10q10k10q10k.net

What changed in Beam Therapeutics Inc.'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Beam Therapeutics 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.

+725 added−799 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-28)

Top changes in Beam Therapeutics Inc.'s 2023 10-K

725 paragraphs added · 799 removed · 495 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

208 edited+90 added−176 removed441 unchanged
Biggest changeThe agency may also require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, including REMS, to help ensure that the benefits of the product outweigh the potential risks. REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe use, or ETASU.
Biggest changeFurther, depending on the specific risk(s) to be addressed, the FDA may require that contraindications, warnings or precautions be included in the product labeling, require that post-approval trials, including post-marketing clinical trials, be conducted to further assess a product’s safety after approval, require testing and surveillance programs to monitor the product after commercialization or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product.
Our platform In summary, we believe that building an integrated platform combining our gene editing capabilities with advanced delivery and manufacturing capabilities will give us the flexibility to develop a sustainable portfolio, featuring rapid development of new programs and lifecycle improvements in our core programs.
In summary, we believe that building an integrated platform combining our gene editing capabilities with advanced delivery and manufacturing capabilities will give us the flexibility to develop a sustainable portfolio, featuring rapid development of new programs and lifecycle improvements in our core programs.
If we are successfully able to gain regulatory approval in any country to introduce a licensed product into the commercial market in such country, then we are also required to use commercially reasonable efforts to commercialize such licensed product and make such licensed product reasonably available to the public.
If we are successfully able to gain regulatory approval in any country to introduce a licensed product into the commercial market in such country, then we are also required to use commercially reasonable efforts to commercialize such licensed product and make such licensed product reasonably available to the public.
FDA recommends that these long-term follow-up studies include, at a minimum, five years of annual physical examinations followed by annual queries, either in-person or by phone or written questionnaire, for the remaining observation period.
The FDA recommends that these long-term follow-up studies include, at a minimum, five years of annual physical examinations followed by annual queries, either in-person or by phone or written questionnaire, for the remaining observation period.
A sponsor seeking approval to market and distribute a new biologic in the United States generally must satisfactorily complete each of the following steps: • preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s Good Laboratory Practice, or GLP, regulations; • completion of the manufacture, under cGMP conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required analytical and stability testing; • design of a clinical protocol and submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated; • performance of adequate and well-controlled human clinical trials to establish the safety, potency, and purity of the product candidate for each proposed indication, in accordance with current Good Clinical Practices, or GCP; 29 • preparation and submission to the FDA of a Biologics License Application, or BLA, requesting marketing of the biological product for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product and proposed labelling; • 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 third parties, at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices, or cGMP, requirements; to assure that the facilities, methods, and controls are adequate to preserve the product’s identity, strength, quality, and purity; and, if applicable, the FDA’s current good tissue practice, or cGTP, requirements for the use of human cellular and tissue products; • satisfactory completion of any FDA audits of the non-clinical and clinical trial sites to assure compliance with GLPs and GCPs and the integrity of clinical data in support of the BLA; • payment of the application fee under the Prescription Drug User Free Act, or PDUFA, unless exempted; and • FDA review and approval of the BLA, which may be subject to additional post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and any post-approval studies required by the FDA.
A sponsor seeking approval to market and distribute a new biologic in the United States generally must satisfactorily complete each of the following steps: • preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s Good Laboratory Practice, or GLP, regulations; • completion of the manufacture, under cGMP conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required analytical and stability testing; • design of a clinical protocol and submission to the FDA of an investigational new drug, or IND, application for human clinical testing, which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated; • performance of adequate and well-controlled human clinical trials to establish the safety, potency, and purity of the product candidate for each proposed indication, in accordance with current Good Clinical Practices, or GCP; • preparation and submission to the FDA of a Biologics License Application, or BLA, requesting marketing of the biological product for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product and proposed labelling; • 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 third parties, at which the product, or components thereof, are produced to assess compliance with cGMP requirements; to assure that the facilities, methods, and controls are adequate to preserve the product’s identity, strength, quality, and purity; and, if applicable, the FDA’s current Good Tissue Practice, or cGTP, requirements for the use of human cellular and tissue products; • satisfactory completion of any FDA audits of the non-clinical and clinical trial sites to assure compliance with GLPs and GCPs and the integrity of clinical data in support of the BLA; 22 • payment of the application fee under the Prescription Drug User Free Act, or PDUFA, unless exempted; and • FDA review and approval of the BLA, which may be subject to additional post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and any post-approval studies required by the FDA.
Sponsors are required to make such policies publicly available upon the earlier of initiation of a Phase 2 or Phase 3 study; or 15 days after the investigational drug or biologic receives designation as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy. In addition, on May 30, 2018, the Right to Try Act was signed into law.
Sponsors are required to make such policies publicly available upon the earlier of initiation of a Phase 2 or Phase 3 study; or 15 days after the investigational drug or biologic receives designation as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy. 23 In addition, on May 30, 2018, the Right to Try Act was signed into law.
The PREVENT Pandemics Act, which was enacted in December 2022, clarifies that foreign drug manufacturing establishments are subject to registration and listing requirements even if a drug or biologic undergoes further manufacture, preparation, propagation, 34 compounding, or processing at a separate establishment outside the United States prior to being imported or offered for import into the United States.
The PREVENT Pandemics Act, which was enacted in December 2022, clarifies that foreign drug manufacturing establishments are subject to registration and listing requirements even if a drug or biologic undergoes further manufacture, preparation, propagation, compounding, or processing at a separate establishment outside the United States prior to being imported or offered for import into the United States.
Under the terms of the agreement, we will conduct preclinical research on up to six base editing programs that target specific genes within the complement system in various organs, including the eye, liver, and brain. Apellis has an exclusive option to license any or all of the six programs and will assume responsibility for subsequent development.
Under the terms of the Apellis Agreement, we will conduct preclinical research on six base editing programs that target specific genes within the complement system in various organs, including the eye, liver, and brain. Apellis has an exclusive option to license any or all of the six programs and will assume responsibility for subsequent development.
If we fail to use commercially reasonable efforts to pursue the viability of such technology or to initiate a discovery program or to submit an updated development plan in the specified time period then the license under such sub-category of the licensed patents will terminate and, if such sub-category of the licensed patents consists of base editor patent rights, our rights with respect to gene targeting licensed patents shall convert to non-exclusive so that such rights may be licensed for use to such terminated base editor licensed patents. 26 Broad Institute, MIT, and Harvard also retain the right to grant further licenses under specified circumstances to third parties, other than specified entities, that wish to research, develop, and commercialize a product that would otherwise fall within the scope of our exclusive license grant from Broad Institute and Harvard pursuant to Broad Institute, Harvard and MIT’s inclusive innovation model.
If we fail to use commercially reasonable efforts to pursue the viability of such technology or to initiate a discovery program or to submit an updated development plan in the specified time period then the license under such sub-category of the licensed patents will terminate and, if such sub-category of the licensed patents consists of base editor patent rights, our rights with respect to gene targeting licensed patents shall convert to non-exclusive so that such rights may be licensed for use to such terminated base editor licensed patents. 19 Broad Institute, MIT, and Harvard also retain the right to grant further licenses under specified circumstances to third parties, other than specified entities, that wish to research, develop, and commercialize a product that would otherwise fall within the scope of our exclusive license grant from Broad Institute and Harvard pursuant to Broad Institute, Harvard and MIT’s inclusive innovation model.
For more information regarding the risks related to our intellectual property, please see Item 1., Business—Intellectual property—Intellectual property licenses and Item 1A., Risk factors—Risks related to our intellectual property , in this Annual Report on Form 10-K. 21 The term of individual patents depends upon the legal term for patents in the countries in which they are granted.
For more information regarding the risks related to our intellectual property, please see Item 1., Business—Intellectual property—Intellectual property licenses and Item 1A., Risk factors—Risks related to our intellectual property , in this Annual Report on Form 10-K. The term of individual patents depends upon the legal term for patents in the countries in which they are granted.
Despite these review goals, it is not uncommon for FDA review of a BLA to extend beyond the PDUFA goal date. 35 Before approving a BLA, the FDA may inspect the sponsor and one or more clinical trial sites to assure compliance with IND and GCP requirements and the integrity of the clinical data submitted to the FDA.
Despite these review goals, it is not uncommon for FDA review of a BLA to extend beyond the PDUFA goal date. Before approving a BLA, the FDA may inspect the sponsor and one or more clinical trial sites to assure compliance with IND and GCP requirements and the integrity of the clinical data submitted to the FDA.
These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of any products for which we or our collaborators obtain regulatory and marketing approval. 42 Regulation and procedures governing approval of medicinal products in the EU and the U.K.
These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of any products for which we or our collaborators obtain regulatory and marketing approval. Regulation and procedures governing approval of medicinal products in the EU and the U.K.
Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the “Investor Center” section of our corporate website and on our social media channels. The contents of our corporate website and social media channels are not, however, a part of this Annual Report on Form 10-K. 51
Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the “Investor Center” section of our corporate website and on our social media channels. The contents of our corporate website and social media channels are not, however, a part of this Annual Report on Form 10-K.
Clinical trial approval On January 31, 2022, the new Clinical Trials Regulation (EU) No 536/2014, or the New Regulation, became effective in the European Union and replaced the prior Clinical Trials Directive 2001/20/EC. The new regulation aims at simplifying and streamlining the authorization, conduct and transparency of clinical trials in the EU.
Clinical trial approval On January 31, 2022, the new Clinical Trials Regulation (EU) No 536/2014, or CTR, became effective in the European Union and replaced the prior Clinical Trials Directive 2001/20/EC. The new regulation aims at simplifying and streamlining the authorization, conduct and transparency of clinical trials in the EU.
The regulatory requirements applicable to drug and biological product development, approval, and marketing are subject to change, and regulations and administrative guidance often are revised or reinterpreted by the agencies in ways that may have a significant impact on our business.
The regulatory requirements applicable to biological product development, approval, and marketing are subject to change, and regulations and administrative guidance often are revised or reinterpreted by the agencies in ways that may have a significant impact on our business.
Our current in-licensed patents and patent applications, if the appropriate maintenance fees are paid, are expected to expire between 2034 and 2040, excluding any additional term for patent term adjustments or patent term extensions (or the corresponding foreign equivalent).
Our current in-licensed patents and patent applications, if the 14 appropriate maintenance fees are paid, are expected to expire between 2034 and 2040, excluding any additional term for patent term adjustments or patent term extensions (or the corresponding foreign equivalent).
We paid Harvard a total of $9.0 million upon the completion of our Series A and Series B financings. 23 In May 2021, the first success payment measurement occurred and amounts due to Harvard were calculated to be $15.0 million.
We paid Harvard a total of $9.0 million upon the completion of our Series A and Series B financings. In May 2021, the first success payment measurement occurred and amounts due to Harvard were calculated to be $15.0 million.
While the guidance provides some additional clarity on FDA’s approach to assessing “sameness,” significant ambiguity and uncertainty remain as to how FDA will assess viral vectors in the same class, what differences in vector or transgene are considered minor, and what additional features may be considered. 39 The period of exclusivity begins on the date that the marketing application is approved by the FDA and applies only to the indication for which the product has been designated.
While the guidance provides some additional clarity on FDA’s approach to assessing “sameness,” significant ambiguity and uncertainty remain as to how FDA will assess viral vectors in the same class, what differences in vector or transgene are considered minor, and what additional features may be considered. 32 The period of exclusivity begins on the date that the marketing application is approved by the FDA and applies only to the indication for which the product has been designated.
Since the passage of the BPCIA, many states have passed laws or amendments to laws, including laws governing pharmacy practices, which are state-regulated, to regulate the use of biosimilars. 40 Patent term restoration and extension A patent claiming a new biological product may be eligible for a limited patent term extension under the Hatch-Waxman Act, which permits a patent restoration of up to five years for a single patent for an approved product as compensation for patent term lost during product development and FDA regulatory review.
Since the passage of the BPCIA, many states have passed laws or amendments to laws, including laws governing pharmacy practices, which are state-regulated, to regulate the use of biosimilars. 33 Patent term restoration and extension A patent claiming a new biological product may be eligible for a limited patent term extension under the Hatch-Waxman Act, which permits a patent restoration of up to five years for a single patent for an approved product as compensation for patent term lost during product development and FDA regulatory review.
Item 1. B usiness. Overview We are a biotechnology company committed to establishing the leading, fully integrated platform for precision genetic medicines. Our vision is to provide life-long cures to patients suffering from serious diseases. To achieve this vision, we have assembled a platform that includes a suite of gene editing and delivery technologies and are establishing internal manufacturing capabilities.
Item 1. B usiness. Overview We are a biotechnology company committed to establishing the leading, fully integrated platform for precision genetic medicines. Our vision is to provide life-long cures to patients suffering from serious diseases. To achieve this vision, we have assembled a platform that includes a suite of gene editing and delivery technologies as well as internal manufacturing capabilities.
Broad Institute may also terminate the Broad License Agreement in the event of our bankruptcy or insolvency, if we fail to procure and maintain insurance or if we, our affiliates or sublicensees bringing patent challenges relating to any licensed patents (subject to a cure period for us to terminate the sublicensee that has taken the applicable action). 27 License Agreement with Bio Palette Co., Ltd.
Broad Institute may also terminate the Broad License Agreement in the event of our bankruptcy or insolvency, if we fail to procure and maintain insurance or if we, our affiliates or sublicensees bringing patent challenges relating to any licensed patents (subject to a cure period for us to terminate the sublicensee that has taken the applicable action). 20 License Agreement with Bio Palette Co., Ltd.
Multiple edits using NHEJ, and thus multiple double-stranded breaks, can compound this issue and lead to large-scale genomic translocations and rearrangements, potentially limiting the applicability of nuclease-based approaches in multiplex editing. Third, while gene disruption with nucleases is efficient, making specific sequence changes to correct or modify genes remains largely inefficient.
Multiple edits using double-stranded breaks can compound this issue and lead to large-scale genomic translocations and rearrangements, potentially limiting the applicability of nuclease-based approaches in multiplex editing. Third, while gene disruption with nucleases is efficient, making specific sequence changes to correct or modify genes remains largely inefficient.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products, if approved in those countries. 47 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.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products, if approved in those countries. 41 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.
We use these channels, as well as social media channels such as Twitter and LinkedIn, in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligations under Regulation FD. It is possible that the information we post on our corporate website or other social media could be deemed to be material information.
We use these channels, as well as social media channels such as X and LinkedIn, in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligations under Regulation FD. It is possible that the information we post on our corporate website or other social media could be deemed to be material information.
Patients with this mutation typically require ongoing corn starch administration, without which they may enter into hypoglycemic shock within one to three hours. Our approach to treating patients with GSDIa is to apply base editing via LNP delivery to repair the two most prevalent mutations that cause the disease, R83C and Q347X.
Patients with this mutation typically require ongoing corn starch administration, without which they may enter into hypoglycemic shock within one to three hours. Our approach to treating patients with GSD1a is to apply base editing via LNP delivery to repair the two most prevalent mutations that cause the disease, R83C and Q347X.
BEAM-302: In Vivo LNP liver-targeting for AATD BEAM-302 is a liver-targeting LNP formulation of base editing reagents designed to offer a one-time treatment to genetically correct the E342K point mutation (PiZZ genotype) responsible for a severe form of AATD. AATD is an inherited genetic disorder that can cause early onset emphysema and liver disease.
BEAM-302: In Vivo LNP liver-targeting for AATD BEAM-302 is a liver-targeting LNP formulation of base editing reagents designed to offer a one-time treatment to correct the E342K point mutation (PiZZ genotype) predominantly responsible for the severe form of AATD. AATD is an inherited genetic disorder that can cause early onset emphysema and liver disease.
The guidance documents provide recommendations and additional clarity as to factors that the FDA will consider at each stage of gene therapy development and relate to, among other things, the proper preclinical assessment of gene therapies; the chemistry, manufacturing, and controls, or CMC, information that should be included in an IND application; the proper design of tests to measure product potency in support of an IND or BLA application; measures to observe delayed adverse effects in subjects who have been exposed to investigational gene therapies; and gene therapy products for the treatment of rare diseases.
The guidance documents provide recommendations and additional clarity as to factors that the FDA will consider at each stage of gene therapy 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 an IND or BLA application; measures to observe delayed adverse effects in subjects who have been exposed to investigational gene therapies; and gene therapy products for the treatment of rare diseases.
These delivery technologies include ex vivo modalities, such as electroporation, as well as in vivo modalities such as LNPs and viral vectors. In our pipeline, we have initially focused on applications of these technologies where their delivery capabilities have already been clinically-validated by third parties, such as ex vivo editing of blood stem cells and LNP delivery to the liver.
These delivery technologies include ex vivo modalities, such as electroporation, as well as in vivo modalities, such as LNPs. In our pipeline, we have initially focused on applications of these technologies where their delivery capabilities have already been clinically-validated by third parties, such as ex vivo editing of blood stem cells and LNP delivery to the liver.
A non-significant risk device study requires only IRB approval prior to initiation of a clinical study. 41 After a device is placed on the market, it remains subject to significant regulatory requirements. Medical devices may be marketed only for the uses and indications for which they are cleared or approved.
A non-significant risk device study requires only IRB approval prior to initiation of a clinical study. 34 After a device is placed on the market, it remains subject to significant regulatory requirements. Medical devices may be marketed only for the uses and indications for which they are cleared or approved.
We have the sole right to prosecute and maintain patents licensed by us to Bio Palette. 28 Unless earlier terminated, the Bio Palette License Agreement will expire on a licensed product-by-licensed product and country-by-country basis upon the expiration of the applicable royalty term for each such licensed product and country.
We have the sole right to prosecute and maintain patents licensed by us to Bio Palette. 21 Unless earlier terminated, the Bio Palette License Agreement will expire on a licensed product-by-licensed product and country-by-country basis upon the expiration of the applicable royalty term for each such licensed product and country.
We believe base editing is a powerful tool to simultaneously multiplex edit many genes without the unintended on-target effects that can result from simultaneous editing with nucleases through the creation of double-stranded breaks.
Immunology/Oncology We believe base editing is a powerful tool to simultaneously multiplex edit many genes without the unintended on-target effects that can result from simultaneous editing with nucleases through the creation of double-stranded breaks.
Advantages of base editing We believe our base editing platform offers meaningful advantages over established approaches in gene editing, including: • Highly precise and predictable gene editing, designed to make only one type of base edit at the desired target location; • Highly efficient and therapeutically relevant levels of gene correction, which are generally unachievable by nuclease-based editing methods; • Broad applicability in a wide range of cell types, including both dividing and non-dividing cells; • Direct chemical modification of DNA with no requirement for delivery of the corrected DNA sequence; 7 • Avoidance of unwanted DNA modifications associated with double-stranded breaks, including gene disruptions and chromosomal rearrangements, such as translocations or deletions; • The potential for permanent editing of genes, creating the opportunity for a life-long therapeutic outcome, including the ability to treat infants or young children since the edit will be passed on by dividing cells as the child grows; • Preservation of natural regulation and a normal number of copies of the gene in the cell by modification of genes in their native genomic setting; and • A versatile and modular product engine that can target a different gene sequence with the same base editor and a different guide RNA.
We believe our base editing platform offers meaningful advantages over established approaches in gene editing, including: • Highly precise and predictable gene editing, designed to make only one type of base edit at the desired target location; • Highly efficient and therapeutically relevant levels of gene correction, which are generally unachievable by nuclease-based editing methods; • Broad applicability in a wide range of cell types, including both dividing and non-dividing cells; • Direct chemical modification of DNA with no requirement for delivery of the corrected DNA sequence; • Avoidance of unwanted DNA modifications associated with double-stranded breaks, including gene disruptions and chromosomal rearrangements, such as translocations or deletions; • The potential for permanent editing of genes, creating the opportunity for a life-long therapeutic outcome, including the ability to treat infants or young children since the edit will be passed on by dividing cells as the child grows; • Multiple applications, including gene correction, gene silencing, gene activation, gene modification and/or multiplex editing of several genes simultaneously • Preservation of natural regulation and a normal number of copies of the gene in the cell by modification of genes in their native genomic setting; and • A versatile and modular product engine that can target a different gene sequence with the same base editor and a different guide RNA.
In addition, in October 2020, HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription products from Canada into the United States.
In addition, in October 2020, HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription drugs from Canada into the United States.
Government regulation Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the EU, extensively regulate, among other things, the research, development, testing, manufacturing, packaging, labeling, storage, record keeping, reimbursement, advertising, promotion, distribution, post-approval monitoring and reporting and import and export, pricing and reimbursement of pharmaceutical products, including biological products.
Government regulation Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the European Union, or EU, extensively regulate, among other things, the research, development, testing, manufacturing, packaging, labeling, storage, record keeping, reimbursement, advertising, promotion, distribution, post-approval monitoring and reporting and import and export, pricing and reimbursement of pharmaceutical products, including biological products.
BEAM-301: In Vivo LNP liver-targeting for GSDIa BEAM-301 is a liver-targeting LNP formulation of base editing reagents designed to correct the R83C mutation, the most prevalent disease-causing mutation for, and the mutation which results in the most severe form of, GSDIa.
BEAM-301: In Vivo LNP liver-targeting for GSD1a BEAM-301 is a liver-targeting LNP formulation of base editing reagents designed to correct the R83C mutation, the most prevalent disease-causing mutation for, and the mutation which results in the most severe form of, GSD1a.
Investors and others should note that we announce material information to our investors using one or more of the following: SEC filings, press releases and our corporate website, including without limitation the “Investors Center” section of our website.
Investors and others should note that we announce material information to our investors using one or more of the following: SEC filings, press releases and our corporate website, including without limitation the “Investors & Media” section of our website.
Under the centralized procedure in the EU, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided by the sponsor in response to questions of the Committee for Medicinal Products for Human Use, or CHMP.
Under the centralized procedure in the EU, the maximum timeframe for the evaluation of an application for an MA is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided by the sponsor in response to questions of the Committee for Medicinal Products for Human Use, or CHMP.
ESCAPE may also have applications in other diseases of the blood and immune system where HSCT could deliver potential benefits but has been limited by toxicities associated with current standard of care conditioning regimens. In December 2022, we presented preclinical data at the 2022 American Society of Hematology Annual Meeting and Exposition, or ASH, on our ESCAPE-1 and ESCAPE-2 programs.
ESCAPE may also have applications in other diseases of the blood and immune system where HSCT could deliver potential benefits but has been limited by toxicities associated with current standard of care conditioning regimens. In December 2022, we presented preclinical data at the 2022 American Society of Hematology Annual Meeting and Exposition, or ASH, on our ESCAPE program.
Beyond streamlining the process, the New Regulation includes a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors, and a harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts.
Beyond streamlining the process, the CTR includes a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors, and a harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts.
This pathway also requires the simultaneous delivery of an additional DNA template containing the desired, corrected gene sequence, which needs to be positioned at the precise location where the double-stranded break has occurred. The requirement of an additional DNA template significantly increases the complexity of delivery.
It also requires the simultaneous delivery of an additional DNA template containing the desired, corrected gene sequence, which needs to be positioned at the precise location where the double-stranded break has occurred. The requirement of an additional DNA template significantly increases the complexity of delivery.
Findings presented at ASH included the first in vivo data for the ESCAPE-1 program, which build upon data shared earlier in 2022 demonstrating that ESCAPE-1 antibodies bound to wild-type CD117 and blocked binding of its ligand in mice. In addition, we observed depletion of unedited cells and enrichment of edited cells in mice dosed with ESCAPE-1 antibodies.
Findings presented at ASH included the first in vivo preclinical data for the ESCAPE program, which builds upon data shared earlier in 2022 demonstrating that ESCAPE antibodies bound to wild-type CD117 and blocked binding of its ligand in mice. In addition, we observed depletion of unedited cells and enrichment of edited cells in mice dosed with ESCAPE antibodies.
Specifically, the grant of marketing authorization in the EU for products containing viable human tissues or cells such as gene therapy medicinal products is governed by Regulation 1394/2007/EC on advanced therapy medicinal products, read in combination with Directive 2001/83/EC of the European Parliament and of the Council, commonly known as the Community code on medicinal products.
Specifically, the grant of an MA in the EU for products containing viable human tissues or cells such as gene therapy medicinal products is governed by Regulation 1394/2007/EC on advanced therapy medicinal products, read in combination with Directive 2001/83/EC of the European Parliament and of the Council, commonly known as the Community code on medicinal products.
As of December 31, 2022, our registered trademark portfolio contained approximately 20 registered/allowed trademarks and pending trademark applications in the United States and in certain overseas jurisdictions. Intellectual property licenses We are a party to a number of license agreements under which we license patents, patent applications, and other intellectual property from third parties.
As of December 31, 2023, our registered trademark portfolio contained approximately 35 registered/allowed trademarks and pending trademark applications in the United States and in certain overseas jurisdictions. Intellectual property licenses We are a party to a number of license agreements under which we license patents, patent applications, and other intellectual property from third parties.
The following table summarizes the status of certain of our programs: Hematology: Ex Vivo HSCs We are advancing hematology base editing programs in which HSCs are collected from a patient, edited using electroporation, a clinically validated technology for the delivery of therapeutic constructs into harvested cells, and then infused back into the patient following a myeloablative conditioning regimen, such as treatment with busulfan, the standard of care in HSC transplantation today.
The following table summarizes the status of our primary programs: 7 Hematology We are advancing hematology base editing programs in which HSCs are collected from a patient, edited using electroporation, a clinically validated technology for the delivery of therapeutic constructs into harvested cells, and then infused back into the patient following a myeloablative conditioning regimen, such as treatment with busulfan, the standard of care in HSC transplantation today.
More broadly in the immuno-oncology cell therapy space, these include Allogene Therapeutics, Cellectis, 2seventy bio, CRISPR Therapeutics, Adicet Bio, Bristol Myers Squibb, Fate Therapeutics, Gilead 19 Sciences, Novartis Pharmaceuticals, Poseida Therapeutics, Precision Bio, Legend Biotech and Autolus Therapeutics.
More broadly in the immuno-oncology cell therapy space, these include Allogene Therapeutics, Cellectis, CRISPR Therapeutics, Adicet Bio, Bristol Myers Squibb, Fate Therapeutics, Gilead Sciences, Novartis Pharmaceuticals, Poseida Therapeutics, Legend Biotech and Autolus Therapeutics.
The New Regulation did not change the preexisting requirement that a sponsor must obtain prior approval from the competent national authority of the EU Member State in which the clinical trial is to be conducted.
The CTR did not change the preexisting requirement that a sponsor must obtain prior approval from the competent national authority of the EU Member State in which the clinical trial is to be conducted.
GSDIa is an autosomal recessive disorder caused by mutations in the G6PC gene that disrupt a key enzyme, G6Pase, critical for maintaining glucose homeostasis. Inhibition of G6Pase activity results in low fasting blood glucose levels that can result in seizures and be fatal.
GSD1a is an autosomal recessive disorder caused by mutations in the G6PC gene that disrupts a key enzyme, G6Pase, critical for maintaining glucose homeostasis. Inhibition of G6Pase activity results in low fasting blood glucose levels that can result in seizures and be fatal.
The Trade and Cooperation Agreement focuses primarily on free trade by ensuring no tariffs or quotas on trade in goods, including healthcare products such as medicinal products. Thereafter, the EU and the United Kingdom will form two separate markets governed by two distinct regulatory and legal regimes.
The Trade and Cooperation Agreement focuses primarily on free trade by ensuring no tariffs or quotas on trade in goods, including healthcare products such as medicinal products. Thereafter, the EU and the U.K. will form two separate markets governed by two distinct regulatory and legal regimes.
ESCAPE-1 consists of multiplex base edited HSCs that include a therapeutic edit for sickle cell disease at the HGB1/2 gene and an additional edit at CD117.
Our ESCAPE sickle cell disease program consists of multiplex base edited HSCs that include a therapeutic edit for sickle cell disease at the HGB1/2 gene and an additional edit at CD117.
In 2020, we showed the ability to directly correct the mutation causing AATD, providing both in vitro and in vivo preclinical proof-of-concept for base editing to correct this disease.
In 2020, we demonstrated the ability of base editors to directly correct the mutation causing AATD, providing both in vitro and in vivo preclinical proof-of-concept for base editing to correct this disease.
The role of the relevant ethics committees in the assessment procedure will continue to be governed by the national law of the Member State Concerned. However, overall related timelines will be defined by the New Regulation.
The role of the relevant ethics committees in the assessment procedure will continue to be governed by the national law of the Member State Concerned. However, overall related timelines will be defined by the CTR.
In addition to our monthly programming, we are undertaking initiatives to accomplish the following goals, which were established with direct input from a company-wide listening tour and are linked to our values: • Inclusion, Diversity and Belonging at Beam is a cultural priority with a clear vision, intentional commitment, and transparent accountability.​ • We incorporate an Inclusion, Diversity and Belonging lens into our programs, policies, and processes, ensuring Beam team members understand how inclusion, diversity and belonging can have a positive effect on the employee experience.​ • We take meaningful action to increase and support underrepresented talent, with specific emphasis on Black and Latinx team members. • We honor and acknowledge various groups throughout the year, observing National Hispanic Heritage Month, Black History Month, International Women’s Day, Global Diversity Awareness Month, and Indigenous People’s Day.
In addition to our monthly programming, we are undertaking initiatives to accomplish the following goals, which were established with direct input from a company-wide listening tour and are linked to our values: • Inclusion, Diversity and Belonging at Beam is a cultural priority with a clear vision, intentional commitment, and transparent accountability.​ • We incorporate an Inclusion, Diversity and Belonging lens into our programs, policies, and processes, ensuring Beam team members understand how inclusion, diversity and belonging can have a positive effect on the employee experience.​ • We take meaningful action to increase and support underrepresented talent, with specific emphasis on Black and Latinx team members. • We honor and acknowledge various groups throughout the year, observing National Hispanic Heritage Month, Black History Month, International Women’s Day, Global Diversity Awareness Month, and Indigenous People’s Day. 45 Available Information Our website address is www.beamtx.com, and our investor relations website is located at investors.beamtx.com.
As such, the Trade and Cooperation Agreement seeks to minimize barriers to trade in goods while accepting that border checks will become inevitable as a consequence that the United Kingdom is no longer part of the single market.
As such, the Trade and Cooperation Agreement seeks to minimize barriers to trade in goods while accepting that border checks will become inevitable as a consequence that the U.K. is no longer part of the single market.
We intend to continue to pursue, when possible, additional patent protection, including composition of matter, method of use, and process claims, directed to each component of our platform technology and the programs in our portfolio. As of December 31, 2022, our wholly-owned patent portfolio consisted of three issued U.S. patents, and two issued patents in jurisdictions outside the United States.
We intend to continue to pursue, when possible, additional patent protection, including composition of matter, method of use, and process claims, directed to each component of our platform technology and the programs in our portfolio. As of December 31, 2023, our wholly-owned patent portfolio consisted of five issued U.S. patents, and six issued patents in jurisdictions outside the United States.
The elegance of the base editing approach combined with a tissue specific delivery modality provides the basis for a targeted, efficient, precise, and highly versatile gene editing system, capable of gene correction, gene modification, gene silencing or gene activation, and/or multiplex editing of several genes simultaneously.
The elegance of the base editing approach, combined with a tissue specific delivery modality, provides the basis for a targeted, efficient, precise, and highly versatile gene editing system that is designed to be capable of gene correction, gene silencing, gene activation, gene modification, and/or multiplex editing of several genes simultaneously.
The deaminase makes a predictable chemical modification, called deamination, of the amine group on either adenine or cytosine. The deaminase in a CBE will convert an amine group of C, resulting in the formation of uracil, which is read by the DNA polymerase as a T.
The deaminase makes a predictable chemical modification, called deamination, of the amine group on either adenine (A) or cytosine (C) bases. 6 The deaminase in a CBE will convert an amine group of C, resulting in the formation of uracil (U), which is read by the DNA polymerase as a thymine (T) base.
Review and approval of a BLA Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, along with information relating to the product’s chemistry, manufacturing, controls and proposed labeling, are submitted to the FDA as part of an application requesting approval to market the product candidate for one or more indications.
Submission of a BLA Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, along with information relating to the product’s CMC and proposed labeling, are submitted to the FDA as part of an application requesting approval to market the product candidate for one or more indications.
Since a significant proportion of the regulatory framework for pharmaceutical products in the United Kingdom covering the quality, safety, and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales, and distribution of pharmaceutical products is derived from EU directives and regulations, Brexit may have a material impact upon the regulatory regime with respect to the development, manufacture, importation, approval and commercialization of our product candidates in the United Kingdom.
Since a significant proportion of the regulatory framework for pharmaceutical products in the U.K. covering the quality, safety, and efficacy of pharmaceutical products, clinical trials, MAs, commercial sales, and distribution of pharmaceutical products is derived from EU directives and regulations, Brexit may have a material impact upon the regulatory regime with respect to the development, manufacture, importation, approval, and commercialization of our product candidates in the U.K.
The modular and individual components of our base editors have the potential to be rapidly customized for specific diseases, potentially allowing us to create new programs with significant efficiencies in development. By changing the guide RNA portions of the CRISPR protein, we believe we can quickly and precisely retarget base editors to different genomic locations based on their gene sequences.
The modular and individual components of our base editors have the potential to be customized for specific diseases, potentially allowing us to create new programs with significant efficiencies in development. For instance, by changing the guide RNA and/or CRISPR protein, we can retarget base editors to different genomic locations based on their gene sequences.
As part of this strategy, we have licensed a portfolio of three additional complementary technologies – RNA base editing, Cas12b nuclease editing, and prime editing for certain fields. Combined with base editing, we have assembled a broad and versatile portfolio of next generation gene editing technologies for the potential treatment of many severe diseases.
Our portfolio of precision gene editing technologies We have licensed a portfolio of three additional complementary gene editing technologies – prime editing, Cas12b nuclease editing and RNA base editing– for certain fields. Combined with base editing, we have assembled a broad and versatile portfolio of next generation gene editing technologies for the potential treatment of many severe diseases.
We also have approximately 301 pending patent applications, including PCT applications, provisional patent applications and counterparts to the foregoing U.S. and foreign patents. In addition, Beam co-owns 24 pending patent applications between the Broad Institute, Inc., UCL Business, Ltd., and Apellis Pharmaceuticals, Inc.
We also have approximately 387 pending patent applications, including PCT applications, provisional patent applications and counterparts to the foregoing U.S. and foreign patents. In addition, Beam co-owns one issued U.S. patent and 26 pending patent applications between the Broad Institute, Inc., UCL Business, Ltd., and Apellis Pharmaceuticals, Inc.
The key features of that plan are to: (a) make pharmaceutical prices more affordable and equitable for all consumers and throughout the health care system by supporting pharmaceutical price negotiations with manufacturers; (b) improve and promote competition throughout the prescription pharmaceutical industry by supporting market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase transparency; and (c) foster scientific innovation to promote better healthcare and improve health by supporting public and private research and making sure that market incentives promote discovery of valuable and accessible new treatments.
The key features of that plan are to: (a) make pharmaceutical prices more affordable and equitable for all consumers and throughout the health care system by supporting pharmaceutical price negotiations with manufacturers; (b) improve and promote competition throughout the prescription pharmaceutical industry by supporting market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase transparency; and (c) foster scientific innovation to promote better healthcare and improve health by supporting public and private research and making sure that market incentives promote discovery of valuable and accessible new treatments. 43 On August 16, 2022, the IRA was signed into law by President Biden.
For our liver targeted therapies, these include Intellia Therapeutics, Editas Medicines, CRISPR Therapeutics, Wave Life Sciences, Arrowhead Pharmaceuticals, Dicerna Pharmaceuticals, Excision BioTherapeutics, Ultragenyx, Apic Bio, Arrowhead Pharmaceuticals, LogicBio Therapeutics, Generation Bio and Vertex.
For our liver targeted therapies, these include Intellia Therapeutics, Editas Medicines, CRISPR Therapeutics, Wave Life Sciences, Moderna, Korro Bio, Arrowhead Pharmaceuticals, Dicerna Pharmaceuticals, Ultragenyx, Arrowhead Pharmaceuticals, LogicBio Therapeutics, Generation Bio and Vertex.
Wave 2: Improved Conditioning In parallel with Wave 1 development, we also aim to improve the transplant conditioning regimen for sickle cell disease patients undergoing HSCT, reducing toxicity challenges associated with HSCT standard of care.
Wave 2: Non-genotoxic Conditioning In parallel with Wave 1 development, we also aim to improve the transplant conditioning regimen for patients undergoing HSCT, reducing toxicity challenges associated with HSCT standard of care.
Our license agreement with The Broad Institute, Inc., or Broad Institute, gives us access to RNA base editing technology, a two-part modular system using an RNA-directed CRISPR protein for targeting RNA strands and a deaminase for editing.
Our Broad Institute license also gives us access to RNA base editing technology, a two-part modular system using an RNA-directed CRISPR protein for targeting RNA strands and a deaminase for editing.
An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions about the product or conduct of the proposed clinical trial, including concerns that human research subjects will be exposed to unreasonable health risks.
An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions about the product or conduct of the proposed clinical trial, including concerns that human research subjects will be exposed to unreasonable health risks or any issues surrounding chemistry, manufacturing and controls, or CMC, for the proposed product.
We have initiated a first-in-human Phase 1/2 clinical trial designed to evaluate the safety and efficacy of BEAM-201 in patients with relapsed/refractory T-ALL/T-LL and we expect to dose the first patient in the trial by mid-2023.
We have dosed the first patient in a first-in-human Phase 1/2 clinical trial designed to evaluate the safety and efficacy of BEAM-201 in patients with relapsed/refractory T-ALL/T-LL.
As of December 31, 2022, our in-licensed patent portfolio consisted of approximately 37 issued U.S. patents, and approximately 90 issued patents in jurisdictions outside the United States. We also have approximately 302 pending patent applications, including PCT applications, provisional patent applications and counterparts to the foregoing U.S. and foreign patents.
As of December 31, 2023, our in-licensed patent portfolio consisted of approximately 45 issued U.S. patents, and approximately 145 issued patents in jurisdictions outside the United States. We also have approximately 274 pending patent applications, including PCT applications, provisional patent applications and counterparts to the foregoing U.S. and foreign patents.
When a foreign clinical trial is not conducted under an IND, the sponsor must ensure that the trial complies with certain FDA regulatory requirements in order to use the trial as support for an IND or application for marketing approval in the U.S.
When a foreign clinical trial is conducted under an IND, all IND requirements must be met unless waived. When a foreign clinical trial is not conducted under an IND, the sponsor must ensure that the trial complies with certain regulatory requirements of the FDA in order to use the trial as support for an IND or application for marketing approval.
Once reinfused, the HSCs begin repopulating a portion of the bone marrow in a process known as engraftment. The engrafted, edited HSCs give rise to progenitor cell types with the corrected gene sequences. We plan to deploy this ex vivo approach in our BEAM-101 (sickle cell disease and beta thalassemia) and ESCAPE (improved conditioning) base editing programs.
Once reinfused, the HSCs begin repopulating a portion of the bone marrow in a process known as engraftment. The engrafted, edited HSCs give rise to progenitor cell types with the corrected gene sequences. We are deploying this ex vivo approach in our BEAM-101 and ESCAPE base editing programs.
After evaluating the application and all related information, including the advisory committee recommendations, if any, and inspection reports of manufacturing facilities and clinical trial sites, the FDA may issue either an approval letter or a Complete Response Letter, or CRL. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications.
After evaluating the application and all related information, including the advisory committee recommendations, if any, and inspection reports of manufacturing facilities and clinical trial sites, the FDA may issue either an approval letter or a Complete Response Letter, or CRL.
Overall, we are seeking to build the leading integrated platform for precision genetic medicine, which may have broad therapeutic applicability and the potential to transform the field of precision genetic medicines. We continue to make meaningful advancements across our programs.
Overall, we are seeking to build the leading integrated platform for precision genetic medicine, which may have broad therapeutic applicability and the potential to transform the field of precision genetic medicines.
The EU and the United Kingdom reached an agreement on their new partnership in the Trade and Cooperation Agreement, or the Trade and Cooperation Agreement, which was applied provisionally beginning on January 1, 2021 and which entered into force on May 1, 2021.
Brexit and the regulatory framework in the U.K. The EU and the U.K. reached an agreement on their new partnership in the Trade and Cooperation Agreement, or the Trade and Cooperation Agreement, which was applied provisionally beginning on January 1, 2021 and which entered into force on May 1, 2021.
Accordingly, the licenses granted to us under the Editas License Agreement are subject to the terms and conditions set forth in each of the license agreements concerning the licensed patents between Broad Institute, Harvard and Editas, or the Broad/Harvard Head Licenses, and each of the license agreements concerning the patents for which we have an option to obtain a license between MGH and Editas, or the MGH Head Licenses.
Accordingly, the licenses granted to us under the Editas License Agreement are subject to the terms and conditions set forth in each of the license agreements concerning the licensed patents between Broad Institute, Harvard and Editas, or the Broad/Harvard Head Licenses, and each of the license agreements concerning the patents for which we have an option to obtain a license between MGH and Editas, or the MGH Head Licenses. 17 As described above, Editas granted us an exclusive option to obtain an exclusive license under certain patents on a patent family-by-patent family basis.
While this NHEJ approach can be effective if the desired outcome is to knock out or switch off the whole gene, it does not allow for precise control of the specific genetic outcome at the target site and its effects may vary from individual to individual.
Nuclease editors can be effective if the desired outcome is to knock out or switch off the whole gene, but do not allow for precise control of the specific genetic outcome at the target site and its effects may vary from individual to individual.
BEAM-101: Recreating naturally-occurring protective mutations to activate fetal hemoglobin BEAM-101 is a patient-specific, autologous HSC investigational therapy designed to offer a potentially best-in-class profile, incorporating base edits that are intended to mimic single nucleotide polymorphisms seen in individuals with HPFH.
BEAM-101 is a patient-specific, autologous HSC investigational therapy designed to offer a potentially best-in-class profile, incorporating base edits that are intended to mimic single nucleotide polymorphisms seen in individuals with hereditary persistence of fetal hemoglobin, or HPFH.
For example, the United Kingdom is no longer covered by the centralized procedures for obtaining EU-wide marketing authorization from the EMA, and a separate marketing authorization will be required to market our product candidates in the United Kingdom.
For example, the U.K. is no longer covered by the centralized procedures for obtaining EU-wide MAs from the EMA, and a separate MA will be required to market our product candidates in the U.K.
Most CPRA provisions took effect on January 1, 2023, though the obligations apply to any personal information collected after January 1, 2022. These provisions may apply to some of our business activities. In addition, other states, including Virginia and Colorado, already have passed state privacy laws. Other states will be considering these laws in the future.
Most CPRA provisions took effect on January 1, 2023, though the obligations apply to any personal information collected after January 1, 2022. These provisions may apply to some of our business activities. In addition, more than 12 other states, already have passed state privacy laws.
Prime editing may be able to achieve the “rewriting” of short sequences of DNA at a target location. Prime editing utilizes a CRISPR protein to target a mutation site in DNA and to nick a single strand of the target DNA.
We have a license to prime editing from Prime Medicine, Inc. Prime editing may be able to achieve the rewriting of short sequences of DNA at a target location. Prime editing utilizes a CRISPR protein to target a mutation site in DNA and to nick a single strand of the target DNA.
A product may be designated as a breakthrough therapy if it is intended to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.
Fast track designation may be rescinded if FDA believes that the product no longer meets the qualifying criteria. 29 A product may be designated as a breakthrough therapy if it is intended to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.

… 394 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

216 edited+122 added−44 removed720 unchanged
Biggest changeMany companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their product candidates. 62 We and our collaborators may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize any product candidates we identify and develop, including: • delays in reaching a consensus with regulators on trial design and endpoints; • regulators, institutional review boards, or IRBs, or independent ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • delays in reaching or failing to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective CROs and clinical trial sites; • clinical trials of any product candidates we may develop may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development or research programs; • difficulty in designing well-controlled clinical trials due to ethical considerations which may render it inappropriate to conduct a trial with a control arm that can be effectively compared to a treatment arm; • difficulty in designing clinical trials and selecting endpoints for diseases that have not been well-studied and for which the natural history and course of the disease is poorly understood; • the number of patients required for clinical trials of any product candidates we develop may be larger than we anticipate; enrollment of suitable participants in these clinical trials, which may be particularly challenging for some of the rare genetically defined diseases we are targeting in our most advanced programs, may be delayed or slower than we anticipate; or patients may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • regulators, IRBs, or independent ethics committees may require that we or our investigators suspend or terminate clinical research or clinical trials of any product candidates we develop for various reasons, including noncompliance with regulatory requirements, a finding of undesirable side effects or other unexpected characteristics, or that the participants are being exposed to unacceptable health risks or after an inspection of our clinical trial operations or trial sites; • the cost of clinical trials of any product candidates we may develop may be greater than we anticipate; • the supply or quality of any product candidates we may develop or other materials necessary to conduct clinical trials of any product candidates we develop may be insufficient or inadequate, including as a result of delays in the testing, validation, manufacturing, and delivery of any product candidates we may develop to the clinical sites by us or by third parties with whom we have contracted to perform certain of those functions; • delays in having patients complete participation in a trial or return for post-treatment follow-up; • clinical trial sites dropping out of a trial; • selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data; • occurrence of serious adverse events associated with any product candidates we may develop that are viewed to outweigh their potential benefits; • occurrence of serious adverse events in trials of the same class of agents conducted by other sponsors; • disruption to the operations of the FDA; and • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols or otherwise complying with additional requirements. 63 If we or our collaborators are required to conduct additional clinical trials or other testing of any product candidates we develop beyond those that we currently contemplate, if we or our collaborators are unable to successfully complete clinical trials or other testing of any product candidates we develop, or if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we or our collaborators may: • be delayed in obtaining marketing approval for any such product candidates we may develop or not obtain marketing approval at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings; • be subject to changes in the way the product is administered; • be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements; • have regulatory authorities withdraw, or suspend, their approval of the product or impose restrictions on its distribution in the form of a REMS or through modification to an existing REMS; • be sued; or • experience damage to our reputation.
Biggest changeWe and our collaborators may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize any product candidates we identify and develop, including: • delays in reaching a consensus with regulators on trial design and endpoints; • regulators, institutional review boards, or IRBs, or independent ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • delays in reaching or failing to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective CROs and clinical trial sites; • clinical trials of any product candidates we may develop may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development or research programs; • difficulty in designing well-controlled clinical trials due to ethical considerations which may render it inappropriate to conduct a trial with a control arm that can be effectively compared to a treatment arm; • difficulty in designing clinical trials and selecting endpoints for diseases that have not been well-studied and for which the natural history and course of the disease is poorly understood; 58 • the number of patients required for clinical trials of any product candidates we develop may be larger than we anticipate; enrollment of suitable participants in these clinical trials, which may be particularly challenging for some of the rare genetically defined diseases we are targeting in our most advanced programs, may be delayed or slower than we anticipate; or patients may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • regulators, IRBs, or independent ethics committees may require that we or our investigators suspend or terminate clinical research or clinical trials of any product candidates we develop for various reasons, including noncompliance with regulatory requirements, a finding of undesirable side effects or other unexpected characteristics, or that the participants are being exposed to unacceptable health risks or after an inspection of our clinical trial operations or trial sites; • the cost of clinical trials of any product candidates we may develop may be greater than we anticipate; • the supply or quality of any product candidates we may develop or other materials necessary to conduct clinical trials of any product candidates we develop may be insufficient or inadequate, including as a result of delays in the testing, validation, manufacturing, and delivery of any product candidates we may develop to the clinical sites by us or by third parties with whom we have contracted to perform certain of those functions; • delays in having patients complete participation in a trial or return for post-treatment follow-up; • clinical trial sites dropping out of a trial; • selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data; • occurrence of serious adverse events associated with any product candidates we may develop that are viewed to outweigh their potential benefits; • occurrence of serious adverse events in trials of the same class of agents conducted by other sponsors; • disruption to the operations of the FDA, EMA or other relevant regulatory authority; and • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols or otherwise complying with additional requirements.
We have limited experience manufacturing any of our product candidates in the volumes that are necessary to support clinical trials or and no experience manufacturing at volumes that are necessary to support commercial sales. Efforts to establish these capabilities may not meet initial expectations as to scheduling, scale-up, reproducibility, yield, purity, cost, potency or quality.
We have limited experience manufacturing any of our product candidates in the volumes that are necessary to support clinical trials and no experience manufacturing at volumes that are necessary to support commercial sales. Efforts to establish these capabilities may not meet initial expectations as to scheduling, scale-up, reproducibility, yield, purity, cost, potency or quality.
Giuseppe Ciaramella, is the interim chief executive officer of Orbital and is a member of its board of directors. Because of our minority ownership in Orbital, we have a lesser degree of control over its business operations, thereby potentially subjecting us to additional the financial, legal, operational and compliance risks.
Giuseppe Ciaramella, is the interim chief executive officer of Orbital and is a member of its board of directors. Because of our minority ownership in Orbital, we have a lesser degree of control over its business operations, thereby potentially subjecting us to additional financial, legal, operational and compliance risks.
Although we have an option to exclusively license certain patents and patent applications directed to Cas9 and Cas12a from Editas, who in turn has licensed such patents from various academic institutions including Broad Institute, we do not currently have a license to such patents and patent applications.
Although we have an option to exclusively license certain patents and patent applications directed to Cas9 and Cas12a from Editas, who in turn has licensed such patents from various academic institutions including Broad Institute, we do not currently have a license to such patents and patent applications.
The opposition procedure before the EPO allows one or more third parties to challenge the validity of a granted European patent within nine months after grant date of the European patent. Opposition proceedings may involve issues including, but not limited to, priority, patentability of the claims involved, and procedural formalities related to the filing of the patent application.
The opposition procedure before the EPO allows one or more third parties to challenge the validity of a granted European patent within nine months after grant date of the European patent. Opposition proceedings may involve issues including, but not limited to, priority, patentability of the claims involved, and procedural formalities related to the filing of the patent application.
If these patents are maintained by the Opposition Division with claims similar to those that are currently opposed, our ability to commercialize our product candidates may be adversely affected if we do not obtain a license to these patents. We may not be able to obtain any required license on commercially reasonable terms or at all.
If these patents are maintained by the Opposition Division with claims similar to those that are currently opposed, our ability to commercialize our product candidates may be adversely affected if we do not obtain a license to these patents. We may not be able to obtain any required license on commercially reasonable terms or at all.
Even if we were able to obtain a license, it could be nonexclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments.
Even if we were able to obtain a license, it could be nonexclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments.
If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, we may be unable to commercialize our base editing platform technology, delivery platform technology or product candidates or such commercialization efforts may be significantly delayed, which could in turn significantly harm our business.
If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, we may be unable to commercialize our base editing platform technology, delivery platform technology or product candidates or such commercialization efforts may be significantly delayed, which could in turn significantly harm our business.
Risks related to our common stock The market price of our common stock may be volatile and fluctuate substantially, which could result in substantially losses for purchasers of our common stock and subject us to securities class action litigation. Our stock price has been, and in the future, may be, subject to substantial volatility.
Risks related to our common stock The market price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock and subject us to securities class action litigation. Our stock price has been, and in the future, may be, subject to substantial volatility.
For example: • any product candidates we may develop will eventually become commercially available in generic or biosimilar product forms; • others may be able to make gene therapy products that are similar to any product candidates we may develop or utilize similar base editing technology but that are not covered by the claims of the patents that we license or may own in the future; • we, or our license partners or current or future collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future; • we, or our license partners or current or future collaborators, might not have been the first to file patent applications covering certain of our or their inventions; • we, or our license partners or current or future collaborators, may fail to meet our obligations to the U.S. government regarding any in-licensed patents and patent applications funded by U.S. government grants, leading to the loss or unenforceability of patent rights; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights; • it is possible that our pending, owned or licensed patent applications or those that we may own in the future will not lead to issued patents; • it is possible that there are prior public disclosures that could invalidate our owned or in-licensed patents, or parts of our owned or in-licensed patents; • it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our product candidates or technology similar to ours; • it is possible that our owned or in-licensed patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable; 93 • issued patents that we hold rights to may be held invalid, unenforceable, or narrowed in scope, including as a result of legal challenges by our competitors; • the claims of our owned or in-licensed issued patents or patent applications, if and when issued, may not cover our product candidates; • the laws of foreign countries may not protect our proprietary rights or the proprietary rights of license partners or current or future collaborators to the same extent as the laws of the United States; • the inventors of our owned or in-licensed patents or patent applications may become involved with competitors, develop products or processes that design around our patents, or become hostile to us or the patents or patent applications on which they are named as inventors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we have engaged in scientific collaborations in the past and will continue to do so in the future and our collaborators may develop adjacent or competing products that are outside the scope of our patents; • we may not develop additional proprietary technologies that are patentable; • any product candidates we develop may be covered by third parties’ patents or other exclusive rights; • the patents of others may harm our business; or • we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
For example: • any product candidates we may develop will eventually become commercially available in generic or biosimilar product forms; 88 • others may be able to make gene therapy products that are similar to any product candidates we may develop or utilize similar base editing technology but that are not covered by the claims of the patents that we license or may own in the future; • we, or our license partners or current or future collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future; • we, or our license partners or current or future collaborators, might not have been the first to file patent applications covering certain of our or their inventions; • we, or our license partners or current or future collaborators, may fail to meet our obligations to the U.S. government regarding any in-licensed patents and patent applications funded by U.S. government grants, leading to the loss or unenforceability of patent rights; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights; • it is possible that our pending, owned or licensed patent applications or those that we may own in the future will not lead to issued patents; • it is possible that there are prior public disclosures that could invalidate our owned or in-licensed patents, or parts of our owned or in-licensed patents; • it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our product candidates or technology similar to ours; • it is possible that our owned or in-licensed patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable; • issued patents that we hold rights to may be held invalid, unenforceable, or narrowed in scope, including as a result of legal challenges by our competitors; • the claims of our owned or in-licensed issued patents or patent applications, if and when issued, may not cover our product candidates; • the laws of foreign countries may not protect our proprietary rights or the proprietary rights of license partners or current or future collaborators to the same extent as the laws of the United States; • the inventors of our owned or in-licensed patents or patent applications may become involved with competitors, develop products or processes that design around our patents, or become hostile to us or the patents or patent applications on which they are named as inventors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we have engaged in scientific collaborations in the past and will continue to do so in the future and our collaborators may develop adjacent or competing products that are outside the scope of our patents; • we may not develop additional proprietary technologies that are patentable; • any product candidates we develop may be covered by third parties’ patents or other exclusive rights; • the patents of others may harm our business; or • we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
Collaborations involving our research programs or any product candidates we may develop pose numerous risks to us, including the following: • Collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations. • Collaborators may not pursue development and commercialization of any product candidates we 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 a new formulation of a product candidate for clinical testing. • Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our medicines or product candidates we develop 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. • Collaborators with marketing and distribution rights to one or more medicines may not commit sufficient resources to the marketing and distribution of such medicine or medicines. 75 • Collaborators may not properly obtain, maintain, enforce, or defend our intellectual property or proprietary rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation. • Disputes may arise between the collaborators and us that result in the delay or termination of the research, development, or commercialization of our medicines or product candidates or that result in costly litigation or arbitration that diverts management attention and resources. • We may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control. • Collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates we may develop. • Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
Collaborations involving our research programs or any product candidates we may develop pose numerous risks to us, including the following: • Collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations. • Collaborators may not pursue development and commercialization of any product candidates we 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 a new formulation of a product candidate for clinical testing. • Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our medicines or product candidates we develop 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. • Collaborators with marketing and distribution rights to one or more medicines may not commit sufficient resources to the marketing and distribution of such medicine or medicines. • Collaborators may not properly obtain, maintain, enforce, or defend our intellectual property or proprietary rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation. • Disputes may arise between the collaborators and us that result in the delay or termination of the research, development, or commercialization of our medicines or product candidates or that result in costly litigation or arbitration that diverts management attention and resources. 71 • We may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control. • Collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates we may develop. • Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
Our competitors or other third parties may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner. 78 In addition, given the amount of time required for the development, testing, and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
Our competitors or other third parties may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner. In addition, given the amount of time required for the development, testing, and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our business, financial condition, results of operations and growth prospects. 92 Intellectual property rights do not necessarily address all potential threats.
Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our business, financial condition, results of operations and growth prospects. Intellectual property rights do not necessarily address all potential threats.
We have not completed any clinical trials of any product candidates and expect that it will be many years, if ever, before we have a product candidate approved for commercialization. To become and remain profitable, we must develop and, either directly or through collaborators, eventually commercialize a medicine or medicines with significant market potential.
We have not completed any clinical trials of any product candidates and expect that it will be many years, if ever, before we have a product candidate approved for commercialization. To become and remain profitable, we must develop and, either directly or through 46 collaborators, eventually commercialize a medicine or medicines with significant market potential.
The SEC also may suspend or bar issuers from trading securities on U.S. exchanges for violations of the FCPA’s accounting provisions. 105 We are subject to stringent privacy laws, information security laws, regulations, policies and contractual obligations related to data privacy and security and changes in such laws, regulations, policies and contractual obligations could adversely affect our business.
The SEC also may suspend or bar issuers from trading securities on U.S. exchanges for violations of the FCPA’s accounting provisions. We are subject to stringent privacy laws, information security laws, regulations, policies and contractual obligations related to data privacy and security and changes in such laws, regulations, policies and contractual obligations could adversely affect our business.
The collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us. We may also be restricted under existing collaboration agreements from entering into future agreements on certain terms with potential collaborators.
The collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us. 72 We may also be restricted under existing collaboration agreements from entering into future agreements on certain terms with potential collaborators.
Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our business, financial condition, results of operations or prospects. Social media platforms present new risks and challenges to our business.
Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our business, financial condition, results of operations or prospects. 103 Social media platforms present new risks and challenges to our business.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights to third parties under our collaborative development relationships; • our diligence obligations under the license agreement with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology. 84 In addition, the agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights to third parties under our collaborative development relationships; • our diligence obligations under the license agreement with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology. 80 In addition, the agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.
Some of these competitive products and therapies are based on scientific approaches that are the same as or similar to our approach, and others are based on entirely different approaches. There are several other companies utilizing CRISPR/Cas9 nuclease technology, including Caribou Biosciences, Editas Medicine, CRISPR Therapeutics, Intellia Therapeutics, Arbor Biotechnologies, Metagenomi, and Mammoth Biosciences.
Some of these competitive products and therapies are based on scientific approaches that are the same as or similar to our approach, and others are based on entirely different approaches. There are several other companies utilizing CRISPR/Cas9 nuclease technology, including Caribou Biosciences, Editas Medicine, CRISPR Therapeutics, Intellia Therapeutics, Arbor Biotechnologies and Metagenomi.
Clinical trial patient enrollment is also affected by other factors, including: • severity of the disease under investigation; • size of the patient population and process for identifying patients; • design of the trial protocol; • availability and efficacy of approved medications for the disease under investigation; • availability of genetic testing for potential patients; • ability to obtain and maintain patient informed consent; • risk that enrolled patients will drop out before completion of the trial; 61 • eligibility and exclusion criteria for the trial in question; • perceived risks and benefits of the product candidate under trial; • perceived risks and benefits of base editing as a therapeutic approach; • efforts to facilitate timely enrollment in clinical trials; • patient referral practices of physicians; • ability to monitor patients adequately during and after treatment; and • proximity and availability of clinical trial sites for prospective patients, especially for those conditions which have small patient pools.
Clinical trial patient enrollment is also affected by other factors, including: • severity of the disease under investigation; • size of the patient population and process for identifying patients; • design of the trial protocol; • availability and efficacy of approved medications for the disease under investigation; • availability of genetic testing for potential patients; • ability to obtain and maintain patient informed consent; • risk that enrolled patients will drop out before completion of the trial; • 57 • eligibility and exclusion criteria for the trial in question; • perceived risks and benefits of the product candidate under trial; • perceived risks and benefits of base editing as a therapeutic approach; • efforts to facilitate timely enrollment in clinical trials; • patient referral practices of physicians; • ability to monitor patients adequately during and after treatment; and • proximity and availability of clinical trial sites for prospective patients, especially for those conditions which have small patient pools.
In certain cases, these institutions provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. Even if we hold such an option, we may be unable to negotiate a license from the institution within the specified timeframe or under terms that are acceptable to us.
In certain cases, these institutions provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. Even if we hold such an option, we may be unable to negotiate a 81 license from the institution within the specified timeframe or under terms that are acceptable to us.
Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. Our future ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.
Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. 50 Our future ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.
If we or our collaborators have difficulty enrolling a sufficient number of patients to conduct our clinical trials as planned, we may need to delay, limit, or terminate ongoing or planned clinical trials, any of which would have an adverse effect on our business, financial condition, results of operations, and prospects.
If we or our collaborators have difficulty enrolling or treating a sufficient number of patients to conduct our clinical trials as planned, we may need to delay, limit, or terminate ongoing or planned clinical trials, any of which would have an adverse effect on our business, financial condition, results of operations, and prospects.
In addition, we may need the cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us. 85 Additionally, we may collaborate with academic institutions to accelerate our preclinical research or development under written agreements with these institutions.
In addition, we may need the cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us. Additionally, we may collaborate with academic institutions to accelerate our preclinical research or development under written agreements with these institutions.
Fast track, breakthrough, and/or RMAT designation alone do not guarantee qualification for the FDA’s priority review procedures. Priority review designation by the FDA may not lead to a faster regulatory review or approval process and, in any event, does not assure FDA approval of any product candidates we may develop.
Fast track, breakthrough, and/or RMAT designation alone do not guarantee qualification for the FDA’s priority review procedures. 95 Priority review designation by the FDA may not lead to a faster regulatory review or approval process and, in any event, does not assure FDA approval of any product candidates we may develop.
We are currently challenging, and in the future may choose to challenge, third party patents in patent opposition proceedings in the EPO or another foreign patent office. Even if successful, the costs of these opposition proceedings could be substantial, and may consume our time or other resources.
We are currently challenging, and in the future may choose to challenge, third party patents in patent opposition proceedings in the EPO or another foreign patent office. Even if 84 successful, the costs of these opposition proceedings could be substantial, and may consume our time or other resources.
Third parties may assert that we are employing their proprietary technology without authorization and may file patent infringement claims or lawsuit against us, and if we are found to infringe such third-party patents, we may be required to pay damages, cease commercialization of the infringing technology, or obtain a license from such third parties, which may not be available on commercially reasonable terms or at all. 87 Our ability to commercialize our product candidates in the United States and abroad may be adversely affected if we cannot obtain a license on commercially reasonable terms to relevant third-party patents that cover our product candidates, delivery platform technology or base editing platform technology.
Third parties may assert that we are employing their proprietary technology without authorization and may file patent infringement claims or lawsuit against us, and if we are found to infringe such third-party patents, we may be required to pay damages, cease commercialization of the infringing technology, or obtain a license from such third parties, which may not be available on commercially reasonable terms or at all. 83 Our ability to commercialize our product candidates in the United States and abroad may be adversely affected if we cannot obtain a license on commercially reasonable terms to relevant third-party patents that cover our product candidates, delivery platform technology or base editing platform technology.
PerkinElmer, Metagenomi and Intellia Therapeutics are developing base editing technology and Tessera Therapeutics is utilizing mobile genetic elements for gene editing. In addition, we face competition from companies utilizing various gene therapy, epigenetic modulation, oligonucleotide, and CAR-T therapeutic approaches.
PerkinElmer, Metagenomi, Revvity, and Intellia Therapeutics are developing base editing technology and Tessera Therapeutics is utilizing mobile genetic elements for gene editing. In addition, we face competition from companies utilizing various gene therapy, epigenetic modulation, oligonucleotide, and CAR-T therapeutic approaches.
Our competitors also may obtain FDA or other regulatory approval for their product candidates more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.
Our competitors also may obtain FDA, EMA, or other regulatory approval for their product candidates more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.
We may focus our efforts and resources on potential programs or product candidates that ultimately prove to be unsuccessful, which would be costly and time-consuming. The gene editing field is relatively new and is evolving rapidly.
We may focus our efforts and resources on potential programs or product candidates that ultimately prove to be unsuccessful, which would be costly and time-consuming. 52 The gene editing field is relatively new and is evolving rapidly.
The possibility also exists that others will develop products that have the same effect as our product candidates on an independent basis that do not infringe our patents or other intellectual property rights, or will design around the claims of our patent applications or our in-licensed patents or patent applications that cover our product candidates. 81 Likewise, our currently owned patents and patent applications, if issued as patents, and in-licensed patents and patent applications, if issued as patents, directed to our proprietary base editing technologies and our product candidates are expected to expire from 2034 through 2044, without taking into account any possible patent term adjustments or extensions.
The possibility also exists that others will develop products that have the same effect as our product candidates on an independent basis that do not infringe our patents or other intellectual property rights, or will design around the claims of our patent applications or our in-licensed patents or patent applications that cover our product candidates. 77 Likewise, our currently owned patents and patent applications, if issued as patents, and in-licensed patents and patent applications, if issued as patents, directed to our proprietary base editing technologies and our product candidates are expected to expire from 2034 through 2044, without taking into account any possible patent term adjustments or extensions.
In addition, investors’ perceptions that our internal controls are inadequate or that we are unable to produce accurate financial statements on a timely basis may harm our common stock price and make it more difficult for us to effectively market and sell our service to new and existing customers. 109 We have incurred and expect to continue to incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives and corporate governance practices.
In addition, investors’ perceptions that our internal controls are inadequate or that we are unable to produce accurate financial statements on a timely basis may harm our common stock price and make it more difficult for us to effectively market and sell our service to new and existing customers. 106 We have incurred and expect to continue to incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives and corporate governance practices.
We will eventually need to transition from a company with a research focus to a company capable of supporting commercial activities. We may not be successful in such a transition. 54 We have never generated revenue from product sales and may never become profitable.
We will eventually need to transition from a company with a research focus to a company capable of supporting commercial activities. We may not be successful in such a transition. We have never generated revenue from product sales and may never become profitable.
If we do not establish commercialization capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates we may develop. 66 We face significant competition in an environment of rapid technological change, and there is a possibility that our competitors may achieve regulatory approval before us or develop therapies that are safer or more advanced or effective than ours, which may harm our financial condition and our ability to successfully market or commercialize any product candidates we may develop.
If we do not establish commercialization capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates we may develop. 62 We face significant competition in an environment of rapid technological change, and there is a possibility that our competitors may achieve regulatory approval before us or develop therapies that are safer or more advanced or effective than ours, which may harm our financial condition and our ability to successfully market or commercialize any product candidates we may develop.
If we, or any third parties that we engage to assist us, are unable to successfully identify such patients, or experience delays in doing so, then: • our ability to develop any product candidates may be adversely affected if we are unable to appropriately select patients for enrollment in our clinical trials; and • we may not realize the full commercial potential of any product candidates we develop that receive marketing approval if, among other reasons, we are unable to appropriately select patients who are likely to benefit from therapy with our medicines. 70 Any product candidates we develop may require use of a companion diagnostic to identify patients who are likely to benefit from therapy.
If we, or any third parties that we engage to assist us, are unable to successfully identify such patients, or experience delays in doing so, then: • our ability to develop any product candidates may be adversely affected if we are unable to appropriately select patients for enrollment in our clinical trials; and • we may not realize the full commercial potential of any product candidates we develop that receive marketing approval if, among other reasons, we are unable to appropriately select patients who are likely to benefit from therapy with our medicines. 66 Any product candidates we develop may require use of a companion diagnostic to identify patients who are likely to benefit from therapy.
Problems in third-party manufacturing process or facilities also could restrict our ability to ensure sufficient clinical material for any clinical trials we may be conducting or are planning to conduct and meet market demand for any product candidates we develop and commercialize. 72 Risks related to our relationships with third parties We rely on and expect to continue to rely on third parties to manufacture components of our product candidates we may develop, conduct our clinical trials and some aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research, or testing.
Problems in third-party manufacturing process or facilities also could restrict our ability to ensure sufficient clinical material for any clinical trials we may be conducting or are planning to conduct and meet market demand for any product candidates we develop and commercialize. 68 Risks related to our relationships with third parties We rely on and expect to continue to rely on third parties to manufacture components of our product candidates we may develop, conduct our clinical trials and some aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research, or testing.
Any of these factors could reduce or eliminate our commercial opportunity, and could have a material adverse effect on our business, financial condition, results of operations, and prospects. We are very early in our development efforts.
Any of these factors could reduce or eliminate our commercial opportunity, and could have a material adverse effect on our business, financial condition, results of operations, and prospects. We are early in our development efforts.
The degree of market acceptance of any product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and safety of such product candidates as demonstrated in clinical trials; • the potential and perceived advantages compared to alternative treatments; • the limitation to our targeted patient population and limitations or warnings contained in approved labeling by the FDA or other regulatory authorities; • the ability to offer our medicines for sale at competitive prices; • convenience and ease of administration compared to alternative treatments; • the clinical indications for which the product candidate is approved by the FDA, the EMA, or other regulatory agencies; • public attitudes regarding genetic medicine generally and gene editing and base editing technologies specifically; 65 • the willingness of the target patient population to try novel therapies and of physicians to prescribe these therapies, as well as their willingness to accept a therapeutic intervention that involves the editing of the patient’s gene; • product labeling or product insert requirements of the FDA, the EMA, or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling; • relative convenience and ease of administration; • the timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; • the strength of marketing and distribution support; • sufficient third-party coverage or reimbursement; and • the prevalence and severity of any side effects.
The degree of market acceptance of any product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and safety of such product candidates as demonstrated in clinical trials; • the potential and perceived advantages compared to alternative treatments; • the limitation to our targeted patient population and limitations or warnings contained in approved labeling by the FDA, EMA, or other regulatory authorities; • the ability to offer our medicines for sale at competitive prices; • convenience and ease of administration compared to alternative treatments; • the clinical indications for which the product candidate is approved by the FDA, the EMA, or other regulatory agencies; • public attitudes regarding genetic medicine generally and gene editing and base editing technologies specifically; • the willingness of the target patient population to try novel therapies and of physicians to prescribe these therapies, as well as their willingness to accept a therapeutic intervention that involves the editing of the patient’s gene; • product labeling or product insert requirements of the FDA, the European Commission, the EMA, or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling; 61 • relative convenience and ease of administration; • the timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; • the strength of marketing and distribution support; • sufficient third-party coverage or reimbursement; and • the prevalence and severity of any side effects.
Accordingly, in the event of contamination or injury, we could be held liable for damages or be penalized with fines in an amount exceeding our resources, and our clinical trials or regulatory approvals could be suspended, which could have a material adverse effect on our business, financial condition, results of operations, and prospects. 71 In addition, we may incur substantial costs in order to comply with current or future environmental, health, and safety laws, regulations, and permitting requirements.
Accordingly, in the event of contamination or injury, we could be held liable for damages or be penalized with fines in an amount exceeding our resources, and our clinical trials or regulatory approvals could be suspended, which could have a material adverse effect on our business, financial condition, results of operations, and prospects. 67 In addition, we may incur substantial costs in order to comply with current or future environmental, health, and safety laws, regulations, and permitting requirements.
The use of service providers and suppliers could expose us to risks, including, but not limited to: 74 • termination or non-renewal of supply and service agreements with third parties in a manner or at a time that is costly or damaging to us; • disruptions to the operations of these suppliers and service providers caused by conditions unrelated to our business or operations, including the bankruptcy of the supplier or service provider; and • inspections of third-party facilities by regulatory authorities that could have a negative outcome and result in delays to or termination of their ability to supply our requirements.
The use of service providers and suppliers could expose us to risks, including, but not limited to: • termination or non-renewal of supply and service agreements with third parties in a manner or at a time that is costly or damaging to us; • disruptions to the operations of these suppliers and service providers caused by conditions unrelated to our business or operations, including the bankruptcy of the supplier or service provider; and 70 • inspections of third-party facilities by regulatory authorities that could have a negative outcome and result in delays to or termination of their ability to supply our requirements.
For some of the product candidates we may develop, we may decide to collaborate with other pharmaceutical and biotechnology companies for the development and potential commercialization of those product candidates. 76 We face significant competition in seeking appropriate collaborators.
For some of the product candidates we may develop, we may decide to collaborate with other pharmaceutical and biotechnology companies for the development and potential commercialization of those product candidates. We face significant competition in seeking appropriate collaborators.
Future emergency-related disruptions could also affect other government agencies such as the SEC, which may also impact our business by delaying review of our public filings, to the extent such review is necessary, and our ability to access the public markets. 99 We may not be able to obtain orphan drug exclusivity for one or more of our product candidates, and even if we do, that exclusivity may not prevent the FDA or the EMA from approving other competing products.
Future emergency-related disruptions could also affect other government agencies such as the SEC, which may also impact our business by delaying review of our public filings, to the extent such review is necessary, and our ability to access the public markets. 96 We may not be able to obtain orphan drug exclusivity for one or more of our product candidates, and even if we do, that exclusivity may not prevent the FDA or the EMA from approving other competing products.
Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue to maintain our business. 94 Although the FDA decides whether individual genetic medicine protocols may proceed, the RAC public review process, if undertaken, can delay the initiation of a clinical trial, even if the FDA has reviewed the trial design and details and approved its initiation.
Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue to maintain our business. 90 Although the FDA decides whether individual genetic medicine protocols may proceed, the RAC public review process, if undertaken, can delay the initiation of a clinical trial, even if the FDA has reviewed the trial design and details and approved its initiation.
Use of gene editing technology by a third party or government to develop biological agents or products that threaten U.S. national security could similarly result in such negative impacts to us. 68 Even if we are able to commercialize any product candidates, such products may become subject to unfavorable pricing regulations, third-party reimbursement practices, or healthcare reform initiatives, which would harm our business.
Use of gene editing technology by a third party or government to develop biological agents or products that threaten U.S. national security could similarly result in such negative impacts to us. 64 Even if we are able to commercialize any product candidates, such products may become subject to unfavorable pricing regulations, third-party reimbursement practices, or healthcare reform initiatives, which would harm our business.
Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocations, seizures or recalls of product candidates or medicines, operating restrictions, and criminal prosecutions, any of which could significantly and adversely affect supplies of our medicines and harm our business, financial condition, results of operations, and prospects.
Our failure, or the failure of third-party suppliers, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocations, seizures or recalls of product candidates or medicines, operating restrictions, and criminal prosecutions, any of which could significantly and adversely affect supplies of our medicines and harm our business, financial condition, results of operations, and prospects.
Depending on what changes the FDA may make to its orphan drug regulations and policies, our business could be adversely impacted. 100 Our relationships with healthcare providers, physicians, and third-party payors will be subject to applicable anti-kickback, fraud and abuse, anti-bribery and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, and diminished profits and future earnings.
Depending on what changes the FDA may make to its orphan drug regulations and policies, our business could be adversely impacted. 97 Our relationships with healthcare providers, physicians, and third-party payors will be subject to applicable anti-kickback, fraud and abuse, anti-bribery and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, and diminished profits and future earnings.
We or our collaborators may not be able to initiate or continue clinical trials for any product candidates we identify or develop if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA, the EMA or other analogous regulatory authorities outside the United States, or as needed to provide appropriate statistical power for a given trial.
We or our collaborators may not be able to initiate or continue clinical trials for any product candidates we identify or develop if we are unable to locate, enroll, and treat a sufficient number of eligible patients in these trials as required by the FDA, the EMA or other analogous regulatory authorities outside the United States, or as needed to provide appropriate statistical power for a given trial.
If we determine such new models are necessary but we are unsuccessful in developing them, or if such models are not adopted by payors, our business, financial condition, results of operations, and prospects could be adversely affected. 69 We expect the cost of a single administration of genetic medicines, such as those we are seeking to develop, to be substantial, when and if they achieve regulatory approval.
If we determine such new models are necessary but we are unsuccessful in developing them, or if such models are not adopted by payors, our business, financial condition, results of operations, and prospects could be adversely affected. 65 We expect the cost of a single administration of genetic medicines, such as those we are seeking to develop, to be substantial, when and if they achieve regulatory approval.
If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, we may be unable to commercialize our base editing platform technology or product candidates or such commercialization efforts may be significantly delayed, which could in turn significantly harm our business. 82 We or our licensors may be subject to similar interferences in the future with the same risks as described above.
If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, we may be unable to commercialize our base editing platform technology or product candidates or such commercialization efforts may be significantly delayed, which could in turn significantly harm our business. 78 We or our licensors may be subject to similar interferences in the future with the same risks as described above.
In connection with the growth and advancement of our pipeline, we expect to increase the number of our employees and the scope of our operations, particularly in the areas of drug development, regulatory affairs, and sales and marketing.
In connection with the growth and advancement of our pipeline, we expect to increase the number of our employees and the scope of our operations in the areas of drug development, regulatory affairs, and sales and marketing.
Any of these events could prevent us from achieving or maintaining market acceptance of any product candidates we may identify and develop and could have a material adverse effect on our business, financial condition, and results of operations. 60 We have not tested many of our proposed delivery modalities and product candidates in clinical trials and any favorable preclinical results are not predictive of results that may be observed in clinical trials.
Any of these events could prevent us from achieving or maintaining market acceptance of any product candidates we may identify and develop and could have a material adverse effect on our business, financial condition, and results of operations. 56 We have not tested many of our proposed delivery modalities and product candidates in clinical trials and any favorable preclinical results are not predictive of results that may be observed in clinical trials.
Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation or amended and restated by-laws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
Alternatively, if a court were to find these provisions of our certificate of incorporation or by-laws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
The market price for our common stock may be influenced by many factors, including: • the success of existing or new competitive product candidates or technologies; • the timing and results of preclinical studies and clinical trials for any product candidates that we develop; • failure or discontinuation of any of our product development and research programs; • results of preclinical studies, clinical trials, or regulatory approvals of product candidates of our competitors, or announcements about new research programs or product candidates of our competitors; 108 • developments or changing views regarding the use of genetic medicines, including those that involve gene editing; • commencement or termination of collaborations for our product development and research programs; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents, or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our research programs, clinical development programs, or product candidates that we may develop; • the results of our efforts to develop additional product candidates or products; • actual or anticipated changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • announcement or expectation of additional financing efforts; • sales of our common stock by us, our insiders or other stockholders; • expiration of any future market stand-off or lock-up agreements; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in estimates or recommendations by securities analysts, if any, that cover our stock; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • the effects of pandemics and public health emergencies, including the ongoing COVID-19 pandemic; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section.
The market price for our common stock may be influenced by many factors, including: • the success of existing or new competitive product candidates or technologies; • the timing and results of preclinical studies and clinical trials for any product candidates that we develop; • failure or discontinuation of any of our product development and research programs; 105 • results of preclinical studies, clinical trials, or regulatory approvals of product candidates of our competitors, or announcements about new research programs or product candidates of our competitors; • developments or changing views regarding the use of genetic medicines, including those that involve gene editing; • commencement or termination of collaborations for our product development and research programs; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents, or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our research programs, clinical development programs, or product candidates that we may develop; • the results of our efforts to develop additional product candidates or products; • actual or anticipated changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • announcement or expectation of additional financing efforts; • sales of our common stock by us, our insiders or other stockholders; • expiration of any future market stand-off or lock-up agreements; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in estimates or recommendations by securities analysts, if any, that cover our stock; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • the effects of pandemics and public health emergencies; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section.
If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented.
If we experience delays or difficulties in the enrollment or treatment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented.
Our amended and restated certificate of incorporation and amended and restated by-laws designate the state or federal courts within the State of Delaware as the exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our certificate of incorporation and by-laws designate the state or federal courts within the State of Delaware as the exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our amended and restated certificate of incorporation provides that, subject to limited exceptions, the state or federal courts within the State of Delaware will be exclusive forums for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated by-laws, (4) any action to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or our amended and restated by-laws or (5) any other action asserting a claim against us that is governed by the internal affairs doctrine.
Our certificate of incorporation provides that, subject to limited exceptions, the state or federal courts within the State of Delaware will be exclusive forums for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our certificate of incorporation or our by-laws, (4) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or our by-laws or (5) any other action asserting a claim against us that is governed by the internal affairs doctrine.
The field of gene editing, especially in the area of base editing technology, is still in its infancy, and no such product candidates have reached the market.
The field of gene editing, especially in the area of base editing technology, is still in its infancy, and no base editing product candidates have reached the market.
As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. 90 If we do not obtain PTE and data exclusivity for any product candidates we may develop, our business may be materially harmed.
As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. 86 If we do not obtain PTE and data exclusivity for any product candidates we may develop, our business may be materially harmed.
Patent Nos. 10,266,850; 10,227,611; 10,000,772; 10,113,167; 10,301,651; 10,308,961; 10,337,029; 10,351,878; 10,407,697; 10,358,659; 10,358,658; 10,385,360; 10,400,253; 10,421,980; 10,415,061; 10,428,352; 10,443,076; 10,487,341; 10,513,712; 10,519,467; 10,526,619; 10,533,190; 10,550,407; 10,563,227; 10,570,419; 10,577,631; 10,597,680; 10,612,045; 10,626,419; 10,640,791; 10,669,560; 10,676,759; 10,752,920; 10,774,344; 10,793,878; 10,900,054; 10,982,230; 10,982,231; 10,988,780; 10,988,782; 11,001,863; 11,008,589; 11,008,590; 11,028,412; 11,186,849; 11,242,543; 11,274,318; 11,293,034;11,332,761; 11,401,532; 11,473,108; 11,479,794; 11,549,127 which are expected to expire around March 2033, excluding any additional term for patent term adjustment, or PTA, or patent term extension, or PTE, and any disclaimed term for terminal disclaimers.
Patent Nos. 10,266,850; 10,227,611; 10,000,772; 10,113,167; 10,301,651; 10,308,961; 10,337,029; 10,351,878; 10,407,697; 10,358,659; 10,358,658; 10,385,360; 10,400,253; 10,421,980; 10,415,061; 10,428,352; 10,443,076; 10,487,341; 10,513,712; 10,519,467; 10,526,619; 10,533,190; 10,550,407; 10,563,227; 10,570,419; 10,577,631; 10,597,680; 10,612,045; 10,626,419; 10,640,791; 10,669,560; 10,676,759; 10,752,920; 10,774,344; 10,793,878; 10,900,054; 10,982,230; 10,982,231; 10,988,780; 10,988,782; 11,001,863; 11,008,589; 11,008,590; 11,028,412; 11,186,849; 11,242,543; 11,274,318; 11,293,034; 11,332,761; 11,401,532; 11,473,108; 11,479,794; 11,549,127; 11,634,730; 11,674,159; 11,814,645, which are expected to expire around March 2033, excluding any additional term for patent term adjustment, or PTA, or patent term extension, or PTE, and any disclaimed term for terminal disclaimers.
Because the target patient populations for many of the product candidates we may develop are small, we must be able to successfully identify patients and achieve a significant market share to maintain profitability and growth. We focus our research and product development on treatments for rare genetically defined diseases.
Because the target patient populations for many of the product candidates we may develop are small, we must be able to successfully identify patients and achieve a significant market share to maintain profitability and growth. We focus a substantial portion of our research and product development on treatments for rare genetically defined diseases.
Item 1A. Ris k Factors. You should carefully consider the risks and uncertainties described below together with all of the other information contained in this Annual Report on Form 10-K, including our consolidated financial statements and related notes appearing at the end of this Annual Report on Form 10-K, in evaluating our company.
Item 1A. Risk Factors. You should carefully consider the risks and uncertainties described below together with all of the other information contained in this Annual Report on Form 10-K, including our consolidated financial statements and related notes appearing at the end of this Annual Report on Form 10-K, in evaluating our company.
The availability of our competitors’ products could limit the demand, and the price we are able to charge, for any product candidates that we may develop and commercialize. 67 Adverse public perception of genetic medicines, and gene editing and base editing in particular, may negatively impact regulatory approval of, and/or demand for, our potential products.
The availability of our competitors’ products could limit the demand, and the price we are able to charge, for any product candidates that we may develop and commercialize. 63 Adverse public perception of genetic medicines, and gene editing and base editing in particular, may negatively impact regulatory approval of, and/or demand for, our potential products.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. 91 Third parties have asserted and may in the future assert that we, our employees, consultants, or advisors have wrongfully used or disclosed confidential information or misappropriated trade secrets.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. 87 Third parties have asserted and may in the future assert that we, our employees, consultants, or advisors have wrongfully used or disclosed confidential information or misappropriated trade secrets.
Provisions in our amended and restated certificate of incorporation, our amended and restated by-laws and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.
Provisions in our fourth amended certificate of incorporation, our second amended and restated by-laws, and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.
The success of our business depends primarily upon our ability to identify, develop, and commercialize product candidates based on our gene editing platform. Many of our product development programs are still in the research or preclinical stage of development. Our research programs may fail to identify potential product candidates for clinical development for a number of reasons.
The success of our business depends primarily upon our ability to identify, develop, and commercialize product candidates based on our gene editing platform. Some of our product development programs are still in the research or preclinical stage of development. Our research programs may fail to identify potential product candidates for clinical development for a number of reasons.
In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. 86 Numerous third-party U.S. and foreign issued patents and pending patent applications exist in the fields in which we are developing product candidates.
In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. 82 Numerous third-party U.S. and foreign issued patents and pending patent applications exist in the fields in which we are developing product candidates.
These products may compete with our product candidates and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. 83 Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
These products may compete with our product candidates and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. 79 Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business, or continue our operations. 52 We will need substantial additional funding.
Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business, or continue our operations. 47 We will need substantial additional funding.
Enrollment delays in our clinical trials may result in increased development costs for any product candidates we may develop, which would cause the value of our company to decline and limit our ability to obtain additional financing.
Enrollment or treatment delays in our clinical trials may result in increased development costs for any product candidates we may develop, which would cause the value of our company to decline and limit our ability to obtain additional financing.
Certain members of the University of California Portfolio are being opposed in Europe by multiple parties. For example, the EPO Opposition Division has initiated opposition proceedings against European Patent Nos. EP2,800,811 B1, and EP3,241,902 B1and EP3401400 B1, which are estimated to expire in March 2033 (excluding any patent term adjustments or extensions).
Certain members of the University of California Portfolio are being opposed in Europe by multiple parties. For example, the EPO Opposition Division has initiated opposition proceedings against European Patent Nos. EP2,800,811 B1, and EP3,241,902 B1and EP3,401,400 B1, which are estimated to expire in March 2033 (excluding any patent term adjustments or extensions).
The IRA includes several provisions that may impact our business, including provisions that impose new manufacturer financial liability on all drugs in Medicare Part D, allow the U.S. government to negotiate Medicare Part B and Part D pricing for certain high-cost drugs and biologics without generic or biosimilar competition, require companies to pay rebates to Medicare for drug prices that increase faster than inflation, and delay the rebate rule that would require pass through of pharmacy benefit manager rebates to beneficiaries.
For example, the Inflation Reduction Act of 2022, or IRA, includes several provisions that may impact our business, including provisions that impose new manufacturer financial liability on all drugs in Medicare Part D, allow the U.S. government to negotiate Medicare Part B and Part D pricing for certain high-cost drugs and biologics without generic or biosimilar competition, require companies to pay rebates to Medicare for drug prices that increase faster than inflation, and delay the rebate rule that would require pass through of pharmacy benefit manager rebates to beneficiaries.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation and amended and restated by-laws described above.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our certificate of incorporation and by-laws described above.
Our amended and restated certificate of incorporation, amended and restated by-laws and Delaware law contain provisions that may have the effect of discouraging, delaying or preventing a change in control of us or changes in our management that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares.
Our fourth amended certificate of incorporation, or our certificate of incorporate, and our second amended and restated by-laws, or our by-laws, and Delaware law contain provisions that may have the effect of discouraging, delaying or preventing a change in control of us or changes in our management that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares.
Our ability to generate future revenues from product sales depends heavily on our, or our collaborators’, ability to successfully: • identify product candidates and complete research and preclinical and clinical development of the product candidates we or our collaborators may identify; • seek and obtain regulatory and marketing approvals for any of our product candidates for which we or our collaborators successfully complete clinical trials; • launch and commercialize any of our product candidates for which we obtain regulatory and marketing approval by establishing a sales force, marketing, and distribution infrastructure or, alternatively, collaborating with a commercialization partner; • qualify for adequate coverage and reimbursement by government and third-party payors for our product candidates for which we or our collaborators obtain regulatory and marketing approval; • develop, maintain, and enhance a sustainable, scalable, reproducible, and transferable manufacturing process for the product candidates we or our collaborators may develop; • manufacture materials in compliance with cGMP and establish the infrastructure necessary to support and develop large-scale manufacturing capabilities; • establish and maintain supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products, and services to support clinical development and the market demand for our product candidates for which we or our collaborators obtain regulatory and marketing approval; • obtain market acceptance of any product candidates we or our collaborators may develop as viable treatment options; • address competing technological and market developments; • implement internal systems and infrastructure, as needed; • negotiate favorable terms in any collaboration, licensing, or other arrangements into which we may enter and performing our obligations in such collaborations, licensing or other arrangements; • maintain, protect, enforce, defend, and expand our portfolio of intellectual property rights, including patents, trade secrets, and know-how; • avoid and defend against third-party interference, infringement, and other intellectual property claims; and • attract, hire, and retain qualified personnel.
Our ability to generate future revenues from product sales depends heavily on our, or our collaborators’, ability to successfully: 49 • identify product candidates and complete research and preclinical and clinical development of the product candidates we or our collaborators may identify; • seek and obtain regulatory and marketing approvals for any of our product candidates for which we or our collaborators successfully complete clinical trials; • launch and commercialize any of our product candidates for which we obtain regulatory and marketing approval by establishing a sales force, marketing, and distribution infrastructure or, alternatively, collaborating with a commercialization partner; • qualify for adequate coverage and reimbursement by government and third-party payors for our product candidates for which we or our collaborators obtain regulatory and marketing approval; • develop, maintain, and enhance a sustainable, scalable, reproducible, and transferable manufacturing process for the product candidates we or our collaborators may develop; • maintain and operate a commercial-scale cGMP manufacturing facility; • establish and maintain supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products, and services to support clinical development and the market demand for our product candidates for which we or our collaborators obtain regulatory and marketing approval; • obtain market acceptance of any product candidates we or our collaborators may develop as viable treatment options; • address competing technological and market developments; • implement internal systems and infrastructure, as needed; • negotiate favorable terms in any collaboration, licensing, or other arrangements into which we may enter and performing our obligations in such collaborations, licensing or other arrangements; • maintain, protect, enforce, defend, and expand our portfolio of intellectual property rights, including patents, trade secrets, and know-how; • avoid and defend against third-party interference, infringement, and other intellectual property claims; and • attract, hire, and retain qualified personnel.
Regulatory authorities also may approve a product candidate for more limited indications than requested or they may impose significant limitations in the form of narrow indications, warnings or a REMS.
Regulatory authorities also may approve a product candidate for more limited indications than requested or they may impose significant limitations in the form of narrow indications, warnings or a REMS or an RMP.
Furthermore, our amended and restated by-laws also provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Furthermore, our by-laws also provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
We do not have a long-term supply agreement with any of the third-party manufacturers, and we purchase our required supply on an order-by-order basis.
We do not have a long-term supply agreement with any of the third-party suppliers, and we purchase our required supply on an order-by-order basis.
As a result of the opposition proceedings, the Opposition Division can revoke a patent, maintain the patent as granted, or maintain the patent in an amended form. Most of the claims of European patent EP 2,800,811 B1 were maintained without amendment by the Opposition Division, but this decision is being appealed.
As a result of the opposition proceedings, the Opposition Division can revoke a patent, maintain the patent as granted, or maintain the patent in an amended form. Most of the claims of European patent EP2,800,811 B1 were maintained without amendment by the Opposition Division, but this decision is being appealed.
We currently generate no revenue from sales of any product, and we may never be able to develop or commercialize a marketable product. Commencing clinical trials in the United States is subject to acceptance by the FDA of our INDs and finalizing the trial design based on discussions with the FDA and other regulatory authorities.
We currently generate no revenue from sales of any product, and we may never be able to develop or commercialize a marketable product. Commencing clinical trials in the United States is subject to acceptance by the FDA of our investigational new drug applications, or INDs, and finalizing the trial design based on discussions with the FDA and other regulatory authorities.
Under this order, federal agencies are directed to re-examine: policies that undermine protections for people with pre-existing conditions, including complications related to the COVID‑19 pandemic; demonstrations and waivers under Medicaid and the PPACA that may reduce coverage or undermine the programs, including work requirements; policies that undermine the Health Insurance Marketplace or other markets for health insurance; policies that make it more difficult to enroll in Medicaid and under the PPACA; and policies that reduce affordability of coverage or financial assistance, including for dependents.
Under this order, federal agencies are directed to re-examine: policies that undermine protections for people with pre-existing conditions; demonstrations and waivers under Medicaid and the PPACA that may reduce coverage or undermine the programs, including work requirements; policies that undermine the Health Insurance Marketplace or other markets for health insurance; policies that make it more difficult to enroll in Medicaid and under the PPACA; and policies that reduce affordability of coverage or financial assistance, including for dependents.

… 302 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeAdditionally, we entered into a lease agreement with Alexandria Real Estate Equities, Inc. to build a 100,000 square foot manufacturing facility in Research Triangle Park, North Carolina intended to support a broad range of clinical programs.
Biggest changeAdditionally, we entered into a lease agreement with Alexandria Real Estate Equities, Inc. pursuant to which we built a 100,000 square foot manufacturing facility in Research Triangle Park, North Carolina intended to support a broad range of clinical programs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−1 removed0 unchanged
Biggest changeItem 3. Legal Proceedings. We are not currently a party to any material legal proceedings. From time to time, we may be subject to various legal proceedings and claims that arise in the ordinary course of our business activities.
Biggest changeItem 3. Legal Proceedings. We are not currently a party to any material legal proceedings. From time to time, we may be subject to various legal proceedings and claims that arise in the ordinary course of our business activities. Item 4. Mine Safe ty Disclosures. Not Applicable. 111 PART II
Removed
Regardless of the outcome, litigation can have a material adverse effect on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. Mine Safe ty Disclosures. Not Applicable. 113 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed3 unchanged
Biggest changeHolders As of February 22, 2023, there were approximately 32 holders of record of our common stock. This number does not include beneficial owners whose shares are held by nominees in street name. Dividends We have not declared or paid any cash dividends on our capital stock since our inception.
Biggest changeHolders As of February 20, 2024, there were approximately 33 holders of record of our common stock. This number does not include beneficial owners whose shares are held by nominees in street name. Dividends We have not declared or paid any cash dividends on our capital stock since our inception.
We intend to retain future earnings, if any, to finance the operation and expansion of our business and do not anticipate paying any cash dividends to holders of common stock in the foreseeable future. 114 Stock Performance Graph The following performance graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, or SEC, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, nor shall such information be incorporated by reference into any future filing under the Exchange Act or Securities Act of 1933, as amended, or the Securities Act, except to the extent that we specifically incorporate it by reference into such filing.
We intend to retain future earnings, if any, to finance the operation and expansion of our business and do not anticipate paying any cash dividends to holders of common stock in the foreseeable future. 112 Stock Performance Graph The following performance graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, or SEC, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, nor shall such information be incorporated by reference into any future filing under the Exchange Act or Securities Act of 1933, as amended, or the Securities Act, except to the extent that we specifically incorporate it by reference into such filing.
The graph set forth below compares the cumulative total stockholder return on our shares of common stock between February 6, 2020 (the date of our initial public offering) and December 31, 2022, with the cumulative total return of (a) the Nasdaq Biotechnology Index and (b) the Nasdaq Composite Index, over the same period.
The graph set forth below compares the cumulative total stockholder return on our shares of common stock between February 6, 2020 (the date of our initial public offering) and December 31, 2023, with the cumulative total return of (a) the Nasdaq Biotechnology Index and (b) the Nasdaq Composite Index, over the same period.
The stock price performance included in this graph is not necessarily indicative of future stock price performance. 115 Purchases of equity securities by the issuer or affiliated purchasers Neither we nor any affiliated purchaser or anyone acting on our behalf or on behalf of an affiliated purchaser made any purchases of shares of our common stock during the fourth quarter of 2022.
The stock price performance included in this graph is not necessarily indicative of future stock price performance. 113 Purchases of equity securities by the issuer or affiliated purchasers Neither we nor any affiliated purchaser or anyone acting on our behalf or on behalf of an affiliated purchaser made any purchases of shares of our common stock during the fourth quarter of 2023.

Item 7. Management's Discussion & Analysis

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

64 edited+18 added−83 removed66 unchanged
Biggest changeResearch and development expenses Research and development expenses consist of costs incurred in performing research and development activities, which include: • Expenses incurred in connection with investments in delivery technology for our base editors, including the LNP technology we acquired through our acquisition of Guide; • the cost to obtain licenses to intellectual property, such as those with Harvard University, or Harvard, The Broad Institute, Inc., or Broad Institute, Editas Medicine, Inc, or Editas, and Bio Palette Co., Ltd., or Bio Palette, and related future payments should certain success, development and regulatory milestones be achieved; • personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation for employees engaged in research and development functions; • expenses incurred in connection with the discovery and preclinical development of our research programs, including under agreements with third parties, such as consultants, contractors and contract research organizations; • expenses incurred in connection with our clinical trials, including CRO costs and costs related to study preparation; • expenses incurred in connection with regulatory filings; • expenses incurred in connection with the building of our base editing platform; • the cost of manufacturing for use in our preclinical studies, IND-enabling studies and clinical trials; • laboratory supplies and research materials; and • facilities, depreciation and other expenses which include direct and allocated expenses.
Biggest changeResearch and development expenses Research and development expenses consist of costs incurred in performing research and development activities, which include: • expenses incurred in connection with our clinical trials, including contract research organization costs and costs related to study preparation; 116 • the cost of manufacturing materials for use in our preclinical studies, IND-enabling studies and clinical trials; • expenses incurred in connection with investments in delivery technology for our base editors, including the LNP technology we acquired through our acquisition of Guide; • expenses incurred in connection with the discovery and preclinical development of our research programs, including under agreements with third parties, such as consultants, contractors and contract research organizations; • personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation for employees engaged in research and development functions; • the cost to obtain licenses to intellectual property, such as those with Harvard University, or Harvard, The Broad Institute, Inc., or Broad Institute, Editas Medicine, Inc., or Editas, and Bio Palette Co., Ltd., or Bio Palette, and related future payments should certain success, development and regulatory milestones be achieved; • expenses incurred in connection with the building of our base editing platform; • expenses incurred in connection with regulatory filings; • laboratory supplies and research materials; and • facilities, depreciation and other expenses which include direct and allocated expenses.
Research and development expenses are expected to continue to increase as we advance clinical trials for BEAM-101 and BEAM-201, advance preclinical studies for BEAM-301 and BEAM-302, continue our current research programs, initiate new research programs, continue the preclinical and clinical development of our product candidates and conduct any future preclinical studies and begin to enroll patients in and conduct clinical trials for any of our product candidates.
Research and development expenses are expected to continue to increase as we advance clinical trials for BEAM-101, BEAM-201, BEAM-302, and BEAM-301, continue our current research programs, initiate new research programs, continue the preclinical and clinical development of our product candidates, conduct any future preclinical studies, and begin to enroll patients in and conduct clinical trials for any of our product candidates.
These contracts generally provide for termination on notice, and therefore are cancelable contracts. 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 we have prepared in accordance with U.S. generally accepted accounting principles.
These contracts generally provide for termination on notice, and therefore are cancelable contracts. 123 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 we have prepared in accordance with U.S. generally accepted accounting principles.
While our significant accounting policies are described in more detail in Note 2, Summary of significant accounting policies , to our consolidated financial statements in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
To date, we have not recognized any royalty revenue resulting from any of our agreements. When no performance obligations are required of us, or following the completion of the performance obligation period, such amounts are recognized as revenue upon transfer of control of the goods or services to the customer.
To date, we have not recognized any royalty revenue resulting from any of our agreements. When no performance obligations are required of us, or following the completion of the performance obligation period, amounts are recognized as revenue upon transfer of control of the goods or services to the customer.
A significant change in our stock price or volatility could have a significant impact on the value of the liability. Accrued research and development costs As part of the process of preparing our financial statements, we are required to estimate our accrued expenses.
A significant change in our stock price or volatility could have a significant impact on the value of the liability. Accrued and prepaid research and development costs As part of the process of preparing our financial statements, we are required to estimate our accrued expenses and prepaid research and development costs.
Any amounts due may be settled in cash or shares of our common stock, at our discretion. The success payments are accounted for under Accounting Standards Codification 815, Derivatives and Hedging and were initially recorded at fair value with a corresponding charge to research and development expense.
Any amounts due may be settled in cash or shares of our common stock, at our discretion. The success payments are accounted for as a derivative under Accounting Standards Codification 815, Derivatives and Hedging and were initially recorded at fair value with a corresponding charge to research and development expense.
As of December 31, 2022, we have sold 2,908,009 shares of our common stock under the Sales Agreement at an average price of $103.16 per share for aggregate gross proceeds of $300.0 million, before deducting commissions and offering expenses payable by us.
As of December 31, 2023, we have sold 2,908,009 shares of our common stock under the Sales Agreement at an average price of $103.16 per share for aggregate gross proceeds of $300.0 million, before deducting commissions and offering expenses payable by us.
These sources of cash were offset in part by our net loss of $289.1 million, a decrease in deferred revenue of $35.9 million, net of the $25.0 million First Anniversary Payment collected from Apellis during the twelve months ended December 31, 2022, decreases in accrued expenses and other liabilities of $16.9 million, an increase in prepaid expenses and other current assets of $7.8 million and a decrease in other long-term liabilities of $2.6 million, as well as noncash items including a decrease in the fair value of derivative liabilities of $23.9 million, an increase in the fair value of non-controlling equity investments of $20.2 million, a change in the fair value of contingent consideration liabilities of $18.9 million and amortization of investment premiums of $9.4 million.
These sources of cash were offset in part by our net loss of $289.1 million, a decrease in deferred revenue of $35.9 million, net of the $25.0 million First Anniversary Payment collected from Apellis during the year ended December 31, 2022, decreases in accrued expenses and other liabilities of $16.9 million, an increase in prepaid expenses and other current assets of $7.8 million and a decrease in other long-term liabilities of $2.6 million, as well as noncash items including a decrease in the fair value of derivative liabilities of $23.9 million, an increase in the fair value of non-controlling equity investments of $20.2 million, a change in the fair value of contingent consideration liabilities of $18.9 million and amortization of investment discounts and premiums of $9.4 million.
We anticipate that we may need to raise additional capital in order to continue to fund our research and development, including our planned preclinical studies and clinical trials, building, maintaining and operating a commercial-scale cGMP manufacturing facility, and new product development, as well as to fund our general operations.
We anticipate that we may need to raise additional capital in order to continue to fund our research and development, including our planned preclinical studies and clinical trials, maintaining and operating our commercial-scale cGMP manufacturing facility, and new product development, as well as to fund our general operations.
We elected to make each payment in shares of our common stock and issued 174,825 shares of our common stock to each of Harvard and Broad Institute to settle these liabilities in June 2021. The remaining success payment obligations are still outstanding as of December 31, 2022.
We elected to make each payment in shares of our common stock and issued 174,825 shares of our common stock to each of Harvard and Broad Institute to settle these liabilities in June 2021. The remaining success payment obligations are still outstanding as of December 31, 2023.
A portion of the success payments was paid in June 2021; the remaining success payment obligations are still outstanding as of December 31, 2022 and will continue to be revalued at each reporting period.
A portion of the success payments was paid in June 2021; the remaining success payment obligations are still outstanding as of December 31, 2023 and will continue to be revalued at each reporting period.
We can give no assurance that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional funding will be sufficient to meet our needs. 127 Contractual obligations We lease certain assets under noncancelable operating and finance leases, which expire through 2037.
We can give no assurance that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional funding will be sufficient to meet our needs. Contractual obligations We lease certain assets under noncancelable operating leases, which expire through 2037.
Our future funding requirements will depend on many factors including: • the cost of continuing to build our base editing platform; • the costs of acquiring licenses for the delivery modalities that will be used with our product candidates; • the scope, progress, results, and costs of discovery, preclinical development, laboratory testing, manufacturing and clinical trials for the product candidates we may develop; • the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights, and defending intellectual property-related claims; • the costs, timing, and outcome of regulatory review of the product candidates we develop; • the costs of future activities, including product sales, medical affairs, marketing, manufacturing, distribution, coverage and reimbursement for any product candidates for which we receive regulatory approval; • the success of our license agreements and our collaborations; • our ability to establish and maintain additional collaborations on favorable terms, if at all; • the achievement of milestones or occurrence of other developments that trigger payments under any collaboration agreements we are a party to or may become a party to, including our agreement with Guide; • the payment of success liabilities to Harvard and Broad Institute pursuant to the respective terms of the Harvard License Agreement and the Broad Institute License Agreement, should we choose to pay in cash; • the extent to which we acquire or in-license products, intellectual property, and technologies; • the costs of obtaining, building, operating and expanding our manufacturing capacity; and • the impact on our business of macro-economic conditions, as well as the prevailing level of macro-economic, business, and operational uncertainty, including as a result of geopolitical events or other global or regional events such as the COVID-19 pandemic.
Our future funding requirements will depend on many factors including: • the cost of continuing to build our base editing platform; • the costs of acquiring licenses for the delivery modalities that will be used with our product candidates; • the scope, progress, results, and costs of discovery, preclinical development, laboratory testing, manufacturing and clinical trials for the product candidates we may develop; • the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights, and defending intellectual property-related claims; • the costs, timing, and outcome of regulatory review of the product candidates we develop; • the costs of future activities, including product sales, medical affairs, marketing, manufacturing, distribution, coverage and reimbursement for any product candidates for which we receive regulatory approval; • the success of our license agreements and our collaborations; • our ability to establish and maintain additional collaborations on favorable terms, if at all; • the achievement of milestones or occurrence of other developments that trigger payments under any collaboration agreements we are a party to or may become a party to, including our agreement with Guide; • the payment of success liabilities to Harvard and Broad Institute pursuant to the respective terms of the Harvard License Agreement and the Broad Institute License Agreement, should we choose to pay in cash; • the extent to which we acquire or in-license products, intellectual property, and technologies; • the actual savings or benefits we realize from our recent portfolio prioritization and strategic restructuring; 122 • the costs of operating and expanding our manufacturing capacity; and • the impact on our business of macro-economic conditions, as well as the prevailing level of macro-economic, business, and operational uncertainty, including as a result of geopolitical events or other global or regional events.
Change in contingent consideration liabilities During the years ended December 31, 2022 and 2021, we recorded $18.9 million and $5.1 million, respectively, of other income related to the change in fair value of the Guide technology and product contingent consideration liabilities as a result of an update in project timelines and the expected probability of achievement of the milestones.
Change in contingent consideration liabilities During the years ended December 31, 2023 and 2022, we recorded $9.7 million and $18.9 million, respectively, of other income related to the change in fair value of the Guide technology and product contingent consideration liabilities as a result of an update in project timelines and the expected probability of achievement of the milestones.
The elegance of the base editing approach combined with a tissue specific delivery modality provides the basis for a targeted efficient, precise, and highly versatile gene editing system, capable of gene correction, gene modification, gene silencing or gene activation, and/or multiplex editing of several genes simultaneously.
The elegance of the base editing approach, combined with a tissue specific delivery modality, provides the basis for a targeted, efficient, precise, and highly versatile gene editing system that is designed to be capable of gene correction, gene silencing or gene activation, gene modification, and/or multiplex editing of several genes simultaneously.
Revenue recognition We recognize revenue in accordance with ASC 606. At inception, we determine whether contracts are within the scope of ASC 606 or other topics. For contracts that are determined to be within the scope of ASC 606, revenue is recognized when a customer obtains control of promised goods or services.
Revenue recognition At inception, we determine whether contracts are within the scope of ASC 606, Revenue from Contracts with Customers , or ASC 606, or other topics. For contracts that are determined to be within the scope of ASC 606, revenue is recognized when a customer obtains control of promised goods or services.
For the year ended December 31, 2020, cash used in investing activities was primarily the net result of purchases of marketable securities partially offset by maturities of marketable securities of $83.0 million, in addition to purchases of property and equipment of $16.4 million.
For the year ended December 31, 2022, cash used in investing activities was primarily the net result of purchases of marketable securities partially offset by maturities of marketable securities of $412.4 million, in addition to purchases of property and equipment of $49.0 million.
Our net losses for the years ended December 31, 2022, 2021 and 2020 were $289.1 million, $370.6 million and $194.6 million, respectively. As of December 31, 2022, we had an accumulated deficit of $1.1 billion.
Our net losses for the years ended December 31, 2023, 2022 and 2021 were $132.5 million, $289.1 million and $370.6 million, respectively. As of December 31, 2023, we had an accumulated deficit of $1.2 billion.
Financing activities Net cash provided by financing activities for the year ended December 31, 2022 consisted primarily of proceeds from equity offerings of $108.3 million, net of sales commissions, $3.1 million of proceeds from the issuance of common stock under our Employee Stock Purchase Plan, and $2.7 million of proceeds from the exercise of stock options, offset in part by repayments of equipment financing liabilities of $2.3 million and payment of equity offering costs of $0.2 million.
Financing activities Net cash provided by financing activities for the year ended December 31, 2023 of $276.4 million consisted primarily of proceeds from equity offerings of $236.6 million, net of sales commissions, proceeds from the issuance of shares from the Lilly Agreement of $33.6 million, $6.1 million of proceeds from the exercise of stock options, and $3.0 million of proceeds from the issuance of common stock under our Employee Stock Purchase Plan, offset in part by net repayments of equipment financing liabilities of $2.3 million and payment of equity offering costs of $0.6 million.
In July 2021, we and Jefferies entered into an amendment to the Sales Agreement to provide for an increase in the aggregate offering amount under the Sales Agreement, such that as of July 7, 2021, we may offer and sell shares of common stock having an aggregate offering price of an additional $500.0 million.
In July 2021 and May 2023, we and Jefferies entered into amendments to the Sales Agreement to provide for increases in the aggregate offering amount under the Sales Agreement, such that as of May 10, 2023, we may offer and sell shares of common stock having an aggregate offering price of an additional $800.0 million.
The facility is designed to support manufacturing for our ex vivo cell therapy programs in hematology and oncology and in vivo non-viral delivery programs for liver diseases, with the capability to scale-up to support potential commercial supply.
The facility, which initiated cGMP operations in late 2023, is designed to support manufacturing for our ex vivo cell therapy programs in hematology and in vivo non-viral delivery programs for liver and liver-mediated diseases, with the capability to scale-up to support potential commercial supply.
General and administrative expenses General and administrative expenses were $87.8 million and $57.2 million for the years ended December 31, 2022 and 2021, respectively.
General and administrative expenses General and administrative expenses were $116.8 million and $87.8 million for the years ended December 31, 2023 and 2022, respectively.
The leases relate primarily to office space, laboratory and manufacturing space in addition to equipment. Aggregate future minimum commitments under these office and laboratory leases and equipment leases are $268.0 million and $2.5 million, respectively, as of December 31, 2022, excluding any related common area maintenance charges or real estate taxes.
The leases relate primarily to office space, laboratory and manufacturing space, and equipment. Aggregate future minimum commitments under these office and laboratory leases and equipment leases are $251.4 million as of December 31, 2023, excluding any related common area maintenance charges or real estate taxes.
For the year ended December 31, 2021, cash used in investing activities was primarily the net result of purchases of marketable securities partially offset by maturities of marketable securities of $248.0 million, in addition to purchases of property and equipment of $46.8 million.
Investing activities For the year ended December 31, 2023, cash provided by investing activities of $71.8 million was primarily the net result of maturities of marketable securities partially offset by purchases of marketable securities, in addition to purchases of property and equipment of $33.7 million.
We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and the clinical development of our product candidates. To date, we have funded our operations primarily through equity offerings.
We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and the clinical development of our product candidates.
Interest and other income (expense), net Interest and other income (expense), net was $15.3 million of other income for the year ended December 31, 2022 as compared to $9,000 of expense for the year ended December 31, 2021. The increase was primarily due to increases in interest income driven by increased market rates and growth of our portfolio.
Interest and other income (expense), net Interest and other income (expense), net was $46.7 million and $15.3 million of other income for the years ended December 31, 2023 and December 31, 2022, respectively. The increase was primarily due to increases in interest income driven by increased market rates and growth of our investment portfolio.
Our vision is to provide life-long cures to patients suffering from serious diseases. To achieve this vision, we have assembled a platform that includes a suite of gene editing and delivery technologies and are establishing internal manufacturing capabilities.
Overview We are a biotechnology company committed to establishing the leading, fully integrated platform for precision genetic medicines. Our vision is to provide life-long cures to patients suffering from serious diseases. To achieve this vision, we have assembled a platform that includes a suite of gene editing and delivery technologies as well as internal manufacturing capabilities.
We are required to make success payments to Harvard and Broad Institute based on increases in the per share fair market value of our Series A-1 Preferred Stock and Series A-2 Preferred Stock or, subsequent to our IPO, our common stock. The amounts due may be settled in cash or shares of our common stock, at our discretion.
We are required to make success payments to Harvard and Broad Institute based on increases in the per share fair market value of our common stock. The amounts due may be settled in cash or shares of our common stock, at our discretion. We may owe Harvard and Broad Institute success payments of up to an additional $90.0 million each.
We can give no assurances that we will be able to secure such additional sources of capital to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs.
We can give no assurance that we will be able to secure such additional sources of capital to support our operations, or, if such capital is available to us, that such additional capital will be sufficient to meet our needs for the short or long term.
We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. Determining the revenue recognition of IP licenses requires significant judgment and is discussed in further detail for each of our license and collaboration agreements in Note 10 and 11 .
Determining the revenue recognition of IP licenses requires significant judgment and is discussed in further detail for each of our license and collaboration agreements in Note 10 and 11 .
To the extent a contract includes multiple promised goods and services, we apply judgment to determine whether promised goods and services are both capable of being distinct and are distinct in the context of the contract.
To the extent a contract includes multiple promised goods and services, we apply judgment to determine whether promised goods and services are both capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation.
As of December 31, 2022, we have sold 3,908,289 additional shares of our common stock under the amended Sales Agreement at an average price of $82.38 per share for aggregate gross proceeds of $322.0 million, before deducting commissions and offering expenses payable by us, resulting in an aggregate of $622.0 million in gross proceeds received under the Sales Agreement as of December 31, 2022.
As of December 31, 2023, we have sold 10,860,992 additional shares of our common stock under the amended Sales Agreement at an average price of $51.93 per share for aggregate gross proceeds of $564.0 million, before deducting commissions and offering expenses payable by us.
Specifically, our expenses will increase if and as we: • advance clinical trials of our product candidates, including our BEACON trial and our trial of BEAM-201; • continue our research programs and our preclinical development of product candidates from our research programs; • seek to identify additional research programs and additional product candidates; • initiate preclinical studies and clinical trials for additional product candidates we identify and develop; • maintain, expand, enforce, defend, and protect our intellectual property portfolio and provide reimbursement of third-party expenses related to our patent portfolio; • seek marketing approvals for any of our product candidates that successfully complete clinical trials; • establish a sales, marketing, and distribution infrastructure to commercialize any medicines for which we may obtain marketing approval; • further develop our base editing platform; • further develop delivery technology for our base editors, including the LNP technology we acquired through our acquisition of Guide; • continue to hire additional personnel including research and development, clinical and commercial personnel; • add operational, financial, and management information systems and personnel, including personnel to support our product development; • acquire or in-license products, intellectual property, medicines and technologies; and • maintain and operate a commercial-scale cGMP manufacturing facility. 126 We expect that our cash, cash equivalents at December 31, 2022 will enable us to fund our current and planned operating expenses and capital expenditures for at least the twelve calendar months beginning January 1, 2023, and beyond such twelve-month period.
Specifically, our expenses will increase if and as we: • advance clinical trials of our product candidates; • continue our research programs and our preclinical development of product candidates from our research programs; • seek to identify additional research programs and additional product candidates; • initiate preclinical studies and clinical trials for additional product candidates we identify and develop; • maintain, expand, enforce, defend, and protect our intellectual property portfolio and provide reimbursement of third-party expenses related to our patent portfolio; • seek marketing approvals for any of our product candidates that successfully complete clinical trials; • establish a sales, marketing, and distribution infrastructure to commercialize any medicines for which we may obtain marketing approval; • further develop our base editing platform; • continue to hire additional personnel including research and development, clinical and commercial personnel; • add operational, financial, and management information systems and personnel, including personnel to support our product development; • acquire or in-license products, intellectual property, medicines and technologies; and • maintain and operate a commercial-scale cGMP manufacturing facility.
In the early phases of development, our research and development costs are often devoted to product platform and proof-of-concept preclinical studies that are not necessarily allocable to a specific target.
In the early phases of development, our research and development costs are often devoted to product platform and proof-of-concept preclinical studies that are not necessarily allocable to a specific target. We expect that our research and development expenses will increase substantially as we advance our programs through their planned preclinical and clinical development.
We are potentially obligated to pay certain milestone and success fees, non-royalty sublicense income fees, royalty fees, licensing maintenance fees, and reimbursement of patent maintenance costs that we may be required to pay under agreements we have entered into with certain institutions to license intellectual property.
We may additionally owe Harvard and Broad Institute success payments of up to an additional $90.0 million each. We are potentially obligated to pay certain milestone and success fees, non-royalty sublicense income fees, royalty fees, licensing maintenance fees, and reimbursement of patent maintenance costs under agreements we have entered into with certain institutions to license intellectual property.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under Item 1A, Risk factors, in this Annual Report on Form 10-K. Overview We are a biotechnology company committed to establishing the leading, fully integrated platform for precision genetic medicines.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under Item 1A, Risk factors, in this Annual Report on Form 10-K.
In September 2022, we entered into a License and Research Collaboration Agreement, or the Orbital Agreement, with Orbital Therapeutics, Inc., or Orbital, a newly formed entity focused on advancing non-viral delivery and RNA technologies. We have not generated any revenue to date from product sales and do not expect to do so in the near future.
In September 2022, we entered into a License and Research Collaboration Agreement, or the Orbital Agreement, with Orbital Therapeutics, Inc., or Orbital, a newly formed entity focused on advancing non-viral delivery and RNA technologies.
Change in fair value of non-controlling equity investments During the years ended December 31, 2022 and 2021, we recorded other income of $20.2 million and $17.7 million, respectively, driven by changes in the value of our investments in Prime and Verve.
Change in fair value of non-controlling equity investments During the years ended December 31, 2023 and 2022,we recorded other expense of $18.6 million and other income of $20.2 million, respectively, as a result of changes in the fair value of our investments in Verve and Prime Medicine common stock.
Other income and expenses Other income and expenses consist of the following items: • Change in fair value of derivative liabilities consists primarily of remeasurement gains or losses associated with changes in success payment liabilities associated with our license agreement with Harvard, dated as of June 27, 2017, as amended, or the Harvard License Agreement, and the license agreement with The Broad Institute, as amended, dated as of May 9, 2018, or the Broad License Agreement. • Change in fair value of non-controlling equity investments consists of mark-to-market adjustments related to our investments in equity securities. • Change in fair value of contingent consideration liabilities consists of remeasurement of the fair market value of the technology and product contingent consideration liabilities related to the acquisition of Guide. • Interest and other income (expense), net consists primarily of interest income as well as interest expense related to our equipment financings.
Other income and expenses Other income and expenses consist of the following items: • Change in fair value of derivative liabilities consists primarily of remeasurement gains or losses associated with changes in success payment liabilities associated with our license agreement with Harvard, dated as of June 27, 2017, as amended, or the Harvard License Agreement, and the license agreement with The Broad Institute, as amended, dated as of May 9, 2018, or the Broad License Agreement. • Change in fair value of non-controlling equity investments consists of changes in the fair value of our investments in equity securities. • Change in fair value of contingent consideration liabilities consists of remeasurement of the fair market value of the technology and product contingent consideration liabilities related to the acquisition of Guide. • Interest and other income (expense), net consists primarily of interest income from our investments in fixed income securities as well as interest expense related to our equipment financings. 117 Results of operations For discussion of 2022 results and comparison with 2021 results, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period and adjust accordingly.
In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period and adjust accordingly.
Cash flows The following table summarizes our sources and uses of cash (in thousands): Years Ended December 31, 2022 2021 2020 Net cash provided by (used in) operating activities $ 22,527 $ (66,268 ) $ (95,741 ) Net cash used in investing activities (461,336 ) (294,144 ) (100,123 ) Net cash provided by financing activities 111,590 756,141 322,322 Net change in cash, cash equivalents and restricted cash $ (327,219 ) $ 395,729 $ 126,458 Operating activities Net cash provided by operating activities for the year ended December 31, 2022 was $22.5 million, consisting primarily of the collection of collaboration receivables of $300.0 million related to the Pfizer Agreement, an increase in operating lease liabilities of $12.4 million and an increase in accounts payable of $2.4 million, as well as noncash items consisting of stock-based compensation expense of $84.3 million, a loss from an equity method investment of $25.5 million, depreciation and amortization expense of $14.1 million and changes in operating lease ROU assets of $8.4 million.
Net cash provided by operating activities for the year ended December 31, 2022 was $22.5 million, consisting primarily of the collection of collaboration receivables of $300.0 million related to the Pfizer Agreement, an increase in operating lease liabilities of $12.4 million and an increase in accounts payable of $2.4 million, as well as noncash items consisting of stock-based compensation expense of $84.3 million, a loss from an equity method investment of $25.5 million, depreciation and amortization expense of $14.1 million and changes in operating lease ROU assets of $8.4 million.
If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation. 128 The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods and services to the customer.
The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods and services to the customer.
We expect that our research and development expenses will increase substantially as we advance our programs through their planned preclinical and clinical development. 119 General and administrative expenses General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, intellectual property, business development and administrative functions.
General and administrative expenses General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, intellectual property, business development and administrative functions.
See Notes 2 and 8 to our consolidated financial statements for more information regarding the equity method of accounting.
As of December 31, 2022 the investment had been written down to zero. See Notes 2 and 11 to our consolidated financial statements for more information regarding the equity method of accounting.
We may additionally owe Harvard and Broad Institute success payments of up to an additional $90.0 million each. We have not yet commercialized any of our product candidates, and we do not expect to generate revenue from the sale of our product candidates for the foreseeable future.
We have not yet commercialized any of our product candidates, and we do not expect to generate revenue from the sale of our product candidates for the foreseeable future.
During the years ended December 31, 2022, 2021, and 2020, we recognized $60.9 million, $51.8 million and $24,000 respectively, of revenue from our license and collaboration agreements. For additional information about our revenue recognition policy, see Note 2 and Note 11 of the notes to our audited consolidated financial statements included in this Annual Report on Form 10-K.
For additional information about our revenue recognition policy, see Note 2 and Note 11 of the notes to our audited consolidated financial statements included in this Annual Report on Form 10-K.
For the year ended December 31, 2022, we recorded a loss from equity method investment of $25.5 million in association with a basis difference attributable to Orbital's in-process research and development with no alternative future use, which was immediately expensed as of the date of this investment. As of December 31, 2022, the investment had been written down to zero.
In addition, taxable income is higher than book expenses due to the requirement under the Tax Cuts and Jobs Act of 2017 for taxpayers to capitalize and amortize research and development expenditures over five or fifteen years. 119 Loss from equity method investment For the year ended December 31, 2022, we recorded a loss from equity method investment of $25.5 million in association with a basis difference attributable to Orbital's in-process research and development with no alternative future use, which was immediately expensed as of the date of this investment.
Examples of estimated accrued research and development expenses include fees paid to vendors in connection with preclinical development activities and vendors related to development, manufacturing and distribution of product candidate materials.
Examples of estimated accrued research and development expenses include fees paid to vendors in connection with preclinical development activities and vendors related to development, manufacturing and distribution of product candidate materials. 125 We base our expenses related to preclinical studies on our estimates of the services received and efforts expended pursuant to contracts with multiple vendors that conduct and manage preclinical studies on our behalf.
License and collaboration revenue recorded in 2022 represents revenue recorded under the Pfizer, Apellis, Orbital and Verve Agreements.
License and collaboration revenue recorded in 2023 represents revenue recorded under the Lilly, Pfizer, Apellis, Orbital and Verve Agreements. In 2022, we recorded $60.9 million of license revenue related to the Pfizer Agreement as well as revenue related to the Apellis and Verve Agreements.
Change in fair value of derivative liabilities During the year ended December 31, 2021, we recorded $1.0 million of expense related to the change in fair value expense related to the success payment liabilities as compared to $63.4 million of expense for the year ended December 31, 2020.
Change in fair value of derivative liabilities During the year ended December 31, 2023, we recorded $7.5 million of other income related to the change in fair value of the success payment liabilities as compared to $23.9 million for the year ended December 31, 2022, driven by the decline in the price of our common stock.
Results of operations Comparison of the years ended December 31, 2022 and 2021 The following table summarizes our results of operations (in thousands): Years Ended December 31, 2022 2021 Change License and collaboration revenue $ 60,920 $ 51,844 $ 9,076 Operating expenses: Research and development 311,594 387,087 (75,493 ) General and administrative 87,805 57,222 30,583 Total operating expenses 399,399 444,309 (44,910 ) Loss from operations (338,479 ) (392,465 ) 53,986 Other income (expense): Change in fair value of derivative liabilities 23,900 (1,000 ) 24,900 Change in fair value of non-controlling equity investments 20,200 17,690 2,510 Change in fair value of contingent consideration liabilities 18,904 5,146 13,758 Interest and other income (expense), net 15,297 (9 ) 15,306 Total other income (expense) 78,301 21,827 56,474 Net loss before income taxes (260,178 ) (370,638 ) 110,460 Provision for income taxes (3,410 ) — (3,410 ) Loss from equity method investment (25,500 ) — (25,500 ) Net loss $ (289,088 ) $ (370,638 ) $ 81,550 License and collaboration revenue License and collaboration revenue was approximately $60.9 million for the year ended December 31, 2022 compared to approximately $51.8 million for the year ended December 31, 2021.
Comparison of the years ended December 31, 2023 and 2022 The following table summarizes our results of operations (in thousands): Years Ended December 31, 2023 2022 Change License and collaboration revenue $ 377,709 $ 60,920 $ 316,789 Operating expenses: Research and development 437,381 311,594 125,787 General and administrative 116,813 87,805 29,008 Total operating expenses 554,194 399,399 154,795 Loss from operations (176,485 ) (338,479 ) 161,994 Other income (expense): Change in fair value of derivative liabilities 7,500 23,900 (16,400 ) Change in fair value of non-controlling equity investments (18,592 ) 20,200 (38,792 ) Change in fair value of contingent consideration liabilities 9,740 18,904 (9,164 ) Interest and other income (expense), net 46,676 15,297 31,379 Total other income (expense) 45,324 78,301 (32,977 ) Net loss before income taxes (131,161 ) (260,178 ) 129,017 Provision for income taxes (1,366 ) (3,410 ) 2,044 Loss from equity method investment — (25,500 ) 25,500 Net loss $ (132,527 ) $ (289,088 ) $ 156,561 License and collaboration revenue License and collaboration revenue was approximately $377.7 million for the year ended December 31, 2023 compared to approximately $60.9 million for the year ended December 31, 2022, an increase of $316.8 million.
We believe this investment will maximize the value of our portfolio and capabilities, the probability of technical success of our programs, and the speed at which we can provide potentially life-long cures to patients. We have a 100,000 square foot manufacturing facility in Research Triangle Park, North Carolina intended to support a broad range of clinical programs.
For our initial clinical trials, we expect to rely primarily on our internal manufacturing capabilities, along with CMOs with relevant manufacturing experience in genetic medicines. We believe this investment will maximize the value of our portfolio and capabilities, the probability of technical success of our programs, and the speed at which we can provide potentially life-long cures to patients.
Net cash provided by financing activities for the year ended December 31, 2021 consisted primarily of proceeds from equity offerings of $757.4 million, net of sales commissions and underwriting discounts, and proceeds from the exercise of stock options of $9.6 million, offset in part by the payment of equity offering costs of $8.8 million and repayments of equipment financing liabilities of $2.1 million.
Net cash provided by financing activities for the year ended December 31, 2022 consisted primarily of proceeds from equity offerings of $108.3 million, net of sales commissions, $3.1 million of proceeds from the issuance of common stock under our Employee Stock Purchase Plan, and $2.7 million of proceeds from the exercise of stock options, offset in part by repayments of equipment financing liabilities of $2.3 million and payment of equity offering costs of $0.2 million. 121 Funding requirements Our operating expenses have increased and are expected to continue to increase substantially as we continue to advance our portfolio of programs.
We can give no assurance that we will be able to secure such additional sources of capital to support our operations, or, if such capital is available to us, that such additional capital will be sufficient to meet our needs for the short or long term. 118 Revenue Recognition In April 2019, we entered into a collaboration and license agreement, or the Verve Agreement, with Verve Therapeutics, Inc., or Verve, a company focused on gene editing for cardiovascular disease treatments.
Revenue Recognition In April 2019, we entered into a collaboration and license agreement, or the Verve Agreement, with Verve Therapeutics, Inc., or Verve, a company focused on gene editing for cardiovascular disease treatments.
The increase of $27.6 million was primarily due to the following: • An increase of $12.8 million in stock-based compensation from additional stock options and restricted stock units granted due to an increase in the number of general and administrative employees from 32 employees as of December 31, 2020 to 62 employees as of December 31, 2021, and additional grants given to existing employees, as well as an increase in the value of our common stock; • Increases of $9.3 million in personnel related costs and $1.3 million in facility related costs, including depreciation costs, due to the increase in the number of general and administrative employees, as well as the expense allocated to general and administrative expenses related to our leased facilities; • An increase of $3.2 million in legal costs primarily due to legal fees incurred in connection with our acquisition of Guide, as well as legal fees incurred in connection with the Apellis, Sana and Pfizer Agreements; and • An increase of $1.6 million in insurance costs due to increased directors and officers insurance costs as a result of our IPO in February 2020 and insurance costs related to our acquisition of Guide in 2021.
The increase of $29.0 million was primarily due to the following: • An increase of $8.5 million in stock-based compensation from additional stock options and restricted stock units granted during the year; • An increase of $14.1 million in legal expenses; and • An increase of $3.9 million in personnel related costs and $3.0 million of facility and IT related costs, including depreciation, due to costs associated with our strategic restructuring in October 2023, as well as the expense allocated to general and administrative expenses related to our leased facilities.
These uses of cash were offset in part by cash provided by increases in deferred revenue of $348.2 million, primarily related to the Pfizer and Apellis Agreements, other accrued expenses and other liabilities of $43.9 million, operating lease liabilities of $16.0 million and accounts payable and other long-term liabilities of $2.6 million as well as noncash items consisting primarily of in-process research and development of $155.0 million, stock-based compensation expense of $43.6 million, change in operating lease ROU assets of $9.0 million, depreciation and amortization expense of $7.5 million and change in fair value of derivative liabilities of $1.0 million.
These sources of cash were offset in part by our net loss of $132.5 million, a decrease in deferred revenue of $159.6 million, a decrease in operating lease liabilities of $10.2 million, decreases in accounts payable of $7.6 million, other long-term liabilities of $0.2 million, increases in prepaid expenses and other current assets of $6.5 million and collaborations receivables of $0.1 million, as well as noncash items including amortization of investment discounts and premiums of $29.7 million, decreases in the fair value of derivative liabilities of $7.5 million and a change in the fair value of contingent consideration liabilities of $9.7 million.
Significant changes in the probabilities as to the periods in which milestones will be achieved would result in a significantly lower or higher fair value measurement. 130 Fair value measurements – Success payments We are required to make success payments to Harvard and Broad Institute based on increases in the per share fair market value of our Series A-1 Preferred Stock and Series A-2 Preferred Stock or, subsequent to our IPO, our common stock.
Deferred revenue expected to be recognized within the next twelve months is classified as a current liability. Fair value measurements – Success payments We are required to make success payments to Harvard and Broad Institute based on increases in the per share fair market value of our common stock.
We base our expenses related to preclinical studies on our estimates of the services received and efforts expended pursuant to contracts with multiple vendors that conduct and manage preclinical studies on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.
The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense.
To unlock the full potential of our base editing technology across a wide range of therapeutic applications, we are pursuing a broad suite of both clinically validated and novel delivery modalities, depending on tissue type, including both ex vivo approaches in our hematology and immunology-oncology portfolios as well as in vivo approaches across our programs.
We believe this design contributes to a more precise and efficient edit compared to traditional gene editing methods, with the potential to dramatically increase the impact of gene editing. We are also pursuing a suite of both delivery modalities, including both ex vivo and in vivo approaches, depending on tissue type.
The following table summarizes our research and development expenses for the years ended December 31, 2022 and December 31, 2021, together with the changes in those items in dollars (in thousands): Years Ended December 31, 2022 2021 Change External research and development expenses $ 111,831 $ 78,232 $ 33,599 In-process research and development — 154,953 (154,953 ) Employee related expenses 89,547 47,823 41,724 Facility and IT related expenses 54,048 36,744 17,304 Stock-based compensation expense 52,004 26,644 25,360 Other expenses 4,164 42,691 (38,527 ) Total research and development expenses $ 311,594 $ 387,087 $ (75,493 ) The decrease of $75.5 million was primarily due to the following: • A decrease of $155.0 million of in-process research and development expense due to an asset acquired from Guide during the year ended December 31, 2021, that was determined to have no alternative future use; and • A decrease of $38.5 million in other expenses, primarily related to decreases in sublicense expenses related to the Apellis, Sana and Pfizer Agreements and related milestones, as well as a decrease in amortization expense related to intangible assets acquired from Guide.
The following table summarizes our research and development expenses for the years ended December 31, 2023 and December 31, 2022, together with the changes in those items in dollars (in thousands): Years Ended December 31, 2023 2022 Change External research and development expenses $ 154,178 $ 111,831 $ 42,347 Employee related expenses 109,878 89,547 20,331 Facility and IT related expenses 69,339 54,048 15,291 Stock-based compensation expense 57,812 52,004 5,808 Other expenses 46,174 4,164 42,010 Total research and development expenses $ 437,381 $ 311,594 $ 125,787 The increase of $125.8 million was primarily due to the following: • A $42.4 million increase in external research and development expenses driven by a $45.6 million increase in outsourced services, driven primarily by clinical and manufacturing expenses for our clinical stage programs and IND enabling activities for our lead liver programs as well as animal studies conducted to further our collaboration programs and LNP platform.
The decrease was partially offset by the following: • An increase of $41.7 million of employee related expenses and $17.3 million of facility and IT related costs, including depreciation.
The increase was partially offset by the following: • A net decrease of $0.5 million of other expenses driven primarily by reduced insurance costs.
Due to the critical importance of high-quality manufacturing and control of production timing and know-how, we are establishing our own manufacturing facility, which will provide us the flexibility to manufacture a variety of different product modalities.
Manufacturing Due to the critical importance of high-quality manufacturing and control of production timing and know-how, we have established a 100,000 square foot manufacturing facility in Research Triangle Park, North Carolina intended to support a broad range of clinical programs.
In addition, Guide’s former stockholders and optionholders are eligible to receive up to an additional $100.0 million in technology milestone payments and $220.0 million in product milestone payments, payable in our common stock. 117 COVID-19 While the COVID-19 pandemic did not significantly impact our business or results of operations during the year ended December 31, 2022, the extent to which the COVID-19 pandemic or any other public health emergency impacts our business, our corporate development objectives, results of operations and financial condition in future periods will depend on developments that are uncertain.
In addition, Guide’s former stockholders and optionholders are eligible to receive up to an additional $100.0 million in technology milestone payments and $220.0 million in product milestone payments, payable in our common stock. 115 Financial operations overview General We were founded in January 2017 and began operations in July 2017.
Removed
We believe this design contributes to a more precise and efficient edit compared to traditional gene editing methods, which operate by creating targeted double-stranded breaks in the DNA that can result in unwanted DNA modifications. We believe that the precision of our editors will dramatically increase the impact of gene editing for a broad range of therapeutic applications.
Added
Information pertaining to fiscal year 2021 was included in our Annual Report on Form 10-K for the year ended December 31, 2022 on pages 120 through 126 under Part II, Item 7, “Management’s Discussion and Analysis of Financial Position and Results of Operations,” which was filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2023.
Removed
We are currently advancing a broad, diversified portfolio of base editing programs against distinct editing targets, utilizing the full range of our development capabilities. We believe the flexibility and versatility of our base editors and delivery technologies may have broad therapeutic applicability and have the potential to transform the field of precision genetic medicines.
Added
Our goal is to advance a broad, diversified portfolio of base editing programs against distinct, genetically validated editing targets, as well as an innovative, platform business model that will expand the reach of our programs to more patients.
Removed
We believe that building an integrated platform combining our gene editing capabilities with advanced delivery and manufacturing capabilities will give us the flexibility to develop our own sustainable portfolio and to create a hub for partnering with other companies to unlock the full potential of precision genetic medicine across a broad array of possible applications.
Added
Overall, we are seeking to build the leading integrated platform for precision genetic medicine, which may have broad therapeutic applicability and the potential to transform the field of precision genetic medicines.
Removed
Manufacturing To realize the full potential of base editors as a differentiated class of medicines and to enable our parallel investment strategy in multiple delivery modalities, we are building customized and integrated capabilities across discovery, manufacturing, and preclinical and clinical development.
Added
In October 2023, we entered into a Transfer and Delegation Agreement, or the Lilly Agreement, with Eli Lilly and Company, or Lilly, pursuant to which Lilly acquired certain assets and other rights under our amended collaboration and license agreement, or the Verve Agreement, with Verve Therapeutics, Inc., or Verve, including our opt-in rights to co-develop and co-commercialize Verve’s base editing programs for cardiovascular disease.
Removed
The facility became operational in the first quarter of 2023, and we expect it to initiate cGMP operations in late 2023. The project is facilitated, in part, by a Job Development Investment Grant approved by the North Carolina Economic Investment Committee, which authorizes potential reimbursements based on new tax revenues generated through the project.
Added
We have not generated any revenue to date from product sales and do not expect to do so in the near future. During the years ended December 31, 2023, 2022, and 2021, we recognized $377.7 million, $60.9 million and $51.8 million respectively, of revenue from our license and collaboration agreements.
Removed
For our initial waves of clinical trials, we expect to use CMOs with relevant manufacturing experience in genetic medicines alongside our internal manufacturing capabilities.
Added
The increase in revenue reflects $216.4 million from the transaction with Lilly (see Note 11), and increases in revenue recognized related to the Pfizer and Apellis transactions as a result of services performed in 2023 as compared to 2022.
Removed
Disruptions to the global economy and supply chain, disruption of global healthcare systems, and other significant impacts of the COVID-19 pandemic or other health emergencies could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Added
Revenue for Pfizer and Apellis, which relates to nonrefundable up-front payments, are recognized based upon a measure of progress using total actual costs incurred as compared to total estimated costs. Research and development expenses Research and development expenses were $437.4 million and $311.6 million for the years ended December 31, 2023 and 2022, respectively.
Removed
For a more detailed discussion of risks related to COVID-19 and other health emergencies, please see Part II, Item 1A, Risk factors—General risk factors , in this Annual Report on Form 10-K. Financial operations overview General We were founded in January 2017 and began operations in July 2017.
Added
Partially offsetting the rise in external research and development expenses is a decrease of $3.2 million in lab supplies due primarily to the movement of our lead programs beyond research and process development activities; • An increase of $42.0 million in other expenses primarily due to increases of accrued liabilities for estimated license fees associated with our transaction with Lilly; 118 • An increase of $20.3 million of employee related expenses and $15.3 million of facility and information technology (IT) related costs, including depreciation, due to the annualized impact of the higher number of research and development employees prior to our strategic restructuring in October 2023, the severance related to the restructuring and the expense allocated to research and development related to our leased facilities; and • An increase of $5.8 million in stock-based compensation from additional stock options and restricted stock units granted during the year.

… 85 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed6 unchanged
Biggest changeItem 7A. Quantitative and Qualitati ve Disclosures About Market Risk. We are exposed to market risk related to changes in interest rates. As of December 31, 2022, we had cash, cash equivalents and marketable securities of $1.1 billion, which consisted of cash, money market funds, commercial paper, corporate notes and corporate equity securities.
Biggest changeItem 7A. Quantitative and Qualitati ve Disclosures About Market Risk. We are exposed to market risk related to changes in interest rates. As of December 31, 2023, we had cash, cash equivalents and marketable securities of $1.2 billion, which consisted of cash, money market funds, commercial paper, corporate notes and corporate equity securities.

Other BEAM 10-K year-over-year comparisons