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What changed in CRISPR Therapeutics AG's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of CRISPR Therapeutics AG'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.

+775 added−862 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-21)

Top changes in CRISPR Therapeutics AG's 2023 10-K

775 paragraphs added · 862 removed · 518 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

219 edited+107 added−191 removed301 unchanged
Biggest changeWe are also progressing several gene-edited allogeneic cell therapy programs, including allogeneic chimeric antigen receptor T cell, or CAR T, candidates for the treatment of hematological and solid tumor cancers, and investigational, allogeneic, gene-edited, immune-evasive, stem cell-derived therapies for the treatment of type 1 diabetes, or T1D.
Biggest changeIn addition, we have further research efforts on targeted conditioning and in vivo editing of hematopoietic stem cells that have the potential to expand the number of patients that could benefit significantly. • Immuno-oncology and autoimmune : We are progressing multiple next-generation gene-edited cell therapy programs, including allogeneic chimeric antigen receptor T cell, or CAR T, candidates for the treatment of hematological and solid tumor cancers and autoimmune diseases. • In vivo approaches : We are advancing a portfolio of programs leveraging in vivo editing for both common and rare diseases, starting with the treatment and prevention of cardiovascular disease. • Type 1 diabetes : We have multiple parallel efforts using allogeneic, gene-edited, hypoimmune, stem cell-derived beta cells to address type 1 diabetes, or T1D, without the need for chronic immunosuppression.
We entered into a research and collaboration agreement in September 2018 with ViaCyte to pursue the discovery, development and commercialization of gene-edited allogeneic stem cell therapies for the treatment of diabetes, and in July 2021, we entered into a joint development and commercialization agreement with ViaCyte, or the ViaCyte JDCA.
ViaCyte . We entered into a research and collaboration agreement in September 2018 with ViaCyte to pursue the discovery, development and commercialization of gene-edited allogeneic stem cell therapies for the treatment of diabetes, and in July 2021, we entered into a joint development and commercialization agreement with ViaCyte, or the ViaCyte JDCA.
The most severe patients can have levels exceeding 2000 mg/dl. Hypertriglyceridemia is associated with CVD and acute pancreatitis. Like LDL-C, triglyceride levels can be affected by diet and lifestyle choices and treated with common therapies. However, over three million adults in the United States still have severe hypertriglyceridemia (sHTG).
The most severe patients can have levels exceeding 2000 mg/dl. Hypertriglyceridemia is associated with CVD and acute pancreatitis. Like LDL-C, triglyceride levels can be affected by diet and lifestyle choices and treated with common therapies. However, over three million adults in the United States still have SHTG.
We believe that our CRISPR/Cas9 gene editing technology is well suited to address DMD, DM1 and CF, all of which have significant patient populations with high unmet medical need. Duchenne Muscular Dystrophy (DMD) DMD is an X-linked recessive genetic disease caused by mutations in the dystrophin gene, which results in a lack of the dystrophin protein.
We believe that our CRISPR/Cas9 gene editing technology is well suited to address CF, DMD and DM1, all of which have significant patient populations with high unmet medical need. Duchenne Muscular Dystrophy DMD is an X-linked recessive genetic disease caused by mutations in the dystrophin gene, which results in a lack of the dystrophin protein.
These new technologies could have advantages over CRISPR/Cas9 gene editing in some applications and there can be no certainty that other gene editing technologies will not be considered better or more attractive than our technology for the development of products.
These new technologies could have advantages over CRISPR/Cas9 gene editing in some applications and there can be no certainty that other gene editing technologies will not be considered better or more attractive than our technology for the development of products.
For example, Cas9 may be determined to be less attractive than other CRISPR proteins, such as Cas12a or novel Cas enzymes that have yet to be discovered, or other CRISPR-associated nuclease variants that can edit human DNA, such as base editors and prime editors.
For example, Cas9 may be determined to be less attractive than other CRISPR proteins, such as Cas12a or novel Cas enzymes that have yet to be discovered, or other CRISPR-associated nuclease variants that can edit human DNA, such as base editors and prime editors.
Among the provisions of the ACA of importance to our potential product candidates are: • an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic products, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; • expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability to prescriptions for individuals enrolled in Medicare Advantage plans; • addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for products that are inhaled, infused, instilled, implanted or injected; • expanded the types of entities eligible for the 340B drug discount program; • established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 70% point-of-sale-discount off the negotiated price of applicable products to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient products to be covered under Medicare Part D, increased pursuant to the Bipartisan Budget Act of 2018 which became effective as of 2019; • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and 49 • established the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription product spending.
Among the provisions of the ACA of importance to our potential product candidates are: • an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic products, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; • expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability to prescriptions for individuals enrolled in Medicare Advantage plans; • addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for products that are inhaled, infused, instilled, implanted or injected; • expanded the types of entities eligible for the 340B drug discount program; • established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 70% point-of-sale-discount off the negotiated price of applicable products to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient products to be covered under Medicare Part D, increased pursuant to the Bipartisan Budget Act of 2018 which became effective as of 2019; • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and • established the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription product spending.
False Claims Act; • the federal false statements statute prohibits knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items, or services; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the anti-inducement law, which prohibits, among other things, the offering or giving of remuneration, which includes, without limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions), to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of items or services reimbursable by a federal or state governmental program; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, collectively HIPAA, which imposes criminal and civil liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program (including private payors) or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services; • HIPAA, which impose obligations with respect to safeguarding the privacy, security, and transmission of individually identifiable information that constitutes protected health information, including mandatory contractual terms and restrictions on the use and/or disclosure of such information without proper authorization; • the federal transparency requirements known as the federal U.S.
False Claims Act; • the federal false statements statute prohibits knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items, or services; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the anti-inducement law, which prohibits, among other things, the offering or giving of remuneration, which includes, without limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions), to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of items or services reimbursable by a federal or state governmental program; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, collectively HIPAA, which imposes criminal and civil liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program (including private payors) or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services; • HIPAA, which impose obligations with respect to safeguarding the privacy, security, and transmission of individually identifiable information that constitutes protected health information, including mandatory contractual terms and 39 restrictions on the use and/or disclosure of such information without proper authorization; • the federal transparency requirements known as the federal U.S.
Department of Health and Human Services, or HHS, information related to payments and other transfers of value made by that entity to physicians (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician providers such as physician assistants and nurse practitioners, and teaching hospitals, and requires certain manufacturers and applicable group purchasing organizations to report ownership and investment interests held by physicians or their immediate family members; • federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; 48 • The Foreign Corrupt Practices Act prohibits companies and their intermediaries from making, or offering or promising to make improper payments to non-U.S. officials for the purpose of obtaining or retaining business or otherwise seeking favorable treatment; and • analogous laws and regulations in other national jurisdictions and states, such as state anti-kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers.
Department of Health and Human Services, or HHS, information related to payments and other transfers of value made by that entity to physicians (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician providers such as physician assistants and nurse practitioners, and teaching hospitals, and requires certain manufacturers and applicable group purchasing organizations to report ownership and investment interests held by physicians or their immediate family members; • federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • The Foreign Corrupt Practices Act prohibits companies and their intermediaries from making, or offering or promising to make improper payments to non-U.S. officials for the purpose of obtaining or retaining business or otherwise seeking favorable treatment; and • analogous laws and regulations in other national jurisdictions and states, such as state anti-kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers.
Orphan Drug Designation and Exclusivity Regulation (EC) No 141/2000 and Regulation (EC) No 847/2000 provide that a product can be designated as an orphan drug by the European Commission if its sponsor can establish that: (1) the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) either (a) such condition affects no more than five (5) in ten thousand (10,000) persons in the EU when the application is made; or (b) it is unlikely that the product, without benefits derived from orphan status, would generate sufficient return in the EU to justify the necessary investment in its development; (3) there exists no satisfactory method of diagnosis, prevention, or treatment of such condition authorized for marketing in the EU or, if such method exists, the product will be of significant benefit to those affected by that condition.
Orphan Drug Designation and Exclusivity Regulation (EC) No 141/2000 and Regulation (EC) No 847/2000 provide that a product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (1) the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) either (a) such condition affects no more than five (5) in ten thousand (10,000) persons in the EU when the application is made; or (b) it is unlikely that the product, without benefits derived from orphan status, would generate sufficient return in the EU to justify the necessary investment in its development; (3) there exists no satisfactory method of diagnosis, prevention, or treatment of such condition authorized for marketing in the EU or, if such method exists, the product will be of significant benefit to those affected by that condition.
An applicant 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; • 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, or by a central IRB if appropriate; 35 • 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 the FDA’s Good Clinical Practice, or GCP, regulations; • preparation and submission to the FDA of a Biologics License Application, or BLA, for a biologic product requesting marketing for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product and proposed labeling; • review of the product by an FDA advisory committee, where appropriate or if 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 and 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, for the use of human cellular and tissue products; • satisfactory completion of any FDA audits of the nonclinical study and clinical trial sites to assure compliance with GLPs and GCPs, respectively, and the integrity of clinical data in support of the BLA; • payment of user fees and securing FDA approval of the BLA; and • compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, adverse event reporting, and compliance with any post-approval studies required by the FDA.
An applicant 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; • 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, or by a central IRB if appropriate; 26 • 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 the FDA’s Good Clinical Practice, or GCP, regulations; • preparation and submission to the FDA of a Biologics License Application, or BLA, for a biologic product requesting marketing for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product and proposed labeling; • review of the product by an FDA advisory committee, where appropriate or if 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 and 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, for the use of human cellular and tissue products; • satisfactory completion of any FDA audits of the nonclinical study and clinical trial sites to assure compliance with GLPs and GCPs, respectively, and the integrity of clinical data in support of the BLA; • payment of user fees and securing FDA approval of the BLA; and • compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, adverse event reporting, and compliance with any post-approval studies required by the FDA.
During this market exclusivity period, neither the European Commission nor the Member States can accept an application or grant a marketing authorization in respect of a “similar medicinal product.” A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication.
During this market exclusivity period, neither the European Commission nor the EU Member States can accept an application or grant a marketing authorization in respect of a “similar medicinal product.” A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication.
Cell therapies have already begun to make a meaningful impact in certain diseases and gene editing could help accelerate that progress across diverse disease areas, including oncology and diabetes. The process of gene editing involves precisely altering DNA sequences within the genomes of cells using enzymes to cut the DNA at specific locations.
Cell therapies have already begun to make a meaningful impact in certain diseases and gene editing could help accelerate that progress across diverse disease areas, including oncology, autoimmune diseases and diabetes. The process of gene editing involves precisely altering DNA sequences within the genomes of cells using enzymes to cut the DNA at specific locations.
The FDA and the NIH have published guidance documents with respect to the development and submission of gene therapy protocols. Although the FDA has indicated that its guidance documents regarding gene therapies are not legally binding, we believe that our compliance with them is likely necessary to gain approval for any product candidate we may develop.
The FDA and the NIH have published guidance documents with respect to the development and submission of gene therapy protocols. 28 Although the FDA has indicated that its guidance documents regarding gene therapies are not legally binding, we believe that our compliance with them is likely necessary to gain approval for any product candidate we may develop.
Nonetheless, product candidates may not be considered medically necessary or cost effective. A decision by a third-party payor not to cover any product candidates we may develop could reduce physician utilization of such product candidates once approved and have a material adverse effect on our sales, results of operations and financial condition.
Nonetheless, products or product candidates may not be considered medically necessary or cost effective. A decision by a third-party payor not to cover any product candidates we may develop could reduce physician utilization of such product candidates once approved and have a material adverse effect on our sales, results of operations and financial condition.
Our goal is to build a culture of diverse and passionate people striving to positively impact patients, our communities, and broader society. Our human capital resource priorities include attracting, recruiting, retaining, incentivizing and integrating our existing and new employees. We believe that a diverse, equitable, and inclusive workplace allows our company to best fulfill our mission.
Our goal is to build a culture of diverse and passionate people striving to positively impact patients, our communities, and broader society. Our human capital resource 42 priorities include attracting, recruiting, retaining, incentivizing and integrating our existing and new employees. We believe that a diverse, equitable, and inclusive workplace allows our company to best fulfill our mission.
LPL is the main enzyme that breaks down triglyceride-enriched lipoproteins like chylomicrons, very low density lipoprotein (VLDL) and LDL. By preventing LPL from hydrolyzing these lipoproteins, ANGPTL3 activity increases the level of circulating triglycerides. Reducing ANGPTL3 expression by disrupting the ANGPTL3 gene increases LPL expression and thereby reduces triglyceride-rich lipoproteins, as well as LDL-C.
LPL is the main enzyme that breaks down triglyceride-enriched lipoproteins like chylomicrons, very low density lipoprotein, or VLDL, and LDL. By preventing LPL from hydrolyzing these lipoproteins, ANGPTL3 activity increases the level of circulating triglycerides. Reducing ANGPTL3 expression by disrupting the ANGPTL3 gene increases LPL expression and thereby reduces triglyceride-rich lipoproteins, as well as LDL-C.
Mergers and acquisitions in the pharmaceutical, biotechnology, and gene and cell therapy industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
Mergers and acquisitions in the pharmaceutical, 25 biotechnology, and gene and cell therapy industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
Thus, while our understanding of genetic diseases has increased since the mapping of the human genome, our ability to treat them effectively has been limited. We believe gene editing has the potential to enable a next generation of therapeutics and provide potentially curative therapies to many genetic diseases through precise gene modification.
Thus, while our understanding of genetic diseases has increased since the mapping of the human genome, our ability to treat them effectively has been limited. 3 We believe gene editing has the potential to enable a next generation of therapeutics and provide potentially curative therapies to many genetic diseases through precise gene modification.
Data exclusivity prevents applicants for authorizations of generics or biosimilars from referencing the innovator’s preclinical and clinical data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the EU, during a period of eight years from the date on which the reference product was first authorized in the EU.
Data exclusivity prevents applicants for authorizations of generics or biosimilars from referencing the innovator’s preclinical and clinical data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the EU, during a period of eight years from the date on which the 35 reference product was first authorized in the EU.
The conduct of such a clinical trial could be expensive and result in delays in our commercialization efforts. In the EU, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed.
The conduct of such a clinical trial could be expensive and result in delays in our commercialization efforts. In the EU, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may 38 be marketed only after a reimbursement price has been agreed.
In addition, under the Food and Drug Omnibus Reform Act of 2022 (“FDORA”), a platform technology incorporated within or utilized by a drug or biological product is eligible for designation as a designated platform technology if (1) the platform technology is incorporated in, or utilized by, a drug approved under a BLA; (2) preliminary evidence submitted by the sponsor of the approved or licensed drug, or a sponsor that has been granted a right of reference to data submitted in the application for such drug, demonstrates that the platform technology has the potential to be incorporated in, or utilized by, more than one drug without an adverse effect on quality, manufacturing, or safety; and (3) data or information submitted by the applicable person indicates that incorporation or utilization of the platform technology has a reasonable likelihood to bring significant efficiencies to the drug development or manufacturing process and to the review process.
In addition, under the Food and Drug Omnibus Reform Act of 2022, or FDORA, a platform technology incorporated within or utilized by a drug or biological product is eligible for designation as a designated platform technology if (1) the platform technology is incorporated in, or utilized by, a drug approved under a BLA; (2) preliminary evidence submitted by the sponsor of the approved or licensed drug, or a sponsor that has been granted a right of reference to data submitted in the application for such drug, demonstrates that the platform technology has the potential to be incorporated in, or utilized by, more than one drug without an adverse effect on quality, manufacturing, or safety; and (3) data or information submitted by the applicable person indicates that incorporation or utilization of the platform technology has a reasonable likelihood to bring significant efficiencies to the drug development or manufacturing process and to the review process.
Up to 20% of adults in the United States have Lp(a) levels above 50 mg/dL and over 1 million adults in the United States have AVCD. Additionally, 30% of patients with familial hypercholesterolemia have elevated Lp(a) levels. To date, there are no Lp(a) lowering therapies approved by the 25 FDA.
Up to 20% of adults in the United States have Lp(a) levels above 50 mg/dL and over 1 million adults in the United States have AVCD. Additionally, 30% of patients with familial hypercholesterolemia have elevated Lp(a) levels. To date, there are no Lp(a) lowering therapies approved by the FDA.
These companies include 2seventy bio, Allogene Therapeutics, Cellectis, Precision BioSciences and Sangamo Therapeutics. We are also aware of companies developing therapies in various areas related to our specific research and development programs. In hemoglobinopathies, these companies include Beam Therapeutics, bluebird bio, Editas Medicine, Graphite Bio, Merck, Novartis Pharmaceuticals, Pfizer, and Sangamo Therapeutics.
These companies include 2seventy bio, Allogene Therapeutics, Cellectis, Precision BioSciences and Sangamo Therapeutics. We are also aware of companies developing therapies in various areas related to our specific research and development programs. In hemoglobinopathies, these companies include Beam Therapeutics, bluebird bio, Editas Medicine, Merck, Novartis Pharmaceuticals and Pfizer.
In immuno-oncology, these companies include 2seventy bio, Adicet Bio, Allogene Therapeutics, Bristol Myers Squibb, Caribou Biosciences, Cellectis, Century Therapeutics, Fate Therapeutics, Gilead Sciences, Legend Biotech, Novartis Pharmaceuticals, Poseida Therapeutics and Precision BioSciences. In regenerative medicine, these companies include BlueRock Therapeutics (acquired by Bayer in 2019), Sana Biotechnology and Semma Therapeutics (acquired by Vertex in 2019).
In immuno-oncology, these companies include 2seventy bio, Adicet Bio, Allogene Therapeutics, Bristol Myers Squibb, Caribou Biosciences, Cellectis, Century Therapeutics, Fate Therapeutics, Gilead Sciences, Legend Biotech, Novartis Pharmaceuticals and Poseida Therapeutics. In regenerative medicine, these companies include BlueRock Therapeutics (acquired by Bayer in 2019), Sana Biotechnology and Semma Therapeutics (acquired by Vertex in 2019).
The market exclusivity period for the authorized therapeutic indication may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan drug designation because, for example, the product is sufficiently profitable not to justify market exclusivity.
The market exclusivity period for the authorized therapeutic indication may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation because, for example, the product is sufficiently profitable not to justify market exclusivity.
We also 30 protect the integrity and confidentiality of our data, know-how and trade secrets by maintaining physical security of our premises and physical and electronic security of our information systems. In-Licensed Intellectual Property from Dr. Charpentier In April 2014, pursuant to an exclusive license with Dr.
We also protect the integrity and confidentiality of our data, know-how and trade secrets by maintaining physical security of our premises and physical and electronic security of our information systems. In-Licensed Intellectual Property from Dr. Charpentier In April 2014, pursuant to an exclusive license with Dr.
Ines Fonfara and Vienna, or the Patent Assignment Agreement. Under the Patent Assignment Agreement, Dr. Charpentier, Dr. Fonfara and Vienna assigned to us all rights to a family of patent applications relating to certain compositions of matter, including additional CRISPR/TRACR/Cas9 complexes, and methods of use, including their use in targeting or cutting DNA.
Under the Patent Assignment Agreement, Dr. Charpentier, Dr. Fonfara and Vienna assigned to us all rights to a family of patent applications relating to certain compositions of matter, including additional CRISPR/TRACR/Cas9 complexes, and methods of use, including their use in targeting or cutting DNA.
The restoration period granted on a patent covering a product is typically one-half the time between the effective date of an IND and the submission date of a marketing application, plus the time between the submission date of the marketing application and the ultimate approval date, less any time the applicant failed to act with due diligence.
The restoration period granted on a patent covering a product is typically one-half the time between the effective date of an IND and the submission date of a marketing application, plus the time between the submission date of the marketing application and the ultimate approval date, less any time the applicant failed to 33 act with due diligence.
Within the FDA, the Center for Biologics Evaluation and Research, or CBER, regulates gene therapy products. Within the CBER, the review of gene therapy and related products is consolidated in the Office of Therapeutic Products, and the FDA has established the Cellular, Tissue and Gene Therapies 37 Advisory Committee to advise CBER on its reviews.
Within the FDA, the Center for Biologics Evaluation and Research, or CBER, regulates gene therapy products. Within the CBER, the review of gene therapy and related products is consolidated in the Office of Therapeutic Products, and the FDA has established the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its reviews.
Our success will depend significantly on our ability to obtain and maintain patent and other proprietary protection for our technology, our ability to defend and enforce our intellectual property rights and our ability to operate without infringing any valid and enforceable patents and proprietary rights of third parties.
Our success will depend significantly on our ability to obtain 21 and maintain patent and other proprietary protection for our technology, our ability to defend and enforce our intellectual property rights and our ability to operate without infringing any valid and enforceable patents and proprietary rights of third parties.
If we elect to co-develop and co-commercialize products for the treatment of DM1, we would reimburse Vertex for fifty percent (50%) of the DM1 research and development costs incurred by Vertex and 29 would be responsible for fifty percent (50%) of such costs going forward.
If we elect to co-develop and co-commercialize products for the treatment of DM1, we would reimburse Vertex for fifty percent (50%) of the DM1 research and development costs incurred by Vertex and would be responsible for fifty percent (50%) of such costs going forward.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available on our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC at its website (https://www.sec.gov). 52
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available on our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC at its website (https://www.sec.gov). 43
There are a few limited of derogations from the ten-year period of market exclusivity pursuant to which the European Commission may grant a marketing authorization for a similar medicinal product in the same therapeutic indication, which are: • where the second applicant can establish that although their product is similar to the orphan medicinal product already authorized, the second product is safer, more effective or otherwise clinically superior; • where the marketing authorization holder consent to the second orphan medicinal product application; or • where the marketing authorization holder cannot supply enough orphan medicinal product.
There are a few limited of derogations from the ten-year period of market exclusivity pursuant to which the European Commission may grant a marketing authorization for a similar medicinal product in the same therapeutic indication, which are: • where the second applicant can establish that although their product is similar to the orphan medicinal product already authorized, the second product is safer, more effective or otherwise clinically superior; • where the marketing authorization holder for the authorized orphan product consents to the second orphan medicinal product application; or • where the marketing authorization holder for the authorized orphan product cannot supply enough orphan medicinal product.
Matters relating to hemoglobinopathies targets are governed by the A&R Vertex JDCA, as summarized below. Further discovery efforts focused on a specified number of other genetic targets.
Matters relating to hemoglobinopathies targets are governed by the Amended A&R Vertex JDCA, as summarized below. Further discovery efforts focused on a specified number of other genetic targets.
The FDA or the clinical trial sponsor may suspend or terminate a clinical trial at any time for various reasons, including a finding that the clinical trial is not being conducted in accordance with FDA requirements or the subjects or patients are being exposed to an unacceptable health risk. 36 Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.
The FDA or the clinical trial sponsor may suspend or terminate a clinical trial at any time for various reasons, including a finding that the clinical trial is not being conducted in accordance with FDA requirements or the subjects or patients are being exposed to an unacceptable health risk. 27 Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.
This mechanism has been validated through natural history studies, as individuals with natural loss-of-function variants of ANGPTL3 have lower triglyceride levels, lower LDL-C levels, and a lower risk of coronary artery disease. CTX310, which consists of messenger RNA encoding Cas9 and a guide RNA targeting ANGPTL3 delivered via LNP, aims to recapitulate this effect by disrupting the ANGPTL3 gene.
This mechanism has been validated through natural history studies, as individuals with natural loss-of-function variants of ANGPTL3 have lower triglyceride levels, lower LDL-C levels, and a lower risk of coronary artery disease. CTX310, which consists of messenger RNA encoding Cas9 and a gRNA targeting ANGPTL3 delivered via LNP, aims to recapitulate this effect by disrupting the ANGPTL3 gene.
Patients are often given iron chelators, or medicines to reduce iron levels in the blood, which are associated with their own significant toxicities. In developing countries, where chronic transfusions are not available, most patients die in early childhood. Also, a disease-modifying therapy for beta thalassemia, Reblozyl (luspatercept-aamt), received FDA approval in 2019.
Patients often undergo phlebotomy or are given iron chelators, or medicines to reduce iron levels in the blood, which are associated with their own significant toxicities. In developing countries, where chronic transfusions are not available, most patients die in early childhood. Also, a disease-modifying therapy for beta thalassemia, Reblozyl (luspatercept-aamt), received FDA approval in 2019.
To expand our efforts in gene-edited immune cell therapy beyond T cells, we formed a collaboration with Nkarta that brings together our gene editing technology and cell therapy expertise with Nkarta’s leading NK cell discovery, development and manufacturing capabilities. We and Nkarta are co-developing and co-commercializing two donor-derived, gene-edited CAR-NK cell product candidates, one of which targets CD70.
To expand our efforts in gene-edited immune cell therapy beyond T cells, we formed a collaboration with Nkarta that brings together our gene editing technology and cell therapy expertise with Nkarta’s leading NK cell discovery, development and manufacturing capabilities. We and Nkarta are co-developing and co-commercializing product candidates incorporating donor-derived, gene-edited CAR-NK cell product candidates, one of which targets CD70.
Pediatric Studies and Exclusivity Under the Pediatric Research Equity Act of 2003 (PREA), as amended, a BLA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and 41 to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
Pediatric Studies and Exclusivity Under the Pediatric Research Equity Act of 2003 (PREA), as amended, a BLA or supplement thereto must contain data that are 32 adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
For instance, the new Clinical Trials Regulation provides for a streamlined application procedure via a single-entry point and strictly defined deadlines for the assessment of clinical trial applications.
For instance, the Clinical Trials Regulation provides for a streamlined application procedure via a single-entry point and strictly defined deadlines for the assessment of clinical trial applications.
Regulation (EC) No 1901/2006 provides that prior to obtaining a marketing authorization in the EEA, an applicant must demonstrate compliance with all measures included in an EMA-approved pediatric investigation plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, class waiver, or a deferral for one or more of the measures included in the PIP.
Regulation (EC) No 1901/2006 provides that prior to obtaining a marketing authorization in the EU, an applicant must demonstrate compliance with all measures included in an EMA-approved pediatric investigation plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, class waiver, or a deferral for one or more of the measures included in the PIP.
TRACR also received a non-exclusive, worldwide, royalty-free license, including the right to sublicense, to carry out internal pharmaceutical research for 32 therapeutic products outside of the TRACR Field and an exclusive, worldwide, royalty-free sublicense, including the right to sublicense, to research, develop, produce, commercialize and sell therapeutic products relating to the TRACR Field which incorporate any intellectual property that CRISPR develops under its license with Dr.
TRACR also received a non-exclusive, worldwide, royalty-free license, including the right to sublicense, to carry out internal pharmaceutical research for 23 therapeutic products outside of the TRACR Field and an exclusive, worldwide, royalty-free sublicense, including the right to sublicense, to research, develop, produce, commercialize and sell therapeutic products relating to the TRACR Field which incorporate any intellectual property that CRISPR develops under its license with Dr.
Even if a product is considered to be an innovative medicinal product so that the innovator gains the prescribed period of data exclusivity, another company nevertheless could also market another version of the product if such company obtained a marketing authorization based on an MAA with a completely independent data package of pharmaceutical tests, preclinical tests and clinical trials.
Even if a product is considered to be an innovative medicinal product so that the innovator gains the prescribed period of data exclusivity, another company nevertheless could also market another version of the product if such company obtained a marketing authorization based on an MAA with a complete independent data package of pharmaceutical tests, preclinical tests and clinical trials.
Charpentier and her collaborators further simplified the system for use in gene editing by combining the crRNA and tracrRNA into a single RNA molecule called a guide RNA. The guide RNA binds to Cas9 and can be programmed to direct the Cas9 enzyme to a specific DNA sequence based on Watson-Crick base pairing rules.
Charpentier and her collaborators further simplified the system for use in gene editing by combining the crRNA and tracrRNA into a single RNA molecule called a guide RNA, or gRNA. The gRNA binds to Cas9 and can be programmed to direct the Cas9 enzyme to a specific DNA sequence based on Watson-Crick base pairing rules.
Sponsors that receive a 38 complete response letter may submit to the FDA information that represents a complete response to the issues identified by the FDA. Such resubmissions are classified under PDUFA as either Class 1 or Class 2. The classification of a resubmission is based on the information submitted by an applicant in response to an action letter.
Sponsors that receive a complete response letter may submit to the FDA information that represents a complete response to the issues identified by the FDA. 29 Such resubmissions are classified under PDUFA as either Class 1 or Class 2. The classification of a resubmission is based on the information submitted by an applicant in response to an action letter.
These patent families encompass filings covering our development programs (such as composition of matter, method of use, manufacturing processes, dosing and formulations), the use and improvement modifications of CRISPR/Cas9 systems for gene editing (such as improvements to component systems including nucleases and single or modified guide RNAs), technologies for delivering protein/nucleic acid complexes and RNA into cells (such as improved viral vector systems and self‑inactivating systems), and technology relevant to stem cell-based therapies.
These patent families encompass filings covering our development programs (such as composition of matter, method of use, manufacturing processes, dosing and formulations), the use and improvement modifications of CRISPR/Cas9 systems for gene editing (such as improvements to component systems including nucleases and single or modified gRNAs), technologies for delivering protein/nucleic acid complexes and RNA into cells (such as improved viral vector systems and self‑inactivating systems), and technology relevant to stem cell-based therapies.
CTX320 consists of a guide RNA targeting LPA , the gene encoding apo(a), and messenger RNA encoding Cas9 delivered via LNP. By reducing levels of apo(a), CTX320 should reduce plasma levels of Lp(a) substantially, as supported by preclinical data showing that treatment with CTX320 decreases Lp(a) levels by over 90% in NHPs.
CTX320 consists of a gRNA targeting LPA, the gene encoding apo(a), and messenger RNA encoding Cas9 delivered via LNP. By reducing levels of apo(a), CTX320 should reduce plasma levels of Lp(a) substantially, as supported by preclinical data showing that treatment with CTX320 decreases Lp(a) levels by over 90% in NHPs.
A product is eligible for this designation if it is a regenerative medicine therapy that is intended to treat, modify, reverse or cure a serious 39 or life-threatening disease or condition and preliminary clinical evidence indicates that the product has the potential to address unmet medical needs for such disease or condition.
A product is eligible for this designation if it is a regenerative medicine therapy that is intended to treat, modify, reverse or cure a serious 30 or life-threatening disease or condition and preliminary clinical evidence indicates that the product has the potential to address unmet medical needs for such disease or condition.
We are obligated to use commercially reasonable efforts to obtain regulatory approval to market a licensed therapeutic product. We must use commercially reasonable efforts to file a U.S. Investigational New Drug application (or its equivalent in a major market country for a therapeutic product in the CRISPR field) by April 2021.
We are obligated to use commercially reasonable efforts to obtain regulatory approval to market a licensed therapeutic product. We must use commercially reasonable efforts to file a U.S. Investigational New Drug application (or its equivalent in a major market country) for a therapeutic product in the CRISPR field by April 2024.
In April 2021, we and Vertex agreed to amend and restate the Vertex JDA and entered into the A&R Vertex JDCA, pursuant to which the parties agreed to, among other things, (a) adjust the governance structure for the collaboration and adjust the responsibilities of each party thereunder; (b) adjust the allocation of net profits and net losses between the parties with respect to exa-cel only; and (c) exclusively license (subject to our 28 reserved rights to conduct certain activities) certain intellectual property rights to Vertex relating to the specified product candidates and products (including exa-cel) that may be researched, developed, manufactured and commercialized under such agreement.
In April 2021, we and Vertex agreed to amend and restate the Vertex JDA and entered into the A&R Vertex JDCA, pursuant to which the parties agreed to, among other things, (a) adjust the governance structure for the collaboration and adjust the responsibilities of each party thereunder; (b) adjust the allocation of net profits and net losses between the parties with respect to CASGEVY only; and (c) exclusively license (subject to our reserved rights to conduct certain activities) certain intellectual property rights to Vertex relating to the specified product candidates and products (including CASGEVY) that may be researched, developed, manufactured and commercialized under such agreement.
In our immuno-oncology cell therapies, we are using the multiplexing ability of CRISPR/Cas9 both to enable allogeneic administration and to introduce additional genetic edits that aim to improve the efficacy or safety profile of these product candidates.
In our immuno-oncology cell therapies, we are using the multiplexing ability of CRISPR/Cas9 both to enable allogeneic administration and to introduce additional genetic edits that aim to improve the efficacy profile of these product candidates.
Inclusion of orphan drugs in reimbursement systems tend to focus on the medical usefulness, need, quality and economic benefits to patients and the 47 healthcare system as for any drug. Acceptance of any medicinal product for reimbursement may come with cost, use and often volume restrictions, which again can vary by country. In addition, results-based rules of reimbursement may apply.
Inclusion of orphan medicinal products in reimbursement systems tend to focus on the medical usefulness, need, quality and economic benefits to patients and the healthcare system as for any drug. Acceptance of any medicinal product for reimbursement may come with cost, use and often volume restrictions, which again can vary by country. In addition, results-based rules of reimbursement may apply.
Outside the United States, ensuring adequate coverage and payment for any product candidates we may develop will face challenges. Pricing of prescription pharmaceuticals is subject to governmental control in many countries.
Outside the United States, ensuring adequate coverage and payment for any products or product candidates we may develop will face challenges. Pricing of prescription pharmaceuticals is subject to governmental control in many countries.
The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of GMP, inspections of manufacturing facilities for medicinal products and GMP documents issued, but does not foresee wholesale mutual recognition of UK and EU pharmaceutical regulations.
The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of GMP, inspections of manufacturing facilities for medicinal products and GMP documents issued, but does not provide for wholesale mutual recognition of UK and EU pharmaceutical regulations.
Enabling Technologies We have entered into a number of additional collaborations and license agreements to support and complement our ex vivo and in vivo programs, including agreements related to: technologies to deliver CRISPR/Cas9 ex vivo and in vivo ; additions to our hematopoietic stem cell and in vivo programs, including a grant to advance gene editing therapies for HIV; and enhancements to our immuno-oncology and regenerative medicine cell therapy programs and platform.
Enabling Technologies We have entered into a number of additional collaborations and license agreements to support and complement our ex vivo and in vivo programs, including agreements related to: technologies to deliver CRISPR/Cas9 ex vivo and in vivo ; additions to our hematopoietic stem cell and in vivo programs, including two grants to advance gene editing therapies for HIV; and enhancements to our immuno-oncology and regenerative medicine cell therapy programs and platform.
Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity, including the non-patent and orphan exclusivity.
Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity.
If a single cut is made, a process called non-homologous end joining can result in the addition or deletion of base pairs, disrupting the original DNA sequence and causing gene inactivation. A larger fragment of DNA can also be deleted by using two guide RNAs that target separate sites.
If a single cut is made, a process called non-homologous end joining can result in the addition or deletion of base pairs, disrupting the original DNA sequence and causing gene inactivation. A larger fragment of DNA can also be deleted by using two gRNAs that target separate sites.
Limitations of current treatment options The most common treatment for beta thalassemia is chronic blood transfusions. Transfusion-dependent patients typically receive transfusions every two to four weeks and chronic administration of blood often leads to elevated levels of iron in the body, which can cause organ damage over a relatively short period of time.
The most common treatment for beta thalassemia is chronic blood transfusions. Transfusion-dependent patients typically receive transfusions every two to four weeks and chronic administration of blood often leads to elevated levels of iron in the body, which can cause organ damage over a relatively short period of time.
Absent early termination, the 2015 Collaboration Agreement will continue until the expiration of the Vertex’s payment obligations under the 2015 Collaboration Agreement. Joint Development Agreement In December 2017, we entered into the Vertex JDA with Vertex pursuant to which the parties agreed to, among other things, co-develop and co-commercialize exa-cel and other product candidates specified in the Vertex JDA.
Absent early termination, the 2015 Collaboration Agreement will continue until the expiration of Vertex’s payment obligations under the 2015 Collaboration Agreement. Joint Development Agreement In December 2017, we entered into the Vertex JDA with Vertex pursuant to which the parties agreed to, among other things, co-develop and co-commercialize CASGEVY and other product candidates specified in the Vertex JDA.
Furthermore, the applicant may only start a clinical trial at a specific study site after the ethics committee, or EC, has issued a favorable opinion in relation to the clinical trial. In April 2014, the EU adopted a new Clinical Trials Regulation (EU) No 536/2014, which replace the Clinical Trials Directive 2001/20/EC on 31 January 2022.
Furthermore, the applicant may only start a clinical trial at a specific study site after the applicable ethics committee, or EC, has issued a favorable opinion in relation to the clinical trial. In April 2014, the EU adopted a new Clinical Trials Regulation (EU) No 536/2014, which replaced the Clinical Trials Directive 2001/20/EC on 31 January 2022.
Patients are unlikely to use any product candidates we may develop unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of such product candidates.
Patients are unlikely to use any products or product candidates we may develop unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of such product candidates.
If circumstances arise pursuant to which a party would have the right to terminate the A&R Vertex JDCA on account of an uncured material breach, such party may elect to keep the A&R Vertex JDCA in effect and cause such breaching party to be treated as if it had exercised its opt-out rights with respect to the products associated with such uncured material breach (described below) and the royalties payable to the breaching party would be reduced by a specified percentage.
If circumstances arise pursuant to which a party would have the right to terminate the agreement on account of an uncured material breach, such party may elect to keep the agreement in effect and cause such breaching party to be treated as if it had exercised its opt-out rights with respect to the products associated with such uncured material breach (described below) and the royalties payable to the breaching party would be reduced by a specified percentage.
Furthermore, the ability to alter DNA sequences precisely has applications beyond the treatment of genetically defined diseases. CRISPR/Cas9 gene editing could also enable the engineering of cell-based therapies to make them more efficacious, safer and available to a broader group of patients.
Furthermore, the ability to alter DNA sequences precisely has applications beyond the treatment of genetic diseases. CRISPR/Cas9 gene editing could also enable the engineering of cell-based therapies to make them more efficacious, safer and available to a broader group of patients.
Most engineered cell therapies in development require unique products to be created for each patient treated, an approach that has in the past proven challenging and cost prohibitive in the field of oncology. This bespoke manufacturing process takes time during which a patient’s disease can progress and sometimes fails to produce a viable product at all.
These cell therapies require unique products to be created for each patient treated, an approach that has in the past proven challenging and cost prohibitive in the field of oncology. This bespoke manufacturing process takes time during which a patient’s disease can progress and sometimes fails to produce a viable product at all.
Gene editing techniques that require different protein enzymes for 13 each genetic modification may be limited in the number of edits they can make concurrently due to efficiency, cytotoxicity and/or manufacturing challenges. In contrast, CRISPR/Cas9 has the potential to efficiently make multiple edits using a single Cas9 protein and multiple small guide RNA molecules.
Gene editing techniques that require different protein enzymes for each genetic modification may be limited in the number of edits they can make concurrently due to efficiency, cytotoxicity and/or manufacturing challenges. In contrast, CRISPR/Cas9 has the potential to efficiently make multiple edits using a single Cas9 protein and multiple small gRNA molecules.
Patients with FH have one or more genetic mutations that contribute to the disease in addition to diet and lifestyle. Patients with FH cannot metabolize LDL-C effectively, leading to high levels of circulating LDL-C, in some cases exceeding 1000 mg/dL. FH can be subcategorized by mutation status into heterozygous and homozygous familial hypercholesterolemia (HeFH and HoFH).
Patients with FH have one or more genetic mutations that contribute to the disease in addition to diet and lifestyle. Patients with FH cannot metabolize LDL-C effectively, leading to high levels of circulating LDL-C, in some cases exceeding 1000 mg/dL. FH can be subcategorized by mutation status into HeFH, and HoFH.
The PRIME scheme is open to medicines under development and for which the applicant intends to apply for an initial marketing authorization application through the centralized procedure.
The PRIME scheme is open to medicines under development and for which the applicant intends to submit an initial marketing authorization application through the centralized procedure.
There are currently two approved disease-modifying therapies in the United States for the treatment of DMD, one for patients who have confirmed mutations of the dystrophin gene amenable to exon 51 skipping and one for patients who have confirmed mutations of the dystrophin gene amenable to exon 53 skipping.
There are currently several approved disease-modifying therapies in the United States for the treatment of DMD, including one for patients who have confirmed mutations of the dystrophin gene amenable to exon 51 skipping, two for patients who have confirmed mutations of the dystrophin gene amenable to exon 53 skipping, and one for patients who have confirmed mutations of the dystrophin gene amenable to exon 45 skipping.
CVD includes heart failure, stroke, atherosclerotic cardiovascular disease (ASCVD), aortic valve calcification and more. Dyslipidemias are a leading cause of CVD. Dyslipidemias are characterized by abnormally high levels of lipids, including cholesterol, lipoproteins and triglycerides, in the blood stream. Three of the most common dyslipidemias are hypercholesterolemia, hypertriglyceridemia and elevated lipoprotein(a), or Lp(a).
CVD includes heart failure, stroke, atherosclerotic cardiovascular disease, or ASCVD, aortic valve calcification and more. Dyslipidemias are a leading cause of CVD. Dyslipidemias are characterized by abnormally high levels of lipids, including cholesterol, lipoproteins and triglycerides, in the bloodstream. Three of the most common dyslipidemias are hypercholesterolemia, hypertriglyceridemia and elevated Lp(a).
Overall, our intellectual property estate includes over one hundred (100) active patent families and over forty (40) granted or allowed patents in the United States, China, Europe, and South Africa, and pending patent applications in the United States, Europe, Australia, Canada, China, Japan, Mexico and other selected countries in Central America, South America, the Middle East, Asia and Africa.
Overall, our intellectual property estate includes over one hundred (100) active patent families and over sixty (60) granted or allowed patents in the United States, China, Europe, and South Africa, and pending patent applications in the United States, Europe, Australia, Canada, China, Japan, Mexico and other selected countries in Central America, South America, the Middle East, Asia and Africa.
Reference pricing used by various EU Member States, and parallel trade (arbitrage between low-priced and high-priced Member States), can further reduce prices. Special pricing and reimbursement rules may apply to orphan drugs.
Reference pricing used by various EU Member States, and parallel trade (arbitrage between low-priced and high-priced Member States), can further reduce prices. Special pricing and reimbursement rules may apply to orphan medicinal products.
In addition, the manufacturing of authorized products, for which a separate manufacturer’s license is mandatory, must also be conducted in strict compliance with the applicable EU laws, regulations and 45 guidance, including Directive 2001/83/EC, Directive 2003/94/EC, Regulation (EC) No 726/2004 and the European Commission Guidelines for Good Manufacturing Practice.
In addition, the manufacturing of authorized products, for which a separate manufacturer’s license is mandatory, must also be conducted in strict compliance with the applicable EU laws, regulations and guidance, including Directive 2001/83/EC, Directive (EU) 2017/1572, Regulation (EC) No 726/2004 and the European Commission Guidelines for Good Manufacturing Practice.
At present, Great Britain has implemented EU legislation on the marketing, promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as amended) (under the Northern Ireland Protocol, the EU regulatory framework will continue to apply in Northern Ireland).
At present, Great Britain has implemented EU legislation on the marketing, promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as amended) (under the Northern Ireland Protocol, the EU regulatory framework currently continues to apply in Northern Ireland).
D., or M.D. degrees. 391 engaged primarily in research and development or technical operations, and 67 engaged in business development, finance, information systems, facilities, human resources, legal functions, or administrative support. We consider our employee relations to be good. 51 We are dedicated to conducting business with the highest standards of corporate responsibility.
D., or M.D. degrees. 355 engaged primarily in research and development or technical operations, and 52 engaged in business development, finance, information systems, facilities, human resources, legal functions, or administrative support. We consider our employee relations to be good. We are dedicated to conducting business with the highest standards of corporate responsibility.
Immuno-Oncology We believe CRISPR/Cas9 has the potential to create the next generation of CAR T cell therapies that may have a superior product profile compared to current autologous therapies and allow accessibility to broader patient populations.
Immuno-Oncology and Autoimmune We believe CRISPR/Cas9 has the potential to create the next generation of CAR T cell therapies that may have a superior product profile and allow broader patient access compared to current autologous therapies.
The CRISPR/Cas9 technology they described consists of three basic components: C RISPR- as sociated protein 9, or Cas9, CRISPR RNA, or crRNA, and trans-activating CRISPR RNA, or tracrRNA. Cas9, in combination with these two RNA molecules, is described as “molecular scissors” that can make specific cuts and edits in selected double-stranded DNA. Dr.
The CRISPR/Cas9 technology they described consists of three basic components: Cas9, CRISPR RNA, or crRNA, and trans-activating CRISPR RNA, or tracrRNA. Cas9, in combination with these two RNA molecules, is described as “molecular scissors” that can make specific cuts and edits in selected double-stranded DNA. Dr.
We will continue to rely on external manufacturing capabilities realized via contract manufacturing organization relationships in the United States and abroad. We have entered into certain manufacturing and supply arrangements with third-party suppliers to support production of our product candidates and their components.
In addition to utilizing our internal manufacturing facility, we expect we will continue to rely on external manufacturing capabilities realized via contract manufacturing organization relationships in the United States and abroad. We have entered into certain manufacturing and supply arrangements with third-party suppliers to support production of our product candidates and their components.
Additional In Vivo Programs Building upon CTX310 and CTX320, we have a number of earlier stage investigational in vivo programs leveraging gene disruption in the liver for both rare and common diseases. These include CTX330, which targets PCSK9 , a well understood target for CVD with robust data from natural human genetics and other therapeutic modalities.
Additional In Vivo Programs Building upon CTX310 and CTX320, we have a number of earlier stage investigational in vivo programs leveraging gene disruption in the liver for both rare and common diseases. These include CTX330, which targets PCSK9, a well understood target for CVD with robust data from natural human genetics and antibody and RNAi therapies.
Vertex We have entered into a series of agreements with Vertex that contemplate certain research, development, manufacturing and commercialization activities involving various targets.
Vertex We, and certain of our affiliates, have entered into a series of agreements with Vertex, and or affiliates of Vertex, that contemplate certain research, development, manufacturing and commercialization activities involving various targets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

212 edited+105 added−95 removed567 unchanged
Biggest changeAdditionally, because our technology involves gene editing across multiple cell and tissue types, we are subject to many of the challenges and risks that gene therapies face, including: • regulatory requirements governing gene and cell therapy products have changed frequently and may continue to change in the future; to date a limited number of products that involve the genetic modification of patient cells have been approved in the United States and the EU; • the administration processes or related procedures for our product candidates (e.g., treatment with myeloablative busulfan conditioning prior to receiving exa-cel or undergoing a lymphodepletion regimen prior to receiving our immunotherapy product candidates); • improper insertion of a gene sequence into a patient’s chromosome could lead to lymphoma, leukemia or other cancers, or other aberrantly functioning cells; and • the FDA recommends a follow-up observation period of 15 years or longer for all patients who receive treatment using gene therapies, and we may need to adopt and support, and have adopted and are supporting for certain of our trials, such an observation period for our product candidates.
Biggest changeAdditionally, because our technology involves gene editing across multiple cell and tissue types, we are subject to many of the challenges and risks that gene therapies face, including: • regulatory requirements and guidance governing gene and cell therapy products have changed frequently and may continue to change in the future, including, e.g., the final guidance document titled “Human Gene Therapy Products Incorporating Human Genome Editing” that the FDA issued in January 2024; 47 • to date, only a limited number of products that involve the genetic modification of patient cells have been approved in the United States and the EU; • the administration processes or related procedures for our product candidates (e.g., treatment with myeloablative busulfan conditioning prior to receiving CASGEVY or undergoing a lymphodepletion regimen prior to receiving our immunotherapy product candidates); • improper modulation of a gene sequence, including unintended editing events, insertion of a gene sequence into certain locations in a patient’s chromosome or other effects related to the technology underlying our product candidates could lead to lymphoma, leukemia or other cancers, or other aberrantly functioning cells, or other diseases, including death; • transient expression of the Cas9 protein or other genome editing components of our product candidates could lead to patients having an immunological reaction towards those cells, which could be severe or life-threatening; • corrective expression of a missing protein in patients’ cells could result in the protein being recognized as foreign, and lead to a sustained immunological reaction against the expressed protein or expressing cells, which could be severe or life-threatening; and • the FDA recommends a follow-up observation period of up to 15 years for all patients who receive treatment using gene therapies, and we may need to adopt and support, and have adopted and are supporting for certain of our trials, such an observation period for our product candidates.
The Commercial Success Of Any Of Our Product Candidates Will Depend Upon Its Degree Of Market Acceptance By Physicians, Patients, Third-party Payors And Others In The Medical Community. Ethical, social and legal concerns about gene therapy could result in additional regulations restricting or prohibiting our products.
The Commercial Success Of Any Of Our Products or Product Candidates Will Depend Upon Its Degree Of Market Acceptance By Physicians, Patients, Third-party Payors And Others In The Medical Community. Ethical, social and legal concerns about gene therapy could result in additional regulations restricting or prohibiting our products.
Nevertheless, we are responsible for ensuring that each of our preclinical studies and any future clinical trials we sponsor are conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards and our reliance on CROs will not relieve us of our regulatory responsibilities.
Nevertheless, we are responsible for ensuring that each of our preclinical studies, clinical trials and any future preclinical studies and clinical trials we sponsor are conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards and our reliance on CROs will not relieve us of our regulatory responsibilities.
The success of our product candidates will depend on several factors, including the following: • successful completion of clinical trials and preclinical studies; • sufficiency of our financial and other resources to complete the necessary clinical trials and preclinical studies; • ability to develop safe and effective delivery mechanisms for our in vivo therapeutic programs; • ability to identify optimal RNA sequences to guide genomic editing; • maintenance of current, and entry into additional, collaborations to further the development of our product candidates; • approval of CTAs or INDs for our product candidates to commence clinical trials; • successful enrollment in, and completion of, clinical trials and preclinical studies; • successful data from our clinical program that support an acceptable risk-benefit profile of our product candidates for the intended patient populations; • receipt of regulatory and marketing approvals from applicable regulatory authorities; • establishing and maintaining arrangements with third-party manufacturers for clinical supply and commercial manufacturing and, where applicable, commercial manufacturing capabilities; • successful development of our internal manufacturing processes and transfer to larger-scale facilities operated by either a contract manufacturing organization or by us; 56 • establishment and maintenance of patent and trade secret protection or regulatory exclusivity for our product candidates; • commercial launch of our product candidates, if and when approved, whether alone or in collaboration with others; • acceptance of the product candidates, if and when approved, by patients, the medical community and third-party payors; • effective competition with other therapies and treatment options; • establishment and maintenance of healthcare coverage and adequate reimbursement; • enforcement and defense of intellectual property rights and claims; • maintenance of a continued acceptable safety profile of the product candidates following approval; and • achieving desirable medicinal properties for the intended indications.
The success of our product candidates will depend on several factors, including the following: • successful completion of clinical trials and preclinical studies; • sufficiency of our financial and other resources to complete the necessary clinical trials and preclinical studies; • ability to develop safe and effective delivery mechanisms for our in vivo therapeutic programs; • ability to identify optimal RNA sequences to guide genomic editing; • maintenance of current, and entry into additional, collaborations to further the development of our product candidates; • approval of CTAs or INDs for our product candidates to commence clinical trials; • successful enrollment in, and completion of, clinical trials and preclinical studies; • successful data from our clinical program that support an acceptable risk-benefit profile of our product candidates for the intended patient populations; • receipt of regulatory and marketing approvals from applicable regulatory authorities; • establishing and maintaining arrangements with third-party manufacturers for clinical supply and commercial manufacturing and, where applicable, commercial manufacturing capabilities; • successful development of our internal manufacturing processes and transfer to larger-scale facilities operated by either a contract manufacturing organization or by us; • establishment and maintenance of patent and trade secret protection or regulatory exclusivity for our product candidates; • commercial launch of our product candidates, if and when approved, whether alone or in collaboration with others; • acceptance of the product candidates, if and when approved, by patients, the medical community and third-party payors; • effective competition with other therapies and treatment options; • establishment and maintenance of healthcare coverage and adequate reimbursement; • enforcement and defense of intellectual property rights and claims; • maintenance of a continued acceptable safety profile of the product candidates following approval; and • achieving desirable medicinal properties for the intended indications.
In addition, the market price for our common shares may be influenced by many factors, including: • the success of existing or new competitive products or technologies; • the timing and results of any product candidates that we may develop; • commencement or termination of collaborations for our product development and research programs; • 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; • developments or changing views regarding the use of genomic products, including those that involve gene editing; • 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 discover, develop, acquire or in-license 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 shares by us, our insiders, or other shareholders; • expiration of 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 common shares; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section.
In addition, the market price for our common shares may be influenced by many factors, including: • the success of existing or new competitive products or technologies; • the timing and results of any product candidates that we may develop; • commencement or termination of collaborations for our product development and research programs; • 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; • developments or changing views regarding the use of genomic products, including those that involve gene editing; • 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; 89 • the results of our efforts to discover, develop, acquire or in-license 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 shares by us, our insiders, or other shareholders; • expiration of 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 common shares; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section.
This statute provides in principle that a judgment rendered by a non-Swiss court may be enforced in Switzerland only if: • the non-Swiss court had jurisdiction pursuant to the Swiss Federal Act on Private International Law; • the judgment of such non-Swiss court has become final and non-appealable; • the judgment does not contravene Swiss public policy; • the court procedures and the service of documents leading to the judgment were in accordance with the due process of law; and • no proceeding involving the same position and the same subject matter was first brought in Switzerland, or adjudicated in Switzerland, or was earlier adjudicated in a third state and this decision is recognizable in Switzerland.
This statute provides in principle that a judgment rendered by a non-Swiss court may be enforced in Switzerland only if: 86 • the non-Swiss court had jurisdiction pursuant to the Swiss Federal Act on Private International Law; • the judgment of such non-Swiss court has become final and non-appealable; • the judgment does not contravene Swiss public policy; • the court procedures and the service of documents leading to the judgment were in accordance with the due process of law; and • no proceeding involving the same position and the same subject matter was first brought in Switzerland, or adjudicated in Switzerland, or was earlier adjudicated in a third state and this decision is recognizable in Switzerland.
If we are characterized as a PFIC, U.S. holders of our common shares may suffer adverse tax consequences, including having gains realized on the sale of the common shares treated as ordinary income, rather than capital gain, the loss of the preferential rate applicable to dividends received on the common shares by individuals who are U.S. holders, and having interest charges apply to distributions by us and the proceeds of sales of the common shares.
If we are characterized as a PFIC, U.S. holders of our common shares may suffer adverse tax consequences, including having gains realized on the sale of the common shares treated as ordinary income, rather than capital gain, the loss of the preferential rate applicable to dividends received on the common shares by 85 individuals who are U.S. holders, and having interest charges apply to distributions by us and the proceeds of sales of the common shares.
Even after we receive and incorporate guidance from these regulatory authorities, they could disagree that we have satisfied their requirements to commence our clinical trial or change their position on the acceptability of our trial design or the clinical endpoints selected, which may require us to complete additional preclinical studies or clinical trials or impose stricter approval conditions than we currently expect.
Even after we receive and incorporate guidance from these regulatory authorities, they could disagree that we have satisfied their requirements to commence our clinical trial or change their position on the acceptability of 46 our trial design or the clinical endpoints selected, which may require us to complete additional preclinical studies or clinical trials or impose stricter approval conditions than we currently expect.
If our CRISPR/Cas9 gene editing technology demonstrates a similar effect, we may decide or be required to halt or delay preclinical development or clinical development of our product candidates. In addition to serious adverse events or side effects caused by any product candidate we may develop, the administration process or related procedures also can cause undesirable side effects.
If our CRISPR/Cas9 gene editing technology demonstrates a similar effect, we may decide or be required to halt or delay preclinical development, clinical development or commercialization of our product candidates. In addition to serious adverse events or side effects caused by any product candidate we may develop, the administration process or related procedures also can cause undesirable side effects.
RMAT-designated products that receive accelerated approval may, as appropriate, fulfill their post-approval requirements through the submission of clinical evidence, clinical trials, patient registries, or other sources of real world evidence, such as electronic health records; through the collection of larger confirmatory data sets; or via post-approval monitoring of all patients treated with such therapy prior to approval of the therapy.
RMAT-designated products that receive 54 accelerated approval may, as appropriate, fulfill their post-approval requirements through the submission of clinical evidence, clinical trials, patient registries, or other sources of real world evidence, such as electronic health records; through the collection of larger confirmatory data sets; or via post-approval monitoring of all patients treated with such therapy prior to approval of the therapy.
In addition, later discovery of previously unknown problems with a product candidate, including adverse events of unanticipated severity or frequency, or with our or other collaborators’ manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on such products, manufacturers, or manufacturing processes; • restrictions on the labeling or marketing of a product; • restrictions on the distribution or use of a product; • requirements to conduct post-marketing clinical trials; 68 • receipt of warning or untitled letters; • restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory biologic recalls; • refusal to approve pending applications or supplements to approved applications that we or our collaborators submit; • fines, restitution, or disgorgement of profits or revenue; • suspension or withdrawal of marketing approvals or revocation of biologics licenses; • suspension of any ongoing clinical trials; • refusal to permit the import or export of our products; • product seizure or detention; and • injunctions or the imposition of civil or criminal penalties.
In addition, later discovery of previously unknown problems with a product candidate, including adverse events of unanticipated severity or frequency, or with our or other collaborators’ manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on such products, manufacturers, or manufacturing processes; 58 • restrictions on the labeling or marketing of a product; • restrictions on the distribution or use of a product; • requirements to conduct post-marketing clinical trials; • receipt of warning or untitled letters; • restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory biologic recalls; • refusal to approve pending applications or supplements to approved applications that we or our collaborators submit; • fines, restitution, or disgorgement of profits or revenue; • suspension or withdrawal of marketing approvals or revocation of biologics licenses; • suspension of any ongoing clinical trials; • refusal to permit the import or export of our products; • product seizure or detention; and • injunctions or the imposition of civil or criminal penalties.
Even with the requisite approvals from FDA in the United States, the EMA in the EU and other regulatory authorities internationally, the commercial success of our product candidates will depend, in significant part, on the acceptance of physicians, patients and health care payors of gene therapy products in general, and our product candidates in particular, as medically necessary, cost-effective and safe.
Even with the requisite approvals from FDA in the United States, the EMA in the EU and other regulatory authorities internationally, the commercial success of our products or product candidates will depend, in significant part, on the acceptance of physicians, patients and health care payors of gene therapy products in general, and our products or product candidates in particular, as medically necessary, cost-effective and safe.
If the FDA or a comparable health regulatory authority does not approve these facilities or cites these facilities for deficiencies for the manufacture of our product candidates or if it withdraws any such approval or cites deficiencies in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved.
If the FDA or a comparable health regulatory authority does not approve these facilities or cites these facilities for deficiencies for the manufacture of our product candidates or if it withdraws any such approval or cites deficiencies in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory 66 approval for or market our product candidates, if approved.
An adverse determination in any such claim may result in our inability to manufacture or commercialize products without infringing 83 third-party patent rights. Competitors may also contest our patents, if issued, by showing that the invention was not patent-eligible, was not novel, was obvious or that the patent claims failed any other requirement for patentability.
An adverse determination in any such claim may result in our inability to manufacture or commercialize products without infringing third-party patent rights. Competitors may also contest our patents, if issued, by showing that the invention was not patent-eligible, was not novel, was obvious or that the patent claims failed any other requirement for patentability.
If we do not succeed in one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates, which would materially harm our business. If we do not receive regulatory approvals for our product candidates, we may not be able to continue our operations.
If we do not succeed in one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates, which would materially harm our business. Ultimately, if we do not receive regulatory approvals for our product candidates, we may not be able to continue our operations.
We will also need to recruit and retain qualified scientific, clinical and commercial personnel as we advance the development of our product candidates and product pipeline. We may be unable to hire, train, retain or motivate these key personnel on acceptable 78 terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel.
We will also need to recruit and retain qualified scientific, clinical and commercial personnel as we advance the development of our product candidates and product pipeline. We may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel.
In addition, because we have only recently commenced clinical trials for certain of our other product candidates, we have not yet been able to assess safety in humans. There may be long-term effects from treatment with any product candidates that we develop that we cannot predict at this time.
In addition, because we have only recently commenced clinical trials for certain of our other product candidates, we have not yet been able to fully assess safety in humans. There may be long-term effects from treatment with any product candidates that we develop that we cannot predict at this time.
Negative public reaction to gene therapy in general could result in greater government regulation and stricter labeling requirements of gene editing products, including any of our product candidates, and could cause a decrease in the demand for any products we may develop. Adverse public attitudes may adversely impact our ability to enroll clinical trials.
Negative public reaction to gene therapy in general could result in greater government regulation and stricter labeling requirements of gene editing products, including any of our product candidates, and could cause a decrease in the demand for any products we may develop. Adverse public attitudes may adversely impact our ability to enroll 56 clinical trials.
Any problems in our supply chain, manufacturing process or facilities could result in delays in planned clinical trials and increased costs, and could make us a less attractive collaborator for potential partners, including larger pharmaceutical companies and academic research institutions, which could limit our access to additional attractive development programs.
Any problems in our supply chain, manufacturing process or facilities could result in delays in planned clinical trials and increased costs, and could make 65 us a less attractive collaborator for potential partners, including larger pharmaceutical companies and academic research institutions, which could limit our access to additional attractive development programs.
We May Be Unable To Obtain Orphan Drug Designation Or Exclusivity. If Our Competitors Are Able To Obtain Orphan Drug Exclusivity For Products That Constitute The Same Drug And Treat The Same Indications As Our Product Candidates, We May Not Be Able To Have Competing Products Approved By The Applicable Regulatory Authority For A Significant Period Of Time.
We May Be Unable To Obtain Orphan Drug Designation Or Exclusivity. If Our Competitors Are Able To Obtain Orphan Drug Exclusivity For Products That Constitute The Same Drug And Treat The Same Indications As Our Product Candidates, We May Not 55 Be Able To Have Competing Products Approved By The Applicable Regulatory Authority For A Significant Period Of Time.
The loss of the services of our executive officers or other key employees or consultants could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. If we are unable to retain high quality personnel, our ability to pursue our growth strategy will be limited.
The loss of the services of our executive officers or other key employees or consultants could impede the achievement of our research, development 67 and commercialization objectives and seriously harm our ability to successfully implement our business strategy. If we are unable to retain high quality personnel, our ability to pursue our growth strategy will be limited.
Further, in June 2019, the USPTO declared a second interference (Interference No. 106,115, or ‘115 interference) between fourteen (14) pending U.S. patent applications co-owned by the CVC Group and thirteen (13) patents and a patent application 85 co-owned by the Broad. The Broad patents include those that were the subject of the ‘048 interference.
Further, in June 2019, the USPTO declared a second interference (Interference No. 106,115, or ‘115 interference) between fourteen (14) pending U.S. patent applications co-owned by the CVC Group and thirteen (13) patents and a patent application co-owned by the Broad. The Broad patents include those that were the subject of the ‘048 interference.
As a result of these factors, it is more difficult for us to predict the time and cost of product candidate development, and we cannot predict whether the application of our gene editing technology, or any similar or competitive gene editing technologies, will result in the identification, development, and regulatory approval of any products.
As a result of these factors, it is more difficult for us to predict the time and cost of product candidate development, and we cannot predict whether the application of 48 our gene editing technology, or any similar or competitive gene editing technologies, will result in the identification, development, and regulatory approval of any products.
Additionally, the designation of any of our product candidates as an orphan product does not guarantee that any regulatory agency will accelerate regulatory review of, or ultimately approve, that product candidate, nor does it limit the ability of any regulatory agency to grant orphan drug designation to product candidates of other companies that treat the same indications as our product candidates prior to our product candidates receiving exclusive marketing approval.
Additionally, the designation of any of our product candidates as an orphan product does not guarantee that any regulatory agency will accelerate regulatory review of, or ultimately approve, that product candidate, nor does it limit the ability of any regulatory agency to grant orphan designation to product candidates of other companies that treat the same indications as our product candidates prior to our product candidates receiving exclusive marketing approval.
Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell, and distribute our product candidates for which we obtain marketing approval.
Our current and future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell, and distribute our product candidates for which we obtain marketing approval.
Products granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites, including through expansion to additional sites.
Products granted RMAT designation may be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites, including through expansion to additional sites.
In September 2020, the PTAB issued an order that, among other matters, advanced the proceeding to the priority phase. In February 2022, PTAB issued a Decision of Priority and Judgment finding that Broad has priority over CVC Group with respect to the subject matter of the interference. The CVC Group has appealed this decision to the Federal Circuit.
In September 2020, the PTAB issued an order that, among other matters, advanced the proceeding to the priority phase. In February 2022, PTAB issued a Decision 73 of Priority and Judgment finding that Broad has priority over CVC Group with respect to the subject matter of the interference. The CVC Group has appealed this decision to the Federal Circuit.
While we have multiple product candidates in clinical development and advanced preclinical development for a range of diseases, we have not yet submitted BLAs for any of our wholly-owned allogeneic CAR T product candidates to the FDA, or similar marketing applications to comparable foreign authorities.
For example, while we have multiple product candidates in clinical development and advanced preclinical development for a range of diseases, we have not yet submitted BLAs for any of our wholly-owned allogeneic CAR T product candidates to the FDA, or similar marketing applications to comparable foreign authorities.
For these reasons, we may encounter difficulties in the timely and accurate reporting of our financial results, which would impact our ability to provide our investors with information in a timely manner. As a result, our investors could lose confidence in our reported financial information, and our stock price could decline.
For these reasons, we may encounter difficulties in the timely and accurate reporting of our financial results, which would impact our ability to provide 69 our investors with information in a timely manner. As a result, our investors could lose confidence in our reported financial information, and our stock price could decline.
We may also require licenses from third parties for certain modified or improved components of gene editing technology, such as modified nucleic acids, as well as non-CRISPR/Cas9 technologies such as delivery methods that we are evaluating for use with product candidates we may develop.
We may also require licenses from third parties for certain modified or improved components of gene editing technology, such as modified nucleic acids or proteins, as well as non-CRISPR/Cas9 technologies such as delivery methods that we are evaluating for use with product candidates we may develop.
We may also need to raise additional funds sooner if we choose to pursue additional indications or geographies for our product candidates or otherwise expand more rapidly than we presently anticipate. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.
We may also need to raise additional funds sooner if we choose to pursue additional indications or geographies for our product candidates or otherwise expand more rapidly than we presently anticipate. Accordingly, we will need to obtain substantial additional funding in connection 44 with our continuing operations.
Our product candidates require preclinical and clinical development; regulatory and marketing approval in multiple jurisdictions; obtaining manufacturing supply, capacity, and expertise; building of a commercial organization; substantial investment and significant marketing efforts before we generate any revenue from product sales.
In general, our product candidates require preclinical and clinical development; regulatory and marketing approval in multiple jurisdictions; obtaining manufacturing supply, capacity, and expertise; building of a commercial organization; substantial investment and significant marketing efforts before we generate any revenue from product sales.
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines, or imprisonment. 75 Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs.
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines, or imprisonment. Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs.
Although the UK is regarded as a third country under the EU’s GDPR, the European Commission (“EC”) has now issued a decision recognizing the UK as providing adequate protection under the EU GDPR and, therefore, transfers of personal data originating in the EU to the UK remain unrestricted.
Although the UK is regarded as a third country under the EU’s GDPR, the European Commission (“EC”) has now issued a decision recognizing the UK as providing adequate protection under the EU GDPR and, therefore, transfers of personal data originating in the EEA to the UK remain unrestricted.
In particular, we anticipate that with respect to our technology platform, these trade secrets and know-how will over time be disseminated within the industry through independent development, the publication of journal articles describing the methodology, and the movement of personnel from academic to industry scientific positions. 92 We seek to protect these trade secrets and other proprietary technology, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors, and other third parties.
In particular, we anticipate that with respect to our technology platform, these trade secrets and know-how will over time be disseminated within the industry through independent development, the publication of journal articles describing the methodology, and the movement of personnel from academic to industry scientific positions. 80 We seek to protect these trade secrets and other proprietary technology, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors, and other third parties.
Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects. 88 Similarly, as we continue to enter into license agreements, collaboration agreements and partnerships with third-parties to expand our development programs, we have, and expect to continue to, out-license some of our intellectual property to these third-parties.
Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects. 76 Similarly, as we continue to enter into license agreements, collaboration agreements and partnerships with third-parties to expand our development programs, we have, and expect to continue to, out-license some of our intellectual property to these third-parties.
This provision has been transposed into the Human Medicines Regulations 2012 and so remains applicable in the UK despite its departure from the EU. Payments made to physicians in certain EU Member States must be publicly disclosed.
This provision has been transposed into the Human Medicines Regulations 2012 and so remains applicable in the UK despite its departure from the EU. 64 Payments made to physicians in certain EU Member States must be publicly disclosed.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights or allow third parties to commercialize our technology or products and compete directly with us, without payment to us.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights or allow third parties to 71 commercialize our technology or products and compete directly with us, without payment to us.
Swiss resident individuals who hold their shares as private assets, or Resident Private Shareholders, are in principle eligible for a full refund or credit against income tax of the Swiss withholding tax if they duly report the underlying income in their income tax return.
Swiss resident individuals who hold their shares as private assets, or Resident Private Shareholders, are in principle eligible for a 84 full refund or credit against income tax of the Swiss withholding tax if they duly report the underlying income in their income tax return.
Moreover, preclinical, nonclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA or EMA approval.
Moreover, preclinical, nonclinical and clinical data are often susceptible to varying 52 interpretations and analyses and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA or EMA approval.
Such a loss of patent protection would have a material adverse impact on our business, financial condition, results of operations, and prospects. 89 The Intellectual Property Landscape Around Gene Editing Technology, Including CRISPR/Cas9, Is Highly Dynamic, And Third Parties May Initiate And Prevail In Legal Proceedings Alleging That The Patents That We In-License Or Own Are Invalid Or That We Are Infringing, Misappropriating, Or Otherwise Violating Their Intellectual Property Rights, The Outcome Of Which Would Be Uncertain And Could Have A Material Adverse Effect On The Success Of Our Business.
Such a loss of patent protection would have a material adverse impact on our business, financial condition, results of operations, and prospects. 77 The Intellectual Property Landscape Around Gene Editing Technology, Including CRISPR/Cas9, Is Highly Dynamic, And Third Parties May Initiate And Prevail In Legal Proceedings Alleging That The Patents That We In-License Or Own Are Invalid Or That We Are Infringing, Misappropriating, Or Otherwise Violating Their Intellectual Property Rights, The Outcome Of Which Would Be Uncertain And Could Have A Material Adverse Effect On The Success Of Our Business.
Our Business Operations Have a Substantial International Footprint and We May Further Expand In The Future, Which Presents Challenges In Managing Our Business Operations. We are headquartered in Zug, Switzerland and have offices in the United States and the United Kingdom. In addition, we may expand our international operations into other countries in the future.
" Our Business Operations Have a Substantial International Footprint and We May Further Expand In The Future, Which Presents Challenges In Managing Our Business Operations. We are headquartered in Zug, Switzerland and have offices in the United States. In addition, we may expand our international operations into other countries in the future.
Even if we do become profitable, we may not be able to sustain or increase our profitability on a quarterly or annual basis. 53 We Will Need To Raise Substantial Additional Funding, Which Will Dilute Our Shareholders.
Even if we do become profitable, we may not be able to sustain or increase our profitability on a quarterly or annual basis. We Will Need To Raise Substantial Additional Funding, Which Will Dilute Our Shareholders.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. 90 Some Intellectual Property Which We Have In-licensed May Have Been Discovered Through Government Funded Programs And Thus May Be Subject To Federal Regulations Such As “march-in” Rights, Certain Reporting Requirements And A Preference For U.S.-based Manufacturers.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. 78 Some Intellectual Property Which We Have In-licensed May Have Been Discovered Through Government Funded Programs And Thus May Be Subject To Federal Regulations Such As “march-in” Rights, Certain Reporting Requirements And A Preference For U.S.-based Manufacturers.
Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application.
Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for 53 each submitted product application, may cause delays in the approval or rejection of an application.
The expertise required to manufacture these product candidates may be unique to a particular contract manufacturing organizations, and as a result, it would be difficult and time consuming to find an alternative contract manufacturing organization.
The expertise required to manufacture these product candidates may be unique to a particular contract manufacturing organization, and as a result, it would be difficult and time consuming to find an alternative contract manufacturing organization.
It is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our product candidates in either the United States or the EU or how long it will take to commercialize our product candidates.
It is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our future product candidates in either the United States or the EU or how long it will take to commercialize our product candidates.
Defense of these claims, regardless of their merit, would involve substantial litigation expense, would be a substantial diversion of management and other employee resources from our business and may impact our reputation. 86 In any case, it may be years before there is a final determination on priority. Pursuant to the terms of the license agreement with Dr.
Defense of these claims, regardless of their merit, would involve substantial litigation expense, would be a substantial diversion of management and other employee resources from our business and may impact our reputation. 74 In any case, it may be years before there is a final determination on priority. Pursuant to the terms of the license agreement with Dr.
In addition, we may seek to obtain additional licenses from our licensors and, in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the licensors, including by agreeing to terms that could enable third parties (potentially including our competitors) to receive licenses to a portion of the intellectual property that is subject to our existing 87 licenses.
In addition, we may seek to obtain additional licenses from our licensors and, in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the licensors, including by agreeing to terms that could enable third 75 parties (potentially including our competitors) to receive licenses to a portion of the intellectual property that is subject to our existing licenses.
For example, our shares traded within a range of a high price of $220.20 and a low price of $11.63 per share for the period beginning on October 19, 2016, our first day of trading on the Nasdaq Global Market, through December 31, 2022. As a result of this volatility, our shareholders could incur substantial losses.
For example, our shares traded within a range of a high price of $220.20 and a low price of $11.63 per share for the period beginning on October 19, 2016, our first day of trading on the Nasdaq Global Market, through December 31, 2023. As a result of this volatility, our shareholders could incur substantial losses.
We anticipate that our expenses will increase substantially if and as we: • continue our clinical trials for our various programs; • continue our current research programs and our preclinical and clinical development of product candidates; • seek to identify additional research programs and additional product candidates; • conduct IND supporting preclinical studies and initiate clinical trials for our product candidates; • initiate preclinical studies and clinical trials for any other product candidates we identify and choose to develop; • expand, maintain, enforce and/or defend our intellectual property estate; • seek marketing approvals for any of our product candidates that successfully complete clinical trials; • further develop our gene editing technology; • hire additional clinical, quality control and scientific personnel; • establish, expand or contract for manufacturing capabilities; • add operational, financial and management information systems and personnel, including personnel to support our product candidate development; • acquire or in-license other technologies; and, • establish a sales, marketing, and distribution infrastructure to commercialize any products for which we may obtain marketing approval.
We anticipate that our expenses will increase substantially if and as we: • continue our clinical trials for our various programs; • continue our current research programs and our preclinical and clinical development of product candidates; • seek to identify additional research programs and additional product candidates; • conduct IND supporting preclinical studies and initiate clinical trials for our product candidates; • initiate preclinical studies and clinical trials for any other product candidates we identify and choose to develop; • expand, maintain, enforce and/or defend our intellectual property estate; • seek marketing approvals for any of our product candidates that successfully complete clinical trials; • further develop our gene editing technology; • hire additional clinical, quality control and scientific personnel; • establish, expand or contract for manufacturing capabilities; • add operational, financial and management information systems and personnel, including personnel to support our product candidate development; • acquire or in-license other technologies; and • establish a sales, marketing, and distribution infrastructure to commercialize any products for which we, or our partners and collaborators, may obtain or have obtained marketing approval.
For our immuno-oncology programs, we are developing a pipeline of allogeneic T cell product candidates (including, for example, CTX110, CTX112, CTX130 and CTX131) that are engineered from healthy donor T cells to express chimeric antigen receptors, or CARs, and are intended for use in any patient with certain cancers.
For our immuno-oncology programs, we are developing a pipeline of allogeneic T cell product candidates (including, for example, CTX112 and CTX131) that are engineered from healthy donor T cells to express chimeric antigen receptors, or CARs, and are intended for use in any patient with certain cancers.
Furthermore, if we or others later identify undesirable side effects caused by any product candidate that we develop, several potentially significant negative consequences could result, including: • regulatory authorities may revoke licenses or suspend, vary or withdraw approvals of such product candidate; • regulatory authorities may require additional warnings on the label; • we may be required to change the way a product candidate is administered or conduct additional clinical trials; • we could be sued and held liable for harm caused to patients; and • our reputation may suffer.
Furthermore, if we or others later identify undesirable side effects caused by any product candidate that we develop alone or with our collaborators, several potentially significant negative consequences could result, including: • regulatory authorities may revoke licenses or suspend, vary or withdraw approvals of such product candidate; • regulatory authorities may require additional warnings on the label; • we may be required to change the way a product candidate is administered or conduct additional clinical trials; • we could be sued and held liable for harm caused to patients; and • our reputation may suffer.
Failure or process defects in any of the interrelated systems at either our manufacturing facility, once validated, or those of our third-party manufacturers, could adversely impact our ability to manufacture and supply cell therapy product candidates and certain components thereof intended for research, clinical and, if approved, commercial production.
Failure or process defects in any of the interrelated systems at either our manufacturing facility or those of our third-party manufacturers, could adversely impact our ability to manufacture and supply cell therapy product candidates and certain components thereof intended for research, clinical and, if approved, commercial production.
We currently generate no revenue from sales of any product and we may never be able to develop or commercialize a marketable product. We must file U.S. Investigational New Drug, or IND, applications, clinical trial applications, or CTAs, or their equivalents with regulatory authorities to commence clinical trials.
We currently generate no revenue from sales of any product and we may never be able to again research, develop or commercialize a marketable product. We must file U.S. Investigational New Drug, or IND, applications, clinical trial applications, or CTAs, or their equivalents with regulatory authorities to commence clinical trials.
If this were to occur this would likely result in delays in our ability to submit a BLA for regulatory approval. We may face similar challenges with foreign regulatory bodies. Furthermore, failure of one or more clinical trials can occur at any stage in the clinical trial process.
If this were to occur this would likely result in delays in our ability to submit a BLA for regulatory approval. We may face similar challenges with foreign regulatory authorities. Furthermore, failure of one or more clinical trials can occur at any stage in the clinical trial process.
We also rely on trade secrets, know-how and continuing technological innovation to develop and maintain our proprietary and intellectual property position.
We also rely on trade secrets, know-how and continuing technological innovation to develop and maintain our 70 proprietary and intellectual property position.
Our testing may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or significant 99 deficiencies.
Our testing may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or significant deficiencies.
In addition, the U.S. government has the right to require us to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third party if it determines that: (i) adequate steps have not been taken to commercialize the invention; (ii) government action is necessary to meet public health or safety needs; or (iii) government action is necessary to meet requirements for public use under federal regulations, also referred to as “march-in rights.” The U.S. government also has the right to take title to these inventions if we, or the applicable contractor, fail to disclose the invention to the government and fail to file an application to register the intellectual property within specified time limits.
In addition, the U.S. government has the right to require us to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third party if it determines that: (i) adequate steps have not been taken to achieve practical application of the invention in the field of use; (ii) government action is necessary to meet public health or safety needs; or (iii) government action is necessary to meet requirements for public use under federal regulations, also referred to as “march-in rights.” The U.S. government also has the right to take title to these inventions if we, or the applicable contractor, fail to disclose the invention to the government and fail to file an application to register the intellectual property within specified time limits.
The exclusivity period in the European Union can be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan drug designation, because, for example, the product is sufficiently profitable so that market exclusivity is no longer justified.
The exclusivity period in the European Union can also be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, because, for example, the product is sufficiently profitable so that market exclusivity is no longer justified.
Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries. 91 Changes To The Patent Law In The United States And Other Jurisdictions Could Diminish The Value Of Patents In General, Thereby Impairing Our Ability To Protect Our Product Candidates.
Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries. 79 Changes To The Patent Law In The United States And Other Jurisdictions Could Diminish The Value Of Patents In General, Thereby Impairing Our Ability To Protect Our Product Candidates.
Swiss corporate law, among other things, (a) requires a binding shareholder “say on pay” vote with respect to the compensation of members of our executive management and board of directors, (b) generally prohibits the making of severance, advance, transaction premiums and similar payments to members of our executive management and board of directors and (c) requires companies to specify various compensation-related matters in their articles of association, thus requiring them to be approved by a shareholders’ vote.
Swiss corporate law, among other things, (a) requires an annual binding shareholder “say on pay” vote with respect to the compensation of members of our executive management team and board of directors, (b) generally prohibits the making of severance, advance, transaction premiums and similar payments to members of our executive management and board of directors and (c) requires companies to specify various compensation-related matters in their articles of association, thus requiring them to be approved by a shareholders’ vote.
In particular, national laws of Member States of the EU have implemented national laws which may partially deviate from the GDPR and impose different and more restrictive obligations from country to country, so that we do not expect to operate in a uniform legal landscape in the EU.
In particular, EEA Member States have implemented national laws which may partially deviate from the EU GDPR and impose different and more restrictive obligations from country to country, so that we do not expect to operate in a uniform legal landscape in the EEA.
The determination of CFC status is complex and includes attribution rules, the application of which is not entirely certain. During our 2022 taxable year we believe that we had certain shareholders that were Ten Percent Shareholders for U.S. federal income tax purposes.
The determination of CFC status is complex and includes attribution rules, the application of which is not entirely certain. During our 2023 taxable year we believe that we had certain shareholders that were Ten Percent Shareholders for U.S. federal income tax purposes.
Our programs require preclinical and clinical development; regulatory and marketing approval in multiple jurisdictions; obtaining manufacturing supply, capacity, and expertise; building of a commercial organization; substantial investment and significant marketing efforts before we generate any revenue from product sales.
In general, our programs require preclinical and clinical development; regulatory and marketing approval in multiple jurisdictions; obtaining manufacturing supply, capacity, and expertise; building a commercial organization; substantial investment and significant marketing efforts before we generate any revenue from product sales.
If Any Of The Product Candidates We May Develop Or Administration Processes We Rely On Causes Undesirable Side Effects, It Could Delay Or Prevent Their Regulatory Approval, Limit The Commercial Potential Or Result In Significant Negative Consequences Following Any Potential Marketing Approval.
If Any Of The Product Candidates We May Develop Or Administration Processes We Rely On Cause Undesirable Side Effects, It Could Delay Or Prevent Their Regulatory Approval, Limit The Commercial Potential Or Result In Significant Negative Consequences Following Any Potential Marketing Approval.
We May Never Obtain FDA Approval For Any Of Our Product Candidates In The United States, And Even If We Do, We May Never Obtain Approval For Or Commercialize Any Of Our Product Candidates In Any Other Jurisdiction, Which Would Limit Our Ability To Realize Their Full Market Potential.
We May Never Obtain FDA Approval For Any Of Our Wholly-Owned Product Candidates In The United States, And Even If We Do, We May Never Obtain Approval For Or Commercialize Any Of Our Wholly-Owned Product Candidates In Any Other Jurisdiction, Which Would Limit Our Ability To Realize Their Full Market Potential.
The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our common shares to decline, and delay the development of our product candidates.
The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our common shares to decline, and delay the development or commercialization of our product candidates.
Because it is possible we were a PFIC for the 2021 taxable year, we provided information necessary for our shareholders to make a qualified electing fund, or QEF, election with respect to us for the 2021 taxable year. We provided such information on our website (www.crisprtx.com).
Because it is possible we were a PFIC for the 2022 taxable year, we provided information necessary for our shareholders to make a qualified electing fund, or QEF, election with respect to us for the 2022 taxable year. We provided such information on our website (www.crisprtx.com).
With our cash, cash equivalents and marketable securities on hand as of December 31, 2022, we expect cash, cash equivalents and marketable securities to be sufficient to fund our current operating plan through at least the next 24 months.
With our cash, cash equivalents and marketable securities on hand as of December 31, 2023, we expect cash, cash equivalents and marketable securities to be sufficient to fund our current operating plan through at least the next 24 months.
In the event that the European regulatory authorities, FDA or their equivalent requires us to complete additional preclinical studies or we are required to satisfy other requests, our clinical trials may be delayed.
In the event that the European regulatory authorities, FDA or their equivalent require us to complete additional preclinical studies or we are required to satisfy other requests, our clinical trials may be delayed.
For some of our product candidates, we may decide to collaborate with additional pharmaceutical and biotechnology companies for the development and potential commercialization of those product candidates. 73 We face significant competition in seeking appropriate collaborators.
For some of our product candidates, we may decide to collaborate with additional pharmaceutical and biotechnology companies for the development and potential commercialization of those product candidates. 62 We face significant competition in seeking appropriate collaborators.
Several factors could cause production interruptions, including inability to develop novel manufacturing processes, equipment malfunctions, facility contamination, raw material shortages or contamination, natural disasters, including the coronavirus pandemic, disruption in utility services, human error or disruptions in the operations of our suppliers, including acquisition of the supplier by a third party or declaration of bankruptcy.
Several factors could cause production interruptions, including inability to develop novel manufacturing processes, equipment malfunctions, facility contamination, raw material shortages or contamination, natural disasters, including pandemics, disruption in utility services, human error or disruptions in the operations of our suppliers, including acquisition of a supplier by a third party or declaration of bankruptcy.
In addition, adverse developments in clinical trials of gene therapy product candidates conducted by others may cause the FDA or other oversight bodies to change the requirements for approval of any of our product candidates.
In addition, adverse developments in clinical trials of gene therapy product candidates conducted by others may cause the FDA or other oversight authorities to change the requirements for approval of any of our product candidates.
Healthcare providers, physicians and third-party payors play a primary role in the recommendation and prescription of any product candidates that we may develop for which we obtain marketing approval.
Healthcare providers, physicians and third-party payors play a primary role in the recommendation and prescription of any products or product candidates that we may develop for which we obtain marketing approval.
Additionally, if one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be adversely affected. We Have Partnered With Vertex On Our Lead Program Exa-cel; Vertex Has Significant Control Over The Exa-cel Program.
Additionally, if one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be adversely affected. We Have Partnered With Vertex On Our Lead Program CASGEVY; Vertex Has Significant Control Over The CASGEVY Program.
Our Relationships With Healthcare Providers, Physicians, And Third-party Payors Will Be Subject To Applicable Anti-kickback, Fraud And Abuse And Other Healthcare Laws And Regulations, Which Could Expose Us To Criminal Sanctions, Civil Penalties, Exclusion From Government Healthcare Programs, Contractual Damages, Reputational Harm And Diminished Profits And Future Earnings.
Our Relationships With Healthcare Providers, Physicians, And Third-party Payors Are Subject To Applicable Anti-kickback, Fraud And Abuse And Other Healthcare Laws And Regulations, Which Could Expose Us To Criminal Sanctions, Civil Penalties, Exclusion From Government Healthcare Programs, Contractual Damages, Reputational Harm And Diminished Profits And Future Earnings.
The clinical and commercial success of our product candidates will depend in part on public acceptance of the use of gene editing therapies for the prevention or treatment of human diseases.
Our product candidates involve editing the human genome. The clinical and commercial success of our product candidates will depend in part on public acceptance of the use of gene editing therapies for the prevention or treatment of human diseases.
Although we have not yet determined whether we are a PFIC for the 2021 taxable year or the current taxable year, it is possible that we may be a PFIC for the 2021 taxable year and / or current taxable year as well.
Although we have not yet determined whether we are a PFIC for the 2022 taxable year or the current taxable year, it is possible that we may be a PFIC for the 2022 taxable year and / or current taxable year as well.
For example, there is no assurance that data obtained at the completion of any of our clinical trials, including for our ongoing wholly-owned product candidates, including CTX110 and CTX130, will indicate clinically meaningful benefit or support submission of a BLA, or will be sufficiently robust from a safety and/or efficacy perspective to support either accelerated or conditional approval or full approval.
For example, there is no assurance that data obtained at the completion of any of our clinical trials, including for our ongoing wholly-owned product candidates, including CTX112 and CTX131, will indicate clinically meaningful benefit or support submission of a BLA, or will be sufficiently robust from a safety and/or efficacy perspective to support either accelerated or conditional approval or full approval.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThis facility is leased through March 2036 with an option to extend the term of the lease for two additional seven-year periods. We also lease business offices elsewhere in Cambridge, Massachusetts, San Francisco, California and London, United Kingdom.
Biggest changeThis facility is leased through March 2036 with an option to extend the term of the lease for two additional seven-year periods. We also lease laboratory and office space, for example, in San Francisco, California. We believe that our facilities are adequate for our current needs and that suitable additional or substitute space would be available if needed.
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We believe that our facilities are adequate for our current needs and that suitable additional or substitute space would be available if needed.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changePatent and Trademark Office and the European Patent Office involving our intellectual property estate including the Patent Portfolio. The outcome of any of the foregoing, regardless of the merits, is inherently uncertain. In addition, litigation and related matters are costly and may divert the attention of our management and other resources that would otherwise be engaged in other activities.
Biggest changePatent and Trademark Office and the European Patent Office or patent offices in other countries, involving our intellectual property estate including the Patent Portfolio. The outcome of any of the foregoing, is inherently uncertain.
Item 3. Legal Proceedings. In the ordinary course of business, we are from time to time involved in lawsuits, investigations, proceedings and threats of litigation related to, among other things, our intellectual property estate (including the Patent Portfolio), commercial arrangements and other matters. Such proceedings may include quasi-litigation, inter partes administrative proceedings in the U.S.
Item 3. Legal Proceedings. In the ordinary course of business, we are or have been from time to time involved in lawsuits, investigations, proceedings and threats of litigation related to, among other things, our intellectual property estate (including the Patent Portfolio), commercial arrangements and other matters. Such proceedings may include quasi-litigation, inter partes administrative proceedings in the U.S.
If we were unable to prevail in any such proceedings, our business, results of operations, liquidity and financial condition could be adversely affected. Item 4. Mine Safe ty Disclosures. Not applicable. 102 PART II
In addition, litigation and related matters are costly and may divert the attention of our management and other resources that would otherwise be engaged in other activities. If we were unable to prevail in any such proceedings, our business, results of operations, liquidity and financial condition could be adversely affected. Item 4. Mine Safe ty Disclosures.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSwiss Federal Stamp Taxes The issuance of the shares and the sale pursuant to and in the course of an offering is subject to Swiss federal securities issuance stamp tax ( Emissionsabgabe ) of 1% and would be borne by us. 104 The subsequent purchase or sale of our shares, whether by Resident Private Shareholders, Domestic Commercial Shareholders or Non-Resident Shareholders (secondary market transactions), may be subject to the Swiss federal securities transfer stamp tax ( Umsatzabgabe ) at a current rate of up to 0.15%, calculated on the purchase price or the sale proceeds, respectively, if (i) such transfer occurs through or with a Swiss or Liechtenstein bank or by or with involvement of another Swiss securities dealer as defined in the Swiss federal stamp tax duty act and (ii) no exemption applies.
Biggest changeThe subsequent purchase or sale of our shares, whether by Resident Private Shareholders, Domestic Commercial Shareholders or Non-Resident Shareholders (secondary market transactions), may be subject to the Swiss federal securities transfer stamp tax ( Umsatzabgabe ) at a current rate of up to 0.15%, calculated on the purchase price or the sale proceeds, respectively, if (i) such transfer 95 occurs through or with a Swiss or Liechtenstein bank or by or with involvement of another Swiss securities dealer as defined in the Swiss federal stamp tax duty act and (ii) no exemption applies.
Information will not be transferred automatically in the absence of consent, and instead will be exchanged only within the scope of administrative assistance on the basis of the double taxation agreement between the United States and Switzerland.
Information will not be transferred automatically in the absence of consent, and instead will be exchanged 96 only within the scope of administrative assistance on the basis of the double taxation agreement between the United States and Switzerland.
Comparison of Total Return Among CRISPR Therapeutics AG, the NASDAQ Composite Index and the NASDAQ Biotechnology Index 103 Swiss Tax Considerations Swiss Withholding Tax Under present Swiss tax law, dividends due and similar cash or in-kind distributions made by us to a shareholder (including liquidation proceeds and stock dividends) are subject to Swiss federal withholding tax ( Verrechnungssteuer ) (“Withholding Tax”), currently at a rate of 35% (applicable to the gross amount of the taxable distribution).
Comparison of Total Return Among CRISPR Therapeutics AG, the NASDAQ Composite Index and the NASDAQ Biotechnology Index 94 Swiss Tax Considerations Swiss Withholding Tax Under present Swiss tax law, dividends due and similar cash or in-kind distributions made by us to a shareholder (including liquidation proceeds and stock dividends) are subject to Swiss federal withholding tax ( Verrechnungssteuer ) (“Withholding Tax”), currently at a rate of 35% (applicable to the gross amount of the taxable distribution).
Foreign Account Tax Compliance Act 105 Switzerland has concluded an intergovernmental agreement with the United States to facilitate the implementation of the Foreign Account Tax Compliance Act.
Foreign Account Tax Compliance Act Switzerland has concluded an intergovernmental agreement with the United States to facilitate the implementation of the Foreign Account Tax Compliance Act.
This graph assumes the investment of $100 on December 31, 2017 in our common shares, the Nasdaq Biotechnology Index and the Nasdaq Composite Index and assumes the reinvestment of dividends, if any. The comparisons shown in the graph below are based upon historical data.
This graph assumes the investment of $100 on December 31, 2018 in our common shares, the Nasdaq Biotechnology Index and the Nasdaq Composite Index and assumes the reinvestment of dividends, if any. The comparisons shown in the graph below are based upon historical data.
Holders As of February 16, 2023, we had approximately 19 holders of record of our common shares. This number does not include beneficial owners whose shares were held in street name. Dividends We have not paid any cash dividends on our common shares since inception and do not anticipate paying cash dividends in the foreseeable future.
Holders As of February 16, 2024, we had approximately 17 holders of record of our common shares. This number does not include beneficial owners whose shares were held in street name. Dividends We have not paid any cash dividends on our common shares since inception and do not anticipate paying cash dividends in the foreseeable future.
The graph set forth below compares the cumulative total stockholder return on our shares between December 31, 2017 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 between December 31, 2018 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.
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Swiss Federal Stamp Taxes The issuance of the shares and the sale pursuant to and in the course of an offering is subject to Swiss federal securities issuance stamp tax ( Emissionsabgabe ) of 1% and would be borne by us.

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe following table summarizes our research and development expenses for the years ended December 31, 2022 and 2021, together with the changes in those items in dollars (in thousands): Years Ended December 31, Period to Period 2022 2021 Change External research and development expenses $ 197,742 $ 118,698 $ 79,044 Employee related expenses 81,683 53,100 28,583 Facility expenses 114,591 99,252 15,339 Stock-based compensation expenses 53,956 59,683 (5,727 ) Other expenses 2,864 2,016 848 Sublicense and license fees 10,809 7,818 2,991 Total research and development expenses $ 461,645 $ 340,567 $ 121,078 The increase of approximately $121.1 million was primarily attributable to the following: • $79.0 million of increased external research and development costs, primarily associated with production of drug product and increased clinical trial expense associated with our immuno-oncology programs; • $28.6 million of increased employee-related expenses primarily due to reallocation of resources from the exa-cel program, which are presented within “collaboration expense, net” in the consolidated statements of operations and comprehensive (loss) income, to our wholly-owned programs; and • $15.3 million of increased facility expenses due to the opening of our U.S. headquarters for research and development in Boston, MA.
Biggest changeThe following table summarizes our research and development expenses for the years ended December 31, 2023 and 2022, together with the changes in those items in dollars (in thousands): Years Ended December 31, Period to Period 2023 2022 Change External research and development expenses $ 130,124 $ 197,742 $ (67,618 ) Employee related expenses 83,316 81,683 1,633 Facility expenses 105,875 114,591 (8,716 ) Stock-based compensation expenses 46,356 53,956 (7,600 ) Other expenses 2,703 2,864 (161 ) Sublicense and license fees 18,958 10,809 8,149 Total research and development expenses $ 387,332 $ 461,645 $ (74,313 ) The decrease of approximately $74.3 million was primarily attributable to the following: • $67.6 million of decreased external research and development costs, primarily associated with a decrease in variable external research and manufacturing costs; 105 • $8.7 million of decreased facility expenses due to incurring rent expense on both our current and previous U.S. headquarters for research and development for a portion of 2022, whereas in 2023, we did not incur any rent expense on our previous U.S. headquarters for research and development due to the termination of the lease; • $7.6 million of decreased stock-based compensation expenses primarily due to an overall decrease in the fair value of equity awards granted in 2023 and 2022; offset by • $8.1 million of increased sublicense and license fees, primarily attributable to research and development licenses and milestones due to strategic partners in connection with the advancement of our clinical programs.
We entered into a research and collaboration agreement in September 2018 with ViaCyte to pursue the discovery, development and commercialization of gene-edited allogeneic stem cell therapies for the treatment of diabetes, and in July 2021, we entered into a joint development and commercialization agreement with ViaCyte, or the ViaCyte JDCA.
ViaCyte . We entered into a research and collaboration agreement in September 2018 with ViaCyte to pursue the discovery, development and commercialization of gene-edited allogeneic stem cell therapies for the treatment of diabetes, and in July 2021, we entered into a joint development and commercialization agreement with ViaCyte, or the ViaCyte JDCA.
Our ability to generate revenue and achieve profitability depends significantly on our success in many areas, including: developing our delivery technologies and our gene editing technology platform; selecting appropriate product candidates to develop; completing research and preclinical and clinical development of selected product candidates; obtaining regulatory approvals and marketing authorizations for product candidates for which we complete clinical trials; developing a sustainable and scalable manufacturing process for product candidates; launching and commercializing product candidates for which we obtain regulatory approvals and marketing authorizations, either directly or with a collaborator or distributor; obtaining market acceptance of our product candidates, if approved; addressing any competing technological and market developments; negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; maintaining good relationships with our collaborators and licensors; maintaining, defending, protecting and expanding our estate of intellectual property rights, including patents, trade secrets and know-how; and attracting, hiring and retaining qualified personnel.
Our ability to generate revenue and achieve profitability depends significantly on our success in many areas, including: developing our delivery technologies and our gene editing technology platform; selecting appropriate product candidates to develop; completing research and preclinical and clinical development of selected product candidates; obtaining regulatory approvals and marketing authorizations for product candidates for which we complete clinical trials; developing a sustainable and scalable manufacturing process for product candidates; launching and commercializing product candidates for which we obtain regulatory approvals and marketing authorizations, either directly or with a collaborator or distributor; obtaining market acceptance of our product candidates, either directly or with a collaborator or distributor, if approved, including for CASGEVY; addressing any competing technological and market developments; negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; maintaining good relationships with our collaborators and licensors; maintaining, defending, protecting and expanding our estate of intellectual property rights, including patents, trade secrets and know-how; and attracting, hiring and retaining qualified personnel.
This is due to the numerous risks and uncertainties associated with developing such product candidates, including the uncertainty of: • successful completion of preclinical studies and IND-enabling studies; • successful enrollment in, and completion of, clinical trials; • receipt of marketing approvals from applicable regulatory authorities; • establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers; • obtaining and maintaining patent and trade secret protection and non-patent exclusivity; • launching commercial sales of the product, if and when approved, whether alone or in collaboration with others; • acceptance of the product, if and when approved, by patients, the medical community and third-party payors; • effectively competing with other therapies and treatment options; • a continued acceptable safety profile following approval; 110 • enforcing and defending intellectual property and proprietary rights and claims; and • achieving desirable medicinal properties for the intended indications.
This is due to the numerous risks and uncertainties associated with developing such product candidates, including the uncertainty of: • successful completion of preclinical studies and IND-enabling studies; • successful enrollment in, and completion of, clinical trials; • receipt of marketing approvals from applicable regulatory authorities; • establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers; • obtaining and maintaining patent and trade secret protection and non-patent exclusivity; • launching commercial sales of the product, if and when approved, whether alone or in collaboration with others; • acceptance of the product, if and when approved, by patients, the medical community and third-party payors; • effectively competing with other therapies and treatment options; • a continued acceptable safety profile following approval; • enforcing and defending intellectual property and proprietary rights and claims; and • achieving desirable medicinal properties for the intended indications.
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: 1) Identify the contract with the customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract has commercial substance 111 and (iii) we determine that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other available resources, and are distinct in the context of the contract, whereby the transfer of the good or service is separately identifiable from other promises in the contract.
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: 1) Identify the contract with the customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract has commercial substance and (iii) we determine that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other available resources, and are distinct in the context of the contract, whereby the transfer of the good or service is separately identifiable from other promises in the contract.
Other Income Other income consists primarily of interest income earned on investments. Critical Accounting Policies and Significant Judgments and Estimates This discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles.
Other income (net) Other income consists primarily of interest income earned on investments. Critical Accounting Policies and Significant Judgments and Estimates This discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles.
To the extent the transaction price includes variable consideration, such as research, development, regulatory and commercial milestones, we determine if it is probable that we will receive such amounts and there is no risk of a significant revenue reversal.
To the extent the transaction price includes variable consideration, such as research, development, regulatory and commercial milestones, we determine if it is probable that we will receive such amounts and there is no risk of a 102 significant revenue reversal.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2022 was $38.6 million and consisted of net proceeds of $37.6 million from stock option exercises and ESPP contributions.
Net cash provided by financing activities for the year ended December 31, 2022 was $38.6 million and consisted primarily of net proceeds of $37.6 million from stock option exercises and ESPP contributions.
We expect our research and development costs to increase significantly for the foreseeable future as our current development programs progress, new programs are added and as we continue to prepare regulatory filings.
We expect our research and development costs to increase for the foreseeable future as our current development programs progress, new programs are added and as we continue to prepare regulatory filings.
At-the-Market Offerings • In August 2019, we entered into an Open Market Sale Agreement SM with Jefferies under which we are able to offer and sell, from time to time at our sole discretion through Jefferies, as our sales agent, our common shares, par value of CHF 0.03 per share, or the August 2019 Sales Agreement.
At-the-Market Offerings In August 2019, we entered into an Open Market Sale Agreement SM with Jefferies under which we were able to offer and sell, from time to time at our sole discretion through Jefferies, as our sales agent, our common shares, par value of CHF 0.03 per share, or the August 2019 Sales Agreement.
The consideration to be received is allocated among the separate performance obligations based on relative standalone selling prices. In determining these estimated standalone selling prices, we make a number of significant judgements including, for licenses, management’s assumptions regarding probability weighted projected discounted cash flows for each of the collaboration development programs.
The consideration to be received is allocated among the separate performance obligations based on relative standalone selling prices. In determining these estimated standalone selling prices, we make a number of significant judgments including, for licenses, management’s assumptions regarding probability weighted projected discounted cash flows for each of the collaboration development programs.
We expect to continue to incur general and administrative expenses consistent with research and development at companies of our size and stage of development, which may increase in the future to support continued research and development activities, and potential commercialization of our product candidates.
We expect to continue to incur general and administrative expenses consistent with general and administrative functions at research and development companies of our size and stage of development, which may increase in the future to support continued 101 research and development activities, and potential commercialization of our product candidates.
We expect to continue to incur operating expenses consistent with research and development at companies of our size and stage of development, which may increase in the future to support continued research and development activities, and potential commercialization of our product candidates.
We expect to continue to incur operating expenses consistent with costs associated with research and development at companies of our size and stage of development, which may increase in the future to support continued research and development activities and potential commercialization of our product candidates.
For the years ended December 31, 2022, 2021 and 2020, we generated $0.8 million, $1.9 million and $0.2 million, respectively, of grant revenue related to certain contracts with not-for-profit entities.
For the years ended December 31, 2023, 2022 and 2021, we generated $1.2 million, $0.8 million and $1.9 million, respectively, of grant revenue related to certain contracts with not-for-profit entities.
Financial Overview Since our inception in October 2013, we have devoted substantially all of our resources to our research and development efforts, undertaking drug discovery and preclinical development activities, building and protecting our intellectual property estate, organizing and staffing our company, business planning, raising capital and providing general and administrative support for these operations.
Financial Overview Since our inception in October 2013, we have devoted substantially all of our resources to our research and development efforts, undertaking drug discovery and preclinical development activities, building and protecting our intellectual property estate, establishing internal manufacturing capabilities, organizing and staffing our company, business planning, raising capital and providing general and administrative support for these operations.
We have not included these commitments on our balance sheet because the achievement and timing of these milestones is not fixed and determinable. 118
We have not included these commitments on our balance sheet because the achievement and timing of these milestones is not fixed and determinable. 108
We anticipate that our expenses will increase significantly as we continue our current research programs and development activities; seek to identify additional research programs and additional product candidates; conduct initial drug application supporting preclinical studies and initiate clinical trials for our product candidates; initiate preclinical testing and clinical trials for any other product candidates we identify and develop; maintain, defend, protect and expand our intellectual property estate; further develop our gene editing platform; hire additional research, clinical and scientific personnel; incur facilities costs associated with such personnel growth; develop manufacturing infrastructure and conduct related regulatory validation activities; and incur additional costs associated with operating as a public company.
We anticipate that our expenses will increase as we continue our current research programs and development activities; seek to identify additional research programs and additional product candidates; conduct initial drug application supporting preclinical studies and initiate clinical trials for our product candidates; initiate preclinical testing and clinical trials for any other product candidates we identify and develop; maintain, defend, protect and expand our intellectual property estate; further develop our gene editing platform; hire additional research, clinical and scientific personnel; incur facilities costs associated with such personnel growth; establish internal manufacturing capabilities and infrastructure; and incur additional costs associated with operating as a public company.
Under the A&R Vertex JDCA, we have an option to defer our portion of specified costs on the exa-cel program in excess of $110.3 million for the years ended December 31, 2022, 2023 and 2024.
Under the Amended A&R Vertex JDCA, we have an option to defer our portion of specified costs on the CASGEVY program in excess of $110.3 million for the years ended December 31, 2022, 2023 and 2024.
Immuno-Oncology We believe CRISPR/Cas9 has the potential to create the next generation of CAR T cell therapies that may have a superior product profile compared to current autologous therapies and allow accessibility to broader patient populations.
Immuno-Oncology and Autoimmune We believe CRISPR/Cas9 has the potential to create the next generation of CAR T cell therapies that may have a superior product profile and allow broader patient access compared to current autologous therapies.
In addition, we anticipate ongoing expenses related to the reimbursements of third-party patent related expenses in connection with certain of our in-licensed intellectual property. Collaboration Expense, Net Collaboration expense, net, consists of operating expenses related to exa-cel under our collaboration with Vertex.
In addition, we anticipate ongoing expenses related to the reimbursements of third-party patent related expenses in connection with certain of our in-licensed intellectual property. Collaboration expense, net Collaboration expense, net, consists of operating expenses related to the CASGEVY program under our collaboration with Vertex.
For these analyses, we selected companies with comparable characteristics to our own, including enterprise value, risk profiles, position within the industry and with historical share price information sufficient to meet the expected life of the stock-based awards.
For these analyses, the Company selected companies with comparable characteristics to itself including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards.
In April 2021, we and Vertex amended and restated our existing joint development and commercialization agreement, pursuant to which, among other things, we will continue to develop and prepare to commercialize exa-cel for TDT and SCD in partnership with Vertex.
In April 2021, we and Vertex amended and restated our existing joint development and commercialization agreement, pursuant to which, among 99 other things, we will continue to develop and commercialize CASGEVY for TDT and SCD in partnership with Vertex.
Investing Activities Net cash used in investing activities for the year ended December 31, 2022 was $258.7 million and consisted of purchases of marketable securities, net of maturities, of $221.5 million, as well as $37.2 million in purchases of property and equipment for use in research and development activities.
Net cash used in investing activities for the year ended December 31, 2022 was $258.7 million and consisted primarily of purchases of marketable securities in excess of maturities of marketable securities of $221.5 million, as well as purchases of property, plant and equipment of $37.2 million.
Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed on February 15, 2022.
Sources of Liquidity Cash Flows Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 21, 2023.
We have entered into a number of additional collaborations and license agreements to support and complement our hematopoietic stem cell, immuno-oncology, regenerative medicine and in vivo programs and platform, including agreements with: Nkarta, Inc. to co-develop and co-commercialize two donor-derived, gene-edited CAR-NK cell product candidates and a product candidate combining NK and T cells; Capsida Biotherapeutics, Inc. to develop in vivo gene editing therapies delivered with engineered AAV vectors for the treatment of amyotrophic lateral sclerosis and Friedreich’s ataxia; Moffitt Cancer Center and Roswell Park Comprehensive Cancer Center to advance autologous CAR T programs against new targets; MaxCyte, Inc. on ex vivo delivery for our hemoglobinopathy and immuno-oncology programs; CureVac AG on optimized mRNA constructs and manufacturing for certain in vivo programs; and KSQ Therapeutics, Inc. on intellectual property for our allogeneic immuno-oncology programs.
We have entered into a number of additional collaborations and license agreements to support and complement our hematopoietic stem cell, immuno-oncology and autoimmune, in vivo and T1D programs and platform, including agreements with: Nkarta, Inc. to develop and commercialize products leveraging donor-derived, gene-edited CAR-NK cells; Capsida Biotherapeutics, Inc. to develop in vivo gene editing therapies delivered with engineered AAV vectors; Roswell Park Comprehensive Cancer Center to advance a gene-edited autologous CAR T program against a new target; MaxCyte, Inc. on ex vivo delivery for our hemoglobinopathy and immuno-oncology programs; CureVac AG on optimized mRNA constructs and manufacturing for certain in vivo programs; and KSQ Therapeutics, Inc. on intellectual property for our allogeneic immuno-oncology programs.
Grant Revenue Grant revenue was $0.8 million and $1.9 million, respectively, for the years ended December 31, 2022 and 2021. 114 Research and Development Expenses Research and development expenses were $461.6 million for the year ended December 31, 2022, compared to $340.6 million for the year ended December 31, 2021.
Grant Revenue Grant revenue was $1.2 million and $0.8 million, respectively, for the years ended December 31, 2023 and 2022. Research and Development Expenses Research and development expenses were $387.3 million for the year ended December 31, 2023, compared to $461.6 million for the year ended December 31, 2022.
Refer to Note 8 of the notes to our consolidated financial statements included in this Annual Report on Form 10-K for a description of revenue recognized related to Vertex.
Collaboration revenue was not significant for the year ended December 31, 2022. Refer to Note 8 of the notes to our consolidated financial statements included in this Annual Report on Form 10-K for a description of revenue recognized related to Vertex.
Future contractual payments on operating lease and sublease obligations due within one year of December 31, 2022 are $29.3 million, and future contractual payments on operating lease and sublease obligations due greater than one year from December 31, 2022 are $310.9 million.
Future contractual payments on operating lease and sublease obligations due within one year of December 31, 2023 are $28.7 million, and future contractual payments on operating lease and sublease obligations due greater than one year from December 31, 2023 are $293.9 million.
Because most of our programs are still in early stages of development and the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully complete the development, manufacture and commercialization of any current or future product candidates, if approved, or whether, or when, we may achieve profitability.
Although we and our partner, Vertex, received marketing approval of CASGEVY in 2023 in certain jurisdictions, and have received a subsequent approval in 2024, most of our programs are still in early stages of development and the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully complete the development, manufacture and commercialization of any current or future product candidates, if approved, or whether, or when, we may achieve profitability.
Revenue Recognition 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, 2022, 2021 and 2020, we recognized $0.4 million, $913.1 million and $0.5 million, respectively, of revenue related to our collaboration agreements with Vertex.
Revenue recognition We have not generated any revenue to date from product sales. During the years ended December 31, 2023, 2022 and 2021, we recognized $370.0 million, $0.4 million and $913.1 million, respectively, of collaboration revenue, which is primarily related to our collaboration agreements with Vertex.
To the extent that these payments are not within the scope of other authoritative accounting literature, the income statement classification for the payments shall be based on an analogy to authoritative accounting literature or if there is no appropriate analogy, a reasonable, rational, and consistently applied accounting policy election. 112 Accrued research and development expenses As part of the process of preparing our financial statements, we are required to estimate our accrued expenses.
To the extent that these payments are not within the scope of other authoritative accounting literature, the income statement classification for the payments shall be based on an analogy to authoritative accounting literature or if there is no appropriate analogy, a reasonable, rational, and consistently applied accounting policy election.
Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research activities, including our product discovery efforts and the development of our product candidates, which include: • employee-related expenses, including salaries, benefits and equity-based compensation expense; • costs of services performed by third parties that conduct research and development and preclinical activities on our behalf; • costs of purchasing lab supplies and non-capital equipment used in our preclinical activities and in manufacturing preclinical and clinical study materials; • consultant fees; • facility costs, including rent, depreciation and maintenance expenses; and • fees and other payments related to acquiring and maintaining licenses under our third-party licensing agreements.
For additional information about our revenue recognition policy, see Note 2 and Note 8 of the notes to our audited consolidated financial statements included in this Annual Report on Form 10-K. 100 Research and development expenses Research and development expenses consist primarily of costs incurred for our research activities, including our product discovery efforts and the development of our product candidates, which include: • employee-related expenses, including salaries, benefits and equity-based compensation expense; • costs of services performed by third parties that conduct research and development and preclinical activities on our behalf; • costs of purchasing lab supplies and non-capital equipment used in our preclinical activities and in manufacturing preclinical study materials, as well as supplies and materials used to manufacture clinical drug material; • consultant fees; • facility costs, including rent, depreciation and maintenance expenses; and • fees and other payments related to acquiring and maintaining licenses under our third-party licensing agreements.
The following table provides information regarding our cash flows for each of the periods below: Years Ended December 31, 2022 2021 (in thousands) Net cash (used in) provided by operating activities $ (495,741 ) $ 538,972 Net cash used in investing activities (258,655 ) (1,035,430 ) Net cash provided by financing activities 38,592 250,945 Effect of exchange rate changes on cash (80 ) (11 ) (Decrease) increase in cash and restricted cash $ (715,884 ) $ (245,524 ) Operating Activities Net cash used in operating activities was $495.7 million for the year ended December 31, 2022, compared to cash provided by operating activities of $539.0 million for the year ended December 31, 2021.
The following table provides information regarding our cash flows for each of the periods below: Years Ended December 31, 2023 2022 (in thousands) Net cash used in operating activities $ (260,375 ) $ (495,741 ) Net cash provided by (used in) investing activities 374,647 (258,655 ) Net cash provided by financing activities 62,664 38,592 Effect of exchange rate changes on cash 73 (80 ) Increase (decrease) in cash and restricted cash $ 177,009 $ (715,884 ) Operating Activities Net cash used in operating activities was $260.4 million for the year ended December 31, 2023, compared to net cash used in operating activities of $495.7 million for the year ended December 31, 2022.
CRISPR-X While we have made significant progress with our current portfolio of programs, we recognize that we need to continue to innovate to unlock the full potential of CRISPR gene editing and bring the potential of transformative therapies to even more patients.
CRISPR-X While we have made significant progress with our current portfolio of programs, we recognize that we need to continue to innovate to unlock the full power of gene editing and bring potentially transformative therapies to even more patients. We have a dedicated early-stage research team called CRISPR-X that focuses on innovating next-generation editing modalities.
We also entered into a strategic collaboration and license agreement with Vertex in June 2019 for the development and commercialization of products for the treatment of Duchenne muscular dystrophy and myotonic dystrophy type 1. ViaCyte .
We also entered into a strategic collaboration and license agreement with Vertex in June 2019 for the development and commercialization of products for the treatment of Duchenne muscular dystrophy, or DMD, and myotonic dystrophy type 1, or DM1 and, in March 2023, we entered into a non-exclusive license agreement with Vertex for Vertex to utilize our gene editing technology in diabetes.
In Vivo Our in vivo gene editing strategy focuses on gene disruption and whole gene correction – the two technologies required to address the vast majority of the most prevalent severe monogenic diseases. We have established a leading platform for in vivo gene disruption, starting in the liver.
In Vivo 98 Our in vivo gene editing strategy focuses on gene disruption and whole gene correction – the two technologies required to address the vast majority of the most prevalent severe monogenic diseases as well as many common diseases.
The risk-free interest rates for periods within the expected term of the option are based on the U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award.
The risk-free interest rates for periods within the expected term of the option are based on the U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. We have never paid, and do not expect to pay, dividends in the foreseeable future.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. 117 Outlook Based on our research and development plans and our timing expectations related to the progress of our programs, we expect our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditures for at least the next 24 months without giving effect to any additional proceeds we may receive under our collaboration with Vertex and any other capital raising transactions we may complete.
Outlook Based on our research and development plans and our timing expectations related to the progress of our programs, we expect our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditures for at least the next 24 months without giving effect to any additional proceeds we may receive under our collaboration with Vertex and any other capital raising transactions we may complete.
Examples of estimated accrued research and development expenses include fees paid to: • CROs in connection with clinical studies; • investigative sites in connection with clinical studies; • vendors in connection with preclinical development activities; and • vendors related to development, manufacturing and distribution of clinical trial materials.
Examples of estimated accrued research and development expenses include fees paid to: • CROs in connection with clinical studies; • investigative sites in connection with clinical studies; • vendors in connection with preclinical development activities; and • vendors related to development, manufacturing and distribution of clinical trial materials. 103 We base our expenses related to clinical studies on our estimates of the services received and efforts expended pursuant to contracts with multiple CROs that conduct and manage clinical studies on our behalf.
In December 2017, we entered into a joint development and commercialization agreement with Vertex pursuant to which, among other things, we are co-developing and preparing to co-commercialize exa-cel for TDT and SCD.
We established our initial collaboration agreement in 2015 with Vertex, which focused on TDT, SCD, cystic fibrosis and select additional indications. In December 2017, we entered into a joint development and commercialization agreement with Vertex pursuant to which, among other things, we are co-developing and co-commercializing CASGEVY for TDT and SCD.
Additional equity issuance costs for stamp taxes related to shares sold in 2020 related to the 2019 and 2020 ATM were $4.9 million, of which $4.0 million was accrued as of December 31, 2020 and paid in 2021. • In January 2021, we issued and sold under the 2020 ATM an aggregate of 0.3 million common shares at an average price of $162.46 per share with aggregate proceeds of $46.7 million, which were net of equity issuance costs of $0.7 million.
In 2021, we issued and sold 1.4 million common shares at an average price of $168.23 per share for aggregate proceeds of $224.5 million, which were net of equity issuance costs of $3.1 million. An additional $2.3 million of stamp taxes related to this amount was paid in 2021.
Under the A&R Vertex JDCA, we are allowed to defer a portion of our share of costs under the arrangement if spending on the exa-cel program exceeds specified amounts. Any deferred amounts are only payable to Vertex as an offset against future profitability of the exa-cel program and the amounts payable are capped at a specified maximum amount per year.
We exercised our option to defer our portion of specified costs incurred in 2022 and 2023 for the CASGEVY program in excess of the amounts described above. Any deferred amounts are only payable to Vertex as an offset against future profitability of the CASGEVY program and the amounts payable are capped at a specified maximum amount per year.
We are investigating CTX110 in our CARBON clinical trials, which are designed to assess the safety and efficacy of CTX110 in adult patients with relapsed or refractory CD19-positive B-cell malignancies who have received at least two prior lines of therapy. CTX110 has been granted RMAT designation by the FDA.
CTX112 is being investigated in an ongoing clinical trial designed to assess the safety and efficacy of the candidate in adult patients with relapsed or refractory CD19-positive B-cell malignancies who have received at least two prior lines of therapy.
As a result, we may face difficulties raising capital through sales of our common shares or such sales may be on unfavorable terms. In addition, a recession, depression or other sustained adverse market event, including resulting from the continued spread of the coronavirus, could materially and adversely affect our business and the value of our common shares.
In addition, a recession, depression or other sustained adverse market event, including resulting from the continued spread of the coronavirus or the recent failure of certain banks and financial institutions in the United States and globally, could materially and adversely affect our 107 business and the value of our common shares.
In August 2019, in connection with the August 2019 Sales Agreement, we filed a prospectus supplement with the SEC to offer and sell, from time to time, common shares having aggregate gross proceeds of up to $200.0 million, or the 2019 ATM.
In connection with the August 2019 Sales Agreement, as amended, we have filed several prospectus supplements with the SEC to offer and sell, from time to time, common shares.
To date, we have primarily financed our operations through private placements of our preferred shares, common share issuances, convertible loans and collaboration agreements with strategic partners. 109 While we were in a net income position in certain previous years due to upfronts associated with our collaborations with Vertex, we have a history of recurring losses and expect to continue to incur losses for the foreseeable future.
While we were in a net income position in certain previous years due to upfront payments associated with our collaborations with Vertex, we have a history of recurring losses and expect to continue to incur losses for the foreseeable future. Our net losses may fluctuate significantly from quarter to quarter and year to year.
We believe that our scientific expertise, together with our gene editing approach, may enable an entirely new class of highly active and potentially curative therapies for patients, including those for whom current biopharmaceutical approaches have had limited success.
We believe that the combination of our technology, research and development capabilities, and proven ability to execute may enable us to create an entirely new class of highly effective and potentially curative therapies for patients with both rare and common diseases for whom current biopharmaceutical approaches have had limited success.
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 clinical expense. Payments under some of these contracts depend on factors such as the successful enrollment of subjects and the completion of clinical study milestones.
Payments under some of these contracts depend on factors such as the successful enrollment of subjects and the completion of clinical study milestones. 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.
We have never paid, and do not expect to pay, dividends in the foreseeable future. 113 Recent Accounting Pronouncements Refer to Note 2 of the notes to our consolidated financial statements included in this Annual Report on Form 10-K for a discussion of recent accounting pronouncements.
Recent Accounting Pronouncements Refer to Note 2 of the notes to our consolidated financial statements included in this Annual Report on Form 10-K for a discussion of recent accounting pronouncements. Results of Operations The following is a discussion of the components of results of operations. This section generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Liquidity and Capital Resources Sources of Liquidity As of December 31, 2022, we had cash, cash equivalents and marketable securities of approximately $1,868.4 million, of which $5.1 million was held outside of the United States.
Liquidity and Capital Resources Sources of Liquidity We have predominantly incurred losses and cumulative negative cash flows from operations since our inception. As of December 31, 2023, we had $1,695.7 million in cash, cash equivalents and marketable securities, of which approximately $2.7 million was held outside of the United States, and an accumulated deficit of $999.7 million.
Since our initial public offering, we have primarily financed our operations through common share issuances and collaboration agreements with strategic partners.
To date, we have primarily financed our operations through private placements of our preferred shares, common share issuances, convertible loans and payments related to certain of our collaboration agreements with strategic partners.
For the year ended December 31, 2022, we exercised our option to defer $36.1 million of our share of costs incurred under the A&R Vertex JDCA. These deferred costs will be recognized by us when recoverability of such deferred amounts by Vertex is probable and the amount can be reasonably estimated.
These deferred costs will be recognized by us when recoverability of such deferred amounts by Vertex is probable and the amount can be reasonably estimated. As of December 31, 2023, no such deferred amounts have been recognized. Refer to Note 8 for further discussion of our arrangements with Vertex.
Deferred costs associated with the exa-cel program have not been accrued as of December 31, 2022 because a reasonable estimate of future payments against future profitability cannot be made.
Any deferred amounts are only payable to Vertex as an offset against future profitability of the CAGEVY program and the amounts payable are capped at a specified maximum amount per year. Deferred costs associated with the CASGEVY program have not been recognized as of December 31, 2023 because a reasonable estimate of future payments against future profitability cannot be made.
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. Equity-Based Compensation Our share-based compensation programs grant awards that have included stock options, restricted stock units and restricted stock awards. Grants are awarded to employees and non-employees, including directors.
Equity-Based Compensation Our share-based compensation programs grant awards that have included stock options, restricted stock units and restricted stock awards. Grants are awarded to employees and non-employees, including directors. We account for our stock-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation , or ASC 718.
During the year ended December 31, 2020, we issued and sold an aggregate of 2.2 million common shares under the 2019 ATM at an average price of $89.47 per share for aggregate proceeds of $195.5 million, which were net of equity issuance costs of $4.5 million. • In December 2020, in connection with the August 2019 Sales Agreement, we filed a prospectus supplement with the SEC to offer and sell from time to time common shares having aggregate gross proceeds of up to $350.0 million, or the 2020 ATM.
In 2022, the sale of common shares pursuant to the 2019 Sales Agreement and the current prospectus supplement was not significant. In 2023, we issued and sold 0.5 million common shares at an average price of $72.32 per share for aggregate proceeds of $32.7 million, which were net of equity issuance costs of $0.4 million.
General and Administrative Expenses General and administrative expenses were $102.5 million for the year ended December 31, 2022, compared to $99.7 million for the year ended December 31, 2021. The increase of $2.8 million was primarily attributable to increased employee compensation, benefit and other headcount-related expenses.
General and administrative expenses General and administrative expenses were $76.2 million for the year ended December 31, 2023, compared to $102.5 million for the year ended December 31, 2022. The decrease of $26.3 million was primarily attributable to decreased stock-based compensation, decreased professional services including intellectual property costs, decreased facility costs as described above, as well as decreased headcount-related expenses.
CRISPR-X focuses on technologies to enable whole gene correction and insertion without requiring HDR or viral delivery of DNA, such as all-RNA gene correction, non-viral delivery of DNA and novel gene insertion techniques. 108 Partnerships Given the numerous potential therapeutic applications for CRISPR/Cas9, we have partnered strategically to broaden the indications we can pursue and accelerate development of programs by accessing specific technologies and/or disease-area expertise.
Partnerships Given the numerous potential therapeutic applications for CRISPR/Cas9, we have partnered strategically to broaden the indications we can pursue and to accelerate programs by accessing specific technologies and/or disease-area expertise. For additional information regarding certain of these partnerships, please see “ Business—Strategic Partnerships and Collaborations .” Vertex.
The A&R Vertex JDCA allows us to defer a portion of our share of costs under the arrangement if spending on the exa-cel program exceeds specified amounts. Any deferred amounts are only payable to Vertex as an offset against future profitability of the exa-cel program and the amounts payable are capped at a specified maximum amount per year.
Other obligations Under the A&R Vertex JDCA, as amended, we are allowed to defer a portion of our share of costs under the arrangement if spending on the CASGEVY program exceeds specified amounts.
Collaboration Expense, net Collaboration expense, net, was $110.3 million for the year ended December 31, 2022, compared to $101.2 million for the year ended December 31, 2021. The increase of approximately $9.1 million was primarily attributable to increased manufacturing and other pre-commercial costs.
Collaboration expense, net Collaboration expense, net, was $130.3 million for the year ended December 31, 2023, compared to $110.3 million for the year ended December 31, 2022.
During the year ended December 31, 2020, we issued and sold an aggregate of 1.8 million common shares under the 2020 ATM at an average price of $169.57 per share for aggregate proceeds of $298.0 million, which were net of equity issuance costs of $4.5 million.
An additional $0.3 million of stamp taxes related to this amount was paid in 2023. 106 As of December 31, 2023, we have $385.6 million remaining under our current prospectus supplement and have issued and sold an aggregate of 1.5 million common shares at an average price of $139.91 per share for aggregate proceeds of $211.5 million, which were net of equity issuance costs of $2.9 million.
As of December 31, 2022, no such deferred amounts have been recognized. Other Income, net Other income, net, was $22.7 million for the year ended December 31, 2022, compared to $6.0 million for the year ended December 31, 2021.
Other income, net Other income, net, was $71.8 million for the year ended December 31, 2023, compared to $22.7 million for the year ended December 31, 2022. The increase in other income, net, was due to higher interest rates.
We have established a portfolio of therapeutic programs in a broad range of disease areas across four core franchises: hemoglobinopathies, immuno-oncology, regenerative medicine and in vivo approaches. Our most advanced programs target the genetically defined diseases transfusion-dependent beta thalassemia, or TDT, and severe sickle cell disease, or SCD, two hemoglobinopathies with high unmet medical need.
We have established a portfolio of therapeutic programs spanning four core franchises: 97 • Hemoglobinopathies : Our most advanced program, CASGEVY, has received approval in the United States and other countries for the treatment of eligible patients with severe SCD or TDT, two genetic disorders of hemoglobin, or hemoglobinopathies, with high unmet medical need.
We base our expenses related to clinical studies on our estimates of the services received and efforts expended pursuant to contracts with multiple CROs that conduct and manage clinical 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 clinical expense.
We compute historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. We will continue to apply this process until a sufficient amount of historical information regarding the volatility of our own stock price becomes available.
The Company computed the historical volatility data using the daily closing prices during the equivalent period of the calculated expected term of its stock-based awards.
Exa-cel is being developed under a joint development and commercialization agreement between us and Vertex Pharmaceuticals Incorporated and certain of its subsidiaries, or Vertex.
CASGEVY is the first therapy to emerge from our strategic partnership with Vertex Pharmaceuticals Incorporated, or Vertex, and is being advanced under a joint development and commercialization agreement between us and Vertex and certain of its affiliates. In 2023, CASGEVY became the first-ever approved CRISPR-based gene-editing therapy in the world.
Comparison of Years Ended December 31, 2022 and 2021 The following table summarizes our results of operations for the years ended December 31, 2022 and 2021, together with the dollar change in those items: Years Ended December 31, Period to 2022 2021 Period Change (in thousands) Revenue: Collaboration revenue $ 436 $ 913,081 $ (912,645 ) Grant revenue 762 1,882 (1,120 ) Total revenue 1,198 914,963 (913,765 ) Operating expenses: Research and development 461,645 340,567 121,078 General and administrative 102,464 99,690 2,774 Collaboration expense, net 110,250 101,178 9,072 Total operating expenses 674,359 541,435 132,924 (Loss) income from operations (673,161 ) 373,528 (1,046,689 ) Other income, net 22,661 6,003 16,658 Net (loss) income before income taxes (650,500 ) 379,531 (1,030,031 ) Benefit (provision) for income taxes 325 (1,870 ) 2,195 Net (loss) income $ (650,175 ) $ 377,661 $ (1,027,836 ) Collaboration Revenue Collaboration revenue was $0.4 million for the year ended December 31, 2022, compared to $913.1 million for the year ended December 31, 2021.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 21, 2023. 104 Comparison of Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022, together with the dollar change in those items: Years Ended December 31, Period to 2023 2022 Period Change (in thousands) Revenue: Collaboration revenue $ 370,000 $ 436 $ 369,564 Grant revenue 1,206 762 444 Total revenue 371,206 1,198 370,008 Operating expenses: Research and development 387,332 461,645 (74,313 ) General and administrative 76,162 102,464 (26,302 ) Collaboration expense, net 130,250 110,250 20,000 Total operating expenses 593,744 674,359 (80,615 ) Loss from operations (222,538 ) (673,161 ) 450,623 Other income, net 71,816 22,661 49,155 Net loss before income taxes (150,722 ) (650,500 ) 499,778 (Provision) benefit for income taxes (2,888 ) 325 (3,213 ) Net loss $ (153,610 ) $ (650,175 ) $ 496,565 Collaboration Revenue Collaboration revenue was $370.0 million for the year ended December 31, 2023, compared to $0.4 million for the year ended December 31, 2022.
Other income, net, for the year ended December 31, 2022 consisted primarily of interest income earned on cash, cash equivalents and marketable securities during the year.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2023 was $374.6 million and consisted primarily of maturities of marketable securities in excess of purchases of marketable securities of $386.6 million.
Overview We are a leading gene editing company focused on the development of CRISPR/Cas9-based therapeutics. CRISPR/Cas9 is a revolutionary gene editing technology that allows for precise, directed changes to genomic DNA. The application of CRISPR/Cas9 for gene editing was co-invented by one of our scientific founders, Dr. Emmanuelle Charpentier. Dr.
Overview We are a leading gene editing company focused on the development of CRISPR/Cas9-based therapeutics. CRISPR/Cas9 is a revolutionary technology for gene editing, the process of precisely altering specific sequences of genomic DNA. We aim to apply this technology to disrupt, delete, correct and insert genes to treat genetic diseases and to engineer advanced cellular therapies.
Shared product revenues will be shared equally by us and ViaCyte. In the third quarter of 2022, Vertex announced it had acquired ViaCyte and the rights to the ViaCyte Collaboration Field. Bayer .
In the third quarter of 2022, Vertex announced it had acquired ViaCyte and the rights to the ViaCyte Collaboration Field, and in March 2023, we entered into an amendment to the ViaCyte JDCA pursuant to which, among other things, we adjusted certain rights and obligations of the parties thereunder.
We anticipate that we will continue to incur losses for at least the next several years. We expect to continue to incur operating expenses consistent with research and development at companies of our size and stage of development, which may increase in the future to support continued research and development activities, and potential commercialization of our product candidates.
We anticipate that we will continue to incur losses for at least the next several years.
Due to the lack of complete company-specific historical and implied volatility data for the full expected term of the stock-based awards, we base our estimate of expected volatility on a representative group of publicly traded companies in addition to our own volatility data.
In prior periods, expected volatility was calculated based on a blend of the Company’s reported volatility data for the length of time that market data is available for the Company’s stock and the historical data for a representative group of publicly traded companies, for which historical information is available.
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Charpentier and her collaborators published work elucidating how CRISPR/Cas9, a naturally occurring viral defense mechanism found in bacteria, can be adapted for use in gene editing. We are applying this technology to potentially treat a broad set of rare and common diseases.
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We have advanced this technology from discovery to an approved medicine with unparalleled speed, culminating in the landmark first approval of a CRISPR-based therapy, CASGEVY (exagamglogene autotemcel [exa-cel]), in 2023 with our collaborators at Vertex Pharmaceuticals Incorporated, or Vertex.
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We are also progressing several gene-edited allogeneic cell therapy programs, including allogeneic chimeric antigen receptor T cell, or CAR T, candidates for the treatment of hematological and solid tumor cancers, and investigational, allogeneic, gene-edited, immune-evasive, stem cell-derived therapies for the treatment of type 1 diabetes, 106 or T1D.
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The use of CRISPR/Cas9 for gene editing was co-invented by one of our scientific founders, Dr. Emmanuelle Charpentier, the Acting and Founding Director of the Max Planck Unit for the Science of Pathogens in Berlin, Germany. Dr.
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In addition, we are advancing multiple programs leveraging in vivo editing approaches, initially for the treatment and prevention of cardiovascular disease. Hemoglobinopathies Our lead product candidate, exa-cel, is an investigational, autologous, ex vivo CRISPR gene-edited hematopoietic stem cell therapy that is being evaluated for the treatment of TDT and SCD.
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Charpentier and her collaborators published work elucidating the mechanism by which the Cas9 endonuclease, a key component of CRISPR/Cas9, can be programmed to cut double-stranded DNA at specific locations. Dr. Charpentier and her collaborator, Dr. Jennifer Doudna of the University of California, Berkeley, shared the 2020 Nobel Prize in Chemistry for their groundbreaking work.
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We and Vertex are investigating exa-cel in two ongoing Phase 1/2/3 open-label clinical trials that are designed to assess the safety and efficacy of a single dose of exa-cel in patients ages 12 to 35 with TDT (CLIMB-111) or SCD (CLIMB-121), respectively. Enrollment is complete for both CLIMB-111 and CLIMB-121.
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We acquired exclusive rights to intellectual property encompassing CRISPR/Cas9 and related technologies from Dr. Charpentier and continue to strengthen our intellectual property estate through our own research and additional in-licensing efforts, furthering our leadership in gene editing therapeutics.
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We and Vertex have also initiated two additional Phase 3 open-label clinical trials of exa-cel in pediatric patients with TDT (CLIMB-141) and SCD (CLIMB-151). Patients who received exa-cel in CLIMB-111, CLIMB-121, CLIMB-141 or CLIMB-151 will be asked to participate in a long-term, open-label follow-up trial, CLIMB-131, to evaluate the safety and efficacy of exa-cel.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDue to the conservative nature of these instruments, we do not believe that we have a material exposure to interest rate risk. If interest rates were to increase or decrease by 1%, the fair value of our investment portfolio would increase or decrease by an immaterial amount.
Biggest changeTreasury securities and government agency securities, corporate bonds, commercial paper and money market accounts invested in U.S. government agency securities. Due to the conservative nature of these instruments, we do not believe that we have a material exposure to interest rate risk.
We do not believe that inflation had a material effect on our business, financial condition or results of operations during the years ended December 31, 2022, 2021 and 2020.
Inflation Inflation generally affects us by increasing our cost of labor, clinical trial and manufacturing costs. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the years ended December 31, 2023, 2022 and 2021.
Changes in foreign exchange rates affect our consolidated statement of operations and distort comparisons between periods. To date, foreign currency transaction gains and losses have not been material to our financial statements, and we have not engaged in any foreign currency hedging transactions. Inflation Inflation generally affects us by increasing our cost of labor, clinical trial and manufacturing costs.
The current exposures arise primarily from cash, accounts payable and intercompany receivables and payables. Changes in foreign exchange rates affect our consolidated statement of operations and distort comparisons between periods. To date, foreign currency transaction gains and losses have not been material to our financial statements, and we have not engaged in any foreign currency hedging transactions.
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk. Interest Rate Sensitivity We are exposed to market risk related to changes in interest rates.
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk. Interest Rate Sensitivity 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 $1,695.7 million, primarily invested in U.S.
Foreign Currency Exchange Rate Risk As a result of our foreign operations, we face exposure to movements in foreign currency exchange rates, primarily the Swiss Franc and British Pound, against the U.S. dollar. The current exposures arise primarily from cash, accounts payable and intercompany receivables and payables.
If interest rates were to increase or decrease by 1%, the fair value of our investment portfolio would increase or decrease by an immaterial amount. Foreign Currency Exchange Rate Risk As a result of our foreign operations, we face exposure to movements in foreign currency exchange rates, primarily the Swiss Franc and British Pound, against the U.S. dollar.
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As of December 31, 2022, we had cash, cash equivalents and marketable securities of $1,868.4 million, primarily invested in U.S. treasury securities and government agency securities, corporate bonds, commercial paper and money market accounts invested in U.S. government agency securities.

Other CRSP 10-K year-over-year comparisons