10q10k10q10k.net

What changed in Generation Bio Co.'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Generation Bio Co.'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.

+714 added−693 removedSource: 10-K (2024-03-06) vs 10-K (2023-02-23)

Top changes in Generation Bio Co.'s 2023 10-K

714 paragraphs added · 693 removed · 431 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

155 edited+158 added−179 removed266 unchanged
Biggest changeAny U.S. or foreign patents issued from national stage filings of our owned or exclusively in-licensed patent applications and any U.S. patents issued from non-provisional applications we may file in connection with our provisional patent applications would be scheduled to expire on various dates from 2037 through 2043, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees. ceDNA construct As of December 31, 2022, we own approximately 31 patent application families, including seven pending PCT patent applications and 12 PCT applications that have entered the national stage in the United States and a number of jurisdictions outside the United States (one of which is jointly owned with UMass and one of which is jointly owned with Vir 22 Table of Contents Biotechnology), and we exclusively license from UMass and Voyager Therapeutics, Inc., or Voyager, one patent family, which has been granted in the United States, Europe, China, South Korea, Japan, Russia, Hong Kong, Macau, and South Africa, and pending in other jurisdictions, including Australia, Canada, Israel, Mexico, New Zealand, and Singapore.
Biggest changeAny U.S. or foreign patents issued from any non-provisional applications we may file in connection with the PCT patent application would be scheduled to expire in 2043, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees. ceDNA As of December 31, 2023, we own approximately 33 patent application families, including four pending PCT patent applications and 18 PCT applications that have entered the national stage in the United States and a number of jurisdictions outside the United States (one of which is jointly owned with UMass and one of which is jointly owned with Vir Biotechnology), including 3 issued patents in Russia covering various ceDNA constructs in combination with LNP formulation comprising the ceDNA constructs, and its uses in, for example, treatment of various diseases and gene editing.
Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date in the United States.
Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date in the United States.
A sponsor seeking approval to market and distribute a new biologic in the United States generally must satisfactorily complete each of the following steps: ● preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s Good Laboratory Practices, or GLP regulations; 27 Table of Contents ● completion of the manufacture, under cGMP conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required analytical and stability testing; ● design of a clinical protocol and its submission to the FDA as part of an Investigational New Drug, or IND, application for human clinical testing, which must become effective before human clinical trials may begin; ● approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials to establish the safety, potency and purity of the product candidate for each proposed indication, in accordance with current Good Clinical Practices, or GCP; ● preparation and submission to the FDA of a biologics license application, or BLA, 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 in clinical development and proposed labelling; ● 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; ● satisfactory completion of any FDA audits of the preclinical studies and clinical trial sites to assure compliance with GLP, as applicable, and GCP, and the integrity of clinical data in support of the BLA; ● payment of user Prescription Drug User Fee Act, or PDUFA, securing FDA approval of the BLA and licensure of the new biologic product; and ● compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and any post-approval studies or other post-marketing commitments required by the FDA.
A sponsor seeking approval to market and distribute a new biologic in the United States generally must satisfactorily complete each of the following steps: ● preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s Good Laboratory Practices, or GLP regulations; ● completion of the manufacture, under cGMP conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required analytical and stability testing; ● design of a clinical protocol and its submission to the FDA as part of an Investigational New Drug, or IND, application for human clinical testing, which must become effective before human clinical trials may begin; ● approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials to establish the safety, potency and purity of the product candidate for each proposed indication, in accordance with current Good Clinical Practices, or GCP; ● preparation and submission to the FDA of a biologics license application, or BLA, 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 in clinical development and proposed labelling; ● 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; 22 Table of Contents ● satisfactory completion of any FDA audits of the preclinical studies and clinical trial sites to assure compliance with GLP, as applicable, and GCP, and the integrity of clinical data in support of the BLA; ● payment of user Prescription Drug User Fee Act, or PDUFA, securing FDA approval of the BLA and licensure of the new biologic product; and ● compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and any post-approval studies or other post-marketing commitments required by the FDA.
Restrictions under applicable federal and state healthcare laws and regulations, include the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid; the federal civil and criminal false 43 Table of Contents claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious or fraudulent or knowingly making, using or causing to made or used a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government; the Foreign Corrupt Practices Act, or FCPA, which 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 the federal transparency requirements known as the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and Human Services, information related to payments and other transfers of value made by that entity to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
Restrictions under applicable federal and state healthcare laws and regulations, include the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid; the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities 42 Table of Contents from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious or fraudulent or knowingly making, using or causing to made or used a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government; the Foreign Corrupt Practices Act, or FCPA, which 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 the federal transparency requirements known as the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and Human Services, information related to payments and other transfers of value made by that entity to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
For more information, please see the section entitled “Risk factors—Risks related to our intellectual property.” License agreements We are a party to a number of license agreements under which we license patents, patent applications and other intellectual property from third parties. These licenses impose various diligence and financial payment obligations on us.
For more information, please see the section entitled “Risk factors—Risks related to our intellectual property.” License and collaboration agreements We are a party to a number of license agreements under which we license patents, patent applications and other intellectual property from third parties. These licenses impose various diligence and financial payment obligations on us.
We believe it is crucial to, and our directors and senior management strongly support, a no-tolerance stance for workplace harassment, biases and unethical behavior. All employees, including senior management, are required to abide by, review and confirm compliance to our Code of Business Conduct and Ethics and other internal policies that outline our high expectations.
We believe it is crucial to, and our directors and senior management strongly support, a no-tolerance stance for workplace harassment, biases and unethical behavior. All employees, including senior management, are required to abide by, review and confirm compliance with our Code of Business Conduct and Ethics and other internal policies that outline our high expectations.
Drug substance The manufacturing of our ceDNA drug substance is anticipated to occur in an external cleanroom facility where we will retain control over personnel, quality, infrastructure and process. We have established a cGMP-ready process at a scale that we believe will provide sufficient ceDNA drug substance for our clinical and initial commercial supply.
Drug substance The manufacturing of our iqDNA drug substance is anticipated to occur in an external cleanroom facility where we will retain control over personnel, quality, infrastructure and process. We have established a cGMP-ready process at a scale that we believe will provide sufficient ceDNA drug substance for our clinical and initial commercial supply.
In the event that the FDA determines that an application does not satisfy this standard, it will issue a Refuse to File, or RTF, determination to the sponsor. The FDA may request additional information rather than accept an application for filing. In this event, the application must be resubmitted with the additional information.
In the event that the FDA determines that an application does not satisfy this standard, it will issue a Refuse to File, or RTF, determination to the sponsor. The FDA may request additional information rather than accept an application for filing. In this event, the application must be resubmitted with such additional information.
Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation, although the FDA has recently taken steps to limit what is considers abuse of this statutory exemption in the PREA by announcing that is does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease.
Unless otherwise required by regulation, the pediatric data requirements generally do not apply to products with orphan designation, although the FDA has taken steps to limit what is considers abuse of this statutory exemption in the PREA by announcing that is does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease.
The term “substantial evidence” is defined under the FDCA as “evidence consisting of adequate and well-controlled investigations, including clinical investigations, by experts qualified by scientific training and experience to evaluate the effectiveness of the product involved, on the basis of which it could fairly and responsibly be concluded by such experts that the product will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling thereof.” 33 Table of Contents The FDA has interpreted this evidentiary standard to require at least two adequate and well-controlled clinical investigations to establish effectiveness of a new product.
The term “substantial evidence” is defined under the FDCA as “evidence consisting of adequate and well-controlled investigations, including clinical investigations, by experts qualified by scientific training and experience to evaluate the effectiveness of the product involved, on the basis of which it could fairly and responsibly be concluded by such experts that the product will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling thereof.” The FDA has interpreted this evidentiary standard to require at least two adequate and well-controlled clinical investigations to establish effectiveness of a new product.
Additionally, under the NIH Agreement, we may be required to reimburse the French Institutions for a portion of certain past and ongoing patent related expenses, including expenses associated with the preparation, filing, prosecution and maintenance of all patents and patent applications. As of December 31, 2022, there have been no invoiced expenses related to these reimbursable costs.
Additionally, under the NIH Agreement, we may be required to reimburse the French Institutions for a portion of certain past and ongoing patent related expenses, including expenses associated with the preparation, filing, prosecution and maintenance of all patents and patent applications. As of December 31, 2023, there have been no invoiced expenses related to these reimbursable costs.
We also non-exclusively license one patent application family, which includes issued patents in each of the United States, Australia, Brazil, China, South Korea and Israel and national stage patent applications in several other jurisdictions, including Europe and Japan. In addition, we own approximately 17 U.S. provisional patent applications within the priority year.
We also non-exclusively license one patent application family, which includes issued patents in each of the United States, Australia, Brazil, China, South Korea and Israel and national stage patent applications in several other jurisdictions, including Europe and Japan. In addition, we own approximately 11 U.S. provisional patent applications within the priority year.
There are four types of meetings that occur between sponsors and the FDA. Type A meetings are those that are necessary for an otherwise stalled product development program to proceed or to address an important safety issue. Type B meetings include pre-IND application and pre-NDA/pre-BLA meetings, as well as Type B end of phase meetings, such as EOP2 meetings.
There are five types of meetings that occur between sponsors and the FDA. Type A meetings are those that are necessary for an otherwise stalled product development program to proceed or to address an important safety issue. Type B meetings include pre-IND application and pre-NDA/pre-BLA meetings, as well as Type B end of phase meetings, such as EOP2 meetings.
Future ceDNA drug substance processes may require additional manufacturing capabilities, which may be addressed by either increasing our capacity at our current cleanroom facility or establishing manufacturing supply relationships with new contract manufacturers. These changes in processes may also require new supply chain agreements with CMOs that specialize in raw material manufacturing.
Future iqDNA drug substance processes may require additional manufacturing capabilities, which may be addressed by either increasing our capacity at our current cleanroom facility or establishing manufacturing supply relationships with new contract manufacturers. These changes in processes may also require new supply chain agreements with CMOs that specialize in raw material manufacturing.
Additional studies may be required after approval. ● Phase 1 clinical trials are initially conducted in a limited population to test the product candidate for safety, including adverse effects, dose tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics in healthy humans or, on occasion, in patients, such as cancer patients. ● Phase 2 clinical trials are generally conducted in a limited patient population to identify possible adverse effects and safety risks, evaluate the efficacy of the product candidate for specific targeted indications and determine dose tolerance and optimal dosage.
Additional studies may be required after approval. ● Phase 1 clinical trials are initially conducted in a limited population to test the product candidate for safety, including adverse effects, dose tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics in healthy humans or, on occasion, in patients, such as cancer patients. ● Phase 2 clinical trials are generally conducted in a limited patient population to identify possible adverse effects and safety risks, evaluate the efficacy of the product candidate for specific targeted indications and determine dose 24 Table of Contents tolerance and optimal dosage.
Further, depending on the specific risk(s) to be addressed, the FDA may require that contraindications, warnings, or precautions be included in the product labeling; post-approval trials, including Phase 4 clinical trials, be conducted to further assess a product’s safety after approval; and/or testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product.
Further, depending on the specific risk(s) to be addressed, the FDA may require that contraindications, warnings, or precautions be included in the product labeling; post-approval trials, including Phase 4 clinical trials, be conducted to further assess a product’s safety after approval; and/or testing and 29 Table of Contents surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product.
We take steps to protect and preserve our trade secrets and other 24 Table of Contents confidential and proprietary information and prevent the unauthorized disclosure of the foregoing, including by entering into non-disclosure and invention assignment agreements with parties who have access to our trade secrets or other confidential and proprietary information, such as employees, consultants, outside scientific collaborators, contract research and manufacturing organizations, sponsored researchers and other advisors, at the commencement of their employment, consulting or other relationships with us.
We take steps to protect and preserve our trade secrets and other confidential and proprietary information and prevent the unauthorized disclosure of the foregoing, including by entering into non-disclosure and invention assignment agreements with parties who have access to our trade secrets or other confidential and proprietary information, such as employees, consultants, outside scientific collaborators, contract research and manufacturing organizations, sponsored researchers and other advisors, at the commencement of their employment, consulting or other relationships with us.
Any U.S. or foreign patents issued from the pending U.S. or foreign non-provisional patent applications or from any non-provisional applications we may file in connection with these provisional patent applications would be scheduled to expire on various dates from 2038 through 2043, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees.
Any U.S. or foreign patents issued from the pending U.S. or foreign non-provisional patent applications or from non-provisional applications we may file in connection with the pending provisional patent applications would be scheduled to expire on various dates from 2038 through 2044, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees.
If we do not successfully obtain patent protection, or if the scope of the patent protection we or our licensors obtain with respect to our product candidates or technology, including our ceDNA constructs, ctLNP delivery system or manufacturing processes is not sufficiently broad, we will be unable to prevent others from using our technology 23 Table of Contents or from developing or commercializing technology and products similar or identical to ours or other similar competing products and technologies.
If we do not successfully obtain patent protection, or if the scope of the patent protection we or our licensors obtain with respect to our product candidates or technology, including our ceDNA constructs, ctLNP delivery system or manufacturing processes is not sufficiently broad, we will be unable to prevent others from using our technology or from developing or commercializing technology and products similar or identical to ours or other similar competing products and technologies.
Decisions on BLAs The FDA reviews an application to determine, among other things, whether the product is safe and whether it is effective for its intended use(s), with the latter determination being made on the basis of substantial evidence.
The FDA reviews an application to determine, among other things, whether the product is safe and whether it is effective for its intended use(s), with the latter determination being made on the basis of substantial evidence.
In addition, we own approximately 12 U.S. provisional patent applications within the priority year, which cover ceDNA construct variants, general applications of the ceDNA construct technology and certain properties of the construct, specific disease-targeted ceDNA compositions and methods of use.
In addition, we own approximately 11 U.S. provisional patent applications within the priority year, which cover ceDNA construct variants, general applications of the ceDNA construct technology and certain properties of the construct, specific disease-targeted ceDNA compositions and methods of use.
The FDA aims to complete its review of priority review applications within six months as opposed to 10 months for standard review. 34 Table of Contents ● Accelerated approval. Drug or biologic products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval.
The FDA aims to complete its review of priority review applications within six months as opposed to 10 months for standard review. ● Accelerated approval. Drug or biologic products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval.
In addition, in October 2020, the HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription drugs from Canada into the United States.
In addition, the HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription drugs from Canada into the United States.
Competition The biotechnology and biopharmaceutical industries generally, and the genetic medicine field specifically, are characterized by rapid evolution of technologies, sharp competition and strong defense of intellectual property. Any product candidates that we successfully develop and commercialize will have to compete with existing therapies and new 26 Table of Contents therapies that may become available in the future.
Competition The biotechnology and biopharmaceutical industries generally, and the genetic medicine field specifically, are characterized by rapid evolution of technologies, sharp competition and strong defense of intellectual property. Any product candidates that we successfully develop and commercialize will have to compete with existing therapies and new therapies that may become available in the future.
The role of the relevant ethics committees in the assessment procedure will continue to be governed by the national law of the concerned EU Member State. However, overall related timelines will be defined by the Clinical Trials Regulation.
The role of the relevant ethics committees in the assessment procedure will continue to be governed by the national law of the concerned EU Member State. However, overall related timelines will be defined by the Clinical Trials Regulation, or the CTR.
For example, in the United States, a patent claiming a new biologic product, its method of use or its method of manufacture may be eligible for a limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, for up to five years beyond the normal expiration date of the patent.
For example, in the United States, a patent claiming a new biologic product, its method of use or its method of manufacture may be eligible for a limited patent term extension under the Drug Price 17 Table of Contents Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, for up to five years beyond the normal expiration date of the patent.
As of December 31, 2022, we have paid the first milestone to UMass for the issuance of the first patent in the licensed patent application family, and we have recorded no royalty or other milestone liabilities under the UMass Agreement.
As of December 31, 2023, we have paid the first milestone to UMass for the issuance of the first patent in the licensed patent application family, and we have recorded no royalty or other milestone liabilities under the UMass Agreement.
Information on our website is not part of this Annual Report or any of our 46 Table of Contents other securities filings unless specifically incorporated herein by reference. In addition, our filings with the SEC may be accessed through the SEC’s Interactive Data Electronic Applications system at http://www.sec.gov.
Information on our website is not part of this Annual Report or any of our other securities filings unless specifically incorporated herein by reference. In addition, our filings with the SEC may be accessed through the SEC’s Interactive Data Electronic Applications system at http://www.sec.gov.
These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products. FDA approval of companion diagnostics In August 2014, the FDA issued final guidance clarifying the requirements that will apply to approval of therapeutic products and in vitro companion diagnostics.
These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products. 34 Table of Contents FDA approval of companion diagnostics In August 2014, the FDA issued final guidance clarifying the requirements that will apply to approval of therapeutic products and in vitro companion diagnostics.
The GDPR also imposes strict rules on the transfer of personal data to countries outside the European Union, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.
The GDPR also imposes strict rules on the transfer of personal data to countries outside the EEA, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.
Specifically, we agreed to achieve regulatory approval for and commercially launch at least one licensed product in the United States by certain specified dates. As part of the UMass Agreement, we have issued to UMass 125,677 shares of our common stock.
Specifically, we agreed to achieve regulatory approval for and commercially launch at least one licensed product in the United States by certain specified dates. 19 Table of Contents As part of the UMass Agreement, we have issued to UMass 125,677 shares of our common stock.
Patients and physicians may achieve individual therapeutic goals in a predictable manner. ● Greater opportunity to demonstrate efficacy in first-in-human trials : Because we may be able to redose, we expect that a greater proportion of patients participating in our early clinical trials may achieve the desired level of gene expression. ● Extending expression : If expression of the gene of interest begins to wane for an individual patient, we expect that redosing could restore effective expression levels, prolonging the benefits of our therapies throughout the patient’s life. ● Reach pediatric patients : Rapidly waning expression due to organ growth and dividing cells in children limits the utility of a single administration of a gene therapy.
Patients and physicians may achieve individual therapeutic goals in a predictable manner. ● Greater opportunity to demonstrate efficacy in first-in-human trials : Because we may be able to redose, we expect that a greater proportion of patients participating in our early clinical trials may achieve the desired level of gene expression or correction. 8 Table of Contents ● Extending expression : If expression of the gene of interest begins to wane for an individual patient, we expect that redosing could restore effective expression levels, prolonging the benefits of our therapies throughout the patient’s life. ● Reach pediatric patients : Rapidly waning expression of the replaced gene due to organ growth and dividing cells in children limits the utility of a single administration of a gene therapy.
We have invested in technical expertise and internal capabilities to optimize and develop the ceDNA drug substance process and to provide technical management and quality oversight for our process transfers to CMOs.
We have invested in technical expertise and internal capabilities to optimize and develop the iqDNA drug substance process and to provide technical management and quality oversight for our process transfers to CMOs.
Marketing authorization To obtain a marketing authorization for a product under the EU regulatory system, a sponsor must submit an MAA, either under a centralized procedure administered by the European Medicines Agency, or EMA, or one of the procedures administered by competent authorities in EU member states (decentralized procedure, national procedure, or mutual recognition procedure).
Marketing authorization To obtain a marketing authorization for a product under the EU regulatory system, a sponsor must submit an MAA, either under a centralized procedure administered by the EMA or one of the procedures administered by competent authorities in EU member states (decentralized procedure, national procedure, or mutual recognition procedure).
We have entered into an agreement with an external cleanroom facility at which we expect to manufacture cGMP-compliant clinical and initial commercial supply of ceDNA using RES that will allow us to retain control over personnel, quality, infrastructure and process. Additionally, we may enter into agreements with contract manufacturing organizations, or CMOs, to provide further manufacturing capacity.
We have entered into an agreement with an external cleanroom facility at which we expect to manufacture cGMP-compliant clinical and initial commercial supply of iqDNA using RES that will allow us to retain control over personnel, quality, infrastructure and process. We may enter into additional agreements with contract manufacturing organizations, or CMOs, to provide further manufacturing capacity.
Only one patent applicable to an approved product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent for which extension is sought. A patent that covers multiple products for which approval is sought can only be extended in connection with one of the approvals.
Only one patent applicable to an approved product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent for which extension is sought. A patent that covers multiple products for which approval is sought can only be 33 Table of Contents extended in connection with one of the approvals.
In that case, the IND sponsor and the FDA must resolve any outstanding FDA concerns before the clinical trials can begin or recommence. 28 Table of Contents Following commencement of a clinical trial under an IND application, the FDA may also place a clinical hold or partial clinical hold on that trial.
In that case, the IND sponsor and the FDA must resolve any outstanding FDA concerns before the clinical trials can begin or recommence. Following commencement of a clinical trial under an IND application, the FDA may also place a clinical hold or partial clinical hold on that trial.
A Type C meeting is any meeting other than a Type A or Type B meeting regarding the development and review of a product. Finally, a Type D meeting is meant to focus on a narrow set of issues and should not require input from more than 3 disciplines or Divisions. Pediatric Studies .
A Type C meeting is any meeting other than a Type A or Type B meeting regarding the development and review of a product. A Type D meeting is meant to focus on a narrow set of issues and should not require input from more than 3 disciplines or Divisions.
In addition, regional healthcare organizations and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription pharmaceutical and other healthcare programs. These 45 Table of Contents measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.
In addition, regional healthcare organizations and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription pharmaceutical and other healthcare programs. These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.
Human clinical trials in support of a BLA Clinical trials involve the administration of the investigational product candidate to healthy volunteers or patients with the disease or condition to be treated under the supervision of a qualified principal investigator in accordance with GCP 29 Table of Contents requirements.
Human clinical trials in support of a BLA Clinical trials involve the administration of the investigational product candidate to healthy volunteers or patients with the disease or condition to be treated under the supervision of a qualified principal investigator in accordance with GCP requirements.
The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints 42 Table of Contents with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR.
The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Our commercial opportunity could be substantially limited if our competitors develop and commercialize products that are more effective, safer, less toxic, more convenient or less expensive than products we may develop.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. 21 Table of Contents Our commercial opportunity could be substantially limited if our competitors develop and commercialize products that are more effective, safer, less toxic, more convenient or less expensive than products we may develop.
These regulations include an interim final rule implementing a most favored nation model for prices that would tie Medicare Part B payments for certain physician-administered pharmaceuticals to the lowest price paid in other economically advanced countries effective January 1, 2021.
These regulations include an interim final rule implementing a most favored nation model for prices that would tie Medicare Part B payments for certain physician- 43 Table of Contents administered pharmaceuticals to the lowest price paid in other economically advanced countries effective January 1, 2021.
As of January 1, 2021, the Medicines and Healthcare products Regulatory Agency, or the MHRA, became responsible for supervising medicines and medical devices in Great Britain, comprising England, Scotland and Wales under domestic law whereas Northern Ireland continues to be subject to EU rules under the Northern Ireland Protocol.
As of January 1, 2021, the Medicines and Healthcare products Regulatory Agency, or the MHRA, became responsible for supervising medicines and medical devices in Great Britain, or GB, comprising England, Scotland, and Wales under domestic law whereas Northern Ireland continues to be subject to European Union rules under the Northern Ireland Protocol.
Human Capital Resources As of December 31, 2022, we had approximately 150 employees, all of whom are full-time employees. None of our employees are represented by labor unions or covered by collective bargaining agreements. Our success is dependent on our ability to attract and retain highly talented individuals.
Human Capital Resources As of December 31, 2023, we had approximately 174 employees, all of whom are full-time employees. None of our employees are represented by labor unions or covered by collective bargaining agreements. Our success is dependent on our ability to attract and retain highly talented individuals.
During the additional two-year period of market exclusivity, a generic marketing authorization application can be submitted, and the innovator’s data may be referenced, but no generic medicinal product can be marketed until the expiration of the market exclusivity.
During the additional two-year period of market exclusivity, a generic marketing authorization application can be submitted, and the innovator’s data may be referenced, but no generic medicinal product can be 38 Table of Contents marketed until the expiration of the market exclusivity.
Other potential consequences include, among other things: ● restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; ● safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about a product; ● mandated modification of promotional materials and labeling and issuance of corrective information; ● fines, warning letters or holds on post-approval clinical trials; ● refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; 35 Table of Contents ● product recall, seizure or detention, or refusal to permit the import or export of products; ● injunctions or the imposition of civil or criminal penalties; and ● consent decrees, corporate integrity agreements, debarment, or exclusion from federal health care programs.
Other potential consequences include, among other things: ● restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; ● safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about a product; ● mandated modification of promotional materials and labeling and issuance of corrective information; ● fines, warning letters or holds on post-approval clinical trials; ● refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; ● product recall, seizure or detention, or refusal to permit the import or export of products; ● injunctions or the imposition of civil or criminal penalties; and ● consent decrees, corporate integrity agreements, debarment, or exclusion from federal health care programs. 31 Table of Contents The FDA strictly regulates the marketing, labeling, advertising and promotion of prescription drug products placed on the market.
Since there are potential consequences to expressing too much Factor VIII, such as excess blood clotting, we expect the ability to titrate the therapy is important to enable an optimal dosing regimen.
Since there are potential consequences to expressing too much FVIII, such as excess blood clotting, we expect the ability to titrate the therapy is important to enable an optimal dosing regimen.
Patent portfolio As of December 31, 2022, we own approximately 54 patent application families related to our business, including 14 pending Patent Cooperation Treaty, or PCT, patent applications and 24 PCT applications that have entered the national stage in the United States and certain foreign jurisdictions, including Europe and Japan (one of which is jointly owned with the University of Massachusetts Medical School, or UMass), and we exclusively license one patent application family, which includes issued patents in each of the United States, Europe, China, South Korea, Japan, Russia, Hong Kong, Macau, and South Africa, and pending national stage applications in several other jurisdictions, including Australia, Canada, Israel, Mexico, New Zealand, and Singapore.
Patent portfolio As of December 31, 2023, we own approximately 58 patent application families related to our business, including 12 pending Patent Cooperation Treaty, or PCT, patent applications and 35 PCT applications that have entered the national stage in the United States and certain foreign jurisdictions, including Europe and Japan (one of which is jointly owned with the University of Massachusetts Medical School, or UMass), and we exclusively license one patent application family, which includes issued patents in each of the United States, Europe, China, South Korea, Japan, Russia, Hong Kong, Israel, Macau, Mexico and South Africa, and pending national stage applications in several other jurisdictions, including Australia, Canada, New Zealand, and Singapore.
Part I is assessed by the competent authorities of all EU Member States in which an application for authorization of a clinical trial has been submitted (Member States concerned). Part II is assessed separately by each Member State concerned. Strict deadlines have been established for the assessment of clinical trial applications.
Part I is assessed by the competent authorities of all EU Member States in which an application for authorization of a clinical trial has been submitted, which we refer to as the Member States concerned. Part II is assessed separately by each Member State concerned. Strict deadlines have been established for the assessment of clinical trial applications.
For example, with enactment of the Tax Cuts and Jobs Act of 2017, or the Tax Act, which was signed by President Trump on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019. Further, on December 14, 2018, a U.S.
For example, with enactment of the Tax Cuts and Jobs Act of 2017, or the Tax Act, which was signed by President Trump on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019.
Drug product Our drug product is our drug substance, ceDNA, formulated with ctLNP. We believe that our drug product requirements can be met by a variety of domestic and international CMOs. We have selected a subset of experienced organizations familiar with the specific operations that our current drug product processes require.
Drug product Our drug product is our drug substance, iqDNA, and/or mRNA formulated with ctLNP. We believe that our drug product requirements can be met by a variety of domestic and international CMOs. We have selected a subset of experienced organizations familiar with the specific operations that our current drug product processes require.
To date, the FDA has approved a number of biosimilars and the first interchangeable biosimilar product was approved on July 30, 2021 and a second product previously approved as a biosimilar was designated as interchangeable in October 2021. A reference biologic is granted twelve years of exclusivity from the time of first licensure of the reference product.
To date, the FDA has approved a number of biosimilars and the first interchangeable biosimilar product was approved on July 30, 2021 and a second product previously approved as a biosimilar and interchangeable biosimilar products. A reference biologic is granted twelve years of exclusivity from the time of first licensure of the reference product.
The ability to redose provides several advantages: ● Individualized patient titration to reach desired expression level : We expect our genetic medicines will enable individualized patient titration, allowing each patient to be redosed until they reach the expression level required to address their specific needs.
The ability to redose provides several advantages: ● Individualized patient titration to reach desired level of expression or gene correction : We expect our genetic medicines will enable individualized patient titration, allowing each patient to be redosed until they reach the level of expression or gene correction required to address their specific needs.
Competitors, however, may receive approval of a different gene therapy for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity.
Competitors, however, may receive approval of a different gene therapy for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has 32 Table of Contents exclusivity.
The data do not need to show the product 36 Table of Contents to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted.
The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted.
Within the FDA, the Center for Biologics Evaluation and Research, or CBER, regulates gene therapy products. Within CBER, the review of gene therapy and related products is consolidated in the Office of Tissues and Advanced Therapies, or OTAT, and the FDA has established the Cellular, Tissue and Gene Therapies 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 CBER, the review of gene therapy and related products is consolidated within the Office of Therapeutic Products, and the FDA has established the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its reviews.
The FDA or the sponsor may request an amendment to the plan at any time. The FDA may, on its own initiative or at the request of the sponsor, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.
The FDA may, on its own initiative or at the request of the sponsor, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.
We have developed RES, our novel, next-generation rapid enzymatic synthesis, to manufacture ceDNA that does not rely on Sf9 cells. RES uses enzymes to convert plasmid DNA and synthetic oligonucleotides into ceDNA, similar to the current high-capacity methods used to manufacture mRNA vaccines.
We have developed RES, our novel, next-generation rapid enzymatic synthesis, which enabled the discovery of iqDNA. RES does not rely on Sf9 cells and uses enzymes to convert plasmid DNA and synthetic oligonucleotides into iqDNA, similar to the current high-capacity methods used to manufacture mRNA vaccines.
PMA applications are subject to an application fee. 38 Table of Contents Regulation and procedures governing approval of medicinal products in the European Union In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products.
Regulation and procedures governing approval of medicinal products in the European Union In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products.
The practical applications of increased capacity include the ability: ● to improve expression of existing targets of viral gene therapy and mRNA; ● to incorporate genes too large to be packaged in viral vectors; ● to include multiple genes, or to produce more than one transcript, which opens the possibility of creating several therapeutic molecules per ceDNA to address conditions that need more than one type of genetic correction as well as producing antibody therapies from patients’ own cells; and 12 Table of Contents ● to add native regulatory elements that are naturally associated with the gene we are replacing, which may allow for activity of the replaced gene to increase or decrease in response to the body’s own signals.
The practical applications of increased capacity include the ability: ● to improve expression of existing targets of viral gene therapy and mRNA; ● to incorporate genes too large to be packaged in viral vectors like AAV; ● to include multiple genes, or to produce more than one transcript, which opens the possibility of creating several therapeutic molecules per iqDNA to address conditions that need more than one type of genetic correction as well as producing antibody therapies from patients’ own cells; and 10 Table of Contents ● to add native regulatory elements that are naturally associated with the gene we are replacing, which may allow for activity of the replaced gene to increase or decrease in response to the body’s own signals. iqDNA applications The application of iqDNA as a versatile DNA with an immune-quiet profile, robust expression and large gene capacity creates several potential attractive therapeutic applications.
The NIH, including the Novel and Exceptional Technology and Research Advisory Committee, or the 31 Table of Contents NExTRAC, also advises the FDA on gene therapy issues and other issues related to emerging biotechnologies. The FDA and the NIH have published guidance documents with respect to the development and submission of gene therapy protocols.
The NIH, including the Novel and Exceptional Technology and Research Advisory Committee, or the NExTRAC, also advises the FDA on gene therapy issues and other issues related to emerging biotechnologies. The FDA and the NIH have published guidance documents with respect to the development and submission of gene therapy protocols. The FDA has issued various guidance documents regarding gene therapies.
It involves a rigorous premarket review during which the sponsor must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling.
It involves a rigorous premarket review during which the sponsor must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling. PMA applications are subject to an application fee.
In addition, the NIH and the French Institutions may terminate the NIH Agreement in the event of a material breach by us and failure to cure such breach within a certain period of time.
In addition, the NIH and the French Institutions may terminate the NIH Agreement in the event of a material breach by us and failure to cure such breach within a certain period of time. We can voluntarily terminate the NIH Agreement with prior notice to the NIH and the French Institutions.
Regulation (EC) No 1901/2006 provides that prior to obtaining a marketing authorization in the European Union, a sponsor 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. 39 Table of Contents The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all European Union member states.
Regulation (EC) No 1901/2006 provides that prior to obtaining a marketing authorization in the European Union, a sponsor 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.
Under this order, federal agencies are directed to re-examine: policies that undermine protections for people with pre-existing conditions, including complications related to COVID-19; demonstrations and waivers under Medicaid and the PPACA that may reduce coverage or undermine the programs, including work requirements; policies that undermine the Health Insurance Marketplace or other markets for health insurance; policies that make it more difficult to enroll in Medicaid and under the PPACA; and policies that reduce affordability of coverage or financial assistance, including for dependents. 44 Table of Contents Pharmaceutical prices The prices of prescription pharmaceuticals have also been the subject of considerable discussion in the United States.
Under this order, federal agencies are directed to re-examine: policies that undermine protections for people with pre-existing conditions, including complications related to COVID-19; demonstrations and waivers under Medicaid and the PPACA that may reduce coverage or undermine the programs, including work requirements; policies that undermine the Health Insurance Marketplace or other markets for health insurance; policies that make it more difficult to enroll in Medicaid and under the PPACA; and policies that reduce affordability of coverage or financial assistance, including for dependents.
Manufacturing processes As of December 31, 2022, we own approximately four patent application families (two of which cover technologies related to RES), including one pending PCT patent application and three PCT applications that have entered the national stage in the United States and a number of jurisdictions outside the United States.
Manufacturing processes As of December 31, 2023, we own approximately five patent application families (three of which cover technologies related to RES for ceDNA and iqDNA and one of which specifically covers iqDNA manufacturing combined with RES), including two pending PCT patent application and three PCT applications that have entered the national stage in the United States and a number of jurisdictions outside the United States.
Our owned and licensed patents and patent applications cover various aspects of our programs and technology, including our ceDNA construct, ctLNP delivery system and manufacturing process as further described below.
Our wholly-owned and licensed patents and patent applications cover various aspects of our programs and technology, including a broad range of our iqDNA and ceDNA constructs, ctLNP delivery system and manufacturing process as further described below.
Manufacturing is subject to extensive regulations that impose procedural and documentation requirements. These regulations govern record keeping, manufacturing processes and controls, personnel, quality control and quality assurance. Our systems and contractors are required to comply with these regulations and are assessed through regular monitoring and formal audits.
These regulations govern record keeping, manufacturing processes and controls, personnel, quality control and quality assurance. Our systems and contractors are required to comply with these regulations and are assessed through regular monitoring and formal audits.
We expect that scaling RES may enable us to manufacture our potential drug candidates in a cost-effective manner and to expand access to patients with prevalent diseases that require hundreds of millions of doses, on a sustainable basis. We have transitioned all of our portfolio programs to RES.
We expect that scaling RES may enable us to manufacture our potential drug candidates in a cost-effective manner and to expand access to patients with prevalent diseases that require hundreds of millions of doses, on a sustainable basis. We have transitioned all of our iqDNA manufacturing to RES. Manufacturing is subject to extensive regulations that impose procedural and documentation requirements.
We can voluntarily terminate the NIH Agreement with prior notice to the NIH and the French Institutions. 25 Table of Contents As part of the NIH Agreement, we agreed to make milestone payments upon the achievement of certain milestones up to a maximum aggregate total of $350,000 for each licensed product, as well as a low single-digit royalty on net sales of licensed products.
As part of the NIH Agreement, we agreed to make milestone payments upon the achievement of certain milestones up to a maximum aggregate total of $350,000 for each licensed product, as well as a low single-digit royalty on net sales of licensed products.
Specialized procedures for gene therapies The grant of marketing authorization in the European Union for gene therapy products is governed by Regulation 1394/2007/EC on advanced therapy medicinal products, read in combination with Directive 2001/83/EC of the European Parliament and of the Council, commonly known as the Community code on medicinal products.
After these five years, the authorization may be renewed on the basis of a reevaluation of the risk-benefit balance. ​ Specialized procedures for gene therapies The grant of marketing authorization in the European Union for gene therapy products is governed by Regulation 1394/2007/EC on advanced therapy medicinal products, read in combination with Directive 2001/83/EC of the European Parliament and of the Council, commonly known as the Community code on medicinal products.
Any authorization that is not followed by the placement of the drug on the European Union market (in the case of the centralized procedure) or on the market of the authorizing member state within three years after authorization ceases to be valid. 41 Table of Contents 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 the product is intended for the diagnosis, prevention or treatment of (1) a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the European Union when the application is made, or (2) a life-threatening, seriously debilitating or serious and chronic condition in the European Union and that without incentives it is unlikely that the marketing of the drug in the European Union would generate sufficient return to justify the necessary investment.
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 the product is intended for the diagnosis, prevention or treatment of (i) a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the European Union when the application is made, or (ii) a life-threatening, seriously debilitating or serious and chronic condition in the European Union and that without incentives it is unlikely that the marketing of the drug in the European Union would generate sufficient return to justify the necessary investment.
There are approximately 16,000 hemophilia A patients in the United States and 320,000 patients worldwide. Because of the deficiency of coagulation Factor VIII, hemophilia A patients bleed in joints, muscles, soft tissues and within mucous membranes, which can be either spontaneous or due to internal or external trauma, depending on the severity of the disease.
Because of the deficiency of coagulation FVIII, hemophilia A patients bleed in joints, muscles, soft tissues and within mucous membranes, which can be either spontaneous or due to internal or external trauma, depending on the severity of the disease.
Any U.S. or foreign patents issued from the pending U.S. or foreign non-provisional patent applications or from non-provisional applications we may file in connection with the pending provisional patent applications would be scheduled to expire on various dates from 2038 through 2043, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees. ctLNP delivery system As of December 31, 2022, we own approximately 18 patent application families, including six pending PCT patent applications and nine PCT applications that have entered the national stage in the United States and a number of jurisdictions outside the United States, and approximately four U.S. provisional patent applications within the priority year with respect to our ctLNP delivery system, including certain lipid and lipid nanoparticle compositions and combinations with ceDNA and/or targeting agents and methods of use.
Any U.S. or foreign patents issued from national stage filings of our owned or exclusively in-licensed patent applications and any U.S. patents issued from non-provisional applications we may file in connection with our provisional and pending PCT patent applications would be scheduled to expire on various dates from 2037 through 2044, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees. 15 Table of Contents ctLNP platform As of December 31, 2023, we own approximately 19 patent application families, including five pending PCT patent applications and 14 PCT applications that have entered the national stage in the United States and a number of jurisdictions outside the United States within the priority year with respect to our ctLNP delivery system, including certain lipid and lipid nanoparticle compositions and optionally in combinations with one or more nucleic acid cargos such as iqDNA, ceDNA, mRNA and/or specific cell-targeting agents and methods of use.
We have entered into an agreement with an external cleanroom facility at which we expect to manufacture cGMP-compliant clinical and initial commercial supply of ceDNA using RES that will allow us to retain control over personnel, quality, infrastructure and process. Additionally, we may enter into agreements with CMOs to provide further manufacturing capacity.
We have entered into an agreement with an external cleanroom facility at which we expect to manufacture current Good Manufacturing Practice, or cGMP, -compliant clinical and initial commercial supply of iqDNA using RES that will allow us to retain control over personnel, quality, infrastructure and process.
Reporting clinical trial results Under the PHSA, sponsors of clinical trials of certain FDA-regulated products, including prescription drugs and biologics, are required to register and disclose certain clinical trial information on a public registry (clinicaltrials.gov) maintained by the NIH.
Occasionally, clinical holds are imposed due to manufacturing issues that may present safety issues for the clinical study subjects. Reporting clinical trial results Under the PHSA, sponsors of clinical trials of certain FDA-regulated products, including prescription drugs and biologics, are required to register and disclose certain clinical trial information on a public registry (clinicaltrials.gov) maintained by the NIH.
The fee required for the submission and review of an application under the PDUFA is substantial (for example, for fiscal year 2023, this application fee is approximately $3.25 million), and the sponsor of an approved application is also subject to an annual program fee, 32 Table of Contents which for fiscal year 2023 is more than $394,000 per eligible prescription product.
The fee required for the submission and review of an application under the PDUFA is substantial (for example, for fiscal year 2024, this application fee is $4.05 million), and the sponsor of an approved application is also subject to an annual program fee, which for federal fiscal year 2024 is more than $410,000 per eligible prescription product.
Regulation 1394/2007/EC includes specific rules concerning the authorization, supervision and pharmacovigilance of gene therapy 40 Table of Contents medicinal products. Manufacturers of advanced therapy medicinal products must demonstrate the quality, safety and efficacy of their products to the EMA, which provides an opinion regarding the MAA.
Regulation 1394/2007/EC includes specific rules concerning the authorization, supervision and pharmacovigilance of gene therapy medicinal products. Manufacturers of advanced therapy medicinal products must demonstrate the quality, safety and efficacy of their products to the EMA, which provides an opinion regarding the MAA. The European Commission grants or refuses marketing authorization in light of the opinion delivered by the EMA.
The MHRA will rely on the Human Medicines Regulations 2012 (SI 2012/1916) (as amended), or the HMR, as the basis for regulating medicines. The HMR has incorporated into the domestic law the body of European Union law instruments governing medicinal products that pre-existed prior to the United Kingdom’s withdrawal from the European Union.
The Human Medicines Regulations 2012 (SI 2012/1916) (as amended), or the HMR, is the primary legal instrument for the regulation of medicines in the United Kingdom The HMR has incorporated into the domestic law the body of European Union law instruments governing medicinal products that pre-existed prior to the United Kingdom’s withdrawal from the European Union.

… 412 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

215 edited+87 added−59 removed624 unchanged
Biggest changeAs a result, we could deplete our capital resources sooner than we currently expect and could be forced to seek additional funding sooner than planned. 48 Table of Contents Our future capital requirements will depend on many factors, including: ● the identification of additional research programs and additional product candidates; ● the scope, progress, costs and results of preclinical and clinical development for any product candidates we may develop; ● the costs, timing and outcome of regulatory review of any product candidates we may develop; ● the cost and timing of completion of commercial-scale manufacturing activities, including the costs and resources required to manufacture our drug substance and drug product using external cleanroom facilities and/or CMOs; ● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any product candidates we may develop for which we receive marketing approval; ● the costs and scope of the continued development of our non-viral genetic medicine platform; ● the costs of satisfying any post-marketing requirements; ● the revenue, if any, received from commercial sales of product candidates we may develop for which we receive marketing approval; ● the costs and timing of preparing, filing and prosecuting applications for patents, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims, including claims of infringement, misappropriation or other violations of third-party intellectual property; ● the costs of operational, financial and management information systems and associated personnel; ● the associated costs in connection with any acquisition of in-licensed products, intellectual property and technologies; and ● the costs of operating as a public company.
Biggest changeOur future capital requirements will depend on many factors, including: ● the costs and scope of the continued development of our non-viral genetic medicine platforms; ● the identification of additional research programs and additional product candidates; ● the costs and timing of preparing, filing and prosecuting applications for patents; obtaining, maintaining, defending and enforcing our intellectual property rights and defending any intellectual property-related claims, including claims of infringement, misappropriation or other violations of third-party intellectual property; ● the scope, progress, costs and results of preclinical and clinical development for any product candidates we may develop; ● our research and development costs and the receipt of milestone payments under our collaboration with Moderna; ● the costs, timing and outcome of regulatory review of any product candidates we may develop; ● the cost and timing of completion of commercial-scale manufacturing activities, including the costs and resources required to manufacture our drug substance and drug product using external cleanroom facilities and/or CMOs; ● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any product candidates we may develop for which we receive marketing approval; 48 Table of Contents ● the costs of satisfying any post-marketing requirements; ● the revenue, if any, received from commercial sales of product candidates we may develop for which we receive marketing approval; ● the costs of operational, financial and management information systems and associated personnel; ● the extent to which our previously announced RIF achieves the anticipated cost savings; ● the associated costs in connection with any acquisition of in-licensed products, intellectual property and technologies; and ● the costs of operating as a public company.
The success of product candidates we may identify and develop will depend on many factors, including the following: ● timely and successful completion of IND-enabling preclinical studies, including toxicology studies, biodistribution studies and minimally efficacious dose studies in animals, where applicable; ● effective IND applications or comparable foreign applications that allow commencement of our planned clinical trials or future clinical trials for any product candidates we may develop; 51 Table of Contents ● successful enrollment and completion of clinical trials, including under the FDA’s GCPs, cGLPs, and any additional regulatory requirements from foreign regulatory authorities; ● positive results from our future clinical programs that support a finding of safety and effectiveness and an acceptable risk-benefit profile in the intended populations of any product candidates we may develop; ● receipt of marketing approvals from applicable regulatory authorities; ● establishment of arrangements through our own facilities or with third-party manufacturers for clinical supply and, where applicable, commercial manufacturing capabilities that satisfy cGMP requirements; ● establishment, maintenance, defense and enforcement of patent, trademark, trade secret and other intellectual property protection or non-patent regulatory exclusivity for any product candidates we may develop; ● commercial launch of any product candidates we may develop, if approved, whether alone or in collaboration with others; ● acceptance of the benefits and use of any product candidates we may develop, including method of administration, if and when approved, by patients, the medical community and third-party payers; ● effective competition with other therapies; ● maintenance of a continued acceptable safety, tolerability and efficacy profile of any product candidates we may develop following approval; and ● establishment and maintenance of healthcare insurance coverage and adequate reimbursement by payers.
The success of product candidates we may identify and develop will depend on many factors, including the following: ● timely and successful completion of IND-enabling preclinical studies, including toxicology studies, biodistribution studies and minimally efficacious dose studies in animals, where applicable; ● effective IND applications or comparable foreign applications that allow commencement of our planned clinical trials or future clinical trials for any product candidates we may develop; ● successful enrollment and completion of clinical trials, including under the FDA’s GCPs, cGLPs, and any additional regulatory requirements from foreign regulatory authorities; ● positive results from our future clinical programs that support a finding of safety and effectiveness and an acceptable risk-benefit profile in the intended populations of any product candidates we may develop; ● receipt of marketing approvals from applicable regulatory authorities; ● establishment of arrangements through our own facilities or with third-party manufacturers for clinical supply and, where applicable, commercial manufacturing capabilities that satisfy cGMP requirements; ● establishment, maintenance, defense and enforcement of patent, trademark, trade secret and other intellectual property protection or non-patent regulatory exclusivity for any product candidates we may develop; ● commercial launch of any product candidates we may develop, if approved, whether alone or in collaboration with others; 51 Table of Contents ● acceptance of the benefits and use of any product candidates we may develop, including method of administration, if and when approved, by patients, the medical community and third-party payers; ● effective competition with other therapies; ● maintenance of a continued acceptable safety, tolerability and efficacy profile of any product candidates we may develop following approval; and ● establishment and maintenance of healthcare insurance coverage and adequate reimbursement by payers.
The degree of market acceptance of any product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including: ● the efficacy and safety of such product candidates as demonstrated in clinical trials; ● the potential advantages and limitations compared to alternative treatments; ● the effectiveness of sales and marketing efforts; ● the cost of treatment in relation to alternative treatments; ● the clinical indications for which the product is approved; ● the convenience and ease of administration compared to alternative treatments; 69 Table of Contents ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● the strength of marketing and distribution support; ● the timing of market introduction of competitive products; ● the availability of third-party coverage and adequate reimbursement; ● the prevalence and severity of any side effects; and ● any restrictions on the use of our products, if approved, together with other medications.
The degree of market acceptance of any product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including: ● the efficacy and safety of such product candidates as demonstrated in clinical trials; ● the potential advantages and limitations compared to alternative treatments; ● the effectiveness of sales and marketing efforts; ● the cost of treatment in relation to alternative treatments; ● the clinical indications for which the product is approved; ● the convenience and ease of administration compared to alternative treatments; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● the strength of marketing and distribution support; ● the timing of market introduction of competitive products; 69 Table of Contents ● the availability of third-party coverage and adequate reimbursement; ● the prevalence and severity of any side effects; and ● any restrictions on the use of our products, if approved, together with other medications.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● our or our licensors’ ability to obtain, maintain and defend intellectual property and to enforce intellectual property rights against third parties; ● the extent to which our technology, product candidates and processes infringe, misappropriate or otherwise violate the intellectual property of the licensor that is not subject to the license agreement; ● the sublicensing of patent and other intellectual property rights under our license agreements; 75 Table of Contents ● our diligence, development, regulatory, commercialization, financial or other obligations under the license agreement and what activities satisfy those diligence obligations; ● the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our current or future licensors and us and our partners; and ● the priority of invention of patented technology.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● our or our licensors’ ability to obtain, maintain and defend intellectual property and to enforce intellectual property rights against third parties; ● the extent to which our technology, product candidates and processes infringe, misappropriate or otherwise violate the intellectual property of the licensor that is not subject to the license agreement; 75 Table of Contents ● the sublicensing of patent and other intellectual property rights under our license agreements; ● our diligence, development, regulatory, commercialization, financial or other obligations under the license agreement and what activities satisfy those diligence obligations; ● the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our current or future licensors and us and our partners; and ● the priority of invention of patented technology.
In addition, later discovery of previously unknown problems with our medicines, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including: ● restrictions on such medicines, manufacturers or manufacturing processes; ● restrictions on the labeling or marketing of a medicine; ● restrictions on the distribution or use of a medicine; ● requirements to conduct post-marketing clinical trials; ● receipt of warning or untitled letters; ● withdrawal of the medicines from the market; 92 Table of Contents ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of medicines; ● fines, restitution or disgorgement of profits or revenue; ● suspension or withdrawal of marketing approvals; ● suspension of any ongoing clinical trials; ● refusal to permit the import or export of our medicines; ● product seizure; and ● injunctions or the imposition of civil or criminal penalties.
In addition, later discovery of previously unknown problems with our medicines, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including: ● restrictions on such medicines, manufacturers or manufacturing processes; ● restrictions on the labeling or marketing of a medicine; ● restrictions on the distribution or use of a medicine; ● requirements to conduct post-marketing clinical trials; ● receipt of warning or untitled letters; ● withdrawal of the medicines from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of medicines; ● fines, restitution or disgorgement of profits or revenue; ● suspension or withdrawal of marketing approvals; 92 Table of Contents ● suspension of any ongoing clinical trials; ● refusal to permit the import or export of our medicines; ● product seizure; and ● injunctions or the imposition of civil or criminal penalties.
In October 2020, HHS and the FDA published a final rule allowing states and other entities to develop a SIP to import certain prescription drugs from Canada into the United States.
In October 2020, the HHS and the FDA published a final rule allowing states and other entities to develop SIP to import certain prescription drugs from Canada into the United States.
Restrictions under applicable federal and state healthcare laws and regulations include the following: ● the federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order, or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid; ● the federal False Claims Act imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting or causing to be presented, to the federal government, claims for payment or approval from Medicare, Medicaid or other government payers that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties; ● HIPAA, as further amended by the Health Information Technology for Economic and Clinical Health Act, which imposes certain requirements, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, healthcare clearinghouses and healthcare providers; ● the federal false statements statute, which 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; ● the federal transparency requirements under the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies to report to HHS information related to payments and other transfers of value to physicians and teaching hospitals and other covered recipients and ownership and investment interests held by physicians and their immediate family members and applicable group purchasing organizations; and ● analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payers, including private insurers, and certain state laws that require pharmaceutical companies to comply with the 94 Table of Contents pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures.
Restrictions under applicable federal and state healthcare laws and regulations include the following: ● the federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order, or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid; ● the federal False Claims Act imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting or causing to be presented, to the federal government, claims for payment or approval from Medicare, Medicaid or other government payers that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties; ● HIPAA, as further amended by the Health Information Technology for Economic and Clinical Health Act, which imposes certain requirements, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, healthcare clearinghouses and healthcare providers; ● the federal false statements statute, which 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; ● the federal transparency requirements under the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies to report to HHS information related to payments and other transfers of value to physicians and teaching hospitals and other covered recipients and ownership and investment interests held by physicians and their immediate family members and applicable group purchasing organizations; and ● analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party 95 Table of Contents payers, including private insurers, and certain state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures.
Collaborations involving our research programs or any product candidates we may develop pose numerous risks to us, including the following: ● collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; ● collaborators may not pursue development and commercialization of any product candidates we may develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities; ● collaborators may delay programs, preclinical studies or clinical trials, provide insufficient funding for programs, preclinical studies or clinical trials, stop a preclinical study or clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; 66 Table of Contents ● collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with any product candidates we may develop if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● collaborators may be acquired by a third party having competitive products or different priorities; ● collaborators with marketing and distribution rights to one or more medicines may not commit sufficient resources to the marketing and distribution of such medicine or medicines; ● collaborators may not properly obtain, maintain, enforce or defend our intellectual property or proprietary rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation; ● disputes may arise between the collaborators and us that result in the delay or termination of the research, development, or commercialization of our medicines or any product candidates we may develop or that result in costly litigation or arbitration that diverts management attention and resources; ● we may lose certain valuable rights under certain circumstances, including if we undergo a change of control; ● collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates we may develop; and ● collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
Collaborations involving our research programs or any product candidates we may develop, including our existing collaboration with Moderna, pose numerous risks to us, including the following: ● collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; ● collaborators may not pursue development and commercialization of any product candidates we may develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities; ● collaborators may delay programs, preclinical studies or clinical trials, provide insufficient funding for programs, preclinical studies or clinical trials, stop a preclinical study or clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; ● collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with any product candidates we may develop if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● collaborators may be acquired by a third party having competitive products or different priorities; ● collaborators with marketing and distribution rights to one or more medicines may not commit sufficient resources to the marketing and distribution of such medicine or medicines; ● collaborators may not properly obtain, maintain, enforce or defend our intellectual property or proprietary rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation; ● disputes may arise between the collaborators and us that result in the delay or termination of the research, development, or commercialization of our medicines or any product candidates we may develop or that result in costly litigation or arbitration that diverts management attention and resources; 66 Table of Contents ● we may lose certain valuable rights under certain circumstances, including if we undergo a change of control; ● collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates we may develop; and ● collaboration agreements, including our Collaboration Agreement with Moderna, may not lead to development or commercialization of product candidates in the most efficient manner or at all.
Additionally, many product candidates we may develop will require the manufacture of the ctLNP component, which may require processing steps that are more complex than those required for current products that utilize LNPs. In order to manufacture ctLNPs that are specialized for a given platform program, we may need to add biologic ligands to existing LNPs.
Additionally, many product candidates we may develop will require the manufacture of the ctLNP component, which may require processing steps that are more complex than those required for current products that utilize LNPs. In order to manufacture ctLNPs that are specialized for a given program, we may need to add biologic ligands to existing LNPs.
Our restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for the following types of proceedings: ● any derivative action or proceeding brought on our behalf; 108 Table of Contents ● any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or stockholders to our company or our stockholders; ● any action asserting a claim arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or ● any action asserting a claim arising pursuant to any provision of our restated certificate of incorporation or amended and restated bylaws (in each case, as they may be amended from time to time) or governed by the internal affairs doctrine.
Our restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have 109 Table of Contents jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for the following types of proceedings: ● any derivative action or proceeding brought on our behalf; ● any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or stockholders to our company or our stockholders; ● any action asserting a claim arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or ● any action asserting a claim arising pursuant to any provision of our restated certificate of incorporation or amended and restated bylaws (in each case, as they may be amended from time to time) or governed by the internal affairs doctrine.
Successful development of product candidates by us will require solving a number of issues, including the expansion of our ctLNP delivery system to tissues and cell types beyond the liver and retina and obtaining expression levels sufficient to address or ameliorate each target disease or indication.
Successful development of product candidates by us will require solving a number of issues, including the expansion of our ctLNP delivery system to tissues and cell types beyond the liver and obtaining expression levels sufficient to address or ameliorate each target disease or indication.
The process by which we identify and disclose product candidates may fail to yield product candidates for clinical development for a number of reasons, including those discussed in these risk factors and also: ● we may not be able to assemble sufficient resources to acquire or discover product candidates; ● competitors may develop alternatives that render our potential product candidates obsolete or less attractive; ● potential product candidates we develop may nevertheless be covered by third parties’ patents or other intellectual property rights; ● potential product candidates may, on further study, be shown to have harmful side effects, toxicities or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance; ● potential product candidates may not be effective in treating their targeted diseases or disorders; ● the market for a potential product candidate may change so that the continued development of that product candidate is no longer reasonable; ● a potential product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; or 58 Table of Contents ● the regulatory pathway for a potential product candidate may be too complex and difficult to navigate successfully or economically.
The process by which we identify and disclose product candidates may fail to yield product candidates for clinical development for a number of reasons, including those discussed in these risk factors and also: ● we may not be able to assemble sufficient resources to acquire or discover product candidates; ● competitors may develop alternatives that render our potential product candidates obsolete or less attractive; ● potential product candidates we develop may nevertheless be covered by third parties’ patents or other intellectual property rights; ● potential product candidates may, on further study, be shown to have harmful side effects, toxicities or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance; ● potential product candidates may not be effective in treating their targeted diseases or disorders; ● the market for a potential product candidate may change so that the continued development of that product candidate is no longer reasonable; ● a potential product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; or ● the regulatory pathway for a potential product candidate may be too complex and difficult to navigate successfully or economically.
Provisions in our restated certificate of incorporation and amended and restated bylaws may discourage, delay or prevent a merger, acquisition or other change in control of our company that stockholders may consider favorable, including transactions in which our stockholders might otherwise receive a premium for their shares.
Provisions in our restated certificate of incorporation and amended and restated bylaws, as amended, may discourage, delay or prevent a merger, acquisition or other change in control of our company that stockholders may consider favorable, including transactions in which our stockholders might otherwise receive a premium for their shares.
If we enter into any such arrangements with any third parties, we will likely have limited control over the amount and timing of resources that our collaborators dedicate to the development or commercialization of any product candidates we may seek to develop with them.
If we enter into any arrangements with third parties, we will likely have limited control over the amount and timing of resources that our collaborators dedicate to the development or commercialization of any product candidates we may seek to develop with them.
The risks we face in connection with acquisitions include: ● diversion of management time and focus from operating our business to addressing acquisition integration challenges; ● coordination of research and development efforts; ● retention of key employees from the acquired company; 101 Table of Contents ● changes in relationships with strategic partners as a result of product acquisitions or strategic positioning resulting from the acquisition; ● cultural challenges associated with integrating employees from the acquired company into our organization; ● the need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked sufficiently effective controls, procedures and policies; ● liability for activities of the acquired company before the acquisition, including intellectual property infringement claims, violation of laws, commercial disputes, tax liabilities and other known liabilities; ● unanticipated write-offs or charges; and ● litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders or other third parties.
The risks we face in connection with acquisitions include: ● diversion of management time and focus from operating our business to addressing acquisition integration challenges; ● coordination of research and development efforts; ● retention of key employees from the acquired company; ● changes in relationships with strategic partners as a result of product acquisitions or strategic positioning resulting from the acquisition; ● cultural challenges associated with integrating employees from the acquired company into our organization; ● the need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked sufficiently effective controls, procedures and policies; ● liability for activities of the acquired company before the acquisition, including intellectual property infringement claims, violation of laws, commercial disputes, tax liabilities and other known liabilities; ● unanticipated write-offs or charges; and ● litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders or other third parties.
For example, these persons, if they choose to act together, would significantly influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets.
For example, these persons, if they choose to act together, would influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets.
For example, we rely on a license from the NIH and the French Institutions, pursuant to which we have been granted a non-exclusive, worldwide, royalty-bearing license to certain patent rights related to our ceDNA construct, to make and have made, research and have researched, use and have used, sell and have sold, offer to sell and to import products for the treatment, prevention or palliation of any human disease, disorder or condition.
For example, we rely on a license from the NIH and the French Institutions, pursuant to which we have been granted a non-exclusive, worldwide, royalty-bearing license to certain patent rights related to our ceDNA and iqDNA, to make and have made, research and have researched, use and have used, sell and have sold, offer to sell and to import products for the treatment, prevention or palliation of any human disease, disorder or condition.
This limited supply, combined with any problems that may arise during the manufacturing process development, may create long lead times to manufacture or procure starting materials. The progress of our non-viral genetic medicine platform is highly dependent on these suppliers providing us or our contract manufacturer with the necessary starting materials that meet our requirements in a timely manner.
This limited supply, combined with any problems that may arise during the manufacturing process development, may create long lead times to manufacture or procure starting materials. The progress of our non-viral genetic medicine platforms is highly dependent on these suppliers providing us or our contract manufacturer with the necessary starting materials that meet our requirements in a timely manner.
To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel.
To achieve and manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel.
The physical expansion of our operations may lead to significant costs and may divert financial resources from other projects, such as the development of our product candidates.
Further, the physical expansion of our operations may lead to significant costs and may divert financial resources from other projects, such as the development of our product candidates.
A number of risk factors common to the manufacturing of biologics and drugs could also cause production issues or interruptions for our genetic medicines, including raw material or starting material variability in terms of quality, productivity or stability issues, shortages of any kind, shipping, distribution, storage and supply chain failures, growth media contamination, equipment malfunctions, operator errors, facility contamination, labor problems, natural disasters, disruption in utility services, terrorist activities, pandemics or “acts of god” that are beyond our or our contract manufacturers’ control.
A number of risk factors common to the manufacturing of biologics and drugs could also cause production issues or interruptions for our genetic medicines, including raw material or starting material variability in terms of quality, productivity or stability issues, shortages of any kind, shipping, distribution, storage and supply chain failures, growth media contamination, equipment malfunctions, 60 Table of Contents operator errors, facility contamination, labor problems, natural disasters, disruption in utility services, terrorist activities, pandemics or “acts of god” that are beyond our or our contract manufacturers’ control.
If our or our partners’ or service providers’ privacy or data security measures fail to comply with the GDPR requirements, we may be subject to litigation, regulatory investigations, enforcement notices requiring us to change the 99 Table of Contents way we use personal data and/or fines of up to 20 million Euros or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, as well as compensation claims by affected individuals, negative publicity, reputational harm and a potential loss of business and goodwill.
If our or our partners’ or service providers’ privacy or data security measures fail to comply with the GDPR requirements, we may be subject to litigation, regulatory investigations, enforcement notices requiring us to change the way we use personal data and/or fines of up to 20 million euros or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, as well as compensation claims by affected individuals, negative publicity, reputational harm and a potential loss of business and goodwill.
If we are unable to identify and advance product candidates through preclinical studies and clinical trials, obtain marketing approval and ultimately commercialize them, or experience significant delays in doing so, our business will be materially harmed. We are very early in our development efforts and have invested our research efforts to date in developing our platform.
If we are unable to identify and advance product candidates through preclinical studies and clinical trials, obtain marketing approval and ultimately commercialize them, or experience significant delays in doing so, our business will be materially harmed. We are very early in our development efforts and have invested our research efforts to date in developing our platforms.
Other events that may prevent successful or timely completion of clinical development include: ● delays in reaching a consensus with regulatory authorities on trial design; 53 Table of Contents ● delays in reaching agreement on acceptable terms with prospective clinical research organizations, or CLROs, and clinical trial sites; ● delays in opening clinical trial sites or obtaining required institutional review board, or IRB, or independent ethics committee approval, or the equivalent review groups for sites outside the United States, at each clinical trial site; ● imposition of a clinical hold by regulatory authorities as a result of a serious adverse event or after an inspection of our clinical trial operations or trial sites; ● failure by us, any CLROs we engage or any other third parties to adhere to clinical trial requirements; ● failure to manufacture in accordance with the FDA’s GCPs; ● failure by physicians to adhere to delivery protocols leading to variable results; ● delays in the testing, validation, manufacturing and delivery of any product candidates we may develop to the clinical sites, including delays by third parties with whom we have contracted to perform certain of those functions; ● delays or difficulties faced by the external cleanroom facilities and/or CMOs we intend to use to manufacture our drug substance and drug product; ● delays in having subjects complete participation in a trial or return for post-treatment follow-up; ● clinical trial sites or subjects dropping out of a trial; ● selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data; ● impact of the COVID-19 pandemic, our response thereto and responses by other businesses and governments; ● occurrence of serious adverse events, including unexpected events, associated with the product candidate that are viewed to outweigh its potential benefits; ● occurrence of serious adverse events associated with a product candidate in development by another company, which are viewed to outweigh its potential benefits, and which may negatively impact the perception of our product due to a similarity in technology or approach; ● changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; ● changes in the legal or regulatory regimes domestically or internationally related to patient rights and privacy; or ● lack of adequate funding to continue the clinical trial.
Other events that may prevent successful or timely completion of clinical development include: ● delays in reaching a consensus with regulatory authorities on trial design; ● delays in reaching agreement on acceptable terms with prospective clinical research organizations, or CLROs, and clinical trial sites; ● delays in opening clinical trial sites or obtaining required institutional review board, or IRB, or independent ethics committee approval, or the equivalent review groups for sites outside the United States, at each clinical trial site; 53 Table of Contents ● imposition of a clinical hold by regulatory authorities as a result of a serious adverse event or after an inspection of our clinical trial operations or trial sites; ● failure by us, any CLROs we engage or any other third parties to adhere to clinical trial requirements; ● failure to manufacture in accordance with the FDA’s GCPs; ● failure by physicians to adhere to delivery protocols leading to variable results; ● delays in the testing, validation, manufacturing and delivery of any product candidates we may develop to the clinical sites, including delays by third parties with whom we have contracted to perform certain of those functions; ● delays or difficulties faced by the external cleanroom facilities and/or CMOs we intend to use to manufacture our drug substance and drug product; ● delays in having subjects complete participation in a trial or return for post-treatment follow-up; ● clinical trial sites or subjects dropping out of a trial; ● selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data; ● occurrence of serious adverse events, including unexpected events, associated with the product candidate that are viewed to outweigh its potential benefits; ● occurrence of serious adverse events associated with a product candidate in development by another company, which are viewed to outweigh its potential benefits, and which may negatively impact the perception of our product due to a similarity in technology or approach; ● changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; ● changes in the legal or regulatory regimes domestically or internationally related to patient rights and privacy; or ● lack of adequate funding to continue the clinical trial.
Any such setbacks in our clinical development could materially harm our business and results of operations. We may not be successful in our efforts to identify, discover or develop potential product candidates. The success of our business depends primarily upon our ability to identify, develop and commercialize product candidates based on our non-viral genetic medicine platform.
Any such setbacks in our clinical development could materially harm our business and results of operations. We may not be successful in our efforts to identify, discover or develop potential product candidates. The success of our business depends primarily upon our ability to identify, develop and commercialize product candidates based on our non-viral genetic medicine platforms.
Our success depends in large part on our and our licensors’ ability to obtain and maintain patent and other intellectual property protection in the United States and other jurisdictions with respect to any product candidates we may develop and our technology, including our ceDNA constructs, ctLNP delivery system, manufacturing processes and their respective components, formulations, combination therapies, methods of treatment, processes and development that are important to our business, as well as successfully defending these patents and other intellectual property against third-party challenges.
Our success depends in large part on our and our licensors’ ability to obtain and maintain patent and other intellectual property protection in the United States and other jurisdictions with respect to any product candidates we may develop and our technology, including our ctLNP delivery system, iqDNA, manufacturing processes and their respective components, formulations, combination therapies, methods of treatment, processes and development that are important to our business, as well as successfully defending these patents and other intellectual property against third-party challenges.
Our ability to stop third parties from making, using, selling, marketing, offering to sell, importing and commercializing any product candidates we may develop and our technology is dependent upon the extent to which we have rights under valid and enforceable patents and other intellectual property that cover our platform and technology.
Our ability to stop third parties from making, using, selling, marketing, offering to sell, importing and commercializing any product candidates we may develop and our technology is dependent upon the extent to which we have rights under valid and enforceable patents and other intellectual property that cover our platforms and technology.
Litigation and legislation over the PPACA are likely to continue, with unpredictable and uncertain results. 95 Table of Contents The Trump Administration also took executive actions to undermine or delay implementation of the PPACA, including directing federal agencies with authorities and responsibilities under the PPACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the PPACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.
Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results. 96 Table of Contents The Trump Administration also took executive actions to undermine or delay implementation of the PPACA, including directing federal agencies with authorities and responsibilities under the PPACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the PPACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.
Moreover, in 2012, the USPTO issued a guidance memo to patent examiners indicating that process claims directed to a law of nature, a natural phenomenon or a naturally occurring relation or correlation that do not include additional elements or steps that integrate the natural principle into the claimed invention such that the natural principle is practically applied and the claim amounts to significantly more than the natural principle itself should be rejected as directed to patent-ineligible subject matter.
Moreover, in 2012, the USPTO issued a guidance memo to patent examiners indicating that process claims directed to a law of nature, a natural phenomenon or a naturally occurring relation or correlation that do not include additional elements or steps that integrate the natural principle into the claimed invention such that the natural principle is practically applied and the claim amounts to 82 Table of Contents significantly more than the natural principle itself should be rejected as directed to patent-ineligible subject matter.
Any of the foregoing could harm our business 105 Table of Contents and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business. Furthermore, our stock price may decline due in part to the volatility of the stock market and any general economic downturn.
Any of the foregoing could 106 Table of Contents harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business. Furthermore, our stock price may decline due in part to the volatility of the stock market and any general economic downturn.
Safety issues that might arise in trials for genetic medicines other than our own could adversely impact public attitudes towards our platform and product candidates notwithstanding that the genetic medicines we are developing are non-viral. There are a number of clinical trials of genetic medicines ongoing.
Safety issues that might arise in trials for genetic medicines other than our own could adversely impact public attitudes towards our platforms and product candidates notwithstanding that the genetic medicines we are developing are non-viral. There are a number of clinical trials of genetic medicines ongoing.
We have entered into an agreement with an external cleanroom facility at which we expect to manufacture cGMP-compliant clinical and initial commercial supply of ceDNA using RES that will allow us to retain control over personnel, quality, infrastructure and process.
We have entered into an agreement with an external cleanroom facility at which we expect to manufacture cGMP-compliant clinical and initial commercial supply of iqDNA using RES that will allow us to retain control over personnel, quality, infrastructure and process.
If third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our studies in accordance with regulatory requirements or our stated study plans and protocols, we will not be able to complete, or may be delayed in completing, the preclinical studies and clinical trials required to support future IND submissions and approval of any product candidates we may develop.
If third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our studies in accordance with regulatory requirements or our stated study plans and protocols, we will not be able to complete, or may 64 Table of Contents be delayed in completing, the preclinical studies and clinical trials required to support future IND submissions and approval of any product candidates we may develop.
If our CROs or CLROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols or regulatory requirements, or for any other reasons, our studies may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize any product candidates we may develop.
If our CROs or CLROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols or regulatory requirements, or for any other reasons, our studies may be extended, delayed or terminated, and we may not be able to obtain regulatory approval 65 Table of Contents for, or successfully commercialize any product candidates we may develop.
Our non-viral genetic medicine platform and RES are novel, and the combination of a novel manufacturing process and novel constructs with untested development of the process at a larger scale may cause us to experience delays in satisfying regulatory authorities or production problems that result in delays in our development or commercialization programs, limit the supply of any product candidates we may develop or otherwise harm our business.
Our non-viral genetic medicine platforms are novel, and the combination of a novel manufacturing process and novel constructs with untested development of the process at a larger scale may cause us to experience delays in satisfying regulatory authorities or production problems that result in delays in our development or commercialization programs, limit the supply of any product candidates we may develop or otherwise harm our business.
Although ceDNA-derived expression has been observed in in vivo and in vitro studies to be episomal, meaning that it can deliver genetic material outside of the chromosome without being directly incorporated into or altering the cell’s genome, we do not yet know if our ceDNA constructs will behave similarly to these AAV genomes.
Although iqDNA-derived expression has been observed in in vivo and in vitro studies to be episomal, meaning that it can deliver genetic material outside of the chromosome without being directly incorporated into or altering the cell’s genome, we do not yet know if our iqDNA will behave similarly to these AAV genomes.
There can be no assurance that any development problems we experience in the future related to our non-viral genetic medicine platform will not cause significant delays or unanticipated costs, or that such development problems can be solved.
There can be no assurance that any development problems we experience in the future related to our non-viral genetic medicine platforms will not cause significant delays or unanticipated costs, or that such development problems can be solved.
In addition, although we believe our platform will position us to rapidly expand our portfolio of programs beyond our current programs, we have not yet successfully developed any product candidate and our ability to expand our portfolio may never materialize.
In addition, although we believe our platforms will position us to rapidly expand our portfolio of programs beyond our current programs, we have not yet successfully developed any product candidate and our ability to expand our portfolio may never materialize.
We own certain patent applications, and exclusively in-license from UMass and Voyager Therapeutics, Inc. certain other patent applications, which cover our ceDNA platform structure, use and/or function, our ctLNP platform and its use, and ceDNA manufacturing processes, as applicable.
We own certain patent applications, and exclusively in-license from UMass and Voyager Therapeutics, Inc. certain other patent applications, which cover our ceDNA construct structure, use and/or function, our ctLNP platform and its use, and RES manufacturing processes, as applicable.
Our efforts to enforce or protect our proprietary rights related to trademarks, 83 Table of Contents trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations or prospects.
Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations or prospects.
Under Omnibus legislation signed by President Trump on December 27, 2020, the requirement for a product to show clinical superiority 90 Table of Contents applies to drugs and biologics that received orphan drug designation before enactment of FDARA in 2017, but have not yet been approved or licensed by the FDA.
Under Omnibus legislation signed by President Trump on December 27, 2020, the requirement for a product to show clinical superiority applies to drugs and biologics that received orphan drug designation before enactment of FDARA in 2017, but have not yet been approved or licensed by the FDA.
We are focusing our research and development efforts on our non-viral genetic medicine platform, but other genetic medicine technologies may be discovered that provide significant advantages over our platform, which could materially harm our business.
We are focusing our research and development efforts on our non-viral genetic medicine platforms, but other genetic medicine technologies may be discovered that provide significant advantages over our platforms, which could materially harm our business.
In addition, certain aspects of our non-viral genetic medicines may induce immune reactions from the lipid as well as adverse reactions within liver pathways or degradation of the LNP into its component molecules or metabolites, any of which could lead to significant adverse events in one or more of our future clinical trials.
In addition, certain aspects of our non-viral genetic medicines may induce immune reactions from the lipid as well as adverse reactions within liver pathways or degradation of the LNP into its component molecules or metabolites, 56 Table of Contents any of which could lead to significant adverse events in one or more of our future clinical trials.
Even when assays are developed, they may need to be further tested, qualified and validated, which may take substantial time and resources. Because of the lagging nature of analytical testing, we may proceed with additional manufacturing and other development activities without having first fully characterized our manufactured materials.
Even when assays are developed, they may need to be further tested, qualified and validated, which may take substantial time and resources. Because of the lagging nature of analytical testing, we may proceed with additional manufacturing and other development activities 61 Table of Contents without having first fully characterized our manufactured materials.
In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be 81 Table of Contents unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own.
In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own.
The IRA in particular includes a one percent excise tax imposed on certain stock repurchases by publicly traded companies, which generally applies to any acquisition of stock by the publicly traded company (or certain of its affiliates) from a stockholder of the company in exchange for money or other property (other than stock of the company itself), subject to a de minimis exception.
The IRA in particular includes a one percent excise tax imposed on certain stock repurchases by publicly 108 Table of Contents traded companies, which generally applies to any acquisition of stock by the publicly traded company (or certain of its affiliates) from a stockholder of the company in exchange for money or other property (other than stock of the company itself), subject to a de minimis exception.
There can be no certainty that these companies will not develop genetic medicines that address some of these limitations and that may be considered to have advantages over our non-viral genetic medicine platform.
There can be no certainty that these companies will not develop genetic medicines that address some of these limitations and that may be considered to have advantages over our non-viral genetic medicine platforms.
We and our licensors have sought, and will seek, to protect our proprietary position by filing patent applications in the United States and abroad related to certain technologies and our platform that are important to our business.
We and our licensors have sought, and will seek, to protect our proprietary position by filing patent applications in the United States and abroad related to certain technologies and our platforms that are important to our business.
Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets 84 Table of Contents become known by our competitors or other third parties, are inadvertently incorporated into the technology of others or are disclosed or used in violation of these agreements.
Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors or other third parties, are inadvertently incorporated into the technology of others or are disclosed or used in violation of these agreements.
In addition, state NOLs generated in one state cannot be used to offset income generated in another state. For these reasons, even if we attain profitability, we may be unable to use a material portion of our NOLs and other tax attributes. Risks related to discovery and development We are very early in our development efforts.
In addition, state NOLs generated in one state cannot be used to offset income generated in another state. For these reasons, even if we attain profitability, we may be unable to use a material portion of our NOLs and other tax attributes. 50 Table of Contents Risks related to discovery and development We are very early in our development efforts.
Lipid nanoparticles have been shown to induce necrosis in the liver at certain doses and induce infusion related reactions, as well as to initiate systemic inflammatory responses. While our ctLNPs are a new generation of LNP, there can be no assurance that our ctLNPs will not have undesired effects.
LNPs have been shown to induce necrosis in the liver at certain doses and induce infusion related reactions, as well as to initiate systemic inflammatory responses. While our ctLNPs are a new generation of LNP, there can be no assurance that our ctLNPs will not have undesired effects.
If we successfully develop product candidates, we may encounter problems achieving adequate quantities and quality that meet FDA, EMA or other comparable applicable foreign standards or specifications with consistent and acceptable production yields and costs and the regulatory review and approval process may be more 61 Table of Contents expensive or take longer than for other product candidates that may be produced using manufacturing processes with which such regulatory agencies are more familiar.
If we successfully develop product candidates, we may encounter problems achieving adequate quantities and quality that meet FDA, EMA or other comparable applicable foreign standards or specifications with consistent and acceptable production yields and costs and the regulatory review and approval process may be more expensive or take longer than for other product candidates that may be produced using manufacturing processes with which such regulatory agencies are more familiar.
Many of these types of side effects have been seen for LNPs. Once delivered to target cells, DNA-based payloads, such as those carried by our ceDNA constructs, may interact with host proteins or chromosomal DNA in the cell endosome, cytosol or nucleus.
Many of these types of side effects have been seen for LNPs. Once delivered to target cells, DNA-based payloads, such as those carried by our iqDNA, may interact with host proteins or chromosomal DNA in the cell endosome, cytosol or nucleus.
As a result, our financial results and commercial prospects would be harmed, our costs could increase, and our ability to generate revenues could be delayed. We may enter into collaborations with third parties for the research, development and commercialization of certain of the product candidates we may develop.
As a result, our financial results and commercial prospects would be harmed, our costs could increase, and our ability to generate revenues could be delayed. We have entered into, and may continue to enter into, collaborations with third parties for the research, development and commercialization of certain of the product candidates we may develop.
Any of these events could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects. Furthermore, our owned and in-licensed patent rights may be subject to a reservation of rights by one or more third parties.
Any of these events could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects. 76 Table of Contents Furthermore, our owned and in-licensed patent rights may be subject to a reservation of rights by one or more third parties.
Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation and our business, financial condition, results of operations or prospects.
Even if we are not determined to have violated these laws, government investigations into these issues 101 Table of Contents typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation and our business, financial condition, results of operations or prospects.
As a result, if these stockholders were to choose to act together, they would be able to significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs.
As a result, if these stockholders were to choose to act together, they would be able to influence matters submitted to our stockholders for approval, as well as our management and affairs.
Any performance failure on the part of our suppliers could delay the development and potential commercialization of any product candidates we may develop, including limiting supplies necessary for clinical trials and regulatory approvals, which would have a material adverse effect on our business.
Any 63 Table of Contents performance failure on the part of our suppliers could delay the development and potential commercialization of any product candidates we may develop, including limiting supplies necessary for clinical trials and regulatory approvals, which would have a material adverse effect on our business.
Even if the endpoints are deemed clinically meaningful, we may not achieve these endpoints to a degree of statistical significance, particularly because many of the diseases we are targeting with our platform have small patient populations, making development of large and rigorous clinical trials more difficult.
Even if the endpoints are deemed clinically meaningful, we may not achieve these endpoints to a degree of statistical significance, particularly because many of the diseases we are targeting have small patient populations, making development of large and rigorous clinical trials more difficult.
Furthermore, product candidates are subject to continued preclinical safety studies, which may be conducted 52 Table of Contents concurrently with our clinical testing. The outcomes of these safety studies may delay the launch of or enrollment in future clinical trials and could impact our ability to continue to conduct our clinical trials.
Furthermore, product candidates are subject to continued preclinical safety studies, which may be conducted concurrently with our clinical testing. The outcomes of these safety studies may delay the launch of or enrollment in future clinical trials and could impact our ability to continue to conduct our clinical trials.
These difficulties may include those related to production costs and yields, quality control and quality assurance testing, stability of the product, operator error, shortages of qualified personnel, as 60 Table of Contents well as difficulty in compliance with strictly enforced federal, state and foreign regulations.
These difficulties may include those related to production costs and yields, quality control and quality assurance testing, stability of the product, operator error, shortages of qualified personnel, as well as difficulty in compliance with strictly enforced federal, state and foreign regulations.
The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products into the healthcare market.
The downward pressure on healthcare costs in general, particularly 70 Table of Contents prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products into the healthcare market.
A loss of key personnel or their work product could hamper or prevent our ability to commercialize any product candidates we may develop and our technology, which would have a material adverse effect on our business, results of operations, financial condition and prospects.
A loss of key personnel or their work product could hamper or prevent our ability to commercialize any product candidates we may develop and our technology, which would have a material adverse effect on our business, results of operations, financial condition and 81 Table of Contents prospects.
We may be unable to hire, train, retain or motivate these personnel on acceptable terms given the competition among 100 Table of Contents numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
We may be unable to hire, train, retain or motivate these personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
Any failure to obtain or maintain patent protection with respect to our ceDNA constructs, ctLNP delivery system, manufacturing processes or our other product candidates and technology would have a material adverse effect on our business, financial condition, results of operations and prospects.
Any failure to obtain or maintain patent protection with respect to our ctLNP delivery system, iqDNA, manufacturing processes or our other product candidates and technology would have a material adverse effect on our business, financial condition, results of operations and prospects.
When new technologies are developed with government funding, in order to secure ownership of patent rights 76 Table of Contents related to the technologies, the recipient of such funding is required to comply with certain government regulations, including timely disclosing the inventions claimed in such patent rights to the U.S. government and timely electing title to such inventions.
When new technologies are developed with government funding, in order to secure ownership of patent rights related to the technologies, the recipient of such funding is required to comply with certain government regulations, including timely disclosing the inventions claimed in such patent rights to the U.S. government and timely electing title to such inventions.
If we were to experience a significant cybersecurity breach of our information systems or data, the costs associated with the investigation, remediation and potential notification of the breach to counterparties and data subjects could be material. In addition, our 102 Table of Contents remediation efforts may not be successful.
If we were to experience a significant cybersecurity breach of our information systems or data, the costs associated with the investigation, remediation and potential notification of the breach to counterparties and data subjects could be material. In addition, our remediation efforts may not be successful.
Outside parties may: ● have staffing difficulties; ● fail to comply with contractual obligations; ● experience regulatory compliance issues; 64 Table of Contents ● undergo changes in priorities or become financially distressed; or ● form relationships with other entities, some of which may be our competitors.
Outside parties may: ● have staffing difficulties; ● fail to comply with contractual obligations; ● experience regulatory compliance issues; ● undergo changes in priorities or become financially distressed; or ● form relationships with other entities, some of which may be our competitors.
If we are unable to raise additional funds through equity or debt financings or other arrangements when needed or on terms acceptable to us, we would 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.
If we are unable to raise additional funds through equity or debt 49 Table of Contents financings or other arrangements when needed or on terms acceptable to us, we would 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.
Competing 67 Table of Contents products, either developed by the collaborators or strategic partners or to which the collaborators or strategic partners have rights, may result in the withdrawal of partner support for our product candidates we may develop. Some of our collaborators or strategic partners could also become our competitors in the future.
Competing products, either developed by the collaborators or strategic partners or to which the collaborators or strategic partners have rights, may result in the withdrawal of partner support for our product candidates we may develop. Some of our collaborators or strategic partners could also become our competitors in the future.
If we are unable to do so, we may be 78 Table of Contents unable to develop or commercialize the affected product candidates, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
If we are unable to do so, we may be unable to develop or commercialize the affected product candidates, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Successfully developing product candidates for and fully understanding the regulatory and manufacturing pathways to all of these therapeutic areas and disease states requires a significant depth of talent, resources and corporate processes in order to allow simultaneous execution across multiple areas.
Successfully developing product candidates for and fully understanding the regulatory and manufacturing pathways to all of these therapeutic areas and diseases requires a significant depth of talent, resources and corporate processes in order to allow simultaneous execution across multiple areas.
If we are unable to identify and discover suitable product candidates for clinical development, this would adversely impact our business strategy and our financial position and share price and could potentially cause us to cease operations. The genetic medicine field is relatively new and evolving rapidly.
If we are unable to identify and discover suitable product candidates for clinical development, this would adversely impact our business strategy and our financial position and share price and could potentially cause us to cease operations. 58 Table of Contents The genetic medicine field is relatively new and evolving rapidly.
We intend to manufacture drug substance and drug product using external cleanroom facilities and/or CMOs, which will require significant resources. If we fail to successfully execute this strategy, our business will be materially harmed.
Risks related to manufacturing We intend to manufacture drug substance and drug product using external cleanroom facilities and/or CMOs, which will require significant resources. If we fail to successfully execute this strategy, our business will be materially harmed.
Poor control of production processes can lead to the introduction of adventitious agents or other 62 Table of Contents contaminants or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final product testing.
Poor control of production processes can lead to the introduction of adventitious agents or other contaminants or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final product testing.
In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We or these third parties may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all.
In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We or these third parties may not obtain approvals from regulatory 88 Table of Contents authorities outside the United States on a timely basis, if at all.
If we and such collaborators are not able to comply with post-approval regulatory requirements, we and such collaborators could have the marketing approvals for our products withdrawn by regulatory authorities and our, or such collaborators’, ability to market any future products could be limited, which could adversely affect our ability to 91 Table of Contents achieve or sustain profitability.
If we and such collaborators are not able to comply with post-approval regulatory requirements, we and such collaborators could have the marketing approvals for our products withdrawn by regulatory authorities and our, or such collaborators’, ability to market any future products could be limited, which could adversely affect our ability to achieve or sustain profitability.
As we are initially seeking to identify and develop product candidates to treat diseases using novel technologies, there is heightened risk that the FDA, the EMA or other regulatory authority may not consider the clinical trial endpoints that we propose to provide clinically meaningful results.
As we are initially seeking to identify and develop product candidates to treat diseases using novel technologies, there is heightened risk that the FDA, the EMA or other regulatory authority may not consider the clinical trial endpoints that we 86 Table of Contents propose to provide clinically meaningful results.
Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration, and the proposed collaborator’s evaluation of a number of factors.
Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms 67 Table of Contents and conditions of the proposed collaboration, and the proposed collaborator’s evaluation of a number of factors.
Other countries allow companies to fix their own prices for products but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount 70 Table of Contents that we are able to charge for product candidates.
Other countries allow companies to fix their own prices for products but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for product candidates.

… 281 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

2 edited+2 added−1 removed1 unchanged
Biggest changeRES production requires a much smaller manufacturing footprint than previously anticipated, and consequently, we are seeking one or more third parties to assume our lease or sublease the property. In the future, we may lease, operate, purchase or construct additional facilities in which to conduct expanded research, development and manufacturing activities and support future commercial operations.
Biggest changeWe will vigorously defend the action and our rights with respect to this matter. In the future, we may lease, operate, purchase or construct additional facilities in which to conduct expanded research, development and manufacturing activities and support future commercial operations.
ITEM 2. PROPERTIES Our headquarters are located at 301 Binney Street, Cambridge, Massachusetts, where we occupy approximately 71,562 square feet of research and development, laboratory and office space. This lease expires in 2029.
ITEM 2. PROPERTIES Our headquarters are located at 301 Binney Street, Cambridge, Massachusetts, where we occupy approximately 71,562 square feet of research and development, laboratory and office space. This lease expires in 2029. In July 2021, we entered into a 12-year operating lease to build out an approximately 104,000 square foot cGMP compliant manufacturing facility in Waltham, Massachusetts .
Removed
In July 2021, we entered into a 12-year operating lease to build out an approximately 104,000 square foot cGMP compliant manufacturing facility in Waltham, Massachusetts intended for ceDNA manufacturing utilizing RES for cGMP-compliant clinical and initial commercial. Following additional process development of RES, we achieved a significant increase in scale, while maintaining high productivity and ceDNA purity.
Added
On January 31, 2024, we notified the landlord of termination of the Seyon Lease due to the landlord’s breach of its obligations to us under the Seyon Lease and returned possession of the premises to the landlord, effective January 31, 2024.
Added
On February 20, 2024, the landlord served us with a complaint, filed in Massachusetts Superior Court, with respect to the Seyon Lease. The complaint seeks declaratory judgment that we unlawfully terminated the Seyon Lease and also asserts a claim for breach of contract damages. Our responsive pleading is due April 1, 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We were not subject to any material legal proceedings during the years ended December 31, 2022 and 2021. ​ ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 109 Table of Contents PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We were not subject to any material legal proceedings during the years ended December 31, 2023 and 2022. ​ ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 111 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed8 unchanged
Biggest changeThe stockholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder return. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6/12/2020 12/31/2020 ​ 12/31/2021 ​ 12/31/2022 Generation Bio Co. ​ $ 100 ​ $ 115 ​ $ 29 ​ $ 16 Nasdaq Composite Total Return (IXIC) ​ $ 100 ​ $ 134 ​ $ 163 ​ $ 109 Nasdaq Biotechnology Total Return (NBI) ​ $ 100 ​ $ 118 ​ $ 118 ​ $ 105 ​ This graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any 110 Table of Contents of our filings under the Securities Act of 1933, as amended, or the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Biggest changeThe stockholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder return. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6/12/2020 12/31/2020 ​ 12/31/2021 ​ 12/31/2022 ​ 12/31/2023 Generation Bio Co. ​ $ 100 ​ $ 115 ​ $ 29 ​ $ 16 ​ $ 7 Nasdaq Composite Total Return (IXIC) ​ $ 100 ​ $ 134 ​ $ 163 ​ $ 109 ​ $ 157 Nasdaq Biotechnology Total Return (NBI) ​ $ 100 ​ $ 118 ​ $ 118 ​ $ 105 ​ $ 109 ​ 112 Table of Contents This graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
There has been no material change in our planned use of the net proceeds from the IPO as described in our final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on June 12, 2020. Recent Sales of Unregistered Securities None. Purchases of Equity Securities None. ​ ITEM 6. [RESERVED] ​ 111 Table of Contents
There has been no material change in our planned use of the net proceeds from the IPO as described in our final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on June 12, 2020. Recent Sales of Unregistered Securities None. Purchases of Equity Securities None. ​ ITEM 6. [RESERVED] ​ 113 Table of Contents
Stock Performance Graph The following graph shows the total stockholder’s return on an investment of $100 in cash at market close on June 12, 2020 (the first day of trading of our common stock), through December 31, 2022 for (i) our common stock, (ii) the Nasdaq Composite Index and (iii) the Nasdaq Biotechnology Index.
Stock Performance Graph The following graph shows the total stockholder’s return on an investment of $100 in cash at market close on June 12, 2020 (the first day of trading of our common stock), through December 31, 2023 for (i) our common stock, (ii) the Nasdaq Composite Index and (iii) the Nasdaq Biotechnology Index.
Prior to this time, there was no public market for our common stock. Holders of Our Common Stock As of February 17, 2023, there were approximately 50 holders of record of shares of our common stock. This number does not include stockholders for whom shares are held in “nominee” or “street” name.
Prior to this time, there was no public market for our common stock. Holders of Our Common Stock As of February 29, 2024, there were approximately 61 holders of record of shares of our common stock. This number does not include stockholders for whom shares are held in “nominee” or “street” name.

Item 7. Management's Discussion & Analysis

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

52 edited+36 added−23 removed31 unchanged
Biggest changeResults of Operations The following table summarizes our results of operations: 116 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (in thousands) ​ 2022 ​ ​ 2021 ​ 2020 ​ 2022 vs 2021 ​ 2021 vs 2020 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ $ 96,718 ​ $ 85,247 ​ $ 58,532 ​ $ 11,471 ​ $ 26,715 ​ General and administrative ​ 44,464 ​ ​ 33,854 ​ ​ 22,582 ​ ​ 10,610 ​ ​ 11,272 ​ Total operating expenses ​ 141,182 ​ ​ 119,101 ​ ​ 81,114 ​ ​ 22,081 ​ ​ 37,987 ​ Loss from operations ​ (141,182) ​ ​ (119,101) ​ ​ (81,114) ​ ​ (22,081) ​ ​ (37,987) ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) and interest income, net ​ 4,543 ​ ​ (50) ​ ​ 591 ​ ​ 4,593 ​ ​ (641) ​ Net loss ​ $ (136,639) ​ $ (119,151) ​ $ (80,523) ​ $ (17,488) ​ $ (38,628) ​ ​ Comparison of the Years Ended December 31, 2022 and 2021 ​ Research and development expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (in thousands) ​ 2022 2021 2020 ​ 2022 vs 2021 ​ 2021 vs 2020 ​ Personnel-related ​ $ 29,693 ​ $ 24,908 ​ $ 17,461 ​ $ 4,785 ​ $ 7,447 ​ Facilities ​ 22,518 ​ 10,527 ​ 9,394 ​ 11,991 ​ 1,133 ​ Preclinical and manufacturing ​ ​ 15,084 ​ ​ 23,128 ​ ​ 16,849 ​ ​ (8,044) ​ ​ 6,279 ​ Stock-based compensation ​ 12,405 ​ 9,316 ​ 4,301 ​ 3,089 ​ 5,015 ​ Lab supplies ​ 5,063 ​ 7,445 ​ 4,002 ​ (2,382) ​ 3,443 ​ Consulting and professional services ​ 3,357 ​ 3,164 ​ 3,031 ​ 193 ​ 133 ​ Other ​ 8,598 ​ 6,759 ​ 3,494 ​ 1,839 ​ 3,265 ​ Total research and development expenses ​ $ 96,718 ​ $ 85,247 ​ $ 58,532 ​ $ 11,471 ​ $ 26,715 ​ ​ Research and development expenses were $96.7 million for the year ended December 31, 2022 compared to $85.2 million for the year ended December 31, 2021.
Biggest changeFor additional information on our collaboration with Moderna and the accounting thereunder, refer to Note 4, Collaboration and License Agreements. ​ Research and development expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (in thousands) 2023 2022 ​ 2021 2023 vs 2022 2022 vs 2021 ​ Personnel-related ​ $ 33,403 ​ $ 29,693 ​ $ 24,908 ​ $ 3,710 ​ $ 4,785 ​ Preclinical and manufacturing ​ ​ 20,675 ​ ​ 15,084 ​ ​ 23,128 ​ ​ 5,591 ​ ​ (8,044) ​ Facilities-related ​ 13,802 ​ 22,518 ​ 10,527 ​ (8,716) ​ 11,991 ​ Stock-based compensation ​ 11,496 ​ 12,405 ​ 9,316 ​ (909) ​ 3,089 ​ Lab supplies ​ 4,729 ​ 5,063 ​ 7,445 ​ (334) ​ (2,382) ​ Consulting and professional services ​ 1,975 ​ 3,357 ​ 3,164 ​ (1,382) ​ 193 ​ Other ​ 7,537 ​ 8,598 ​ 6,759 ​ (1,061) ​ 1,839 ​ Total research and development expenses ​ $ 93,617 ​ $ 96,718 ​ $ 85,247 ​ $ (3,101) ​ $ 11,471 ​ ​ Research and development expenses were $93.6 million for the year ended December 31, 2023, compared to $96.7 million for the year ended December 31, 2022.
Other income (expense) Other income (expense) and interest income, net Other income (expense) and interest income, net consists of interest income earned on our invested cash balances and other income (expense) income from miscellaneous expenses and income unrelated to our core operations.
Other income (expense) and interest income, net Other income (expense) and interest income, net consists of interest income earned on our invested cash balances and other income (expense) income from miscellaneous expenses and income unrelated to our core operations.
In August 2021, we entered into an “at-the-market” sales agreement pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $250.0 million.
In August 2021, we entered into an “at-the-market” sales agreement pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $250.0 million.
We could use our available capital resources sooner than we currently expect, in which case we would be required to obtain additional financing, which may not be available to us on acceptable terms, or at all.
We could use our available capital resources sooner than we currently expect, in which case we would be required to obtain additional financing, which may not be available to us on acceptable terms, or at all.
Since our inception in October 2016, we have focused substantially all of our resources on building our non-viral genetic medicine platform, establishing and protecting our intellectual property portfolio, conducting research and development activities, developing our manufacturing process, organizing and staffing our company, business planning, raising capital and providing general and administrative support for these operations.
Since our inception in October 2016, we have focused substantially all of our resources on building our non-viral genetic medicine platforms, establishing and protecting our intellectual property portfolio, conducting research and development activities, developing our manufacturing process, organizing and staffing our company, business planning, raising capital and providing general and administrative support for these operations.
Our external research and development expenses consist of costs that include fees and other costs paid to consultants, contractors, CDOs and CROs in connection with our research, preclinical and manufacturing activities. We do not allocate our research and development costs to specific programs because costs are deployed across multiple programs and our platform and, as such, are not separately classified.
Our external research and development expenses consist of costs that include fees and other costs paid to consultants, contractors, CDOs and CROs in connection with our research, preclinical and manufacturing activities. We do not allocate our research and development costs to specific programs because costs are deployed across multiple programs and our platforms and, as such, are not separately classified.
In January 2021, we issued and sold 9,200,000 shares of our common stock, including 1,200,000 shares sold by us pursuant to the full exercise of the underwriters’ option to purchase additional shares, in a follow-on public offering, resulting in net proceeds of $211.3 million after deducting underwriting discounts and commissions and other offering expenses.
In 115 Table of Contents January 2021, we issued and sold 9,200,000 shares of our common stock, including 1,200,000 shares sold by us pursuant to the full exercise of the underwriters’ option to purchase additional shares, in a follow-on public offering, resulting in net proceeds of $211.3 million after deducting underwriting discounts and commissions and other offering expenses.
Liquidity and Capital Resources Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we support our continued research activities and development of our programs and platform.
Liquidity and Capital Resources Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we support our continued research activities and development of our programs and platforms.
General and administrative expenses General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based compensation, for employees engaged in executive, legal, finance and accounting and other administrative functions.
General and administrative expenses General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits, stock-based compensation and severance expense, for employees engaged in executive, legal, finance and accounting and other administrative functions.
We expect that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we: ● obtain, expand, maintain, defend and enforce our intellectual property portfolio; ● continue our current research programs and conduct additional research programs; ● expand the capabilities of our proprietary non-viral genetic medicine platform; ● add operational, legal, compliance, financial and management information systems and personnel to support our research, product development, future commercialization efforts and operations as a public company; ● establish additional manufacturing sources and secure supply chain capacity sufficient to provide necessary quantities of any product candidates we may develop for clinical or commercial use; ● hire additional clinical, regulatory and scientific personnel; ● advance any product candidates we identify into preclinical and clinical development; ● seek marketing approvals for any product candidates that successfully complete clinical trials; and ● ultimately establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval.
We expect that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we: ● continue our current research programs and conduct additional research programs, including pursuant to our collaboration with Moderna; ● expand the capabilities of our proprietary non-viral genetic medicine platforms; ● advance any product candidates we identify into preclinical and clinical development; ● obtain, expand, maintain, defend and enforce our intellectual property portfolio; ● seek marketing approvals for any product candidates that successfully complete clinical trials; ● hire additional clinical, regulatory and scientific personnel; ● establish additional manufacturing sources and secure supply chain capacity sufficient to provide necessary quantities of any product candidates we may develop for clinical or commercial use; ● ultimately establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval; and ● add operational, legal, compliance, financial and management information systems and personnel to support our research, product development, future commercialization efforts.
Components of Our Results of Operations Operating expenses Research and development expenses Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our programs, which include: ● personnel-related costs, including salaries, benefits and stock-based compensation expense, for employees engaged in research and development functions; ● expenses incurred in connection with our research programs, including under agreements with third parties, such as consultants, contractors and CROs, and regulatory agency fees; 114 Table of Contents ● the cost of developing and scaling our manufacturing process and capabilities and manufacturing drug substance and drug product for use in our research and preclinical studies, including under agreements with third parties, such as consultants, contractors and CDOs; ● laboratory supplies and research materials; ● facilities, depreciation and amortization and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and insurance; and ● payments made under third-party licensing agreements.
Operating expenses Research and development expenses Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our programs, which include: ● personnel-related costs, including salaries, benefits, stock-based compensation, and severance expense, for employees engaged in research and development functions; ● expenses incurred in connection with our research programs, including under agreements with third parties, such as consultants, contractors and CROs, and regulatory agency fees; ● the cost of developing and scaling our manufacturing process and capabilities and manufacturing drug substance and drug product for use in our research and preclinical studies, including under agreements with third parties, such as consultants, contractors and CDOs; ● laboratory supplies and research materials; ● facilities, depreciation and amortization and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and insurance; and ● payments made under third-party licensing agreements.
This is due to the numerous risks and uncertainties associated with product development, including the following: ● the timing and progress of preclinical studies, including IND-enabling studies; ● the number and scope of preclinical and clinical programs we decide to pursue; ● raising additional funds necessary to complete preclinical and clinical development of our product candidates; ● the timing of the submission and acceptance of IND applications or comparable foreign applications that allow commencement of future clinical trials for our product candidates; ● the successful initiation, enrollment and completion of clinical trials, including under GCPs; ● our ability to achieve positive results from our future clinical programs that support a finding of safety and effectiveness and an acceptable risk-benefit profile in the intended patient populations of any product candidates we may develop; ● our ability to scale RES to produce clinical and initial commercial supply; ● our ability to establish arrangements with third-party manufacturers for preclinical and clinical supply; ● the availability of specialty raw materials for use in production of our product candidates; ● our ability to establish new licensing or collaboration arrangements; ● the receipt and related terms of regulatory approvals from the FDA, and other applicable regulatory authorities; ● our ability to establish, obtain, maintain, enforce and defend patent, trademark, trade secret protection and other intellectual property rights or regulatory exclusivity for any product candidates we may develop and our technology; and 115 Table of Contents ● our ability to maintain a continued acceptable safety, tolerability and efficacy profile of our product candidates following approval.
This is due to the numerous risks and uncertainties associated with product development, including the following: ● the timing and progress of preclinical studies, including IND-enabling studies; ● the number and scope of preclinical and clinical programs we decide to pursue; ● our ability to raise additional funds necessary to complete preclinical and clinical development of any product candidates we may develop; ● the timing of the submission and acceptance of IND applications or comparable foreign applications that allow commencement of future clinical trials for any product candidates we may develop; ● the successful initiation, enrollment and completion of clinical trials, including under GCPs; ● our ability to achieve positive results from our future clinical programs that support a finding of safety and effectiveness and an acceptable risk-benefit profile in the intended patient populations of any product candidates we may develop; ● our ability to scale RES to produce clinical and initial commercial supply; ● our ability to establish arrangements with third-party manufacturers for preclinical, clinical and initial commercial supply; ● the availability of specialty raw materials for use in production of any product candidates we may develop; ● our ability to establish new licensing or collaboration arrangements; ● the receipt and related terms of regulatory approvals from the FDA, and other applicable regulatory authorities; ● our ability to establish, obtain, maintain, enforce and defend patent, trademark, trade secret protection and other intellectual property rights or regulatory exclusivity for any product candidates we may develop and our technology; ● our ability to maintain a continued acceptable safety, tolerability and efficacy profile of our product candidates following approval; and ● the terms and timing of any existing or future collaboration, license or other arrangement, including the terms and timing of any achievement of milestones and the receipt of payments thereunder.
Results of Operations – Years Ended December 31, 2021 and 2020 For a discussion of our results of operations for the year ended December 31, 2021 and for a comparison of such results of operations to the results of operations for the year ended December 31,2020, please refer to “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 that was filed with the SEC on February 24, 2022.
Results of Operations – Years Ended December 31, 2022 and 2021 For a discussion of our results of operations for the year ended December 31, 2022 and for a comparison of such results of operations to the results of operations for the year ended December 31,2021, please refer to “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 that was filed with the SEC on February 23, 2023.
For a discussion of our sources and uses of cash for the years ended December 31, 2021 and 2020 please refer to “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 that was filed with the SEC on February 24, 2022.
For a discussion of our sources and uses of cash for the years ended December 31, 2022 and 2021 please refer to “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 that was filed with the SEC on February 23, 2023.
Our ability to generate any product revenue or product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more product candidates we may develop. For the years ended December 31, 2022, 2021, and 2020, we reported net losses of $136.6 million, $119.2 million, and $80.5 million, respectively.
Our ability to generate any product revenue or product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more product candidates we may develop. For the years ended December 31, 2023, 2022, and 2021, we reported net losses of $126.6 million, $136.6 million, and $119.2 million, respectively.
The increase in other income (expense) and interest income, net during the year ended December 31, 2022 was primarily due to an increase of interest earned on our invested cash balances.
The increase in other income (expense) and interest income, net during the year ended December 31, 2023 was primarily due to an increase in interest earned on our invested cash balances.
Recently Issued and Adopted Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements included in this Annual Report. ​ 121 Table of Contents
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements included in this Annual Report. ​
As of December 31, 2022, we had federal net operating loss carryforwards of $328.2 million, which may be available to offset future taxable income, of which $8.2 million of the total net operating loss carryforwards begin to expire in 2036, while the remaining $320.0 million do not expire but may be limited in their usage to an annual deduction equal to 80% of annual taxable income.
As of December 31, 2023, we had federal net operating loss carryforwards of $353.0 million, which may be available to offset future taxable income, of which $8.2 million of the total net operating loss carryforwards begin to expire in 2036, while the remaining $344.8 million do not expire but may be limited in their usage to an annual deduction equal to 80% of annual taxable income.
The timing and amount of our operating expenditures will depend largely on: ● the identification of additional research programs and product candidates; ● the scope, progress, costs and results of preclinical and clinical development for any product candidates we may develop; ● the costs, timing and outcome of regulatory review of any product candidates we may develop; ● the cost and timing of completion of commercial-scale manufacturing activities, including the costs and resources required to manufacture our drug substance and drug product using external cleanroom facilities and/or CMOs; ● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any product candidates we may develop for which we receive marketing approval; ● the costs and scope of the continued development of our non-viral genetic medicine platform; ● the costs of satisfying any post-marketing requirements; ● the revenue, if any, received from commercial sales of product candidates we may develop for which we receive marketing approval; ● the costs and timing of preparing, filing and prosecuting applications for patents; obtaining, maintaining, defending and enforcing our intellectual property rights and defending against any intellectual property-related claims, including claims of infringement, misappropriation or other violation of third-party intellectual property; ● the costs of operational, financial and management information systems and associated personnel; 119 Table of Contents ● the associated costs in connection with any acquisition of in-licensed products, intellectual property and technologies; and ● the costs of operating as a public company.
The timing and amount of our operating expenditures will depend largely on: ● the costs and scope of the continued development of our non-viral genetic medicine platforms; ● the identification of additional research programs and product candidates; ● the costs and timing of preparing, filing and prosecuting applications for patents; obtaining, maintaining, defending and enforcing our intellectual property rights and defending against any intellectual property-related claims, including claims of infringement, misappropriation or other violation of third-party intellectual property; ● the scope, progress, costs and results of preclinical and clinical development for any product candidates we may develop; ● our research and development costs and the receipt of milestone payments under our collaboration with Moderna; ● the costs, timing and outcome of regulatory review of any product candidates we may develop; ● the cost and timing of completion of commercial-scale manufacturing activities, including the costs and resources required to manufacture our drug substance and drug product using external cleanroom facilities and/or CMOs; 122 Table of Contents ● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any product candidates we may develop for which we receive marketing approval; ● the costs of satisfying any post-marketing requirements; ● the revenue, if any, received from commercial sales of product candidates we may develop for which we receive marketing approval; ● the costs of operational, financial and management information systems and associated personnel; ● the extent to which our previously announced RIF achieves the anticipated cost savings; ● the associated costs in connection with any acquisition of in-licensed products, intellectual property and technologies; and ● the costs of operating as a public company.
We expect that our research and development expenses will increase substantially as we advance our programs into clinical development and expand our discovery, research and preclinical activities in the near term and in the future.
We expect that our research and development expenses will increase substantially as we advance our programs into clinical development and expand our discovery, research and preclinical 117 Table of Contents activities in the near term and in the future.
We believe that our existing cash, cash equivalents, and marketable securities will enable us to fund our operating expenses and capital expenditures into 2025. We have based our estimates as to how long we expect we will be able to fund our operations on assumptions that may prove to be wrong.
We believe that our existing cash, cash equivalents, and marketable securities will enable us to fund our operating expenses and capital expenditures into the second half of 2027. We have based our estimates as to how long we expect we will be able to fund our operations on assumptions that may prove to be wrong.
We believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditures into 2025. We have based our estimates as to how long we expect we will be able to fund our operations on assumptions that may prove to be wrong.
We believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditures into the second half of 2027. We have based our estimates as to how long we expect we will be able to fund our operations on assumptions that may prove to be wrong.
In addition, as of December 31, 2022, we had state net operating loss carryforwards of $326.5 million, which may be available to offset future taxable income and expire at various dates beginning in 2036.
In addition, as of December 31, 2023, we had state net operating loss carryforwards of $360.8 million, which may be available to offset future taxable income and expire at various dates beginning in 2036.
If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
As of December 31, 2022, we had an accumulated deficit of $444.8 million. We expect to continue to incur significant expenses and increasing operating losses for at least the next several years.
As of December 31, 20223, we had an accumulated deficit of $571.4 million. We expect to continue to incur significant expenses and increasing operating losses for at least the next several years.
As of December 31, 2022, we also had federal and state research and development tax credit carryforwards of $10.4 million and $6.2 million, respectively, which may be available to reduce future tax liabilities and expire at various dates beginning in 2036 and 2033, respectively.
As of December 31, 2023, we also had federal and state research and development tax credit carryforwards of $14.5 million and $8.0 million, respectively, which may be available to reduce future tax liabilities and expire at various dates beginning in 2036 and 2033, respectively.
If we raise additional funds through collaborations or licensing arrangements with third parties, we may have to relinquish valuable rights to future revenue streams or product candidates or grant licenses on terms that may not be favorable to us. See “Risk Factors” for additional risks associated with our substantial capital requirements.
If we raise additional funds through collaborations or licensing arrangements with third parties, we may have to relinquish valuable rights to future revenue streams or product candidates or grant licenses on terms that may not be favorable to us.
General and administrative expenses also include professional fees for legal, patent, consulting, investor and public relations and accounting and audit services as well as direct and allocated facility-related costs. We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research activities and development of our programs and platform.
General and administrative expenses also include professional fees for legal, patent, consulting, investor and public relations and accounting and audit services as well as direct and allocated facility-related costs. 118 Table of Contents We anticipate that our general and administrative expenses will increase in the future as our research progresses towards clinical studies and we will increase our headcount.
Investing activities During the year ended December 31, 2022, net cash used by investing activities was $192.5 million, due to an increase in purchases of marketable securities of $323.7 million and property and equipment of $8.8 million during the year, offset by $140.0 million in maturities of marketable securities.
Investing activities During the year ended December 31, 2023, net cash used by investing activities was $9.7 million, due to an increase in purchases of marketable securities of $405.3 million and property and equipment of $7.4 million during the year, offset by $403.0 million in maturities of marketable securities.
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements. 120 Table of Contents Accrued research and development expenses As part of the process of preparing our consolidated financial statements, we are required to estimate certain accrued research and development expenses.
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
As of February 23, 2023, the issuance date of this Annual Report on Form 10-K, we have issued and sold 1,795,524 shares of our common stock pursuant to this sales agreement resulting in net proceeds of $12.3 million. As of December 31, 2022, we had cash, cash equivalents, and marketable securities of $279.1 million.
As of March 6, 2024, the issuance date of this Annual Report on Form 10-K, we have issued and sold 1,795,524 shares of our common stock pursuant to this sales agreement resulting in net proceeds of $12.3 million.
As of December 31, 2022, our material cash requirements consisted of: ● $150.1 million in total lease payments under our noncancelable operating lease for our office and laboratory space that was entered into in August 2018, as amended, and expires in 2029 and our noncancelable operating lease to operate an approximately 104,000 square foot cGMP-compliant manufacturing facility that was entered into July 2021 and expires in 2034; and ● $6.7 million in cancellable purchase obligations to CMOs and CROs for preclinical activities during 2023 and 2024.
As of December 31, 2023, our material cash requirements consisted of: ● $136.7 million in total lease payments under our noncancelable operating lease for our office and laboratory space that was entered into in August 2018, as amended, and expires in 2029 and our noncancelable operating lease to operate an approximately 104,000 square foot cGMP-compliant manufacturing facility that was entered into July 2021 and which we notified the landlord of the termination of the lease due to the landlord’s breach of its obligations to us under the lease and returned possession of the premises to the landlord in January 2024; and ● $4.2 million in cancellable purchase obligations to CMOs and CROs for preclinical activities during 2024 and 2025.
Cash flows The following table summarizes our sources and uses of cash for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ (in thousands) 2022 2021 ​ 2019 ​ Net cash used in operating activities ​ $ (102,448) ​ $ (91,821) ​ $ (70,142) ​ Net cash (used in) provided by investing activities ​ (192,515) ​ 193,047 ​ (205,196) ​ Net cash provided by financing activities ​ 12,989 ​ 214,671 ​ 323,095 ​ Net (decrease) increase in cash, cash equivalents and restricted cash ​ $ (281,974) ​ $ 315,897 ​ $ 47,757 ​ ​ Operating activities During the year ended December 31, 2022, operating activities used $102.4 million of cash, primarily resulting from our net loss of $136.6 million, offset by non-cash charges of $33.1 million and changes in our operating assets and liabilities of $1.0 million.
Cash flows The following table summarizes our sources and uses of cash for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 ​ 2021 Net cash used in operating activities ​ $ (52,745) ​ $ (102,448) ​ $ (91,821) Net cash (used in) provided by investing activities ​ (9,698) ​ (192,515) ​ 193,047 Net cash provided by financing activities ​ 35,817 ​ 12,989 ​ 214,671 Net (decrease) increase in cash, cash equivalents and restricted cash ​ $ (26,626) ​ $ (281,974) ​ $ 315,897 ​ ​ ​ 121 Table of Contents Operating activities During the year ended December 31, 2023, operating activities used $52.7 million of cash, primarily resulting from our net loss of $126.6 million, offset by non-cash charges of $20.4 million and changes in our operating assets and liabilities of $53.5 million.
Critical accounting policies and significant judgments and estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP.
See “Risk Factors” for additional risks associated with our substantial capital requirements. 123 Table of Contents Critical accounting policies and significant judgments and estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP.
General and administrative expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (in thousands) ​ 2022 2021 ​ 2020 2022 vs 2021 ​ 2021 vs 2020 ​ Personnel-related ​ $ 15,465 ​ $ 13,609 ​ $ 8,927 ​ $ 1,856 ​ $ 4,682 ​ Stock-based compensation ​ 12,047 ​ 8,541 ​ 4,111 ​ 3,506 ​ 4,430 ​ Professional and consultant fees ​ 7,909 ​ 7,819 ​ 6,987 ​ 90 ​ 832 ​ Facilities ​ 6,909 ​ 1,011 ​ 1,576 ​ 5,898 ​ (565) ​ Other ​ 2,134 ​ 2,874 ​ 981 ​ (740) ​ 1,893 ​ Total general and administrative expenses ​ $ 44,464 ​ $ 33,854 ​ $ 22,582 ​ $ 10,610 ​ $ 11,272 ​ ​ General and administrative expenses were $44.5 million for the year ended December 31, 2022, compared to $33.9 million for the year ended December 31, 2021.
General and administrative expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended December 31, ​ Change (in thousands) 2023 2022 ​ 2021 2023 vs 2022 2022 vs 2021 Personnel-related ​ $ 17,507 ​ $ 15,465 ​ $ 13,609 ​ $ 2,042 ​ $ 1,856 Stock-based compensation ​ 12,845 ​ 12,047 ​ 8,541 ​ 798 ​ 3,506 Professional and consultant fees ​ 8,744 ​ 7,909 ​ 7,819 ​ 835 ​ 90 Facilities-related ​ 9,499 ​ 6,909 ​ 1,011 ​ 2,590 ​ 5,898 Other ​ 2,255 ​ 2,134 ​ 2,874 ​ 121 ​ (740) Total general and administrative expenses ​ $ 50,850 ​ $ 44,464 ​ $ 33,854 ​ $ 6,386 ​ $ 10,610 ​ General and administrative expenses were $50.9 million for the year ended December 31, 2023, compared to $44.5 million for the year ended December 31, 2022.
To date, we have funded our operations with proceeds from the sales of instruments convertible into convertible preferred stock (which converted into convertible preferred stock in 2017), the sales of convertible preferred stock (which converted into common stock in 2020) and with proceeds from the sales of common stock in our public offerings.
Historically, we have funded our operations with proceeds from the sale of instruments convertible into convertible preferred stock (which converted into convertible preferred stock in 2017), sales of convertible preferred stock (which converted into common stock in 2020) and sales of common stock in underwritten public offerings, “at-the-market” offerings and in a private placement, as well as payments pursuant to our collaboration with Moderna.
Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and/or licensing arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all.
Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and/or licensing arrangements, including our collaboration with Moderna.
Net cash provided by changes in our operating assets and liabilities for the year ended December 31, 2022 consisted of a $1.3 million increase of other noncurrent assets, a $0.9 million increase in operating lease liability, a $0.6 million decrease of accrued expense and other current liabilities and accounts payable, a $3.5 million increase in prepaid expenses and other current assets, a $5.9 million decrease in operating lease right-of-use assets and a $0.4 million increase in tenant receivable. 118 Table of Contents Changes in accounts payable, accrued expenses and other current liabilities and prepaid expenses and other current assets in all periods were generally due to growth in our business, the advancement of our research programs and the timing of vendor invoicing and payments.
Net cash provided by changes in our operating assets and liabilities for the year ended December 31, 2023 consisted of a $41.6 million increase of deferred revenue, $1.4 million decrease of other noncurrent assets, a $16.2 million increase in operating lease liability, a $5.4 million increase of accrued expense and other current liabilities and accounts payable, a $3.2 million decrease in prepaid expenses and other current assets, a $10.6 million increase in operating lease right-of-use assets and a $3.6 million increase in tenant receivable.
If we fail to raise capital or enter into such agreements when needed or on terms 113 Table of Contents acceptable to us, we would be required to delay, limit, reduce or terminate our product development or future commercialization of one or more of our product candidates.
If we fail to raise capital or enter into such agreements when needed or on terms acceptable to us, we would be required to delay, limit, reduce or terminate our product development or future commercialization of one or more of our product candidates. 116 Table of Contents Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability.
This process involves estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. We make estimates of our accrued expenses as of each balance sheet date in our consolidated financial statements based on facts and circumstances known to us at that time.
Accrued research and development expenses As part of the process of preparing our consolidated financial statements, we are required to estimate certain accrued research and development expenses. This process involves estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs.
As of February 23, 2023, the issuance date of these consolidated financial statements, we have issued and sold 1,795,524 shares of our common stock pursuant to this sales agreement resulting in net proceeds of $12.3 million. Historically, we have incurred significant operating losses.
As of March 6, 2024, the issuance date of this Annual Report on Form 10-K, we have issued and sold 1,795,524 shares of our common stock pursuant to this sales agreement resulting in net proceeds of $12.3 million.
Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. See “—Liquidity and Capital Resources.” COVID-19 The COVID-19 pandemic continues to present a public health and economic challenge around the world.
Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy.
To date, we have funded our operations with proceeds from the sale of instruments convertible into convertible preferred stock (which converted into convertible preferred stock in 2017), the 112 Table of Contents sales of convertible preferred stock (which converted into common stock in 2020) and, most recently, the sales of common stock in our public offerings.
Historically, we have funded our operations with proceeds from the sale of instruments convertible into convertible preferred stock (which converted into convertible preferred stock in 2017), sales of convertible preferred stock (which converted into common stock in 2020) and sales of common stock in underwritten public offerings, “at-the-market” offerings, and in a private placement, as well as collaboration revenue under our collaboration with Moderna.
The increase in facilities-related costs of $5.9 million was primarily driven by rent expense related to the Seyon Lease. 117 Table of Contents Other income (expense) and interest income, net ​ Other income (expense) and interest income, net for the year ended December 31, 2022 was $4.5 million in income compared to $0.1 million in expense for the year ended December 31, 2021.
The increases in personnel-related costs and stock-based compensation costs of $2.0 million and $0.8 million, respectively, were primarily driven by restructuring costs recognized in connection with the RIF announced in November 2023. 120 Table of Contents Other income (expense) and interest income, net ​ Other income (expense) and interest income, net for the year ended December 31, 2023 was $12.0 million in income compared to $4.5 million in expense for the year ended December 31, 2022.
Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. We do not have any committed external source of funds. Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources.
Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. Although we may receive potential future payments under our collaboration with Moderna, we do not have any committed external source of funds.
Overview We are innovating genetic medicines to provide durable, redosable treatments for potentially hundreds of millions of patients living with rare and prevalent diseases. Our non-viral genetic medicine platform incorporates our high-capacity DNA construct called ceDNA; our ctLNP; and our highly scalable capsid-free manufacturing process that uses our proprietary cell-free RES to produce ceDNA.
Overview We are innovating non-viral genetic medicines to provide durable, redosable treatments for potentially hundreds of millions of patients living with rare and prevalent diseases. We are developing two distinct and complementary platforms that we believe will enable highly differentiated therapeutic applications.
We plan to expand our portfolio to include programs based on cell-targeted delivery of ceDNA to immune cells, tumors, retina, skeletal muscle, and to the CNS by developing discrete ctLNPs specifically engineered to reach each of these cell types or tissues.
We plan to expand our portfolio to include programs for additional indications in other tissues, including retina, skeletal muscle, and to the central nervous system, or CNS, by developing discrete ctLNPs, each with a unique targeting ligand engineered to provide targeted delivery of mRNA and/or iqDNA to T cells, HSCs and hepatocytes or for ETAP programs.
Financing activities During the year ended December 31, 2022, net cash provided by financing activities was $13.0 million, consisting primarily of net proceeds from the issuance of common stock pursuant to our “at-the-market” sales agreement of $12.4 million and $1.3 million in proceeds from the exercise of common stock options and other types of equity, net during the period, offset by payments for the repurchase of common stock for employee tax withholdings.
Financing activities During the year ended December 31, 2023, net cash provided by financing activities was $35.8 million, consisting primarily of net proceeds from the sale and issuance of our common stock to Moderna .
We periodically confirm the accuracy of the estimates with the service providers and make adjustments if necessary.
We make estimates of our accrued expenses as of each balance sheet date in our consolidated financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of the estimates with the service providers and make adjustments if necessary.
If we raise additional funds by issuing equity securities, our stockholders may experience dilution.
Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources. If we raise additional funds by issuing equity securities, our stockholders may experience dilution.
We do not have any products approved for sale and have not generated any revenue from product sales.
We do not have any products approved for sale and have not generated any revenue from product sales. We expect that any revenue recognized for the next several years will be derived primarily from our current collaboration with Moderna and any additional collaborations that we may enter into in the future.
The increase in facilities-related costs of $12.0 million was primarily driven by the recognition of a $5.1 million impairment related to the abandonment of leasehold improvements and rent expense related to the Seyon Lease.
The increase in facilities-related costs of $2.6 million was primarily driven by rent expense related to the Seyon Facility after our decision to transition from building out the Seyon Facility to utilizing an external cleanroom facility.
Removed
Using our approach, we are developing novel genetic medicines to provide targeted delivery of genetic payloads that include large and multiple genes to a range of cell types across a broad array of diseases.
Added
Our first platform is a potent, highly selective ctLNP delivery system for nucleic acids, which is designed to avoid off-target clearance by the liver and spleen, enabling ctLNPs to persist in systemic circulation and allowing for highly selective and potent ligand-driven targeting to specific tissues and cell types.
Removed
We are also engineering our genetic medicines to be redosable, which may enable individualized patient titration to reach the desired level of therapeutic expression and to maintain efficacy throughout a patient’s life. We are advancing a broad portfolio of programs, including programs for rare and prevalent diseases of the liver.
Added
The identification and optimization of new ligands to target new tissues and cell types is an efficient, flexible, and modular process, which we believe may allow us to rapidly expand our portfolio.
Removed
We are focused on diseases with significant unmet need for which our non-viral genetic medicine platform may substantially improve clinical efficacy relative to current gene therapy approaches. We are initially prioritizing rare monogenic diseases that result from mutations in a single gene, and which can be treated by delivering our ceDNA cargo to cells of the liver, called hepatocytes.
Added
Our second platform is our novel iqDNA, which is an optimized variant of our ceDNA designed to enable long-lasting high levels of gene expression from non-integrating episomes, while avoiding innate immune sensors that have long prevented DNA from use in non-viral systems.
Removed
We are focusing on indications like hemophilia A, which is our lead program, that have well-established biomarkers and clear clinical and regulatory pathways. We are at the preclinical research stage, and are currently optimizing our ctLNPs to improve hepatocyte delivery to treathemophilia A and other rare monogenic diseases.
Added
Underpinning the iqDNA platform is our highly scalable capsid-free manufacturing process that uses our proprietary cell-free RES to produce highly pure iqDNA at scale. We are advancing a portfolio of programs guided by the potent and highly selective delivery of messenger RNA, or mRNA, and/or iqDNA to T cells, hematopoietic stem cells, or HSCs, and hepatocytes.
Removed
The biodistribution of our ctLNPs is driven by biological targeting molecules called ligands, which we believe will enable selective delivery to hepatocytes and ultimately to other cell types and tissues.
Added
Our work in T cells initially focuses on in vivo reprogramming of this cell type to treat cancer and autoimmune diseases. Our HSC research is focused initially on in vivo gene editing of HSCs for hematologic disorders, prioritizing sickle cell disease and beta-thalassemia.
Removed
In addition, we believe that our non-viral genetic medicine platform may be used to develop therapies that deliver antibody genes to direct the liver to produce antibody therapies from patients’ own cells for years at a time from a single dose in a process we refer to as ETAP.
Added
Our work in hepatocytes prioritizes hemophilia A, a rare monogenic disease that results from mutations in a single gene, has significant unmet need, and clear biomarkers for development.
Removed
We plan to advance ETAP programs across multiple therapeutic areas, including prevalent diseases. We also believe that our platform may be used to develop other therapeutic modalities and are exploring ways to apply our platform technologies. For example, we are conducting early research into the development of potential ceDNA-based vaccines using our proprietary vaccine-optimized ctLNPs.
Added
In November 2023, following a review of strategic priorities and a determination by our management and board of directors to implement a strategic reorganization to invest in our ctLNP delivery system to develop wholly-owned programs for extrahepatic cell types and to develop our iqDNA platform for our lead program in hemophilia A and other programs, we announced a strategic reorganization, pursuant to which we undertook a RIF and implemented reductions in operational expenditures including cGMP readiness and manufacturing expenses.
Removed
We believe that, compared to currently approved mRNA vaccines, ceDNA-ctLNP vaccines could enable improved immune responses, more durable protection, and could be stored at ambient temperatures potentially allowing for greater shelf stability than currently approved mRNA-LNP vaccines, which currently must be stored at very low temperatures, limiting distribution.
Added
As part of the restructuring, we intend to prioritize investment in the development of our ctLNP delivery system for wholly-owned programs in extrahepatic cell types and to develop iqDNA for our lead program in hemophilia A. In July 2021, we entered into a lease agreement to build out a cGMP-compliant manufacturing facility, or the Seyon Facility, in Waltham, Massachusetts.
Removed
Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable.
Added
On January 31, 2024, we notified the landlord of termination of the Seyon Lease due to the landlord’s breach of its obligations to us under the Seyon Lease and returned possession of the premises to the landlord, effective January 31, 2024.
Removed
The length of time and full extent to which the COVID-19 pandemic may directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain, subject to change and difficult to predict.
Added
On February 20, 2024, the landlord served us with a complaint, filed in Massachusetts Superior Court, with respect to the Seyon Lease. The complaint seeks declaratory judgment that we unlawfully terminated the Seyon Lease and also asserts a claim for breach of contract 114 Table of Contents damages. Our responsive pleading is due April 1, 2024.
Removed
We, our CMOs, and our contract research organizations, or CROs, experienced temporary reductions in the capacity to undertake research-scale production and to execute some preclinical studies. While these operations have since normalized, we, together with our CMOs and CROs, are closely monitoring the impact of the COVID-19 pandemic on these operations.
Added
We will vigorously defend the action and our rights with respect to this matter. In March 2023, we entered into a Collaboration and License Agreement, or the Collaboration Agreement, with Moderna, to collaborate on developing treatments for certain diseases by targeting delivery of nucleic acids to liver cells and certain cells outside of the liver.
Removed
In addition, shortages, delays and governmental restrictions arising from the COVID-19 pandemic have disrupted and may continue to disrupt global supply chains and our vendors’ ability to procure items, such as raw materials, that are essential for the manufacturing of our product candidates.
Added
Under the Collaboration Agreement, the parties have agreed to collaborate on preclinical research programs relating to lipid nanoparticle, or LNP, delivery systems and nucleic acid payloads, with each party obtaining certain rights to intellectual property used in and arising out of such research programs.
Removed
We have taken steps to monitor and strengthen our supply chain to maintain an uninterrupted supply of our critical products and services. We continue to closely monitor the ongoing impact and effects of the COVID-19 pandemic on our employees and our other business operations.
Added
The research programs will be conducted pursuant to research plans and associated research budgets established by governance committees formed by the parties. Moderna will reimburse us for the internal and external costs we incur in conducting the research programs, to the extent consistent with such research plans and budgets.
Removed
In an effort to provide a safe work environment for our employees, we have maintained our increased cadence of sanitization of our office and lab facilities. Additionally, we have maintained a company policy requiring COVID-19 vaccinations for all employees, with certain limited exceptions.
Added
Each party will be solely responsible for its own clinical development and commercialization of products under the Collaboration Agreement.

… 31 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed5 unchanged
Biggest changeAs of December 31, 2022, a hypothetical increase in interest rates of 100 basis points across the entire yield curve on our holdings would have resulted in an immaterial decrease to the fair value of our holdings. We currently do not seek to hedge this exposure to fluctuations in interest rates.
Biggest changeAs of December 31, 2023, a hypothetical increase in interest rates of 100 basis points across the entire yield curve on our holdings would have resulted in a $0.9 million decrease to the fair value of our holdings. We currently do not seek to hedge this exposure to fluctuations in interest rates.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Market Risk We are exposed to market risk related to changes in interest rates. We had cash, cash equivalents and marketable securities of $279.1 million as of December 31, 2022. We did not record any impairment charges to our marketable debt securities during the year ended December 31, 2022.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Market Risk We are exposed to market risk related to changes in interest rates. We had cash, cash equivalents and marketable securities of $264.4 million as of December 31, 2023. We did not record any impairment charges to our marketable debt securities during the year ended December 31, 2023.

Other GBIO 10-K year-over-year comparisons