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What changed in Caribou Biosciences, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Caribou Biosciences, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+702 added−683 removedSource: 10-K (2024-03-11) vs 10-K (2023-03-09)

Top changes in Caribou Biosciences, Inc.'s 2023 10-K

702 paragraphs added · 683 removed · 544 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

235 edited+64 added−70 removed269 unchanged
Biggest changeAtara Biotherapeutics, Inc., Cellectis S.A., Celyad Oncology SA, CRISPR Therapeutics, Fate Therapeutics, Inc., Gracell Biotechnologies Inc., Kite, Legend Biotech Corporation, Poseida Therapeutics, Inc., Precision BioSciences, Inc., Sana Biotechnology, Inc., and Vor Biopharma Inc.; • Allogeneic NK therapy: Artiva Biotherapeutics, Inc., Celularity Inc., Century Therapeutics, Inc., Fate Therapeutics, Inc., Fortress Biotech, Inc., ImmunityBio, Inc., Nkarta, Inc., NKGen Biotech, Inc., and Takeda Pharmaceutical Company Limited; • Other cell therapies: Other companies are developing CAR-expressing immune cell therapies derived from natural killer T (“NKT”) cells, including Kuur Therapeutics, Inc.; from macrophages, including Carisma Therapeutics Inc.; from regulatory T cells, including Kyverna Therapeutics; and from gamma-delta T cells, including Adicet Bio, Inc., GammaDelta Therapeutics Limited, Cytomed Therapeutics Limited, TC Biopharm (Holdings) plc, Hebei Senlang Biotechnology Co.
Biggest changeAtara Biotherapeutics, Inc., AvenCell Therapuetics, Inc., Cellectis S.A., Celyad Oncology SA, CRISPR Therapeutics AG, Fate Therapeutics, Inc., Gracell 30 Table of Contents Biotechnologies, an AstraZeneca PLC company, Imugene Limited, Kite, a Gilead Company, Legend Biotech Corporation, Poseida Therapeutics, Inc., Sana Biotechnology, Inc., and Vor Biopharma Inc.; • Allogeneic NK therapy: Artiva Biotherapeutics, Inc., Celularity Inc., Century Therapeutics, Inc., Fate Therapeutics, Inc., ImmunityBio, Inc., Nkarta, Inc., NKGen Biotech, Inc., Oncternal Therapeutics, Inc., and Takeda Pharmaceutical Company Limited; • Other cell therapies: Other companies are developing CAR-expressing immune cell therapies derived from macrophages, including Carisma Therapeutics Inc.; from regulatory T cells, including Kyverna Therapeutics; and from gamma-delta T cells, including Adicet Bio, Inc., Cytomed Therapeutics Limited, and Takeda Pharmaceutical Company Limited; • Other oncology therapeutics: Multiple biotechnology and pharmaceutical companies developing other directly competitive technologies, such as small molecule, antibody, bi-specific antibody, and antibody-drug conjugates; and • Non-oncology therapeutics: Several companies are also exploring the use of CAR-T cell therapies for the treatment of autoimmune disorders, often including against the same targets as in the oncology field (e.g., CD19, BCMA).
Allogeneic Cell Therapies Despite the regulatory approvals and commercialization of autologous CAR-T cell therapies, several limitations have prevented autologous therapies from achieving the full potential of CAR-T products: • Limited patient access. Many patients are not eligible for autologous therapy because of the quality of their T cells or the lengthy vein-to-vein time. • Bridging therapy often required.
Allogeneic Cell Therapies Despite the regulatory approvals and commercialization of autologous CAR-T cell therapies, several limitations have prevented autologous therapies from achieving the full potential of CAR-T cell products: • Limited patient access. Many patients are not eligible for autologous therapy because of the quality of their T cells or the lengthy vein-to-vein time. • Bridging therapy often required.
Similar approaches may be used for our CAR-NK platform where improved targeting, CAR-NK cell survival, and enhancement of antitumor activity is thought to be key. Checkpoint Disruption with PD-1 Knockout Strategy One of the approaches we deploy to increase the antitumor activity of CAR-T cells is to remove PD-1 from the CAR-T cell surface.
Similar approaches may be used for our CAR-NK cell platform where improved targeting, CAR-NK cell survival, and enhancement of cell activity is thought to be key. Checkpoint Disruption with PD-1 Knockout Strategy One of the approaches we deploy to increase the antitumor activity of CAR-T cells is to remove PD-1 from the CAR-T cell surface.
(“ProMab”) On January 31, 2020, we entered into a Sale and Assignment Agreement with ProMab (as amended, the “ProMab Agreement”) under which we purchased a humanized scFv targeting BCMA and a patent family related thereto for an upfront cash payment of $0.4 million and the potential payments of future royalties to ProMab. To date, five U.S. patents have granted (U.S.
(“ProMab”) On January 31, 2020, we entered into a Sale and Assignment Agreement with ProMab (as amended, “ProMab Agreement”) under which we purchased a humanized scFv targeting BCMA and a patent family related thereto for an upfront cash payment of $0.4 million and the potential payments of future royalties to ProMab. To date, five U.S. patents have granted (U.S.
We granted Pioneer an exclusive license, with the right to sublicense, to our background CRISPR intellectual property, including the CVC IP discussed below, in certain agricultural crops, specified microorganisms, a defined industrial bio field, and certain nutrition and health applications (the “Pioneer Exclusive Field”), and a non-exclusive license, with the right to sublicense, to Pioneer for CRISPR in certain defined fields outside of research reagents.
We granted Pioneer an exclusive license, with the right to sublicense, to our background CRISPR intellectual property, including the CVC IP discussed below, in certain agricultural crops, specified microorganisms, a defined industrial bio field, and certain nutrition and health applications (“Pioneer Exclusive Field”), and a non-exclusive license, with the right to sublicense, to Pioneer for CRISPR in certain defined fields outside of research reagents.
The Regents of the University of California (“UC”) and the University of Vienna (“Vienna”) On April 16, 2013, we entered into an Exclusive License for Methods and Compositions for RNA-Directed Target DNA Modification and for RNA-Directed Modulation of Transcription with UC and Vienna (as amended, the “UC/Vienna Agreement”), under which we received an exclusive worldwide license, with the right to sublicense, in all fields to the foundational CRISPR-Cas9 patent family co-owned by UC, Vienna, and Dr.
The Regents of the University of California (“UC”) and the University of Vienna (“Vienna”) On April 16, 2013, we entered into an Exclusive License for Methods and Compositions for RNA-Directed Target DNA Modification and for RNA-Directed Modulation of Transcription with UC and Vienna (as amended, “UC/Vienna Agreement”), under which we received an exclusive worldwide license, with the right to sublicense, in all fields to the foundational CRISPR-Cas9 patent family co-owned by UC, Vienna, and Dr.
Emmanuelle Charpentier (the “CVC IP”). Dr. Charpentier has not granted us any rights to the CVC IP, either directly or indirectly.
Emmanuelle Charpentier (“CVC IP”). Dr. Charpentier has not granted us any rights to the CVC IP, either directly or indirectly.
Additionally, under the Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Amendments”), the term of a patent that covers an FDA-approved biologic may also be eligible for a PTE of up to five years, which is designed to compensate for the patent term lost during clinical trials and the FDA regulatory review process.
Additionally, under the Drug Price Competition and Patent Term Restoration Act of 1984 (“Hatch-Waxman Amendments”), the term of a patent that covers an FDA-approved biologic may also be eligible for a PTE of up to five years, which is designed to compensate for the patent term lost during clinical trials and the FDA regulatory review process.
Licensure and Regulation of Biologics in the United States In the United States, our product candidates are regulated as biological products, or biologics, under the Public Health Service Act (the “PHSA”), and the Federal Food, Drug, and Cosmetic Act (the “FDCA”), and their implementing regulations promulgated by the FDA.
Licensure and Regulation of Biologics in the United States In the United States, our product candidates are regulated as biological products, or biologics, under the Public Health Service Act (“PHSA”), and the Federal Food, Drug, and Cosmetic Act (“FDCA”), and their implementing regulations promulgated by the FDA.
The failure to comply with the applicable requirements at any time during the product development process, including nonclinical testing, clinical testing, the approval process, or post-approval process, may subject us to delays in the conduct of a clinical trial, regulatory review and approval, and/or subject us to administrative or judicial sanctions.
Failure to comply with the applicable requirements at any time during the product development process, including nonclinical testing, clinical testing, the approval process, or post-approval process, may subject us to delays in the conduct of a clinical trial, regulatory review and approval, and/or subject us to administrative or judicial sanctions.
Biosimilars and Exclusivity The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”) includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (the “BPCIA”), which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product in the United States.
Biosimilars and Exclusivity The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (“Affordable Care Act”) includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product in the United States.
Among the provisions of the Affordable Care Act that may be of importance to our potential product candidates are: • an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic products, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications; • expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price” for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability to prescriptions for individuals enrolled in Medicare Advantage plans; • established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 70% point-of-sale-discount off the negotiated price of applicable products to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient products to be covered under Medicare Part D, increased pursuant to the Bipartisan Budget Act; • the establishment of a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; • the establishment of the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription product spending; • introduction of a new average manufacturer price definition for biologics and drugs that are inhaled, infused, instilled, implanted, or injected and not generally dispensed through retail community pharmacies; • increase in the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and expansion of rebate liability from fee-for-service Medicaid utilization to include the utilization of Medicaid managed care organizations as well; • establishment of a branded prescription drug fee that pharmaceutical manufacturers of branded prescription drugs must pay to the federal government; • expansion of the list of covered entities eligible to participate in the 340B drug pricing program; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; and • creation of a licensure framework for follow on biologic products.
Among the provisions of the Affordable Care Act that may be of importance to our potential product candidates are: • an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic products, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications; • expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer 47 Table of Contents price” for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability to prescriptions for individuals enrolled in Medicare Advantage plans; • established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 70% point-of-sale-discount off the negotiated price of applicable products to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient products to be covered under Medicare Part D, increased pursuant to the Bipartisan Budget Act; • the establishment of a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; • the establishment of the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription product spending; • introduction of a new average manufacturer price definition for biologics and drugs that are inhaled, infused, instilled, implanted, or injected and not generally dispensed through retail community pharmacies; • increase in the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and expansion of rebate liability from fee-for-service Medicaid utilization to include the utilization of Medicaid managed care organizations as well; • establishment of a branded prescription drug fee that pharmaceutical manufacturers of branded prescription drugs must pay to the federal government; • expansion of the list of covered entities eligible to participate in the 340B drug pricing program; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; and • creation of a licensure framework for follow on biologic products.
Memorial Sloan Kettering Cancer Center On November 13, 2020, we entered into an Exclusive License Agreement with MSKCC (the “MSKCC Agreement”), under which we exclusively licensed from MSKCC know-how, biological materials, and related patent families to fully human scFvs targeting CLL-1 (also known as CD371) for use in T cells, NK cells, and genome-edited iPSCs for allogeneic CLL-1-targeted cell therapy.
Memorial Sloan Kettering Cancer Center On November 13, 2020, we entered into an Exclusive License Agreement with MSKCC (“MSKCC Agreement”), under which we exclusively licensed from MSKCC know-how, biological materials, and related patent families to fully human scFvs targeting CLL-1 (also known as CD371) for use in T cells, NK cells, and genome-edited iPSCs for allogeneic CLL-1-targeted cell therapy.
The phase 2 clinical trial for our product candidates may serve as the pivotal trial, in which case a phase 3 clinical trial will not be necessary. • Phase 3 clinical trials are undertaken within an expanded patient population to further evaluate dosage and gather the additional information about effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the drug and to provide an adequate basis for physician labeling.
The phase 2 clinical trial for our product candidates may serve as the pivotal phase 3 trial, in which case a separate phase 3 clinical trial will not be necessary. • Phase 3 clinical trials are undertaken within an expanded patient population to further evaluate dosage and gather the additional information about effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the drug and to provide an adequate basis for physician labeling.
There are several well-established genome-editing technologies being applied to generate immune cell therapies currently in preclinical research or clinical development, including zinc-finger nucleases (“ZFNs”), transcription activator-like effector nucleases (“TALENs”), and meganucleases, but each has limitations with respect to both their agility and their ability to generate site-specific gene insertions with high efficiency.
There are several well-established genome-editing technologies being applied to generate immune cell therapies currently in preclinical research or clinical development, including zinc-finger nucleases (“ZFNs”), transcription activator-like effector nucleases (“TALENs”), and meganucleases, but each has limitations with respect to both agility and ability to generate site-specific gene insertions with high efficiency.
Our therapies are directed at established tumor cell surface targets for which autologous CAR-T cell therapeutics have already demonstrated clinical proof of concept, including CD19 and B cell maturation antigen (“BCMA”), as well as targets such as C-type lectin-like molecule-1 (“CLL-1,” also known as CD371).
Our therapies are directed at established cell surface targets for which autologous CAR-T cell therapeutics have already demonstrated clinical proof of concept, including CD19 and B cell maturation antigen (“BCMA”), as well as targets such as C-type lectin-like molecule-1 (“CLL-1,” also known as CD371).
Thus, although we expect that approvals of additional therapies may serve to partially mitigate the need for more treatment options in r/r MM, therapies that prolong the lives of r/r MM patients or delay disease progression, address simpler manufacturing, and streamline dosing schedules are critical to address the unmet medical need in r/r MM.
Thus, although we expect that approvals of additional therapies may serve to partially mitigate the need for more treatment options in r/r MM, therapies that prolong the lives of r/r MM patients or delay disease progression, address simpler manufacturing, and streamline dosing schedules are critical to address the unmet medical need in patients with r/r MM.
The principal purposes of our equity and cash incentive plans are to attract, retain, and motivate employees through grants of stock-based compensation awards and payments of performance-based cash bonus awards, which motivate our employees to perform to the best of their abilities and achieve our objectives. We are committed to providing a competitive and comprehensive benefits package to our employees.
The principal purposes of our equity and cash incentive plans are to attract, retain, and recognize employees through grants of stock-based compensation awards and payments of performance-based cash bonus awards, which motivate our employees to perform to the best of their abilities and achieve our objectives. We are committed to providing a competitive and comprehensive benefits package to our employees.
We employ multiple armoring strategies to engineer allogeneic CAR-T cell therapies with the potential for durable antitumor activity. Engineering Enhanced Antitumor Activity is the Key to Unlocking the Full Potential of Allogeneic Cell Therapies CAR-T cells will generally proliferate in response to tumor antigen engagement via their respective CAR.
We employ multiple armoring strategies to engineer allogeneic CAR-T cell therapies with the potential for durable antitumor activity. Engineering Enhanced Antitumor Activity is the Key to Unlocking the Full Potential of Allogeneic Cell Therapies CAR-T cells will generally proliferate in response to antigen engagement via their respective CAR.
Among these approaches, allogeneic cell therapy is positioned to unlock the broad potential of immune cells as a leading therapeutic modality. Expansion, trafficking, and sufficient antitumor activity of allogeneic CAR-T and CAR-NK cells are critical to achieving long-term efficacy.
Among these approaches, allogeneic cell therapy is positioned to unlock the broad potential of immune cells as a leading therapeutic modality. Expansion, trafficking, and sufficient antitumor activity of allogeneic CAR-T cells are critical to achieving long-term efficacy.
(“Pioneer,” now Corteva Agriscience) On July 13, 2015, we entered into an Amended and Restated Collaboration and License Agreement (as amended, the “Pioneer Agreement”) with Pioneer (then a DuPont company) that superseded and replaced a prior Collaboration and License Agreement entered into on September 10, 2014.
(“Pioneer,” now Corteva Agriscience) On July 13, 2015, we entered into an Amended and Restated Collaboration and License Agreement (as amended, “Pioneer Agreement”) with Pioneer (then a DuPont company) that superseded and replaced a prior Collaboration and License Agreement entered into on September 10, 2014.
Whether or not we obtain FDA approval for our product candidates, we will need to obtain the necessary approvals from the comparable health regulatory authorities in other countries or jurisdictions before we can initiate clinical trials or marketing of our products in those countries or jurisdictions.
Whether or not we obtain FDA approval for our product candidates, we will need to obtain the necessary approvals from health regulatory authorities in other countries or jurisdictions before we can initiate clinical trials or marketing of our products in those countries or jurisdictions.
The regulatory approval and commercialization of multiple first-generation CD19- and BCMA-directed autologous CAR-T cell products have laid the foundation and opened a path for the development of more advanced cell therapeutics, including CAR-T and CAR-NK cell products with next-generation capabilities and approaches.
The regulatory approval and commercialization of multiple first-generation CD19- and BCMA-directed autologous CAR-T cell products have laid the foundation and opened a path for the development of more advanced cell therapeutics, including CAR-T cell products with next-generation capabilities and approaches.
To our knowledge, our CB-010 product candidate is the first allogeneic CAR-T cell therapy in a clinical study with a PD-1 knockout, and we believe the PD-1 knockout enhances the potential for durable antitumor response of allogeneic CAR-T cell therapy.
To our knowledge, our CB-010 product candidate is the first allogeneic CAR-T cell therapy in a clinical study with a PD-1 knockout, and we believe the PD-1 knockout enhances the potential for durable antitumor response of an allogeneic CAR-T cell therapy.
The PD-1/PD-L1 pathway leads to rapid exhaustion in T cells. This occurs when a T cell expressing PD-1 engages with another cell expressing PD-L1. Tumor cells and the patient’s own cells can express PD-L1, leading to interaction with PD-1 and subsequent exhaustion of the CAR-T cells.
The PD-1/PD-L1 pathway leads to rapid exhaustion of T cells. This occurs when a T cell expressing PD-1 engages with another cell expressing PD-L1. Tumor cells and the patient’s own cells can express PD-L1, leading to interaction with PD-1 and subsequent exhaustion of the CAR-T cells.
Patients receiving allogeneic cell therapy, however, do not have to wait for their CAR-T cell therapy to be manufactured and thus avoid the potential need for bridging therapy. • More efficient and scalable manufacturing.
Patients receiving allogeneic cell therapy, however, do not have to wait for their CAR-T cell therapy to be manufactured and thus may avoid the potential need for bridging therapy. • More efficient and scalable manufacturing.
Genome editing occurs in two steps, as shown in figure 2 below. In the first step, a double-stranded break (“DSB”) is made at the location of the genome where the edit is desired.
Canonical genome editing occurs in two steps, as shown in figure 2 below. In the first step, a double-stranded break (“DSB”) is made at the location of the genome where the edit is desired.
As a result, obtaining coverage and reimbursement approval for such a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical, and cost-effectiveness data regarding the products’ clinical benefits, medical necessity, and risks on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained.
As a result, obtaining coverage and reimbursement approval for such a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical, and cost-effectiveness data regarding the product’s clinical benefits, medical necessity, and risks on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained.
We use our chRDNA technology to knock out the PDCDI gene to eliminate PD-1 expression from the CAR-T cell surface, thereby preventing PD-1/PD-L1-mediated exhaustion. We believe that knocking out PD-1 will maintain the CAR-T cells in a higher antitumor state for an extended period of time, and we believe this will result in greater initial tumor debulking in the patient.
We use our chRDNA technology to knockout the PDCDI gene to eliminate PD-1 expression from the CAR-T cell surface, thereby preventing PD-1/PD-L1-mediated exhaustion. We believe that knocking out PD-1 will maintain the CAR-T cells in a higher antitumor state for an extended period of time, and we believe this will result in greater initial tumor debulking in the patient.
We have multiple armoring strategies in development for our CAR-NK platform, including a Casitas B-Lineage lymphoma proto-oncogene-B (“ CBLB ”) gene knockout for enhanced antitumor activity, IL-15/IL-15RA fusion gene insertion for enhanced persistence, and immune cloaking to reduce T cell-mediated rejection and to prevent NK fratricide (collectively, “NK cell self-killing”).
We have multiple armoring strategies in development for our CAR-NK cell platform, including a Casitas B-Lineage lymphoma proto-oncogene-B (“ CBLB ”) gene knockout to enhance cell activity, IL-15/IL-15RA fusion gene insertion for enhanced cell persistence, and immune cloaking to reduce T cell-mediated rejection and to prevent NK cell fratricide (collectively, “NK cell self-killing”).
Our chRDNA technologies enable us to design allogeneic cell therapies with the potential to achieve enhanced antitumor activity through the use of tailored armoring strategies, including (i) checkpoint disruption, through a knockout of PD-1 to sustain the initial activity of CAR-T cells by disrupting a pathway that leads to CAR-T cell exhaustion, (ii) immune cloaking of CAR-T cells to reduce rejection by the patient’s immune system, (iii) cytokine support to enhance antitumor activity, and (iv) a combination of these strategies. • Developing allogeneic CAR-T cell therapies against clinically proven targets for the treatment of hematologic malignancies.
Our chRDNA technologies enable us to design allogeneic cell therapies with the potential to achieve enhanced cell killing activity through the use of tailored armoring strategies, including (i) checkpoint disruption, such as through a knockout of PD-1 to sustain the initial activity of CAR-T cells by disrupting a pathway that leads to CAR-T cell exhaustion; (ii) immune cloaking of CAR-T cells to reduce rejection by the patient’s immune system; (iii) cytokine support to enhance antitumor activity; and (iv) a combination of these strategies. • Developing allogeneic CAR-T cell therapies against clinically proven targets for the treatment of hematologic malignancies.
CB-011 Overview: Strategy and Rationale CB-011 is a healthy donor-derived, genome-edited, allogeneic CAR-T cell therapy targeting BCMA-positive malignancies that is being evaluated in the ongoing first-in-human, open-label, multicenter CaMMouflage phase 1 clinical trial (NCT05722418) in the United States in adults with r/r MM.
CB-011 Overview: Strategy and Rationale CB-011 is a healthy donor-derived, genome-edited, allogeneic CAR-T cell therapy targeting BCMA-positive malignancies that is being evaluated in the ongoing open-label, multicenter CaMMouflage phase 1 clinical trial (NCT05722418) in the United States in adults with r/r MM.
Other potential consequences of a failure to comply with regulatory requirements include: • restrictions on the marketing or manufacturing of our product, complete withdrawal of our product from the market, or product recalls; • fines, untitled or warning letters, or holds on post-approval clinical trials; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of our product license approvals; • product seizure or detention, or refusal to permit the import or export of products or the raw materials or ingredients that are needed for product manufacture; or • injunctions or the imposition of civil or criminal penalties.
Other potential consequences of a failure to comply with regulatory requirements include: • restrictions on the marketing or manufacturing of our product, complete withdrawal of our product from the market, or product recalls; • fines, untitled or warning letters, or holds on post-approval clinical trials; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of our product license approvals; 41 Table of Contents • product seizure or detention, or refusal to permit the import or export of products or the raw materials or ingredients that are needed for product manufacture; or • injunctions or the imposition of civil or criminal penalties.
Doudna, Ph.D., who was a co-recipient of the 2020 Nobel Prize in Chemistry for the development of CRISPR-Cas9 as a method for genome editing; Martin Jinek, Ph.D., Assistant Professor at the University of Zurich in the Department of Biochemistry; James Berger, Ph.D., Professor in the Department of Biophysics and Biophysical Chemistry at the Johns Hopkins University School of Medicine; and Rachel E.
Doudna, Ph.D., who was a co-recipient of the 2020 Nobel Prize in Chemistry for the development of CRISPR-Cas9 as a method for genome editing; Martin Jinek, Ph.D., Associate Professor at the University of Zurich in the Department of Biochemistry; James Berger, Ph.D., Professor in the Department of Biophysics and Biophysical Chemistry at the Johns Hopkins University School of Medicine; and Rachel E.
In addition, the FDA may call for post-approval studies, including phase 4 clinical trials, to further assess the product’s safety after approval.
In addition, the FDA may call for post-approval studies, including phase 4 clinical trials, to further assess a product’s safety after approval.
The relevant time period commences when the first patient is dosed with our first CLL-1 product candidate in the first phase 1 clinical trial and ends upon the earlier of the third anniversary of approval of our biologics license application (“BLA”) by the FDA or 10 years from the date the first patient was dosed with our first CLL-1 product candidate in the first phase 1 clinical trial.
The relevant time period commences when the first patient is dosed with our first CLL-1 product candidate (CB-012) in the first phase 1 clinical trial and ends upon the earlier of the third anniversary of approval of our biologics license application (“BLA”) by the FDA or 10 years from the date the first patient was dosed with our first CLL-1 product candidate in the first phase 1 clinical trial.
The FDA may grant our product candidates RMAT designations if our product candidates are regenerative medicine therapies intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition and preliminary clinical evidence indicates that our product candidates have the potential to address unmet medical needs for such disease or condition.
The FDA may grant product candidates RMAT designations if such product candidates are regenerative medicine therapies intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition and preliminary clinical evidence indicates that they have the potential to address unmet medical needs for such disease or condition.
Our benefits package provides a balance of overall protection along with the flexibility to meet the individual health and wellness needs of our employees. We plan to continue to refine our efforts related to optimizing our use of human capital as we grow, including improvements in the way we hire, develop, motivate, and retain employees.
Our benefits package provides a balance of overall protection along with the flexibility to meet the individual health and wellness needs of our employees. We plan to continue to refine our efforts related to optimizing our use of human capital as we grow, including improvements in the way we hire, develop, reward, and retain employees.
Physician Payments Sunshine Act, or Open Payments program, created under the Affordable Care Act, which requires certain manufacturers of drugs, devices, biologics, and medical supplies to report annually to the Centers for Medicare & Medicaid Services (“CMS”) information related to payments, including certain product development activities such as clinical trials, and other transfers of value made by that entity to covered recipients, currently defined to include doctors, dentists, optometrists, podiatrists, chiropractors, teaching hospitals, physician assistants, nurse practitioners, and certain other healthcare providers and requires certain manufacturers and applicable group purchasing organizations to report ownership and investment interests held by physicians or their immediate family members; 45 Table of Conte n t s • U.S. price reporting laws, which require companies to calculate and report complex pricing metrics in an accurate and timely manner to government programs.
Physician Payments Sunshine Act, or Open Payments program, created under the Affordable Care Act, which requires certain manufacturers of drugs, devices, biologics, and medical supplies to report annually to the Centers for Medicare & Medicaid Services (“CMS”) information related to payments, including certain product development activities such as clinical trials, and other transfers of value made by that entity to covered recipients, currently defined to include doctors, dentists, optometrists, podiatrists, chiropractors, teaching hospitals, physician assistants, nurse practitioners, and certain other healthcare providers and requires certain manufacturers and applicable group purchasing organizations to report ownership and investment interests held by physicians or their immediate family members; • U.S. price reporting laws, which require companies to calculate and report complex pricing metrics in an accurate and timely manner to government programs.
Allogeneic cell therapies are prone to rapid rejection by a patient’s immune system, thus limiting antitumor activity. Donor-derived or stem cell-derived allogeneic cell therapies can be armored via one or multiple genome-editing strategies with the intent of enhancing antitumor activity.
Allogeneic cell therapies are prone to rapid rejection by a patient’s immune system, thus limiting antitumor activity. Donor-derived or stem cell-derived allogeneic cell therapies can be armored via one or multiple genome-editing strategies with the intent of enhancing activity against disease.
Regulation and Procedures Governing Approval of Medicinal Products in Other Countries In order to market any product outside of the United States, we must also comply with numerous and comprehensive regulatory requirements of other countries and jurisdictions, regarding quality, safety, and efficacy, and governing, among other things, clinical trials, marketing authorization, post-authorization requirements, commercial sales, import and export, reimbursement, and distribution of products.
Regulation and Procedures Governing Approval of Medicinal Products in Other Countries In order to market any product outside of the United States, we must also comply with numerous and comprehensive regulatory requirements of other countries and jurisdictions, regarding quality, safety, and efficacy, and 43 Table of Contents governing, among other things, clinical trials, marketing authorization, post-authorization requirements, commercial sales, import and export, reimbursement, and distribution of products.
Under an approved IND, the unapproved biologic product candidate may be shipped in interstate commerce for use in an investigational clinical trial, provided that the product candidate meets certain quality and labeling requirements. The FDA has 30 calendar days after receipt of our IND application to review and decide whether we may proceed to human clinical trials.
Under a cleared IND, the unapproved biologic product candidate may be shipped in interstate commerce for use in an investigational clinical trial, provided that the product candidate meets certain quality and labeling requirements. The FDA has 30 calendar days after receipt of our IND application to review and decide whether we may proceed to human clinical trials.
The guidance documents provide additional factors that the FDA will consider at each of the above stages of development and relate to, among other things, the proper preclinical assessment of gene therapies; the chemistry, manufacturing, and control information that should be included in an IND application; the proper design of tests to measure product potency in support of a BLA application; and measures to observe delayed adverse effects in subjects who have been exposed to investigational gene therapies when the risk of such effects is high.
The guidance documents provide additional factors that the FDA will consider at each of the above stages of development and relate to, among other things, the proper preclinical assessment of gene therapies; the CMC information that should be included in an IND application; the proper design of tests to measure product potency in support of a BLA application; and measures to observe delayed adverse effects in subjects who have been exposed to investigational gene therapies when the risk of such effects is high.
Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation. Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity, including the non-patent and orphan exclusivity.
Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation. 42 Table of Contents Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity, including the non-patent and orphan exclusivity.
We are advancing a pipeline of allogeneic, or off-the-shelf, cell therapies from our chimeric antigen receptor (“CAR”) T (“CAR-T”) cell and CAR-natural killer (“CAR-NK”) cell platforms as readily available therapeutic treatments for patients. We are initially focused on advancing multiple allogeneic cell therapies for the treatment of hematologic malignancies and solid tumors.
We are advancing a pipeline of allogeneic, or off-the-shelf, cell therapies from our chimeric antigen receptor (“CAR”) -T (“CAR-T”) cell and CAR-natural killer (“CAR-NK”) cell platforms as readily available therapeutic treatments for patients. We are initially focused on advancing our allogeneic cell therapies for the treatment of hematologic malignancies.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. If the FDA approves our product, it may limit the approved indications for use of our product. The FDA may also require that contraindications, warnings, or precautions be included in the product labeling.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. If the FDA approves any one of our products, it may limit the approved indications for use of our products. The FDA may also require that contraindications, warnings, or precautions be included in the product labeling.
We developed chRDNA guides that target the exact same genomic locations that achieve equivalent on-target editing compared to the all-RNA guides. However, the chRDNA guides, in contrast to the all-RNA guides, result in minor to no detectable off-target editing. For any single genome edit, the chRDNA platform provides high specificity for use in our product candidates.
We developed chRDNA guides that target the exact same genomic locations that achieve equivalent on-target editing compared to the all-RNA guides. In contrast to the all-RNA guides, the chRDNA guides induce minor to no detectable off-target editing. For any single genome edit, the chRDNA platform provides high specificity for use in our product candidates.
The ratio of men to women is fairly balanced at each level of our organization; as an example, 49% of our director-level and above employees identify as female.
The ratio of men to women is fairly balanced at each level of our organization; as an example, 47% of our director-level and above employees identify as female.
As such, patients receiving CB-012 treatment would not require an HSC transplant to provide them with myeloid compartment cells for sustained immunity.
As such, patients receiving CB-012 treatment should not require an HSC transplant to provide them with myeloid compartment cells for sustained immunity.
Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), the FDA has 10 months in which to complete its initial review of a standard application and respond to us, and six months for a priority review of the application.
Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), the 38 Table of Contents FDA has 10 months in which to complete its initial review of a standard application and respond to us, and six months for a priority review of the application.
As we seek approval to market and distribute a new biologic in the United States, we generally must satisfactorily complete each of the following steps: • preclinical laboratory tests and formulation studies all performed in accordance with the FDA’s current Good Laboratory Practice (“cGLP”) regulations; • manufacture and testing of clinical investigational product according to cGMPs; • submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin; • approval by an independent institutional review board (“IRB”), representing each clinical trial site before each clinical trial may be initiated, or by a central IRB if appropriate; • performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the product candidate for each proposed indication, in accordance with the FDA’s current Good Clinical Practice (“cGCP”) regulations including, but not limited to, informed consent and investigator disclosure requirements; • preparation and submission to the FDA of a BLA for marketing approval of our product candidates for one or more proposed indications, including submission of detailed information on the manufacture and composition of our product candidates and proposed labeling; • review of the BLA by an FDA advisory committee, where applicable; • satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of any third-party manufacturers, at which the product, or components thereof, are produced in order to assess compliance with cGMP requirements and to ensure that the facilities, methods, and controls are adequate to preserve and ensure the product’s identity, strength, quality, and purity, and, if applicable, the FDA’s current Good Tissue Practice (“cGTP”), for the use of human cell and tissue products; • satisfactory completion of any FDA audits of the nonclinical study and clinical trial sites to ensure compliance with cGLPs and cGCPs, respectively, and the integrity of nonclinical and clinical data in support of the BLA; 34 Table of Conte n t s • payment of user fees and securing FDA approval of the BLA; and • compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”) adverse event reporting, and compliance with any post-approval studies required or requested by the FDA.
Department of Justice (“DOJ”), or other governmental entities. 34 Table of Contents As we seek approval to market and distribute a new biologic in the United States, we generally must satisfactorily complete each of the following steps: • preclinical laboratory tests and formulation studies performed in accordance with the FDA’s current Good Laboratory Practice (“cGLP”) regulations; • manufacture and testing of clinical investigational product according to cGMPs; • submission to the FDA of an investigational new drug (“IND”) application for human clinical testing, which must become effective before human clinical trials may begin; • approval by an independent institutional review board (“IRB”), representing each clinical trial site before each clinical trial may be initiated, or by a central IRB if appropriate; • performance of adequate and well-controlled human clinical trials required to establish the safety and efficacy of the product candidate for each proposed indication, in accordance with the FDA’s current Good Clinical Practice (“cGCP”) regulations including, but not limited to, informed consent and investigator disclosure requirements; • preparation and submission to the FDA of a BLA for marketing approval of our product candidates for one or more proposed indications, including submission of detailed information on the manufacture and composition of our product candidates and proposed labeling; • review of the BLA by an FDA advisory committee, where applicable; • satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of any third-party manufacturers, at which the product, or components thereof, are produced in order to assess compliance with cGMP requirements and to ensure that the facilities, methods, and controls are adequate to preserve and ensure the product’s identity, strength, quality, and purity, and, if applicable, the FDA’s current Good Tissue Practice (“cGTP”), for the use of human cell and tissue products; • satisfactory completion of any FDA audits of the nonclinical study and clinical trial sites to ensure compliance with cGLPs and cGCPs, respectively, and the integrity of nonclinical and clinical data in support of the BLA; • payment of user fees and securing FDA approval of the BLA; and • compliance with any post-approval requirements, including the potential requirement to implement Risk Evaluation and Mitigation Strategy (“REMS”), adverse event reporting, and compliance with any post-approval studies required or requested by the FDA.
The BLA must contain extensive manufacturing information and detailed information on the composition of the product candidate and proposed labeling as well as payment of a user fee.
The BLA must contain sufficient manufacturing information and detailed information on the composition of the product candidate and proposed labeling as well as payment of a user fee.
We embrace and encourage differences in age, color, disability, ethnicity, family or marital status, gender identity or expression, language, national origin, culture or customs, physical and mental ability, political affiliation, race, religion, sexual orientation, socio-economic status, veteran status, and other characteristics that make our employees unique.
We embrace and encourage 49 Table of Contents differences in age, color, disability, ethnicity, family or marital status, gender identity or expression, language, national origin, culture or customs, physical and mental ability, political affiliation, race, religion, sexual orientation, socio-economic status, veteran status, and other characteristics that make our employees unique.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available on our website free of charge as soon as reasonably practicable after we electronically file the material with, or furnish it to, the SEC.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act, are available on our website free of charge as soon as reasonably practicable after we electronically file the material with, or furnish it to, the SEC.
HDR, by contrast, is a more controlled repair system where the cell incorporates donor DNA delivered during the experiment into the DSB, resulting in the site-specific insertion of the provided DNA sequence. Figure 2. Genome editing may be initiated by generating a double-stranded break (“DSB”) in chromosomal DNA at a desired location.
HDR, by contrast, is a more controlled repair system where the cell incorporates donor DNA delivered during the experiment into the DSB, resulting in the site-specific insertion of the provided DNA sequence. Figure 2. Genome editing may be initiated by generating a DSB in chromosomal DNA at a desired location.
We believe that knocking out PD-1 will maintain the CAR-T cells in a higher antitumor state for an extended period of time, which we believe will result in greater initial tumor debulking in the patient, thereby enabling a potentially better therapeutic index relative to PD-1-expressing CAR-T cells and CAR-T cell-mediated antitumor responses.
We believe that knocking out PD-1 will maintain the CAR-T cells in a higher antitumor state for an extended period of time, which we believe will result in greater initial tumor debulking in the patient, thereby enabling a potentially better therapeutic index relative to PD-1-expressing CAR-T cells.
The advantages of our chRDNA technologies include: • Specificity: Significantly fewer off-target events are observed using our chRDNA guides versus first-generation CRISPR-Cas9 or CRISPR-Cas12a using all-RNA guides. The improved genome-editing specificity from the use of our chRDNA guides leads to a high degree of editing specificity with lower levels of off-target events.
The advantages of our chRDNA technologies include: • Specificity: Significantly fewer off-target events are observed using our chRDNA guides versus first-generation CRISPR-Cas9 or CRISPR-Cas12a systems using all-RNA guides. The improved genome-editing 3 Table of Contents specificity from the use of our chRDNA guides leads to a high degree of editing specificity with lower levels of off-target events.
A PTE cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent claiming the drug product, methods of use or methods of manufacturing may be restored.
A PTE cannot extend the remaining term of a patent 29 Table of Contents beyond a total of 14 years from the date of product approval and only one patent claiming the drug product, methods of use or methods of manufacturing may be restored.
Furthermore, the Food and Drug Omnibus Reform Act of 2022, which was enacted in December 2022, requires clinical trial sponsors to submit a diversity action plan for clinical trials, unless a waiver is granted by the FDA for reasons such as prevalence of the disease or condition, impracticality of implementing such a diversity action plan, or if such implementation would be against the interest of public health during a public health emergency.
Furthermore, the Food and Drug Omnibus Reform Act of 2022 requires clinical trial sponsors to submit a diversity action plan for clinical trials, unless a waiver is granted by the FDA for reasons such as prevalence of the disease or condition, impracticality of implementing such a diversity action plan, or if such implementation would be against the interest of public health during a public health emergency.
Although the NIH Guidelines are not mandatory unless the research in question is being conducted at or sponsored by institutions receiving National Institutes of Health (“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.
In the future, we plan to seek additional opportunities with select collaborators as appropriate to accelerate our ability to develop therapeutics to address significant unmet medical need. • Pursuing potential indications both within and outside of oncology, selectively on our own and through strategic collaborations.
We plan to seek opportunities with select collaborators as appropriate to accelerate our ability to develop therapeutics to address significant unmet medical need. • Pursuing potential indications both within and outside of oncology, selectively on our own and through strategic collaborations.
We demonstrated that iNK cells with a CBLB knockout exhibit significant enhancement in antitumor activity compared to wild -type (“WT”) iNK cells in a solid tumor model, as shown in figure 25 below, left panel. We demonstrated that membrane-bound IL-15/IL-15RA fusion (mbIL-15) engineered iNK cells demonstrate enhanced cytotoxicity against a solid tumor cell line (middle panel).
We demonstrated that iNK cells with a CBLB knockout exhibit significant enhancement in target cell killing activity compared to wild-type (“WT”) iNK cells in a solid tumor model, as shown in figure 24 below, left panel. We demonstrated that membrane-bound IL-15/IL-15RA fusion (mbIL-15) engineered iNK cells demonstrate enhanced cytotoxicity against a solid tumor cell line (middle panel).
In addition to the submission of an IND to the FDA before initiation of a clinical trial in the United States, certain human clinical trials involving recombinant or synthetic nucleic acid molecules may be subject to oversight of institutional biosafety committees (“IBCs”), as set forth in the NIH Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules (“NIH Guidelines”).
In addition to the submission of an IND to the FDA before initiation of a clinical trial in the United States, certain human clinical trials involving recombinant or synthetic nucleic acid molecules may be subject to oversight of institutional biosafety committees (“IBCs”), as set forth in the National Institutes of Health (“NIH”) Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules (“NIH Guidelines”).
Our initial focus is on allogeneic cell therapies for hematologic malignancies and solid tumors, and our chRDNA technologies offer broad potential applications longer-term. Key components of our strategy include: • Applying our chRDNA genome-editing technology to engineer allogeneic cell therapies from our CAR-T and CAR-NK platforms that have the potential for durable antitumor activity.
Our initial focus is on allogeneic cell therapies for hematologic malignancies, and our chRDNA technologies offer broad potential applications longer-term. Key components of our strategy include: • Applying our chRDNA genome-editing technology to engineer allogeneic cell therapies from our CAR-T and CAR-NK platforms that have the potential for durable activity against disease.
Our CaMMouflage phase 1 clinical trial is designed to evaluate CB-011 in r/r MM patients. The study consists of two parts: Part A is a dose escalation with a 3 + 3 design, with sequential, increasing single doses. Part B is an expansion portion where patients will receive CB-011 at the RP2D, determined in Part A.
Our CaMMouflage phase 1 clinical trial is designed to evaluate CB-011 in r/r MM patients. The study consists of two parts: Part A is a dose escalation with a 3 + 3 design, with sequential, increasing single doses. Part B is an expansion portion where CB-011 will be evaluated at the dose levels determined in Part A.
As shown in figure 21 below, the CLL-1-specific CB-012 CAR-T cells statistically significantly increased overall 22 Table of Conte n t s survival in the tumor-bearing mice compared to mice that received either control CAR-T cells expressing PD-1 or the vehicle control. The genome edits we use to armor CB-012 may enhance persistence and yield greater antitumor activity. Figure 21.
As shown in figure 22 below, the CLL-1-specific CB-012 CAR-T cells statistically significantly increased overall survival in the tumor-bearing mice compared to mice that received either control CAR-T cells expressing PD-1 or the vehicle control. The genome edits we use to armor CB-012 may enhance persistence and yield greater antitumor activity. 23 Table of Contents Figure 22.
RMAT-designated 39 Table of Conte n t s products that receive accelerated approval may, as appropriate, fulfill their post-approval requirements through the submission of clinical evidence, clinical trials, patient registries, or other sources of real-world evidence such as electronic health records, through the collection of larger confirmatory data sets as agreed with the FDA, or via post-approval monitoring of all patients treated with such therapy prior to approval of the therapy.
RMAT-designated products that receive accelerated approval may, as appropriate, fulfill their post-approval requirements through the submission of clinical evidence, clinical trials, patient registries, or other sources of real-world evidence such as electronic health records, through the collection of larger confirmatory data sets as agreed with the FDA, or via post-approval monitoring of all patients treated with such therapy prior to approval of the therapy.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, motivating, and integrating our existing and future employees.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, motivating, and engaging our existing and future employees.
See figure 4 below. • Versatility: Our chRDNA guides are compatible with and offer utility across multiple cell types. • Simplicity: Our chRDNA guides are manufactured via chemical synthesis using readily available technologies. Figure 3. chRDNA guides significantly improve genome-editing specificity relative to all-RNA guides. 4 Table of Conte n t s Figure 4.
See figure 4 below. • Versatility: Our chRDNA guides are compatible with, and offer utility across, multiple cell types. • Simplicity: Our chRDNA guides are manufactured via chemical synthesis using readily available technologies. Figure 3. chRDNA guides significantly improve genome-editing specificity relative to all-RNA guides. 4 Table of Contents Figure 4.
Allogeneic approaches utilize cells from healthy donors or stem cells, resulting in a streamlined manufacturing process and enhanced scalability relative to autologous cell therapies where each patient requires their own bespoke batch of cell therapy. • Healthy donor cells engineered with genome-editing strategies enhanced antitumor activity.
Allogeneic approaches utilize cells from healthy donors or stem cells, resulting in a streamlined manufacturing process and enhanced scalability relative to autologous cell therapies where each patient requires their own batch of cell therapy. • Healthy donor cells engineered with genome-editing strategies for enhanced activity against disease.
We embrace differences in experience and background, and we welcome a diversity of opinions when making decisions. We would not be who we are today without the diversity of our team. As of March 1, 2023, 53% of our employees identify as female.
We embrace differences in experience and background, and we welcome a diversity of opinions when making decisions. We would not be who we are today without the diversity of our team. As of March 1, 2024, 51% of our employees identify as female.
Other companies developing CRISPR-based technologies include, among others, Arbor Biotechnologies, Beam Therapeutics Inc., CRISPR Therapeutics AG, Editas Medicine, Inc., Intellia Therapeutics, Inc., Metagenomi Technologies, LLC, and Scribe Therapeutics, Inc. Companies developing other genome-editing technologies include, among others, bluebird bio, Inc., Allogene Therapeutics, Inc., Cellectis S.A., Precision BioSciences, Inc., and Sangamo Therapeutics, Inc.
Other companies developing CRISPR-based technologies include, among others, Arbor Biotechnologies, Beam Therapeutics Inc., CRISPR Therapeutics AG, Editas Medicine, Inc., Intellia Therapeutics, Inc., MammothBiosciences, Inc., Metagenomi Technologies,Inc., and Scribe Therapeutics, Inc. Companies developing other genome-editing technologies include, among others,Allogene Therapeutics, Inc., Cellectis S.A., Precision BioSciences, Inc., and Sangamo Therapeutics, Inc.
Recently, many European countries have increased the level of discounting required in relation to the pricing of biological products and these efforts could continue as countries attempt to manage healthcare expenditures. 44 Table of Conte n t s Healthcare Law and Regulation Healthcare providers and third-party payors play a primary role in the recommendation and prescription of pharmaceutical products that are granted marketing approval.
Recently, many European countries have increased the level of discounting required in relation to the pricing of biological products and these efforts could continue as countries attempt to manage healthcare expenditures. Healthcare Law and Regulation Healthcare providers and third-party payors play a primary role in the recommendation and prescription of pharmaceutical products that are granted marketing approval.
CB-012 has both checkpoint disruption and immune cloaking armoring strategies. 1. TRAC knockout: We knock out the TRAC gene to eliminate expression of the TCR from the surface of the CAR-T cells. The removal of TCR expression is intended to prevent GvHD in patients. 2.
CB-012 has both checkpoint disruption and immune cloaking armoring strategies, designed to potentially improve antitumor activity. 1. TRAC knockout: We knock out the TRAC gene to eliminate expression of the TCR from the surface of the CAR-T cells. The removal of TCR expression is intended to prevent GvHD in patients. 2.
We are obligated to reimburse UC for its prosecution and maintenance costs of the CVC IP. The CVC IP is currently involved in administrative proceedings at the United States Patent and Trademark Office (“USPTO”) and at the European Patent Office (“EPO”).
We are obligated to reimburse UC for its prosecution and maintenance costs of the CVC IP. The CVC IP is currently involved in administrative proceedings at the U.S. Patent and Trademark Office (“USPTO”) and at the European Patent Office (“EPO”).
In the United States, patent term may be lengthened by a PTA, which compensates a patentee for administrative delays by the United States Patent and Trademark Office in granting a patent or may be shortened if a patent is terminally disclaimed over an earlier-filed patent.
In the United States, patent term may be lengthened by a PTA, which compensates a patentee for administrative delays by the USPTO in granting a patent or may be shortened if a patent is terminally disclaimed over an earlier-filed patent.
If MSKCC materially breaches the MSKCC Agreement in certain circumstances (for example, granting a third party a license in our field), then during the time of such uncured material breach, MSKCC will not be entitled to receive any success payments or any change of control payment. 27 Table of Conte n t s ProMab Biotechnologies, Inc.
If MSKCC materially breaches the MSKCC Agreement in certain circumstances (for example, granting a third party a license in our field), then during the time of such uncured material breach, MSKCC will not be entitled to receive any success payments or any change of control payment. ProMab Biotechnologies, Inc.
Even if a product is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full BLA for such 42 Table of Conte n t s product containing our own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity, and potency of the product.
Even if a product is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full BLA for such product containing our own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity, and potency of the product.
More recently, CRISPR genome-editing technology has been used for the generation of ex vivo immune cell therapeutics that are in preclinical research or clinical development. The canonical CRISPR system utilizes Cas9, an enzyme that can cut genomic DNA. Cas9 is targeted to a specific site in a genome by a guide ribonucleic acid (“RNA”).
More recently, CRISPR genome-editing technology has been used for the generation of ex vivo immune cell therapeutics. The canonical CRISPR system utilizes Cas9, an enzyme that can cut genomic DNA. Cas9 is targeted to a specific site in a genome by a guide ribonucleic acid (“RNA”).
We also demonstrated that knockout of the B2M gene and insertion of the B2M–HLA-E fusion protein reduced both CD8 + T cell-mediated killing and NK cell self-killing (fratricide), as shown in figure 25 below, right panel. 25 Table of Conte n t s Figure 25. We are developing multiple armoring strategies for our CAR-NK cell platform.
We also demonstrated that knockout of the B2M gene and insertion of the B2M–HLA-E fusion protein reduced both CD8 + T cell-mediated killing and NK cell self-killing (fratricide), as shown in figure 24 below, right panel. Figure 24. We are developing multiple armoring strategies for our CAR-NK cell platform.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe success of our product candidates will depend on several factors, including the following: • sufficiency of our financial and other resources; • acceptance of our chRDNA genome-editing technology; • ability to develop and deploy armoring technologies so that our product candidates have a competitive edge; • completion of preclinical studies; • clearance of IND applications to initiate clinical trials; • successful enrollment in, and completion of, our clinical trials; • data from our clinical trials that support an acceptable risk-benefit profile of our product candidates for our intended patient populations and indications and demonstrate safety and efficacy; • establishment of agreements with CMOs for clinical and commercial supplies and scaling up of manufacturing processes and capabilities to support our clinical trials; • successful development of our internal process development and transfer to larger-scale facilities; • receipt of regulatory and marketing approvals from applicable regulatory authorities as well as receipt of regulatory exclusivity for our product candidates; • establishment, maintenance, enforcement, and defense of patent and trade secret protection and other intellectual property rights; • not infringing, misappropriating, or otherwise violating third-party intellectual property rights; • entry into collaborations to further the development of our product candidates or for the development of new product candidates; • establishment of sales, marketing, and distribution capabilities for commercialization of our product candidates if and when approved, whether by us or in collaboration with third parties; • identification and establishment of a stable supply chain that permits us to procure the necessary materials for our product candidates; • maintenance of a continued acceptable safety profile of products post-approval; • acceptance of product candidates, if and when approved, by patients, the medical community, and third-party payors; • effective competition with other therapies and treatment options; • establishment and maintenance of healthcare coverage and adequate reimbursement; and • expanding indications and patient populations for our products post-approval. 55 Table of Conte n t s Our product candidates are cell therapies generated by our novel CRISPR chRDNA genome-editing technologies, which make it difficult to predict the time and cost of developing these product candidates and obtaining regulatory approval.
Biggest changeThe success of our product candidates will depend on several factors, including the following: • sufficiency of our financial and other resources; • acceptance of our chRDNA genome-editing technology; • ability to develop and deploy armoring technologies so that our product candidates have a competitive edge; • successful completion of preclinical studies; • clearance of IND applications to initiate clinical trials; • successful enrollment in, and completion of, our clinical trials; • data from our clinical trials that support an acceptable risk-benefit profile of our product candidates for our intended patient populations and indications and demonstrate safety and efficacy; • establishment of agreements with CMOs for clinical and commercial supplies and scaling up of manufacturing processes and capabilities to support our clinical trials; • successful development of our internal process development and transfer to larger-scale facilities; • receipt of regulatory and marketing approvals from applicable regulatory authorities as well as receipt of regulatory exclusivity for our product candidates; • establishment, maintenance, enforcement, and defense of patent and trade secret protection and other intellectual property rights; • not infringing, misappropriating, or otherwise violating third-party intellectual property rights; • entry into collaborations to further the development of our product candidates or for the development of new product candidates; • establishment of sales, marketing, and distribution capabilities for commercialization of our product candidates if and when approved, whether by us or in collaboration with third parties; • identification and establishment of a stable supply chain that permits us to procure the necessary materials for our product candidates; • legal and regulatory compliance by third parties that provide services to us or on our behalf, including but not limited to CMOs, suppliers, and clinical research organizations (“CROs”), some of which may be subject to regulatory investigations; 56 Table of Contents • the ability of CROs and clinical trial sites to conduct our clinical trials; • maintenance of a continued acceptable safety profile of products post-approval; • acceptance of product candidates, if and when approved, by patients, the medical community, and third-party payors; • effective competition with other therapies and treatment options, including but not limited to autologous CAR-T cell therapies, small molecules, and antibody treatment; • establishment and maintenance of healthcare coverage and adequate reimbursement; and • expanding indications and patient populations for our products post-approval.
If we are unable to advance our product candidates through clinical trials, obtain regulatory approval, and ultimately commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.
If we are unable to advance our product candidates through clinical trials, obtain regulatory approval, and ultimately commercialize our product candidates, or we experience significant delays in doing so, our business will be materially harmed.
In the meantime, the Medicines and Healthcare products Regulatory Agency (the “MHRA”), the medicines and medical devices regulator in the United Kingdom, has published detailed guidance for industry and organizations to follow as of January 1, 2021, which is updated as necessary.
In the meantime, the Medicines and Healthcare products Regulatory Agency (“MHRA”), the medicines and medical devices regulator in the United Kingdom, has published detailed guidance for industry and organizations to follow as of January 1, 2021, which is updated as necessary.
We are required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), to furnish a report by management on, among other things, the effectiveness of our internal controls over financial reporting. This assessment includes disclosure of any material weaknesses identified by our management in our internal controls over financial reporting.
We are required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”), to furnish a report by management on, among other things, the effectiveness of our internal controls over financial reporting. This assessment includes disclosure of any material weaknesses identified by our management in our internal controls over financial reporting.
Under the Tax Cuts and Jobs Act of 2017 (“TCJA”), as modified by the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), our federal NOLs incurred in taxable years beginning after December 31, 2017 may be carried forward indefinitely.
Under the Tax Cuts and Jobs Act of 2017 (“TCJA”), as modified by the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), our federal NOLs incurred in taxable years beginning after December 31, 2017 may be carried forward indefinitely.
In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Tax Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percentage point change, by value, in its equity ownership by certain stockholders over a rolling three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited.
In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (“Tax Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percentage point change, by value, in its equity ownership by certain stockholders over a rolling three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited.
In addition to the business disruptions caused by public health crises or potential cybersecurity attacks, our operations, and those of our suppliers, CMOs, CROs, and clinical trial sites, could be subject to disruptions, including those caused by earthquakes, power shortages or outages, telecommunications failures, water shortages or outages, floods, hurricanes, typhoons, fires, extreme weather conditions, epidemics and pandemics, and other natural or man-made disasters or business interruptions.
In addition to the business disruptions caused by public health crises or potential cybersecurity attacks, our operations, and those of our CMOs, suppliers, CROs, and clinical trial sites, could be subject to disruptions, including those caused by earthquakes, power shortages or outages, telecommunications failures, water shortages or outages, floods, hurricanes, typhoons, fires, extreme weather conditions, epidemics and pandemics, and other natural or man-made disasters or business interruptions.
Our ability to manufacture our product candidates could be disrupted if our operations or those of our suppliers, CMOs, CROs, or clinical trial sites are affected by a natural or man-made disaster or other business interruption. Our corporate headquarters are located in California near major earthquake faults and fire zones.
Our ability to manufacture our product candidates could be disrupted if our operations or those of our CMOs, suppliers, CROs, or clinical trial sites are affected by a natural or man-made disaster or other business interruption. Our corporate headquarters are located in California near major earthquake faults and fire zones.
These exemptions include not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; reduced disclosure obligations regarding executive compensation; and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
These exemptions include not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (“PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; reduced disclosure obligations regarding executive compensation; and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Although we may enter into non-disclosure or confidentiality agreements with parties who may have access to patentable aspects of our research and development, such as our employees, collaborators, CMOs, consultants, CROs, clinical trial site investigators and personnel, and other third parties, any one of these parties may breach their confidentiality agreements and disclose innovations before we can file a patent application, thereby jeopardizing our ability to seek patent protection.
Although we may enter into non-disclosure or confidentiality agreements with parties who may have access to patentable aspects of our research and development, such as our employees, collaborators, CMOs, suppliers, consultants, CROs, clinical trial site investigators and personnel, and other third parties, any one of these parties may breach their confidentiality agreements and disclose innovations before we can file a patent application, thereby jeopardizing our ability to seek patent protection.
The failure of our product candidates in clinical trials, or the failure of other companies’ allogeneic anti-CD19 CAR-T and allogeneic anti-BCMA CAR-T cell therapies, including for reasons due to safety, efficacy, or the durability of response, may impede our ability to develop not only CB-010 and CB-011 but our other CAR-T and CAR-NK product candidates as well, and may significantly influence physicians’ and regulatory authorities’ opinions with regard to the viability of our entire pipeline of allogeneic cell therapies.
The failure of our product candidates in clinical trials, or the failure of other companies’ allogeneic anti-CD19 CAR-T and allogeneic anti-BCMA CAR-T cell therapies, including for reasons due to safety, efficacy, or the durability of response, may impede our ability to develop not only CB-010, CB-011, and CB-012 but our other CAR-T and CAR-NK product candidates as well, and may significantly influence physicians’ and regulatory authorities’ opinions with regard to the viability of our entire pipeline of allogeneic cell therapies.
We may also experience delays in developing robust, reproducible, and scalable manufacturing processes and transferring those processes to CMOs, which may prevent us from completing our clinical trials or commercializing our products on a timely or profitable basis, if at all. Currently, we have only manufactured our CB-010 and CB-011 product candidates for clinical trials.
We may also experience delays in developing robust, reproducible, and scalable manufacturing processes and transferring those processes to CMOs, which may prevent us from completing our clinical trials or commercializing our products on a timely or profitable basis, if at all. Currently, we have only manufactured our CB-010, CB-011, and CB-012 product candidates for clinical trials.
A court of competent jurisdiction could hold that these third-party patents are valid, enforceable, and infringed, which could materially and adversely affect our ability to commercialize any product candidates we may develop, including CB-010, CB-011, CB-012, and CB-020, as well as any other product candidates or technologies covered by the asserted third-party patents.
A court of competent jurisdiction could hold that these third-party patents are valid, enforceable, and infringed, which could materially and adversely affect our ability to commercialize any product candidates we may develop, including CB-010, CB-011, and CB-012, as well as any other product candidates or technologies covered by the asserted third-party patents.
Additional factors will influence whether our product candidates are accepted in the market, including: • the clinical indications for which our product candidates are approved; • physicians, hospitals, cancer treatment centers, and patients considering our product candidates as safe and effective treatments; • the potential and perceived advantages of our product candidates over alternative treatments; • the prevalence, identification, or severity of any side effects; • product labeling or product insert requirements of the FDA or other regulatory authorities, including limitations or warnings contained in the product labeling; • the timing of market introduction of our product candidates as well as competitive products; • the cost of treatment of our product candidates in relation to alternative treatments; • the availability of coverage and adequate reimbursement by third-party payors and government authorities; • the willingness of patients to pay out-of-pocket for our product candidates in the absence of coverage; • relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; and • the effectiveness of our sales and marketing efforts.
Additional factors will influence whether our product candidates are accepted in the market, including: the clinical indications for which our product candidates are approved; • physicians, hospitals, cancer treatment centers, and patients considering our product candidates as safe and effective treatments; • the potential and perceived advantages of our product candidates over alternative treatments; • the prevalence, identification, or severity of any side effects; • product labeling or product insert requirements of the FDA or other regulatory authorities, including limitations or warnings contained in the product labeling; • the timing of market introduction of our product candidates as well as competitive products; • the cost of treatment of our product candidates in relation to alternative treatments; • the availability of coverage and adequate reimbursement by third-party payors and government authorities; • the willingness of patients to pay out-of-pocket for our product candidates in the absence of coverage; • relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; • the effectiveness of our sales and marketing efforts; and • potential product liability claims.
To the extent that our claims relate to naturally occurring antibodies or proteins, these may be deemed to be directed to natural products or to lack an inventive concept above and beyond an isolated natural product, and a court may decide the claims are invalid under Myriad. Depending on future actions by the U.S.
To the extent that our claims relate to naturally occurring antibodies or proteins, these may be deemed to be directed to natural products or to lack an inventive concept above and beyond an isolated natural product, and a court may decide the claims are invalid under the Myriad decision. Depending on future actions by the U.S.
We currently rely on five different CMOs to supply materials to an additional CMO who manufactures the necessary CB-010 and CB-011 materials for our phase 1 clinical trials. We anticipate that we may need to engage other suppliers and CMOs for our clinical trials with our CB-012 and CB-020 product candidates.
We currently rely on five different CMOs to supply materials to an additional CMO who manufactures the necessary CB-010, CB-011, and CB-012 product candidates for our phase 1 clinical trials. We anticipate that we may need to engage other suppliers and CMOs for our clinical trials with our product candidates.
Pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if any product candidates we may develop obtain marketing approval. Because our product candidates represent new approaches to the treatment of cancer, we cannot accurately estimate the potential revenue from our product candidates.
Pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if any product candidates we may develop obtain marketing approval. Because our current product candidates represent new approaches to the treatment of cancer, we cannot accurately estimate the potential revenue from our product candidates.
If (i) we are required to extend the duration of any clinical trials or to conduct additional preclinical studies or clinical trials or other testing of our product candidates beyond those that we currently contemplate; (ii) we are unable to successfully complete preclinical studies or clinical trials of our product candidates or other testing; (iii) the results of these trials, studies, or tests are negative or produce inconclusive results; (iv) there are safety concerns; or (v) we determine that the observed safety or efficacy profile would not be competitive in the marketplace, we may: • abandon the development of one or more product candidates; • incur unplanned costs; • be delayed in obtaining marketing approval for our product candidates or not obtain marketing approval at all; • obtain marketing approval in some jurisdictions and not in others; • obtain marketing approval for indications or patient populations that are not as broad as we intended or designed; • obtain marketing approval with labeling that includes significant use restrictions or safety warnings, including black box warnings; • be subject to additional post-marketing requirements; or • have regulatory agencies remove the product from the market or we voluntarily withdraw the product from the market after obtaining marketing approval.
If (i) we are required to extend the duration of any clinical trials or to conduct additional preclinical studies or clinical trials or other testing of our product candidates beyond those that we currently contemplate; (ii) we are unable to successfully complete preclinical studies or clinical trials of our product candidates or other testing; (iii) the results of these 61 Table of Contents trials, studies, or tests are negative or produce inconclusive results; (iv) there are safety concerns; or (v) we determine that the observed safety or efficacy profile would not be competitive in the marketplace, we may: • abandon the development of one or more product candidates; • incur unplanned costs; • be delayed in obtaining marketing approval for our product candidates or not obtain marketing approval at all; • obtain marketing approval in some jurisdictions and not in others; • obtain marketing approval for indications or patient populations that are not as broad as we intended or designed; • obtain marketing approval with labeling that includes significant use restrictions or safety warnings, including black box warnings; • be subject to additional post-marketing requirements; or • have regulatory agencies remove the product from the market or we voluntarily withdraw the product from the market after obtaining marketing approval.
Our product candidate development programs and the potential commercialization of our product candidates will require substantial additional cash to fund expenses. To date, we have not partnered with a third party with respect to any of our product candidates.
Our product candidate development programs and the potential commercialization of our product candidates will require substantial additional cash to fund expenses. To date, we have not partnered with a third party with respect to commercializing of any of our product candidates.
Specifically, the Broad Institute Inc. and Massachusetts Institute of Technology and, in some instances, the President and Fellows of Harvard College (individually and collectively, the “Broad”), owns a patent family (having an earliest filing date of December 12, 2012) that includes issued patents in the United States and Europe that claim certain aspects of CRISPR-Cas9 systems to edit DNA in eukaryotic (i.e., plant and animal) cells, including human cells.
Specifically, the Broad Institute Inc. and Massachusetts Institute of Technology and, in some instances, the President and Fellows of Harvard College (individually and collectively, “Broad”), owns a patent family (having an earliest filing date of December 12, 2012) that includes granted patents in the United States and Europe that claim certain aspects of CRISPR-Cas9 systems to edit DNA in eukaryotic (i.e., plant and animal) cells, including human cells.
Even if we are able to enter into a collaboration, the following are some of the risks associated with doing so: • collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations and may not devote sufficient resources to the development, manufacturing, marketing, or sale of collaboration products; • collaborators may not pursue development and commercialization of any product candidates we may develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require further development of a product candidate for clinical testing; • collaborators may adopt alternative technologies, which could decrease the marketability of our product candidates and genome-editing technologies; • collaborators may independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours, that may result in the withdrawal of the collaborator support for our collaboration product candidates; • collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of our product candidates; • collaborators may not properly obtain, maintain, enforce, or defend our intellectual property if we grant such rights or may use our intellectual property in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or expose us to potential litigation; • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change in control; 89 Table of Conte n t s • disputes may arise between our collaborator and us that may cause the collaborator to act in a manner adverse to us and could result in the delay or termination of the research, development, or commercialization of our product candidates or that result in costly litigation or arbitration that diverts our management’s attention and resources; • collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner, if at all.
Even if we are able to enter into a collaboration, the following are some of the risks associated with doing so: • collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations and may not devote sufficient resources to the development, manufacturing, marketing, or sale of collaboration products; • collaborators may not pursue development and commercialization of any product candidates we may develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require further development of a product candidate for clinical testing; • collaborators may adopt alternative technologies, which could decrease the marketability of our product candidates and genome-editing technologies; • collaborators may independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours, that may result in the withdrawal of the collaborator support for our collaboration product candidates; • collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of our product candidates; • collaborators may not properly obtain, maintain, enforce, or defend our intellectual property if we grant such rights or may use our intellectual property in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or expose us to potential litigation; • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change in control; 90 Table of Contents • disputes may arise between our collaborator and us that may cause the collaborator to act in a manner adverse to us and could result in the delay or termination of the research, development, or commercialization of our product candidates or that result in costly litigation or arbitration that diverts our management’s attention and resources; • collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner, if at all.
We expect to continue to incur significant expenses and net losses over the next several years and for the foreseeable future as we seek to advance product candidates through preclinical and clinical development, expand our research and development activities, develop new product candidates, complete preclinical studies and clinical trials, seek regulatory approval and, if we receive approval from the FDA or foreign regulatory authorities, commercialize our products.
We expect to continue to incur significant expenses and operating losses over the next several years and for the foreseeable future as we seek to advance product candidates through preclinical and clinical development, expand our research and development activities, develop new product candidates, complete preclinical studies and clinical trials, seek regulatory approval and, if we receive approval from the FDA or foreign regulatory authorities, commercialize our products.
Nevertheless, third parties may allege that the act of filing our BLA or conducting clinical trials is outside of the safe harbor provision for activities reasonably related to the development and submission of information to the FDA for regulatory approval, and third parties may, upon our regulatory filing, assert infringement claims based on existing patents or patents that may be issued prior to our BLA filing, regardless of the merit of such claims.
Nevertheless, third parties may allege that the act of filing our BLA or conducting clinical trials is outside of the safe harbor provision for activities reasonably related to the development and submission of information to the FDA for regulatory approval, and third parties may, upon our regulatory filing, assert infringement claims based on existing patents or patents that may be granted prior to our BLA filing, regardless of the merit of such claims.
Disputes may arise with the third parties from whom we license or take assignment of our intellectual property rights from for a variety of reasons, including: • the scope of rights granted under the license or assignment agreement and other interpretation-related issues; • the extent to which our technology and processes infringe on, or derive from, intellectual property of the licensor that is not subject to the license or assignment agreement and is not covered by a covenant not to sue; • the sublicensing of rights and the obligations to our licensors associated with sublicensing; • our diligence obligations under license or assignment agreements and what activities satisfy those diligence obligations; and • whether payments are due and when.
Disputes may arise with the third parties from whom we license or take assignment of our intellectual property rights from for a variety of reasons, including: • the scope of rights granted under the license or assignment agreement and other interpretation-related issues; 82 Table of Contents • the extent to which our technology and processes infringe on, or derive from, intellectual property of the licensor that is not subject to the license or assignment agreement and is not covered by a covenant not to sue; • the sublicensing of rights and the obligations to our licensors associated with sublicensing; • our diligence obligations under license or assignment agreements and what activities satisfy those diligence obligations; and • whether payments are due and when.
We have experienced prior ownership changes in 2014, 2016, and most recently in July 2021 upon our IPO. We do not expect any permanent limitations on our tax attributes. We have recorded a full valuation allowance for deferred tax assets, including NOLs and tax credits as of December 31, 2022.
We have experienced prior ownership changes in 2014, 2016, and most recently in July 2021 upon our IPO. We do not expect any permanent limitations on our tax attributes. We have recorded a full valuation allowance for deferred tax assets, including NOLs and tax credits as of December 31, 2023.
Our ability to generate product revenue, which we do not expect will occur for many years, if ever, will be a result of the successful development and eventual commercialization of our product candidates, which may never occur. Our product candidates may have adverse side effects or fail to demonstrate safety and efficacy.
Our ability to generate product revenue, which we do not expect will occur for many years, if ever, will be a result of the successful development and eventual commercialization of our product candidates, which may never occur. Our product candidates may have expected or unexpected adverse side effects or fail to demonstrate safety and efficacy.
Even as our patent applications, or those of our licensors, currently or in the future, issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us, dissuade companies from collaborating with us, or otherwise provide us with any competitive advantage.
Even as our patent applications, or those of our licensors, currently or in the future, grant as patents, they may not grant in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us, dissuade companies from collaborating with us, or otherwise provide us with any competitive advantage.
We may experience disruptions related to the COVID-19 pandemic or other pandemics or public health crises that could severely impact our business, preclinical studies, clinical trials, and commercialization activities, including: • halting or suspending enrollment in our clinical trials; • delays or difficulties in enrolling and retaining patients in our clinical trials; • interruption of key clinical trial activities, such as clinical trial site data monitoring and efficacy, safety and translational data collection, processing and analyses, due to limitations on travel imposed or recommended by federal, state, or local governments, employers and others or interruption of clinical trial subject visits, which may impact the collection and integrity of subject data and clinical study endpoints; • requirements to change the ways in which our preclinical studies and clinical trials are conducted due to governmental regulations as part of a response to the COVID-19 pandemic or other pandemics or other public health crises, which may result in unexpected costs, delays, or discontinuation of our preclinical studies and clinical trials altogether; • increased adverse events and deaths in our clinical trials due to COVID-19-related or other pandemic-related infections, which may result in increased complications due to immunosuppression from our lymphodepletion regimen; • increased rates of patients withdrawing from our clinical trials following enrollment as a result of contracting COVID-19 or being forced to quarantine due to other public health crises; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; • interruption or delays in the operations of the FDA and comparable foreign regulatory agencies and necessary interactions with such regulatory agencies due to limitations in employee resources, limitations on travel, forced furlough of government employees, or diversion of resources, which would impact review and approval timelines; • interruption of, or delays in receiving, supplies of components for our product candidates from our suppliers, including the supply of healthy donor cells, and delays or suspension in manufacturing by our CMOs due to staffing shortages, production slowdowns or stoppages, and disruptions in delivery systems, or due to prioritization of production for COVID-19-specific (or other pandemic-related) therapies or vaccines; • limitations on employee resources that would otherwise be focused on advancing our business, including because of sickness of employees or their families, including our executive officers and other key employees, the desire of employees to avoid contact with large groups of people, an increased reliance on working from home, or mass transit disruptions; and • significant disruptions and volatility in the financial markets.
We may experience disruptions related to pandemics or other public health crises that could severely impact our business, preclinical studies, clinical trials, and commercialization activities, including: • halting or suspending enrollment in our clinical trials; • delays or difficulties in enrolling and retaining patients in our clinical trials; • interruption of key clinical trial activities, such as clinical trial site data monitoring and efficacy, safety and translational data collection, and processing and analyses, due to limitations on travel imposed or recommended by federal, state, or local governments, employers and others or interruption of clinical trial subject visits, which may impact the collection and integrity of subject data and clinical study endpoints; • requirements to change the ways in which our preclinical studies and clinical trials are conducted due to governmental regulations as part of a response to pandemics or other public health crises, which may result in unexpected costs, delays, or discontinuation of our preclinical studies and clinical trials altogether; • increased adverse events and deaths in our clinical trials due to pandemic-related infections; • increased rates of patients withdrawing from our clinical trials following enrollment as a result of contracting certain diseases or being forced to quarantine due to other public health crises; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; • interruption or delays in the operations of the FDA and comparable foreign regulatory agencies and necessary interactions with such regulatory agencies due to limitations in employee resources, limitations on travel, forced furlough of government employees, or diversion of resources, which would impact review and approval timelines; • interruption of, or delays in receiving, supplies of components for our product candidates from our suppliers, including the supply of healthy donor cells, and delays or suspension in manufacturing by our CMOs due to staffing shortages, production slowdowns or stoppages, and disruptions in delivery systems, or due to prioritization of production for pandemic-related therapies or vaccines; • limitations on employee resources that would otherwise be focused on advancing our business, including because of sickness of employees or their families, including our executive officers and other key employees, the desire of employees to avoid contact with large groups of people, an increased reliance on working from home, or mass transit disruptions; and • significant disruptions and volatility in the financial markets.
The GDPR also permits data protection authorities to require destruction of improperly gathered or used personal information or impose substantial fines for violations of the GDPR, which can be up to 4% of global revenues or €20 million, whichever is greater, and it also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
The GDPR also permits 75 Table of Contents data protection authorities to require destruction of improperly gathered or used personal information or impose substantial fines for violations of the GDPR, which can be up to 4% of global revenues or €20 million, whichever is greater, and it also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
Numerous third-party U.S. and foreign issued patents and pending patent applications exist in the fields of CRISPR genome editing as well as the field of immuno-oncology, including those relating to CAR constructs and CAR-T and CAR-NK cell therapy compositions and methods of use.
Numerous third-party U.S. and foreign granted patents and pending patent applications exist in the fields of CRISPR genome editing as well as the field of immuno-oncology, including those relating to CAR constructs and CAR-T and CAR-NK cell therapy compositions and methods of use.
Moreover, if disputes over intellectual property that we have licensed, or taken assignment of, prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the product candidates or technologies covered by such patents, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.
Moreover, if disputes over intellectual property that we have licensed, or taken assignment of, prevent or impair our ability 81 Table of Contents to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the product candidates or technologies covered by such patents, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.
The USPTO requires compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent application process. The ultimate outcome of our pending patent applications is uncertain and the coverage claimed in a patent application can be significantly reduced before the patent is issued.
The USPTO requires compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent application process. The ultimate outcome of our pending patent applications is uncertain and the coverage claimed in a patent application can be significantly reduced before the patent is granted.
As industry, government, academia, and other biotechnology and pharmaceutical research expands and more patents are issued, the risk increases that our genome-editing technologies or product candidates may give rise to claims of infringement of the patent rights of others.
As industry, government, academia, and other biotechnology and pharmaceutical research expands and more patents are granted, the risk increases that our genome-editing technologies or product candidates may give rise to claims of infringement of the patent rights of others.
Patent No. 10,266,850) included in the CVC IP and 12 issued U.S. patents owned jointly by the Broad to determine which set of inventors invented first and, thus, was entitled to patents on the invention in the United States.
Patent No. 10,266,850) included in the CVC IP and 12 granted U.S. patents owned jointly by the Broad to determine which set of inventors invented first and, thus, was entitled to patents on the invention in the United States.
Risks Relating to Our Intellectual Property If we do not possess the necessary intellectual property rights covering our CRISPR chRDNA genome-editing technologies and our product candidates, we may not be able to block competitors or to compete effectively in the market.
Risks Relating to Our Intellectual Property If we do not possess the necessary intellectual property rights covering our CRISPR chRDNA genome-editing technologies, our product candidates, and other proprietary technologies, we may not be able to block competitors or to compete effectively in the market.
If the FDA or a foreign regulatory authority inspects these third-party facilities for compliance with regulations for the manufacture and testing of materials or product candidates and, if these facilities fail inspection and cannot adequately correct deficiencies, we may need to find alternative CMOs, which would significantly impact our ability to develop and obtain regulatory approval for our product candidates, and if approved, to market our products.
If the FDA or a foreign regulatory authority inspects these third-party facilities for compliance with regulations for the manufacture and testing of materials or product candidates and, if these 86 Table of Contents facilities fail inspection and cannot adequately correct deficiencies, we may need to find alternative CMOs, which would significantly impact our ability to develop and obtain regulatory approval for our product candidates, and if approved, to market our products.
We expect the innovative nature of our product candidates to create further challenges in obtaining regulatory approval. For example, the FDA has limited experience with the development of allogeneic T cell and NK cell therapies for cancer.
We expect the innovative nature of our product candidates to create further challenges in obtaining regulatory approval. For example, the FDA has limited experience with the development of allogeneic T cell and NK cell therapies for cancer and other diseases.
Events that may prevent successful or timely completion of clinical development include: • the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials; • delays or failure to obtain regulatory clearance to initiate our clinical trials, as well as delays or failures to obtain any necessary approvals by the clinical sites; • delays, suspension, or termination of our clinical trials by the clinical sites; • modification of clinical trial protocols; • delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites, as well as possible future breaches of such agreements; • failure to manufacture sufficient quantities of our product candidates for use in our clinical trials; • failure by third-party suppliers, CMOs, CROs, and clinical trial sites to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • imposition of a temporary or permanent clinical hold by us, IRBs for the institutions at which such trials are being conducted, or by the FDA or other regulatory authorities for safety or other reasons, such as a result of a new safety finding in a clinical trial on a similar product by one of our competitors, that presents unreasonable risk to clinical trial participants; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; • changes in the standard of care on which we developed our clinical development plan, which may require new or additional trials; • the cost of clinical trials of our product candidates being greater than we anticipated; • insufficient funding to continue clinical trials with our product candidates; • the emergence of unforeseen safety issues or undesirable side effects; • clinical trials of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon development of our product candidates; • inability to establish clinical trial endpoints that applicable regulatory authorities consider clinically meaningful, or, if we seek accelerated approval, that applicable regulatory authorities consider likely to predict clinical benefit; 60 Table of Conte n t s • regulators withdrawing their approval of a product or imposing restrictions on its distribution; and • interruptions, delays, or staffing shortages resulting from the COVID-19 pandemic, other pandemics, or public health crises.
Events that may prevent successful or timely completion of clinical development include: • the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials; • delays or failure to obtain regulatory clearance to initiate our clinical trials, as well as delays or failures to obtain any necessary approvals by the clinical sites; • delays, suspension, or termination of our clinical trials by the clinical sites; • modification of clinical trial protocols; • delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites, as well as possible future breaches of such agreements; • failure to manufacture sufficient quantities of our product candidates for use in our clinical trials; • failure by CMOs, suppliers, CROs, or clinical trial sites to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • imposition of a temporary or permanent clinical hold by us, IRBs for the institutions at which such trials are being conducted, or by the FDA or other regulatory authorities for safety or other reasons, such as a result of a new safety finding in a clinical trial on a similar product by one of our competitors, that presents unreasonable risk to clinical trial participants; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; • changes in the standard of care on which we developed our clinical development plan, which may require new or additional trials; • the cost of clinical trials of our product candidates being greater than we anticipated; • insufficient funding to continue clinical trials with our product candidates; • the emergence of unforeseen safety issues or undesirable side effects; • clinical trials of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon development of our product candidates; • inability to establish clinical trial endpoints that applicable regulatory authorities consider clinically meaningful, or, if we seek accelerated approval, that applicable regulatory authorities consider likely to predict clinical benefit; • regulators withdrawing their approval of a product or imposing restrictions on its distribution; and • interruptions, delays, or staffing shortages resulting from pandemics or other public health crises.
Additionally, we are aware of third-party patents assigned to the U.S. government relating to anti-BCMA CARs as well as nucleic acids encoding such CARs, vectors comprising these nucleic acids, and host cells expressing such CARs, which will expire in 2033 assuming no PTE or PTA.
Additionally, we are aware of third-party patents assigned to the U.S. government relating to anti-BCMA CARs as well as nucleic acids encoding such CARs, vectors comprising these 77 Table of Contents nucleic acids, and host cells expressing such CARs, which will expire in 2033 assuming no PTE or PTA.
We and these third parties are required to comply with cGCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for the conduct of clinical trials on product candidates in clinical development. Regulatory authorities enforce cGCPs through periodic inspections and for-cause inspections of clinical trial principal investigators and trial sites.
We and these third parties are required to comply with cGCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for the conduct of clinical trials on product candidates 88 Table of Contents in clinical development. Regulatory authorities enforce cGCPs through periodic inspections and for-cause inspections of clinical trial principal investigators and trial sites.
Additionally, we may not own, or may have to share, the intellectual property rights to any improvements made by our CMOs in the manufacturing process for our product candidates; • our CMOs and suppliers may not perform as agreed or may not remain in business for the time required to supply our clinical trials or to successfully manufacture, store, and distribute our commercial products; • our CMOs and suppliers could breach or terminate their agreements with us; • we face competition for supplies from other gene and cell therapy companies, which may make it difficult for us to secure materials or the testing of such materials on commercially reasonable terms or in a timely manner; • our CMOs may fail to adequately store the various components received from our suppliers and any damage or loss of such materials could materially impact our ability to manufacture and supply our product candidates; • we rely on third parties to perform release tests on our product candidates prior to delivery to clinical trial sites.
Additionally, we may not own, or may have to share, the intellectual property rights to any improvements made by our CMOs in the manufacturing process for our product candidates; • our CMOs and suppliers may not perform as agreed or may not remain in business for the time required to supply our clinical trials or to successfully manufacture, store, and distribute our commercial products; • our CMOs and suppliers could breach or terminate their agreements with us; • we face competition for supplies from other gene and cell therapy companies, which may make it difficult for us to secure materials or the testing of such materials on commercially reasonable terms or in a timely manner; • our CMOs may fail to adequately store the various components received from our suppliers and any damage or loss of such materials could materially impact our ability to manufacture and supply our product candidates; • our product candidates may be damaged or otherwise made unfit for use in clinical trials during shipment from our CMOs to clinical trial sites; • we rely on third parties to perform release tests on our product candidates prior to delivery to clinical trial sites.
The FDA and other regulatory authorities have substantial discretion in the approval process and may refuse to accept our BLA applications and decide that our data are insufficient and require additional preclinical studies or clinical trials. The same may happen with review of our product candidates by foreign regulatory authorities.
The FDA and other regulatory authorities have substantial discretion in the approval process and may refuse to accept our BLA applications and decide that our data are insufficient and require additional preclinical studies or clinical trials. The same may happen with review of our product 64 Table of Contents candidates by foreign regulatory authorities.
Additionally, in November 2018, a researcher at the Southern University of Science and Technology in Shenzhen, China, reportedly claimed they had created the first human genome-edited babies, which was subsequently confirmed by Chinese authorities and was negatively received by the public, in particular by those in the scientific community.
Additionally, in November 2018, a researcher at the 68 Table of Contents Southern University of Science and Technology in Shenzhen, China, reportedly claimed they had created the first human genome-edited babies, which was subsequently confirmed by Chinese authorities and was negatively received by the public, in particular by those in the scientific community.
Several factors could cause production interruptions including facility contaminations; shortages or quality problems; contamination of healthy donor cells, chRDNA guides, Cas9 and Cas12a proteins, viruses, iPSC master cell banks or working cell banks; natural disasters, including the COVID-19 pandemic and other public health crises; labor shortages and strikes; lack of experienced scientific, quality control, and manufacturing personnel; human error; or other disruptions in the operations of our suppliers and CMOs.
Several factors could cause production interruptions including facility contaminations; shortages or quality problems; contamination of healthy donor cells, chRDNA guides, Cas9 and Cas12a proteins, viruses, iPSC master cell banks or working cell banks; natural disasters, including pandemics and other public health crises; labor shortages and strikes; lack of experienced scientific, quality control, and manufacturing personnel; human error; or other disruptions in the operations of our suppliers and CMOs.
Although an inadvertent lapse can, in many cases, be cured by payment of a late fee or by other means in accordance with applicable laws and regulations, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in the loss of patent rights.
Although an inadvertent lapse can, in many 76 Table of Contents cases, be cured by payment of a late fee or by other means in accordance with applicable laws and regulations, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in the loss of patent rights.
However, we may not be granted an extension because of, for example, failing to exercise due diligence during the clinical phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy the applicable requirements.
However, we may not be 79 Table of Contents granted an extension because of, for example, failing to exercise due diligence during the clinical phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy the applicable requirements.
For example: • others may be able to make, use, and sell cell therapy products that are similar to our product candidates without infringing our intellectual property rights; • others may independently develop similar or alternative genome-editing technologies without infringing our intellectual property rights; • we may not develop additional patentable technologies; • others may misappropriate our trade secrets, or independently develop or acquire our trade secrets lawfully; and • our patents may have expired, whether or not PTE was granted.
For example: • others may be able to make, use, and sell cell therapy products that are similar to our product candidates without infringing our intellectual property rights; • others may independently develop similar or alternative genome-editing technologies without infringing our intellectual property rights; • we may not develop additional patentable technologies; 85 Table of Contents • others may misappropriate our trade secrets, or independently develop or acquire our trade secrets lawfully; and • our patents may have expired, whether or not PTE was granted.
In addition, since we are in the early stages of clinical development, we do not know the doses to be used in later phase 2 or pivotal trials needed to evaluate the efficacy of our product candidates, which will affect the manufacturing requirements for our product candidates.
In addition, since we are in the early stages of clinical development, we do not know the doses to be used in later phase 2 or pivotal phase 3 clinical trials necessary to evaluate the efficacy of our product candidates, which will affect the manufacturing requirements for our product candidates.
Furthermore, other third parties have adopted a “wait and see” approach and are not entering into license agreements with us or third parties until all of the uncertainty surrounding inventorship and priority among the groups with CRISPR-Cas9 patents is resolved.
Furthermore, other third parties have adopted a “wait and see” approach and are not entering into license agreements with us or third parties until all of the uncertainty 84 Table of Contents surrounding inventorship and priority among the groups with CRISPR-Cas9 patents is resolved.
In addition, third parties may attempt to penetrate our systems or those of our vendors or fraudulently induce our personnel or the personnel of our vendors to disclose sensitive information to gain access to data and systems. We may experience threats to our data and systems, including malicious codes and viruses, phishing, and other cyber-attacks.
In addition, third parties may attempt to penetrate our systems or those of our vendors or fraudulently induce our personnel or the personnel of our vendors to disclose sensitive information to gain access to data and systems. We may experience threats to our data and systems, including malicious codes and viruses, phishing, and other cyberattacks.
Our clinical trials may fail to adequately demonstrate the safety and efficacy of any of our product candidates and the development of our product candidates may be delayed or unsuccessful, which could prevent or delay regulatory approval and commercialization. Our product candidates are in various stages of preclinical and clinical development.
Our clinical trials may fail to adequately demonstrate the safety and efficacy of any of our product candidates and, if this happens, the development of our product candidates may be delayed or unsuccessful, which could prevent or delay regulatory approval and commercialization. Our product candidates are in various stages of preclinical and clinical development.
With respect to both owned and in-licensed intellectual property, we cannot predict whether the patent applications we and our licensors are currently pursuing will issue as patents, whether the claims of any issued patents will provide sufficient protection, or whether, if these patents are challenged by our competitors, they will be found to be invalid, unenforceable, or not infringed.
With respect to both owned and in-licensed intellectual property, we cannot predict whether the patent applications we and our licensors are currently pursuing will grant as patents, whether the claims of any granted patents will provide sufficient protection, or whether, if these patents are challenged by our competitors, they will be found to be invalid, unenforceable, or not infringed.
The COVID-19 pandemic or other pandemics or public health crises may adversely impact our business, financial condition, and results of operations, including our preclinical studies and clinical trials, and may cause substantial disruption in the financial markets and adversely impact economies worldwide.
Pandemics or other public health crises, such as the prior COVID-19 pandemic, may adversely impact our business, financial condition, and results of operations, including our preclinical studies and clinical trials, and may cause substantial disruption in the financial markets and adversely impact economies worldwide.
Our CMO that supplies the virus we use to insert the CAR into our CB-010 CAR-T product candidate is located outside the United States. To date, our virus CMO has not been audited by the FDA, but it has received the cGMP certification for the manufacture of recombinant viral vectors from an EU national regulatory authority.
Our CMO that supplies the virus we use to insert the CAR into our CAR-T product candidates is located outside the United States. To date, our virus CMO has not been audited by the FDA, but it has received the cGMP certification for the manufacture of recombinant viral vectors from an EU national regulatory authority.
We may in the future be subject to claims that former employees, consultants, or other third parties have an interest in our patents or other intellectual property as an inventor, co-inventor, or owner of trade secrets.
We may be subject to claims challenging the inventorship of our patents and other intellectual property. We may in the future be subject to claims that former employees, consultants, or other third parties have an interest in our patents or other intellectual property as an inventor, co-inventor, or owner of trade secrets.
In the United States, each co-owner has the freedom to license and exploit the technology. As a result, although our license from UC/Vienna is exclusive, we do not have any rights from Dr. Charpentier and thus our license to the CVC IP from UC/Vienna is non-exclusive with respect to such co-owned rights.
In the United States, each co-owner has the freedom to license and exploit the technology. As a result, although our license from UC/Vienna is exclusive, we do not have any rights from Dr. Charpentier and thus our license to the CVC IP from UC/ 83 Table of Contents Vienna is non-exclusive with respect to such co-owned rights.
Our ANTLER phase 1 clinical trial for our CB-010 product candidate and our CaMMouflage phase 1 clinical trial for our CB-011 product candidate are posted on www.ClinicalTrials.gov.
Our ANTLER phase 1 clinical trial for our CB-010 product candidate, our CaMMouflage phase 1 clinical trial for our CB-011 product candidate, and our AMpLIFY phase 1 clinical trial for our CB-012 product candidate are posted on www.ClinicalTrials.gov.
The extent to which the COVID-19 pandemic or other public health crises may impact our business, research, preclinical studies and clinical trials, productivity of our employees, supply chains, and access to capital or business development activities will depend on future developments, which are highly uncertain at this time.
The extent to which pandemics or other public health crises may impact our business, research, preclinical studies and clinical trials, productivity of our employees, supply chains, and access to capital or business development activities will depend on future developments, which are highly uncertain at this time.
The issuance of common stock in the future, or shifts in the ownership of our common stock among certain stockholders, either separately or in combination, over time may result in a limitation under Sections 382 and 383 of the Code.
The issuance of common stock in the future, or shifts in the ownership of our common stock among certain stockholders, either separately or in combination, over time may result in a limitation under Sections 96 Table of Contents 382 and 383 of the Code.
Our ability to continue to receive licensing revenue and to enter into new licensing arrangements related to the foundational CRISPR-Cas9 intellectual property will be substantially impaired if such intellectual property is limited by administrative patent proceedings. We have an exclusive license from UC and Vienna in all fields to the CVC IP, having as inventors Drs. Jennifer A.
Our ability to continue to receive licensing revenue and to enter into new licensing arrangements related to the foundational CRISPR-Cas9 intellectual property will be substantially impaired if such intellectual property is limited by administrative patent proceedings or other patent challenges. We have an exclusive license from UC and Vienna in all fields to the CVC IP, having as inventors Drs.
Given the small number of patients who have the eligibility criteria and diseases that we are targeting, it is critical to our ability to become profitable that we successfully identify such patients.
Given the small number of patients who have the eligibility criteria and diseases that we are or will be targeting, it is critical to our ability to become profitable that we successfully identify such patients.
Even if our product candidates are successful in clinical trials and receive marketing approval, we cannot provide any assurances that we will be able to obtain and maintain third-party payor coverage or adequate reimbursement for our product candidates in whole or in part.
Even if our product candidates are successful in clinical trials 71 Table of Contents and receive marketing approval, we cannot provide any assurances that we will be able to obtain and maintain third-party payor coverage or adequate reimbursement for our product candidates in whole or in part.
There are over 200 preclinical- and clinical-stage autologous and allogeneic anti-CD19 CAR-T programs, some of which will be competitive with our CB-010 product candidate, and over 90 preclinical- and clinical-stage autologous and allogeneic anti-BCMA CAR-T programs, some of which will be competitive with our CB-011 product candidate. Additionally, other companies are developing allogeneic CAR-T cell therapies for AML.
There are over 170 preclinical- and clinical-stage autologous and allogeneic anti-CD19 CAR-T programs, some of which will be competitive with our CB-010 product candidate, and over 60 preclinical- and clinical-stage autologous and allogeneic anti-BCMA CAR-T programs, some of which will be competitive with our CB-011 product candidate. Additionally, other companies are developing allogeneic CAR-T cell therapies for AML.
In addition, if our CMOs and suppliers are unable to timely perform or have operations temporarily halted as a result of inspection or enforcement actions taken by the FDA or other regulatory authorities, or as a result of the COVID-19 pandemic or other public health crises, we may experience manufacturing delays or delays in receiving healthy donor cells used in manufacturing our CB-010 product candidate or may need to find alternative CMOs or suppliers, which in each case would significantly impact our ability to develop, obtain regulatory approval for, and market our product candidates, if approved.
In addition, if our CMOs and suppliers are unable to timely perform or have operations temporarily halted as a result of inspection or enforcement actions taken by the FDA or other regulatory authorities, or as a result of pandemics or other public health crises, we may experience manufacturing delays or delays in receiving healthy donor cells used in manufacturing our product candidates or may need to find alternative CMOs or suppliers, which in each case would significantly impact our ability to develop, obtain regulatory approval for, and market our product candidates, if approved.
If any third-party patents were held by a court of competent jurisdiction to cover our genome-editing technology used in the manufacturing of our product candidates or any product candidate itself or its indication, the holders of those patents may be able to block our ability to commercialize the product candidate unless and until we obtained a license 76 Table of Conte n t s under the applicable patents, or the patents expire, or are held to be not infringed, unpatentable, invalid, or unenforceable.
If any third-party patents were held by a court of competent jurisdiction to cover our genome-editing technology used in the manufacturing of our product candidates or any product candidate itself or its indication, the holders of those patents may be able to block our ability to commercialize the product candidate unless and until we obtained a license under the applicable patents, or the patents expire, or are held to be not infringed, unpatentable, invalid, or unenforceable.
The information that we choose to 61 Table of Conte n t s disclose publicly regarding preclinical studies or clinical trials is typically a summary of extensive information, and others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities, or otherwise regarding a particular product candidate or our product candidates generally.
The information that we choose to disclose publicly regarding preclinical studies or clinical trials is typically a summary of extensive information, and others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities, or otherwise regarding a particular product candidate or our product candidates generally.
Although we try to ensure that our employees, consultants, and third parties performing services for us do not use the confidential information of former employers or other companies in their work for us, we may be subject to claims that we or these individuals have used or disclosed confidential information or intellectual property, including trade secrets, of any such individual’s current or 90 Table of Conte n t s former employer or other third party.
Although we try to ensure that our employees, consultants, and third parties performing services for us do not use the confidential information of former employers or other companies in their work for us, we may be subject to claims that we or these individuals have used or disclosed confidential information or intellectual property, including trade secrets, of any such individual’s current or former employer or other third party.
Our future capital requirements will depend on, and could increase significantly as a result of, many factors, including: • costs, progress, and results of our product candidate preclinical studies and clinical trials; • potential delays in our preclinical studies and clinical trials, whether current or planned, due to unforeseen events as well as other factors such as the economic environment or the COVID-19 pandemic or other public health crises; • costs and prioritization of our research and development programs as well as costs to acquire or in-license technologies or other product candidates; • expansion of our workforce or our facilities; • costs of establishing and maintaining a supply chain for the development and manufacture of our product candidates; • timing and outcome of regulatory review of our product candidates; 52 Table of Conte n t s • success of our collaboration with AbbVie and our receipt of reimbursements due thereunder; • our ability to establish and maintain additional collaborations on favorable terms; • costs of fulfilling our contractual obligations to reimburse certain parties for costs incurred in connection with the prosecution and maintenance of licensed patent rights, including reimbursements owed to The Regents of the University of California; • achievement of milestones that trigger payments under any of our current license and assignment agreements as well as under any additional agreements we enter into in the future; • costs of preparing, filing, prosecuting, and maintaining our patent portfolio, including costs associated with administrative proceedings of patent offices; • litigation costs in the event we seek to enforce our patents against third parties or if we are sued for infringement by third parties as well as for stockholder lawsuits; • effects of competing technologies, success or failure of products similar to our product candidates, and market developments; • costs of establishing or contracting for sales and marketing capabilities if we obtain regulatory approvals to market our product candidates; and • costs of operating as a public company.
Our future capital requirements will depend on, and could increase significantly as a result of, many factors, including: • costs, progress, and results of our product candidate preclinical studies and clinical trials; • potential delays in our preclinical studies and clinical trials, whether current or planned, due to unforeseen events as well as other factors such as the economic environment or pandemics or other public health crises; • potential difficulties and delays in receiving regulatory clearances and/or approvals for our product candidates; • costs and prioritization of our research and development programs as well as costs to acquire or in-license technologies or other product candidates; • expansion of our workforce or our facilities; • costs of establishing and maintaining a supply chain for the development and manufacture of our product candidates; • timing and outcome of regulatory review of our product candidates; • our ability to establish and maintain collaborations on favorable terms; 53 Table of Contents • costs of fulfilling our contractual obligations to reimburse certain parties for costs incurred in connection with the prosecution and maintenance of licensed patent rights, including reimbursements owed to The Regents of the University of California; • achievement of milestones that trigger payments under any of our current license and assignment agreements as well as under any additional agreements we enter into in the future; • costs of preparing, filing, prosecuting, and maintaining our patent portfolio, including costs associated with administrative proceedings of patent offices; • litigation costs in the event we seek to enforce our patents against third parties or if we are sued for infringement by third parties as well as for stockholder lawsuits; • effects of competing technologies, success or failure of products similar to our product candidates, and market developments; • costs of establishing or contracting for sales and marketing capabilities if we obtain regulatory approvals to market our product candidates; and • costs of operating as a public company.
As a result, the regulatory approval process for cell therapy product candidates such as ours is uncertain and may be more expensive and take longer than the approval process for product candidates based on better known or more extensively studied technologies.
As a result, the regulatory approval process for cell 57 Table of Contents therapy product candidates such as ours is uncertain and may be more expensive and take longer than the approval process for product candidates based on better known or more extensively studied technologies.
Periodic maintenance fees on issued patents are also required to be paid over the lifetime of the patent.
Periodic maintenance fees on granted patents are also required to be paid over the lifetime of the patent.
The PTAB concluded at the end of the motions phase that the declared interference should be discontinued (and not progress to the priority phase) because the involved claim sets were considered patentably distinct from each other. Following appeal 82 Table of Conte n t s by the CVC group, in September 2018, the U.S.
The PTAB concluded at the end of the motions phase that the declared interference should be discontinued (and not progress to the priority phase) because the involved claim sets were considered patentably distinct from each other. Following appeal by the CVC group, in September 2018, the U.S.
Although this new court is being implemented to provide more certainty and efficiency to patent enforcement throughout Europe, it will also provide our competitors with a new forum to use to centrally challenge our patents, rather than having to seek invalidity or non-infringement decisions on a country-by-country basis.
Although this new court was implemented to provide more certainty and efficiency to patent enforcement throughout Europe, it also provides our competitors with a new forum to use to centrally challenge our patents, rather than having to seek invalidity or non-infringement decisions on a country-by-country basis.
As of March 1, 2023, we have 137 full-time employees, and we expect to continue to increase our number of employees and the scope of our operations, specifically clinical operations, in 2023 and beyond as we seek to advance development, and if successful, commercialization, of our product candidates.
As of March 1, 2024, we have 158 full-time employees, and we expect to continue to increase our number of employees and the scope of our operations, specifically clinical operations, in 2024 and beyond as we seek to advance development, and if successful, commercialization, of our product candidates.
All these factors could be costly to us and otherwise harm our business, financial condition, results of operations, and prospects. 57 Table of Conte n t s Our business is highly dependent on the success of our product candidates, which will require significant additional preclinical studies and and/or human clinical trials before we can seek regulatory approval and potentially commercialize our product candidates.
All these factors could be costly to us and otherwise harm our business, financial condition, results of operations, and prospects. Our business is highly dependent on the success of our product candidates, which will require significant additional preclinical studies and and/or human clinical trials before we can seek regulatory approval and potentially commercialize our product candidates.
If our product candidates cause serious adverse events or undesirable side effects, including injury and death, or have other properties that could delay or prevent regulatory approval, their commercial potential may be limited or extinguished. Product candidates we develop may be associated with undesirable or unacceptable side effects, unexpected characteristics, or other SAEs, including death.
If our product candidates cause serious adverse events or undesirable side effects, including injury and death, or have other properties that could delay or prevent regulatory approval, they would have limited or no commercial potential. Product candidates we develop may be associated with undesirable or unacceptable side effects, unexpected characteristics, or other SAEs, including death.
If these third parties do not successfully 87 Table of Conte n t s carry out their contractual duties or obligations or meet expected deadlines, if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements, or if there are other difficulties with such third parties, such as staffing difficulties, changes in priorities, or financial distress, our clinical trials may be extended, delayed, or terminated.
If these third parties do not successfully carry out their contractual duties or obligations or meet deadlines, if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements, or if there are other difficulties with such third parties, such as staffing difficulties, changes in priorities, or financial distress, our clinical trials may be extended, delayed, or terminated.
Current and future growth imposes significant added responsibilities on members of management, including: • identifying, recruiting, integrating, maintaining, motivating, and integrating additional employees; 91 Table of Conte n t s • managing our internal development efforts effectively, including clinical trials and FDA or foreign regulatory authority review for our product candidates, while complying with our contractual obligations to third parties; and • improving our operational, financial and management controls, reporting systems, and procedures.
Current and future growth imposes significant added responsibilities on members of management, including: • identifying, recruiting, integrating, maintaining, motivating, and integrating additional employees; 92 Table of Contents • managing our internal development efforts effectively, including clinical trials and FDA or foreign regulatory authority review for our product candidates, while complying with our contractual obligations to third parties; and • improving our operational, financial and management controls, reporting systems, and procedures.
In February 2022, the PTAB issued its decision that the Broad inventors were the first to invent the use of CRISPR-Cas9 genome editing in eukaryotic cells; the owners of the CVC IP have appealed this decision to the CAFC and briefing is ongoing.
In February 2022, the PTAB issued its decision that the Broad inventors were the first to invent the use of CRISPR-Cas9 genome editing in eukaryotic cells; the owners of the CVC IP have appealed this decision to the CAFC.
Although our suppliers are currently able to provide us with donor material, if, in the future, our suppliers are unable to secure donor material due to the COVID-19 pandemic or other public health crises or for other reasons, we may no longer have sufficient donor material to manufacture our cell therapy product candidates.
Although our suppliers are currently able to provide us with donor material, if, in the future, our suppliers are unable to secure donor material due to pandemics or other public health crises or for any other reasons, we may no longer have sufficient donor material to manufacture our cell therapy product candidates.
Although we intend to design the clinical trials for our product candidates, our CROs will facilitate and monitor our clinical trials. As a result, many important aspects of our clinical development programs, including site and investigator selection, and the conduct and timing and monitoring of the study, will be partly or completely outside our direct control.
Although we design the clinical trials for our product candidates, our CROs facilitate and monitor our clinical trials. As a result, many important aspects of our clinical development programs, including site and investigator selection, and the conduct and timing and monitoring of the study, are partly or completely outside our direct control.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSee Note 9 to the consolidated financial statements included in this Annual Report on Form 10-K for additional information. We believe that our existing facilities are adequate for our near-term needs and that suitable additional facilities will be available in the future if and when needed.
Biggest changeSee Note 8 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information. We believe that our existing facilities are adequate for our near-term needs and that suitable additional facilities will be available in the future if and when needed.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe complaint challenges disclosures regarding our company’s business, operations, and prospects, specifically with respect to the alleged durability of CB-010’s therapeutic effect and the product candidate’s clinical and commercial prospects, in alleged violation of Sections 11 and 15 of the Securities Act and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended.
Biggest changeThe Bergman complaint challenges disclosures regarding our company’s business, operations, and prospects, specifically with respect to the alleged durability of CB-010’s therapeutic effect and the product candidate’s clinical and commercial prospects, in alleged violation of Sections 11 and 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act.
Regardless of the outcome, litigation can have a material adverse effect on us due to defense and settlement costs, diversion of management resources, and other factors. On February 10, 2023, a putative class action lawsuit was filed in the U.S.
Regardless of the outcome, litigation can have a material adverse effect on us due to defense and settlement costs, diversion of management resources, and other factors. On April 11, 2023, a putative class action lawsuit was filed in the U.S.
District Court for the Northern District of California against our company and certain of our officers and current and former members of our board of directors ( Greenhalgh v. Caribou Biosciences, Inc., et al. , Case Number 3:23-cv-00609-VC).
District Court for the Northern District of California against our company and certain of our officers and current and former members of our board of directors, B ergman v. Caribou Biosciences, Inc., et al. , Case Number 4:23-cv-01742-YGR (“Bergman Case”).
Removed
The complaint seeks an unspecified amount of damages on behalf of a putative class of purchasers of our company’s securities during the class period of July 23, 2021, through December 9, 2022, as well as interest and reasonable fees and costs. We believe that this lawsuit is without merit and intend to vigorously defend against it. Item 4.
Added
On September 18, 2023, plaintiffs filed an amended complaint adding the IPO underwriters as defendants and making substantially the same allegations as the original complaint. On November 14, 2023, we filed a motion to dismiss the amended complaint for failure to state a claim.
Removed
Mine Safety Disclosures. Not applicable. 103 Table of Conte n t s PART II
Added
Motion to dismiss briefing was completed on February 21, 2024, and oral argument on the motion is scheduled for April 23, 2024. We intend to vigorously defend the claims asserted against us.
Added
On March 22, 2023, a putative class action lawsuit was filed in Superior Court of the State of California for the County of Alameda against our company and certain of our officers and current and former members of our board of directors, Lowry v. Caribou Biosciences, Inc., et al. , Case Number T23-1084 (“Lowry Case”).
Added
The Lowry Case challenges disclosures regarding our company’s business, operations, and prospects, specifically with respect to the alleged durability of CB-010’s therapeutic effect and the product candidate’s clinical and commercial prospects, in alleged violation of Sections 11 and 15 of the Securities Act.
Added
The allegations and claims in the Lowry Case are substantially similar to the Securities Act claims asserted in the Bergman Case. On April 26, 2023, we filed a motion to stay the Lowry Case during the pendency of the parallel federal court litigation in the Bergman Case, and, on July 11, 2023, our motion to stay was denied.
Added
On September 11, 2023, plaintiff filed an amended complaint making substantially the same allegations as the original complaint. On November 9, 2023, we filed a motion to dismiss the amended complaint on the grounds that our certification of incorporation mandates that Securities Act claims against us be brought in federal court.
Added
On February 28, 2024, the court granted our motion to dismiss and ordered the case dismissed. Item 4. Mine Safety Disclosures. Not applicable. 106 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThere has been no material change in our planned use of the net proceeds from our IPO from that described in the final prospectus for our IPO filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act on July 23, 2021. Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
Biggest changeThere has been no material change in our planned use of the net proceeds from our IPO from that described in the final prospectus for our IPO filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act on July 23, 2021.
On July 22, 2021, we filed a second Registration Statement on Form S-1 (File No. 333-258105) pursuant to Rule 462(b) of the Securities Act, which was effective immediately upon filing.
On July 22, 2021, we filed a second Registration Statement on Form S-1 (File No. 333-258105) pursuant to Rule 462(b) of the Securities Act of 1933, as amended (“Securities Act”), which was effective immediately upon filing.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “CRBU.” Holders As of March 3, 2023, we had approximately 42 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “CRBU.” Holders As of March 5, 2024, we had 40 holders of record of our common stock.
Use of Proceeds from our IPO On July 22, 2021, our Registration Statement on Form S-1 (File No. 333-257604) relating to our initial public offering (“IPO”) of our common stock was declared effective by the SEC.
Use of Proceeds from our IPO On July 22, 2021, our Registration Statement on Form S-1 (File No. 333-257604) relating to our initial public offering (“IPO”) of our common stock was declared effective by the U.S. Securities and Exchange Commission (“SEC”).
Added
Recent Sales of Unregistered Securities We had no sales of unregistered equity securities during the period covered by this Annual Report that were not previously reported in a Current Report on Form 8-K (or on Form 10-Q in lieu of Form 8-K). Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved] 107 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Comparison of the Years Ended December 31, 2022 and 2021 The following table summarizes our results of operations for the years ended December 31, 2022 and 2021: Years Ended December 31, Change 2022 2021 $ (in thousands) Licensing and collaboration revenue $ 13,851 $ 9,598 $ 4,253 Operating expenses Research and development 82,230 52,255 29,975 General and administrative 38,020 24,322 13,698 Total operating expenses 120,250 76,577 43,673 Loss from operations (106,399) (66,979) (39,420) Other income (expense) Change in fair value of equity securities (133) — (133) Change in fair value of the MSKCC success payments liability 2,429 (1,426) 3,855 Gain on extinguishment of PPP Loan — 1,584 (1,584) Other income, net 4,752 219 4,533 Total other income 7,048 377 6,671 Net loss before provision for income taxes (99,351) (66,602) (32,749) Provision for income taxes 70 321 (251) Net loss $ (99,421) $ (66,923) $ (32,498) Licensing and Collaboration Revenue Licensing and collaboration revenue increased by $4.3 million to $13.9 million for the year ended December 31, 2022 from $9.6 million for the year ended December 31, 2021.
Biggest changeOther Income (Expense) Other income (expense) consists primarily of interest income earned on cash and marketable securities and the change in fair value of the Memorial Sloan Kettering Cancer Center (“MSKCC”) success payments liability under our Exclusive License Agreement, dated November 13, 2020 with MSKCC (“MSKCC Agreement”). 112 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the periods indicated: Years Ended December 31, Change 2023 2022 $ (in thousands) Licensing and collaboration revenue $ 34,477 $ 13,851 $ 20,626 Operating expenses Research and development 112,075 82,230 29,845 General and administrative 38,461 38,020 441 Total operating expenses 150,536 120,250 30,286 Loss from operations (116,059) (106,399) (9,660) Other income (expense) Change in fair value of equity securities (6) (133) 127 Change in fair value of the MSKCC success payments liability (1,288) 2,429 (3,717) Other income, net 15,476 4,752 10,724 Total other income 14,182 7,048 7,134 Net loss before provision for income taxes (101,877) (99,351) (2,526) Provision for income taxes 193 70 123 Net loss $ (102,070) $ (99,421) $ (2,649) Licensing and Collaboration Revenue Licensing and collaboration revenue increased by $20.6 million to $34.5 million for the year ended December 31, 2023 from $13.9 million for the year ended December 31, 2022.
This strategy is designed to reduce CAR-T cell rejection by both patient T cells and natural killer (“NK”) cells to potentially enable more durable antitumor activity. CB-011 is being evaluated in our CaMMouflage phase 1 clinical trial in patients with relapsed or refractory multiple myeloma (“r/r MM”).
This strategy is designed to reduce CAR-T cell rejection by both patient T cells and natural killer (“NK”) cells to potentially enable more durable antitumor activity. CB-011 is being evaluated in our CaMMouflage phase 1 clinical trial in adult patients with relapsed or refractory multiple myeloma (“r/r MM”).
Comparable companies are chosen based on their size, stage in the life cycle, or area of specialty. We will continue to apply this process for stock options awards and 2021 ESPP stock purchases until enough historical information regarding the volatility of our stock price becomes available.
Comparable companies are chosen based on their size, stage in the life cycle, or area of specialty. We will continue to apply this process for stock options awards and ESPP stock purchases until enough historical information regarding the volatility of our stock price becomes available.
The expected term for our 2021 ESPP is the offering period. Expected Volatility — Expected volatility is estimated based on the average historical volatilities of common stock of comparable publicly traded entities over a period equal to the expected term of the stock option grants , as we do not have sufficient trading history for our common stock.
The expected term for our ESPP is the offering period. Expected Volatility — Expected volatility is estimated based on the average historical volatilities of common stock of comparable publicly traded entities over a period equal to the expected term of the stock option grants , as we do not have sufficient trading history for our common stock.
On August 9, 2022, we entered into an Open Market Sale Agreement SM (the “ATM Sales Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which, upon the terms and subject to the conditions and limitations set forth in the ATM Sales Agreement, we may, from time to time, in our sole discretion, issue and sell, through Jefferies, acting as sales agent, up to $100.0 million of our shares of common stock, by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended (the “Securities Act”).
On August 9, 2022, we entered into an Open Market Sale Agreement SM (the “ATM Sales Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which, upon the terms and subject to the conditions and limitations set forth in the ATM Sales Agreement, we may, from time to time, in our sole discretion, issue and sell, through Jefferies, acting as sales agent, up to $100.0 million of our shares of common stock, by any method permitted by law deemed to be an “at the 114 Table of Contents market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended (“Securities Act”).
As of December 31, 2022, the timing and likelihood of triggering the MSKCC success payments are uncertain. See Note 4 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information about the MSKCC success payments liability. Leases We have operating lease agreements for our office spaces.
As of December 31, 2023 the timing and likelihood of triggering the MSKCC success payments are uncertain. See note 4 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information about the MSKCC success payments liability. Leases We have operating lease agreements for our office spaces.
We expect that our general and administrative expenses may increase in the future as a result of expanding our operations, including hiring personnel, preparing for potential commercialization of our product candidates, and additional facility occupancy costs, as well as other expenses necessary to support the growth and operations of a clinical-stage public company.
We expect that our general and administrative expenses will increase in the future as a result of expanding our operations, including hiring personnel, preparing for potential commercialization of our product candidates, and additional facility occupancy costs, as well as other expenses necessary to support the growth and operations of a clinical-stage public company.
Cash used in investing activities for the year ended December 31, 2022 was primarily due to purchases of marketable securities of $339.1 million, property and equipment of $6.5 million, and in-process research and development of $0.6 million, partially offset by the proceeds from maturities of marketable securities of $252.9 million.
Cash used in investing activities for the year ended December 31, 2022 was primarily due to our purchases of marketable securities of $339.1 million, purchases of property and equipment of $6.5 million, and in-process research and development of $0.6 million, partially offset by the proceeds of maturities of marketable securities of $252.9 million.
We have based these estimates on our current assumptions, which may require future adjustments based on our ongoing business decisions. Contractual Obligations and Commitments We enter into contracts in the normal course of business with suppliers, CMOs, CROs, clinical trial sites, and the like.
We have based these estimates on our current assumptions, which may require future adjustments based on our ongoing business decisions. Contractual Obligations and Commitments We enter into contracts in the normal course of business with suppliers, CMOs, CROs, clinical trial sites, licensors, assignors, and the like.
We expect that our research and development expenses will increase substantially for the foreseeable future as we continue to implement our business strategy; advance our CB-010 and CB-011 product candidates through clinical trials and later stages of development; conduct preclinical studies and clinical trials for our other product candidates; seek regulatory approvals for any product candidates that successfully complete clinical trials; expand our research and development efforts and incur expenses associated with hiring additional personnel to support our research and development efforts; and seek to identify, in-license, acquire, and/or develop additional product candidates.
We expect that our research and development expenses will increase substantially for the foreseeable future as we continue to implement our business strategy; advance our product candidates through clinical trials and later stages of development; conduct preclinical studies and clinical trials for our other product candidates; seek regulatory approvals for any product candidates that successfully complete clinical trials; expand our research and development efforts and incur expenses associated with hiring additional personnel to support our research and development efforts; and seek to identify, in-license, acquire, and/or develop additional product candidates.
We have no current ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, except for our lease commitments as described in Note 9, and payments under certain of our license agreements as described in Note 4, in each case to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
We have no current ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, except for our lease commitments, and payments under certain of our license agreements as described in Note 4 and Note 9, respectively, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The duration, costs, and timing of preclinical studies, clinical trials, and development of our product candidates will depend on a variety of factors, including: • sufficiency of our financial and other resources; • acceptance of our CRISPR chRDNA genome-editing technology; • ability to develop differentiating features so that our products have a competitive edge; • completion of preclinical studies; • establishment, maintenance, enforcement, and defense of our patents and other intellectual property rights; • our ability to not infringe, misappropriate, or otherwise violate third-party intellectual property rights; 108 Table of Conte n t s • clearance of IND applications to initiate clinical trials on product candidates; • successful enrollment in, and completion of, our clinical trials on our product candidates; • data from our clinical trials that support an acceptable risk-benefit profile of our product candidates for the intended patient populations and that demonstrate safety and efficacy; • entry into collaborations to further the development of our product candidates or for the development of new product candidates; • successful development of our internal process development and transfer to larger-scale facilities; • establishment of agreements with CMOs for clinical and commercial supplies and scaling up manufacturing processes and capabilities to support our clinical trials; • receipt of marketing approvals from applicable regulatory authorities; • grant of regulatory exclusivity for our product candidates; • establishment of sales, marketing, and distribution capabilities necessary for commercialization of our product candidates if and when approved, whether by us or in collaboration with third parties; • maintenance of a continued acceptable safety profile of our products post-approval; • acceptance of our product candidates, if and when approved by the applicable regulatory authorities, by patients, the medical community, and third-party payors; • ability of our products to compete with other therapies and treatment options; • establishment and maintenance of healthcare coverage and adequate reimbursement; and • expanded indications and patient populations for our products.
The duration, costs, and timing of preclinical studies, clinical trials, and development of our product candidates will depend on a variety of factors, including: • sufficiency of our financial and other resources; • acceptance of our CRISPR chRDNA genome-editing technology; • ability to develop differentiating features so that our products have a competitive edge; • completion of preclinical studies; • establishment, maintenance, enforcement, and defense of our patents and other intellectual property rights; • our ability to not infringe, misappropriate, or otherwise violate third-party intellectual property rights; • clearance of IND applications to initiate clinical trials on new product candidates; • successful enrollment in, and completion of, our clinical trials on our product candidates; • data from our clinical trials that support an acceptable risk-benefit profile of our product candidates for the intended patient populations and that demonstrate safety and efficacy; • entry into collaborations to further the development of our product candidates or for the development of new product candidates; • successful development of our internal process development and transfer to larger-scale facilities; • establishment of agreements with CMOs and suppliers for clinical and commercial supplies and scaling up manufacturing processes and capabilities to support our clinical trials; • receipt of marketing approvals from applicable regulatory authorities; 111 Table of Contents • grant of regulatory exclusivity for our product candidates; • establishment of sales, marketing, and distribution capabilities necessary for commercialization of our product candidates if and when approved, whether by us or in collaboration with third parties; • maintenance of a continued acceptable safety profile of our products post-approval; • acceptance of our product candidates, if and when approved by the applicable regulatory authorities, by patients, the medical community, and third-party payors; • ability of our products to compete with other therapies and treatment options; • establishment and maintenance of healthcare coverage and adequate reimbursement; and • expanded indications and patient populations for our products.
Our 2022 non-cash charges were primarily comprised of $11.7 million of stock-based compensation, $2.0 million of non-cash lease expense, $1.6 million of depreciation and amortization expense, and $0.6 million of acquired in-process research and development, which were partially offset by the change in the fair value of the MSKCC success payments liability of $2.4 million, and amortization of premiums on marketable securities of $0.8 million.
Our 2022 non-cash charges were primarily comprised of $11.7 million of stock-based compensation, $2.0 million of non-cash lease expense, $1.6 million of depreciation and amortization expense, and $0.6 million of acquired in-process research and development, which were partially offset by the change in the fair value of the MSKCC success payments liability of $2.4 million, and accretion of discounts on marketable securities of $0.8 million.
Our therapies are directed at established tumor cell surface targets for which autologous CAR-T cell therapeutics have already demonstrated clinical proof of concept, including CD19 and B cell maturation antigen (“BCMA”), as well as targets such as C-type lectin-like molecule-1 (“ CLL-1 ,” also known as CD371).
Our therapies are directed at established cell surface targets for which autologous CAR-T cell therapeutics have already demonstrated clinical proof of concept, including CD19 and B cell maturation antigen (“BCMA”), as well as targets such as C-type lectin-like molecule-1 (“CLL-1,” also known as CD371).
We are advancing a pipeline of allogeneic, or off-the-shelf, cell therapies from our chimeric antigen receptor (“CAR”) T (“CAR-T”) cell and CAR-natural killer (“CAR-NK”) cell platforms as readily available therapeutic treatments for patients. We are initially focused on advancing multiple allogeneic cell therapies for the treatment of hematologic malignancies and solid tumors.
We are advancing a pipeline of allogeneic, or off-the-shelf, cell therapies from our chimeric antigen receptor (“CAR”) T (“CAR-T”) cell and CAR-natural killer (“CAR-NK”) cell platforms as readily available therapeutic treatments for patients. We are initially focused on advancing our allogeneic cell therapies for the treatment of hematologic malignancies.
Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity offerings (including our at-the-market facility), debt financings, collaborations and strategic alliances, licensing arrangements, or other sources.
Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity offerings (including our at-the-market facility), debt financings, collaborations and strategic alliances, licensing arrangements, or other sources.
Jefferies will use commercially reasonable efforts consistent with its normal sales and trading practices to sell shares from time to time, based upon our instructions (including any price or size limits or other customary parameters or conditions we may impose).
Jefferies uses commercially reasonable efforts consistent with its normal sales and trading practices to sell shares from time to time, based upon our instructions (including any price or size limits or other customary parameters or conditions we may impose).
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
Such license agreements require payments of non-refundable annual license fees by the licensees (referred to as maintenance fees in the license agreements), which are accounted for as material rights for license renewals. We recognize revenue when the license is delivered and the term commences.
Such license agreements require payments of non-refundable annual license fees by the licensees (referred to as maintenance fees in the license agreements), which are accounted for as material rights for license renewals. 119 Table of Contents We recognize revenue when the license is delivered and the term commences.
Our approach to estimating the fair market value of our common stock was consistent with the methods outlined in the American Institute of Certified Public Accountants’ Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.
Our approach to estimating the fair market value of our common stock was consistent with the methods outlined in the American Institute of Certified Public Accountants’ Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as 120 Table of Contents Compensation.
Our future funding requirements will depend on many factors, including the following: • the initiation, progress, timing, costs, and results of preclinical studies and clinical trials for our product candidates; • the clinical development plans we establish for these product candidates; • the number and characteristics of the product candidates that we develop; • the increase in the number of our employees and expansion of our physical facilities to support growth initiatives; • the outcome, timing, and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities; • whether we enter into any additional collaboration agreements and the terms of any such agreements; • the cost of filing and prosecuting our patent applications, and maintaining and enforcing our patents and other intellectual property rights; • the extent to which we acquire or in-license other product candidates and technologies; • the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against our products after we receive regulatory approval; • the effect of competing technological and market developments; • the cost and timing of completion of commercial-scale outsourced manufacturing activities or the cost and timing of completion of clinical-scale and commercial-scale internal manufacturing activities; • the cost of establishing sales, marketing, and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products without a partner; • the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; • the achievement of milestones or occurrence of other developments that trigger payments by or to third parties under any collaboration or licensing agreements; • our implementation of various computerized informational systems and efforts to enhance operational systems; 113 Table of Conte n t s • the impact of the COVID-19 pandemic or other public health crises or geopolitical events on our clinical development or operations; • the impact of inflationary pressures on the cost of our operations; and • the costs associated with being a public company.
Our future funding requirements will depend on many factors, including the following: • the initiation, progress, timing, costs, and results of preclinical studies and clinical trials for our product candidates; • the clinical development plans we establish for these product candidates; • the number and characteristics of the product candidates that we develop; • increases in the number of our employees and expansion of our physical facilities to support growth initiatives; • the outcome, timing, and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities; 116 Table of Contents • whether we enter into any collaboration agreements and the terms of any such agreements; • the cost of filing and prosecuting our patent applications, and maintaining and enforcing our patents and other intellectual property rights; • the extent to which we acquire or in-license other product candidates and technologies; • the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against our products after we receive regulatory approval; • the effect of competing technological and market developments; • the cost and timing of completion of commercial-scale outsourced manufacturing activities or the cost and timing of completion of clinical-scale and commercial-scale internal manufacturing activities; • the cost of establishing sales, marketing, and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products without a partner; • the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; • the achievement of milestones or occurrence of other developments that trigger payments by or to third parties; • our implementation of various computerized informational systems and efforts to enhance operational systems; • the impact of public health crises or geopolitical events on our clinical development or operations; • the impact of inflationary pressures on the cost of our operations; and • the costs associated with being a public company.
During the years ended December 31, 2022 and 2021, we recorded $3.5 million and $7.1 million, respectively, of patent cost reimbursements as a reduction to general and administrative expense.
During the years ended December 31, 2023 and 2022, we recorded $1.5 million and $3.5 million, respectively, of patent cost reimbursements as a reduction to general and administrative expense.
We anticipate that our expenses will increase substantially if and as we: • progress our ANTLER phase 1 clinical trial for our CB-010 product candidate and our CaMMouflage phase 1 clinical trial for our CB-011 product candidate; • continue our current research programs and our preclinical and clinical development of our other current product candidates, including CB-012 and CB-020, and any other product candidates we identify and choose to develop; • hire additional clinical, quality control, regulatory, and scientific personnel; • seek to identify additional research programs and additional product candidates; • further develop our genome-editing technologies; • acquire or in-license technologies; • expand, maintain, enforce, and defend our intellectual property portfolio; • seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical trials, if any; • establish and expand manufacturing capabilities and supply chain capacity for our product candidates; • add operational, legal, financial, and management information systems and personnel; • experience any delays, challenges, or other issues associated with any of the above, including the failure of clinical trials meeting endpoints, the generation of unanticipated preclinical results or clinical trial data subject to differing interpretations, or the occurrence of potential safety issues or other development or regulatory challenges; • make royalty, milestone, or other payments under current, and any future, in-license or assignment agreements; • establish a sales, marketing, and distribution infrastructure to commercialize any product candidates for which we obtain marketing approval; and • continue to operate as a public company.
We anticipate that our expenses will increase substantially as we: • advance the ANTLER phase 1 clinical trial and initiate the planned pivotal phase 3 clinical trial for our CB-010 product candidate, the CaMMouflage phase 1 clinical trial for our CB-011 product candidate, and the AMpLify phase 1 clinical trial for our CB-012 product candidate; • continue our current research programs and our preclinical and clinical development of our other current product candidates and any other product candidates we identify and choose to develop; • hire additional clinical, quality control, regulatory, technical operations, and scientific personnel; • seek to identify additional research programs and additional product candidates; • further develop our genome-editing technologies; • acquire or in-license technologies; • expand, maintain, enforce, and defend our intellectual property portfolio; • seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical trials, if any; • establish and expand manufacturing capabilities and supply chain capacity for our product candidates; • add operational, legal, financial, and management information systems and personnel; • experience any delays, challenges, or other issues associated with any of the above, including the failure of clinical trials meeting endpoints, unanticipated preclinical results, or clinical trial data subject to differing interpretations, or the occurrence of potential safety issues or other development or regulatory challenges; • make royalty, milestone, or other payments under current, and any future, agreements with third parties; • establish a sales, marketing, and distribution infrastructure to commercialize any product candidates for which we obtain marketing approval; and • continue to operate as a public company.
Revenue under such licensing and collaboration agreements was $13.9 million and $9.6 million for the years ended December 31, 2022 and 2021, respectively. See Note 4 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
Revenue under such licensing and collaboration agreements was $34.5 million and $13.9 million for the years ended December 31, 2023 and 2022, respectively. See Note 4 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
We are also a “smaller reporting company.” If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.
We are also a “smaller reporting company.” If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available 121 Table of Contents to smaller reporting companies.
Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited consolidated financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. 119 Table of Conte n t s
Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited consolidated financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
We recognized a loss related to the change in the fair value of the MSKCC success payments liability in the amount of $1.4 million for the year ended December 31, 2021.
We recognized a loss related to the change in the fair value of the MSKCC success payments liability in the amount of $1.3 million for the year ended December 31, 2023.
We are entitled to receive reimbursement from third 109 Table of Conte n t s parties of a portion of the costs for filing, prosecuting, and maintaining certain patents and patent applications. We accrue for these reimbursements as the respective expenses are incurred and classify such reimbursements as a reduction of general and administrative expenses.
We are entitled to receive reimbursement from third parties of a portion of the costs for filing, prosecuting, and maintaining certain patents and patent applications. We accrue for these reimbursements as the respective expenses are incurred and classify such reimbursements as a reduction of general and administrative expenses.
We use the Black-Scholes valuation model as the method for determining the estimated fair market value of stock options and stock purchases under our 2021 Employee Stock Purchase Plan (“2021 ESPP”) with the following assumptions: Fair Market Value of Common Stock — Prior to our IPO, the fair market value of our common stock was determined by our board of directors with assistance from management and external valuation experts.
We use the Black-Scholes valuation model as the method for determining the estimated fair market value of stock options and stock purchases under our ESPP with the following assumptions: Fair Market Value of Common Stock — Prior to our IPO, the fair market value of our common stock was determined by our board of directors with assistance from management and external valuation experts.
The successful development of our CB-010, CB-011, CB-012, and CB-020 product candidates, as well as other potential future product candidates, is highly uncertain. Accordingly, at this time, we cannot reasonably estimate or know the nature, timing, and costs of the efforts that will be necessary to complete the development of our product candidates.
The successful development of our CAR-T product candidates, as well as other potential future product candidates, is highly uncertain. Accordingly, at this time, we cannot reasonably estimate or know the nature, timing, and costs of the efforts that will be necessary to complete the development of our product candidates.
We use multiple contract manufacturing organizations (“CMOs”) to individually manufacture, 106 Table of Conte n t s under current good manufacturing processes, chRDNA guides, Cas9 and Cas12a proteins, plasmids, and adeno-associated virus serotype 6 vectors used in the manufacture of our CAR-T cells as well as our CAR-NK cell therapy product candidates.
We use multiple contract manufacturing organizations (“CMOs”) to individually manufacture, under current good manufacturing processes, our chRDNA guides, Cas9 and Cas12a proteins, plasmids, and adeno-associated virus serotype 6 (“AAV6”) vectors used in the manufacture of our cell therapy product candidates as well as the CAR-T and CAR-NK cell therapy product candidates themselves.
Variations in the assumptions used to estimate accruals including, but not limited to, the number of 116 Table of Conte n t s patients enrolled, the rate of patient enrollment and the actual services performed, may vary from our estimates, resulting in adjustments to clinical trial expenses in future periods.
Variations in the assumptions used to estimate accruals including, but not limited to, the number of patients enrolled, the rate of patient enrollment and the actual services performed, may vary from our estimates, resulting in adjustments to clinical trial and manufacturing expenses in future periods.
As of December 31, 2022, the total unrecognized stock-based compensation expense related to unvested RSUs was $1.6 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.1 years.
As of December 31, 2023, the total unrecognized stock-based compensation expense related to unvested RSUs was $0.8 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.0 years.
We will pay Jefferies a commission equal to 3.0% of the aggregate gross proceeds of any shares sold through Jefferies pursuant to the ATM Sales Agreement. We are not obligated to sell any shares under the ATM Sales Agreement.
We will pay Jefferies a commission equal to 3.0% of the aggregate gross proceeds of any shares sold through Jefferies pursuant to the ATM Sales Agreement.
Our actual results and the timing of certain events could differ materially from those described in or implied by these forward-looking statements as a result of various factors, including those set forth in the “Risk Factors” section of this Annual Report on Form 10-K. See also the Special Note Regarding Forward-Looking Statements section of this Annual Report on Form 10-K.
Our actual results and the timing of certain events could differ materially from those described in or implied by these forward-looking statements as a result of various factors, including those set forth the “Risk Factors” section in Part I, Item 1A of this Annual Report on Form 10-K.
In order to assist in funding our future operations, including our planned clinical trials, on August 9, 2022, we filed a universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”) with the Securities and Exchange Commission (the “SEC”), which allows us to, from time to time, sell up to $400.0 million of common stock, preferred stock, debt securities, warrants, rights, or units comprised of any combination thereof (including the $100.0 million of common stock reserved for our at-the-market equity offering program described below).
On August 9, 2022, we filed a universal shelf registration statement on Form S-3 (“Shelf Registration Statement”) with the SEC, which allows us to, from time to time, sell up to $400.0 million of common stock, preferred stock, debt securities, warrants, rights, or units comprised of any combination thereof (including the $100.0 million of common stock reserved for our at-the-market equity offering program described below).
Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses, and prepaid expenses.
Funding Requirements Our primary use of cash is to fund operating expenses and research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses, and prepaid expenses.
Our revenues are primarily derived through our license agreements and license and collaboration agreements. The terms of these types of agreements may include (i) licenses for our technology, (ii) research and development services, and (iii) services or obligations in connection with participation in research or governance committees.
The terms of these types of agreements may include (i) licenses for our technology, (ii) research and development services, and (iii) services or obligations in connection with participation in research or governance committees.
Income Tax An income tax expense of $0.1 million was recognized for the year ended December 31, 2022, which was primarily related to current federal taxes and deferred state taxes.
An income tax expense of $0.1 million was recognized for the year ended December 31, 2022, which was primarily related to current federal taxes of $0.2 million, partially offset by a state deferred tax benefit of $0.1 million.
Cash Used in Investing Activities During the year ended December 31, 2022 and 2021, cash used in investing activities was $93.2 million and $176.4 million, respectively.
Cash Used in Investing Activities During the year ended December 31, 2023 and 2022, cash used in investing activities was $68.2 million and $93.2 million, respectively.
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.
Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.
These increases were partially offset by a $0.8 million decrease in expenses related to licenses, sublicensing revenue, and milestones. General and Administrative Expenses General and administrative expenses increased by $13.7 million to $38.0 million for the year ended December 31, 2022 from $24.3 million for the year ended December 31, 2021.
These increases were partially offset by a $0.4 million decrease in expenses related to licenses, sublicensing revenue, and milestones. General and Administrative Expenses General and administrative expenses increased by $0.4 million to $38.5 million for the year ended December 31, 2023 from $38.0 million for the year ended December 31, 2022.
We recognized a gain related to the change in the fair value of the MSKCC success payments liability in the amount of $2.4 million for the year ended December 31, 2022.
We recognized a gain related to the change in the fair value of the MSKCC success payments liability in the amount of $2.4 million for the year ended December 31, 2022. We recognized a $10.7 million increase in other income during the year ended December 31, 2023 compared to December 31, 2022.
Our genome-editing platform, including our novel chRDNA ( C RISPR h ybrid R NA- DNA , or “chRDNA,” pronounced “chardonnay”) technologies, enables superior editing precision to develop cell therapies that are armored to improve antitumor activity.
Our genome-editing platform, including our novel chRDNA ( C RISPR h ybrid R NA- DNA , or “chRDNA,” pronounced “chardonnay”) technology, enables more precise genome editing to develop cell therapies that are armored to improve activity against diseases.
Cash used in operating activities in the year ended December 31, 2021 was primarily due to our net loss of $66.9 million, adjusted by non-cash charges of $5.3 million and net changes in our net operating assets and liabilities of $29.1 million.
Cash used in operating activities in the year ended December 31, 2023 was primarily due to our net loss of $102.1 million, adjusted by non-cash charges of $16.1 million and net changes in our net operating assets and liabilities of $7.3 million.
Costs of certain activities are recognized based on an evaluation of the progress to completion of specific tasks. However, payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses and other current assets on our consolidated balance sheets.
However, payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses and other current assets on our consolidated balance sheets. The capitalized amounts are recognized as expenses as the goods are delivered or as related services are performed.
We use our chRDNA technologies to armor our cell therapies’ antitumor activity by using multiple genome-editing strategies, such as checkpoint disruption, immune cloaking, or a combination of these two strategies.
We use our chRDNA technologies to armor our cell therapies through multiple genome-editing strategies, such as checkpoint disruption, immune cloaking, or a combination of these two strategies, to enhance activity against devastating diseases.
As of December 31, 2022, there was $26.5 million of unrecognized stock-based compensation expense related to employee and non-employee stock options that is expected to be recognized over a weighted-average period of 2.7 years.
We recorded stock-based compensation expense of $13.8 million and $11.7 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, there was $25.8 million of unrecognized stock-based compensation expense related to employee stock options that is expected to be recognized over a weighted-average period of 2.5 years.
We expect to rely on our CMOs for the manufacturing of our product candidates to expedite readiness for future clinical trials, and most of these CMOs have capabilities for commercial manufacturing. Additionally, we may decide to build our own manufacturing facility in the future to provide us greater flexibility and control over our clinical or commercial manufacturing needs.
We expect to continue to rely on our CMOs for the manufacturing of our preclinical study and clinical trial materials, and most of these 109 Table of Contents CMOs have capabilities for commercial manufacturing. Additionally, we may decide to build our own manufacturing facility in the future to provide greater flexibility and control over our clinical or commercial manufacturing needs.
To our knowledge, it is the first anti-BCMA CAR-T cell therapy incorporating an immune cloaking approach that includes both the removal of the endogenous beta-2 microglobulin (“B2M”) protein by a genome-edited knockout of the B2M gene and insertion of a B2M–human-leukocyte-antigen-E–peptide transgene (“B2M–HLA-E”), enabling expression of HLA-E on the CAR-T cell surface.
Our second product candidate, CB-011, is an allogeneic CAR-T cell therapy that is, to our knowledge, the first anti-BCMA CAR-T cell therapy incorporating an immune cloaking approach that includes both the removal of the endogenous beta-2 microglobulin (“B2M”) protein and insertion of a beta-2-microglobulin–human-leukocyte-antigen-E–peptide transgene (“B2M–HLA-E”).
Our net losses and operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of expenses associated with our clinical trials and nonclinical studies and our other research and development expenses.
We had an accumulated deficit of $299.3 million as of December 31, 2023. Our net losses and operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of expenses associated with our clinical trials and nonclinical studies and our other research and development expenses.
Our lead product candidate, CB-010, to our knowledge, is the first clinical-stage allogeneic anti-CD19 CAR-T cell therapy with programmed cell death protein 1 (“PD-1”) removed from the CAR-T cell surface by a genome-edited knockout of the PDCD1 gene.
To our knowledge, CB-010 is also the first clinical-stage allogeneic anti-CD19 CAR-T cell therapy with programmed cell death protein 1 (“PD-1”) removed from the CAR-T cell surface by a genome-edited knockout of the PDCD1 gene. CB-010 is being evaluated in our ongoing ANTLER phase 1 clinical trial in adult patients with r/r B-NHL.
These increases were partially offset by a $1.4 million net decrease in patent prosecution and maintenance costs. Total Other Income Total other income increased by $6.7 million for the year ended December 31, 2022 as compared to the year ended December 31, 2021.
These increases were partially offset by decreases of $2.4 million in legal and director and officer insurance expenses, and other service related expenses; and a $1.0 million in patent prosecution and maintenance costs. Total Other Income Total other income increased by $7.1 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Additionally, through December 31, 2022, we received approximately $84.2 million from licensing agreements, licensing and collaboration agreements, a service agreement, patent assignments, and government grants, including $33.8 million that was received from AbbVie under the AbbVie Agreement.
Through December 31, 2023, we received approximately $95.1 million from licensing agreements, licensing and collaboration agreements, a service agreement, patent assignments, and government grants, including $36.7 million that was received from AbbVie under the now-terminated AbbVie Agreement.
We cannot estimate when such payments will be due and none of these events is probable to occur as of December 31, 2022. 112 Table of Conte n t s MSKCC Agreement Success Payments Under the MSKCC Agreement, we are obligated to make success payments to MSKCC of up to $35.0 million if our stock price increases by certain multiples of increasing value based on a comparison of the fair market value of our common stock with $5.1914 per share, adjusted for future stock splits, during a specified time period.
MSKCC Agreement Success Payments Under the MSKCC Agreement, we are obligated to make success payments to MSKCC of up to $35.0 million if our stock price increases by certain multiples of increasing value based on a comparison of the fair market value of our common stock with $5.1914 per share, adjusted for future stock splits, during a specified time period.
External costs include: • costs associated with acquiring technology and intellectual property licenses that have no alternative future uses, sublicensing revenue, and milestones under our licensing agreements; • costs incurred in connection with the preclinical and clinical development and manufacturing of our product candidates, including under agreements with contract research organizations (“CROs”), CMOs, and clinical sites; and • other research and development costs, including laboratory materials and supplies, and consulting services.
External costs include: • costs associated with acquiring technology and intellectual property licenses that have no alternative future uses, sublicensing revenues, and milestones; • costs incurred in connection with the preclinical and clinical development and manufacturing of our product candidates, including under agreements CMOs, suppliers, clinical research organizations (“CROs”), and clinical sites; and • other research and development costs, including laboratory materials and supplies, and consulting services. 110 Table of Contents Internal costs include: • personnel-related costs, including salaries, benefits, and share-based compensation expense, for our research and development personnel; and • allocated facilities and other overhead expenses, including expenses for rent, facilities maintenance, and depreciation.
Revenue Recognition We recognize revenue when a licensee or assignee, or a customer, obtains control of the promised goods or services (e.g., an intellectual property license), in an amount that reflects the consideration that we have received or expect to receive in exchange for those goods or services. 115 Table of Conte n t s We apply judgment to determine whether agreements are within the scope of revenue for customers or other accounting guidance at an agreement’s effective date.
Revenue Recognition We recognize revenue when a licensee or assignee, or a customer, obtains control of the promised goods or services (e.g., an intellectual property license), in an amount that reflects the consideration that we have received or expect to receive in exchange for those goods or services.
The following table summarizes our research and development expenses for the periods indicated: Year Ended December 31, 2022 2021 Change (in thousands) External costs: Expenses related to licenses, sublicensing revenue, and milestones $ 3,169 $ 3,960 $ (791) Services provided by CROs, CMOs, and other third parties that conduct preclinical studies and clinical trials on our behalf 30,367 20,032 10,335 Other research and development expenses 16,703 9,393 7,310 Total external costs 50,239 33,385 16,854 Internal costs: Personnel-related expenses 24,123 13,361 10,762 Facilities and other allocated expenses 7,868 5,509 2,359 Total internal costs 31,991 18,870 13,121 Total research and development expenses $ 82,230 $ 52,255 $ 29,975 General and Administrative Expenses Our general and administrative expenses consist primarily of personnel-related costs, intellectual property costs, consulting costs, and allocated overhead, including rent, equipment depreciation, and utilities.
The following table summarizes our research and development expenses for the periods indicated: Year Ended December 31, 2023 2022 Change (in thousands) External costs: Expenses related to licenses, sublicensing revenue, and milestones $ 2,777 $ 3,169 $ (392) Services provided by CROs, CMOs, and other third parties that conduct preclinical studies and clinical trials on our behalf 45,777 30,367 15,410 Other research and development expenses 16,967 16,703 264 Total external costs 65,521 50,239 15,282 Internal costs: Personnel-related expenses 35,411 24,123 11,288 Facilities and other allocated expenses 11,143 7,868 3,275 Total internal costs 46,554 31,991 14,563 Total research and development expenses $ 112,075 $ 82,230 $ 29,845 General and Administrative Expenses Our general and administrative expenses consist primarily of personnel-related costs, intellectual property costs, consulting costs, and allocated overhead, including rent, equipment depreciation, and utilities.
Overview We are a clinical-stage C lustered R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”) genome-editing biopharmaceutical company dedicated to developing transformative therapies for patients with devastating diseases.
See also the Special Note Regarding Forward-Looking Statements section of this Annual Report on Form 10-K. We are a clinical-stage C lustered R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”) genome-editing biopharmaceutical company dedicated to developing transformative therapies for patients with devastating diseases.
Furthermore, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development expenditures. If we need to raise additional capital to fund our operations, funding may not be available to us on acceptable terms, or at all.
Furthermore, our operating plans may change, and we expect to need additional funds to meet operational needs and capital requirements for clinical trials and other research and development expenditures.
The changes in our net operating assets and liabilities were due to increases of $29.6 million in deferred revenue primarily from the upfront payment received from AbbVie, $4.3 million in accrued expenses and other current liabilities, $1.2 million in deferred rent and lease incentive liability, $1.1 million in accounts payable, $0.3 million in deferred tax liabilities, offset by increases of $4.0 million in prepaid expenses and other current assets, $1.8 million in other receivables, $1.0 million in accounts receivable, and $0.2 million in contract assets.
The changes in our net operating assets and liabilities were due to decreases of $16.9 million in deferred revenue and $0.6 million in operating lease liabilities, partially offset by increases of $5.7 million in accrued expenses and other current liabilities, $1.8 million in accounts payable, and decreases of $1.8 million in prepaid expenses and other current assets and $0.8 million in contract assets.
These agreements provide for termination at the request of either party generally with less than one-year notice and, therefore, we believe that our non-cancelable obligations under these agreements are not material. We have milestones, royalties, and/or other payments due to third parties under our existing license and assignment agreements.
These agreements provide for termination at the request of either party generally with less than one-year notice and, therefore, we believe that our non-cancelable obligations under these agreements are not material. Some of these agreements include contingent payments that will become payable if and when we achieve certain development, regulatory, clinical, and/or commercial milestones.
We do not have any products approved for commercial sale and have not generated any revenue from product sales. We have incurred net losses since commencement of our operations. To date, we have primarily funded our operations through revenue from our license agreements, license and collaboration agreements, and a service agreement; the sale of shares of Intellia Therapeutics, Inc.
We do not have any products approved for commercial sale and have not generated any revenue from product sales. We have incurred operating losses since commencement of our operations.
If we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in dilution to our stockholders.
If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in dilution to our stockholders.
This increase primary relates to a $4.0 million increase in revenue recognized under the Collaboration and License Agreement (as amended, the “AbbVie Agreement”) with AbbVie Manufacturing Management Unlimited Company (“AbbVie”).
This increase primarily relates to a $16.8 million increase in revenue recognized under the now-terminated Collaboration and License Agreement (as amended, “AbbVie Agreement”) with AbbVie Manufacturing Management Unlimited Company (“AbbVie”). In connection with the termination of the AbbVie Agreement, we recognized the remaining deferred revenue of $20.8 million during the year ended December 31, 2023.
We accrue for these costs based on factors such as estimates of the work completed and in accordance with service agreements established with these third-party service providers. We make significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals.
We make significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals.
Accrued Research and Development Expenses As part of the process of preparing our financial statements, we are required to estimate and accrue expenses. Research and development expenses are charged to expense as incurred.
Accrued Research and Development Expenses As part of the process of preparing our financial statements, we are required to estimate and accrue expenses. Research and development expenses are charged to expense as incurred. Research and development expenses include those for certain payroll and personnel; laboratory supplies; consulting; manufacturing; external clinical; and allocated overhead, including rent, equipment depreciation, and utilities.
CB-020 and potential future CAR-NK cell therapy product candidates will contain genome edits designed to overcome some of the challenges of targeting solid tumors, such as trafficking, tumor infiltration, heterogeneity, and the immunosuppressive tumor microenvironment. 105 Table of Conte n t s Since our founding in 2011, we have devoted substantially all of our resources to organizing and staffing, business planning, raising capital, developing our genome-editing platform technologies, developing our product candidates and building our pipeline, creating and maintaining our intellectual property portfolio, and establishing arrangements with third parties for the manufacture and testing of our product candidates.
Since our founding in 2011, we have devoted substantially all of our resources to organizing and staffing, business planning, raising capital, expanding our genome-editing platform technologies, developing our product candidates and building our pipeline, creating and maintaining our intellectual property portfolio, and establishing arrangements with third parties for the manufacture, testing, and clinical trial evaluations of our product candidates.
We have funded our operations through sales of our convertible preferred stock, which generated approximately $150.1 million in aggregate net proceeds, and from our IPO, which generated approximately $321.0 million in net proceeds. We have also received approximately $88.4 million in net proceeds from the sale of Intellia common stock that we received under the Intellia Agreement.
We have funded our operations through sales of our capital stock, including sales of our convertible preferred stock, which generated approximately $150.1 million in aggregate net proceeds through 2021, from our initial public offering (“IPO”) in 2021, which generated approximately $321.0 million in net proceeds, and from an underwritten follow-on public offering in 2023 which generated approximately $134.4 million in net proceeds.
Our 2021 non-cash charges were primarily comprised of $3.4 million of stock-based compensation, $1.4 million related to the change in the fair value of the MSKCC success payments liability, and $1.0 million of depreciation and amortization expense, which were offset by a gain of $1.6 million from the PPP Loan extinguishment upon the loan 114 Table of Conte n t s forgiveness.
Our 2023 non-cash charges were primarily comprised of $13.8 million of stock-based compensation, $3.5 million of depreciation and amortization expense, $2.0 million of non-cash lease expense, and change in the fair value of the MSKCC success payments liability of $1.3 million, which were partially offset by the accretion of discounts on marketable securities of $4.4 million.
For the foreseeable future, we expect substantially all of our revenue will be generated from licensing and collaboration agreements.
For the foreseeable future, we expect substantially all of our revenue will be generated from licensing and collaboration agreements. Operating Expenses Research and Development Expenses Our research and development expenses consist of internal and external expenses incurred in connection with the development of our product candidates and our platform technologies, and our in-licensing, assignment, and other third-party agreements.
Cash used in investing activities for the year ended December 31, 2021 was primarily due to our purchases of marketable securities of $173.3 million, purchases of property and equipment of $2.1 million, and payments to acquire in-process research and development of $1.0 million.
Cash used in investing activities for the year ended December 31, 2023 was primarily due to purchases of marketable securities of $394.8 million and purchases of property and equipment of $11.6 million, partially offset by the proceeds from sales and maturities of marketable securities of $338.2 million.
We believe the fair value of the indemnification rights and agreements is minimal. Accordingly, we have not recorded any liabilities for these indemnification rights and agreements as of December 31, 2022. Emerging Growth Company and Smaller Reporting Company Status We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS”) Act.
Emerging Growth Company and Smaller Reporting Company Status We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 Act (“JOBS Act”).
This increase was primarily related to increases of $9.2 million in personnel-related expenses (which include an increase in stock-based compensation expense of $5.3 million) due to incremental hiring; $2.6 million in legal, accounting, insurance, and other expenses necessary to support the growth and operations of a clinical-stage public company; and $1.9 million in other facilities and allocated expenses.
This increase was primarily related to increases of $3.1 million in personnel-related expenses, including stock-based compensation, due to headcount increases; and $0.9 million in facilities and other allocated expenses.
The remaining increase of $0.3 million relates to other license agreements with various licensees. 110 Table of Conte n t s The following table summarizes our revenue by licensee for the years ended December 31, 2022 and 2021: Years Ended December 31, 2022 2021 Change (in thousands) AbbVie $ 7,956 $ 3,972 $ 3,984 Other licensees 5,895 5,626 269 Total licensing revenue $ 13,851 $ 9,598 $ 4,253 Research and Development Expenses Research and development expenses increased by $30.0 million to $82.2 million for the year ended December 31, 2022 from $52.3 million for the year ended December 31, 2021.
The following table summarizes our revenue by licensee for the years ended December 31, 2023 and 2022: Years Ended December 31, 2023 2022 Change (in thousands) AbbVie $ 24,802 $ 7,956 $ 16,846 Edge Animal Health, related party 1,150 — 1,150 Pfizer, related party 1,243 — 1,243 Other licensees 7,282 5,895 1,387 Total licensing and collaboration revenue $ 34,477 $ 13,851 $ 20,626 Research and Development Expenses Research and development expenses increased by $29.8 million to $112.1 million for the year ended December 31, 2023 from $82.2 million for the year ended December 31, 2022.
An income tax expense of $0.3 million was recognized for the year ended December 31, 2021, which was primarily related to state minimum taxes and an increase in the valuation allowance. 111 Table of Conte n t s Liquidity, Capital Resources, and Capital Requirements Sources of Liquidity Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations.
Liquidity, Capital Resources, and Capital Requirements Sources of Liquidity Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations.
We believe that CLL-1 is an attractive target for acute myeloid leukemia (“AML”) due to its expression on myeloid cancer cells, its enrichment in leukemic stem cells, and its absence on hematopoietic stem cells (“HSCs”).
We believe that CLL-1 is an attractive target for acute myeloid leukemia (“AML”) due to its expression on myeloid cancer cells, its enrichment in leukemic stem cells, and its absence on hematopoietic stem cells (“HSCs”).We have dosed the first patient in 108 Table of Contents our AMpLify phase 1 clinical trial, which is evaluating CB-012 in adult patients with relapsed or refractory AML (“r/r AML”) at dose level 1 (25x10 6 viable CAR-T cells).
CB-012 is our allogeneic CAR-T cell product candidate targeting CLL-1, currently in preclinical development for the treatment of relapsed or refractory acute myeloid leukemia (“r/r AML”). CB-012 is, to our knowledge, the first allogeneic CAR-T cell therapy with both checkpoint disruption and immune cloaking strategies.
CB-012 is, to our knowledge, the first allogeneic CAR-T cell therapy with both checkpoint disruption and immune cloaking strategies, and its manufacture requires a total of five genome edits.
We expect to continue to grant equity-based awards in the future, and to the extent that we do, our stock-based compensation expense recognized in future periods will likely increase. 117 Table of Conte n t s Leases We adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) on January 1, 2022, using the modified retrospective transition approach.
We expect to continue to grant equity-based awards in the future, and to the extent that we do, our stock-based compensation expense recognized in future periods will likely increase. Income Taxes We account for income taxes using the asset and liability method.
This increase was primarily related to increases of $10.8 million in personnel-related expenses (which include an increase in stock-based compensation expense of $3.0 million) due to incremental hiring; $10.3 million in external CMO manufacturing and CRO clinical activities, driven by increases of $3.7 million due to timing of CMO manufacturing activities for our product candidates, and $6.6 million in CRO clinical activities primarily to advance our ANTLER phase 1 trial for CB-010; $7.3 million in other research and development expenses to advance IND-enabling studies for CB-011 and preclinical research for additional programs, as well as other consulting services related to research and development; and $2.4 million in other facilities and allocated expenses.
This increase was primarily related to an increase of $15.4 million of external CMO and CRO activities for our clinical CAR-T cell therapy product candidates, including an increase of $5.1 million due to timing of CMO activities, and $10.3 million in CRO activities for clinical 113 Table of Contents trials; $11.3 million in personnel-related expenses, including stock-based compensation, due to headcount increases; and $3.3 million in facilities and other allocated expenses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our consolidated financial statements. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. We do not have any foreign currency.
Biggest changeWe have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. We do not have any foreign currency. Inflation generally affects us by increasing our cost of labor, manufacturing, and clinical trial costs.
Inflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation had a material effect on our results of operations during the year ended December 31, 2022.
We do not believe that inflation had a material effect on our results of operations during the year ended December 31, 2023.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We had cash, cash equivalents, and marketable securities of $317.0 million as of December 31, 2022, consisting of cash, money market funds, government securities, commercial paper, and corporate bonds, and we had cash and cash equivalents of $413.5 million as of December 31, 2021, consisting of cash and money market funds.
We had cash, cash equivalents, and marketable securities of $372.4 million as of December 31, 2023, consisting of cash, money market funds, government securities, commercial paper, and corporate debt securities, and we had cash and cash equivalents of $317.0 million as of December 31, 2022, consisting of cash, money market funds, government securities, commercial paper, and corporate debt securities.
To date, fluctuations in interest income have not been significant. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.
We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our consolidated financial statements.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Other CRBU 10-K year-over-year comparisons