into all three cell types, the cells functioned in the mouse, and the transplanted cells survived for the full standard observation period with no evidence of immune system activations despite any immune suppression.

Differentiated cells derived from non-edited iPSC cells led to immune activation in the host mouse, and they did not survive.

The hypoimmune iPSCs successfully differentiated into all three cell types, the cells functioned in the mouse, and the transplanted cells survived for the full standard observation period with no evidence of immune system activation despite having received no immune suppression.

Differentiated cells derived from unmodifiediPSC cells led to immune activation in the host mice, which did not survive.

These data provide initial proof of concept that iPSCs can be genetically modified and differentiated into target cells that can engraft, function, and evade the recipient’s immune system following transportation.

Human iPSC-derived hypoimmune cells transplanted into MHC mismatched allogeneic humanized mouse

Having demonstrated the ability of mouse iPSC-derived hypoimmune cells to satisfy each of three testing criteria, the experiments were advanced to evaluate human hypoimmune cells.

This was evaluated using a “humanized” mouse system, generated by grafting a functioning human immune system in place of the mouse immune system.

In addition to evaluating the three primary criteria, the ability to successfully engineer human hypoimmune cells from human iPSCs and whether differentiated cells derived from human hypoimmune cells retain biological function were also evaluated.

Having demonstrated the ability of mouse iPSC-derived hypoimmune cells to satisfy each of three testing criteria, the experiments were advanced to evaluate human hypoimmune cells by using a “humanized” mouse system, generated by grafting a functioning human immune system in place of the mouse immune system.

We also evaluated the ability to successfully engineer human hypoimmune cells from human iPSCs and whether differentiated cells derived from human hypoimmune cells retain biological function.

Creating Hypoimmune Therapeutic Cells from Human iPSCs

Our hypoimmune technology combines the following three gene modifications to hide cells from the host immune system:

Our current clinical hypoimmune technology combines the following three gene modifications to “hide” cells from the host immune system:

disruption of MHC class I and class II expression (which inactivates adaptive immune responses), and overexpression of CD47 (which “hides” cells from the innate immune system, including macrophages and natural killer (NK) cells).

Pluripotent stem cells from healthy donors are used as the starting material and are then genetically modified with the hypoimmune edits.

These edited cells are then differentiated into cell types of therapeutic interest, which are administered to the patient as “off the shelf” therapies.

First, the foregoing three edits were replicated in human iPSCs to engineer a human hypoimmune cell line that had comparable properties to the mouse hypoimmune cells in vitro .

Next, non-edited human iPSCs were transplanted into MHC mismatched humanized mice.

It was observed that these non-edited human iPSCs were rapidly rejected.

Pluripotent stem cells from healthy donors are used as the starting material which are then genetically modified with the hypoimmune modifications.

These edited cells are then differentiated into cell types of therapeutic interest, which could be administered to the patient as “off the shelf” therapies.

First, the three genome modifications described above were replicated in human iPSCs to engineer a human hypoimmune cell line with properties comparable to the mouse hypoimmune cells in vitro .

Next, unmodified human iPSCs were transplanted into MHC mismatched humanized mice.

It was observed that these unmodified human iPSCs were rapidly rejected.

Human hypoimmune cells were then transplanted into MHC mismatched humanized mice.

It was observed that the human hypoimmune cells survived the full length of the experiment and failed to elicit any type of immune response.

From this, it was concluded that, in humanized mice, the human

hypoimmune cells can evade the immune system.

Pluripotency of human hypoimmune cells was confirmed by differentiation into two different cell types, endothelial cells and cardiomyocytes.

These differentiated cells exhibited the characteristics of normal endothelial cells and cardiomyocytes.

From this data we concluded that in humanized mice, the human hypoimmune cells can evade the immune system.

Pluripotency of human hypoimmune cells was confirmed by differentiation into two different cell types, endothelial cells and cardiomyocytes which exhibited the characteristics of normal endothelial cells and cardiomyocytes.

Finally, to test whether these the differentiated cell types derived from human hypoimmune cells continue to evade the immune system, the differentiated cells were transplanted into humanized mice, and the transplanted cells survived for the full standard observation period.

In contrast, differentiated cells derived from non-edited human iPSC cells did not survive after being transplanted, as anticipated.

In contrast, differentiated cells derived from unmodified human iPSC cells did not survive after being transplanted, as anticipated.

It was also observed that the hypoimmune endothelial cells formed primitive vasculature with active blood flow and the hypoimmune cardiomyocyte cells matured into functional-looking heart cells.

Absence of T and B Cell Activation Following Transplantation of Hypoimmune-Edited Human iPSCs into Mismatched Humanized Mice

Absence of T and B Cell Activation Following Transplantation of Hypoimmune Human iPSCs into Mismatched Humanized Mice

T cell activation was measured by EliSpot counts for interferon-gamma production.

Immune cells from mice that received wild type (wt) iPSC grafts show a brisk interferon response when tested against allogeneic wt iPSC grafts.

In contrast, immune cells from mice that received hypoimmune-edited (MHC class I/II disruption, CD47 tg) cells show only minimal interferon production when exposed to allogeneic hypoimmune cells, comparable to background frequency in non-immunized mice.

By contrast, immune cells from mice that received hypoimmune cells (MHC class I/II disruption, CD47 tg) cells show only minimal interferon production when exposed to allogeneic hypoimmune cells, comparable to background frequency in non-immunized mice.

Right panels:

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Wild type cells exhibit significant antibody binding when incubated with serum from mice that received wt cells.

In contrast, hypoimmune-edited cells show only background levels of binding when treated with serum from mice that received hypoimmune-edited cells.

By contrast, hypoimmune cells show only background levels of binding when treated with serum from mice that received hypoimmune cells.

Adapted from Deuse et al, Nature Biotechnology 2019.

CD47 is Required to Protect Hypoimmune-Edited Cells from Killing by Human NK Cells

CD47 is Required to Protect Hypoimmune Cells from Killing by Human NK Cells

Human iPSCs were differentiated into endothelial cells (hiECs) and plated as a monolayer in a multielectrode system.

After exposure to NK cells, monolayer viability was measured electrical impedance, indicated here as normalized cell index.

After exposure to NK cells, monolayer viability was measured by electrical impedance, indicated here as normalized cell index.

As expected, wt cells were not killed by NK cells.

In contrast, cells lacking MHC class I and II (but not expressing CD47 tg;

MHC class I/II disruption) were rapidly killed.

By contrast, cells lacking MHC class I and II ( MHC class I/II disruption), but not expressing CD47, were rapidly killed.

Addition of CD47 tg prevented killing by NK cells.

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From Deuse et al, Nature Biotechnology 2019.

Survival of Hypoimmune-Edited Human iPSC Grafts in MHC-Mismatched Humanized Mice

Wild type (wt) and hypoimmune-edited (MHC class I/II disruption CD47 tg) iPSCs were engineered to express firefly luciferase before transplantation.

Survival of Hypoimmune Human iPSC Grafts in MHC-Mismatched Humanized Mice

Wild type (wt) and hypoimmune (MHC class I/II disruption and CD47 tg) iPSCs were engineered to express firefly luciferase before transplantation.

Emission of light was used as an index of graft cell viability.

Sequential light emission scans from the same representative animal receiving wt cells show progressive loss of graft viability, indicating graft rejection, confirmed quantitatively in the line tracings below.

In contrast, mice receiving hypoimmune-edited cells show graft expansion over the course of the experiment, indicating immune evasion.

By contrast, mice receiving hypoimmune cells show graft expansion over the course of the experiment, indicating immune evasion.

From Deuse et al, Nature Biotechnology 2019.

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The study involved a randomized group of eight NHPs distributed into two cohorts of four NHPs each.

The first cohort received an initial intramuscular injection of non-edited NHP iPSCs and a second injection of NHP hypoimmune cells at six weeks (i.e., a crossover design).

The second cohort received an initial injection of NHP hypoimmune cells, which allowed assessment of immune

evasion in a naïve recipient.

This cohort also received a second injection of non-edited NHP iPSCs, which, with a view towards modeling certain aspects of autoimmune disease, enabled assessment of the impact of injecting hypoimmune cells into an NHP with a pre-existing immune response to non-edited cells.

No immunosuppression was administered to any of the animals in the study.

Allogeneic Hypoimmune iPSC Survive in vivo in NHPs with an Intact Immune System

The first cohort received an initial intramuscular injection of unmodified NHP iPSCs in one leg and a second injection of NHP hypoimmune cells at six weeks in the other leg (i.e., a crossover design).

The second cohort received an initial injection of NHP hypoimmune cells in one leg, which allowed assessment of immune evasion in a naïve recipient.

In order to model certain aspects of autoimmune disease, this cohort also

received a second injection of unmodified NHP iPSCs in the other leg, which.

No immunosuppression was administered to any of the NHPs in the study.

Allogeneic Hypoimmune iPSCs Survive in vivo in NHPs with an Intact Immune System

Unmodified wild type (wt) NHP iPSCs (Group 1, top row) or hypoimmune NHP iPSCs (Group 2, bottom row) were introduced via intramuscular injection into allogeneic NHPs.

Unmodified NHP iPSCs are undetectable in recipient NHPs by week 3 while hypoimmune NHP iPSCs introduced into naïve NHPs were viable and detectable for 16 weeks post injection.

After 6 weeks of the initial injection, NHPs were injected with the cross-over cell type (group 1 with hypoimmune NHP iPSCs and group 2 with wild type iPSCs).

At 6 weeks following the initial injection, NHPs were injected with the crossover cell type (Group 1 with hypoimmune NHP iPSCs and Group 2 with wt unmodified iPSCs).

In these crossover experiments, hypoimmune NHP iPSCs survived even when the NHP had been exposed to unmodified iPSCs.

Unmodified cells injected into NHPs previously injected with hypoimmune iPSCs were rapidly killed with no observable impact on the hypoimmune NHP iPSCs that continued to remain viable.

Data are representative for four NHPs receiving HIP iPSCs and wt iPSCs.

iPSC survival is followed over time in vivo using bioluminescence imaging (BLI).

Unmodified iPSCs injected into NHPs previously injected with hypoimmune iPSCs were rapidly killed with no observable impact on the hypoimmune NHP iPSCs that continued to remain viable.

Data shown from single NHP belonging to each group;

images are representative for four NHPs receiving hypoimmune iPSCs and four NHPs receiving wt iPSCs.

iPSC survival in vivo is followed over time using bioluminescence imaging (BLI).

Absence of T Cell, B Cell, or NK Cell Responses Following the First Delivery and Crossover of Hypoimmune NHP iPSCs into NHPs

Immune cells from animals receiving hypoimmune iPSCs showed no response when exposed to hypoimmune iPSCs in vitro (Row 1) in contrast to wt iPSCs (Row 2).

Neither unmodified nor hypoimmune-edited cells were susceptible to killing by natural killer (NK) cells, indicating protection from the “missing self” signal.

Immune cells from NHPs receiving hypoimmune iPSCs showed no response when exposed to hypoimmune iPSCs in vitro (Row 1) in contrast to wt iPSCs (Row 2).

Neither unmodified nor hypoimmune iPSCs were susceptible to killing by NK cells, indicating protection from the “missing self” signal.

Data above are collected from four NHPs in each experimental arm.

NHP hypoimmune cells grafted into NHPs elicited no detectable systemic immune responses, including no T cell activation and no antibody formation.

NHP hypoimmune iPSCs grafted into NHPs elicited no detectable systemic immune responses, including no T cell activation and no antibody formation.

Innate immune responses mediated by macrophages and NK cells were also undetectable.

The transplanted hypoimmune cells were alive and detectable for the duration of the study in these allogeneic recipients (Study duration was 16 weeks for 2/4 NHPs and 8 weeks for 2/4 NHPs.

The transplanted hypoimmune cells were alive and detectable in the four allogeneic recipients for the duration of the study, which was 16 weeks for two of the NHPs and 8 weeks for the other two NHPs.

To our knowledge, this is the first instance of prolonged graft survival in an allogeneic transplant setting without immunosuppression in NHPs.

In contrast, systemic immune responses from T cells as well as IgM and IgG antibodies were generated to iPSCs without the hypoimmune edits, and the cells were rapidly rejected within two to three weeks.

In the crossover portion of this experiment, injection of NHP hypoimmune cells into NHPs that had previously received non-edited NHPs again elicited no systemic responses as tested in assays for T cell or antibody responses.

By contrast, systemic immune responses from T cells as well as IgM and IgG antibodies were generated to iPSCs without the hypoimmune edits, and the iPSCs were rapidly rejected within two to three weeks.

In the crossover portion of this experiment, injection of NHP hypoimmune iPSCs into NHPs that had previously received unmodified iPSCs again elicited no systemic responses as tested in assays for T cell or antibody responses.

Similarly, macrophage and NK responses could not be detected.

Correspondingly, these cells survived for the full eight weeks that they were monitored suggesting that pre-existing immunity to non-edited human iPSCs had no impact on hypoimmune cell survival.

By contrast, in the NHPs that had previously been injected with the hypoimmune cells, the non-edited NHP cells elicited both T cell and antibody responses against the non-edited cells.

Notably, these non-edited cells were rapidly rejected (in one to two weeks) in the recipient even as the previously injected hypoimmune cells continued to be viable in the other leg of the NHP.

These results provide confirmation that the survival of the hypoimmune allo-graft was not an artifact of an impaired immune system or immune response in the recipient NHP.

They also suggest that these hypoimmune cells have the potential for immune evasion even the context of a new immune response toward cells without these edits.

In light of our preclinical data to date, we believe our hypoimmune technology has the potential to address the most fundamental limitation of ex vivo therapies, persistence, and thereby unlock waves of potentially disruptive therapies across a variety of cell types.

Correspondingly, these iPSCs survived for the full eight weeks that they were monitored, suggesting that pre-existing immunity to unmodified human iPSCs had no impact on hypoimmune iPSC survival.

By contrast, in the NHPs that had previously been injected with hypoimmune iPSCs, the unmodified NHP iPSCs elicited both T cell and antibody responses.

Notably, these unmodified iPSCs were rapidly rejected by the NHP within one to two weeks, while the previously injected hypoimmune iPSCs continued to be viable in the other leg of the NHP.

These results confirm that the survival of the hypoimmune allo-graft was not an artifact of an impaired immune system or immune response in the recipient NHP.

They also suggest that these hypoimmune iPSCs have the potential for immune evasion even the context of a new immune response toward iPSCs without these edits.

In addition, we recently conducted experiments in which we observed immune evasion and cell survival of hypoimmune NHP iPSC-derived cardiomyocytes and retinal pigment epithelial cells (RPEs).

In separate experiments, these cardiomyocytes and RPEs were injected into the hearts and eyes (subretinal space), respectively, of healthy allogeneic NHP recipients without

immunosuppression.

Both the hypoimmune cardiomyocytes and RPEs were found to evade systemic adaptive and innate immune responses and survived for the duration of the applicable experiment.

Separately, we have shown that hypoimmune NHP islet cells transplanted into a non-matched allogeneic NHP survive for the duration of the study, which at this point is 40 weeks.

Based on our preclinical data to date, we believe our hypoimmune technology has the potential to address the most fundamental limitation of ex vivo therapies, persistence, and thereby unlock waves of potentially disruptive therapies across a variety of cell types.

Safety Switch for Hypoimmune Cells

We are actively investigating approaches to control hypoimmune cells after administration into the patient.

If necessary, the aim of these “safety switches” would be to provide a mechanism to eliminate hypoimmune cells within the body in a targeted fashion, in scenarios where the cells are not in a location where physical removal is viable.

Such a safety switch would be beneficial to mitigate the potential risk of a hypoimmune cell becoming infected with a virus or undergoing oncogenic transformation, in light of the immune evasion modifications to these cells.

One approach we are exploring as a safety switch is to re-sensitize the hypoimmune cells to innate cell killing via administration of a blocking anti-CD47 antibody.

If necessary, the aim of these “safety switches” would be to provide a mechanism to eliminate hypoimmune cells within the body in a targeted fashion when the cells are not in a location where physical removal is feasible.

Such a safety switch would mitigate the potential risk of adverse outcomes if a hypoimmune cell, which can, by its nature, evade the immune system, becomes infected with a virus or undergoes oncogenic transformation.

One approach we are exploring as a safety switch is re-sensitization of the hypoimmune cells to innate cell killing via administration of a blocking anti-CD47 antibody.

We have tested the effectiveness of this approach in iPSCs and teratomas (a particular tumor formed by pluripotent cells with histological features from all three germ layers), both bearing the hypoimmune modifications.

Using hypoimmune NHP iPSCs we observed in vitro that the addition of an anti-CD47 antibody binds to and blocks CD47 expressed in the hypoimmune cells and restores the sensitivity to the missing-self killing response mediated by NK cells.

We also assessed this strategy in mouse experiments, where the animals were transplanted in with human iPSCs which then formed small teratomas.

We have shown that treatment with an anti-CD47 antibody resulted in the loss of immune evasion and the rapid killing of these transplanted cells.

We have identified several additional safety switches with in vivo activity and intend to continue to explore them, potentially including multiple safety switches in therapeutic programs moving forward.

Using hypoimmune NHP iPSCs, we observed in vitro that the addition of an anti-CD47 antibody binds to and blocks CD47 expressed in the hypoimmune cells and restores their sensitivity to the missing-self killing response mediated by NK cells.

We also assessed this strategy in mice, which were transplanted with human iPSCs that formed small teratomas.

Finally, we have conducted in vitro and in vivo experiments with this strategy using a number of human cancer lines, showing that an anti-CD47 antibody resensitizes cancer cells to killing by NK cells and macrophages.Treatment with an anti-CD47 antibody resulted in the loss of immune evasion and the rapid killing of these transplanted cells.

We have identified several additional safety switches with in vivo activity and intend to continue to explore them, and potentially including multiple safety switches in our therapeutic programs moving forward.

Anti-CD47 Administration Results in the Rapid Clearance of Hypoimmune NHP iPSCs in vitro

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By contrast, anti-CD47 antibody treated hypoimmune NHP iPSCs are no longer able to evade missing-self responses mediated by NK cells and are killed rapidly.

Anti-CD47 Administration Results in the Rapid Clearance of Human iPSCs derived Teratomas in a Humanized Mouse Model

Human iPSC proliferate (as visualized by luminescence of live cells) and form teratoma in NSG mice (n=3) with adoptive transferred human NK cells.

Administration of isotype control has no impact on HIP survival.

Blocking of CD47 in vivo results in killing of HIP iPSCs (as visualized by luminescence of live cells) in NSG mice (n=5) with adoptive transferred human NK cells.

Anti-CD47 Administration Results in the Rapid Clearance of Human iPSC - derived Teratomas in a Humanized Mouse Model

Human iPSCs proliferate (as visualized by luminescence of live cells) and form teratomas in NSG mice (n=3) with adoptive transferred human NK cells.

Administration of isotype control has no impact on hypoimmune iPSC survival.

Blocking of CD47 in vivo results in killing of hypoimmune iPSCs (as visualized by luminescence of live cells) in NSG mice (n=5) with adoptive transferred human NK cells.

CD47 overexpression is differentiated in inhibiting “missing self” response relative to other approaches

As part of our ongoing program to further refine our hypoimmune technology we evaluated the effectiveness of the overexpression of CD47 in comparison to other molecules that have at least some ability to inhibit innate immune responses.

We carried out these head-to-head comparisons in K562 cells, a naturally MHC class I and class II deficient cell line.

The lack of the MHC class I molecule should result in virtually instantaneous cell killing by stimulated innate immune cells such as NK cells due to the activation of the “missing self” response.

We compared three molecules, HLA-E, HLA-G and PDL-1, that have previously been proposed to have a role in inhibiting innate immune responses versus CD47.

In this assay, overexpression of these three molecules conferred limited protection from NK cell killing in contrast to CD47 overexpression.

This difference in activity may be the result of the more ubiquitous presence of the receptor for CD47 receptor on innate immune cells relative to the presence of receptors for these other immunomodulators.

While these results do not rule out a role for these other molecules in inhibiting NK cell responses, they suggest that CD47 may be sufficient to nullify the NK cell-mediated missing-self response.

As part of our ongoing efforts to further refine our hypoimmune technology, we evaluated the effectiveness of the overexpression of CD47 in comparison to other molecules that have at least some ability to inhibit innate immune responses.

We carried out these head-to-head comparisons in K562 cells, a cell line that is naturally deficient in MHC class I and class II, and in which the lack of the MHC class I molecule should result in rapid cell killing by stimulated innate immune cells such as NK cells due to the activation of the “missing self” response.

We compared three molecules, HLA-E, HLA-G and PDL-1, that have previously been proposed to play a role in inhibiting innate immune responses against CD47.

In this assay, overexpression of these three molecules conferred limited protection from NK cell killing as compared to CD47 overexpression.

This difference in activity may be the result of the more ubiquitous presence of the receptor for CD47 on innate immune cells relative to the presence of receptors for these other immunomodulators.

Although these results do not rule out a role for these other molecules in inhibiting NK cell responses, they suggest that CD47 may be sufficient to nullify the NK cell-mediated missing-self response.

CD47 Overexpression is Differentiated in Inhibiting “Missing Self” Response Relative to Other Approaches

Panels above show in vitro killing assays mediated by NK cells.

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Our ex vivo Cell Engineering Pipeline

Allogeneic T Cell Program (SC291, SC276, SC255)

Our allogeneic T cell program utilizes T cells from healthy donors to generate CAR T therapies that will initially target CD19, a protein expressed on the cell surface of B cell malignancies, to treat patients with refractory lymphoma.

We believe that applying the hypoimmune technology to allogeneic T cells gives us an opportunity to create differentiated allogeneic CAR T therapies.

Allogeneic T Cell Programs (SC291, SC262, SC255)

Our allogeneic T cell programs utilize T cells from healthy donors to generate CAR T therapies that will initially target CD19, a protein expressed on the cell surface of B cell malignancies, to treat patients with refractory B cell lymphomas and leukemias.

We believe that applying the hypoimmune technology to allogeneic T cells will enable us to create differentiated allogeneic CAR T therapies.

We believe our allogeneic T cell and T cell fusosome discovery programs provide us with two potentially disruptive programs to address the limitations of adoptive T cell therapy for cancer, each with idiosyncratic risks and opportunities.

We also believe each approach can address separate and valuable opportunities if they are both successful.

Specifically, our allogeneic T cell program offers the opportunity to perform multiple gene edits in a T cell, which may allow us to make intentional modifications to control T cell function or to deliver more complex chimeric receptors and signal integration machinery to enable the T cell to distinguish tumor cells based on surface antigen combinations to improve the specificity of targeting.

These approaches may prove especially valuable in

targeting solid tumors, which have remained largely refractory to CAR T approaches to date.

We also have an earlier-stage program looking to differentiate hypoimmune iPSCs into T cells.

While we are still working to successfully create the appropriate T cells from an iPSC, we expect that progress with our allogeneic T cell program will also inform the iPSC T cell program.

Separately, the fusogen technology allows for the in vivo generation of CAR T cells in a patient, offering a distinct advantage in terms of manufacturability and scalability that may enable the introduction of gene-modified T cells earlier in the course of a patient’s therapy.

We also believe each approach, if successful, will be able to address separate and valuable opportunities.

Specifically, as part of our allogeneic T cell programs, we have the opportunity to perform multiple gene edits in a T cell, which may allow us to make intentional modifications to control T cell function or deliver more complex chimeric receptors and signal integration machinery to enable the T cell to distinguish tumor cells based on surface antigen combinations and improve the specificity of targeting.

These approaches may prove especially valuable in targeting solid tumors, which have remained largely refractory to CAR T approaches to date.

We also have developed a scaled manufacturing process that we beleve we can rapidly leverage to manufacture allogeneic CAR T cells across multiple targets.

We also have an earlier-stage program in which we are exploring the possibility of differentiating hypoimmune PSCs into T cells (the iPSC T cell program).

We expect that progress with our allogeneic T cell programs will also inform the iPSC T cell program.

Separately, our fusogen technology has the potential for the in vivo generation of CAR T cells in a patient, offering a distinct advantage in terms of manufacturability and scalability that may enable the introduction of gene-modified T cells earlier in the course of a patient’s therapy.

Additionally, modifying the T cells inside the body without the need for ex vivo manipulation of the cells may generate CAR T cells with more favorable attributes.

We intend to develop our CD19 allogeneic T cell therapies with the goal of submitting an IND for SC291 in 2022.

We intend to follow this with SC276, a CD22-targeting allogeneic CAR T which could be combined with targeting CD19 and offers the potential benefit of higher and more durable complete response rates, with an IND submission as early as 2023.

We are also advancing our SC255 allogeneic T cell program targeting BCMA for multiple myeloma, with the goal of submitting an IND in the next several years.

Finally, eliminating the need for conditioning chemotherapy may improve tolerability for the patient, potentially opening up novel opportunities in less sick patients while also improving patient outcomes.

Our Investigational New Drugapplication (IND) for our CD19-directed allogeneic CAR T cell therapy, SC291, which we submitted to the United States Food and Drug Administration (FDA) in December 2022, was cleared by the FDA in January 2023.

We intend to enroll patients in our Phase 1a/b studies in 2023 and 2024.

We intend to follow this drug candidate with SC262, a CD22- directed allogeneic CAR T that has the potential to treat patients that are CD19 treatment-naïve, as well as those that have experienced CD19 treatment failures, with a goal of submitting an IND in 2023.

We intend to focus our development toward patients that have previously failed a CD19-targeted CAR T therapy.

We are also advancing SC255, our allogeneic T cell program targeting BCMA for multiple myeloma, with the goal of submitting an IND as early as 2024.

Background on B Cell Malignancies

B cell malignancies represent a spectrum of cancers including non-Hodgkin Lymphoma (NHL), chronic lymphocytic leukemia (CLL), acute lymphoblastic leukemia (ALL), and multiple myeloma (MM) and result in over 100,000 deaths per year in the United States and Europe.

See the subsection titled “—in vivo Cell Engineering Pipeline—Background on B Cell Malignancies” for further background discussion.

In addition to our in vivo cell engineering technology, we believe our ex vivo cell engineering technology also has the potential to address B cell malignancies.

B cell malignancies represent a spectrum of cancers including NHL, CLL, ALL, and MM and result in over 100,000 deaths per year in the United States and Europe.

NHL is the most common cancer of the lymphatic system.

NHL is not a single disease, but rather a group of several closely related cancers.

Over 77,000 cases of NHL are diagnosed annually in the United States and the most common subtype of NHL overall is diffuse large B cell lymphoma (DLBCL).

DLBCL, if left untreated, may have survival measured in weeks or months.

CLL is the most common type of leukemia and occurs most frequently in older individuals, with diagnoses in people under 30 years of age occurring only rarely.

Each year, approximately 20,000 patients are diagnosed with CLL in the United States.

Approximately 20 to 25% of CLL patients initially present with high risk disease.

Median progression-free survival in these high-risk individuals is often less than 12 to 18 months after front-line therapy and less than 12 months in relapsed or refractory (R/R) disease.

ALL is a type of leukemia that results from an uncontrolled proliferation of lymphoblasts, which are immature white blood cells.

The lymphoblasts, which are produced in the bone marrow, cause damage and death by inhibiting the production of normal cells.

Approximately 6,000 patients are diagnosed with ALL in the United States each year, and the vast majority of the approximately 1,500 ALL deaths per year occur in adults.

Approximately 80% of cases of ALL in the United States and Europe are B cell ALL, which almost always involves cancer cells that express the CD19 protein.

The five-year overall survival rate in ALL adults over the age of 60 is approximately 20%, and in patients with R/R ALL after two or more lines of therapy, the median disease-free survival is less than six months.

B cell ALL is the most common cancer in children.

Although children with ALL fare better than adults, children with R/R disease have poor outcomes.

Because of the frequency of this disease, ALL remains a leading cause of death due to cancer in children.

MM is a cancer of the plasma cells, which are B cells that have matured to specialize in the production of antibodies, and which typically express the BCMA protein.

MM is a condition in which plasma cells become malignant and grow at an uncontrolled pace.

These cells secrete large quantities of the same antibody, resulting in patient symptoms that result from the myeloma cells crowding out other plasma and bone marrow cells, including increased risk of infection, risk of bone destruction, and kidney disease.

MM is the second most common hematologic malignancy, and comprises approximately 2% of all cancers, and accounts for over 34,000 new cases per year with 12,600 deaths estimated to have occurred in 2022 in the United States.

High Mortality in Lymphoma, Leukemia and Multiple Myeloma in United States and EU5

Hematologic malignancies result in a large number of annual death across the United States and Europe.

Only a small fraction of patients have durable remissions following CAR T therapy.

Current Treatment Landscape and Unmet Need

We believe our hypoimmune edited cells have the potential to create a differentiated platform for developing allogeneic T cells.

There are two major hurdles to the use of allogeneic T cells.

The first is the risk of graft versus host disease, in which the allogenic donor T cells target and kill recipient tissues.

Multiple CAR T cell product candidates in clinical development have managed to prevent this reaction through gene edits targeting components of the T cell receptor such as TCR-alpha gene.

First-line therapy for NHL typically consists of multi-agent cytotoxic drugs in combination with the monoclonal antibody Rituxan.

In younger patients with NHL who have good organ function, high dose chemotherapy followed by stem cell transplantation is often used.

Patients often relapse, however, and over the last three years, several therapeutics have been approved in the United States for the treatment of patients with R/R NHL who have received prior therapies.

These approved therapies include CD19 CAR T therapies tisagenlecleucel, axicabtagene ciloleucel, and lisocabtagene maraleucel, CD19 antibody drug conjugate therapy polatuzumab

vedotin, and CD19 antibody tafasitamab.

Recently, two autologous CD19 CAR T products have been approved in second-line patients with R/R NHL after proving to be superior to standard of care in pivotal trials , raising the possibility that CD19 CAR T cell therapies may have the potential to have a broader impact for patients with NHL.

Newly-diagnosed CLL patients are often treated with targeted therapies such as BTK inhibitors, PIK3 inhibitors, BCL-2 inhibitors, or monoclonal antibodies targeting CD20 or CD52 in combination with chemotherapy.

However, most patients treated with these regimens become refractory.

Numerous drug candidates, including next-generation kinase inhibitors, are in clinical development for refractory patients.

Autologous CD19 CAR T cell therapies are also beginning to progress through clinical trials, with a recent Phase 1/2 study in R/R CLL reporting that it had met its primary endpoint of complete response.

Cure rates for ALL patients have continued to increase over the last four decades, with pediatric ALL cure rates reaching greater than 80% in developed countries.

This progress has been enabled by advances in combination chemotherapy, monitoring of minimal residual disease, expanded use of kinase inhibitors for Philadelphia chromosome-positive ALL, and the recent approval of Kymriah ® for R/R pediatric ALL.

Adult patients fare much worse, however, with 5-year overall survival rates of approximately 20%, and there are still significant challenges managing R/R disease across all age groups.

Multiple therapeutic candidates are in development for R/R patients, including proteasome inhibitors, antimetabolites, JAK inhibitors, and monoclonal antibodies, as well as autologous and allogeneic CAR T candidates.

There are no curative treatment options for MM patients.

First-line therapy for MM consists of induction therapy and high-dose chemotherapy followed by a potential stem cell transplant, and the standard of care for R/R MM includes immunomodulatory agents, proteasome inhibitors, monoclonal antibodies, cytotoxic agents, and hematopoietic stem cell transplant.

Despite the recent advancement in available therapies for MM disease management, the five-year overall survival rate remains at approximately 50%.

Given this significant unmet need, several groups are investigating autologous and allogeneic CAR T cell therapies for R/R MM.

BCMA is among the most promising antigens used to target MM, with two BCMA CAR T therapies (idecabtagene vicleucel and ciltacabtagene autoleucel) having received marketing approval in late-line R/R MM.

Recently, both drugs have been used to dose patients in pivotal clinical studies for patients with R/R MM in earlier lines of therapy, where they outperformed standard of care.

Novel treatments with other mechanisms of action are also undergoing development, including bispecific T cell engagers, next-generation antibodies, and antibody drug conjugates.

As highlighted above, recent therapeutic advances across R/R B cell malignancies have led to a variety of treatment options and better patient outcomes.

In particular, autologous surface protein-directed CAR T therapies have been highly effective in certain subsets of patients with R/R disease.

However, not all patients have access to these novel therapies, and even if they able to obtain such access, many patients ultimately relapse following treatment and succumb to their cancer, resulting in 100,000 deaths per year in the United States and Europe across these indications.

There are two primary outstanding challenges that have limited utilization of these CAR T therapies and their impact on broader groups of patients:

relapse and manufacturing challenges.

Lack of Response / Relapse .

Only about 50% of patients treated with an approved CD19-directed CAR T therapy will have a complete response and approximately one-third of patients with a complete response will replapse relatively quickly.

The emerging post-approval data from approved CAR T therapies tisagenlecleucel and axicabtagene ciloleucel indicate that relapse can result from one of two primary factors.

The first involves loss of CD19 expression on malignant cells, resulting in tumor escape.

This finding was initially established for ALL and is the cause of relapse after CAR T treatment for roughly half of treated patients.

More recent data indicate that low CD19 expression contributes to the lack of response in a meaningful number of patients with NHL.

CD19 CAR T treatments have recently been tested in pivotal trials in earlier lines of therapy for NHL, which raises the possibility that more patients will be treated with CD19 CAR T therapy and subsequently relapse due to CD19 loss.

Patients with CD19 therapy failure have an extremely poor prognosis, with overall survival measurable in months and virtually no treatment options.

Therefore, the development of CAR T therapies targeting an alternate antigen other than CD19 may provide an opportunity to address this growing unmet need.

Data from several studies have shown that CD22 CAR T treatment has led to complete responses in NHL and ALL patients that failed to reach a complete response or relapsed after CD19 CAR T treatment.

The second pattern of relapse relates to suboptimal CAR T cell functionality, such as poor expansion, poor persistence, or T cell exhaustion, resulting in relapse and continued growth of cancer cells that retain the targeted antigen.

Re-infusion with the same CAR T therapy has had limited benefit in these patients, although treatment with a different CAR T therapy has demonstrated some promise in ongoing clinical trials.

Manufacturing .

Because autologous CAR T therapies are patient-specific products, their manufacturing process is complex and requires a significant amount of time and labor.

Given this, infrastructure and cost considerations and limitations have resulted in limited patient access to these therapies.

Even for patients who are fortunate enough to have access to approved CAR T therapies, delays, commonly of at least one month, resulting from scheduling difficulties and issues that arise during manufacturing may prevent use of and the utility of these therapies in patients with rapidly progressing malignancies.

Certain groups are seeking to overcome access limitations by using healthy donor-derived, or allogeneic, CAR T cells instead of patient T cells to yield “off-the-shelf”

therapeutics that can be manufactured consistently.

However, efficacy and durability concerns remain, largely due to the inability to effectively control the host versus graft response and the risk of eventual immune rejection of these products by the recipient.

We are developing our ex vivo allogeneic T cell programs to address this host versus graft response and prevent immune rejection.

Limitations of Allogeneic CAR T Therapies

We believe our hypoimmune cells have the potential to create a differentiated platform for developing allogeneic T cells, and to address two major hurdles associated with use of allogeneic T cells.

The first is the risk of graft versus host disease, in which the allogeneic donor T cells target and kill recipient tissues.

Multiple CAR T cell product candidates in clinical development have prevented this reaction through gene edits targeting components of the T cell receptor, such as TCR-alpha gene.

The more significant challenge has been HvGR, in which the patient’s immune system kills the transplanted T cells.

One strategy to approach this challenge has been to essentially eliminate the patient’s immune system, neutering its ability to find and destroy the transplanted allogeneic CAR T cells.

This strategy has two limitations.

First, the patient is at risk of severe infections during this period of substantial immune suppression.

Second, as the immune system returns, it will inevitably reject the allogeneic CAR T cells, limiting the duration that these therapeutic cells are in the body.

Experience with autologous CAR T cells in patients with B cell malignancies has demonstrated that persistence of CAR T cells is important for the durability of response.

Thus, the ability to effectively prevent long term rejection of an allogeneic CAR T therapy without significant immune suppression would be a major advance.

We are aware of other efforts to develop allogeneic CAR T cell products that focus on overcoming the adaptive immune system (T and B cells).

Our technology addresses rejection mediated by both the adaptive and innate immune systems, giving us the potential to create a differentiated allogeneic CAR T solution.

Our Allogeneic T Cell Program Approach

Our hypoimmune technology is designed to hide the cell from the patient’s immune system, and we are applying this technology to manufacture allogeneic CAR T cells.

We intend to utilize T cells from healthy donors into which we will introduce the CAR gene and make the gene modifications necessary to overcome graft versus host disease and to incorporate our hypoimmune technology in an effort to address host versus graft response.

We then intend to expand these cells ex vivo , with a goal of making many batches from a single donor as well as creating comparable CAR T cells from various healthy donors.

These allogeneic CAR T therapies could be frozen and delivered as an “off the shelf” product for cancer patients without the need for severe immunosuppression.

One strategy to address this challenge has been to essentially eliminate the patient’s immune system, neutering its ability to find and destroy the transplanted allogeneic CAR T cells.

However, this strategy has two limitations.

First, the patient is at risk for developing severe infections during this period of substantial immune suppression.

Second, as the immune system returns following immune suppression, it will inevitably reject the allogeneic CAR T cells, limiting their persistence, or the duration that these therapeutic cells are in the body.

In multiple independent clinical trials, regardless of the disease setting, allogeneic CAR T cells have been shown to be cleared from the patient immune system in less than a month despite high dose immunosuppression.

The therapy recipients often experience short lived clinical responses with the lack of durability correlating with the poor persistence of the allogeneic cells.

Conversely, the clinical experience with autologous CAR T cells has demonstrated that longer persistence of the CAR T correlates with durable cancer remission.

Thus, the ability to effectively prevent long-term rejection of an allogeneic CAR T therapy without significant immune suppression would provide a significant advantage over existing allogeneic approaches.

We are aware of other efforts to develop allogeneic CAR T cell products that focus on overcoming the adaptive immune system, consisting of T and B cells.

However, our hypoimmune technology addresses rejection mediated by both the adaptive and innate immune systems, which we believe will enable us to create a differentiated allogeneic CAR T solution.

Our Allogeneic T Cell Approach

Our hypoimmune technology is designed to “hide” the cell from the patient’s immune system, and we are applying this technology for the clinical development of hypoimmune allogeneic CAR T cells for a variety of therapeutic applications.

Our allogeneic T cell platform is designed to enable the substitution of CAR constructs in a modular fashion.

Initial clinical success with SC291 would support the expansion of our allogeneic CAR T efforts and enable additional product candidates to be brought forward and developed.

We are prioritizing clinically-validated cancer antigens as well as CAR constructs that have shown robust safety and efficacy profiles in hematologic malignancies in the autologous context.

Our manufacturing process begins with T cells from healthy donors, into which we introduce the CAR gene,make the gene modifications necessary to avoid GvHD, and incorporate our hypoimmune modifications to prevent HvGD.

We then expand these cells ex vivo , which enables us to both make many batches from a single T cell donor as well as create comparable CAR T cells derived from different donors.

Our vision is to freeze these allogeneic CAR T therapies, store them, and deliver them to cancer patients as an “off the shelf” product without requiring severe immunosuppression.

Preclinical Data

For our preclinical studies, human donor-derived T cells were genetically modified ex vivo, to generate cells bearing the hypoimmune edits (disruption of MHC class I/class II;

For our preclinical studies, human donor T cells were genetically modified ex vivo to generate T cells with hypoimmune modifications (disruption of MHC class I/class II;

overexpression of CD47), TCR-alpha disruption (to mitigate graft versus host disease), and the expression of a CD19 CAR.

These cells were then tested in vivo for their tumor-killing activity in a human xenograft mouse model for leukemia (Nalm-6).

These preclinical data suggest that the hypoimmune edits do not interfere with CAR T killing activity.

We observed clearance of the leukemic cells by the hypoimmune CD19 CAR T cells and the potency of these cells was comparable to unmodified CD19 CAR T cells, which are similar to CAR T cells currently in clinical use.

Hypoimmune Donor-Derived CD19 CAR T Cells Clear Leukemia Cells in a Human Xenograft Mouse Model at Levels Comparable to Unmodified CD19 CAR T Cells

These cells, as well as unmodified CD19 CAR T cells, were then tested in vivo for their tumor-killing activity in a human xenograft mouse model for leukemia (Nalm-6).

These preclinical data suggest that the hypoimmune modifications do not interfere with CAR T killing activity.

We observed initial clearance of the leukemic cells by both the hypoimmune CD19 CAR T cells and the unmodified CD19 CAR T cells, which are similar to CAR T cells currently in clinical use.

However, the unmodified CD19 CAR T cells were eventually rejected by the host immune system, and tumor regrowth began after about two months.

By contrast, in hypoimmune CD19 CAR T injected mice, tumor control was maintained throughout the study, including following a rechallenge at day 83 with Nalm-6 leukemia cells, without further administration of hypoimmune CD19 CAR T cells.

Analysis of immune cells from the bone marrow and spleen at the study endpoint confirmed persistence of the hypoimmune CD19 CAR T cells.

Hypoimmune Donor-Derived CD19 CAR T Cells Demonstrate Persistence and Sustained Tumor Clearance in a Human Xenograft Mouse Model

Activity of hypoimmune donor-derived CD19 CAR T in a mouse leukemia xenograft model (Nalm-6).

Note that when compared to untreated controls, infusion of unmodified CD19 CAR T or hypoimmune CAR T results in eradication of leukemia cells.

Both cohorts of CAR T treated mice had significantly reduced tumor burden when compared to control as early as D7 (p ≤ 0.0001;

One-way ANOVA Bonferroni) with no significant difference between either of the treatment arms.

Furthermore, the hypoimmune CD19 CAR T cells were protected from immune system rejection in humanized mice, and no evidence was observed of either adaptive or innate immune system activation, in contrast to the unmodified CAR T cells:

When compared to untreated controls, infusion of unmodified CD19 CAR T or hypoimmune CD19 CAR T results in eradication of leukemia cells.

Tumor regrowth was visible in animals treated with unmodified CD19 CAR T cells by Day 57;

by contrast, hypoimmune CD19 CAR T-treated animals remained tumor free.

Leukemia tumor cells were reinjected into both sets of animals at Day 83 and markedly greater tumor clearance was seen in the hypoimmune CD19 CAR T-treated animals.

Animals were not retreated with CAR T cells after initial dosing.

Furthermore, the absence of adaptive or innate immune system activation by hypoimmune CD19 CAR T cells in the humanized mice was confirmed in vitro.

Absence of T Cell, B Cell, NK Cell, and Macrophage Responses in a Human Xenograft Mouse Model Following Injection of Hypoimmune Donor-Derived CD19 CAR T Cells

Immune cells from humanized animals receiving hypoimmune donor-derived CD19 CAR T showed no response when exposed to hypoimmune CAR T cells in vitro.

Delivery of hypoimmune cells did not result in production of donor-specific antibodies, as evidenced by binding of IgM antibodies to the surface of donor cells (increased mean fluorescent intensity, MFI).

Hypoimmune-edited cells were not susceptible to killing by NK cells nor macrophages, indicating protection from the “missing self” signal.

Immune cells from humanized animals receiving hypoimmune donor-derived CD19 CAR T cells showed no response when exposed to hypoimmune CAR T cells in vitro.

Delivery of hypoimmune cells did not result in production of donor-specific antibodies, as evidenced by binding of IgM antibodies to the surface of donor cells, demonstrated by increased mean fluorescent intensity (MFI).

Hypoimmune cells were not susceptible to killing by NK cells nor macrophages, indicating protection from the “missing self” signal.

Development Plan and Key Next Steps

Process development work is ongoing within the Technical Operations team to develop scalable manufacturing processes to generate quality and consistent allogeneic T cell product candidates.

In parallel, our cell engineering team is developing an efficient and specific gene editing platform to enable manufacturing of our allogeneic T cell product candidates.

The next major milestones are to complete Good Laboratory Practice (GLP) studies and GMP manufacturing with the goal of submitting an IND for SC291 in 2022.

We believe that early data from the SC291 study will help us understand the therapeutic potential of this therapy, as the ability to evade immune detection with corresponding enhanced persistence of the CAR T may predict higher and more durable complete responses for patients.

Additionally, it will give us insight into the potential of this hypoimmune platform for additional CAR T programs targeting other antigens and cancers as well as the potential for the platform more broadly in areas beyond cancer.

Following the IND submission for SC291, we are progressing SC276, a CD22-targeting allogeneic CAR T which could be combined with targeting CD19 and offers the potential benefit of higher and more durable complete response rates, with the goal of submitting an IND as early as 2023.

We are also advancing our SC255 allogeneic T cell program targeting BCMA for multiple myeloma, with the goal of submitting an IND in the next several years.

Beta Cell Program

Our beta cell program aims to restore lifelong glucose control in Type I diabetes mellitus (T1DM), patients by transplanting hypoimmune iPSC-derived beta cells.

Current therapies for T1DM require continual management, and we believe that effectively restoring beta cell functionality will meaningfully improve patient outcomes for patients with T1DM.

We intend to develop this program with the goal of submitting an IND for SC451 as early as 2023.

Background on Type 1 Diabetes

T1DM is an autoimmune disease in which the patient’s immune system destroys its own pancreatic beta cells.

With the clearance of our SC291 IND in January 2023, our next key milestone is initial data testing SC291 in patients with lymphoma and leukemia.

We believe that early data from the SC291 clinical study will help us understand the therapeutic potential of this therapy.

Early data showing cell expansion and responses will give us insights into the quality of the CAR T cells we manufacture.

More importantly, the ability to evade immune detection with corresponding enhanced persistence of the CAR T may predict higher and more durable complete responses for patients.

Cellular persistence of SC291 in patients for two months or greater would exceed the persistence seen by allogeneic CAR T product candidates that are currently in the clinic.

This may potentially translate into longer remissions in treated patients.

Cellular persistence of three to six months would match the persistence of the approved autologous CAR T products and potentially translate into comparable long term remissions.

More consistent robust early cellular expansion and cellular persistence of greater than six months may translate into higher durable response rates when compared to approved autologus CAR T products.

Additionally, data from this clinical study should give us insight into the potential of our hypoimmune platform for additional CAR T programs targeting other antigens and cancers, as well as the potential for the platform more broadly in areas beyond cancer.

In parallel, we are progressing SC262, a CD22- targeted allogeneic CAR T therapy that offers the potential benefit of treating both CD19 treatment-naïve patients as well as those that have experienced CD19 therapy treatment failures, with the goal of submitting an IND in 2023.

We will focus initial development toward patients that have previously failed to respond or relapsed after treatment with a CD19-directed CAR T cell treatment.

We are also advancing our SC255 allogeneic T cell program targeting BCMA for MM, with the goal of submitting an IND as early as 2024.

Pancreatic Islet Cell Program

Our pancreatic islet cell program aims to restore glucose control in type 1 diabetes mellitus (T1DM) patients by transplanting hypoimmune PSC-derived pancreatic islet cells without the need for immunosuppression.

Current therapies for T1DM require continual management, and we believe that effectively restoring islet cell functionality will meaningfully improve patient outcomes for T1DM patients, which is supported by data from patients who have successfully received primary islet transplants with immunosuppression.

We are developing SC451, hypoimmune PSC-derived pancreatic cells, with a goal of submitting an IND as early as 2024.

Background on Type 1 Diabetes Mellitus

T1DM is an autoimmune disease in which the patient’s immune system destroys its own pancreatic islet cells.

The destruction of these cells leads to complete loss of insulin production and a metabolic disease wherein patients are unable to control their blood glucose levels.

Often called “juvenile diabetes”, this disease commonly has its onset in adolescence.

Often called “juvenile diabetes,” T1DM disease onset commonly occurs in adolescence.

Beta cells reside in specialized hormone-producing clusters within the pancreas called the islets of Langerhans.

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Once the reserve capacity of beta cells is exhausted, blood glucose rises, and the patient will have a life-long battle to control blood glucose levels.

T1DM affects 1.6 million adults in the United States, and there are approximately 20,000 new cases diagnosed per year in patients under the age of 20.

In Europe there are an estimated 2.4 million adults with T1DM, and 300,000 under the age 20, with 31,000 new cases of T1DM diagnosed each year.

Combining prevalence in the United States and Europe yields a pool of approximately 4 million patients with T1DM.

Without insulin therapy, T1DM is rapidly fatal.

T1DM affects approximately 860,000 patients in the United States, with adults constituting 80% of the patient pool.

In EU5, there are an estimated 870,000 patients with T1DM, and 118,000 under the age 18.

Current Treatment Landscape and Unmet Need

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Despite significant advances in types of insulins, glucose monitoring, and insulin pumps, life expectancy for T1DM is still approximately 15 years shorter than for people without diabetes.

Patients are at risk from acute complications of hyperglycemia, including diabetic ketoacidosis and coma.

Conversely, they are also at risk of hypoglycemic episodes, particularly at night, which can lead to the “dead in bed” syndrome, thought to result from cardiac arrhythmias induced by low glucose.

Long term elevations in blood glucose levels have particularly devastating effects on arteries and capillaries, resulting in premature myocardial infarction, stroke, limb ischemia, gangrene, kidney failure, and blindness due to diabetic retinopathy.

“Insulin pumps,” which feature a computerized system for sensing blood glucose and delivering appropriate doses of insulin, have improved glycemic control.

Notably, data from the FDA indicate that issues with insulin pumps are among the most frequently reported problems in their database.

All current therapies require patients to carefully monitor their dietary intake, which, while inconvenient in adults, is a frequent point of failure in adolescents.

Pancreas transplantation for uncontrollable diabetes was first performed in the 1960s, and this established the principle that replacing the beta cells (here in the context of the whole pancreas) could restore physiological glucose control.

Patients are at risk of acute complications of hyperglycemia, including diabetic ketoacidosis, coma, and death, as well as hypoglycemic episodes, particularly at night, which can lead to the “dead in bed” syndrome, thought to result from cardiac arrhythmias induced by low glucose.

Long term elevations in blood glucose levels can have particularly devastating effects on arteries and capillaries, resulting in premature myocardial infarction, stroke, limb ischemia, gangrene, kidney failure, and blindness due to diabetic retinopathy.

“Insulin pumps,” which feature a computerized system for sensing blood glucose and delivering appropriate doses of insulin, have improved glycemic control, though data from the FDA indicate that issues with insulin pumps are among the most frequently reported problems in their database.

All current therapies require patients to carefully monitor their dietary intake, which, although inconvenient in adults, is a frequent point of failure in adolescents.

Pancreas transplantation for uncontrollable diabetes was first performed in the 1960s, and established the principle that replacing the beta cells (here in the context of the whole pancreas) could restore physiological glucose control.

Pancreas transplants are complicated surgical interventions, require lifelong immunosuppression, and are limited due to organ availability.

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Because of these challenges, the biomedical community began exploring pancreatic islet transplantation in the 1970s.

This process involves enzymatic digestion of a donor pancreas and isolation of the Islets of Langerhans followed by delivery of these cells to an appropriate site in the body where the islets can engraft and become well vascularized.

The major lessons from islet transplantation have been that glucose homeostasis can be restored, insulin-independence can be achieved, hemoglobin A1C levels (a marker of long-term glucose levels) can be normalized, and severe episodes of hypoglycemia can be reduced.

As with an organ transplant, patients must be immune suppressed to prevent immune rejection of the transplanted cells.

In addition to complications from this immune suppression and the lack of cell availability, the principal limitation of islet transplantation has been the therapy’s durability.

Most patients lose glucose control over months to years and eventually become insulin-dependent again, primarily due to immune rejection of the allogeneic islets.

Our Beta Cell Program Approach

The goal of our beta cell hypoimmune program is to restore lifelong glucose control in T1DM patients by transplanting hypoimmune iPSC-derived beta cells, including beta cells.

Our goal is to create a therapy that restores the body’s normal beta cell mass, giving patients physiologically appropriate glucose sensing ability and insulin secretion.

We believe this therapy could reduce, or even eliminate, the hypoglycemia and hyperglycemia in diabetic patients, potentially enabling less onerous and costly treatment, fewer complications, and longer life expectancy, resulting in a meaningfully improved quality of life.

This process requires enzymatic digestion of a donor pancreas and isolation of the islets of Langerhans, followed by delivery of these cells to an appropriate site in the body where the islets can engraft and become well vascularized.

The major lessons from islet transplantation have been that glucose homeostasis can be restored, insulin independence can be achieved, levels of hemoglobin A1C (a marker of long-term glucose levels) can be normalized, severe episodes of hypoglycemia can be reduced, and the pathology associated with long-term hyperglycemia can halt or even reverse.

As with an organ transplant, patients must undergo chronic immune suppression to prevent immune rejection of the transplanted cells.

Most patients lose glucose control over a period of months to years and eventually become insulin-dependent again, primarily due to immune rejection of the allogeneic islets resulting from an inability to tolerate the significant immune suppression necessary to protect the cell transplant.

Our Pancreatic Islet Cell Program Approach

The goal of our SC451 program is to restore glucose control in T1DM patients by transplanting hypoimmune PSC-derived islet cells, including beta cells, without the need for immunosuppression, giving patients physiologically appropriate glucose sensing and insulin secretion.

We believe this therapy could reduce, or even eliminate, hypoglycemia and hyperglycemia in T1DM patients, potentially enabling less onerous and costly treatment, fewer complications, a meaningfully improved quality of life, and longer life expectancy.

We focus our efforts around three goals:

(i) deriving highly functional beta cells from PSCs, (ii) genetically modifying these cells to evade allogeneic immune responses, and (iii) genetically modifying these cells to evade autoimmune destruction of beta cells.

(i) deriving highly functional islet cells from PSCs, (ii) using our hypoimmune technology to genetically modify these cells to evade allogeneic immune responses, and (iii) using our hypoimmune technology to

genetically modify these cells to evade autoimmune destruction of islet cells.

This strategy requires building on lessons from pancreatic islet transplantation, recent advances in understanding pancreatic islet developmental biology, and our hypoimmune technology.

Deriving beta cells from iPSCs has the potential to solve limitations associated with donor pancreas and improve the overall product quality and product consistency.

iPSCs have the potential to create a virtually limitless supply of these cells.

Our program uses proprietary differentiation protocols to generate mature beta cells with glucose control comparable to primary human islets, as evidenced by our animal studies.

Finally, we intend to modify the genomes of the iPSCs in order to apply our hypoimmune technology.

If successful, the hypoimmune gene modifications will protect these cells from both auto-immune and allogeneic rejection

by the patient’s immune system and potentially remove the need for toxic immunosuppression in transplant recipients.

Hypoimmunity also should eliminate the need for physical separation of the beta cells from the rest of the body by a device or encapsulation technology, which may allow for tighter control of glucose by eliminating the lag time between glucose sensing and insulin secretion.

Deriving islet cells from PSCs has the potential to solve limitations associated with use of a donor pancreas and improve the overall product quality and product consistency.

PSCs have the potential to create a virtually limitless supply of these cells.

Our program uses proprietary differentiation protocols to generate mature islet cells with glucose control comparable to primary human islets, as evidenced by our animal studies.

Finally, we are applying our hypoimmune technology to modify the genomes of the PSCs.

If successful, the hypoimmune genome modifications will protect these PSC-derived islet cells from both autoimmune and allogeneic rejection by the patient’s immune system and potentially remove the need for toxic immunosuppression in transplant recipients.

Hypoimmunity also eliminates the need for physical separation of the islet cells from the rest of the body by a device or encapsulation technology, which may allow for tighter glucose control by eliminating the lag time between glucose sensing and insulin secretion as well as avoid the fibrotic reaction inherent in encapsulation technologies to date.

Preclinical Data

We are developing a proprietary protocol that will differentiate hypoimmune iPSCs into mature, glucose-sensitive, insulin-secreting beta cells based on licensed technology from Washington University in St.

This technology enables differentiation of beta cells at a greater purity and with superior function compared to published stem cell-based protocols.

The principal function of beta cells is to maintain steady levels of glucose in circulation.

The beta cells sense when glucose levels rise in the bloodstream and release insulin in response.

In vitro , our beta cells respond to glucose and robustly secrete insulin at an equivalent level to primary human islets, as depicted in the figure below.

Human iPSC-Derived Beta Cells Exhibit Glucose-Induced Insulin Release

Human islets from cadaveric pancreases (gold standard) exhibit robust insulin secretion in response to an increase in glucose levels.

Human iPSC-derived beta cells using technology licensed from Washington University in St.

Louis show similar dynamics of insulin secretion to the cadaveric islets.

These stem cell-derived beta cells were tested in a mouse model of Type I diabetes induced by the beta cell toxin, streptozotocin.

When transplanted into the kidney of the diabetic mice, these beta cells normalize glucose levels in an equivalent fashion to primary human islets.

The diabetic glucose levels return when the grafts are surgically excised (nephrectomy).

Similar to the human phenotype, diabetic mice cannot normalize circulating glucose levels following a glucose injection.

Following transplantation of our beta cells, these mice rapidly normalized blood glucose in an equivalent fashion to both non-diabetic mice and diabetic mice that received human primary islet transplants.

In vivo Performance of iPSC-Derived Beta Cells in a Mouse Model of T1DM

Normalization of blood glucose levels after transplantation of cadaveric human islet cells or iPSC-derived islet cells obtained by planar or suspension differentiation (Washington University technology).

Note the rapid normalization of blood glucose with cadaveric and stem cell-derived islets with the planar protocol, with slower normalization using the suspension protocol.

We are developing a proprietary protocol to differentiate hypoimmune PSCs into mature, glucose-sensitive, insulin-secreting islet cells using licensed technology from Washington University in St.

Louis (Washington University) as well as our own research insights.

This technology enables differentiation of islet cells at a greater purity and with superior function compared to published stem cell-based protocols.

The principal function of beta islet cells, the insulin-secreting cells within an islet, is to maintain steady levels of glucose in circulation.

The beta islet cells sense when glucose levels rise in the bloodstream and release insulin in response.

In vitro , our PSC-derived islets respond to glucose and robustly secrete insulin at an equivalent level to primary human islets, as depicted in the figure below.

Human PSC-Derived Islet Cells Exhibit Glucose-Induced Insulin Release

Human islets from cadaveric pancreases exhibit robust insulin secretion in response to an increase in glucose levels.

Human PSC-derived islet cells using technology licensed from Washington University demonstrate similar levels of insulin secretion as the cadaveric islets.

These PSC-derived islet cells were tested in a mouse model of T1DM induced by the beta cell toxin, streptozotocin (STZ).

When transplanted into the kidney of the T1DM mice, these islet cells normalize glucose levels in an equivalent fashion to primary human islets.

The diabetic glucose levels return when the grafts are surgically excised via nephrectomy.

Similar to the human phenotype, T1DM mice cannot normalize circulating glucose levels following a glucose injection.

Following transplantation of our islet cells, these mice rapidly normalized blood glucose in an equivalent fashion to both non-T1DM mice and T1DM mice that received human primary islet transplants.

In vivo Performance of iPSC-Derived Islet Cells in a Mouse Model of T1DM

Normalization of blood glucose levels after transplantation of cadaveric human islet cells or PSC-derived islet cells obtained by planar or suspension differentiation (based on Washington University technology).

Note the rapid normalization of blood glucose with cadaveric and PSC-derived islets with the planar protocol, with slower normalization using the suspension protocol.

In all groups, removal of the graft by nephrectomy re-induced diabetes, indicating the correction resulted from the transplant.

STZ, streptozotocin, is a toxin for beta-islet cells that induces diabetes in animal models.

Normalization of blood glucose after glucose injection by transplantation of cadaveric islet cells or iPSC-derived islet cells.

STZ is a toxin for beta islet cells that induces diabetes in animal models.

Bottom panel:

Normalization of blood glucose after glucose injection by transplantation of cadaveric islet cells or PSC-derived islet cells.

Note the more complete normalization using the planar protocol.

Groups are defined by the same symbols shown in the middle panel.

Groups are defined by the same symbols shown in the top panel.

From Hogrebe et al, Nature Biotechnology 2020.

We ran an experiment to better understand whether hypoimmune edits impair the function of islet cells and to confirm that these edits enable the islets to evade immune responses.

For these experiments, we made the hypoimmune genetic modifications in human islets isolated from cadaveric human donors.

These cells were transplanted intramuscularly, without immunosuppression, into a humanized mouse strain, a mouse strain engrafted with human immune cells that mimic certain aspects of the human immune system.

Type 1 diabetes was induced in this mouse model with streptozotocin, and the ability of transplanting islet cells to restore normal glucose levels while evading immune rejection was tested.

We found that hypoimmune edited human donor islets were successful in restoring glucose control while unmodified islets failed to do so.

The key driver of this difference was that, while human donor islets with hypoimmune edits survived for the full duration of the experiment (approximately 30 days), unmodified islets were rapidly rejected within a week.

These data demonstrate that hypoimmune edits do not impair the ability of cadaveric islet cells to restore glucose homeostasis, but they do prevent rejection of these cells in mice with humanized immune systems.

We next tested whether our hypoimmune edited cells could survive in serum containing autoreactive antibodies and T cells from patients with Type I diabetes.

We exposed pancreatic islets with or without our hypoimmune edits to serum and T cells from patients with Type I diabetes.

As expected, both T cells and antibodies from patients recognize and kill unedited pancreatic islets.

In contrast, these T cells and antibodies from Type I diabetics did not recognize or kill our hypoimmune edited islet cells.

The results from this experiment increase our confidence that, in addition to preventing allogeneic rejection, our hypoimmune technology may allow islet cells to survive autoimmune killing in patients with Type I diabetes without the need for immunosuppression.

Hypoimmune human donor pancreatic islet cells evade immune detection and regulate glucose le vels

Unmodified human donor derived pancreatic islets (Row 1) are rapidly killed by PBMCs (immune cells) from Type 1 Diabetic donors but are not recognized by immune cells from healthy volunteers.

Human donor derived pancreatic islets bearing hypoimmune modifications (Row 2) are not recognized by the PBMCs of healthy volunteers or type 1 diabetics

Unmodified human donor derived pancreatic islets (unmodified islet cells) are readily recognized by antibodies in the serum of Type 1 Diabetic patients.

Antibody binding is corelated with higher values of Maximum Fluorescent intensity (MFI) Right graph:

Human donor derived pancreatic islets bearing hypoimmune modifications are not recognized by antibodies in serum of healthy volunteers or Type 1 diabetic patients

Hypoimmune human donor pancreatic islet cells survive in humanized mice and regulate glucose le vels

Top image panel on left:

Unmodified human donor derived pancreatic islets injected intramuscularly into humanized mice are rejected by recipient mice by D9.

Viable cells are marked via a bioluminescent marker that is lost when transplanted cells are no longer viable.

Top image panel on right:

By contrast hypoimmune human donor derived pancreatic islet cells survive in humanized recipient mice till D29 when the experiment was terminated

Lower graphs are serum glucose measurements in the humanized mice.

Diabetes was induced via streptozotocin treatment that results in loss of glycemic control as visualized by an immediate and sustained increase in serum glucose.

Transplantation of unmodified human donor derived pancreatic islets had no effect on serum glucose levels.

By contrast hypoimmune human donor derived islets successfully lowered serum glucose levels as measured by a glucose tolerance test.

We conducted an experiment to better understand whether hypoimmune modifications impair the function of islet cells and to confirm that these modifications enable the islet cells to evade immune responses.

For these experiments, we made hypoimmune genetic modifications to NHP primary islets that were then transplanted intramuscularly, without immunosuppression, into a different NHP.

We found that these cells were viable for the full duration of the study (approximately 10 months) and did not incite either an adaptive or innate immune response.

By contrast, unmodified NHP primary islets were rejected within one week.

These results suggest that hypoimmune modifications enable allogeneic immune evasion in NHP primary islet cells and increase our confidence in the clinical translatability of this approach.

Primary Allogeneic Hypoimmune NHP Pancreatic Islet Cells Survive in NHPs for 10 Months Without Immunosuppression

Hypoimmune NHP primary islets (top row) or unmodified wild type (wt) NHP primary islets (bottom row) were introduced via intramuscular injection into allogeneic NHPs.

Unmodified NHP primary islets are undetectable in recipient NHPs by week 1 while hypoimmune NHP primary islets introduced into naïve NHPs were viable and detectable until the experiment was terminated at 40 weeks following injection.

Primary islet cell survival in vivo is followed over time using bioluminescence imaging (BLI).

We next tested whether hypoimmune modifications to iPSC-derived islet cells can enable evasion of autoimmune rejection.

We approached this question in two ways.

First, we carried out transplantation experiments in the non-obese diabetic (NOD) mouse model, which develops spontaneous T1DM due to induction of autoantibodies and autoreactive T cells the kill the islet cells.

We isolated islets from pre-diabetic NOD mice and applied hypoimmune technology to these islets to generate hypoimmune NOD islet cells, which we transplanted into diabetic NOD mice.

When transplanted into NOD mice, unmodified NOD islet cells were rejected within approximately two weeks and had no impact on the diabetes.

By contrast, the hypoimmune NOD islet cells survived and achieved durable glycemic control within two weeks.

In a second set of experiments, we tested whether we would observe similar findings in a human T1DM model.

Because a T1DM patient has no functioning islets, we used iPSC technology to generate islet cells with the same genetic makeup as the patient.

To accomplish this, we reprogrammed immune cells from a T1DM patient donor into iPSCs.

We then split the iPSCs into two groups – one group to which we applied hypoimmune modifications and one that remained unmodified – before differentiating these cells into islet cells using our differentiation protocol.

The end result is two different cell products for testing – (i) hypoimmune iPSC-derived islet cells and (ii) unmodified iPSC-derived islet cells.

To simulate the immune environment of a T1DM patient, we developed a proprietary humanized mouse model (T1D mice) which is populated with immune cells from the same T1DM patient donor and subsequently in which diabetes is induced via STZ.

Unmodified iPSC-derived islet cells injected intramuscularly into T1D mice were rejected within nine days without any impact on the T1D mice’s diabetes.

By contrast, hypoimmune iPSC-derived islet cells survived in T1D mice and resulted in glucose control within two weeks.

To confirm that the autoimmune rejection remained intact in these mice, we tested the impact of a subsequent injection of iPSC-derived islet cells in these mice that had already been injected with hypoimmune iPSC-derived islet cells.

We found that, although the iPSC-derived islet cells were rapidly rejected, the hypoimmune iPSC-derived islet cells and the glucose control were preserved.

Together, these data support the belief that our hypoimmune modifications can enable evasion of autoimmune rejection.

Autologous Pancreatic Islet Experiment

A, Experimental schema for generating a humanized T1D mouse and autologous iPSCs from T1D patient PBMCs.

T1D patient PBMCs were used to generate iPSCs, which were used to generate unmodified and hypoimmune autologous islet cell.

B, Unmodified iPSC-derived autologous islets are cleared by the immune system of the humanized T1D mouse by Day 7 and did not restore glycemic control C, Hypoimmune iPSC-derived autologous islets (injected on left side of mouse) survive for durationof experiment (until Day 29) while unmodified iPSC-derived autologous islets (injected on right side of mouse at Day 15 post hypoimmune iPSC-derived autologous islet injection) are cleared within a week of injection.

Development Plan and Key Next Steps

Our work is currently focused on manufacturing GMP-grade, gene-edited, pluripotent stem cell banks;

We are planning to support an investigator sponsored trial of allogeneic hypoimmune primary islet cells in T1DM patients in 2023.

Allogeneic primary islet cell transplantation into T1DM patients has been shown to reduce long-term exogenous insulin dependence, albeit when administered with immunosuppression .

Under the IST, a group of experienced pancreatic islet transplantation experts will transplant allogeneic hypoimmune primary islet cells intramuscularly into T1DM patients without immunosuppression.

We expect that data from the IST will provide insight into the impact of hypoimmune modifications that we plan to apply to our SC451 program in enabling evasion of allogeneic and autoimmune rejection .

We expect that data from the IST will be available as early as the second half of 2023.

We believe that a stem cell-derived islet product candidate such as SC451 would likely maximize the benefit to patients, with superior manufacturing scalability as compared to primary islet cells.

However, if the IST demonstrates persistence of allogeneic hypoimmune primary islet cells, it may accelerate our development of SC451.

Our work on the SC451 program is currently focused on manufacturing GMP-grade, genome-edited, pluripotent stem cell banks;

scaling manufacturing;

and characterizing the product.

We are working through the process development and IND-enabling studies to allow for an IND submission for SC451 as early as 2023.

Our GPC program aims to deliver healthy allogeneic GPCs, the precursors to both astroglia and myelin-producing oligodendrocytes.

This program has the potential to treat myelin and glial-based disorders, which represent a broad group of debilitating neurological disorders, such as multiple sclerosis and a number of neurodegenerative disorders, none of which have effective treatment alternatives.

We intend to develop our stem cell derived GPC therapies for secondary progressive multiple sclerosis, Pelizaeus-Merzbacher disease other disorders of myelin, Huntington’s disease, and other astrocytic diseases.

Our goal is to submit three INDs for SC379 in the next several years.

We are working through process development and IND-enabling studies with the goal of filing an IND as early as 2024.

Our GPC program, SC379, aims to deliver to patients healthy allogeneic GPCs, which are the precursors to both astroglia and myelin-producing oligodendrocytes.

This program has the potential to treat myelin- and glial-based disorders, which represent a broad group of debilitating neurological disorders, such as multiple sclerosis (MS) and a number of neurodegenerative disorders, none of which have effective treatment alternatives.

We intend to develop our stem cell-derived GPC therapy for secondary progressive MS, Pelizaeus-Merzbacher disease (PMD) other disorders of myelin, Huntington’s disease, and other astrocytic diseases.

Our goal is to submit three INDs for SC379 as early as 2024.

Background on Myelin- and Glial -Based Disorders

Glial cells are the support cells of the human CNS.

The two major types of CNS-derived glial cells are oligodendrocytes—the cells that produce myelin, the insulating substance of the brain’s white matter that enables neural conduction and astrocytes, the support cells of neurons and their synapses.

These two kinds of glial cells arise from human GPCs (hGPCs), are responsible for remyelination in the injured and demyelinated adult brain and spinal cord.

The two major types of CNS-derived glial cells are oligodendrocytes, which are the cells that produce myelin, the insulating substance of the brain’s white matter that enables neural conduction, and astrocytes, which are the support cells of neurons and their synapses.

These two kinds of glial cells that arise from human GPCs (hGPCs) are responsible for remyelination in the injured and demyelinated adult brain and spinal cord.

Diseases of glial cells are among the most prevalent and disabling conditions in neurology.

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Tens of thousands of children in the United States suffer from diseases of myelin loss.

The most prototypic example of this class of diseases is Pelizaeus-Merzbacher disease (PMD), an X-linked leukodystrophy most often manifesting in male infants and young boys, caused by mutations in the oligodendrocytic PLP1 gene, which results in widespread hypomyelination.

The most prototypic example of this class of diseases is PMD, an X-linked leukodystrophy most often manifesting in male infants and young boys caused by mutations in the oligodendrocytic PLP1 gene, which results in widespread hypomyelination.

There is no treatment for PMD, which is typically fatal in childhood.

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Prevalence of PMD in the general population is estimated to be approximately 1 in 100,000 in the United States.

While we are initially targeting PMD as our proof of concept, congenital leukodystrophies as a group affect a more significant population, or about 1 in 7,600 births.

Although we are initially targeting PMD as our proof of concept, we believe our stem-cell derived GPCs may have broader applicability to other congenital leukodystrophies as well, which as a group affect a more significant population, or about 1 in 7,600 births.

Multiple Sclerosis (MS) .

MS is a debilitating disease characterized by both inflammatory myelinolysis and degenerative axonal loss.

There are two major forms, the initial relapsing remitting form, known as RRMS, and its later progressive neurodegenerative phase designated secondary progressive MS (SPMS).

There are two major forms:

the initial relapsing remitting form, known as RRMS, and its later progressive neurodegenerative phase designated secondary progressive MS (SPMS).

RRMS is characterized by clearly defined attacks with new or increasing neurologic symptoms.

In contrast, SPMS is characterized by progressive neurodegeneration with a loss of neurons, including those that were previously demyelinated during the RRMS phase of the disease.

By contrast, SPMS is characterized by progressive neurodegeneration with a loss of neurons, including those that were previously demyelinated during the RRMS phase of the disease.

The demyelination occurs in a diffuse fashion throughout the adult brain and appears to reflect a loss of axonal support by local oligodendrocytes.

The delivery of GPCs into such chronically demyelinated brain may offer tangible benefits through the oligodendrocytic engagement of axons, as well as by myelin repair.

MS is highly prevalent, with estimates of up to 1.0 million in the United States, 600,000 in Europe, and 2.8 million patients globally.

Approximately 85% of MS patients receive a diagnosis of RRMS initially while 15% of patients are diagnosed with primary progressive MS (PPMS).

Up to a third of RRMS patients transition to secondary progressive MS within a decade if untreated, and most will progress to SPMS within 20-25 years of diagnosis.

The delivery of GPCs into such a chronically demyelinated brain may offer tangible benefits through the oligodendrocytic engagement of axons, as well as by myelin repair.

MS is highly prevalent, with estimates of up to 1.0 million patients in the United States, 600,000 patients in Europe, and 2.8 million patients globally.

Approximately 85% of MS patients receive an initial diagnosis of RRMS, while approximately 15% of patients receive an initial diagnosis of PPMS.

Up to a third of RRMS patients transition to SPMS within a decade if untreated, and most RRMS patients will progress to SPMS within 20 to 25 years of their initial diagnosis.

Success with a stem cell -derived GPC product in SPMS, and especially with a hypoimmune product, could enable further expansion into the RRMS patient population.

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HD is a neurodegenerative disorder in which glial pathology appears to make a significant causal contribution.

It is an autosomal dominant disorder characterized by abnormally long CAG repeat expansions in the first exon of the Huntingtin gene.

HD is an autosomal dominant disorder characterized by abnormally long CAG repeat expansions in the first exon of the huntingtin gene.

The encoded polyglutamine expansions of mutant huntingtin protein disrupts its normal functions and protein-protein interactions, ultimately yielding widespread neuropathology, most rapidly evident in the neostriatum.

We have found that glial pathology is a major contributor to the functional deficits of HD and repairing the glial pathology has significant and positive effects in animal models.

There are approximately 41,000 symptomatic Americans and more than 200,000 at-risk of inheriting HD.

In the United States, there are approximately 41,000 symptomatic HD patients and more than 200,000 at risk of inheriting HD.

In Europe, there are approximately 50,000 patients with HD.

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Congenital Leukodystrophies.

There are no viable treatment options for these conditions, only supportive and palliative therapies for symptoms as they present.

There are no viable treatment options for these conditions.

Patients’ only options are supportive and palliative therapies for symptoms as they present.

Current treatments for MS are largely limited to treatments for RRMS.

few treatments are approved for SPMS, and these have at best marginal efficacy in delaying disease progression;

none are restorative.

There are few approved treatments for SPMS, and none are restorative, having, at best, marginal efficacy in delaying disease progression.

Currently approved treatments for RRMS may be divided into three broad categories of disease -modifying therapies:

(i) first line injectables (such as beta-interferons, Copaxone), (ii) newer oral agents (such as Tecfidera, Gilenya, Mayzent, Zeposia), and (iii) high-efficacy agents (such as Tysabri, Lemtrada, Ocrevus).

Despite many recently successful drug launches in the RRMS space, these drugs still only slow the progression of disease and aid in the recovery from attacks, and there remains no treatment that confers functional restoration or effective cure for this disease.

Currently, there is no treatment to stop or reverse Huntington’s disease.

((i) first-line injectables (such as beta-interferons and Copaxone ® ), (ii) newer oral agents (such as Tecfidera ® , Gilenya ® , Mayzent ® , and Zeposia ® ), and (iii) high-efficacy agents (such as Tysabri ® , Lemtrada ® , and Ocrevus ® ).Despite many recently successful drug launches in the RRMS space, these drugs still only slow the progression of disease and aid in the recovery from attacks, and there remains no treatment that confers functional restoration or effective cure for this RRMS.

There are currently no treatments that stop or reverse HD.

Treatment is limited to several medications that can help minimize symptoms, including the drug tetrabenazine, antipsychotic drugs, antidepressants, and tranquilizers.

Our GPC Program Approach

Our approach to treat myelin and neurodegenerative disorders is via the delivery of healthy allogeneic stem cell-derived GPCs.

We have developed methods for producing and isolating these cells from pluripotent stem cells and delivering them in the purity and quantities necessary for their replacement of endogenous diseased cells.

We believe that both the myelin disorders and glial-based neurodegenerative conditions have compelling potential for our ex vivo therapy.

Our approach to treat myelin and neurodegenerative disorders is via the delivery of healthy allogeneic stem cell-derived GPCs to the recipient.

We have developed methods for producing and isolating GPCs from PSCs and delivering them in the purity and quantities necessary for their replacement of endogenous diseased cells.

We believe that our ex vivo GPC therapy has compelling potential for use in both myelin disorders and glial-based neurodegenerative conditions.

Preclinical Data

Congenital Leukodystrophies .

The capacity of stem cell-derived GPCs for remyelination has been conducted in animal models of congenital hypomyelination.

The capacity of stem cell-derived hGPCs for remyelination has been conducted in animal models of congenital hypomyelination.

Our collaborators used newborn shiverer mice that have a genetic defect in myelin basic protein (MBP), resulting in their neurons being hypomyelinated and the mice having a shortened lifespan.

When iPSC-derived hGPCs were transplanted into these mice, the cells spread widely throughout the brain, developing as astrocytes and oligodendrocytes.

These oligodendrocytes generated mature myelin that effectively restored neuronal conductance and prolonged survival in the transplanted

We believe that these data suggest the feasibility of iPSC-derived hGPC implantation in treating childhood disorders of myelin formation and maintenance, as depicted in the figure below:

hGPCs myelinate widely to greatly extend the survival of hypomyelinated mice.

When iPSC-derived hGPCs were transplanted into these mice, the hGPCs spread widely throughout the brain and developed as astrocytes and oligodendrocytes.

These oligodendrocytes generated mature myelin that effectively restored neuronal conductance and prolonged survival in the transplanted mice.

We believe that these data, as depicted in the figures below, suggest the feasibility of iPSC-derived hGPC implantation in treating childhood disorders of myelin formation and maintenance.

hGPCs G reatly E xtend the S urvival of H ypomyelinated M ice

A, Dot map indicating distribution of human iPSC-derived GPCs at 7 months of age, following neonatal engraftment in a shiverer mouse brain.

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Myelin basic protein (MBP)-immunoreactivity (green) is all human donor-derived.

Myelination in sagittal sections taken at different mediolateral levels from 2 additional 7 month-old mice, each engrafted with iPSC-derived hGPCs at birth.

C, D, Myelination in sagittal sections taken at different mediolateral levels from 2 additional 7 month-old mice, each engrafted with iPSC-derived hGPCs at birth.

E, Kaplan-Meier plot of survival of iPSC-OPC implanted (n=22) vs.

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However, the experimental subjects were neonates, not adults.

Until recently, it was unclear whether GPCs are able to migrate extensively in adult brain tissue, as would be required for the repair of diffusely demyelinated adult brains.

To explore whether the introduction of stem-cell derived hGPCs delivered directly into the adult brain could remyelinate axons in the setting as might be encountered clinically in multiple sclerosis our collaborators studied three different biologic models.

Until recently, it was unclear whether GPCs can migrate extensively in adult brain tissue, as would be required for the repair of diffusely demyelinated adult brains.

To explore whether the introduction of stem-cell derived hGPCs delivered directly into the adult brain could remyelinate axons in the setting as might be encountered clinically in MS, our collaborators studied three different biologic models.

First, it was shown that stem cell derived hGPCs can disperse within and myelinate the brains of adult shiverer mice (as depicted in the figure below).

Second, it was shown that neonatally-engrafted hGPCs engrafted as a neonate can generate new oligodendrocytes and remyelinate demyelinated axons after chemically induced demyelination.

Second, it was shown that neonatally-engrafted hGPCs can generate new oligodendrocytes and remyelinate demyelinated axons after chemically-induced demyelination.

This result demonstrated the ability of already-resident hGPCs to remyelinate previously myelinated axons after a new demyelinating insult as an adult, as well as the ability of transplanted hGPCs to reside as a functional reservoir of new myelinogenic cells in the host brains.

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hGPCs Mediate Robust Myelination After Transplantation into the Adult Shiverer Brain

Human GPCs proved both highly migratory and robustly myelinogenic, after delivery to the hypomyelinated adult shiverer x rag2-/- brain.

A, By 19-20 weeks of age (mice were injected as post-weaning adults, at 4-6 wks) the injected cells had dispersed broadly throughout the forebrain white matter.

Human GPCs proved both highly migratory and robustly myelinogenic after delivery to the hypomyelinated adult shiverer x rag2-/- brain (mice were injected as post-weaning adults at 4-6 weeks).

A, By 19-20 weeks of age, the injected cells had dispersed broadly throughout the forebrain white matter.

B, hGPCs delivered to myelin wild type rag2-/- mice distributed throughout both gray and white matter.

C, Oligodendrocyte differentiation and myelinogenesis by donor hGPCs was robust, with myelination of brain regions that would typically be demyelinated in shiverer mice D, a higher power image of C shows the high proportion of donor cells in those brain regions.

C, Oligodendrocyte differentiation and myelinogenesis by donor hGPCs was robust, with myelination of brain regions that would typically be demyelinated in shiverer mice.

D, A higher power image of C shows the high proportion of donor cells in those brain regions.

Note that DAPI marks all nuclei, hN marks the hGPCs, and MBP marks the remyelinated regions in C and D.

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Our collaborators explored the cellular basis for HD related glial pathology and identified significant defects in potassium channel and glutamate uptake mechanisms in HD glia, which appeared to account for both the glial pathology and its deleterious effects on synaptic function.

Together, these studies suggest a critical role for glial pathology in the progression of HD and suggested the potential for glial cell replacement as a therapeutic strategy in HD, and more broadly, to other neurodegenerative diseases in which glial pathology might be causally contributory.

Together, these studies suggest a critical role for glial pathology in the progression of HD and suggest the potential for glial cell replacement as a therapeutic strategy in HD, and more broadly, to other neurodegenerative diseases in which glial pathology might be causally contributory.

It was confirmed in preclinical mouse studies that stem cell derived hGPC transplant ameliorated both the neuronal and glial pathology of HD by restoring synaptic homeostasis and normal synaptic function to the most affected regions of the host brain.

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This model allows observation of the competitive interactions of the two separately tagged human GPC populations.

The human-into-human grafts expanded and integrated well in their humanized host, with competitive interactions.

The human-to-human grafts expanded and integrated well in their humanized host, with competitive interactions.

As might be anticipated in the clinical setting of healthy cells being transplanted for the purpose of replacing lost or diseased hGPCs, the healthy donor cells outcompete both diseased and older cells to ultimately colonize the hosts.

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GMP Grade Stem Cell-Derived hGPCs for Clinical Studies

A protocol to direct differentiation of human ESCs, as well as iPSCs, to hGPCs has been established.

We have established a protocol to direct differentiation of human ESCs, as well as iPSCs, to hGPCs.

These hGPCs cells remain bipotential for astrocytes and oligodendrocytes, and they differentiate to either fate depending on local signaling.

This protocol has been transferred to a GMP facility in order to enable production of clinical grade cells for both safety and efficacy testing.

These cells have been validated to robustly remyelinate shiverer mouse brains upon intracerebral transplantation.

We plan to use these cells for our IND-enabling studies and initial clinical trial material.

Development Plan and Key Next Steps

Progression of SC379 to IND is planned to follow completion of definitive safety and toxicology studies.

Definitive preclinical efficacy studies using the anticipated clinical product are also planned and will replicate studies that we have published.

Since GPCs are not a terminally differentiated cell type and divide and differentiate in vivo post-transplantation, we will continue to assess potential safety risks, including the risk of tumorigenicity.

We expect to submit IND applications for SC379 for SPMS, PMD, and HD in the next several years.

Cardiomyocyte Program

Background on Heart Failure

Heart failure (HF) is a classic example of a disease of cell loss, ideally suited to the application of ex vivo engineered cells.

The clear but ambitious goal of our program is to replace missing cells after a myocardial infarction, commonly known as a heart attack, in an attempt to restore heart function and improve outcomes for patients.

HF is a life-threatening syndrome, and patients with HF have a mortality rate of 20-30% within one year of diagnosis and a mortality rate of around 50% within five years of diagnosis.

HF with reduced ejection fraction (HFrEF), is a severe form of HF where heart muscle is unable to contract, and therefore pump, adequately.

HFrEF is most frequently a consequence of a loss of heart muscle cells (cardiomyocytes), following a myocardial infarction.

In the United States, there were approximately 380,000 deaths associated with HF in 2018 according to the United States Centers for Disease Control and an overall prevalence of approximately 6 million people with HF, with similar numbers in Europe.

In general, HF has been a challenging area for drug and device development, including only one new drug, Entresto, approved in the last 20 years, and a limited number of devices introduced including electrical resynchronization therapy and implantation of left ventricular assistance devices (LVADs).

These approaches provide only symptomatic relief and do not address the underlying loss of cardiomyocytes associated with HFrEF.

As a result, HFrEF currently remains a progressive and deadly disease with a large unmet need worldwide.

To date, efforts to develop cell-based therapies to address this unmet need have provided little evidence of clinical benefit.

Importantly, these attempts have typically utilized cells such as bone marrow-derived mononuclear cells and mesenchymal stromal cells where any potential benefit would be limited to paracrine mechanisms and not the direct replacement of lost cardiomyocytes.

Our cardiomyocyte program aims to directly regenerate the heart, by replacing lost cardiomyocytes with iPSC-derived cardiomyocytes, with the goal of restoring heart muscle and increasing ejection fraction, which is the percentage of blood the heart pumps with each heartbeat.

Replacement of lost cardiomyocytes with iPSC-derived cardiomyocytes that engraft and function correctly has the potential to prevent or even reverse the progression of HFrEF.

Developing an ideal stem cell-derived cardiomyocyte therapy involves many steps, including:

differentiating cardiomyocytes at scale that engraft upon transplantation, beat in synchrony with the host heart muscle, and improve heart function;

engineering cardiomyocytes to avoid rejection due to the host immune response to the transplanted cells, without requiring immunosuppression;

addressing the risks associated with potential transient arrhythmias, or temporary abnormal heart beats, following transplantation.

Differentiating Cardiomyocytes at Scale that Engraft, Beat Correctly and in Synchrony with the Host Heart Muscle, and Improve Host Heart Function

Scientists, including Dr.

Chuck Murry, our Senior Vice President, Head of Cardiometabolic Cell Therapy, have been working for over 20 years towards developing a regenerative therapy for HFrEF with the goal of transplanting cardiomyocytes derived from

human pluripotent stem cells that engraft, function, and persist in the human heart in vivo .

The groundwork for potential future clinical development has been laid by key breakthroughs such as the ability to direct the differentiation of stem cells selectively into cardiomyocytes, including producing pharmaceutical grade cardiomyocytes at large scale in bioreactors, and the ability to transplant such cardiomyocytes to induce remuscularization of injured hearts.

Initial preclinical attempts to remuscularize the infarcted heart were unsuccessful due to death of the transplanted cells within a few days of delivery.

None of the animals with failed engraftment showed improvement in cardiac function, indicating that engraftment is essential for functional improvement.

Our collaborators developed a pro-survival cocktail that kept cells alive through the rigors of transplantation, allowing the cardiomyocytes to self-assemble into new muscle tissue and induce ingrowth of new blood vessels and connective tissue from the surrounding heart muscle.

Once engraftment was successful, cardiac function improved.

As our collaborators’ capabilities to scale cell manufacturing increased, studies progressed from mice to rats to guinea pigs, all showing improved function:

Human ESC-Cardiomyocytes Improve Function in Injured Rat and Guinea Pig Hearts

functional rescue in rat.

All groups showed comparably reduced fractional shortening after infarction at 2 days pre-transplantation (Pre-Tx).

At 28 days post-transplantation there was preservation of fractional shortening in animals receiving hESC-cardiomyocytes, with deterioration of function in all other groups.

PSC, pro-survival cocktail.

SFM, serum-free media.

2 days Pre-Tx.

functional rescue in guinea pig.

Following cardiac injury at 2 days before transplantation, all groups showed comparably reduced fractional shortening.

At 28 days post-transplantation there was preservation of function in animals receiving hESC-cardiomyocytes (hESC-CM), with deterioration of function in other groups.

†p<0.05 vs 2 days Pre-Tx.

From Laflamme et al, Nature Biotechnology 2007 (left) and Shiba et al, Nature 2012 (right).

Current methods demonstrate regeneration of the hearts of large animals including pigs and NHPs by transplanting human ESC-derived cardiomyocytes (hESC-CM).

The figure below shows low magnification microscopic images from NHP hearts that were infarcted and then received either hESC-CM or saline controls.

The replacement of heart muscle by scar tissue is evident in the saline-treated heart, whereas human heart muscle has repopulated the infarct in the hESC-CM treated group.

Remuscularization of the Heart of an NHP by hESC-CM Transplantation

The saline-treated heart (left) shows infarct scar tissue (blue) replacing the myocardium lost to infarction.

The hESC-CM treated heart (right) shows a large graft of human heart muscle (green) replacing the myocardium lost to infarction.

From Liu et al, Nature Biotechnology 2018.

Scale bar, 5 mm.

We conducted an experiment to help us understand the mechanism of action and learn whether the transplanted muscle beat in synchrony with the host heart muscle.

hESC-CMs were genome-edited to express a protein that fluoresced green with each contraction, and their behavior was studied after transplantation into an infarcted macaque heart.

hESC-CMs showed 1:1 synchrony with the host heart, indicating that the graft follows the heart’s natural pacemaker, an essential result for heart regeneration.

A final question was whether this regeneration improves the function of the injured heart.

To assess this, engrafted NHP hearts were studied by magnetic resonance imaging (MRI), the gold standard for assessing cardiac contractile function.

As illustrated in the figure below, myocardial infarction induced a 25-point drop in left ventricular ejection fraction, the fraction of blood ejected from the heart with each beat.

Control animals receiving a saline injection showed no significant improvement at 4 or 12 weeks, as expected.

In contrast, four weeks after receiving hESC-CMs, ejection fraction improved by approximately 10 points, and by 12 weeks, it had improved by a total of approximately 22 points.

While the number of animals followed for 12 weeks is limited, cardiac remuscularization in this study restored ventricular function back into the normal range.

In contrast, the current standard of care for myocardial infarction, including reperfusion via angioplasty, ACE inhibitors, and beta blockers, increases ejection fraction by approximately 6 points.

Restoration of Cardiac Function in NHPs by Transplantation of Human ESC-derived Cardiomyocytes (hESC-CM)

Myocardial infarction reduces ejection fraction (a measure of cardiac function), and there is no spontaneous recovery in control animals receiving a saline injection (gray).

All animals receiving hESC-CM (blue) showed significant improvement by 4 weeks, and by 12 weeks after treatment, cardiac function was restored to the normal range.

In summary, structural data demonstrating extensive remuscularization of the infarcted heart in conjunction with physiologic and pharmacodynamic data provide evidence that the transplanted cardiomyocytes directly restore heart contractile function.

Engineering the cells to avoid rejection due to the host immune response to the transplanted cells

Initially, we plan to establish safety with first-in-human clinical trials of our cardiomyocyte cell therapy using immunosuppression to reduce the risk of a host immune response to allogeneic transplanted cells and the potential immune rejection.

Our collaborators have studied immunosuppressive regimens in NHP by transplanting rhesus cardiomyocytes derived from stem cells into the hearts of mismatched recipient NHP.

An immunosuppressive regimen was identified that keeps the allogeneic grafts alive long term and is considerably less toxic than regimens used for heart transplantation.

However, an approach that obviates the need for an immunosuppression regimen has the potential to improve safety and patient eligibility.

Therefore, as part of our program lifecycle we intend to switch to a hypoimmune stem cell-derived cardiomyocyte over time, as this should allow us to eliminate or reduce the immune suppression required for durable maintenance of these cells.

Addressing the risks associated with potential transient arrhythmias, or abnormal heart beats, following cell transplantation

The term engraftment arrhythmia refers to a transient period of unstable electrical activity that occurs in some species over approximately four weeks following cardiomyocyte transplantation.

Engraftment arrhythmias were not observed in mice, rats, or guinea pigs (probably because their natural heart rates are too fast), but they are observed in NHPs, where they cause mild symptoms, and in farm pigs, where they cause more significant symptoms.

The arrhythmias follow a stereotypical course, where they increase in frequency and duration, plateau for a variable period, and then wane until the heart has normal rhythm once again.

Once the heart rhythm stabilizes, the arrhythmias seem to disappear permanently.

We are exploring three ways to address engraftment arrhythmias:

pharmaceutical interventions, genetic modifications to the cardiomyocytes, and adjusting the stage of differentiation of the cardiomyocytes.

Electrical mapping studies in NHPs and pigs suggest that the engraftment arrhythmias originate from the site of the cell injection, likely from the injected cardiomyocytes.

The stem-cell derived cardiomyocytes in these experiments are more similar to fetal cardiomyocytes than their adult counterparts, and while this favors their engraftment it potentially increases the risk for the

induction of arr h ythmias.

We compared the expression and function of ion channels, proteins regulating the electrical properties of cardiomyocytes, in immature versus mature cardiomyocytes.

We identified multiple ion channels which showed differential activity, including HCN4, CACNA1H, and SLC8A1 which are active, as well as KCNJ2 which is inactive, in immature cardiomyocyte relative to mature ones.

We subsequently assessed the impact of modulation of a variety of combinations of ion channels in animal studies.

We found that PSC-derived cardiomyocytes in which the expression of HCN4, CACNA1H, and SLC8A1 has been abolished and the expression of KCNJ2 has been activated (“MEDUSA cells”) creates cardiomyocytes that lack endogenous pacemaking ability but can follow exogenously supplied electrical stimulation.

MEDUSA cells robustly engraft but do not induce arrythmias in a pig model.

We are currently testing whether MEDUSA cells can effectively restore heart function in infarcted NHPs as well as the longer-term potential impacts of modifying these ion channels in cardiomyocytes .

MEDUSA cells do not induce arrythmia after transplantation in a pig model

Wildtype stem cell-derived cardiomyocyte grafts induce arrhythmias after transplantation into pig hearts (blue circles), shown by the rise in heart rate and the increased arrhythmia burden (percentage of day spent in arrhythmia).

Black circle indicates one wildtype animal that died from complications of the arrhythmia.

In contrast, MEDUSA-edited cardiomyocytes (3 KO/1 OE;

orange squares) do not induce arrhythmias.

Immunostaining for human cardiac muscle (human-specific slow skeletal troponin I stain, brown) demonstrates large grafts of human myocardium in the heart of a pig receiving MEDUSA cells.

Thus, absence of engraftment arrhythmia is not due to absence of engraftment.

A GMP-compliant protocol has been established, which will be used to produce cells for our IND-enabling safety and toxicity studies.

We are transferring this protocol to a GMP facility to produce clinical-grade cells and plan to use these cells for initial clinical trial supply.

Development Plan and Key Next Steps

Our key milestones include understanding any potential impact on function and safety of these MEDUSA edits, their ability to protect longer-term from the risk of arrhythmias, completing GLP toxicology studies, and additional efficacy and safety studies in NHPs and pigs, with the goal of submitting an IND in the next several years.

We plan to finalize our clinical plan based on the results of ongoing studies in NHPs using the MEDUSA edits in stem-cell derived cardiomyocytes as well as early results from humans in other settings with our hypoimmune platforms.

We plan to submit an IND for SC379 following completion of safety and toxicology studies.

We also plan to conduct definitive preclinical efficacy studies using the anticipated clinical product, which we believe will replicate studies that we have published.

Since GPCs are not a terminally differentiated cell type and divide and differentiate in vivo post-transplantation, we plan to continue to assess potential safety risks, including the risk of tumorigenicity.

We expect to submit IND applications for SC379 for SPMS, PMD, and HD as early as 2024.

Our in vivo Cell Engineering Platform

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Our in vivo cell engineering platform is focused on engineering fusogens that, when combined with delivery vehicles, can effectively deliver a payload to a desired cell or location in the appropriate quantities in vivo .

The combination of a fusogen with a delivery vehicle referred to as a fusosome.

We believe our platform provides us with the flexibility to deliver a wide range of payloads to make different modifications for different diseases, as well as delivery vehicle options to address volume of distribution and re-dosing, which could fundamentally expand the treatment potential of in vivo therapies.

The combination of a fusogen with a delivery vehicle, is referred to as a fusosome.

Our Approach to Building our in vivo Cell Engineering Platform

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We believe the critical limitation for in vivo cell engineering is delivery, and therefore, we are investing significantly in delivery technologies, including our fusogen technology, which is designed to enable both cell-specific delivery and delivery of diverse payloads.

We were founded with core technology in this area which was the product of a multi-year effort by a Flagship Labs innovation team at Flagship Pioneering led by Dr.

Geoffrey von Maltzahn, one of our board members.

This effort is led by Dr.

Jagesh Shah, our VP, Gene Therapy Technologies.

We were founded with core technology in this area, which was the product of a multi-year effort by a Flagship Labs innovation team at Flagship Pioneering.

Gene modification.

There has been substantial recent progress in gene modification and the field is now at the point where virtually any desired modification can be performed in vitro .

There has been substantial recent progress in gene modification and the field is now at the point at which virtually any desired modification can be performed in vitro .

However, no single technology or platform is optimal for all possible applications.

To this end, we are developing capabilities across multiple technologies and investing to develop our own novel technologies to be applied on a case-by-case basis, an effort that is led by Dr.

Ed Rebar, our Senior Vice President, Chief Technology Officer.

We also have entered, and intend to enter more, agreements with other companies that have capabilities in this area.

To this end, we are developing capabilities across multiple technologies and investing to develop our own novel technologies to be applied on a case-by-case basis.

We also have entered into, and intend in the future to enter into, agreements with other companies that have capabilities in this area.

Manufacturing.

We are investing proactively in process development, analytical development, CMC regulatory, supply chain, quality, and other manufacturing sciences in order to enable scalable manufacturing of our in vivo therapies and ensure broad access.

These efforts are led by Dr.

Stacey Ma, our Executive Vice President, Technical Operations.

We are investing proactively in process development, analytical development, chemistry, manufacturing, and controls (CMC) regulatory, supply chain, quality, and other manufacturing sciences in order to enable scalable manufacturing of our in vivo therapies and ensure broad access.

We have also built a pilot manufacturing plant in South San Francisco, California and entered into a long-term lease agreement for a facility in Bothell, Washington where we intend to build our own clinical trial and commercial GMP manufacturing capabilities.

As described above, we also entered into a lease agreement for access to University of Rochester Medical Center’s cell-based manufacturing facility to support manufacturing for early-stage clinical trials.

Our Approach to Building our in vivo Cell Engineering Portfolio

We have prioritized cell types for our programs where:

We have prioritized cell types for our programs when:

existing proof of concept in humans and animal models demonstrates that in vivo cell engineering should have a clinical benefit;

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delivery is the most critical bottleneck, such that delivering payloads specifically to the target cell type could lead to highly differentiated and transformative therapeutics;

an opportunity to apply the technology more broadly exists, which creates the potential for more medicines if successful (for example, delivery to hepatocytes unlocks potential to treat many diseases with different payloads).

Based on this prioritization, we are initially focused on three cell types:

T Cells, Hepatocytes, Hematopoietic Stem Cells

an opportunity to apply the technology more broadly exists, which creates the potential for more medicines if successful (for example, delivery to hematopoietic stem cells unlocks the potential to treat many diseases with different payloads).

Based on this prioritization, we are initially focused on two cell types:

T cells and hematopoietic stem cells.

History of in vivo Cell Engineering and Current Limitations

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Seminal work by Dr.

Richard Mulligan, our Executive Vice-Chairman and Head of SanaX, and colleagues established the promise of gene therapy by delivering genes into host chromosomes, thereby correcting genetic deficits.

Richard Mulligan, our Vice-Chairman and Head of SanaX, and colleagues established the promise of gene therapy by delivering genes into host chromosomes, thereby correcting genetic deficits.

More recently, significant investments have resulted in improved safety and efficacy of viral vectors.

However, most approaches continue to concentrate on adapting the innate capabilities of various viruses to transmit these payloads.

Profound benefits have been realized in cases where there is direct correlation between the biological activity transmitted by the therapy and the genetic activity that is missing in the patient.

AAV vectors, which are broadly used by gene therapy researchers due to their broad tissue tropism, lack of pathogenicity, and ability to target both dividing and non-dividing cells.

While these therapies have had a categorical impact on their target patient populations, they have only scratched the surface of the potential of in vivo cell engineering, with success limited to a small number of patients.

Profound benefits have been realized in cases when there is direct correlation between the biological activity transmitted by the therapy and the genetic activity that is missing in the patient.

Adeno-associated virus (AAV) vectors are broadly used by gene therapy researchers due to their broad tissue tropism, lack of pathogenicity, and ability to target both dividing and non-dividing cells.

Although these therapies have had a categorical impact on their target patient populations, they have only scratched the surface of the potential of in vivo cell engineering, with success limited to a small number of patients.

Broad impact of gene therapies has been limited by challenges within three key areas:

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Volume of distribution refers to the ability of a therapeutic to reach various tissues.

While AAV vectors can be used to systemically deliver payloads to certain tissues, such as muscle, in the case of other therapeutically important targets, such as cells of the CNS, only a small proportion of cells can be transduced.

Although AAV vectors can be used to systemically deliver payloads to certain tissues, such as muscle, in the case of other therapeutically important targets, such as cells of the CNS, only a small proportion of cells can be transduced.

Immunogenicity .

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In addition to the need to deliver sequences encoding a desired protein that may not fit into an AAV vector, the increasing interest in the use of gene editing machinery to correct specific gene defect via homologous recombination or transposition will require delivery vehicles capable of a larger payload capacity than is currently available.

For most viruses currently used for in vivo therapy, the payload type is generally limited to the specific genetic material of the virus (e.g., DNA or RNA).

For most viruses currently used for in

vivo therapy, the payload type is generally limited to the specific genetic material of the virus (e.g., DNA or RNA).

In addition, n on-viral delivery with LNPs has largely been limited to RNA and proteins to date, with scant evidence for DNA deliver y .

The ability to deliver additional payloads, such as proteins, could unlock novel therapeutic opportunities.

Non-viral delivery with LNPs has been limited to RNA and proteins to date, with an inability to deliver DNA.

Durability Limitations .

Obtaining the persistence of the desired level of expression over long periods of times can be problematic, due to both immune reactions and the silencing of vector expression.

In cases where the target cells are undergoing replication, as can be the case in pediatric patients for example, durability of expression by non-integrating vectors or delivery of material that does not permanently change the cell’s DNA can also be limited by the gradual loss of vector sequences as infected cells replicate.

Obtaining the persistence of the desired level of expression over long periods of time can be problematic, due to both immune reactions and the silencing of vector expression.

In cases when the target cells are undergoing replication, for example, as in pediatric patients, durability of expression by non-integrating vectors or delivery of material that does not permanently change the cell’s DNA can also be limited by the gradual loss of vector sequences as infected cells replicate.

Execution in manufacturing is limited by:

Complex manufacturing .

Today, the adage of “the process is the product” applies with particular relevance to these in vivo viral vector-based therapies.

Today, the adage of “the process is the product” applies with particular relevance to in vivo viral vector-based therapies.

These therapies are relatively more complex to characterize and control during manufacturing compared to other common biologically derived modalities such as recombinant proteins and antibodies.

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Fusogens are widely used by enveloped viruses to confer target specificity and to drive the process of introducing material in target cells.

A well-known current example of a viral fusogen is the SARS-CoV-2 coronavirus that causes COVID-19.

A well-known current example of a viral fusogen is found in the SARS-CoV-2 coronavirus that causes COVID-19.

This virus uses its spike glycoprotein to target cells expressing the ACE2 receptor and to fuse with the cell membrane of host cells and release the viral genome into the cell.

Many other biological processes utilizing fusogens for the delivery of complex, diverse, and large payloads to specific cell types have also been found.

Many other biological processes using fusogens for the delivery of complex, diverse, and large payloads to specific cell types have also been found.

For example, the process of fertilization occurs as a result of a sperm fusing specifically with the egg and the transfer of the paternal genetic material to the oocyte.

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Mechanism of Fusogen-Mediated Membrane Fusion

The G protein has the potential to be engineered for a high degree of cell selectivity.

The G protein can be engineered for a high degree of cell selectivity.

To accomplish this, we first engineer the G protein so that its natural binding domain is no longer functional.

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By serially swapping different targeting scaffolds, we believe we can target multiple different cell surface receptors, giving us the ability to target many different cell types.

Re-targeting the specificity of the G-protein is a challenging protein engineering problem, since altering the protein structure directly impacts all aspects of biological function.

However, once we have achieved the desired specificity and potency for a certain cell type, we have the ability to deliver a variety of payloads to that cell.

Re-targeting the specificity of the G protein is a challenging protein engineering problem because altering the protein structure directly impacts all aspects of biological function.

However, once we have achieved the desired specificity and potency of the G protein for a certain cell type, we have the ability to deliver a variety of payloads to that cell.

This feature of the technology should allow us to create multiple therapies targeting a variety of diseases with each successful fusogen.

As a result, we believe success with any initial therapy targeting a given cell type could meaningfully advance lead candidate selection for other indications and increases our confidence that we will be successful with subsequent therapies targeting that same cell type.

For example, a successful hepatocyte-targeting fusogen applied to a fusosome for a given monogenic liver disease meaningfully accelerates lead candidate selection and increases our confidence that we will be successful with subsequent therapies targeting hepatocytes.

Addressing key in vivo cell engineering challenges

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Neuronal-specific transduction of the Green Fluorescent Protein (GFP) payload in the murine hippocampal region was observed using a fusosome specific for GRIA4 when injected into the hippocampal space (as depicted by the green coloring in Figure D) compared to widespread transduction when using a VSV-G fusogen (Figure C).

Confirmation of neuron-specific targeting of the fusogen can be observed by the colocalization of GFP positive cells (green, Figure E) with the presence of a neuron-specific protein (NeuN in red, Figure F) and considering the high degree of overlap (colocalization seen as yellow, Figure G).

Confirmation of neuron-specific targeting of the fusogen can be observed by the

colocalization of GFP positive cells (green, Figure E) with the presence of a neuron-specific protein (NeuN in red, Figure F) and considering the high degree of overlap (colocalization seen as yellow, Figure G).

Figures C-G from Anliker et al, Nature Methods, 2010.

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We have successfully delivered a variety of payloads, including DNA, RNA, and proteins, using viral delivery methods and have used cells engineered to express specific fusogens to deliver organelles to a broad range of target cells.

We believe this provides us the opportunity to potentially intervene in a wide range of human diseases.

Using VLPs, we have shown that we can deliver a variety of genome modification tools specifically to a cell.

We believe this capability provides us the opportunity to potentially intervene in a wide range of human diseases.

Diverse Payload Delivery via Fusosomes

Cre protein loaded cell-based fusosomes delivered recombinase activity to cells that activated the expression of a red fluorescent protein in cells already expressing green fluorescent protein, seen as orange cells (Figures A, B).

In contrast, fusosomes in which the fusogen is not included, but only contain Cre protein, showed no recombinase activity, or no orange cells (Figure C).

Cre protein loaded cell-based fusosomes delivered recombinase activity to cells that activated the expression of a red fluorescent protein in cells already expressing GFP, seen as orange cells (Figures A, B).

By contrast, fusosomes in which the fusogen is not included, but only contain Cre protein, showed no recombinase activity, or no orange cells (Figure C).

Fusosomes loaded with fluorescently -labeled RNA showed cellular localization and green fluorescence consistent with cytoplasmic delivery and translation of delivered RNA (Figures D-G).

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Our current fusosome has approximately twice the genetic capacity of the commonly used AAV vectors.

This greater payload size increases the potential of addressing defects in larger genes or conditions where delivery of multiple genes may be required.

This greater payload size increases the potential for our fusosomes to address defects in larger genes or conditions when delivery of multiple genes may be required.

Our research efforts include other fusosomes with even larger payload capacities.

For example, utilizing a cell as the delivery vehicle can confer an almost limitless capacity.

For example, we are exploring using a cell as the delivery vehicle, which can confer an almost limitless capacity.

Durability limitations .

We can engineer our fusosomes to integrate into the target cell genome or to deliver non-integrating payloads.

We can engineer our fusosomes to deliver payloads that integrate into the target cell genome or that are non-integrating.

Integrated payloads allow the genetic information transmitted by the vector to be propagated durably with the genetic material of the target cell when it undergoes cell division.

Thus, conditions that require this type of genetic propagation, such as genetic diseases in essential genes functioning in growing tissues or in T cells expanding after recognizing a target antigen, can be better addressed by this approach.

Our preclinical studies have also demonstrated the ability to deliver gene-editing machinery, such as CRISPR, with this system.

In this case, the entire payload does not integrate, but instead, it transiently delivers the machinery to

permanently modify the DNA in the target cell.

Thus, we are able to make targeted, specific, and durable repairs to the genome of the target cell.

Thus, conditions that require this type of genetic propagation, such as diseases arising from issues in essential genes that are functioning in growing tissues, or in T cell expansion occurring following target antigen recognition, can be better addressed through use of integrating payloads.

Our preclinical studies have also demonstrated the ability of our fusosome system to deliver non integrating gene-editing machinery, such as CRISPR, with this system.

In this case, the entire payload does not integrate, but instead, this payload transiently delivers the machinery to permanently modify the DNA in the target cell, enabling us to make targeted, specific, and durable repairs to the genome of the target cell.

Execution in Manufacturing

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We believe that these therapies have the potential to have greater product consistency, improved scale, and lower costs than current autologous solutions.

Currently, there are a number of therapies either approved or in development for ex vivo modification of autologous T cells and autologous HSCs.

Additionally, vectors that deliver payload to random or off target cells not only create the risk for toxicities, but they necessitate meaningfully larger doses in order to ensure adequate delivery to the targeted cells.

Currently, there are a number of therapies either approved or in development for ex vivo modification of autologous and allogeneic T cells and autologous hematopoietic stem cells (HSCs).

Additionally, vectors that deliver payloads to random or off-target cells not only create the risk for toxicities, but they necessitate meaningfully larger doses in order to ensure adequate delivery to the targeted cells.

Our targeted delivery offers the potential for meaningfully lower doses, which could decrease scale needs in manufacturing.

Further, we are investing across a number of areas to improve manufacturing scale, costs, consistency, and product quality in the near-term and long-term, including by establishing and maintaining our relationships with our CDMO partners and investing in establishing and operating our own GMP manufacturing facility.

Further, we are investing across a number of areas to improve manufacturing scale, costs, consistency, and product quality in the near- and long-term, including by establishing and maintaining our relationships with our contract development manufacturing organizations (CDMO) partners and investing in establishing and operating our own GMP manufacturing facility.

Manufacturing novel fusosome compositions is complex.

Since our inception, we have invested in scientific and process engineering expertise to improve manufacturing of our therapies.

Examples include novel producer cell lines, novel processes and analytical technology, as well as incorporating suspension bioreactors into our process early in the research phase.

By building out these capabilities early, we hope to improve the probability of technical success for our programs and have a thoughtful approach to deliver consistent supply while managing cost of goods with the goal of improving patient access.

Since our inception, we have invested in improving the manufacturing of our therapies, including by investing in in scientific and process engineering aspects thereof.

Our investments include use of novel producer cell lines, novel processes, and analytical technology, as well as incorporating suspension bioreactors into our manufacturing processes early in the research phase.

By building out these capabilities early, we hope to improve the probability of technical success for our programs, which will enable us to deliver consistent supply while managing cost of goods and improve patient access.

Our in vivo Cell Engineering Pipeline

T Cell Fusosome Program (SG242, SG295, SG233, SG221, SG239)

Our most advanced CAR T cell fusosome product candidates (SG242, SG295) target CD19+ cancer cells, including NHL, CLL, and ALL.

We intend to develop these product candidates with the goal of submitting an IND as early as 2022.

In parallel with the CD19 CAR product candidates we are developing other CAR T cell therapies, including BCMA product candidates for the treatment of multiple myeloma (SG221, SG239), CD22 product candidates for the treatment of NHL, CLL, and ALL (SG233), as well as other targets on a spectrum of cancers.

Background on B Cell Malignancies

B cell malignancies represent a spectrum of cancers including non-Hodgkin lymphoma (NHL), chronic lymphocytic leukemia (CLL), acute lymphoblastic leukemia (ALL) and multiple myeloma (MM) and result in over 100,000 deaths per year in the United States and Europe.

NHL is the most common cancer of the lymphatic system.

NHL is not a single disease, but rather a group of several closely related cancers.

Over 77,000 cases of NHL are diagnosed annually in the United States and the most common subtype of NHL overall is diffuse large B cell lymphoma (DLBCL).

DLBCL, if left untreated, may have survival measured in weeks or months.

CLL is the most common type of leukemia, and it occurs most frequently in older individuals, with diagnoses in people under 30 years of age occurring only rarely.

Each year, approximately 20,000 patients are diagnosed with CLL in the United States.

Approximately 20–25% of CLL patients initially present with poor risk disease.

Median progression-free survival in these high-risk groups is often less than 12 to 18 months after frontline therapy, and less than 12 months in R/R disease.

ALL is an uncontrolled proliferation of lymphoblasts, which are immature white blood cells.

The lymphoblasts, which are produced in the bone marrow, cause damage and death by inhibiting the production of normal cells.

Approximately 6,000 patients are diagnosed with ALL in the United States each year, the vast majority of the approximately 1,500 deaths per year occur in adults.

Approximately 80% of cases of ALL in the United States and Europe are B cell ALL, which almost always express the CD19 protein.

The five-year overall survival in adults over the age of 60 with ALL is approximately 20%, and in patients with R/R ALL after two or more lines of therapy, the median disease-free survival is less than six months.

B cell ALL is the most common cancer in children.

Although children with ALL fare better than adults, children with R/R disease have poor outcomes.

Because of the frequency, ALL remains a leading cause of death due to cancer in children.

Multiple myeloma is a cancer of the plasma cells, which typically express a protein called B Cell Maturational Antigen (BCMA).

Plasma cells are B cells that have matured to specialize in the production of antibodies.

Multiple myeloma is a condition in which these plasma cells become malignant, with a single clone growing at an uncontrolled pace.

These myeloma cells secrete large

quantities of the same antibody, and patient symptoms can develop from the myeloma cells crowding out other plasma and bone marrow cells, leading to increased risk of infection, risk of bone destruction, and kidney disease.

Multiple myeloma is the second most common hematologic malignancy making up approximately 2% of all cancers, accounting for over 32,000 new cases per year with 12,800 deaths estimated to occur in 2020 in the United States.

Current Treatment Landscape and Unmet Need

First line therapy for NHL typically consists of multi-agent cytotoxic drugs in combination with the monoclonal antibody Rituxan.

In younger patients with NHL who have good organ function, high dose chemotherapy followed by stem cell transplantation is often used.

These approved therapies include CD19 CAR T therapies tisagenlecleucel, axicabtagene ciloleucel and lisocabtagene maraleucel, CD19 antibody drug conjugate therapy polatuzumab vedotin, and CD19 antibody tafasitamab.

Recently, pivotal trials with approved CD19 CAR T cells have been shown to be superior to standard of care approaches in patients in second line R/R NHL raising the possibility of broader impact for CD19 CAR T cells for patients with NHL.

Newly diagnosed CLL patients are often treated with targeted therapies such as BTK inhibitors, PIK3 inhibitors, BCL-2 inhibitors, or monoclonal antibodies targeting CD20, or CD52 in combination with chemotherapy.

However, most patients treated with these regimens become refractory.

Numerous drug candidates are in clinical development for the refractory patients, including next-generation kinase inhibitors and both autologous and allogeneic CAR T therapies targeting CD20 and CD19.

Cure rates for ALL patients have continued to increase over the last four decades, with pediatric ALL cure rates reaching greater than 80% in developed countries.

This progress has been enabled by advances in combination chemotherapy, monitoring of minimal residual disease, expanded use of kinase inhibitors for Philadelphia chromosome–positive ALL, and the recent approval of Kymriah for R/R pediatric ALL.

Adult patients fare much worse, however, with 5-year overall survival rates of approximately 20%, and there are still significant challenges managing R/R disease across all age groups.

Multiple therapeutic candidates are in development for these R/R patients, including proteasome inhibitors, antimetabolites, JAK inhibitors, monoclonal antibodies, as well as autologous and allogeneic CAR T candidates.

First-line therapy for MM is induction and high-dose chemotherapy followed by a potential stem cell transplant.

There are no curative treatment options for MM patients and the standard of care for R/R MM includes immunomodulary agents, proteasome inhibitors, monoclonal antibodies, cytotoxic agents, and hematopoietic stem cell transplant.

Despite the recent advancement in available therapies for disease management, the 5-year overall survival rate remains approximately 50%.

To this end, several groups are investigating autologous and allogeneic CAR T cell therapies for R/R MM.

BCMA is among the most promising antigens used to target MM, with two approved BCMA CAR T therapies idecabtagene vicleucel, and ciltacabtagene autoleucel, as well as multiple late-stage clinical trials ongoing.

Novel treatments with other mechanisms of action are also under development, including bispecific T cell engagers, next-gen antibodies, and antibody drug conjugates.

As highlighted above, recent therapeutic advances across R/R B cell malignancies have led to a variety of treatment options and better patient outcomes.

In particular, autologous surface protein directed CAR T therapies have been highly effective in certain subsets of patients with R/R disease.

However, not all patients have access to novel therapies, and even with them, many patients will ultimately relapse and succumb to their cancer, resulting in 100,000 deaths per year in the United States and Europe across these indications.

There are two outstanding challenges that have limited utilization of these CAR T therapies and their impact on broader groups of patients.

The emerging post-approval data with tisagenlecleucel and axicabtagene ciloleucel have indicated that there are two broad categories of relapse.

One involves loss of CD19 on malignant cells resulting in tumor escape.

This finding was initially established for ALL and is the cause of relapse after CAR T cells for roughly half of patients.

More recent data indicate that low antigen expression contributes to the lack of response in a meaningful number of patients with NHL.

CD19 CAR T treatments have recently been tested in pivotal trials in earlier lines of therapy for NHL, which raises the possibility of more patients being treated with CD19 CAR T therapy who subsequently relapse due to CD19 loss.

Therefore, the development of CAR Ts targeting an alternate antigen beyond CD19 may be beneficial to address this growing unmet need.

Data from several studies have shown that CD22 CAR T treatment has led to complete responses in NHL and ALL patients that have failed to reach a complete response or relapsed after treatment with a CD19 CAR T cell product.

Additionally, dual targeting of CD19 and CD22 as the initial form of treatment may prevent this form of relapse, offering patients the potential for both a higher rate and longer duration of complete response.

The second pattern of relapse relates to suboptimal CAR T cell functionality (poor expansion, poor persistence, T cell exhaustion) resulting in relapse of cancer that retains the targeted antigen.

Unfortunately, re-infusion of the same CAR T cell product has had limited benefit

in these patients although treatment with a different CAR T cell has demonstrated some promise in the context of ongoing clinical trials.

Manufacturing .

The manufacturing process for a patient-specific product is complex, leading to limited access due to both infrastructure and cost considerations.

As such, approved CAR T cell therapies have not been available to all patients in need of these highly effective therapies.

Even for patients who are fortunate enough to have access, inevitable delays (often a month or more) in manufacturing may prevent use of therapy in patients with rapidly progressing malignancies.

There are groups that are seeking to overcome access limitations by using healthy donor-derived, or allogeneic, CAR T cells instead of patient T cells.

This approach yields off-the-shelf therapeutics that can be manufactured consistently, but questions remain around efficacy and durability, largely due to the inability to effectively control the host versus graft response with concern for eventual rejection of these products.

As will be discussed in the subsection titled “—Our ex vivo Cell Engineering Pipeline,” our ex vivo allogeneic T cell program also seeks to address this host versus graft response.

T Cell Fusosome Program

Our T cell fusosome approach provides us with an opportunity to develop potential product candidates to expand access to CAR T cell therapy to many more patients in need.

In addition, we believe the ability to deliver a payload encoding a CAR to a T cell inside the body has the potential to improve effectiveness over ex vivo manufactured CAR T cell products.

Experience thus far has demonstrated that both CD8+ and CD4+ T cells contribute to the CAR T cell response.

Thus, the fusosome programs we are developing will deliver the CAR gene using fusogens that directly and specifically target the CD8 co-receptor or the CD4 co-receptor on T cells following a single intravenous injection.

These approaches could result in the generation of therapeutically active CAR T cells without the complexities and delays associated with the process of T cell collection and ex vivo manufacturing.

We believe the generation of a CAR T cell within the natural physiological environment has the potential to improve the quality of the CAR T cell generated, potentially improving both efficacy and the side effect profile.

T Cell Fusosome Programs (SG299, SG242, SG233, SG221, SG239)

Our most advanced CAR T cell fusosome product candidate is SG299, a CD8-targeted fusosome that delivers a CD19 CAR to target CD19+ cancer cells that we are developing to treat patients with hematologic malignancies.

SG299 was previously referred to as SG295, and was renamed in connection with our transition to a new manufacturing process for this product candidate.

SG299 has at least a 50X improvement in potency over SG295, which may translate into better efficacy, safety, and long-term manufacturability.

As such, we plan to use this second-generation manufacturing process to manufacture SC299 for use in our preclinical studies and future clinical trials.

We intend to submit an IND for SG299 as early as 2023.

We are also developing SG242, a CD4-targeted fusosome that delivers a CD19 CAR, for patients with NHL, CLL, and ALL, and multiple other candidates, including fusosomes that target T cells and deliver a BCMA CAR for the treatment of MM (SG221 and SG239) and a CD22 CAR for the treatment of NHL, CLL, and ALL (SG233).

T Cell Fusosome Approach

Our T cell fusosome approach provides us with an opportunity to develop CAR T cell therapies that can be more broadly accessible to patients than treatments that are currently available.

We also believe that the ability to deliver a payload encoding a CAR to a T cell inside the body has the potential for improved effectiveness over ex vivo manufactured CAR T cell products.

Experience thus far has demonstrated that both CD8+ and CD4+ T cells contribute to the CAR T cell response in patients that receive autologous CAR T cell therapies with conditioning lymphodepletion.

Thus, our fusosome programs will deliver the CAR gene using fusogens that directly and specifically target the CD8 co-receptor or the CD4 co-receptor on T cells following a single intravenous injection.

We believe that these approaches could result in the generation of therapeutically active CAR T cells without the complexities and delays associated with the process of T cell collection and ex vivo manufacturing.

Furthermore, ex vivo expansion in the presence of high cytokine concentrations, although necessary for the manufacture of approved CAR T cell products, also contributes to marked changes in T cell quality that may not be therapeutically beneficial.

We believe the generation of an in vivo CAR T cell, within the natural

physiological environment, has the potential to improve the quality of the CAR T cell generated, which may ultimately improve both efficacy and the side effect profile.

We do not expect to need a lymphodepleting regimen prior to in vivo delivery of the CAR gene, as our goal is to expose our fusosomes to as many T cells in the body as possible.

We do not expect to use a lymphodepleting regimen prior to in vivo delivery of the CAR gene, as our goal is to expose our fusosomes to as many T cells in the body as possible.

Preclinical Data

Our preclinical data have demonstrated that fusosomes can deliver a genetic payload specifically and efficiently to human T cells in culture and in immunodeficient mice with intraperitoneally injected human peripheral blood mononuclear cells (PBMC) and fused with a single dose of a fusosome.

Our preclinical data have demonstrated that fusosomes can deliver a genetic payload specifically and efficiently to human T cells in culture, as well as in immunodeficient mice with intraperitoneally-injected human peripheral blood mononuclear cells (PBMCs) that have been infused with a single dose of a fusosome.

The T cells can be categorized into functional subsets based on the expression pattern of cell surface molecules.

CD3 is a protein expressed on all T cells, CD4 is expressed on the Helper T cells that primarily activate T and B cells to carry out their function, and CD8 is found on cytotoxic T cells that primarily kill cancerous or virally infected cells.

CD3 is a protein expressed on all T cells, CD4 is expressed on helper T cells that primarily activate T and B cells to carry out their function, and CD8 is found on cytotoxic T cells that primarily kill cancerous or virally infected cells.

We generated fusogens against these three cell-surface molecules and have demonstrated that we can deliver a marker gene to cells bearing these cell surface proteins in vitro .

Fusogens Demonstrate the Ability to Target Multiple T Cell Subtypes

Fusosomes containing a gene that encodes a fluorescent marker protein called GFP (used to identify cells have been genetically modified by the fusogen) can efficiently and specifically deliver GFP to T cells in culture (CD8, CD4, and CD3).

Fusosomes can efficiently and specifically deliver GFP, which is used to identify cells that have been genetically modified by the fusogen, to three different types of T cells in culture (CD8, CD4, and CD3).

Expression of GFP is restricted to the population of T cells that express the specific T cell receptor targeted by the fusogen (CD8, CD4, or CD3).

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Delivery of CD19 CAR to CD4 T Cells Leads to in vitro Killing of B Cells and CD19+ Leukemia Cells

Demonstrates that the fusosome-generated CD4 CAR is functional and eradicates both nonmalignant B cells (CD19+/RFP-) as well as CD19+ leukemia cells expressing NALM6-RFP.

We have also validated, in vivo , the tumor-killing activity of CD8 T cells to which CD19 CAR has been delivered via a fusosome.

The fusosome-generated CD4 CAR is functional and eradicates both nonmalignant B cells (CD19+/RFP-) as well as CD19+ leukemia cells expressing NALM6-RFP.

We have also validated, in vivo , the tumor-killing activity of CD8+ T cells to which a CD19 CAR has been delivered via a fusosome:

Delivery of CD19 CAR to CD8 Cells Leads to in vivo Killing of Leukemia Cells in a Human Xenograft Mouse Model

demonstrates activity of CD8 fusosome delivering CD19 CAR to human T cells in a murine leukemia xenograft model (Nalm-6).

Demonstrates activity of CD8-targeted fusosome delivering CD19 CAR to human T cells in a murine leukemia xenograft model (Nalm-6).

Note that when compared to untreated controls, fusosome delivery results in eradication of leukemia cells.

Activated T cells were cultured with CD3/CD28 beads for 3 days prior to injection.

CD8 fusosome delivering the CD19 CAR is effective regardless of activation status of T cells at time of injection.

Activated T cells were cultured with CD3/CD28 beads for three days prior to injection.

CD8-targeted fusosome delivering the CD19 CAR is effective regardless of activation status of T cells at time of injection.

Represents quantification of luminescence (representing leukemic burden) from mice shown in left panel.

Both cohorts of fusosome -treated mice had significantly reduced tumor burden when compared to control as early as D10 (p ≤ .0001;

One-way ANOVA Bonnferroni) Experimental note:

One-way ANOVA Bonnferroni).

Experimental note:

Tumors injected on day zero, donor T cells injected on day three, and fusosome injected on Day Four.

Using a human xenograft mouse model for leukemia (Nalm-6), we observed both prolonged survival and clearance of the leukemic cells.

During the manufacture of autologous CAR Ts, cytokine signaling has to be activated in order to successfully produce functional CAR T cells.

In our mouse experiments the CD8 fusosome was able to generate CD19 CAR cells just as effectively with activated as non-activated donor T cells.

Several of our human T cell fusogens cross-react on non-human primate (NHP) T cells including our lead candidate CD8 fusogen.

We have used the fusogen to deliver a CD20 CAR into six NHPs (the CD20 CAR was chosen as the CD19 CAR to be used for our clinical programs does not cross-react with NHP B cells).

As shown below, a single intravenous administration of our CD8 fusogen containing a CD20 CAR was associated with B cell depletion, including in the blood and in lymph nodes, in four out of six NHPs, occurring between day seven and fourteen.

During the manufacture of autologous CAR Ts, cytokine signaling must be activated in order to successfully produce functional CAR T cells.

In our mouse experiments the CD8-targeted fusosome was able to generate CD19 CAR cells just as effectively with activated as non-activated donor T cells.

We have also begun to develop new fusosome compositions that target new T cell types and deliver CARs that target other therapeutic antigen targets for hematologic malignancies.

In one set of experiments, we successfully achieved dose-dependent tumor control in the Nalm-6 mouse xenograft model following intravenous infusion of a CD4 T cell-targeted fusosome that delivers a CD19 CAR.

In a separate set of experiments, we successfully achieved dose dependent tumor control in the same tumor model following intravenous infusion of a CD8 T cell-targeted fusosome that delivers a CD22 CAR.

Several of our human T cell fusogens, including our lead candidate CD8 fusogen, cross-react on NHP T cells.

In one experiment, we used this CD8 fusogen to deliver a CD20 CAR into six NHPs.

We selected the CD20 CAR for this experiment as a surrogate target because the CD19 CAR that we use for our SG299 program does not cross-react with NHP B cells.

As shown below, a single intravenous administration of our CD8-targeted fusosome containing a CD20 CAR was associated with B cell depletion, including in the blood and in lymph nodes, in four out of six NHPs, occurring between days seven and 14.

This result is consistent with reported observations that peak expansion of ex vivo manufactured CAR T cells typically occurs during the second week.

Serum cytokines were transiently elevated at day seven in all fusosome-treated animals.

CD20 CAR transgene (by vector copy number) and CD20 CAR mRNA could be detected in peripheral blood between days three to ten, and in the spleen at study termination.

Importantly, there was no infusion-related toxicity or evidence for CAR-associated toxicity (cytokine release syndrome or neurotoxicity) other than the intended B cell depletion.

The ability to deliver fusogen without toxicity and with evidence for activity in NHP are critical milestones for the program.

In addition, the NHPs received no T cell activating agent or lymphodepletion.

The latter potentially supports a path for the fusogen platform to enable delivery of CAR therapy without the lymphodepletion regimens used by existing ex vivo approaches, which have toxic side-effects.

This and future NHP experiments will also provide important information on dosing parameters, durability of the effect, and provide pharmacokinetic, pharmacodynamic, and toxicology data.

Serum cytokines were transiently elevated at day seven in all fusosome-treated NHPs.

CD20 CAR transgene (by vector copy number) and CD20 CAR mRNA could be detected in peripheral blood between days three and 10, and in the spleen at study termination.

Importantly, there was no infusion-related toxicity or evidence of CAR-associated toxicity (i.e., cytokine release syndrome or neurotoxicity), other than the intended B cell depletion.

In addition, the NHPs received no T cell activating agent or lymphodepletion, which could support a path for the fusogen platform to enable delivery of CAR therapy without the lymphodepletion regimens required by existing ex vivo approaches and their associated toxic side effects.

The delivery of fusosomes without toxicity and with evidence of activity in NHPs are critical milestones for our fusosome programs.

This and future animal experiments will also provide important information on dosing parameters, durability of the effect, and provide pharmacokinetic, pharmacodynamic, and toxicology data.

Delivery of CD20 CAR to CD8 Cells Causes B Cell Depletion in NHPs

Graph demonstrates activity of CD8 fusosome delivering CD20 CAR in NHPs.

CD8 fusosome was delivered as a single intravenous infusion.

Graph demonstrates activity of CD8-targeted fusosome delivering CD20 CAR in NHPs.

CD8-targeted fusosome was delivered as a single intravenous infusion.

B cell counts were quantified in peripheral blood using flow cytometry for CD20+ cells.

Given expected NHP-to-NHP variability in baseline counts, data is represented as single lines per NHP and is shown as deviation from baseline level for each NHP at Day Fourteen (when maximal expansion of CAR T cells are expected).

Given expected NHP-to-NHP variability in baseline counts, data is represented as a single line per NHP and is shown as deviation from baseline level for each NHP at day 14, when maximal expansion of CAR T cells are expected.

Significant B cell depletion is observed in four out of six NHPs.

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Development Plan and Key Next Steps

We are currently conducting experiments to validate the ability of a systemically administered fusosome to transduce T cells in an NHP and for these CAR T cells to deplete B cells.

These NHP studies are also expected to inform preclinical pharmacology and toxicology.

As a next step, we intend to conduct our in-life GLP toxicology studies.

While these studies are ongoing, we intend to scale our GMP manufacturing and finalize our initial development plan.

We intend to submit an IND for SG295 to support clinical trials in patients with NHL in 2022.

We continue to advance additional programs and plan to submit INDs over the next several years:

SG242 in NHL, SG233 which delivers a CAR gene targeting CD22 and could be combined with targeting CD19, and our BCMA programs in MM.

Hepatocyte Fusosome Program

Numerous genetic metabolic diseases arise from gene defects that manifest in the liver and, in particular, in the hepatocyte.

Additionally, hepatocytes can serve as protein manufacturing sites to deliver proteins to other cells in the body.

Multiple modalities exist that enable delivery of genetic material to liver cells, including AAV and LNPs.

However, these approaches have limitations, including non-integrating payloads, payload size, lack of cell specificity, and, in the case of AAV, immunogenicity.

Our fusogen technology, which we expect will be able to deliver a payload specifically to hepatocytes in the liver, has the potential to address these limitations.

Success with this hepatocyte-targeting technology may allow us to generate therapies for a number of genetic disorders.

We are developing our lead product candidate, SG328, for ornithine transcarbamylase (OTC) deficiency, and we expect to submit an IND in the next several years.

Hepatocyte Targeting Capability

Targeting the hepatocyte with a fusogen can enable specific delivery of either integrating or non-integrating payloads.

It can also be used to deliver the machinery of gene editing and gene modification tools to these cells, both with or without the inclusion of DNA to replace a mutated gene or gene fragment.

Since we anticipate that hepatocytes transduced with fusosomes will harbor the novel genetic construct in their genome, all progeny of that cell will also have the genetic construct.

Thus, the natural turnover and organ growth will not dilute the genetic construct, providing the potential for long-term expression and efficacy even when the

fusosome is delivered during infancy, childhood, or when it is delivered to treat a disease where the disorder can cause rapid hepatocyte turnover.

We believe that success with an initial hepatocyte-targeted fusosome will meaningfully accelerate our future hepatocyte programs.

Once a hepatocyte-targeting fusosome is established, our subsequent programs will require only substituting the relevant payload to correct for the defective gene in question, opening up the possibility to address multiple inherited liver diseases.

Our initial focus is on monogenic diseases with clear biology linking the missing activity of a gene in hepatocytes to a disease outcome.

According to the National Institute of Health, over 30 genetic disorders of the liver exist, impacting over 10,000 births annually around the world.

Many of these disorders lead to death in the first few years or cause long term disabilities.

Proof of concept within this set of initial diseases will enable expansion to other diseases, such as hemophilia, where we may be able to address an unmet need by providing a durable in vivo therapy in the hepatocyte .

Preclinical Data

Our ability to use our hepatocyte-targeting fusosomes in relevant animal models is limited by a lack of cross-species transduction.

To address this, we first developed murine disease models and introduced the therapeutic payload utilizing a conventional lentivirus pseudotyped with VSV-G.

The VSV-G fusogen targets the LDL receptor which is highly expressed in hepatocytes providing a potent in vivo delivery vehicle for hepatocytes.

These models established proof of concept to treat these diseases through genomic integration of the corrected gene as well as transduction efficiency in the range that would be needed for efficacy.

However, the LDL receptor is found on a significant number of other cell types resulting in extensive off-target transduction.

We do not intend to move forward with this non-specific lentivirus construct, as its lack of specificity creates potential challenges in humans.

However, it does provide a preclinical model system for us to understand the percentage of hepatocytes, as well as the expression level of the novel genetic material that are required for the intended therapeutic effect.

In parallel, we have developed and improved hepatocyte-specific fusosomes for high on target transduction efficiency (as measured by titer), with the goal of achieving potency comparable to or better than what we see with conventional lentivirus.

Engineering of hepatocyte specificity is generated through the choice of target receptor selectively expressed in human hepatocytes.

Through an iterative process focusing on multiple hepatocyte-selective cell surface protein targets, diverse binders, and protein engineering, we have developed constructs that have met our potency goals.

We have tested these constructs in vivo in mouse models and shown that they can transduce human hepatocytes at levels comparable to conventional lentivirus with significantly lower frequency of off-target transduction.

Furthermore, the transduction occurs in a dose-dependent manner.

Improved Targeted Fusogens Exhibit High in vitro Transduction of Primary Human Hepatocytes (PHHs)

Improved hepatocyte-targeted fusosomes show levels of in vitro transduction similar to conventional lentivirus.

Protein engineering of Fusogen 1b resulted in new sets of fusogens with significantly increased titer on PHHs.

The most potent of these fusosomes approach the hepatocyte titer of conventional lentivirus.

Improved Targeted Fusogens Can Transduce Hepatocytes in vivo in a Humanized Liver Mouse (FRG) at Comparable Levels to Conventional Lentivirus and in a Dose-Dependent Fashion

Hepatocyte-targeted fusosomes show levels of in vivo transduction similar to conventional lentivirus and dose dependence.

Fusosomes were delivered by intravenous injection (tail vein) into humanized liver mice (FRG, or FAH- immunodeficient mice, repopulated with primary human hepatocytes).

Dose for lentivirus was 1.4 10 11 TU/kg (# of transducing units per kilogram mouse body weight, tested on primary human hepatocytes).

Highest dose for the hepatocyte-targeted fusosome was 1.1 10 10 TU/kg (1X) and lower doses were at one-third (0.33X) and one-tenth (0.1X) of the highest dose.

Liver cells were harvested from injected mice seven days after injection, separated into hepatocytes and non-parenchymal cells (non-hepatocytes) and analyzed for GFP expression and species (human or mouse).

Background on OTC Deficiency

OTC deficiency is the most common inherited disorder of the urea cycle, the process by which the body detoxifies ammonia and produces urea.

It is the only urea cycle disorder that is X-linked, leading to more severe disease in males.

OTC deficiency occurs in approximately 1 in 50,000 births, and there are approximately 10,000 patients worldwide.

A deficiency of the OTC enzyme leads to accumulation of ammonia, which can lead to neurotoxicity manifesting early as vomiting and anorexia, before progressing to a progressive lethargy, seizures, intellectual impairment, coma, and death.

The severity and age of onset of OTC deficiency can vary with the most severely affected, typically males, presenting shortly after birth.

In this severe, neonatal onset of OTC deficiency, patients present with an overwhelming illness that rapidly progresses with up to 90% mortality rate despite advances in standard of care treatments.

In less severely affected patients who present later in childhood or as adults, severe elevations of ammonia and resulting neurotoxicity still occur, primarily precipitated by an illness or excessive protein intake.

OTC Deficiency:

Current Treatment Landscape and Unmet Need

The standard of care for patients with OTC deficiency includes a low protein diet, nutrient supplementation, and the use of ammonia scavengers such as benzoate, phenylacetate, or phenylbutyrate.

Despite all of these measures, patients may still experience acute hyperammonemia crises particularly in the setting of increased protein catabolism that can be induced by viral illness or certain medications.

These acute crises are treated with supportive care including kidney dialysis for rapid ammonia reduction.

The frequency and duration of hyperammonemia crises has been directly linked to poor long-term outcomes and intellectual disability.

The only curative therapy available is liver transplantation, which has become more common as surgical techniques and supportive care have improved over time.

In those patients with severe, neonatal onset of OTC deficiency, liver transplantation is commonly performed before the age of five and, in some cases, can occur before one year of age.

In addition to the standard of care therapies noted above, therapies to replace the defective OTC gene have been pursued.

Recent trials have primarily utilized AAVs to deliver a corrected OTC gene.

While these viruses have to date been generally well tolerated, they are still associated with significant immunogenicity that can preclude use in the up to one third of patients with pre-existing antibodies to AAV and can lead to systemic symptoms, including elevated liver enzymes.

Beyond the challenge of pre-existing antibodies, the primary drawback is the potential for transient efficacy as the gene replacement via AAV would not be expected to be

permanent if replication of the target cell occurs.

While the durability of an AAV delivered gene replacement for OTC deficiency depends on many factors, one of the key determinants is the rate of hepatocyte turnover.

This is especially relevant in pediatric patients with growing livers and rapid cell turnover.

This dilution of effect has been supported by animal studies where AAV delivered gene replacement was successful in adult animals but not successful in younger animals.

The most severe form of OTC deficiency presents in the neonatal period and, if a donor is available, may be treated with liver transplantation, a permanent gene therapy that provides long lasting benefit to patients is required to address the greatest unmet need from OTC deficiency.

Additionally, as hepatocytes continue to divide approximately once a year even in adults, a durable gene therapy would also be expected to provide an advantage even in adult patients where an AAV delivered gene therapy is likely to lose function over time.

We believe our approach of pursuing a permanent gene replacement therapy has the potential to improve morbidity, mortality, and quality of life even in the youngest, most severely ill patients.

Development Plan and Key Next Steps

We are conducting mouse studies to establish proof of concept and inform the dose profile of our lead hepatocyte fusosome.

In the near term, we are seeking to finalize the hepatocyte-targeted fusosome candidate and begin GLP production.

Dose and safety of our lead fusosome compositions for OTC will be further informed through NHP studies, and with success, we expect to submit an IND in the next several years.

The hepatocytes of the liver are the one cell type readily accessible to competing technologies such as AAVs and LNPs.

Each of these technologies has limitations overcome by the fusosome platform, but any future investment in therapeutics targeting hepatocytes will need to consider if these fusosome advantages are meaningful enough to patients to justify the investment.

For example, we are currently evaluating whether our technology offers differentiated solutions to these liver-targeted gene therapies for genetic diseases such as Hemophilia and Alpha-1 antitrypsin deficiency.

We intend to complete GLP toxicology studies and GMP manufacturing for SG299 in 2023.

We intend to submit an IND for SG299 for the treatment of patients with B cell malignancies later in 2023.

HSC Fusosome Program

We are developing hematopoietic stem cell (HSC) targeted fusosomes, designed to target and repair genetic abnormalities underlying diseases such as sickle cell disease and beta-thalassemia (SG418), with the goal of achieving preclinical proof of concept as early as 2023.

We are developing our SG418 product candidate, which is an HSC-targeted fusosome that is designed to target and repair genetic abnormalities underlying diseases such as sickle cell disease (SCD) and beta-thalassemia, with the goal of achieving preclinical proof of concept as early as 2023.

Background on hemoglobinopathies

Devastating inherited hematologic disorders, including sickle cell disease, beta-thalassemia, and other hemoglobinopathies, are caused by a monogenic variant, and patients suffering from these diseases are candidates for in vivo cell engineering.

Sickle cell disease (SCD) is caused by a single point mutation in the beta globin gene (HbB).

SCD is caused by a single point mutation in the beta globin gene (HbB).

The resulting mutant form of the protein, referred to as HbS, is prone to aggregate into long, rigid molecules that deform red blood cells (RBCs) into a sickle shape, obstructing blood vessels and undergoing premature lysis.

The consequences are severe pain (sickle cell crisis), tissue infarction, infection, anemia, stroke, and early death.

The consequences are severe pain, referred to as sickle cell crisis, tissue infarction, infection, anemia, stroke, and early death.

SCD is the most common inherited blood disorder in the United States, affecting an estimated 100,000 individuals, and 134,000 individuals in Europe.

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Patients with TDBT suffer from failure to thrive, persistent infections, and life-threatening anemia.

Frequent blood transfusions can lead to iron overload that then require iron chelation therapy, which itself is associated with significant toxicities, resulting in low levels of adherence.

Frequent blood transfusions can lead to iron overload that then requires iron chelation therapy, which itself is associated with significant toxicities, resulting in low levels of adherence.

Even with frequent transfusions, patients with TDBT continue to suffer from failure to thrive, persistent infections, and life-threatening anemia.

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Allogeneic HSC transplantation (HSCT) is currently the only potentially curative therapy available.

However, HSCT is limited by donor availability (approximately 15-30% worldwide).

Furthermore, chronic graft-versus-host disease is a major risk that contributes to the long-term morbidities associated with allogeneic HSCT.

However, HSCT is limited by donor availability, with only approximately 15-30% of patients worldwide finding matched donors.

Furthermore, chronic GvHD is a major risk that contributes to the long-term morbidities associated with allogeneic HSCT.

Otherwise, treatment options largely manage disease symptoms, including analgesia during crises, hydroxyurea, L-glutamine, and anti-infectives.

Recently, two disease-modifying treatments were approved by the FDA, crizanlizumab and voxelotor.

Recently, two disease-modifying treatments, crizanlizumab and voxelotor, were approved by the FDA.

Crizanlizumab was approved for treating crises in SCD patients who are unresponsive to either hydroxyurea or L-glutamine.

Voxelotor is an oral small molecule inhibitor of HbS polymerization, which compared to placebo, was associated with a reduction in acute crises.

While these agents represent a meaningful advance in the treatment of SCD, they focus on supportive care and do not address the mutation in the gene that is the root cause of the disease.

Although these agents represent a meaningful advance in the treatment of SCD, they focus on supportive care and do not address the mutation in the gene that is the root cause of the disease.

As in SCD, there are limited treatment options available for TDBT, and those that exist are supportive in nature.

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However, this treatment is burdensome and associated with significant toxicities, and consequently, has low adherence.

Currently, there is only one FDA approved therapy for beta-thalassemia, luspatercept, which significantly reduces the frequency of blood transfusions needed.

However, safety concerns remain with a possible increased risk for hypertension and thromboembolic events.

Currently, luspatercept, which significantly reduces the frequency of blood transfusions needed, is only FDA-approved therapy for beta-thalassemia.

However, even with this therapy, safety concerns remain and include a possible increased risk for hypertension and thromboembolic events.

There are several therapies in development to treat diseases of the hematopoietic system that have demonstrated clinical proof of concept through ex vivo gene modification.

These approaches directly address the genetic activity missing in SCD and TDBT by supplying a novel gene to the patient’s cell or by editing genome to enhance hemoglobin expression.

These approaches directly address the genetic activity missing in SCD and TDBT by supplying a novel gene to the patient’s cell or by editing the genome to enhance hemoglobin expression.

The ex vivo process begins with the mobilization and removal of cells from the blood, a process known as leukapheresis.

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However, even under enrichment, long-lived HSCs make up less than 1% of all the CD34+ cells.

CD34+ cells are transduced with either a novel gene or genome editing complexes, each having a distinct therapeutic action.

CD34+ cells are transduced with either a novel gene or genome editing complexes, each of which has a distinct therapeutic action.

The cells are then cryopreserved and sent back to the patient.

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The current conditioning regimens are toxic, with significant risks and side effects, although less toxic regimens are in development.

Key questions remain regarding durability and safety, particularly over time, for transplanting these ex vivo modified HSCs.

Key questions remain regarding durability and safety, particularly over time, of these transplanted ex vivo modified HSCs.

Furthermore, manufacturing complexities, cost, and the complications from the myeloablative conditioning chemotherapy regimens remain significant obstacles to widespread adoption.

There are multiple ongoing efforts to improve this approach by focusing on HSC procurement, transduction, gene editing, milder conditioning regimens, and transplantation efficiency.

We believe that the most meaningful opportunity to improve outcomes is to eliminate the complex ex vivo modification and transplantation steps by utilizing our fusogen technology to develop fusosomes that specifically target HSC and other key hematopoietic cells via in vivo delivery.

We believe that the most meaningful opportunity to improve outcomes is to eliminate the complex ex vivo modification and transplantation steps by using our fusogen technology to develop fusosomes that specifically target HSC and other key hematopoietic cells via in vivo delivery.

Our HSC Fusosome Approach

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HSCs have no single specific marker, but there are a number of cell surface proteins that are highly enriched on HSCs.

Some of these markers also appear on erythrocytic, or red blood cell, progenitors, which may help establish both short-term and long-term efficacy.

Some of these

markers also appear on erythrocytic, or red blood cell, progenitors, which may help establish both short-term and long-term efficacy.

We have an ongoing program to discover fusogens with appropriate target specificity.

In parallel, we are establishing our capability to deliver different payloads utilizing the fusosome system.

Our goal is to establish the appropriate cell specificity with the ability to utilize the appropriate gene modification system to achieve the right outcome for patients.

With successful cell-specific targeting, we have an opportunity to deliver the therapeutic payload to the right cell without the need for complex ex vivo manufacturing or toxic conditioning chemotherapy.

In parallel, we are establishing our capability to deliver different payloads using the fusosome system.

Our goal is to establish the appropriate cell specificity with the ability to use the appropriate gene modification system to achieve the right outcome for patients.

Development Plan and Key Next Steps

The next major milestones are to identify candidate fusogens for specific HSC targeting and fusosome compositions with relevant genome modification payloads.

The next major milestones are to identify candidate fusogens for HSC targeting and fusosome compositions with relevant genome modification payloads.

Our goal is to achieve preclinical proof of concept for SG418 as early as 2023 and submit an IND in the next several years.

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We wish to lead both the present and future of cell and gene therapy, and we are therefore committed to investing in research and other activities that will ensure a leadership position for the long-term.

Towards this end, we have established SanaX as a distinct research arm.

In contrast to the industry’s traditional research activities which are focused primarily on near-term product development using existing technologies, SanaX is devoted to finding solutions to the limitations of today’s technology in order to expand the breadth of therapeutic opportunities.

To this end, we have established SanaX as a distinct research arm of our organization.

In contrast to the industry’s traditional research activities that are focused primarily on near-term product development using existing technologies, SanaX is devoted to finding solutions to the limitations of today’s technology in order to expand the breadth of therapeutic opportunities.

SanaX research efforts are aimed at making fundamental improvements to existing technologies and establishing new paradigms for gene and cell delivery that will ultimately lead to the development of completely new therapeutic modalities.

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In addition, several collaborative efforts with outside investigators possessing specific biological sector expertise have been established to enhance our internal efforts.

Current SanaX research activities are focused in several areas where we believe advances in technology are most critical.

Current SanaX research activities are focused in several areas for which we believe advances in technology are most critical.

Some of these efforts include:

evaluating the use of cells, rather than viruses, as delivery vehicles;

re-purposing several different virus vector systems and virus-like particles (VLPs) to expand the therapeutic payloads that may be delivered by the different viruses and VLPs;

re-purposing several different virus vector systems and VLPs to expand the therapeutic payloads that may be delivered by the different viruses and VLPs;

developing novel approaches to the production of different viral vectors;

developing novel methods for enabling the exogenous control of transgene expression via small molecule drugs;

developing new paradigms for genetically manipulating specific arms of the immune response in order to engender immunological tolerance to specific antigens, cells, and organs;

COVID-19 related research focused on the delivery of specific anti-SARS-Cov-2 antibodies and the evaluation of novel direct anti-viral strategies.

Mulligan, our Executive Vice-Chairman and Head of SanaX, directly oversees the SanaX research effort.

Mulligan, our Vice-Chairman and Head of SanaX, directly oversees the SanaX research effort.

SanaX maintains an independent research budget in order to ensure that these longer-term, disruptive priorities are not sacrificed for near-term needs.

Once SanaX develops an understanding of how a technology can translate into the clinic, a program will move from SanaX into our internal R&D and manufacturing organization or partnered externally.

Once SanaX develops an understanding of how a technology can translate into the clinic, a program will move from SanaX into our internal research and development and manufacturing organization or partnered externally.

Manufacturing Strategy and Approach

While the field of cell and gene therapy has had a number of successes with innovative therapies, the challenges of manufacturing at industrial scale have limited access for patients in need.

Although the field of cell and gene therapy has had a number of successes with innovative therapies, the challenges of manufacturing at industrial scale have limited access for patients in need.

As was the case during the initial development of recombinant biologics, an improvement to our ability to characterize these products will be essential to increasing patient access.

It is especially critical to have an in-depth understanding of the impact of manufacturing processes on the product quality attributes and resulting clinical performance of the product.

especially critical to have an in-depth understanding of the impact of manufacturing processes on the product quality attributes and resulting clinical performance of the product.

From inception, we have recognized the key role manufacturing plays in enabling the access of these innovative engineered cells as medicines.

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viral vector, allogeneic T cells, and PSC-derived.

While the three manufacturing platforms are very different in terms of the manufacturing process and supply chain, they also share some common challenges and opportunities.

Although the three manufacturing platforms are very different in terms of the manufacturing process and supply chain, they also share some common challenges and opportunities.

For example, product characterization and analytical development are critical, and these capabilities are fungible across platforms.

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Transfer to these bioreactors later in development can complicate product comparability assessments.

For the allogeneic T cell program, we are focusing on scaling the multiplex gene editing process and understanding of the impact of the variability of the starting material from healthy donors to on product quality.

For stem-cell derived therapies, such as beta cells, cardiomyocytes, and glial progenitor cells, we are focusing on developing a scalable process and analytical technologies to characterize stability of the starting cells, end cell products, and critical product quality attributes.

For the allogeneic T cell platform, we are focusing on scaling the multiplex gene editing process and understanding of the impact of the variability of the starting material from healthy donors to on product quality.

For stem-cell derived therapies, such as islet cells and GPCs, we are focusing on developing a scalable process and analytical technologies to characterize stability of the starting cells, end cell products, and critical product quality attributes.

To establish our manufacturing capability, we started with a non-GMP pilot plant for ex vivo and in vivo engineered cell platform processes with up to 200L bioreactor scale.

This provides the infrastructure for process and technology development, technology transfer support, and production for non-GMP material such as GLP toxicology study material.

In addition, we are taking a hybrid approach to establish our end-to-end supply chains for the three manufacturing platforms, leveraging a combination of internal manufacturing capability and external contract development and manufacturing organizations (CDMOs) for clinical supplies, in a staged manner:

we will utilize CDMOs for GMP supplies initially to support our upcoming INDs and early-stage clinical trials;

we intend to build the internal manufacturing facilities needed to support late-stage clinical trials and commercialization of therapies across our pipeline.

This provides the infrastructure for process and technology development, technology transfer support, and production for non-GMP material such for GLP toxicology studies.

we will use CDMOs for initial GMP supply to support our upcoming INDs and early-stage clinical trials;

we intend to build the internal manufacturing facilities needed to support late-stage clinical trials and commercialization of our therapies.

In addition, we anticipate we will use CDMOs for at least some portions of our supply chain for the foreseeable future.

Operating our own internal manufacturing facilities to complement our CDMO networks is a key to our strategy.

Accordingly, in July 2021, we entered into a long-term lease to establish and operate our own GMP manufacturing facility to support our late-stage clinical development and early commercial product candidates across our product portfolio, including with the production of allogeneic T cells, viral vectors, and PSC-derived products.

Accordingly, in June 2022, we entered into a long-term lease to establish and operate our own GMP manufacturing facility to support our late-stage clinical development and early commercial product candidates across our product portfolio, such as the production of allogeneic T cells.

We believe that investing in an internal manufacturing facility will offer us a competitive advantage that will better position us to execute on our goal of ensuring broad and uninterrupted patient access to our therapies, including by allowing us to mitigate delays related to third-parties, including related to capacity-, personnel-, or production-related issues at our CDMOs;

develop proprietary knowledge and product and process expertise we can utilize across our programs to create long-term value;

develop proprietary knowledge and product and process expertise we can use across our programs to create long-term value;

and design a facility that can be optimized for and adaptable to our existing and future needs.

There are other companies that have stated that they are developing cell and gene therapies that may address oncology, diabetes, CNS disorders, and cardiovascular diseases.

Other companies have stated that they are developing cell and gene therapies that may address oncology, diabetes, and CNS disorders.

Some of these companies may have substantially greater financial and other resources than we have, such as larger research and development staff and well-established marketing and salesforces or may operate in jurisdictions where lower standards of evidence are required to bring products to market.

For example, we are aware that some of our competitors, including Novartis International AG, Gilead Sciences, Inc., Bristol-Myers Squibb Company, Novo Nordisk A/S, Johnson & Johnson, Allogene Therapeutics, Inc., CRISPR Therapeutics AG, Precision BioSciences, Inc., Caribou Biosciences, Inc., Fate Therapeutics, Inc., Century Therapeutics, Inc., bluebird bio, Inc., 2seventy bio, Inc., Orchard Therapeutics PLC, Aruvant Sciences, Inc., Sanofi S.A., Editas Medicine, Inc., Beam Therapeutics Inc.

(Beam), ViaCyte Inc., Vertex Pharmaceuticals Incorporated, Eli Lilly and Company, Astellas Pharma Inc., and Bayer AG might be conducting large-scale clinical trials for therapies that could be competitive with our ex vivo and in vivo programs.

For example, we are aware that some of our competitors, including Novartis AG, Gilead Sciences, Inc., Bristol-Myers Squibb Company, Novo Nordisk A/S, Johnson & Johnson, Allogene Therapeutics, Inc., CRISPR

Therapeutics AG, Precision BioSciences, Inc., Caribou Biosciences, Inc., Fate Therapeutics, Inc., Century Therapeutics, Inc., bluebird bio, Inc., 2seventy bio, Inc., Orchard Therapeutics plc , Aruvant Sciences, Inc., Sanofi S.A., Editas Medicine, Inc., Beam Therapeutics Inc.

(Beam), Vertex Pharmaceuticals Incorporated, Eli Lilly and Company, Astellas Pharma Inc., and Bayer AG might be conducting large-scale clinical trials for therapies that could be competitive with our ex vivo and in vivo programs.

Among companies pursuing ex vivo and in vivo cell engineering, we believe we are substantially differentiated by our robust intellectual property portfolio, extensive research, rigorous and objective approach, and multidisciplinary capabilities.

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We additionally plan to rely on data exclusivity, market exclusivity, and patent term extensions when available and, where applicable, plan to seek and rely on regulatory protection afforded through orphan drug designations.

Our commercial success may depend in part on our ability to obtain and maintain patent and other proprietary protection for our technology, inventions, and improvements, preserve the confidentiality of our trade secrets, maintain our licenses to use intellectual property owned by third parties, defend and enforce our proprietary rights, including our patents, and operate without infringing on the valid and enforceable patents and other proprietary rights of third parties.

Our commercial success will depend in part on our ability to obtain and maintain patent and other proprietary protection for our technology, inventions, and improvements, preserve the confidentiality of our trade secrets, maintain our licenses to use intellectual property owned by third parties, defend and enforce our proprietary rights, including our patents, and operate without infringing on the valid and enforceable patents and other proprietary rights of third parties.

We have in-licensed and developed numerous patents and patent applications, which include claims directed to compositions, methods of use, processes, dosing, and formulations, and possess substantial know-how and trade secrets relating to the development and commercialization of our ex vivo and in vivo cell engineering platforms and related product candidates, including related manufacturing processes.

As of February 2022, our in-licensed and owned patent portfolio consisted of approximately 41 licensed U.S.

issued patents, approximately 78 licensed U.S.

pending patent applications, and approximately 55 owned U.S.

pending patent applications, as well as approximately 69 licensed patents issued in jurisdictions outside of the United States, approximately 326 licensed patent applications pending in jurisdictions outside of the United States (including approximately five licensed pending Patent Cooperation Treaty (PCT) applications), and approximately 42 owned patent applications pending in jurisdictions outside of the United States (including approximately 15 owned pending PCT applications) that, in many cases, are counterparts to the foregoing U.S.

patents and patent applications.

As of February 2023, our in-licensed and owned patent portfolio consisted of approximately 39 licensed or owned U.S.

issued patents, approximately 67 licensed United States pending patent applications, and approximately 65 owned U.S.

pending patent applications, as well as approximately 69 licensed patents issued in jurisdictions outside of the United States, approximately 336 licensed patent applications pending in jurisdictions outside of the United States (including approximately five licensed pending Patent Cooperation Treaty (PCT) applications), and approximately 110 owned patent applications pending in jurisdictions outside of the United States (including approximately 32 owned pending PCT applications) that, in many cases, are counterparts to the foregoing United States patents and patent applications.

The patents and patent applications outside of the United States in our portfolio are held primarily in Europe, Canada, China, Japan, and Australia.

For information related to our in-licensed intellectual property, see the subsection below titled “—Key Intellectual Property Agreements.”

For the product candidates and related manufacturing processes we develop and commercialize in the normal course of business, we intend to pursue, when possible, composition, method of use, process, dosing, and formulation patent protection.

For the product candidates and related manufacturing processes we develop and may commercialize in the normal course of business, we intend to pursue, when possible, composition, method of use, process, dosing, and formulation patent protection.

We may also pursue patent protection with respect to manufacturing, drug development processes and technology, and our technology platforms.

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Individual patents extend for varying periods of time, depending upon the date of filing of the patent application, the date of patent issuance, and the legal term of patents in the countries in which they are obtained.

Generally, patents issued for applications filed in the United States and in many jurisdictions worldwide have a term that extends to 20 years from the earliest nonprovisional filing date.

Generally, patents issued for applications filed in the United States and in many jurisdictions worldwide have a term that extends to 20 years from the earliest non-provisional filing date.

In the United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the Unites States Patent and Trademark Office (USPTO) in examining and granting a patent counterbalanced by delays on the part of a patentee, or may be shortened if a patent is terminally disclaimed over another patent.

In addition, in certain instances, the patent term of a U.S.

patent that covers an FDA-approved drug may also be eligible for patent terms extension, which recaptures a portion of the term effectively lost as a result of the testing and regulatory review periods required by FDA.

In addition, in certain instances, the term of a United States patent that covers an FDA-approved drug may also be eligible for patent term extension, which recaptures a portion of the term effectively lost as a result of the testing and regulatory review periods required by the FDA.

The patent term extension period cannot be longer than five years, and the total patent term, including the extension, cannot exceed 14 years following FDA approval.

however, there is no guarantee that the applicable authorities will agree with our assessment of whether such extensions should be granted, and, if granted, the length of such extensions.

There is no guarantee that the applicable authorities will agree with our assessment of whether such extensions should be granted, and, if granted, the length of such extensions.

Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug.

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If patents are issued on our patent applications pending as of February 2023, the resulting patents are projected to expire on dates ranging from 2023 to 2044.

However, the actual protection afforded by a patent varies on a product-by-product and country-to-country basis and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country, and the validity and enforceability of the patent.

In some instances, we submit patent applications directly with the USPTO as provisional patent applications.

Provisional applications for patents were designed to provide a lower-cost first patent filing in the United States.

However, the actual protection afforded by a patent varies on a product-by-product and country-to-country basis and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the validity and enforceability of the patent, and the availability of legal remedies in a particular country.

In some instances, we submit patent applications directly to the USPTO as provisional patent applications.

Provisional patent applications were designed to provide a lower-cost first patent filing in the United States.

Corresponding non-provisional patent applications must be filed not later than 12 months after the provisional application filing date.

The corresponding non-provisional application benefits in that the priority date(s) of the patent application is/are the earlier provisional application filing date(s), and the patent term of the finally issued patent is calculated from the later non-provisional application filing date.

This system allows us to obtain an early priority date, add material to the patent application(s) during the priority year, obtain a later start to the patent term, and to delay prosecution costs, which may be useful in the event that we decide not to pursue examination in an

While we intend to timely file nonprovisional patent applications relating to our provisional patent applications, we cannot predict whether any such patent applications will result in the issuance of patents that provide us with any competitive advantage.

nonprovisional applications and PCT applications that claim the benefit of the priority date of earlier filed provisional applications, when applicable.

The corresponding non-provisional application benefits in that the priority date(s) of th is patent application is/are the earlier provisional application filing date(s), and the patent term of the finally issued patent is calculated from the later non-provisional application filing date.

While we intend to timely file non - provisional patent applications relating to our provisional patent applications, we cannot predict whether any such patent applications will result in the issuance of patents that provide us with any competitive advantage.

We file United States non-provisional applications and PCT applications that claim the benefit of the priority date of earlier filed provisional applications, when applicable.

The PCT system allows an applicant to file a single application within 12 months of the original priority date of the patent application and to designate all of the 153 PCT member states in which national patent applications can later be pursued based on the international patent application filed under the PCT.

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The PCT system delays expenses, allows a limited evaluation of the chances of success for national/regional patent applications, and enables substantial savings where applications are abandoned within the first two and a half years of filing.

For all patent applications, we determine claiming strategy on a case-by-case basis.

We determine claiming strategy for each patent application on a case-by-case basis.

We always consider the advice of counsel and our business model and needs.

We file patents containing claims for protection of all useful applications of our proprietary technologies and any product candidates, as well as all new applications and/or uses we discover for existing technologies and product candidates, assuming these are strategically valuable.

We file patent applications containing claims for protection of all useful applications of our proprietary technologies and any product candidates, as well as all new applications or uses we discover for existing technologies and product candidates, assuming these are strategically valuable.

We continuously reassess the number and type of patent applications, as well as the pending and issued patent claims, to help ensure that maximum coverage and value are obtained for our inventions given existing patent office rules and regulations.

Further, claims may be and typically are modified during patent prosecution to meet our intellectual property and business needs.

We recognize that the ability to obtain patent protection and the degree of such protection depends on a number of factors, including the extent of the prior art, the novelty and non-obviousness of the invention, and the ability to satisfy the enablement requirement of the patent laws.

In addition, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted or further altered even after patent issuance.

Consequently, we may not obtain or maintain adequate patent protection for any of our future product candidates or for our technology platform.

Consequently, we may not obtain or maintain adequate patent protection for any of our future product candidates or for our technology platforms.

We cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient proprietary protection from competitors.

Any patents that we hold may be challenged, circumvented, or invalidated by third parties.

The area of patent and other intellectual property rights in biotechnology is an evolving one with many risks and uncertainties.

The patent positions of companies like ours are generally uncertain and involve complex legal and factual questions.

No consistent policy regarding the scope of claims allowable in patents in the fields of cell and gene therapy has emerged in the United States.

The patent situation outside of the United States is even more uncertain.

The patent positions of companies outside of the United States can be even more uncertain.

Changes in either the patent laws or their interpretation in the United States and worldwide may diminish our ability to protect our inventions and enforce our intellectual property rights, and more generally could affect the value of our intellectual property.

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With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our products and the methods used to manufacture those products.

Moreover, even our issued patents do not guarantee us the right to practice our technology in relation to the commercialization of our products.

The area of patent and other intellectual property rights in biotechnology is an evolving one with many risks and uncertainties, and third parties may have blocking patents that could be used to prevent us from commercializing our patented product candidates and practicing our proprietary technology.

Moreover, our issued patents do not guarantee us the right to practice our technology in relation to the commercialization of our products, as third parties may have blocking patents that could be used to prevent us from commercializing our patented product candidates and practicing our proprietary technology.

It is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies, products, or processes, obtain licenses, or cease certain activities.

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Our issued patents and those that may issue in the future may be challenged, invalidated, or circumvented, which could limit our ability to stop competitors from marketing related products or limit the length of the term of patent protection that we may have for our product candidates.

In addition, the rights granted under any issued patents may not provide us with protection or competitive advantages against competitors with similar technology.

In addition, the rights granted under any issued patents may

not provide us with protection or competitive advantages against competitors with similar technology.

Furthermore, our competitors may independently develop similar technologies.

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Patent disputes are sometimes interwoven into other business disputes.

As of February, 2022, our registered trademark portfolio contain ed approximately 2 5 registered trademarks and pending trademark applications, consisting of approximately two pending trademark applications in the United States, and approximately 13 registered trademarks and approximately ten pending trademark applications in the following countries through both national filings and under the Madrid Protocol:

Australia, Canada, China, European Union, India, Japan, Republic of Korea, Singapore, and Switzerland.

As of February 2023, our registered trademark portfolio contained approximately 26 registered trademarks and pending trademark applications, consisting of approximately one pending trademark application and one registered trademark in the United States, and approximately 20 registered trademarks and approximately four pending trademark applications in the following countries through both national filings and under the Madrid Protocol:

Australia, Canada, China, European Union, India, Japan, Republic of Korea, the United Kingdom, Singapore, and Switzerland.

We may also rely, in some circumstances, on confidential information, including trade secrets, to protect our technology.

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We also obtained a non-exclusive, sub-licensable license under certain other patent rights in the United States, and a non-exclusive, sub-licensable, worldwide license under know-how pertaining to the licensed patent rights, to make, have made, use, offer for sale, sell, have sold and import the Harvard Products, or otherwise practice under and exploit the licensed patent rights and know-how, for the treatment of disease in humans.

We have the option to obtain such non-exclusive rights in additional jurisdictions if Harvard is successful in obtaining the right to grant such from the third-party co-owner of such patent rights.

We have the option to obtain such non-exclusive rights in additional jurisdictions if Harvard is successful in obtaining the right to grant such rights from the third-party co-owner of such patent rights.

In October 2021, we entered into an amendment to the Harvard Agreement to include products containing primary cells with certain specified genetic modifications as Harvard Products.

We utilize these license rights in our ex vivo cell engineering program relying on our hypoimmune technology.

We utilize these license rights in our ex vivo cell engineering platform relying on our hypoimmune technology.

We are obligated to use commercially reasonable efforts to develop Harvard Products in accordance with a written development plan, to market the Harvard Products following receipt of regulatory approval, and to achieve certain specified development and regulatory milestones within specified time periods, as such period may be extended, for at least two Harvard Products.

The licenses granted pursuant to the Harvard Agreement are subject to certain rights retained by Harvard and the rights of the U.S.

The licenses granted pursuant to the Harvard Agreement are subject to certain rights retained by Harvard and the rights of the United States government.

The retained rights of Harvard pertain only to the ability of Harvard and other not-for-profit research organizations to conduct academic research and educational and scholarly activities and do not limit our ability to pursue our programs and product candidates.

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We paid Harvard annual license maintenance fees of $25,000 for 2019, $50,000 for 2020, and $100,000 for each of 2021 , 2022 and 2023 , and we are required to pay annual license maintenance fees of $100,000 for each calendar year thereafter for the remainder of the term.

We are required to pay Harvard up to an aggregate of $15.2 million per Harvard Product upon the achievement of certain pre-specified development and regulatory milestones for up to a total of five Harvard Products, or an aggregate total of $76.0 million for all five Harvard Products.

We are required to pay Harvard up to an aggregate of $15.2 million per Harvard Product upon the achievement of certain specified development and regulatory milestones for up to a total of five Harvard Products, or an aggregate total of $76.0 million for all five Harvard Products.

These milestone payments would double if we undergo a change of control.

We are also obligated to pay,

on a product-by-product and country-by-country basis, royalties in the low single-digit percentage range on quarterly net sales of Harvard Products covered by licensed patent rights, and a lower single-digit percentage royalty on quarterly net sales of Harvard Products not covered by licensed patent rights.

We are also obligated to pay, on a product-by-product and country-by-country basis, royalties in the low single-digit percentage range on quarterly net sales of Harvard Products covered by licensed patent rights, and a lower single-digit percentage royalty on quarterly net sales of Harvard Products not covered by licensed patent rights.

The royalty rates with respect to Harvard Products covered by licensed patent rights are also subject to specified and capped reductions for loss of market exclusivity and for payments owed to third parties with respect to patent rights which cover Harvard Products in the territory.

We are also obligated to pay Harvard a percentage of certain sublicense income ranging from the high single-digit to low double-digit percentage range .

We are obligated to pay up to $175.0 million in success payments based on increases in the per share fair value of our common stock at pre-specified valuation dates that include the one-year anniversary of the consummation of our IPO and periodically thereafter, the date of the consummation of a merger, an asset sale, or merger, or the sale of the majority of the shares held by our Series A convertible preferred stockholders, and the last day of the term of the success payments.

Pursuant to the terms of the Harvard agreement, we may be required to make up to an aggregate of $175.0 million in success payments to Harvard (Harvard Success Payments), payable in cash, based on increases in the per share fair market value of our common stock.

The potential Harvard Success Payments are based on multiples of increas ing value ranging from 5x to 40x based on a comparison of the per share fair market value of our common stock relative to the original issuance price of $4.00 per share at ongoing pre-determined valuation measurement dates.

The Harvard Success Payments can be achieved over a maximum of 12 years from the effective date of the agreement.

If a higher success payment tier is met at the same time a lower tier is met, both tiers will be owed.

Any previous Harvard Success Payments made are credited against the Harvard Success Payment owed as of any valuation measurement date so that Harvard does not receive multiple success payments in connection with the same threshold.

As of December 31 , 2022 , a Harvard Success Payment had not been triggered.

The Harvard Agreement will expire upon the expiration of the last-to-expire valid claim within the licensed patent rights or, if later, at the end of the final royalty term, which is determined on a Harvard Product-by-Harvard Product and country-by-country basis, and is the later of (i) the date on which the last valid claim within the licensed patent rights covering such Harvard Product in such country expires, (ii) expiry of regulatory exclusivity for such Harvard Product in such country, or (iii) ten years from the first commercial sale of such Harvard Product in such country, which we expect to occur in 2039.

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License Agreement with UCSF

In January 2019, we entered into a license agreement (as amended, the UCSF Agreement) with The Regents of the University of California (The Regents) acting through its Office of Technology Management, University of California San Francisco (UCSF), pursuant to which we obtained an exclusive license to inventions related to immunoengineered pluripotent cells and derivatives claimed in U.S.

and international patents and patent applications (UCSF Patent Rights) by The Regents.

The license is to make, have made, use, sell, offer for sale and import licensed products that are covered by such UCSF Patent Rights, provide licensed services, practice licensed methods, and otherwise practice under the UCSF Patent Rights, for use in humans only, in the United States and other countries where The Regents is not prohibited by applicable law from granting such UCSF Patent Rights.

The license grants us rights to make, have made, use, sell, offer for sale and import licensed products that are covered by such UCSF Patent Rights, provide licensed services, practice licensed methods, and otherwise practice under the UCSF Patent Rights, for use in humans only, in the United States and other countries where The Regents is not prohibited by applicable law from granting such UCSF Patent Rights.

We have the right to sublicense our rights granted under the UCSF Agreement to third parties subject to certain terms and conditions.

We utilize these license rights in our ex vivo cell engineering platform program that relies on our hypoimmune technology.

We are obligated, directly or through affiliates or sub-licensees, to use commercially reasonable efforts to develop, manufacture, and sell one or more licensed products and licensed services and to bring one or more licensed products or licensed services to market.

We utilize these license rights in our ex vivo cell engineering platform that relies on our hypoimmune technology.

We are obligated, directly or through affiliates or sublicensees, to use commercially reasonable efforts to develop, manufacture, and sell one or more licensed products and licensed services and to bring one or more licensed products or licensed services to market.

We are required to use commercially reasonable efforts to obtain all necessary governmental approvals in each country where licensed products or licensed services are manufactured, used, sold, offered for sale, or imported.

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If we are unable to complete any of the specified milestones by the completion date, or extended completion date, for such milestone, then The Regents has the right and option to either terminate the Agreement, subject to our ability to cure the applicable breach, or convert our exclusive license to a non-exclusive license.

The Regents reserves and retains the right to make, use and practice the invention, and any related technology, and to make and use any products and to practice any process that is the subject of the UCSF Patent Rights (and to grant any of the foregoing rights to other educational and non-profit institutions) for educational and non-commercial research purposes, including publications and other communication of research results.

This does not limit our ability to pursue our programs and product candidates.

The Regents reserves and retains the right to make, use and practice the invention s , and any related technology, and to make and use any products and to practice any process that is the subject of the UCSF Patent Rights (and to grant any of the foregoing rights to other educational and non-profit institutions) for educational and non-commercial research purposes, including publications and other communication of research results.

This reservation of rights does not limit our ability to pursue our programs and product candidates.

Pursuant to the UCSF Agreement, we paid an upfront license fee of $100,000 to The Regents, and we issued The Regents 0.7 million shares of our Series A-2 convertible preferred stock.

In addition, we entered into an amendment to the UCSF Agreement in December 2020, pursuant to which we issued 37,500 shares of our common stock to The Regents.

We are required to pay license maintenance fees ranging from $10,000 on the first anniversary of the date of the UCSF Agreement to $40,000 on the sixth anniversary and continuing annually thereafter.

This fee shall not be due if we are selling or exploiting licensed products or licensed

services and paying an earned royalty to The Regents on net sales of such licensed products or licensed service.

We are required to pay The Regents up to an aggregate of $2.45 million per licensed product upon the achievement of certain pre-specified development and regulatory milestones for the first five licensed products and half such amount for the second five licensed products, for an aggregate total of $18.4 million in development and regulatory milestone payments.

We are required to pay license maintenance fees ranging from $10,000 on the first anniversary of the effective date of the UCSF Agreement to $40,000 on the sixth anniversary and continuing annually thereafter.

This fee will not be due if we are selling or exploiting licensed products or licensed services and paying an earned royalty to The Regents on net sales of such licensed products or licensed services.

We are also required to pay The Regents up to an aggregate of $2.45 million per licensed product upon the achievement of certain specified development and regulatory milestones for the first five licensed products and half such amount for the second five licensed products, for an aggregate total of $18.4 million in development and regulatory milestone payments.

Additionally, we are required to pay The Regents up to an aggregate of $0.5 million per licensed product upon the achievement of certain commercial milestones for the first five licensed products and half such amount for the second five licensed products, for an aggregate total of $3.75 million in commercial milestone payments.

With respect to each licensed product, licensed service, or licensed method, we are obligated to pay, on a country-by-country basis, tiered royalties on net sales in the low single-digits.

With respect to each licensed product, licensed service, or licensed method, we are obligated to pay, on a country-by-country basis, tiered royalties on net sales with percentages in the low single-digits.

The royalty rates are subject to specified capped reductions for payments owed to unaffiliated third parties in consideration for patent rights, or patent rights together with know-how, in order to practice licensed methods or to make, have made, use sell, offer to sell, or import licensed products or licensed services.

We are required to pay to The Regents a minimum annual royalty of $100,000 beginning with the year of the first sale of a licensed product or licensed service and ending upon the expiration of the last-to-expire UCSF Patent Right.

This will be credited against any earned royalty due for the twelve-month period following which the minimum payment was made and pro-rated.

This will be credited against any earned royalty due for the twelve-month period following for which the minimum payment was made and pro-rated.

We are also obligated to pay The Regents a percentage of certain non-royalty sublicense income ranging from the low double-digits to mid-twenties.

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In November 2019, we entered into a license agreement (the 2019 WU Agreement) with Washington University, pursuant to which we obtained an exclusive sublicensable, non-transferable, worldwide license under certain Washington University patent rights related to genetically engineered hypoimmunogenic stem cells to research, develop, make, have made, and sell products, the manufacture, use, sale or import of which by us or our sublicensees would, in the absence of the 2019 WU Agreement, infringe at least one valid claim of the licensed patent rights (WU Hypoimmune Products).

We are obligated to use commercially reasonable efforts to (i) develop, manufacture, promote and sell WU Hypoimmune Products and (ii) to achieve certain development, regulatory, and commercial diligence milestones within specified time periods.

We are obligated to use commercially reasonable efforts to (i) develop, manufacture, promote and sell WU Hypoimmune Products and (ii) achieve certain development, regulatory, and commercial diligence milestones within specified time periods.

We have the ability to extend the time periods for achievement of such milestones under certain terms set forth in the 2019 WU Agreement, including payment of extension fees.

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Washington University retains all rights not granted to us under the patents.

In addition, the 2019 WU Agreement is subject to certain rights retained by the U.S.

government, including the requirement that licensed products sold in the U.S.

be substantially manufactured in the U.S.

Pursuant to the 2019 WU Agreement, we paid Washington University an upfront fee of $75,000.

We are required to pay Washington University up to $100,000 in license maintenance fees on each anniversary of the 2019 WU Agreement’s effective date until the first commercial sale of a WU Hypoimmune Product.

In addition, the 2019 WU Agreement is subject to certain rights retained by the United States government, including the requirement that licensed products sold in the United States be substantially manufactured in the United States.

Pursuant to the 2019 WU Agreement, we paid Washington University an upfront license issue fee of $75,000.

We are required to pay Washington University up to $100,000 per year in license maintenance fees on each anniversary of the 2019 WU Agreement’s effective date until the first commercial sale of a WU Hypoimmune Product.

Upon the achievement of certain development and regulatory milestones, we are required to pay Washington University up to an aggregate of $2.0 million in milestone payments per WU Hypoimmune Product for the first three WU Hypoimmune Products, for an aggregate of $6 million in development and regulatory milestones.

Additionally, upon the achievement of certain commercial milestones, we are required to pay Washington University up to an aggregate of $2.5 million in milestone payments per WU Hypoimmune Product for the first three WU Hypoimmune Products, for an aggregate of $7.5 million in commercial milestones.

We are also obligated to pay royalties on annual net sales in the low single-digits, subject to a minimum amount of royalties payable in advance.

We are also obligated to pay royalties as a percentage o f annual net sales of WU Hypoimmune Products in the low single-digits, subject to a minimum amount of royalties payable in advance.

The minimum annual royalty for the first anniversary of the effective date following the first commercial sale will be $100,000 and subsequently will increase up to a maximum minimum annual royalty of $750,000 on the fourth anniversary of the effective date following the first commercial sale.

The royalties are payable

provided there is at least one valid claim of licensed patent rights present in the country of manufacture or sale.

The royalties are payable provided there is at least one valid claim of licensed patent rights present in the country of manufacture or sale.

The royalty rates are also subject to specified and capped reduction upon certain other events.

Furthermore, we are obligated to pay Washington University a percentage of certain non-royalty sublicense income in the low double-digits.

The 2019 WU Agreement will expire upon the last-to-expire valid claim in the licensed patent rights, which we expect to occur in 2038.

We also have the right to terminate the 2019 WU Agreement for any reason upon 90 days’ prior written notice to Washington University.

The 2019 WU Agreement will expire upon the last-to-expire valid claim under the licensed patent rights, which we expect to occur in 2038.

We have the right to terminate the 2019 WU Agreement for any reason upon 90 days’ prior written notice to Washington University.

Washington University may terminate the 2019 WU Agreement upon our material breach that is not cured within 30 days after receiving written notice thereof.

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Under the 2020 WU Agreement, we obtained an exclusive, worldwide, non-transferable, and royalty-bearing license under the patent rights to research, develop, make, have made, sell, offer for sale, have sold, use, have used, export, and import licensed products, the manufacture, use, sale or import of which by us or our sublicensees would, in the absence of the 2020 WU Agreement, infringe at least one valid claim of the licensed patent rights, solely in fields relating to diagnosis, prevention, and treatment of human diseases or disorders.

We utilize these license rights in our ex vivo cell engineering platform program that relies on our hypoimmune technology, including our beta cell program.

We utilize these license rights in our ex vivo cell engineering platform that relies on our hypoimmune technology, including our beta cell program.

Under the 2020 WU Agreement, we are obligated to use commercially reasonable efforts to (i) develop, manufacture, promote, and sell licensed products, and (ii) achieve certain development, regulatory, and commercial diligence milestones within specified time periods.

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Washington University retains the right to use the licensed patent rights to make, have made, use, and import licensed products worldwide in fields relating to diagnosis, prevention, and treatment of human disease or disorders for research and educational purposes, including collaboration with other nonprofit entities, but expressly excluding any commercial purposes, and such retained rights do not limit our ability to pursue our programs and product candidates.

In addition, the 2020 WU Agreement is subject to certain rights retained by the U.S.

government, including the requirement that licensed products sold in the U.S.

be substantially manufactured in the U.S.

In addition, the 2020 WU Agreement is subject to certain rights retained by the United States government, including the requirement that licensed products sold in the United States be substantially manufactured in the United States.

Pursuant to the 2020 WU Agreement, we paid Washington University an upfront license issue fee of $150,000.

We are required to pay annual license maintenance fees on each anniversary of the 2020 WU Agreement’s effective date until the first commercial sale of a licensed product.

The license maintenance fee for the first and second anniversaries of the effective date will be $25,000 and subsequently will increase by $25,000 per two anniversaries up to a maximum annual license maintenance fee of $100,000.

We are also required to pay Washington University up to an aggregate of $2.0 million upon the achievement of certain pre-specified development and regulatory milestones per licensed product for the first three licensed products under the 2020 WU Agreement, for an aggregate of $6 million in development and regulatory milestones.

Additionally, we are required to pay Washington University, up to an aggregate of $4.5 million upon the achievement of certain pre-specified commercial milestones per licensed product for the first three licensed products under the 2020 WU Agreement, for an aggregate of $13.5 million in commercial milestones.

We are also required to pay, for each licensed product made or sold by or for us worldwide, earned royalties on net sales of the licensed products in the low single-digits, with the royalty rate being subject to specified and capped reduction upon certain events.

Under the 2020 WU Agreement, we are obligated to pay a minimum annual royalty commencing with the first anniversary of the effective date following the first commercial sale of the licensed product, which will be paid as an advance against the earned royalties paid to Washington University over the ensuing 12-month period.

We are required to pay Washington University up to $100,000 per year in license maintenance fees on each anniversary of the 2020 WU Agreement’s effective date until the first commercial sale of a licensed product.

Upon the achievement of certain development and regulatory milestones, we are required to pay Washington University up to an aggregate of $2.0 million per licensed product for the first three licensed products under the 2020 WU Agreement, for an aggregate of $6 million in development and regulatory milestones.

Additionally, of certain commercial milestones, we are required to pay Washington University up to an aggregate of $4.5 million per licensed product for the first three licensed products under the 2020 WU Agreement, for an aggregate of $13.5 million in commercial milestones.

We are also obligated to pay royalties as a percentage of annual net sales of licensed products in the low single-digits,

subject to a minimum amount of royalties payable in advance.

The royalties are payable provided there is at least one valid claim of the licensed patent rights present in the country of manufacture or sale.

The royalties are payable provided there is at least one valid claim of licensed patent rights present in the country of manufacture or sale.

The royalty rates are also subject to specified and capped reduction upon certain other events.

Furthermore, we are obligated to pay Washington University a percentage of certain non-royalty sublicense income in the low double-digits.

The 2020 WU Agreement will expire upon the last-to-expire valid claim under the licensed patent rights, which we expect to occur in 2038.

We also have the right to terminate the 2020 WU Agreement for any reason upon 90 days’ prior written notice to Washington University.

We have the right to terminate the 2020 WU Agreement for any reason upon 90 days’ prior written notice to Washington University.

Washington University may terminate the 2020 WU Agreement upon our material breach that is not cured within 30 days after receiving written notice thereof.

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That agreement was terminated upon the closing of our acquisition of Oscine.

As part of the Oscine acquisition, we also agreed to pay additional amounts of up to an aggregate of $225.8 million upon achievement of certain pre-specified development and commercial milestones, which we may pay in cash or in shares of our common stock, subject to certain conditions.

As a result of the Oscine acquisition, we entered into, or obtained and amended, licenses to various technologies related to our glial progenitor ex vivo cell-based therapy program, including a license agreement with University of Rochester and a seed bank supply agreement with Hadasit Medical Research Services and Development Ltd.

As part of the Oscine acquisition, we also agreed to pay additional amounts of up to an aggregate of $225.8 million upon achievement of certain specified development and commercial milestones, which we may pay in cash or in shares of our common stock, subject to certain conditions.

As a result of the Oscine acquisition, we entered into, or obtained and amended, licenses to various technologies related to our glial progenitor cell-based therapy program, including a license agreement with University of Rochester and a supply agreement with Hadasit Medical Research Services and Development Ltd.

(Hadasit) for access to certain cells and information.

We terminated the supply agreement with Hadasit in September 2022 following our decision to cease using the cells and information in our glial progenitor cell-based therapy program.

License Agreement with University of Rochester

Effective as of the closing of the Oscine acquisition, we entered into an amended and restated exclusive license agreement (the Rochester Agreement) with the University of Rochester, which amended and restated a prior license agreement between Oscine and its affiliates and the University of Rochester and assigned Oscine’s rights and obligations in the license agreement to us.

Under the Rochester Agreement, we obtained an exclusive, royalty-bearing, sublicensable, worldwide license under certain patents, and a non-exclusive, royalty-free license under know-how, to research, develop, import, make, have made, use, sell, offer to sell, commercialize, and otherwise exploit cell-based therapies for the treatment of human central nervous system disease and disorders.

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Goldman, solely for Dr.

Goldman or any of his lab members at the University of Rochester to practice such patent rights within Dr.

Goldman or any of his laboratory members at the University of Rochester to practice such patent rights within Dr.

Goldman’s laboratory at the University of Rochester for internal academic research purposes.

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Goldman or members of his laboratory at the University of Rochester within a certain timeframe in connection with the internal academic research license that we granted to the University of Rochester.

We are obligated to use commercially reasonable efforts to proceed with the commercial exploitation of the patents, to create a reasonable supply of licensed products to meet demand, and to adhere to a specified commercial development plan for development of stem cell therapy products, with pre-specified development milestones, including obtaining government approvals to market at least one licensed product, and to market such product within twelve months of receiving such approval.

The licenses granted pursuant to the Rochester Agreement are subject to certain rights retained by the University of Rochester and the rights of the U.S.

The retained rights of the University of Rochester pertain only to its ability to conduct internal academic research other than clinical research and for teaching, education, and other non-commercial research activities, in publications related to its scientific research and findings, and for any other non-clinical and non-commercial purpose that is not inconsistent with the rights granted to us under the Rochester Agreement.

We are obligated to use commercially reasonable efforts to proceed with the commercial exploitation of the patents, to create a reasonable supply of licensed products to meet demand, and to adhere to a specified commercial development plan for development of stem cell therapy products, with specified development milestones, including obtaining government approvals to market at least one licensed product, and to market such product within twelve months of receiving such approval.

The licenses granted pursuant to the Rochester Agreement are subject to certain rights retained by the University of Rochester and the rights of the United States government.

publications related to its scientific research and findings, and for any other non-clinical and non-commercial purpose that is not inconsistent with the rights granted to us under the Rochester Agreement.

These retained rights do not limit our ability to pursue our programs and product candidates.

Pursuant to the Rochester Agreement, we are obligated to pay to University of Rochester minimum annual royalties beginning in January 2023, the amount of which payments will be $20,000 in 2023, $50,000 in 2025, and will increase to $70,000 in 2028 and beyond.

The minimum annual royalty payment is creditable against our obligation to pay tiered royalties on annual net sales in the low single-digits.

The royalty rates are also subject to reduction upon certain other events.

We are also required to pay University of Rochester up to an aggregate of $950,000 upon the achievement of certain pre-specified development and commercial milestones for

each licensed product.

We are also required to pay University of Rochester up to an aggregate of $950,000 upon the achievement of certain specified development and commercial milestones for each licensed product.

In addition, we are required to pay a tiered mid-single-digit to mid-double-digit percentage of revenue arising from any sublicenses granted by us to third parties.

The Rochester Agreement will terminate on the last-to-expire of the licensed patents thereunder, which we expect to occur in 2038.

We also have the right to terminate the Rochester Agreement in its entirety for any reason upon 90 days’ prior written notice to the University of Rochester.

The Rochester Agreement will expire on the last-to-expire of the licensed patents thereunder, which we expect to occur in 2038.

We have the right to terminate the Rochester Agreement in its entirety for any reason upon 90 days’ prior written notice to the University of Rochester.

The University of Rochester may terminate the Rochester Agreement upon our material breach that is not cured within 30 days of receiving written notice thereof or immediately in the event of our bankruptcy.

The University of Rochester may also terminate the Rochester Agreement, or at its sole discretion terminate the exclusivity of the license granted, upon our failure to meet the diligence obligations under and cure such failure within 90 days of our receipt of notice thereof, or such longer reasonable time determined by University of Rochester, at its discretion, and subject to a good faith negotiation mechanism included in the Rochester Agreement.

Supply Agreement with Hadasit Medical Research Services and Development Ltd.

In July 2018, Oscine Therapeutics (U.S.) Inc., an affiliate of Oscine, entered into a supply agreement (as amended, the Hadasit Agreement) with Hadasit Medical Research Services and Development Ltd.

(Hadasit), pursuant to which Oscine obtained a quantity of seed bank cells and accompanying regulatory information on a non-exclusive basis for the sole purpose of developing, manufacturing, and selling cell therapy products for the treatment or prevention of central nervous system disorders in humans, which cell therapy products are derived using the Oscine proprietary differentiation technology from a certain human ESC line provided by Hadasit under the Hadasit Agreement.

We utilize these cells and information in our glial progenitor cell program.

Concurrently with our acquisition of Oscine in September 2020, the Hadasit Agreement was assigned by Oscine Therapeutics (U.S.) Inc.

We amended the Hadasit Agreement effective as of the closing of the Oscine acquisition, and we subsequently assigned the Hadasit Agreement from Oscine to us.

Pursuant to the Hadasit Agreement, Oscine Therapeutics (U.S.) Inc.

paid Hadasit an upfront fee of $24,000.

We are required to pay Hadasit up to an aggregate of $1.1 million upon the achievement of certain development milestones for the first product.

We are also obligated to pay tiered royalties in the low single digits on annual net sales of the relevant products worldwide, which obligation shall commence upon the first commercial sale of a relevant product and shall expire after 15 years on a product-by-product and country-by-country basis.

The royalty rates are also subject to reduction upon certain other events.

The Hadasit Agreement will continue until terminated in accordance with its terms.

Hadasit may terminate the Hadasit Agreement upon giving 30 days’ written notice if we fail to make any payment due thereunder and do not cure such failure within 30 days’ notice, or upon 60 days’ written notice if we cease to use the seed bank cells for the development and manufacture of our products, subject to our ability to dispute Hadasit’s claim and resolution of such dispute in accordance with a process set forth in the Hadasit Agreement.

Either party may terminate the Hadasit Agreement upon a material breach by the other party that is not cured within 60 days after receiving written notice thereof, or upon giving written notice thereof, in the event of the other party’s bankruptcy.

Cytocardia Acquisition

In November 2019, we acquired Cytocardia, Inc.

(Cytocardia), a privately-held early-stage biotechnology company developing ex vivo cell engineering programs focused on the replacement of damaged heart cells, in exchange for $8.0 million in cash, net of certain indebtedness and expenses, of which $6.8 million was an upfront cash payment, and $1.2 million was set aside (Cytocardia Holdback Amount) to satisfy certain general representations and warranties set forth in the stock purchase agreement.

We also agreed to pay additional amounts of up to an aggregate of $75.0 million upon our achievement of certain pre-specified development milestones and up to an aggregate of $65.0 million in pre-specified commercial milestones.

As a result of that transaction, we obtained licenses to various intellectual property and technologies, including intellectual property and technology related to our cardiomyocyte program that we rely on for development of our cardiac cell therapy product candidates.

These included a license agreement with the University of Washington, as described below.

University of Washington

In October 2018, Cytocardia entered into an exclusive start-up license agreement (as amended, the UW Agreement) with the University of Washington (UW), pursuant to which Cytocardia obtained an exclusive license under certain patents relating to stem cell-derived cardiomyocytes and heart regeneration owned solely by UW or jointly by UW and the University of Cambridge, for which UW has the sole right to control the protection and licensing pursuant an inter-institutional agreement between UW and the University of Cambridge.

We amended the UW Agreement in November 2019, concurrently with the closing of our acquisition of Cytocardia, and in July 2020 assigned the UW Agreement from Cytocardia to us.

We further amended the UW Agreement in January 2021, February 2021, March 2021, April 2021, July 2021, September 2021, and October 2021 to add additional patent families to the scope of the license.

The scope of the license is to make, have made, use, offer to sell, sell, offer to lease or lease, import, or otherwise

offer to dispose of products worldwide (i) for any use, with respect to certain specified licensed patents, (ii) for the production of cardiomyocytes having an atrial or ventricular phenotype, with respect to other specified licensed patents, and (iii) heart regeneration therapy, with respect to other specified licensed patents.

Additionally, UW granted us a non-exclusive, worldwide license to use certain related know-how, clinical trial information, and program materials.

We may sublicense the exclusively licensed rights under the UW Agreement.

We may also sublicense the non-exclusively licensed rights, but only for the purpose of using them in conjunction with exclusively licensed rights.

We utilize intellectual property in our cardiomyocyte program.

For a period of 12 months after the effective date of the UW Agreement, UW agreed to provide reasonable written notice to us of any improvements to the licensed patents upon notice to UW.

We have the option to add such improvements to the licensed patents.

Pursuant to the UW Agreement, we are required to use commercially reasonable efforts to commercialize the licensed rights and to make and sell licensed products as soon as practicable and to maximize sales thereof.

We are also obligated to achieve specified development, regulatory, and commercial milestones within specified time periods.

Inventions covered in the licensed patents have arisen, in whole or in part, from federally supported research by the U.S.

federal government, and the licenses granted pursuant to the UW Agreement are subject to certain rights of the U.S.

UW has retained for itself as well as for Cambridge University and for any other not-for-profit academic research institution, an irrevocable, nonexclusive right to practice the licensed rights for academic research and instructional or any other academic or non-commercial purpose.

UW has retained for itself an irrevocable, nonexclusive license to practice licensed rights for clinical purposes.

Cambridge University has also retained for itself an irrevocable, nonexclusive license to practice certain rights co-owned with UW for clinical purposes.

Pursuant to the UW Agreement, we will pay to UW a low single-digit royalty on net sales of products, with the royalty rate being subject to specified and capped reduction upon certain events.

We will pay minimum annual fees for the term of the UW Agreement, to be creditable against running royalty payments for the preceding calendar year on a noncumulative basis.

These minimum annual fees are due following the second anniversary of the effective date of the UW Agreement and continue during the term of the UW Agreement, ranging from $5,000 up to $50,000 for the years following the second anniversary of the first commercial sale of an FDA-approved licensed product.

We will also pay to UW non-cumulative, non-creditable, and non-refundable development milestone payments of up to $175,000 and commercial milestone payments of up to $700,000 for the first licensed product to achieve each applicable milestone event.

Furthermore, pursuant to the UW Agreement, we are obligated to pay UW a percentage of certain non-royalty sublicense income ranging from the low single-digits to middle double-digits, depending on the stage of development of our licensed products at the time of execution of the sublicense agreement.

The UW Agreement will expire, without further action by the parties, when all valid claims of the licensed patents have expired, and we have sold all licensed products manufactured prior to the expiration of such valid claims, which we expect to occur in 2040.

UW may terminate the UW Agreement if we (i) permanently cease operations, (ii) voluntarily file or have filed against us a petition under applicable bankruptcy or insolvency laws that we fail to have released within 30 days after filing, (iii) propose any dissolution, composition, or financial reorganization with creditors, or if a receiver, trustee, custodian, or similar agent is appointed, (iv) make a general assignment for the benefit of creditors, (v) challenge the validity of the licensed patents, or (vi) breach our material obligations under the UW Agreement and do not cure such breach within 60 days.

We may terminate the UW Agreement at any time by delivering to UW a written notice of termination at least 60 days prior to the effective date of termination.

In addition, we may propose to terminate certain of our licensed rights under the UW Agreement by delivering to UW a written notice of termination accompanied by a proposed written amendment to the UW Agreement at least 60 days prior to the effective date of termination of such licensed rights.

Non-Exclusive License and Development Agreement with FUJIFILM Cellular Dynamics, Inc.

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Pursuant to the FCDI Agreement, we agreed to pay FCDI an upfront fee of $1.0 million, annual license maintenance fees, and license fees of up to $500,000 per indication for one certain cell type or up to $350,000 per indication for certain other cell types.

We are required to pay FCDI up to an aggregate of $28.5 million per indication upon the achievement of certain pre-specified development and regulatory milestones for up to a total of three indications and up to an aggregate of $14.25 million in pre-specified development and regulatory milestones for each additional indication.

We are also required to pay up to an aggregate of $8.8 million per product upon the achievement of certain pre-specified commercial milestones.

In addition, we are obligated to pay royalties on

annual net sales of the relevant products worldwide in the low- to mid-single digits, which obligation shall commence upon the first commercial sale of a relevant product and shall expire after 15 years on a product-by-product and country-by-country basis.

We are required to pay FCDI up to an aggregate of $28.5 million per indication upon the achievement of certain specified development and regulatory milestones for up to a total of three indications and up to an aggregate of $14.25 million in specified development and regulatory milestones for each additional indication.

We are also required to pay up to an aggregate of $8.8 million per product upon the achievement of certain specified commercial milestones.

In addition, we are obligated to pay royalties on annual net sales of the relevant products worldwide in the low- to mid-single digits, which obligation shall commence upon the first commercial sale of a relevant product and shall expire after 15 years on a product-by-product and country-by-country basis.

The royalty rates are also subject to reduction upon certain other events.

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FCDI may terminate the FCDI Agreement upon giving written notice if we fail to make any payment due or upon our material breach, subject, in each case, to our ability to dispute or cure such breach.

We may also terminate the FCDI Agreement for convenience upon prior written notice, and either party may terminate upon giving written notice in the event of the other party’s bankruptcy.

We may terminate the FCDI Agreement for convenience upon prior written notice, and either party may terminate upon giving written notice in the event of the other party’s bankruptcy.

License Agreement with Beam

In October 2021, we entered into an option and license agreement (the Beam Agreement) with Beam, pursuant to which Beam granted us a non-exclusive license to use Beam’s proprietary CRISPR Cas12b nuclease editing technology for a specified number of gene editing targets to research, develop and commercialize engineered cell therapy products that (i) are directed to certain antigen targets, with respect to our allogeneic T cell programs, or (ii) comprise certain human cell types, with respect to our stem cell-derived programs.

In October 2021, we entered into an option and license agreement (as amended, the Beam Agreement) with Beam, pursuant to which Beam granted us a non-exclusive license to use Beam’s proprietary CRISPR Cas12b nuclease editing technology for a specified number of gene editing targets to research, develop, and commercialize engineered cell therapy products that (i) are directed to certain antigen targets, with respect to our allogeneic T cell programs, or (ii) comprise certain human cell types, with respect to our stem cell-derived programs.

We are permitted to use the CRISPR Cas12b system to modify or introduce, ex vivo , selected genetic sequences with respect to licensed products.

The Beam Agreement excludes any rights to base editing using the CRISPR Cas12b system.

Pursuant to the Beam Agreement, we have the option, for a period of one year from the effective date of the Beam Agreement, to select additional antigen targets, with respect to our allogeneic T cell programs, or human cell types, with respect to our stem cell-derived programs, in each case, upon our payment of an option payment of $10 million per antigen target or cell type.

In addition, we may, for a period of three years from the effective date of the Beam Agreement, (i) elect to replace an antigen target, with respect to our allogeneic T cell programs, or human cell type, with respect to our stem cell-derived programs (Replacement Right) previously selected by us, and (ii) select new gene editing targets, or replace gene editing targets previously selected by us, with respect to any licensed product (Gene Nomination Right).

In each case, our rights with respect to its exercise of the option, Replacement Right or Gene Nomination Right are subject to certain limitations.

Pursuant to the Beam Agreement, we originally had the option, for a period of one year from the effective date of the Beam Agreement, to select additional antigen targets, with respect to our allogeneic T cell programs, or human cell types, with respect to our stem cell-derived programs, in each case, upon our payment of an option payment of $10 million per antigen target or cell type.

We subsequently amended the Beam Agreement in July 2022 to extend the term of the option period and to add certain additional rights to the scope of the license for the purpose of supporting research and development of licensed products.

In addition, we may, for a period of three years from the effective date of the Beam Agreement, (i) elect to replace an antigen target, with respect to our allogeneic T

cell programs, or human cell type, with respect to our stem cell-derived programs ( Replacement Right ) previously selected by us, and (ii) select new gene editing targets, or replace gene editing targets previously selected by us, with respect to any licensed product ( Gene Nomination Right ).

In each case, our rights with respect to exercise of the option, Replacement Right , or Gene Nomination Right are subject to certain limitations.

Pursuant to the Beam Agreement, we paid Beam an upfront payment of $50 million.

Additionally, with respect to each licensed product, we will be obligated to pay to Beam up to $65 million in specified developmental and commercial milestone payments.

Additionally, with respect to each licensed product, we will be obligated to pay to Beam up to $65 million in specified developmental and commercial milestones.

We will also be obligated to pay to Beam an aggregate royalty, including any royalty owed by Beam to its licensor, on a licensed product-by-licensed product and country-by-country basis, in the low to mid-single-digits, subject to reduction in certain circumstances, on net sales of each licensed product until the latest of (i) the expiration of certain patents covering such licensed product in the applicable country, (ii) the date on which any applicable regulatory exclusivity, including orphan drug, new chemical entity, data or pediatric exclusivity, with respect to such licensed product expires in such country, or (iii) the 10th anniversary of the first commercial sale of such licensed product in such country.

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In January 2022, we entered into a patent license agreement (the NIH Agreement) with the U.S.

Department of Health and Human Services, as represented by The National Cancer Institute, an institute of the National Institutes of Health (the NIH), pursuant to which the NIH granted to us an exclusive, worldwide, commercial license under certain patent rights related to certain fully-human anti-CD22 binders and CD22 CAR constructs comprising such binders for use in certain in vivo gene therapy and ex vivo allogeneic CAR T cell applications for B cell malignancies.

Department of Health and Human Services, as represented by The National Cancer Institution, an institute of the National Institutes of Health (the NIH), pursuant to which the NIH granted to us an exclusive, worldwide, commercial license under certain patent rights related to certain fully-human anti-CD22 binders and CD22 CAR constructs comprising such binders for use in certain in vivo gene therapy and ex vivo allogeneic CAR T cell applications for B cell malignancies.

The license grant is subject to customary statutory requirements and reserved rights as required under federal law and NIH requirements.

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Pursuant to the NIH Agreement, we paid to the NIH an upfront payment of $1.0 million.

Additionally, we will be obligated to pay to the NIH (i) up to an aggregate of $9.6 million in specified regulatory, developmental, and commercial milestone payments

with respect to each product developed through exploitation of the licensed patent rights, and (ii) a payment of $1,000,000 upon the assignment of the NIH Agreement to an affiliate upon a change of control.

Additionally, we will be obligated to pay to the NIH (i) up to an aggregate of $9.6 million in specified regulatory, developmental, and commercial milestone payments with respect to each licensed product, and (ii) a payment of $1,000,000 upon the assignment of the NIH Agreement to an affiliate upon a change of control.

In addition, we are obligated to pay to the NIH (i) a royalty on net sales of licensed products in the low-single-digits, subject to reduction in certain circumstances, and subject to certain annual minimum royalty payments, and (ii) a percentage, ranging from the mid-single-digits to mid-teens, of revenues from sublicensing arrangements.

Additionally, if we are granted a priority review voucher by the U.S.

Food and Drug Administration with respect to a licensed product, we will be obligated to pay to the NIH the greater of (i) $5,000,000 or (ii) a percentage in the mid-single digits of any consideration received for the sale, transfer, or lease of such priority review voucher.

Additionally, if we are granted a priority review voucher by the FDA with respect to a licensed product, we will be obligated to pay to the NIH the greater of (i) $5,000,000 or (ii) a percentage in the mid-single-digits of any consideration received for the sale, transfer, or lease of such priority review voucher.

We are also obligated to pay to the NIH a percentage in the low-single-digits of the consideration we receive for any assignment of the NIH Agreement to a non-affiliate.

We are obligated to use commercially reasonable efforts to exploit, and make publicly available, inventions developed by the exploitation of the licensed patent rights, including licensed products.

Unless earlier terminated by either party, the NIH Agreement will terminate upon expiration of the last-to-expire valid claim in the licensed patent rights.

Unless earlier terminated by either party, the NIH Agreement will expire upon expiration of the last-to-expire valid claim in the licensed patent rights.

The NIH may terminate the Agreement with written notice for our material breach if we fail to timely cure such breach or upon certain insolvency events involving us.

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Of the 36.4 million shares of Series A-2 convertible preferred stock issued, 12.1 million shares were contingent on the achievement of a pre-specified development milestone, which was achieved in July 2019.

We also agreed to pay contingent consideration of up to an aggregate of $500.0 million upon our achievement of certain pre-specified development milestones and a success payment of up to $500.0 million (the Cobalt Success Payment), which we may elect to pay in cash or in stock.

The payout of the Cobalt Success Payment will only be paid if, at pre-determined valuation measurement dates, our market capitalization equals or exceeds $8.1 billion, and we are advancing a program based on the fusogen technology in a clinical trial pursuant to an IND, or have filed for, or received approval for, a BLA or NDA with respect to a program based on the fusogen technology.

The valuation measurement dates for the Cobalt Success Payments are triggered by certain pre-determined valuation measurement dates, including the closing of our IPO and periodically thereafter.

In addition to our IPO, a valuation measurement date would be triggered upon a change of control if at least one of our programs based on the fusogen technology is the subject of an active research program at the time of such change of control.

Pursuant to the terms and conditions of the Cobalt acquisition agreement, we are obligated to pay to certain former Cobalt stockholders contingent consideration (Cobalt Contingent Consideration) of up to an aggregate of $500.0 million upon our achievement of certain pre-specified development milestones and a success payment (Cobalt Success Payment) of up to $500.0 million, each of which is payable in cash or stock.

The Cobalt Success Payment is payable if, at pre-determined valuation measurement dates, our market capitalization equals or exceeds $8.1 billion, and we are advancing a program based on the fusogen technology in a clinical trial pursuant to an IND, or have filed for, or received approval for, a biologics license application or new drug application for a product based on the fusogen technology.

A valuation measurement date would also be triggered upon a change of control if at least one of our programs based on the fusogen technology is the subject of an active research program at the time of such change of control.

If there is a change of control and our market capitalization is below $8.1 billion as of the date of such change of control, the amount of the potential Cobalt Success Payment will decrease, and the amount of potential Cobalt Contingent Consideration will increase.

As a result of the Cobalt transaction, we obtained licenses to various technologies and intellectual property rights that relate to the development of our fusogen technology and related fusosome programs, including exclusive license agreements with Flagship Pioneering Innovations V, Inc.

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In addition, Flagship irrevocably and unconditionally assigned to Cobalt all of its right, title and interest in and to any and all patents claiming any inventions conceived (i) solely by Flagship Management or jointly by Flagship Management and Cobalt, (ii) after Cobalt’s spinout from Flagship, and (iii) as a result of activities conducted pursuant the Managerial Agreement or other participation of Flagship Management in Cobalt’s affairs, but excluding Fusogen Foundational IP.

We utilize the rights granted by Flagship under the Flagship Agreement in our fusogen platform and related

therapeutic product candidates.

We utilize the rights granted by Flagship under the Flagship Agreement in our fusogen platform and related therapeutic product candidates.

The license granted to Fusogen Foundational IP is contingent upon Cobalt’s compliance with its obligations under the Flagship Agreement.

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Pursuant to the Flagship Agreement, Cobalt is obligated to pay, on a Fusogen Product-by-Fusogen Product and jurisdiction-by-jurisdiction basis, royalties in the low single-digit percentage on net sales of Fusogen Products.

The Flagship Agreement will terminate on the last-to-expire royalty term, which is determined on a Fusogen Product-by-Fusogen Product and jurisdiction-by-jurisdiction basis, and is the earlier of (i) the expiration of the last valid claim of any Fusogen Foundational IP covering such Fusogen Product or (ii) the date on which the last applicable additional milestone payment has been made in accordance with that certain merger agreement under which we acquired Cobalt, which we expect to be in 2039.

The Flagship Agreement will expire on the expiration of the last-to-expire royalty term, which is determined on a Fusogen Product-by-Fusogen Product and jurisdiction-by-jurisdiction basis, and occurs on the earlier of (i) the expiration of the last valid claim of any Fusogen Foundational IP covering such Fusogen Product or (ii) the date on which the last applicable additional milestone payment has been made in accordance with that certain merger agreement under which we acquired Cobalt, which we expect to be in 2039.

Upon expiration of the royalty term with respect to a Fusogen Product in any jurisdiction and payment in full of all amounts owed under the Flagship Agreement for such Fusogen Product, the license granted to us will automatically convert into a non-exclusive, fully paid-up license for such Fusogen Product in such jurisdiction.

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Under the Pulsalys Agreement, the Co-Owners will retain the right to practice the licensed patent rights for non-commercial research purposes, alone or in collaboration with third parties.

These retained rights do not affect our ability to pursue our programs and product candidates.

Pursuant to the Pulsalys Agreement, Cobalt paid Pulsalys an upfront fee of 18,000 EUR.

We are required to pay an annual license maintenance fee of 18,000 EUR until the first commercial sale of a licensed product.

We are also required to pay Pulsalys up to an aggregate of 575,000 EUR upon the achievement of certain clinical and regulatory milestones for each of the first three distinct licensed products.

We are also required to pay Pulsalys up to an aggregate of 575,000 EUR upon the achievement of certain development and regulatory milestones for each of the first three distinct licensed products.

In addition, we are obligated to pay an annual royalty in the low single-digits on net sales of the licensed products, with the royalty rate being subject to reduction upon certain events.

Lastly, we are obligated to pay percentage annual fees on certain sublicense income in the low single-digits.

The Pulsalys Agreement will terminate on a country-by-country and licensed product-by-licensed product basis upon the expiration of the last-to-expire valid claim within the licensed patent rights covering the making, using, sale, and import of such licensed product in such country or any patent term extension or supplementary protection certificate thereof covering the sale of such licensed product in such country, which we expect to occur in 2037.

The Pulsalys Agreement will expire on a country-by-country and licensed product-by-licensed product basis upon the expiration of the last-to-expire valid claim within the licensed patent rights covering the making, using, sale, and import of such licensed product in such country or any patent term extension or supplementary protection certificate thereof covering the sale of such licensed product in such country, which we expect to occur in 2037.

We also have the right to terminate the Pulsalys Agreement in its entirety upon notice if we determine, in our sole discretion, that continued pursuit of development of the licensed patent rights is not feasible or desirable in the context of (i) the resources available to us or due to external factors such as competition, market forces, or access or license to other reasonably useful intellectual property, or (ii) a change of direction of our business focus.

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We utilize the rights granted under the UCLA Agreement in our in vivo fusogenic platform and related fusosome programs.

We are obligated to use commercially reasonable and diligent efforts to (i) develop licensed products, (ii) market licensed products, and (ii) manufacture and sell licensed products in quantities sufficient to meet market demands.

We are also required to satisfy certain development and commercial milestones with respect to at least one licensed product that is administered directly to a patient for therapeutic purposes.

The license granted pursuant to the UCLA Agreement is subject to certain rights retained by the California Institute for Regenerative Medicine (CIRM) and the U.S.

government, including a non-exclusive, royalty-free license granted to the U.S.

government in accordance with 35 U.S.C.

If CIRM exercises its rights under Title 17, California Code of Regulations, Section 100600, and the scope of our exclusive license under the UCLA Agreement is impacted, then our financial obligations therein will be reduced by 50%.

The license granted pursuant to the UCLA Agreement is subject to certain rights retained by the California Institute for Regenerative Medicine (CIRM) and the United States government, including a non-exclusive, royalty-free license granted to the United States government in accordance with 35 U.S.C.

If CIRM exercises its rights under Title 17, California Code of Regulations, Section 100600, and the scope of our exclusive license under the UCLA Agreement is impacted, then our financial

obligations therein will be reduced by 50%.

Otherwise, rights retained by CIRM do not limit our ability to pursue our programs and product candidates.

In addition, UCLA retains the right to ( i ) use the licensed patent rights for educational and research purposes and research sponsored by commercial entities, (ii) publicly disclose research results, (iii) use the licensed patent rights to offer and perform clinical diagnostic and prognostic care solely within the University of California system, and (iv) allow other non-profit and academic institutions to use the licensed patent rights for educational and research purposes and research sponsored by commercial entities, as well as to publicly disclose research results .

Th es e retained rights do not affect our ability to pursue our programs and product candidates .

Pursuant to the UCLA Agreement, we paid UCLA an upfront license issue fee of $25,000.

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In addition, we are obligated to pay an annual license maintenance fee beginning on the first anniversary of the UCLA Agreement until the first commercial sale of a licensed product.

The license maintenance fee for the first anniversary was $10,000, and it will subsequently increase by $10,000 per anniversary up to a maximum annual license maintenance fee of $100,000.

The license maintenance fee for the first anniversary was $10,000, and subsequently increases by $10,000 per anniversary up to a maximum annual license maintenance fee of $100,000.

We are also required to pay, on a country-by-country basis, earned royalty percentages in the low single-digits on net sales of the licensed products, with the royalty rate being subject to reduction upon certain events.

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If any claim within the licensed patent rights is held invalid or unenforceable in a final decision by a court of competent jurisdiction, all royalty obligations with respect to that claim or any claim patentably indistinct from it will expire as of the date of that final decision.

No royalties will be collected or paid on licensed products sold to the U.S.

government to the extent required by law, and we will be required to reduce the amount charged for licensed products distributed to the U.S.

government by the amount of the royalty that otherwise would have been paid.

No royalties will be collected or paid on licensed products sold to the United States government to the extent required by law, and we will be required to reduce the amount charged for licensed products distributed to the United States government by the amount of the royalty that otherwise would have been paid.

Furthermore, we are obligated to pay UCLA tiered fees on a percentage of certain sublicense income in the low single-digit to low double-digit range.

Lastly, if we challenge the validity of any licensed patent rights, we agree to pay UCLA all royalties and other amounts due in view of our activities under the UCLA Agreement during the period of challenge.

If we fail such challenge, we are required to pay two times the royalty rate paid during the period of such challenge for the remaining term of the UCLA Agreement and all of UCLA’s verifiable legal out-of-pocket fees and costs incurred in defending such challenge, including attorney’s fees.

The UCLA Agreement will terminate on the later of the expiration of the last-to-expire patent or last to be abandoned patent application in the licensed patent rights, which we expect to occur in 2033.

If such challenge fails, we are required to pay two times the royalty rate paid during the period of such challenge for the remaining term of the UCLA Agreement and all of UCLA’s verifiable legal out-of-pocket fees and costs incurred in defending against such challenge, including attorney’s fees.

The UCLA Agreement will expire on the later of the expiration of the last-to-expire patent or last to be abandoned patent application in the licensed patent rights, which we expect to occur in 2033.

We also have the right to terminate the UCLA Agreement in its entirety or with respect to any portion of the licensed patent rights for any reason upon 90 days’ prior written notice to UCLA.

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If the breach is incapable of being cured within such period, then UCLA will consider our efforts to avoid, and to take reasonable steps to cure, such breach when determining whether to terminate the UCLA Agreement.

(ii) achieve certain development milestones set forth in the UCLA Agreement, subject to our ability to extend such milestones in accordance with terms set forth in the UCLA Agreement.

Also, UCLA has the right and option, at its sole discretion, to either terminate the UCLA Agreement or reduce our exclusive license to a non-exclusive license if we fail to (i) exercise commercially reasonable and diligent efforts to develop, market, manufacture, and sell licensed products, or (ii) achieve certain development milestones set forth in the UCLA Agreement, subject to our ability to extend such milestones in accordance with terms set forth in the UCLA Agreement.

Upon our termination of the UCLA Agreement, we may continue to sell any previously manufactured licensed products for 180 days after the effective date of termination.

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The process required by the FDA before biologics may be marketed in the United States generally involves the following:

completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s Good Laboratory Practice requirements (GLPs);

completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s Good Laboratory Practice requirements (GLPs) and other applicable regulations;

submission to the FDA of an Investigational New Drug application (IND), which must become effective before clinical trials may begin;

approval by an institutional review board (IRB), or ethics committee at each clinical site before the trial is commenced;

performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose;

performance of adequate and well-controlled human clinical trials to satisfy the FDA’s legal standards with respect to the safety, purity, and potency of the proposed product candidate, which may include, among other things, demonstrating that the benefits of the product candidate outweigh its known risks for the intended patient population;

preparation of and submission to the FDA of a biologics license application (BLA), after completion of all pivotal clinical trials;

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a determination by the FDA within 60 days of its receipt of a BLA to file the application for review;

satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with current Good Manufacturing Practices (cGMP), and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency and, if applicable, to assess compliance with the FDA’s current Good Tissue Practice (cGTP) requirements for the use of human cellular and tissue products, and of selected clinical investigation sites to assess compliance with Good Clinical Practices (GCPs);

satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is processed, packed, or held to assess compliance with current Good Manufacturing Practices (cGMP), and to assure that the facilities, methods, and controls will continue to meet the FDA’s legal requirements, and, if applicable, to assess compliance with the FDA’s current Good Tissue Practice (cGTP) requirements for the use of human cellular and tissue products, and of selected clinical investigation sites to assess compliance with Good Clinical Practices (GCPs);

FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.

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Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.

In addition to the IND submission process, under the National Institutes of Health (NIH), Guidelines for Research Involving Recombinant DNA Molecules, or the NIH Guidelines, supervision of human gene transfer trials includes evaluation and assessment by an institutional biosafety committee (IBC), a local institutional committee that reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at that institution.

In addition to the IND submission process, under the National Institutes of Health Guidelines for Research Involving Recombinant DNA Molecules (the NIH Guidelines), supervision of human gene transfer trials includes evaluation and assessment by an institutional biosafety committee (IBC), a local institutional committee that reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at that institution.

The IBC assesses the safety of the research and identifies any potential risk to public health or the environment, and such review may result in some delay before initiation of a clinical trial.

While the NIH Guidelines are not mandatory unless the research in question is being conducted at or sponsored by institutions receiving NIH funding of recombinant or synthetic nucleic acid molecule research, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them.

Although the NIH Guidelines are not mandatory unless the research in question is being conducted at or sponsored by institutions receiving NIH funding of recombinant or synthetic nucleic acid molecule research, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them.

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical study.

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A separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments.

While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a

significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure .

Furthermore, an independent IRB for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site, and must monitor the study until completed.

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Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the biological characteristics of the product candidate, and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product.

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, sponsors must develop methods for testing the identity, strength, quality, and purity of the final product.

Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

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In both standard and priority reviews, the review process may also be extended by FDA requests for additional information or clarification.

The FDA reviews a BLA to determine, among other things, whether a product is safe, pure and potent and the facility in which it is manufactured, processed, packed or held meets standards designed to assure the product’s continued safety, purity and potency.

The FDA reviews a BLA for a product candidate to determine, among other things, whether the information provided satisfies the FDA’s legal standards with respect to the safety, purity, and potency of the proposed product candidate, which may include, among other things, demonstrating that the benefits of the product candidate outweigh its known risks for the intended patient population.

The FDA also reviews a BLA to determine whether the facility in which it is manufactured, processed, packed, or held

meets standards designed to assure th at the product candidate will continue to meet the FDA’s legal requirements .

The FDA may also convene an advisory committee to provide clinical insight on application review questions.

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Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.

If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information.

Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be produced, the FDA may issue an approval letter or a Complete Response Letter (CRL).

After the FDA evaluates a BLA and conducts any inspections it deems necessary, the FDA may issue an approval letter or a Complete Response Letter (CRL).

An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications.

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The FDA may require one or more Phase 4 post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing studies.

In addition, the Pediatric Research Equity Act (PREA) requires a sponsor to conduct pediatric clinical trials for most drugs for a new active ingredient, new indication, new dosage form, new dosing regimen, or new route of administration.

Under PREA, original BLAs and supplements must contain a pediatric assessment unless the sponsor has received a deferral or waiver.

In general, the required assessment must evaluate the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which it is determined that there is substantial evidence that the product provides benefits that outweigh its known and potential risks.

The sponsor or FDA may request a deferral of pediatric clinical trials for some or all of the pediatric subpopulations.

A deferral may be granted for several reasons, including a finding that the drug is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or efficacy data need to be collected before the pediatric clinical trials begin.

The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, keep a deferral current, or submit a request for approval of a pediatric formulation.

Expedited development and review programs

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Any marketing application for a drug or biologic submitted to the FDA for approval, including a product candidate with a fast track designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite the FDA review and approval process, such as priority review and accelerated approval.

A product candidate is eligible for priority review if it is designed to treat a serious or life-threatening disease or condition, and if approved, would provide a significant improvement in safety or effectiveness compared to available alternatives for such disease or condition.

A BLA is eligible for priority review if the product candidate is designed to treat a serious or life-threatening disease or condition, and if approved, would provide a significant improvement in safety or effectiveness compared to available alternatives for such disease or condition.

For original BLAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date (as compared to ten months under standard review).

Additionally, product candidates studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit.

Products receiving accelerated approval may be subject to expedited withdrawal procedures if the sponsor fails to conduct the required post-marketing studies or if such studies fail to verify the predicted clinical benefit.

As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled confirmatory clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit.

Products receiving accelerated approval may be subject to expedited withdrawal procedures if the sponsor fails to conduct the required confirmatory studies in a timely manner or if such studies fail to verify the predicted clinical benefit.

In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.

In 2017, the FDA established a new regenerative medicine advanced therapy (RMAT), designation as part of its implementation of the 21st Century Cures Act.

In 2017, the FDA established the regenerative medicine advanced therapy (RMAT) designation as part of its implementation of the 21st Century Cures Act.

The RMAT designation program is intended to fulfill the 21st Century Cures Act requirement that the FDA facilitate an efficient development program for, and expedite review of, any drug or biologic that meets the following criteria:

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After the FDA grants orphan drug designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not

approve any other applications, including a full BLA, to market the same biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated.

If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the

FDA may not approve any other applications, including a full BLA, to market the same biologic for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated.

Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition.

Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the BLA application user fee.

A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation.

A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the disease or condition for which it received orphan designation.

In addition, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if a second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

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The Affordable Care Act, signed into law in 2010, includes a subtitle called the Biologics Price Competition and Innovation Act (BPCIA), which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.

The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars.

Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical study or studies.

Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

However, complexities associated with the larger, and often more complex, structures of biological products, as well as the processes by which such products are manufactured, pose significant hurdles to implementation of the abbreviated approval pathway that are still being worked out by the FDA.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA.

In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed.

During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate that the product meets the FDA’s legal standards with respect to safety, purity, and potency, which may include, among other things, demonstrating that the benefits of the product outweigh its known risks.

The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products.

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Other Healthcare Laws

Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business and may constrain the financial arrangements and relationships through which we research, as well as, sell, market and distribute any products for which we obtain marketing approval.

Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business, which may constrain the financial arrangements and relationships through which we conduct research, as well as sell, market and distribute any products for which we obtain marketing approval.

Such laws include, without limitation, federal and state anti-kickback, fraud and abuse, false claims, data privacy and security and physician and other health care provider transparency laws and regulations.

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Healthcare Reform

In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, each as amended, collectively known as the ACA, was enacted, which substantially changed the way healthcare is financed by both governmental and private insurers, and significantly affected the pharmaceutical industry.

The United States government and other governments have shown significant interest in pursuing health care reform.

Any government-adopted reform measures could adversely impact the pricing of health care products and services in the United States or internationally and the amount of reimbursement available from governmental agencies or other third-party payors.

For example, the Patient Protection and Affordable Care Act (the ACA) which was enacted in the United States in 2010, substantially changed the way healthcare is financed by both governmental and private insurers, and significantly affected the pharmaceutical industry.

The ACA contains a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement adjustments and changes to fraud and abuse laws.

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increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs from 15.1% to 23.1% of the average manufacturer price;

required collection of rebates for drugs paid by Medicaid managed care organizations;

expanded the manufacturer Medicaid rebate obligation to drugs paid by Medicaid managed care organizations;

required manufacturers to participate in a coverage gap discount program, under which they must agree to offer 70 percent point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;

imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell “branded prescription drugs” to specified federal government programs.

Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.

For example, on March 2, 2020 the United States Supreme Court granted the petitions for writs of certiorari to review the U.S.

Court of Appeals for the 5th Circuit ruling that the individual mandate was unconstitutional and to determine the constitutionality of the ACA in its entirety.

It is uncertain when the Supreme Court will rule on this case.

Other legislative changes have been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year, which was temporarily suspended from May 1, 2020 through March 31, 2021 due to the COVID-19 pandemic, and reduced payments to several types of Medicare providers.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries, proposed and enacted legislation and executive orders issued by the President designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

It is also possible that additional governmental action is taken in response to the COVID-19 pandemic.

Since its enactment, there have been judicial, executive, and Congressional challenges to certain aspects of the ACA.

On June 17, 2021, the United States Supreme Court dismissed the most recent judicial challenge to the ACA without specifically ruling on the constitutionality of the ACA.

Thus, the ACA will remain in force in its current form .

Other legislative changes have been proposed and adopted since the ACA was enacted, including reductions of Medicare payments to providers through 2032.

In addition, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, beginning January 1, 2024.

Most significantly, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law.

This statute marks the most significant action by Congress with respect to the pharmaceutical industry since adoption of the ACA in 2010.

Among other things, the IRA requires, beginning in 2026, that manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap;

imposes rebates, first due in 2023, under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation;

and, beginning in 2025, replaces the Part D coverage gap discount program with a new discounting program.

The IRA permits the Secretary of the Department of Health and Human Services to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

For that and other reasons, it is currently unclear how the IRA will be effectuated, and while the impact of the IRA on the pharmaceutical industry and our business cannot yet be fully determined, it is likely to be significant.

Moreover, there has been recent heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which is likely to continue.

Individual states in the United States have also become increasingly active in implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Similar political, economic, and regulatory developments are occurring in the European Union (EU) and may affect the ability of pharmaceutical companies to profitably commercialize their products.

In addition to continuing pressure on prices and cost containment measures, legislative developments at the EU or member state level may result in significant additional requirements or obstacles.

The delivery of healthcare in the EU, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy.

National governments and health service providers have different priorities and approaches to the delivery of healthcare and the pricing and reimbursement of products in that context.

In general, however, the healthcare budgetary constraints in most EU member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers.

Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could restrict or regulate post-approval activities and affect the ability of pharmaceutical companies to commercialize their products.

In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies.

On December 13, 2021, Regulation 2021/2282 on Health Technology Assessment (HTA) amending Directive 2011/24/EU (the Regulation), was adopted.

Although the Regulation entered into force in January 2022, it will only begin to apply from January 2025 onward, with preparatory and implementation-related steps to take place in the interim.

Once the Regulation becomes applicable, it will have a phased implementation depending on the concerned products.

The Regulation intends to boost cooperation among EU

member states in assessing health technologies, including new medicinal products , and provid ing the basis for cooperation at the EU level for joint clinical assessments in these areas.

The R egulation will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.

Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, and ethical) aspects of health technology, and making decisions on pricing and reimbursement.

We expect that additional state, federal, and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates once approved or additional pricing pressures.

Employees and Human Capital Resources

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We consider our relationship with our employees to be good.

In November 2022, we underwent a portfolio prioritization and corporate restructuring d esigned to optimize development of our programs at or nearing clinical development, to continue investments in our core research platforms and innovation, and to maintain a strong balance sheet.

As part of the prioritization and restructuring, we reduced our workforce by approximately 15% as of December 31, 2022.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and additional employees.

The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards.

Legal Proceedings

We are not currently a party to any material legal proceedings.

From time to time, we may, however, in the ordinary course of business face various claims brought by third parties, and we may, from time to time, make claims or take legal actions to assert our rights, including intellectual property rights as well as claims relating to employment matters and the safety or efficacy of our products.

Any of these claims could subject us to costly litigation, and, while we generally believe that we have adequate insurance to cover many different types of liabilities, our insurance carriers may deny coverage, may be inadequately capitalized to pay on valid claims, or our policy limits may be inadequate to fully satisfy any damage awards or settlements.

If this were to happen, the payment of any such awards could have a material adverse effect on our operations, cash flows and financial position.

Additionally, any such claims, whether or not successful, could damage our reputation and business.

The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants, and directors through the granting of stock-based compensation awards and, with respect to our employees, cash-based performance bonus awards.

Our Corporate Information

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Our website address is www.sana.com .

The information on, or that can be accessed through, our website is not part of this report, and is not incorporated by reference herein.

The information on, or that can be accessed through, our website is not part of this Annual Report, and is not incorporated by reference herein.

We have included our website address as an inactive textual reference only.

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

What changed 10-K

Item 1. Business