UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 20142017

OR

For the transition period from                         to                     

Commission File Number: 001-35966

bluebird bio, Inc.

(Exact Name of Registrant as Specified in Its Charter)

(339) 499-9300

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x☒    No  ¨☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨☐    No  x☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x☒    No  ¨☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x☒    No  ¨☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨☐    No  x☒

The aggregate market value of common stock held by non-affiliates of the registrant based on the closing price of the registrant’s common stock as reported on the Nasdaq Global Select Market on June 30, 2014,2017, the last business day of the registrant’s most recently completed second quarter, was $798,893,699.$4,746,861,154.

As of February 18, 2015,16, 2018, there were 32,566,33149,983,514 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement relating to its 20152018 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

Table of Contents

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Annual Report on Form 10-K are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

Any forward-looking statements in this Annual Report on Form 10-K reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part I, Item 1A. Risk Factors and elsewhere in this Annual Report on Form 10-K. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This Annual Report on Form 10-K also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.

PART I

Item 1. Business

Overview

We are a clinical-stage biotechnology company committed to developing potentially transformative gene therapies for severe genetic and rare diseases and in the field of T cell-based immunotherapy.cancer. With our lentiviral-based gene therapy and gene editing capabilities, we have built an integrated product platform with broad therapeutic potential application in these areas.  

Many diseases have a genetic aspect whereby a dysfunctional gene linked to a disease is passed down from generation to generation and causes the disease. For the treatmentvariety of severe genetic and rare diseases, gene therapy seeks to introduce a functional copy of the defective gene into a patient’s own cells, a process called gene transfer.  In this context, weindications. We believe that gene therapy for severe genetic diseases has the potential to change the way these patients are treated by correcting the underlying genetic defect that is the cause of their disease, rather than offering solutionstreatments that only address their symptoms. Accordingly, we believe gene therapy has the potential to provide transformative disease modifying effects with life-longsymptoms. Our clinical benefits based on a single therapeutic administration.

In the gene transfer process, a functional gene is typically delivered and incorporated into a patient’s cells using viral vectors, which are based on naturally-occurring viruses that have been modified to take advantage of the virus’ natural ability to introduce genes into human cells. However, unlike naturally-occurring viruses, which replicate following infection of a target cell and can infect new cells, gene therapy viral vectors are genetically modified to be non-replicating. Gene transfer using a viral vector is called transduction and the resulting gene-modified cells are called transduced cells. Transduction can be accomplished through either ex vivo or programs in vivo delivery of the vectors.  In the ex vivo approach, cells are transduced outside of the patient’s body and the modified cells are transplanted back into the patient.  In the in vivo approach, vectors are introduced directly into the patient’s body to deliver the desired gene to the target cell.

A growing body of gene therapy-based clinical data, the establishment of regulatory guidelines to govern the development and approval of gene therapy products and increased investment from the biopharmaceutical industry has allowed gene therapy to emergesevere genetic diseases include our LentiGlobin^® product candidate as a potentially important new therapeutic modalitytreatment for patientstransfusion-dependent β-thalassemia, or TDT, and severe sickle cell disease, or severe SCD, and our Lenti-D^™ product candidate as a treatment for cerebral adrenoleukodystrophy, or CALD, a rare hereditary neurological disorder. Our programs in oncology are built upon our leadership in lentiviral gene delivery and T cell engineering, with significant unmet medical need. We believe wea focus on developing novel T cell-based immunotherapies, including chimeric antigen receptor (CAR) and T cell receptor (TCR) T cell therapies. bb2121 and bb21217, our lead product candidates in oncology, are particularly well-positioned to drive the continued advancement of gene therapy technologyCAR T cell product candidates for the treatment of severe geneticmultiple myeloma, which we have exclusively licensed to Celgene Corporation, or Celgene.

We are developing our LentiGlobin product candidate with a goal of filing for regulatory approval in the US and rare diseasesEU for different genotypes of TDT and for T cell-based immunotherapy, initially in oncology.  We have assembled extensive expertise in viral vector design, manufacturingsevere SCD.  Both TDT and gene transfer, translational research and development capabilities, a broad intellectual property estate, an experienced management team and a world-class group of scientific advisors.

We and our scientific collaborators have generated what we believe is human proof-of-concept data for our gene therapy platform in three underserved diseases, each of which has been granted orphan drug status by U.S. and European regulatory authorities.  Wesevere SCD are conducting a Phase II/III clinical study, called the Starbeam Study, with our most advanced product candidate, Lenti-D^™, to evaluate its safety and efficacy in subjects with childhood cerebral adrenoleukodystrophy, or CCALD, a rare, hereditary neurological disorder affecting young boys that is often fatal.  We also are conducting three clinical studies of our next most advanced product candidate, LentiGlobin^® in a variety of rare, hereditary blood disorders that often lead to severe anemia and shortened lifespans:lifespans.  We are currently conducting five clinical studies of our LentiGlobin product candidate: a global Phase I/II study in the United States, Australia, and Thailand for the treatment of subjects with TDT, called the Northstar Study (HGB-204); a multi-site, international, Phase III study for the treatment of β-thalassemia major;subjects with TDT and non-β⁰/β⁰ genotypes, called the Northstar-2 Study (HGB-207); a multi-site, international, Phase III study for the treatment of subjects with TDT and a β⁰/β⁰ genotype, called the Northstar 3 Study (HGB-212); a single-center Phase I/II study in France (HGB-205) for the treatment of β-thalassemia majorsubjects with TDT or severe SCD (HGB-205); and severe sickle cell disease, or SCD; and a multi-site Phase I study in the United States (HGB-206) for the treatment of subjects with severe SCD (HGB-206).  We have achieved our enrollment target of 18 patients in the Northstar Study, and we have achieved our enrollment target for the adult and adolescent cohort in the Northstar 2 Study.  We are currently planning to file a marketing authorization application in the EU for LentiGlobin for the treatment of adult and adolescent patients with TDT and a non-β⁰/β⁰ genotype during the second half of 2018, with a future biologics licensing application, or BLA, planned in the United States.  We are also engaged with the U.S. Food and Drug Administration, or FDA, and the European Medicines Agency, or EMA, in discussions regarding our proposed development plans for LentiGlobin in severe SCD.

In March 2013,We are developing our Lenti-D product candidate for CALD, a rare, hereditary neurological disorder that is often fatal.  We are currently conducting a multi-site, international, Phase II/III clinical study of our Lenti-D^™ product candidate, called the Starbeam Study (ALD-102), for the treatment of subjects with CALD.  Seventeen subjects were treated with our Lenti-D product candidate in the initial cohort of the Starbeam Study, and we announcedare enrolling up to thirteen additional subjects in an expansion cohort of this study for a global strategictotal target enrollment of thirty subjects. We are also conducting an observational study of subjects with CALD treated by allogeneic hematopoietic stem-cell transplant referred to as the ALD-103 study. If our Lenti-D product candidate shows a sufficiently compelling treatment effect, and pending further discussion with regulatory authorities, the results from the Starbeam study could potentially form the basis of a Biologics License Application, or BLA, and a Marketing Authorization Application, or MAA, submission in the United States and European Union, respectively. We are planning to submit our first filing for regulatory approval of Lenti-D in 2019.

We are developing, in collaboration with Celgene, Corporation to discover, developour bb2121 and commercialize novel, disease-altering gene therapiesbb21217 product candidates with the goal of filing for regulatory approval in oncology.  Themultiple myeloma on a global basis, a hematologic malignancy that develops in the bone marrow that is fatal if untreated.  We are conducting a multi-site Phase I clinical study in the United States of our bb2121 product candidate for the treatment of subjects with relapsed/refractory multiple myeloma (CRB-401), and the final patient enrolled in the CRB-401 study was treated in February 2018. bb2121 is the lead product candidate arising from our multi-year collaboration focuses on applying gene therapy technology to genetically modify a patient’s own T cells to target and destroy cancer cells.  Such modified T cells, called chimeric antigen receptor, or CAR T cells, have been shown by academic and corporate researchers to have beneficial effects in human clinical trialswith Celgene for patients with a variety of lymphomas.  The multi-year research and development collaboration has the potential to lead to thediscovery, development and commercialization of multiple CAR T cell products,therapies targeting B-cell maturation antigen, or BCMA. We have exclusively licensed to Celgene the right to develop and commercialize our bb2121 product candidate, and we expect to exercise our option to co-develop and co-promote this product candidate in the United States.  In February 2018, Celgene treated the first subject in a multi-site Phase II clinical study in the United States and Europe of our bb2121 product candidate from this collaborationfor the treatment of subjects with relapsed/refractory multiple myeloma.  Celgene has announced plans to enter clinical trialsinitiate an international Phase III study of bb2121 in early 2016.third line multiple myeloma in 2018 and plans to file a BLA with the FDA in 2019 for bb2121 to treat relapsed/refractory multiple myeloma.  

In June 2014,September 2017, we acquired Precision Genome Engineering, Inc., or Pregenen,initiated a privately-held biotechnology company headquartered in Seattle, Washington. ThroughPhase I clinical study of bb21217, the acquisition, we obtained rightssecond anti-BCMA product candidate arising from our collaboration with Celgene, and Celgene exercised its option to Pregenen’s gene editing technology platformobtain an exclusive worldwide license to develop and cell signaling technology, and have integrated these technologies and research team and expanded our related discovery research efforts.  We are focused on utilizing homing endonuclease and megaTAL gene editing technologies in a variety of potential applications and disease areas, including for hematology and oncology.  Homing endonucleases and MegaTALs are novel enzymes that provide a highly specific and efficient way to silence, edit or insert genetic components into a cell to potentially treat a variety of diseases.commercialize bb21217.

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Our gene therapy platform is based on viral vectors that utilize a modified, non-replicating version of the Human Immunodeficiency Virus Type 1, or HIV-1 virus, that has been stripped of all of the components required for it to self-replicate and infect additional cells. The HIV-1 virus is part of the lentivirus family of viruses, as a result of which we refer to our vectors as lentiviral vectors. Our lentiviral vectors are used to introduce a functional copy of a gene to the patient’s own isolated blood stem cells, called hematopoietic stem cells, or HSCs, in the case of our LentiGlobin and Lenti-D product candidates, or the patient’s own isolated white blood cells which resideinclude T cells, in a patient’s bone marrowthe case of our bb2121 and are capable of differentiating into a wide range of cell types. HSCs are dividing cells, thus our approach allows for sustained expression of the modified gene as we are able to take advantage of a lifetime of replication of the gene-modified HSCs.bb21217 product candidates. Additionally, we have developed a proprietary cell-based vector manufacturing process that is both reproducible and scalable. We believe our innovations in viral vector design and related manufacturing processes are important steps towards advancing the field of gene therapy and in realizing its full potential on a commercial scale.

Utilizing our gene therapy platform, we are developing product candidates comprising the patient’s own gene-modified HSCs.HSCs and T cells. Clinical proof-of-concept already exists for allogeneic hematopoietic stem cell transplant, or HSCT, an approach of treating a patient with HSCs contributed by a donor other than the patient that contain the properly functioning copy of the gene whose mutation has caused the underlying disease.  However, this approach has significant limitations, including difficulties in finding appropriate genetically-matched donors and the risk of transplant-related rejection, graft-versus-host disease, or GVHD, and mortality, and is therefore typically only available on a limited basis. Our approach is intended to address the significant limitations of allogeneic HSCT while utilizing existing stem cell transplant infrastructure and processes. Also, because our approach has the potential to drive sustained expression of the functional protein encoded by the gene insert after potentially a single-administration, we believe the value proposition offered by our product candidates for patients, families, health care providers and payors would be significant.

Although our initial focus for HSCssevere genetic diseases is in CCALD, ß-thalassemia major andTDT, severe SCD and CALD, and for T cellscancer is in oncology,multiple myeloma, we believe our gene therapy platform has broad therapeutic potential in a variety of indications. We believe that our lentiviral vectors can be used to introduce virtually any gene into a cell and have the potential to be manufactured on a commercial scale reproducibly and reliably, as each new vector is produced using substantially the same process.

We also take advantagehave discovery research programs utilizing our cell signaling technology and gene editing technology platform across our pipeline. For instance, we are exploring applications of lentivirus’ abilityour CAR and TCR T cell technologies in combination with novel proteins based on synthetic biology. These technologies may potentially allow our future T cell-based product candidates to transduce HSCs more efficiently than other vectors, such as those derived from another virus useddetect the tumor microenvironment or, in the case of future CAR T cell product candidates, to be regulated by small molecules. In addition, we are focused on utilizing homing endonuclease and megaTAL gene therapy approaches, called adeno-associated virus, or AAV, which gives us the potential to address diseasesediting technologies in a variety of cell lineages beyond thosepotential applications and disease areas, including for oncology, hematology and other diseases.  Homing endonucleases and MegaTALs are novel enzymes that are derived from HSCs, such as microglia (useful for CCALD), red blood cells (useful for ß-thalassemiaprovide a highly specific and SCD), T cells (useful for cancer and immunology) and others.

The potentialefficient way to modify DNA sequences to edit or insert genetic components to potentially treat a variety of gene therapy to address severe genetic and rare diseasesdiseases.

Gene therapy has been an evolving field for the last 20 years that has been characterized by great hope and potential. Gene therapy is an approach to treating disease through the introduction of a desired gene or gene sequence into a patient’s own cells to modulate or enhance the activity of such cells. Each person’s hereditary genetic material is encoded by deoxyribonucleic acid, or DNA, in sequences of genetic code called genes. Gene expression patterns influence cell functionality by controlling protein production, either directly or through other indirect regulatory mechanisms. A mutation, or alteration, in the gene or in sequences that control the expression of that gene can cause proteins to be produced aberrantly in the cell, which can cause disease.

Gene therapy represents a unique opportunity to change the way patients with severe genetic and rare diseases are treated by addressing the underlying cause of their disease, rather than offering solutions that focus only on their symptoms.  By correcting the underlying genetic defect, we believe gene therapy can provide transformative disease modifying effects—potentially with life-long clinical benefits based on a single therapeutic administration.

Our belief in the potential of gene therapy to become a viable therapeutic modality is supported by several recent developments, including the following:

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Our gene therapy platform and proprietary lentiviral vectors

Our gene therapy platform and product candidates for severe genetic diseases are being developed based on a simple notion: to genetically modify a patient’s own cells to fundamentally correct or address the genetic basis underlying a disease. Although the notion of gene transfer to a patient’s own cells is simple, the processes of developing viral vectors capable of delivering the genetic material and inserting gene sequences safely into a patient’s target cells is highly technical and demands significant expertise, experience and know-how.  Leveraging our extensive expertise in viral vector design and manufacturing and transduction, we have developed a gene therapy platform that we believe is broadly applicable in a variety of indications with significant unmet medical need.

The success of a gene therapy platform is highly dependent on the type of delivery system used. Our platform is based upon an ex vivo viral delivery system whereby a certain type of virus delivers the DNA that it is carrying into a cell and inserts this DNA into the cell’s existing DNA.genome. We have developed significant expertise in designing a particular type of vector delivery system employing a lentivirus for use in gene therapy and have also developed and in-licensed relevant intellectual property, including know-how, related to lentiviral vectors. Our lentiviral construct design includes only the minimal viral components of the HIV-1 virus required to enable the vector to undergo one round of replication within the cell during manufacturing and subsequently to enter the target cells and deliver the gene that it is carrying.

We believe that our lentiviral vectors are particularly well-suited for treating a number of diseases and have certain advantages over other viral vectors used in developing gene therapy products, including:

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Our focus on Hematopoietic Stem Cells (HSCs)

Our gene therapy platform takes advantage of lentiviral vectors’ ability to stably integrate into the target cell’s chromosomegenome by focusing on diseases we can treat through genetic modification of hematopoietic stem cells, or HSCs, which when reintroduced back into the patient will differentiate into numerous other cell lineages, as depicted below.lineages. We believe our initial clinical indications—CCALD, ß-thalassemia majorindications in severe genetic diseases (CALD, TDT and severe SCD—SCD) can all be treated by introducing a specific functional gene into HSCs taken from the patient to correct the gene defect responsible for the disease.

HSCs are dividing stem cells that are permanently found in a patient’s bone marrow and are an ongoing replacement source of mature cell types as they die off. HSCs produce progeny cells, called progenitors, that differentiate into all of the cellular elements that compose the blood, including microglia (useful for CCALD), red blood cells (useful for ß-thalassemiaTDT and severe SCD), T cellsand microglia (useful for cancer and immunology) and others.CALD).  As such, all progenitors derived from a single gene therapy-modified HSC will carry the same corrective genetic modification, which we believe gives our approach the potential to deliver life-long clinical benefits based on a single therapeutic administration.

Our therapeutic approach in severe genetic diseases

The delivery of a gene therapy product in HSCs for the treatment of severe genetic diseases requires several steps, as illustrated in the figure below.steps. Importantly, our approach seeks to leverage cell transplant procedures and infrastructure already widely used in the clinic for allogeneic HSCT.

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We believeOur therapeutic approach in oncology

The delivery of modified T cell products in oncology requires several steps that are similar to our therapeutic approach in severe genetic diseases with HSCs. Importantly, our approach has several potential advantages over current treatment optionsseeks to leverage cell transplant procedures and infrastructure already widely used in the clinic for CCALD, ß-thalassemiaautologous and SCD, including the following:allogeneic bone marrow transplant.

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Our product candidate pipeline

The following table summarizes key information onWe are developing our development programs.

Our most advancedLentiGlobin product candidate is called Lenti-D, which we are developing to treat patients with CCALD,TDT and severe SCD, with the mostgoal of filing for regulatory approval in the US and EU for different genotypes of TDT and for severe formSCD.  We are conducting five clinical studies of ALD.our LentiGlobin product candidate: a Phase I/II study in the United States, Australia, and Thailand to evaluate its safety and efficacy in the treatment of subjects with TDT, called the Northstar Study (HGB-204); a multi-site, international, Phase III study to evaluate its safety and efficacy in the treatment of subjects with TDT and a non-β⁰/β⁰ genotype, called the Northstar-2 Study (HGB-207); a multi-site, international, Phase III study for the treatment of subjects with TDT and a β⁰/β⁰ genotype, called the Northstar 3 Study (HGB-212);  a single-center Phase I/II study in France to evaluate its safety and efficacy in the treatment of subjects with TDT or with severe SCD (HGB-205); and a multi-site Phase I study in the United States to evaluate its safety and efficacy in the treatment of subjects with severe SCD (HGB-206).  We are currently planning to file a marketing authorization application in the EU for LentiGlobin for the treatment of adult and adolescent patients with TDT and a non-β⁰/β⁰ genotype during the second half of 2018, with a future BLA filing planned in the United States.  We are also engaged with the FDA and EMA in discussions regarding our proposed development plans for LentiGlobin in severe SCD.

We are developing our Lenti-D product candidate to treat patients with CALD with the goal of filing for regulatory approval in the US and EU for CALD, with the first filing for regulatory approval planned in 2019. We are currently conducting a Phase II/III clinical

study of our Lenti-D product candidate in the United States, United Kingdom, and France, which we refer to as the Starbeam Study (ALD-102), to examine the safety and efficacy of our Lenti-D in preserving neurological function and stabilizing cerebral demyelinationproduct candidate in subjects with CCALD.  In January 2015, we received regulatory authority approval for the Starbeam Study from the Medicines and Healthcare Products Regulatory Agency (MHRA) in England. We also expect to activate a site for the Starbeam Study in France, pending approvals from the applicable regulatory authorities. Our next most advanced product candidate is called LentiGlobin, which we are developing to treat patients with ß-thalassemia and severe SCD. CALD.

We are conducting a Phase I/II clinical study of LentiGlobin, which we referalso pursuing opportunities to as the HGB-205 Study, in subjects with ß-thalassemia major and severe SCD. We also have initiated a second Phase I/II clinical study in the United States, Australia and Thailand for LentiGlobin, which we refer to as the Northstar Study, for the treatment of ß-thalassemia major.  We have also initiated a Phase I study of LentiGlobin in the United States (HGB-206) for the treatment of severe SCD.

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In March 2013, we announced a global strategic collaboration with Celgene Corporation to discover, develop and commercialize novel disease-altering gene therapies in oncology. The collaboration focuses on applyingapply our gene therapy technology toplatform technologies in cancer by genetically modifymodifying a patient’s own T cells to target and destroy cancer cells. Such modified T cells, called chimeric antigen receptor, or CAR, T cells have been shown by academic and corporate researchers to have beneficial effects in human clinical trials for patientsOur collaboration with a variety of lymphomas. The multi-year research and development collaboration has the potential to lead to the development and commercialization of multipleCelgene focuses on CAR T cell productsproduct candidates directed against BCMA, a protein expressed on the surface of multiple myeloma cells, plasma cells and we expectsome mature B cells. We are developing, in collaboration with Celgene, our bb2121 and bb21217 product candidates with the firstgoal of filing for regulatory approval in multiple myeloma on a global basis.  We are conducting a multi-site Phase I clinical study in the United States to evaluate the safety and efficacy of our bb2121 product candidate, the lead product candidate from this collaboration, in the treatment of subjects with relapsed/refractory multiple myeloma (CRB-401), and the final patient enrolled in the CRB-401 study was treated in February 2018. We have exclusively licensed to enterCelgene the right to develop and commercialize our bb2121 product candidate, while we have retained an option to co-develop and co-promote this product candidate in the United States.  In February 2018, Celgene treated the first patient in a Phase 2 clinical trialstrial of bb2121 in early 2016. See “—Our strategic alliancerelapsed/refractory multiple myeloma, and Celgene plans to conduct additional clinical studies of bb2121 in earlier lines of treatment, including a planned international Phase III study of bb2121 in third line multiple myeloma.  Celgene has announced plans to file a BLA with Celgene.”the FDA in 2019 for bb2121 to treat relapsed/refractory multiple myeloma.  

In September 2017, we initiated a Phase I clinical study of bb21217, the second anti-BCMA cell product candidate arising from our collaboration with Celgene, and Celgene exercised its option to obtain an exclusive worldwide license to develop and commercialize bb21217. We are also collaborating with Medigene AG, through its subsidiary Medigene Immunotherapies GmbH, in the research and development of TCR product candidates directed against up to four antigens for the treatment of cancer indications, and with TC BioPharm Limited in the research and development of gamma delta CAR T cells directed at hematologic and solid tumor targets.

Our Lenti-DLentiGlobin product candidate opportunity

Adrenoleukodystrophyβ-thalassemia

AdrenoleukodystrophyOverview

In the United States and Europe, β-thalassemia is a rare X-linked, inherited, neurological disorder that is often fatal. ALD isgenetic disease caused by mutationsa mutation in the ABCD1β-globin gene which encodes for a protein called the ALD protein, or ALDP, which plays a critical roleresulting in the breakdown and metabolismproduction of very long-chain fatty acids,defective red blood cells, or VLCFA. Without functional ALDP, VLCFA accumulate in cellsRBCs. Genetic mutations cause the absence or reduced production of the beta chains of hemoglobin, or β-globin, thereby preventing the proper formation of hemoglobin A, which normally accounts for greater than 95% of the hemoglobin in the body, including microglial cells which are foundblood of adults. Hemoglobin is an iron-containing protein in the brain and spinal cord.  The build-up of VLCFAs  causes damageblood that carries oxygen from the respiratory organs to the myelin sheath,rest of the body. Hemoglobin A consists of four chains—two chains each of a-globin and β-globin. Genetic mutations that impair the production of β-globin can lead to a protectiverelative excess of a-globin, leading to premature death of RBCs. The clinical implications of the a-globin/ β-globin imbalance are two-fold: first, patients lack sufficient RBCs and insulating membranehemoglobin to effectively transport oxygen throughout the body and can become severely anemic; and second, the shortened life span and ineffective production of RBCs can lead to a range of multi-systemic complications, including but not limited to splenomegaly, marrow expansion, bone deformities, and iron overload in major organs.

The clinical course of β-thalassemia correlates with the degree of globin chain imbalance. Nearly 350 different mutations have been described in patients with β-thalassemia. Mutations can be categorized as those that surrounds nerve cellsresult in the brain. This damage canno functional β-globin production (β⁰) and those that result in decreased motor coordinationfunctional β-globin production (β⁺). TDT refers to any mutation pairing that results in the need for chronic transfusions due to severe anemia, and function, visualis the clinical finding in most patients with β⁰/ β⁰ genotypes as well as many patients with other genotypes resulting in abnormal β-globin production, such as the β⁰/β⁺ and hearing disturbances, the lossβ⁺/β⁺genotypes. Affected patients produce as little as one to seven g/dL of cognitive function, dementia, seizures, adrenal dysfunctionhemoglobin (in contrast, a normal adult produces 12-18 g/dL of hemoglobin). Hemoglobin E (β^E), which is another β-globin mutation and other complications, including death. The worldwide incidence rate for ALD is approximately oneusually asymptomatic, can also result in 20,000 newborn males.

ALD is divided into various sub-segmentsTDT when paired with three main phenotypes that impact brain function:β⁰ or β⁺ mutations.

Limitations of current treatment options

ThereIn geographies where treatment is a clear unmet medical need foravailable, patients with TDT receive chronic blood transfusions to survive. These regimens consist of regular infusions with units of packed RBC, or pRBC, usually every three to five weeks, which are intended to maintain hemoglobin levels and control symptoms of the cerebral phenotypedisease. While chronic blood transfusions can be effective at minimizing the symptoms of ALD. Currently,TDT, they often lead to unavoidable iron overload, which over time may lead to significant morbidity and mortality through iron-associated heart and liver toxicity. To help reduce iron overload-associated risks and resulting complications, patients must adhere to therapeutic iron chelation regimens to reduce the iron overload. Despite improvements in supportive care with transfusion and chelation, the overall life expectancy for a patient with TDT is significantly reduced compared to the general population. In addition, patient and caregiver quality of life can be significantly affected by complications associated with TDT and chronic disease management.

The only effective treatment optionpotentially curative therapy for boys with CCALDβ-thalassemia today is allogeneic HSCT. In this procedure, the patient is treatedHSCT with HSCs containing a functioning copy of the gene contributed by a donor other than the patient. Allogeneic HSCT has also been shown to have potential clinical benefitbest outcomes observed in other forms of ALD including ACALD.

Allogeneic HSCT is preferably performed early in the course of the disease, ideally using an unaffected matched sibling HSC donor to minimize complications. However, the majority of allogeneic HSCT procedures for CCALD are carried outpediatric patients with non-sibling matched donor cells, partially matched related or unrelated donor cells including umbilical cord blood cells because a matched sibling donor is not available in most cases. The difficulty of finding a suitable sibling-matched donor is one of the primary drawbacks of this approach. Allogeneicdonor.  However, allogeneic HSCT is associated with significant morbidityserious risks, some of which can be life threatening and mortality, particularlyresult in patients who undergo non-sibling-matched allogeneic HSCT. Complicationsdeath.  Potential complications of allogeneic HSCT include a 10-30% risk of engraftment failure in unrelated Human-Leukocyte-Antigen,human-leukocyte-antigen, or HLA, matched patients, a 12-16% incidencerisk of life-threatening infection, and an approximately 30%a risk of graft-versus-host-disease, or GVHD, a common complication in which donor immune cells (white blood cells in the graft) recognize the cells of the recipient (the host) as “foreign” and attack them.  As a result of these safety challenges, allogeneic HSCT in CCALD patients can lead to significant mortality rates, particularly for patients treated with cells from a donor who is not a matched sibling. In addition,sibling, and in patients >11 years old. Consequently, transplants are offered primarily to pediatric patients with a matched sibling donor, which occurs in only a fraction of all cases.There is a need for an option that can address the underlying genetic cause of TDT for more patients. Overall, TDT remains a life shortening disease with a significant unmet medical need.

Sickle cell disease

Overview

Sickle cell disease, or SCD, is a hereditary blood disorder resulting from a mutation in the β-globin gene that causes polymerization of hemoglobin proteins and abnormal red blood cell function. The disease is characterized by anemia, vaso-occlusive pain crisis (a common complication of SCD in which there is severe pain due to obstructed blood flow in the small blood vessels of the body), cumulative damage to multiple organs, infections, stroke, overall poor quality of life and early death in a large subset of patients. Under low-oxygen conditions, which are exacerbated by the RBC abnormalities, the mutant hemoglobin polymerizes causing the RBCs to take on a sickle shape (sickle cells), which causes them to aggregate and obstruct small blood vessels, thereby restricting blood flow to organs resulting in pain, cell death and organ damage. If oxygen levels are restored, the hemoglobin can depolymerize and the RBCs will return to their normal shape, but over time, the sickling damages the cell membrane and the cells fail to return to the normal shape even in high-oxygen conditions.

Limitations of current treatment options

Where adequate medical care is available, common treatments for patients with SCD largely revolve around management and prevention of acute sickling episodes. Chronic management may include hydroxyurea and, in certain cases, chronic transfusions. Hydroxyurea is currently one of two medications approved for the treatment of SCD and is recommended for patients with recurrent episodes of acute pain or specific frequencies of painful crises. Not all SCD patients respond to hydroxyurea however, or are able to tolerate the cytotoxic effect of reduced white blood cell and platelet counts. A significant number of patients with severe SCD find it difficult to adhere to hydroxyurea treatment, and for most patients there is no effective long-term treatment.

RBC transfusion therapy can be utilized to maintain the level of sickle hemoglobin below 30% to 50%, which decreases sickling of RBCs, reduces the risk of recurrent stroke, and decreases the incidence of associated co-morbidities. While transfusion therapy can be critical in the management of acute disease, and can be vital in preventing some of the chronic manifestations of severe SCD, it does not provide equal benefit to all patients.  Furthermore, in patients with SCD, chronic blood transfusions can lead to allo-sensitization that render continued transfusions difficult.  Additional complications of chronic transfusion include iron overload.

Similar to TDT, the only potentially curative therapy currently available for severe SCD is allogeneic HSCT, however because of the needsignificant risk of transplant-related morbidity and mortality, this option is usually offered primarily to pediatric patients with available sibling-matched donors. It is particularly difficult to find suitable donors for long-term immunosuppression following allogeneic HSCT, thereindividuals of African descent, and it is estimated that only a fraction of eligible patients undergo transplant. In light of these factors, we believe that severe SCD is a prolonged riskseriously debilitating and life threatening disease with a significant unmet medical need.

Our LentiGlobin product candidate

We are developing our LentiGlobin product candidate as a potential one-time treatment for both TDT and severe SCD. Our approach involves the ex vivo insertion of opportunistic infections and other serious side effects associated with immunosuppressive drugs.

Moreover,a single codon variant of the approximately 80 boys whonormal β-globin gene using a lentiviral vector into the patient’s own HSCs to enable formation of normally functioning hemoglobin A and normal RBCs in patients. Importantly, this codon variant, referred to as T87Q, also serves as a distinct biomarker used to quantify expression levels of the functional β-globin protein in patients with TDT and severe SCD, while also providing anti-sickling properties in the context of severe SCD. We refer to the cells that have undergone our ex vivo manufacturing process resulting in genetically modified HSCs as the final LentiGlobin drug product, or our LentiGlobin product candidate.

We are bornconducting four clinical studies of our LentiGlobin product candidate to evaluate its safety and efficacy in the treatment of subjects with CCALD each yearTDT. In December 2013, we announced that the first subject with TDT had been treated in our HGB-205 study, which also enrolled subjects with severe SCD. In March 2014, we announced that the first subject with TDT had been treated in our

Northstar Study (HGB-204). We announced in December 2016 that the first subject had been treated in our Northstar-2 Study (HGB-207), which evaluates the safety and efficacy of our LentiGlobin product candidate in the treatment of subjects with TDT and non-β⁰/β⁰ genotypes. In addition, we initiated in 2017 our planned Phase III study of our LentiGlobin product candidate for the treatment of subjects with TDT and β⁰/β⁰ genotypes, called the Northstar-3 Study (HGB-212). In November 2017, we announced that the first patient has been treated in this study.  We are using our refined drug product manufacturing process with the objective of increasing the vector copy number and the percentage of transduced cells in the LentiGlobin drug product in our ongoing Northstar-2 and Northstar-3 Studies.  We presented clinical data from our Northstar Study, Northstar 2 Study and our HGB-205 study at the American Society of Hematology Annual Meeting in December 2017.

We are currently planning to file a marketing authorization application in the EU for LentiGlobin for the treatment of adult and adolescent patients with TDT and a non-β⁰/β⁰ genotype during the second half of 2018.  If successful, we also believe that data from the ongoing Northstar Study and Northstar-2 Study could form the basis for a biologics licensing application, or BLA, submission for our LentiGlobin product candidate in the United States for the treatment of patients with TDT and non-β⁰/β⁰ genotypes. In addition, if successful, we believe the data from our Northstar-3 Study, together with data from our ongoing Northstar Study, Northstar-2 Study and HGB-205 study, could be sufficient to form the basis for a BLA supplement submission for our LentiGlobin product candidate for the treatment of patients with TDT and β⁰/β⁰ genotypes.

We are conducting two clinical studies of our LentiGlobin product candidate to evaluate its safety and efficacy in the treatment of subjects with severe SCD. In October 2014, we announced that the first subject with severe SCD had been treated in our HGB-205 study. We are also conducting our HGB-206 study to evaluate the safety and efficacy of our LentiGlobin product candidate in the treatment of subjects with severe SCD. In 2016, we amended the protocol of our HGB-206 study to expand enrollment and to incorporate several process changes, including using refined drug product manufacturing process. In February 2017, we announced that the first subject has been treated under this amended protocol.  We are engaged with FDA and EMA in discussions regarding our proposed development plans for LentiGlobin in severe SCD. We presented clinical data from our HGB-205 and HGB-206 studies at the American Society of Hematology Annual Meeting in December 2017.

Our LentiGlobin product candidate has been granted Orphan Drug status by the FDA and EMA for both β-thalassemia and SCD. Our LentiGlobin product candidate was granted Fast-Track designation by the FDA for the treatment of β-thalassemia major and for the treatment of certain patients with severe SCD.  The FDA has also granted Regenerative Medicine Advanced Therapy (RMAT) designation to our LentiGlobin product candidate for the treatment of severe SCD.  The FDA has granted Breakthrough Therapy designation to our LentiGlobin product candidate for the treatment of transfusion-dependent patients with β-thalassemia major. We are participating in the EMA’s Adaptive Pathways pilot program (formerly referred to as Adaptive Licensing), which is part of the EMA’s effort to improve timely access for patients to new medicines. Based on our discussions involving the EMA, European Union,Health Technology Assessment agencies and patient advocacy organizations as part of this program, we believe that it is possible to seek conditional approval for LentiGlobin for the treatment of adults and adolescents with TDT on the basis of the totality of the clinical data from our ongoing Northstar Study and HGB-205 study, with available data from our Northstar 2 Study, assuming these studies demonstrate acceptable efficacy and safety, respectively, and in particular, transfusion independence.  We believe that conversion to full approval would be subject to the successful completion of our ongoing Northstar-2 and Northstar-3 Studies, supportive long-term follow-up data and “real-world” post-approval monitoring data. Whether or not our clinical data are sufficient to support conditional, and ultimately full, approval will be a review decision by the EMA. In addition, the EMA has granted Priority Medicines (PRIME) eligibility for our LentiGlobin product candidate in the treatment of TDT.

Clinical development of our LentiGlobin product candidate

The Northstar Study (HGB-204) – Phase I/II clinical study in subjects with TDT

Our Northstar Study is a single-dose, open-label, non-randomized, multi-site Phase I/II clinical study in the United States, Australia and Thailand to evaluate the safety and efficacy of the LentiGlobin product candidate in increasing hemoglobin production and eliminating or reducing transfusion dependence following treatment. In March 2014, we announced that the first subject with TDT had been treated in our Northstar Study.

Eighteen adults and adolescents have been enrolled in the study. To be eligible for enrollment in this study, subjects were between 12 and 35 years of age with a diagnosis of TDT and receive at least 100 mL/kg/year of pRBCs or greater than or equal to eight transfusions of pRBCs per year in each of the two years preceding enrollment. The subjects were also eligible for allogeneic HSCT. In September 2016, we announced that our Northstar Study has been fully enrolled.

Efficacy will be evaluated primarily by the production of ≥2.0 g/dL of hemoglobin A containing β^A-T87Q-globin for the six-month period between 18 and 24 months post-transplant. In order to allow for endogenous hemoglobin production following transplant, subjects will be transfused with RBCs only when total hemoglobin decreases below 7.0 g/dL. The rationale for this endpoint is that

production of ≥2.0 g/dL of hemoglobin A containing β^A-T87Q-globin represents a clinically meaningful increase in endogenous hemoglobin production that would be expected to diminish transfusion requirements, and could result in transfusion independence in TDT subjects.

Exploratory efficacy endpoints include RBC transfusion requirements (measured in milliliters per kilogram) per month and per year, post-transplant. Safety evaluations to be performed during the study include success and kinetics of HSC engraftment, incidence of transplant-related mortality post-treatment, overall survival, detection of vector-derived replication-competent lentivirus in any subject and characterization of events of insertional mutagenesis leading to clonal dominance or leukemia. Subjects will be monitored by regular screening. Each subject will remain on study for approximately 26 months from time of consent and then will be enrolled in a long-term follow-up protocol that will assess safety and efficacy beyond 24 months.

The Northstar-2 Study (HGB-207) – Phase III study in subjects with TDT and a non-β⁰/ β⁰ genotype

Our Northstar-2 Study is an ongoing single-dose, open-label, non-randomized, international, multi-site Phase III clinical study to evaluate the safety and efficacy of the LentiGlobin product candidate to treat subjects with TDT and non-β⁰/β⁰ genotypes.

Approximately 23 subjects will be enrolled in the study, consisting of at least 15 adolescent and adult subjects between 12 and 50 years of age at enrollment, and at least eight pediatric subjects less than 12 years of age at enrollment. To be enrolled, subjects with TDT and non-β⁰/β⁰ genotypes must have received at least 100 mL/kg/year of pRBCs per year for the past two years. All subjects must be eligible for allogeneic HSCT, but without a matched sibling allogeneic HSCT donor.

The primary endpoint of this study is the proportion of treated subjects who achieve transfusion independence, defined as hemoglobin levels ≥9.0 g/dL without any pRBC transfusions for a continuous period of at least 12 months at any time during the study after treatment. The secondary endpoints of this study are to quantify gene transfer efficiency and expression, and to measure the effects of treatment with the LentiGlobin drug product on transfusion requirements post-transplant and clinical events. Each subject will remain on study for approximately 24 months from time of consent.

Safety evaluations to be performed during the study include success and kinetics of HSC engraftment, incidence of transplant-related mortality post-treatment, overall survival, detection of vector-derived replication-competent lentivirus in any subject and characterization of events of insertional mutagenesis leading to clonal dominance or leukemia.

Subjects in our Northstar-2 Study will be treated with our LentiGlobin product candidate manufactured using our refined drug product manufacturing process with the objective of increasing the vector copy number and the percentage of transduced cells. In December 2016, we announced the first subject in the Northstar-2 Study had received treatment with our LentiGlobin product candidate.

The HGB-205 study – Phase I/II clinical study in subjects with TDT or with severe SCD

Our HGB-205 study is a single-dose, open-label, non-randomized, Phase I/II clinical study at a single site in France to examine the safety and efficacy of our LentiGlobin product candidate in up to seven subjects with a diagnosis of TDT or severe SCD. Study subjects must be between five and 35 years of age with a diagnosis of TDT or severe SCD. In December 2013, we announced that the first subject with TDT had been treated in our HGB-205 study and in October 2014 we announced that the first subject with severe SCD had been treated in our HGB-205 study. To be enrolled, subjects with TDT must have received at least 100 mL/kg/year of pRBCs per year for the past two years. Those with severe SCD must have failed to achieve clinical benefit from treatment with hydroxyurea and have an additional poor prognostic risk factor (e.g., recurrent vaso-occlusive crises or acute chest syndromes). All subjects must be eligible for allogeneic HSCT, but without a matched sibling allogeneic HSCT donor. This study is fully enrolled, with four subjects with TDT and three subjects with SCD enrolled in this study.

The primary objective of our HGB-205 study is to determine the safety, tolerability and success of engraftment of the LentiGlobin drug product. The secondary objectives of the study are to quantify gene transfer efficiency and expression, and to measure the effects of treatment with the LentiGlobin drug product on disease-specific biological parameters and clinical events. In the case of subjects with TDT and SCD, this means the volume of pRBC transfusions, and for subjects with SCD, it also means the number of vaso-occlusive crises and acute chest syndrome events in each subject, compared with the two-year period prior to treatment.

Safety evaluations to be performed during the study include success and kinetics of HSC engraftment, incidence of transplant-related mortality post-treatment, overall survival, detection of vector-derived replication-competent lentivirus in any subject and characterization of events of insertional mutagenesis leading to clonal dominance or leukemia.

Northstar-3 Study (HGB-212) – Phase III Study for TDT in subjects with TDT and β⁰/ β⁰ genotypes

Our Northstar-3 Study is an ongoing single-dose, open-label, non-randomized, international, multi-site Phase III clinical study to evaluate the efficacy and safety of the LentiGlobin product candidate to treat subjects with TDT and β⁰/β⁰ genotypes.

Approximately 15 subjects who are less than 50 years of age at enrollment will be enrolled in the study. To be eligible, subjects with TDT and a β⁰/β⁰ genotype must have received at least 100 mL/kg/year of pRBCs or ≥8 transfusions of pRBCs per year for the past two years. All subjects must be clinically stable and eligible to undergo HSCT, as well as having been treated and followed for at least the last two years in a specialized center that maintained detailed medical records, including transfusion history.

The primary endpoint of this study is the proportion of treated subjects who meet the definition of “transfusion reduction”, which is defined as demonstration of reduction in volume of RBC transfusion requirements (in mL/kg) in the post-treatment time period of Months 12 to 24 compared to the average annual transfusion requirement in the 24 months prior to enrollment.  The secondary endpoints of this study are to measure the proportion of subjects who meet the definition of “transfusion independence” and also quantify gene transfer efficiency and expression, and measure the effects of treatment with the LentiGlobin drug product on transfusion requirements post-transplant and clinical events. Each subject will remain on study for approximately 24 months from time of consent.

Subjects in our Northstar-3 Study will be treated with our LentiGlobin product candidate manufactured using our refined drug product manufacturing process with the objective of increasing the vector copy number and the percentage of transduced cells.

In November 2017, we announced that the first subject in the Northstar-3 Study had received treatment with our LentiGlobin product candidate.

The HGB-206 study – Phase I clinical study in subjects with severe SCD

Our HGB-206 study is a single-dose, open-label, non-randomized, multi-site Phase I clinical study in the United States to evaluate the safety and efficacy of the LentiGlobin product candidate to treat severe SCD.  

Up to 29 adults will be enrolled in the study. Study subjects must be ≥18 years of age with a diagnosis of sickle cell disease, with either β^S/β^S or β^S/β⁰ genotype. The sickle cell disease must be severe, as defined by recurrent severe vaso-occlusive events, acute chest syndrome, history of an overt stroke, or echocardiographic evidence of an elevated tricuspid regurgitation jet velocity, an indicator of pulmonary hypertension, and subjects must have failed to achieve clinical benefit from treatment with hydroxyurea.  The subjects must also be eligible for HSCT.

Efficacy endpoints include changes in the frequency of severe vaso-occlusive crises, acute chest syndrome, and strokes or ischemic attacks.  Pharmacodynamic endpoints include measurements of transgene persistence and transgene expression. Safety endpoints include monitoring for laboratory parameters and frequency and severity of adverse events; the success and kinetics of HSC engraftment; the incidence of treatment related mortality and overall survival; the detection of vector-derived replication-competent lentivirus in any subject; and the characterization of events of insertional mutagenesis leading to clonal dominance or leukemia.

Each subject will remain on study for approximately 26 months from time of consent and then will be enrolled in a long-term follow-up protocol that will assess safety and efficacy beyond 24 months.

In October 2016, we announced that we have amended the protocol for our HGB-206 study to incorporate several changes with the goal of increasing production of anti-sickling β-globin, such as increasing the percentage of transduced cells through manufacturing improvements, increasing target busulfan area under the curve, introducing a minimum period of regular blood transfusions prior to stem cell collection, and collecting HSCs from peripheral blood after mobilization with plerixafor rather than via bone marrow harvest. In February 2017, we treated the first subject under this amended protocol for the HGB-206 study.

Updated Clinical Data for the LentiGlobin product candidate in subjects with TDT or severe SCD

Updated clinical data from the Northstar Study in subjects with TDT

In December 2017, we presented updated clinical data from our Northstar Study at the ASH Annual Meeting. All data presented at ASH Annual Meeting and summarized below from our Northstar Study are as of the data cut-off date of September 21, 2017. As of the data cut-off date, ten subjects with non-β⁰/β⁰ genotypes and eight subjects with β⁰/β⁰ genotypes have undergone infusion with LentiGlobin drug product in our Northstar Study.

For the 18 subjects, the median LentiGlobin drug product vector copy number was 0.7 (min. max: 0.3-1.5) copies per diploid genome, the median cell dose was 8.1 (range: 5.2-18.1) x 10⁶ CD34+ cells/kg, and the proportion of transduced CD34+ cells was 17 to 58 percent. Vector copy number, or VCN, is a measurement of the mean number of viral vectors in a population of cells, or vector copies per diploid genome.

As of the data cut-off date, all 18 subjects have ≥18 months follow up, with ten having completed the two-year follow up analysis. Three subjects have had three years of follow up, for a median of 27.4 (range: 17.5-36.5) months of follow up.

Nine of ten subjects with non-β⁰/β⁰ genotypes were free from chronic transfusions, for a median of 29 (range: 14.7-33.1) months. These nine subjects had HbA^T87Q concentrations of 3.6-9.3 (g/dL). The one subject with a non-β⁰/β⁰ genotype who still required periodic transfusions was treated with LentiGlobin drug product having a VCN in the lower range (0.3 copies per diploid genome).

Two of eight subjects with β⁰/β⁰ genotypes have not received a transfusion in more than a year (16.7 months and 15.7 months). At the subjects’ last study visits (Month 36 and Month 18, respectively), total hemoglobin levels were 10.2 and 10.3 g/dL and HbA^T87Q levels were 9.7 and 7.0 g/dL, respectively. Clinically meaningful reductions in transfusion volume and frequency were observed in five of the six subjects with β⁰/β⁰ genotypes who have continued to receive transfusions.

The safety profile of LentiGlobin drug product continues to be consistent with myeloablative conditioning with single-agent busulfan. No Grade 3 or higher drug product-related adverse events have been observed. All subjects remain enrolled in the study and there have been no reports of graft versus host disease.

It should be noted that these data presented above are current as of the data cut-off date, are preliminary in nature and our Northstar Study is not complete. There is limited data concerning long-term safety and efficacy following treatment with our LentiGlobin product candidate. These data may not continue for these subjects or be repeated or observed in ongoing or future studies involving our LentiGlobin product candidate in subjects with TDT, including this study, our HGB-205 study, our Northstar-2 Study, or our Northstar-3 Study. It is possible that subjects for whom transfusion support has been reduced or eliminated may receive transfusion support in the future.

Updated clinical data from the Northstar-2 Study in subjects with TDT and a non-β0/β0 genotype

In December 2017, we presented updated clinical data from our Northstar-2 Study at the ASH Annual Meeting.  As of December 1, 2017, drug product had been manufactured for ten subjects, using our updated refined drug product manufacturing process. The median LentiGlobin drug product VCN for these subjects was 3.3 (range: 2.4-5.4) copies per diploid genome.  

As of October 13, 2017, seven subjects, with ages of 15-24 years, had been infused with LentiGlobin drug product. The median follow-up period was 3 (range 1-9) months. Three subjects who had ≥6 months of follow-up as of October 13, 2017 are transfusion-free, and of the three subjects, two have achieved or are approaching a normal total hemoglobin level (up to 12.5 g/dL total Hb; range in three subjects: 8.4 – 12.5 g/dL) without transfusions (up to 10.2 g/dL vector-derived HbA^T87Q). Five of six subjects treated in the study with ≥3 months of follow-up available as of December 1, 2017 are making at least 6 g/dL of HbA^T87Q.

The safety profile of LentiGlobin drug product to date is similar to that observed in the Northstar Study, and consistent with myeloablative conditioning with single-agent busulfan. No drug product-related adverse events have been observed. All subjects remain enrolled in the study and there have been no reports of graft versus host disease.

It should be noted that these data presented above are current as of the data cut-off date, are preliminary in nature and our Northstar Study-2 is not complete. There is limited data concerning long-term safety and efficacy following treatment with our LentiGlobin product candidate. These data may not continue for these subjects or be repeated or observed in ongoing or future studies involving our LentiGlobin product candidate in subjects with TDT, including this study, our Northstar Study, or our Northstar-3 Study, or our HGB-205 study. It is possible that subjects for whom transfusion support has been reduced or eliminated may receive transfusion support in the future.

Updated clinical data from the HGB-205 study in subjects with TDT or severe SCD

In December 2017, we presented updated clinical data from our HGB-205 study in subjects with SCD or TDT at the ASH Annual Meeting.  All data presented at the ASH Annual Meeting and summarized below from our HGB-205 study are as of the data cut-off date of September 20, 2017. As of the data cut-off date, the study had enrolled three subjects with severe SCD and four subjects with TDT.

All three subjects with severe SCD were infused with LentiGlobin drug product and showed rising HbA^T87Q in the first six months following infusion. Subject 1204 was 13 years old at study enrollment. At 30 months post-drug product infusion, this subject had a total hemoglobin level of 12.4 g/dL, of which 6.1 g/dL was HbA^T87Q and 52 percent was anti-sickling hemoglobin. HbA^T87Q concentration in this subject has remained stable since approximately nine months post-infusion. The subject continues to show marked clinical improvement. Subject 1207 was 16 years old at study enrollment. At 9 months following drug product infusion, this subject had a total hemoglobin of 10.0 g/dL, of which 0.7 g/dL was HbA^T87Q and 14 percent was anti-sickling hemoglobin). This subject had a pre-treatment history of frequent episodes of vaso-occlusive crisis (VOC) and acute chest syndrome (ACS) despite hydroxyurea prior to beginning regular transfusions. Subject 1207 had episodes of ACS and hospitalization at six and eight months post-treatment, and was treated with exchange transfusions.  Subject 1208 was 21 years old at study enrollment. At last follow-up (6.0 months), this subject had a total hemoglobin of 10.6 g/dL, of which 2.7 g/dL was HbA^T87Q and 46 percent was anti-sickling hemoglobin). This subject had a pre-treatment history of frequent episodes of VOCs and ACS prior to beginning regular transfusions, and was still symptomatic while receiving regular transfusions. Following LentiGlobin treatment, Subject 1208 has had no episodes of VOCs or ACS (with six months follow-up).

All four subjects with TDT have remained free of chronic transfusions since shortly after receiving LentiGlobin drug product. Subject 1201 (β⁰/β^E genotype) has been free of transfusions for 45.2 months with total hemoglobin of 10.1 g/dL at month 42, of which 6.7 g/dL was HbA^T87Q. Subject 1202 (β⁰/β^E genotype) has been free of transfusions for 40.1 months with total hemoglobin of 12.9 g/dLat month 42, of which 10.1 g/dL was HbA^T87Q. Subject 1206 (β⁰/β^E genotype) has been free of transfusions for 23.8 months with total hemoglobin of 11.1 g/dL at month 21, of which 8.0 g/dL was HbA^T87Q. Subject 1203, who is homozygous for the severe β+ mutation IVS1-110, has been free of transfusions for 20.9 months with total hemoglobin of 8.7 g/dL at month 24, of which 6.7 g/dL was HbA^T87Q. Three of four subjects (1201, 1202 and 1206) were able to begin therapeutic phlebotomy. Subject 1202 subsequently discontinued iron chelation and phlebotomy.

The safety profile of LentiGlobin drug product continues to be consistent with myeloablative conditioning with single-agent busulfan. No drug-product related adverse events have been observed.

It should be noted that these data presented above are current as of the data cut-off date, are preliminary in nature and our HGB-205 study is not complete. There is limited data concerning long-term safety and efficacy following treatment with our LentiGlobin product candidate. These data may not continue for these subjects or be repeated or observed in ongoing or future studies involving our LentiGlobin product candidate in subjects with TDT or SCD, including this study, our Northstar Study, our Northstar-2 Study, or our Northstar-3 Study. It is possible that subjects for whom transfusion support has been reduced or eliminated may receive transfusion support in the future. Furthermore, the LentiGlobin drug product used for the HGB-205 study is manufactured at the clinical trial site in Paris, and is not manufactured at our third-party manufacturing locations, and does not use our updated drug product manufacturing process that is being utilized in our Northstar-2 Study.

Updated clinical data from the HGB-206 study in subjects with severe SCD

Also in December 2017 at the ASH Annual Meeting, we presented updated clinical data from our HGB-206 study of subjects with severe SCD.  All data presented at the ASH Annual Meeting and summarized below from our HGB-206 study are as of the data cut-off date of October 26, 2017 for Group A and November 30, 2017 for Group B. Subjects in this study are divided into three cohorts: A, B and C. Subjects in Group A were treated under the original study protocol. Subjects in Group B were treated under an amended study protocol that included changes intended to increase drug product VCN and to improve engraftment of gene-modified stem cells. Subjects in both Group A and B had drug product made from stem cells collected using bone marrow harvest. Subjects in Group C are also treated under the amended study protocol, but received LentiGlobin made from stem cells collected from peripheral blood after mobilization with plerixafor, rather than via bone marrow harvest. As of the data cut-off date, ten subjects had been treated in the study and follow‑up data were available on nine subjects from groups A and B, with a median of 21 (6-27) months since transplantation.  The updated clinical data from our HGB-206 study presented at the ASH Annual Meeting are summarized below.

As of November 30, 2017, LentiGlobin drug product has been manufactured for four subjects enrolled in Group C of this study, for which the median transduced CD34+ cells was 80 percent, the median drug product cell dose was 6.9 x10⁶ CD34+ cells, and the median drug product VCN was 3.3 copies per diploid genome. The first subject treated with LentiGlobin in Group C of this study had VCN of 2.5 copies per diploid genome in peripheral blood one month following infusion.

The safety profile of LentiGlobin drug product observed from drug product infusion to latest follow-up was generally consistent with myeloablative conditioning with single-agent busulfan.

It should be noted that these data presented above are current as of the respective data cut-off dates, are preliminary in nature and our HGB-206 study is not complete. There is limited data concerning long-term safety and efficacy following treatment with our LentiGlobin drug product. These data may not continue for these subjects or be repeated or observed in ongoing or future studies involving our LentiGlobin product candidate in subjects with severe SCD, including this study and our HGB-205 study. It is possible that subjects for whom complications of severe SCD have been reduced or eliminated may experience complications of severe SCD in the future. Furthermore, the LentiGlobin drug product used in the HGB-206 study under the original protocol and presented above did not utilize our refined drug product manufacturing process that is being utilized under the amended protocol for the HGB-206 study.

Clinical data for plerixafor-mediated peripheral HSC collection in subjects with severe SCD

Also in December 2017, we presented clinical data on the feasibility and potential benefits of plerixafor-mediated peripheral HSC collection and LentiGlobin drug product manufacturing subjects with severe SCD at the ASH Annual Meeting. The results of the study, as of the November 30, 2017 data cut-off, suggest that plerixafor mobilization is generally tolerable for severe SCD subjects, and may enable the collection of a greater quantity of higher quality cells that may be used in the manufacture of LentiGlobin drug product, as summarized below:

Our Lenti-D product candidate opportunity

Adrenoleukodystrophy

Adrenoleukodystrophy is a rare X-linked, metabolic disorder caused by mutations in the ABCD1 gene which results in a deficiency in adrenoleukodystrophy protein, or ALDP, and subsequent accumulation of very long-chain fatty acids, or VLCFA. VLCFA accumulation occurs in plasma and all tissue types, but primarily affects the adrenal cortex and white matter of the brain and spinal cord, leading to a range of clinical outcomes. The most severe form of ALD, the inflammatory cerebral phenotype, referred to as CALD, involves a progressive destruction of myelin, the protective sheath of the nerve cells in the brain that are responsible for thinking and muscle control. Symptoms of CALD usually occur in early childhood and progress rapidly if untreated, leading to severe loss of neurological function and eventual death in most patients. We estimate that between 20%approximately 35%  to 40% of boys with ALD will develop CALD.

Limitations of current treatment options

There is a clear unmet medical need for patients with CALD. Currently, the only effective treatment option is allogeneic HSCT. In this procedure, the patient is treated with HSCs containing a functioning copy of the gene contributed by a donor other than the patient.

Allogeneic HSCT is an effective treatment option for patients in the earliest stages of cerebral disease, ideally using an unaffected matched sibling HSC donor to minimize complications. However, the majority of allogeneic HSCT procedures for CALD are carried out with non-sibling matched donor cells or partially matched related or unrelated donor cells including umbilical cord blood cells because a matched sibling donor is not available. The difficulty of finding a suitable donor is one of the primary limitations of this approach. Complications of allogeneic HSCT include a significant risk of morbidity and 50% may havemortality related to graft failure, GVHD and opportunistic infections, particularly in patients who undergo non-sibling-matched allogeneic HSCT.

As the outcome of HSCT varies with clinical stage of the disease so advanced at the time of diagnosis that a beneficial outcome from treatment would be unlikely. This is attributed to rapid disease progression and difficulty withtransplant, early diagnosis asof CALD is important. In the initial presentation of the signs and symptoms of CCALD are frequently misdiagnosed. Newborn screening through a simple and inexpensive blood test is being

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developed to enable earlier detection of CCALD and is available in several states. Based in part on the fact that several states have approved or are currently considering universalUnited States, newborn screening for ALD itwas added to the Recommended Universal Screening Panel, or RUSP, in February 2016. The RUSP is our expectationa list of disorders that are screened at birth and recommended by the Secretary of the U.S. Department of Health and Human Services for states to screen as part of their state universal newborn screening will be widely adoptedprogram. Disorders are chosen based on evidence that supports the potential net benefit of screening, among other factors. A small number of states in the United States within the next five years,have added ALD to their newborn screening programs. Newborn screening may have a profound impact on early identification and potentially elsewhere, providing for the opportunity to identify moretreatment of boys for proactive monitoring of disease symptoms and early disease intervention.with CALD.

Our Lenti-D product candidate

We are developing our Lenti-D product candidate as aan autologous treatment with the potential one-time treatment to haltprovide the progression of CCALD.effectiveness seen with allogeneic-HSCT, but without the immunologic risk. Our approach involves the ex vivo insertion of a functional copy of the ABCD1 gene via an HIV-1 based lentiviral vector into the patient’s own HSCs to correct the aberrant expression of ALDP in patients with CCALD.CALD. Upon successful engraftment of our Lenti-D product candidate, we expect that microglia in the brain derived from the transduced HSCs will correct the metabolic abnormalities resulting from excess VLCFAexpress functional ALDP and stabilize the demyelination and cerebral inflammation characteristiccharacteristics of CCALD.CALD.

We treated the first subject in the Starbeam Study in the United States in 2013. In October 2017, interim data was published in the New England Journal of Medicine along with a poster presentation at the Child Neurology Society Annual Meeting. In January 2015,2018, we received regulatory authority approval forannounced that we intend to expand the Starbeam Study fromto enroll a total of 30 patients in an effort to enable the Medicinesmanufacture of our Lenti-D product candidate in Europe, the subsequent treatment of subjects in Europe, and Healthcare Products Regulatory Agency (MHRA)to bolster our overall clinical data package for potential future regulatory filings in England.the United States and Europe. We also expect to activate a site forare currently enrolling the additional subjects in the Starbeam Study in France, pending approvals from the applicable regulatory authorities. Study.

If successful, and pending further discussion with the regulatory authorities, the results from the Starbeam Study could potentially form the basis of a BLA submission to the FDA and an MAA to the EMA for this product candidate.Lenti-D.  We are planning to submit our first filing for regulatory approval of Lenti-D in 2019.  However, there can be no assurance that the FDA and the EMA will not require additional studies before the approval of a BLA or MAA, respectively. The FDA has advised us that the Starbeam Study may not be deemed to be a pivotal study or may not provide sufficient support for a BLA submission. The FDA normally requires two pivotal clinical studies to approve a drug or biologic product, and thus the FDA may require that we conduct additional clinical studies of Lenti-D prior to a BLA submission. See “Item 1A. Risk Factors—The results from our Starbeam Study may not be sufficiently robust to support the submission of marketing approval for our Lenti-D product candidate. Before we submit Lenti-D for marketing approval, the FDA and the EMA may require us to enroll additional subjects, conduct additional clinical studies, or evaluate subjects for an additional follow-up period.” Lenti-D has been granted Orphan Drug status by the FDA and EMA for CCALD.adrenoleukodystrophy.

Clinical development of our Lenti-D product candidate

Completed non-interventional retrospective study (the ALD-101 Study)

Due toCALD is a rare disease and as such, data on the rarity of CCALD, and the fact that allogeneic HSCT has historically not been subject to extensive systematic analysis in controlled clinical studies, the amount of clinical data necessary to precisely characterize progressionnatural history of the disease, andas well as the efficacy and safety profile of allogeneic HSCT is largely absent fromlimited in the current scientific literature. Accordingly, inIn order to properly design future clinical studiesfurther characterize the natural history of Lenti-DCALD, describe outcomes after HSCT, and interpret the efficacy and safety results thereof, at the recommendationidentify predictors of the FDA,positive treatment outcomes, we performed a non-interventionallarge, multicenter, retrospective chart review and collected data collection study to assess the natural course of disease in CCALDon 72 untreated CALD patients, that were left untreated, which we refer to as the untreated group or cohort, in comparison to the efficacy and safety data obtained from65 CALD patients thatwho received allogeneic HSCT, which we refer to as the treated cohort. A non-interventional retrospective data collection study involves an examination of historical clinical records from patients with the pertinent condition in order to assess the typical course of the condition and the efficacy and safety of treatment options.HSCT.  In the study, we collected neurologicsurvival, functional and neuropsychological assessments and neuroimaging data for both treated and untreated patients, as available; however, given the retrospective nature of the study, we were not able to collect comprehensive data for all subjects.  Additional analyses were conducted to gain further insight into ongoing risks and determinants of successful outcomes after HSCT, identify appropriate populations for treatment, and define endpoints that could be useful for future clinical studies.

ForStarbeam Study (ALD-102) – Phase II/III clinical study in subjects with CALD

In October 2013, we treated the first subject in a Phase II/III clinical study, called the Starbeam Study, of our Lenti-D product candidate, to evaluate its safety and efficacy in subjects with CALD.  The study is designed as a single-dose, open-label, non-randomized, international, multi-site Phase II/III study to test the safety and efficacy of our Lenti-D product candidate in preserving neurological function and stabilizing cerebral demyelination in subjects with CALD. Subjects will be followed for 24 months post-infusion under this protocol. In accordance with applicable guidance from the FDA and EMA, we will be monitoring study we collected data from four U.S. sitessubjects in a separate long-term follow up protocol to evaluate safety for up to 15 years, and one French site onwill also monitor efficacy endpoints to demonstrate a totalsustained treatment effect.

The primary efficacy endpoint of 137 subjects, 72 of whom were untreated and 65 of whom were treated with allogeneic HSCT. To our knowledge, the ALD-101 Studystudy is the proportion of patients who are alive and free of major functional disabilities (MFD) at 24 months post-treatment.  MFDs are 6 of the most comprehensive study ever conductedsevere functional disabilities typical of CALD that are thought to characterizebe of the greatest clinical outcomessignificance because they most severely impair a patient’s ability to functional independently. They are loss of communication, no voluntary movement, cortical blindness, tube feeding, wheelchair dependence, and total incontinence. The primary safety endpoint is the proportion of patients who experience either ≥ Grade 2 acute GVHD or chronic GVHD by 2 years post-treatment.

Secondary and exploratory endpoints include change in untreatedNeurologic Function Score (NFS), change in Loes score, resolution of gadolinium enhancement on MRI, evidence of graft failure, and allogeneic HSCT-treated CCALD patient populations.occurrence of AEs and SAEs.

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Three primaryThe NFS is a 25-point score used to evaluate the severity of gross neurologic dysfunction by scoring 15 neurological abnormalities across multiple domains. These neurological abnormalities are listed below. Among the 15 functional domains in the NFS scale, we consider six to be of particular clinical measurementsimportance because when these neurological abnormalities occur, a potential subject’s ability to function independently is severely compromised. These particular deficiencies, which we define as major functional disabilities, or MFDs, are loss of CCALD disease progression

The findings from the ALD-101 Study suggest that, although there are a wide numbercommunication, complete loss of cognitive, behavioral, functionalvoluntary movement, cortical blindness, requirement for tube feeding, wheelchair dependence and radiological modalities utilized to assess patients with CCALD, three are utilized most widely and consistently:

Among

The Loes score is a 34-point scale specifically designed to objectively measure the 15 functional domainsextent of demyelination and atrophy in CALD based on brain magnetic resonance imaging, or MRI, studies. Increasing Loes scores indicate worsening disease. A Loes score of one-half or more (i.e., the NFS scale, we consider sixpresence of any such abnormalities) indicates the cerebral form of the disease, and patients with a Loes score of 10 or more generally are not considered to be of particular clinical importance because when these neurological abnormalities occur, the patient’s ability to function independently is severely compromised. These particular deficiencies, which we define as Major Functional Disabilities, or MFDs, are loss of communication, complete loss of voluntary movement, cortical blindness, requirement for tube feeding, wheelchair dependence and total incontinence.

Summary of findings

Key findings from the ALD-101 Study are summarized below:

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As a consequence of this observation, and consistent with entry criteria that have been used in studies of allogeneic HSCT due to the entry criteria for the Starbeam Study excludes subjects with evidence of advanced disease on NFS and Loes score to prevent enrollment of subjects whose disease would be expected to progress to a poor outcome despite treatment.

We believe the results from the ALD-101 Study support the proposition that, while the approach of treating a patient with genetically corrected HSCs can stabilize the progression of disease in patients with CCALD, there remains a significant unmet medical need for safer therapies, particularly for patients without the option of a sibling-matched donor. We believe that manystage of the issues that contribute to the mortalitydisease. CALD can progress rapidly and morbidityis associated with allogeneic HSCT couldsevere inflammation and disruption of the blood brain barrier which can be avoided usingdetected by gadolinium enhancement on brain MRI. Evidence of gadolinium enhancement, referred to by clinicians as a patient’s own gene-modified HSCs. Importantly,gadolinium positive result, is highly predictive of rapid neurologic decline. However, while pre-transplant gadolinium status is clearly correlated with rapid disease progression, the results from thiskinetics of gadolinium enhancement after clinically successful HCST are not well understood.

In the study, were also used to inform the criteria for patient and endpoint selection for our Starbeam Study.

Previous clinical experience with lentiviral gene therapy for CCALD (the TG04.06.01 Study)

Between September 2006 and September 2010, four boyssubjects must be age seventeen years or younger with a confirmed diagnosis of CCALD were treated in Paris, France, inactive CALD, including elevated levels of plasma VLCFA, a Phase I/II study with autologous HSCs transducedbrain MRI Loes score of 0.5 to nine, inclusive, evidence of gadolinium enhancement and an NFS ex vivo≤ one. Subjects with a lentiviral vector carrying a functional ABCD1 gene before reinfusion. Short-term clinical data and biological experience withwilling, unaffected 10/10 HLA matched sibling HSCT donor will be excluded from the first two treated boys was first reported in Science (2009).

The TG04.06.01 Study is sponsored bystudy. In December 2016, we amended the institut national de la santé et de la recherche médicale (French Institute of Health and Medical Research), or Inserm, in Paris, and the lentiviral vector was supplied by a third party company not affiliated with bluebird bio. We are party to a strategic collaboration agreement with Inserm for the development of HSC gene therapies in this patient population, pursuant to which we are collaborating with Patrick Aubourg, the Principal Investigator of the TG04.06.01 Study.

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In the TG04.06.01 Study, all four subjects had cerebral demyelinating lesions with Loes scores ranging from two to seven prior to treatment. Gadolinium contrast enhancement indicated that the lesions were active and inflammatory in all four subjects. At the time of enrollment, each subject had a normal neurologic examination with NFS equal to zero.

Below is a summary of the efficacy results for each of the four subjects in the TG04.06.01 Study as of March 2013:

We believe these efficacy results are consistent with outcomes that would be expected following successful allogeneic HSCT. All four boys were alive two years or more after treatment, while the ALD-101 Study would suggest an expected mortality rate of approximately 20% in the same two-year window post-allogeneic HSCT. As assessed by NFS and brain MRI, Subjects One, Two and Four showed encouraging evidence of disease stabilization. Additionally, gadolinium enhancement resolved in Subjects One, Two and Four, suggesting a reduction of neuroinflammation. These results also contrast with the natural history of disease in untreated patients, which is characterized by continuous and rapid progression of cerebral demyelination in the majority of cases, particularly those with gadolinium enhancement on brain MRI. All four subjects demonstrated some deterioration of neurologic function within the second year after transplant, which is expected as it is also seen following allogeneic HSCT. Although neurologic deficits have occurred in these subjects post-treatment, we are encouraged by the fact that neurologic disease stabilized in all four subjects.

Importantly, as of March 2013, there were no reported incidents of gene therapy-related safety concerns in the TG04.06.01 Study. In addition, none of these subjects experienced adverse events due to immune incompatibility issues typically associated with allogeneic HSCT, such as graft rejection or GVHD.

We believe the efficacy and safety results of the TG04.06.01 Study provided clinical proof-of-concept, as the lentiviral vector used in the study shares many features with our Lenti-D vector. In addition, the results of the TG04.06.01 Study were helpful in informing the design of our Starbeam Study. The designprotocol of the Starbeam Study is built upon the observations madeto enroll up to eight additional patients in the TG04.06.01 Study, but will enroll a larger number of subjects, is a multi-center trial with a different primary endpoint and in consultation with experts in the field, and has a predefined criterion for clinical success.  Additionally, with improvements we have introduced into the vector manufacturing and transduction processes, we expectan effort to obtain a higher frequency of gene-modified HSCs in subjects treated in the Starbeam Study compared to what was achieved in the TG04.06.01 Study, which we believe should translate into improved clinical benefit by virtue of the increased expression of normally-functioning ALDP.

Phase II/III Starbeam clinical study

In October 2013, we treatedenable the first subject in a Phase II/III clinical study, called the Starbeam Study, of our Lenti-D product candidate, to evaluate its safety and efficacy in subjects with CCALD. The study is designed as a single-dose, open-label, non-randomized, international, multi-center Phase II/III study to test the safety and efficacymanufacture of our Lenti-D product candidate in preserving neurological functionEurope and stabilizing cerebral demyelination in subjects with CCALD. Subjects will be followed for 24 months post-transplant under this protocol. In accordance with applicable guidance from the FDA and EMA, we will be monitoring studysubsequent treatment of subjects in a long-term follow up protocolEurope, and to evaluate safetybolster our overall clinical data package for up to 15 years, and will also monitor efficacy endpoints to demonstrate a sustained treatment effect.

Based on results from our retrospective ALD-101 Study and consultation with leading clinicianspotential future regulatory filings in the field of ALD, we have defined the primary efficacy endpoint in the Starbeam Study as the proportion of subjects who have no MFDs, as measured by NFS, at 24 months (±two months) post-transplant. Secondary efficacy evaluations, in each case measured at 24 months (±two months) post-transplant, capture the key assessments of CCALD disease status, including the change from baseline in NFSUnited States and Loes score,Europe.

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resolution of gadolinium enhancement on MRI and determination of MFD-free survival and overall survival. The sample size for this study was not determined by formal statistical methods, but we believe it may be sufficient to demonstrate a robust effect on the binary response endpoint, where a responder is defined as a subject with no MFD at 24 months (±two months) following treatment with Lenti-D drug product. Thus, we expect the FDA and EMA will make a qualitative assessment of the efficacy and safety data from this study to evaluate whether the results are sufficient to support a BLA or MAA filing.

Safety evaluations will be performed during the study and will include evaluation of the following: success and kinetics of HSC engraftment; incidence of transplant-related mortality through 100 and 180 days post-transplant;mortality; detection of vector-derived replication of the lentivirus; and characterization and quantification of events related to the location of insertion of the functional gene in target cells.

If successful, we believe that the results from the Starbeam Study could form the basis of a BLA and an MAA. However, given the current number of subjects and design of the study and the qualitative/subjective assessment of the data, there can be no assurance the FDA or EMA will not require one or more additional clinical studies as a precursor to a BLA application or an MAA, respectively. The FDA has advised us that the Starbeam Study may not be deemed to be a pivotal study or may not provide sufficient support for a BLA submission. The FDA normally requires two pivotal clinical studies to approve a drug or biologic product, and thus the FDA may require that we conduct additional clinical studies of our Lenti-D product candidate prior to a BLA submission.

Interim Clinical Data from the Starbeam Study

In October 2017, we presented interim clinical data from the Starbeam Study at the Child Neurology Society (CNS) Annual Meeting. All data presented at the CNS Annual Meeting and summarized below from the Starbeam Study are as of the data cut-off date of August 25, 2017. As of the data cut-off date, each of the initial cohort of 17 subjects had achieved 24 months of post-treatment follow-up. Fifteen of these initial 17 subjects remain alive and free of MFDs, the primary efficacy endpoint of the trial. These 15 subjects also maintained NFS ≤ 1 at 24 months of follow-up. Twelve of the 17 subjects had a stable Loes score at 24 months of follow-up, defined as maintaining a Loes score of ≤ 9 or not increasing by ≥ 6 from baseline. Fourteen of these initial 17 subjects showed resolution of gadolinium enhancement at their last follow-up.

As of August 25, 2017, an additional four subjects in the expansion cohort had been infused and received Lenti-D drug product with a median drug product VCN of 1.4 (range: 1.2 – 1.9) copies per diploid genome.  Most adverse events for the entire cohort occurred during the 2 weeks post-transplant and most were associated with myeloablative chemotherapy. There were three adverse events deemed related or possibly related to Lenti-D drug product: one serious adverse event of Grade 3 BK-mediated viral cystitis, one adverse event of Grade 1 tachycardia, and one adverse event of Grade 1 vomiting.  All resolved with standard measures.  There was no engraftment failure or GVHD. There was no evidence of insertional oncogenesis.

It should be noted that the data presented above are current as of August 25, 2017, are preliminary in nature and the Starbeam Study is not complete. There are limited data concerning long-term safety and efficacy following treatment with our Lenti-D product candidate. These responses may not continue for these subjects or be repeated or observed in our ongoing Starbeam Study or future studies involving our Lenti-D product candidate. It is possible that subjects who exhibit NFS stabilization, a stable Loes score, or resolution of gadolinium enhancement as of the data cut-off date may experience disease progression in the future.

The ALD-103 study – Observational study

We are also conducting the ALD-103 study, an observational prospective and retrospective data collection study of 60 subjects with CCALD treated byCALD ≤17 years of age who received allogeneic HSCT referred to as the ALD-103 study.HSCT.  This study willis ongoing and designed to collect efficacy and safety outcomes data in patientssubjects who are undergoing allogeneic-HSCT.have undergone allogeneic HSCT in a period that is contemporaneous with the Starbeam Study.  We anticipate that our Lenti-D product candidate safety and efficacy will be evaluated by the FDA and EMA in light of the data collected in the Starbeam Study as well asin conjunction with our retrospective observational ALD-101 study and our retrospective and prospective observational ALD-103 study.

Our LentiGlobin opportunity

ß-thalassemia

Overview

ß-thalassemia is a rare hereditary blood disorder caused by a genetic abnormality of the ß-globin gene resultingcollaboration with Boston Children’s Hospital in defective red blood cells, or RBCs. Genetic mutations cause the absence or reduced production of the beta chains of hemoglobin, or ß-globin, thereby preventing the proper formation of hemoglobin A, which normally accounts for greater than 95% of the hemoglobin in the blood of adults. Hemoglobin is an iron-containing protein in the blood that carries oxygen from the respiratory organs to the rest of the body. Hemoglobin A consists of four chains—two chains each of a-globin and ß-globin. Normally existing at an approximate 1:1 ratio, genetic mutations that impair the production of ß-globin can lead to a relative excess of a-globin, leading to premature death of red blood cells. The clinical implications of the a-globin/ß-globin imbalance are two-fold: first, patients lack sufficient RBCs and hemoglobin to effectively transport oxygen throughout the body and can become severely anemic; and second, the shortened life span and ineffective production of RBCs can lead to other complications such as splenomegaly, marrow expansion, bone deformities, and iron overload in major organs.

The clinical course of ß-thalassemia correlates with the degree of globin chain imbalance. Nearly 200 different mutations have been described in patients with ß-thalassemia. The clinical presentation varies widely, dependent largely upon the number and type of inherited mutation. Mutations can be categorized as those which result in little or no functional ß-globin production (ß°) and those which result in decreased functional ß-globin production (ß⁺). ß-thalassemia major refers to any mutation pairing that results in the need for chronic transfusions due to severe anemia, and is the clinical finding in patients with ß°ß° genotype as well as many with the ß°ß⁺ genotype. Affected patients produce as little as one to seven g/dL of hemoglobin (while a normal adult produces 12-18 g/dL of hemoglobin). Hemoglobin E, which is another ß-globin mutation and is usually asymptomatic, can also result in ß-thalassemia major when paired with the ß° or ß⁺ mutations.

ß-thalassemia is concentrated in populations of Mediterranean, South and Southeast Asian and Middle Eastern descent. It has been estimated that about 1.5% (80 to 90 million people) of the global population are carriers of ß-thalassemia, with about 60,000 symptomatic individuals born annually, the great majority in the developing world. According to Thalassemia International Federation, about 288,000 patients with ß-thalassemia major are alive and registered as receiving regular treatment around the world, of which it is estimated that about 15,000 live in the United States and Europe. Due to the rarity of this disease in the United States, published research on the prevalence of ß-thalassemia in the United States is limited, although it is estimated that due to changing immigration patterns, 1.8 in 100,000 births in California are affected by ß-thalassemia.

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Limitations of current treatment options

In geographies where treatment is available, patients with ß-thalassemia major receive chronic blood transfusion regimens aimed at maintaining steady state hemoglobin levels. These regimens consist of infusions with units of pRBC every three to five weeks, the timing of which is based predominantly on monitoring hemoglobin levels. Chronic blood transfusions can be effective at preventing the symptoms of childhood ß-thalassemia major, however, often lead to iron overload, which over time leads to mortality through iron-associated heart and liver toxicity. To prevent iron overload-associated risks, patients must adhere to therapeutic iron chelation regimens to reduce the iron overload. Poor compliance with chelation regimens remains a key challenge; it is estimated that with typical compliance, the overall life expectancy for a patient with transfusion-dependent ß-thalassemia is only 28 years. Even patients who are compliant with transfusion and iron chelation regimens can experience a reduced quality of life due to the burden of therapy and the fluctuating levels of hemoglobin on a month-to-month basis.

The only potentially curative therapy for ß-thalassemia today is allogeneic HSCT. However, because of the significant risk of transplant-related morbidity and mortality, transplants are offered primarily to pediatric patients with a matched sibling donor, which occurs in less than 25% of all cases. Allogeneic HSCT carries a significant risk of morbidity and mortality related to myeloablation), immunosuppressive medications, graft failure, GVHD and opportunistic infections. Overall, ß-thalassemia major remains a devastating disease with an unmet medical need.

In many developing countries where ß-thalassemia is more prevalent, such as Thailand, the lack of readily available chronic blood transfusions and optimal iron chelation regimens represents a significant societal challenge. In these countries, children with ß-thalassemia major have a poor prognosis and experience growth retardation, hepatosplenomegaly, or enlargement of the spleen, and skeletal deformities resulting from extra-medullary hematopoiesis. Ultimately, most die in childhood. We believe that safer therapies, such as those represented by our gene therapy approach, could offer a potential solution to the challenges of treating ß-thalassemia patients across the world.

Sickle cell disease

Overview

Sickle cell disease, or SCD is a hereditary blood disorder resulting from a mutation in the ß-globin gene that causes polymerization of hemoglobin proteins and abnormal red blood cell function. The disease is characterized by anemia, vaso-occlusive pain crisis (a common complication of SCD in which there is severe pain due to obstructed blood flow in the bones, joints, lungs, liver, spleen, kidney, eye, or central nervous system), infections, stroke, overall poor quality of life and early death in a large subset of patients. Under low-oxygen conditions, which are exacerbated by the red blood cell abnormalities, the mutant hemoglobin aggregates causing the RBCs to take on a sickle shape (sickle cells), which causes them to aggregate and obstruct small blood vessels, thereby restricting blood flow to organs resulting in pain, cell death and organ damage. If oxygen levels are restored, the hemoglobin can disaggregate and the RBCs will return to their normal shape, but over time, the sickling damages the cell membrane and the cells fail to return to the normal shape even in high-oxygen conditions. Additionally, the sickle-shaped RBCs tend to rupture more easily, often resulting in damage to the blood vessels and iron overload that can ultimately lead to organ failure and death.

SCD is concentrated in populations of African, Middle Eastern and South Asian descent. The global incidence of SCD is estimated to be 250,000-300,000 births annually, and the global prevalence of the disease is estimated to be about 20-25 million. In the United States, where SCD is a standard part of mandatory newborn screening, the incidence is more than 1,600 births annually with an estimated prevalence of 100,000 individuals.

Limitations of current treatment options

Where adequate medical care is available, common treatments for patients with SCD include chronic blood transfusions and hydroxyurea. As is the case with ß-thalassemia, chronic transfusions pose a compliance burden and are associated with significant risks that often leads to mortality through iron-associated heart and liver toxicity. Patients must also adhere to daily iron chelation regimens. A significant number of patients with SCD find it difficult to adhere to hydroxyurea treatment regimens due in part to drug-related toxicities.

The only potentially curative therapy currently available for SCD is allogeneic HSCT, however because of the significant risk of transplant-related morbidity and mortality, this option is usually offered primarily to pediatric patients with available sibling-matched donors. It is particularly difficult to find suitable donors for individuals of African descent, and it is estimated that approximately 10% of eligible patients do so. In light of these factors, we believe SCD is a devastating disease with a significant unmet medical need.

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Our LentiGlobin product candidate

We are developing our LentiGlobincollaborating with investigators at Boston Children’s Hospital, or BCH, to advance a product candidate as a potential one-time treatment for both ß-thalassemia major and severe SCD. Our approach involves the ex vivo insertion of a single codon variant of the normal ß-globin gene usingthat utilizes a lentiviral vector intodelivering a short hairpin RNA, or shRNA, embedded in a microRNA, or miRNA, which is known as a shRNAmiR, to suppress the patient’s own HSCsgenetic target BCL11a to enable formation of normally functioningupregulate fetal hemoglobin A and normal RBCs into treat patients with ß-thalassemia orsevere SCD.  Importantly,An IND to investigate this codon variant, referred to as T87Q, also serves as a distinct biomarker used to quantify expression levels of the functional ß-globin protein in patients with ß-thalassemia and SCD, while also providing strong anti-sickling properties in the context of SCD. We refer to the HSCs that have undergone gene modification ex vivo as the final LentiGlobin drug product, or our LentiGlobin product candidate.

We are conducting two  Phase I/II clinical studies of our LentiGlobin product candidate to evaluate its safety and efficacy in subjects with ß-thalassemia major. In December 2013, we announced that the first subject with ß-thalassemia major had been treated in our French study of LentiGlobin, called the HGB-205 study, which also permits the enrollment of subjects with severe sickle cell disease, or SCD. In October 2014 we announced that the first subject with severe SCD had been treated in the French HGB-205 study. In March 2014, we announced that the first subject with ß-thalassemia major had been treated in our other study of LentiGlobin being conducted in the United States, Australia and Thailand, called the Northstar Study. We presented preliminary results from the HGB-205 study at the European Hematology Association Congress in June 2014 and presented preliminary results from both the HGB-205 study and the Northstar Study at the American Society of Hematology Annual Meeting in December 2014.

We have initiated a Phase I clinical study inis now open, and our collaborators at BCH plan to initiate the United States, called the HGB-206 Study, to evaluate the safety and efficacy of LentiGlobin in subjects with severe SCD.

LentiGlobin has been granted Orphan Drug status by the FDA and EMA for both β-thalassemia and severe SCD, in January 2013 LentiGlobin was granted Fast-Track designation by the FDA for the treatment of beta-thalassemia major, and in January 2015, the FDA granted Breakthrough Therapy designation to LentiGlobin for the treatment of transfusion dependent patients with β-thalassemia.

Clinical development of our LentiGlobin product candidate

Previous clinical experience with lentiviral gene therapy for ß-thalassemia major (the LG001 Study)

Between September 2006 and November 2011, three subjects with ß-thalassemia major were treated in France by our scientific collaborators in a Phase I/II study with autologous HSCs transduced ex vivo with an earlier generation of our LentiGlobin vector, called HPV569. We refer to the HSCs transduced ex vivo with the HPV569 vector as the HPV569 drug product. Clinical data and biological experience with one subject in this study (Subject Three) were first reported in Nature (2010), with follow-up data presented at the European Hematology Association Congress in June 2014.

Four subjects were enrolled in the LG001 Study, although only three subjects were actually treated with the HPV569 drug product—Subject One was ineligible due to pre-transplant complications. The other three subjects were successfully transplanted, however Subject Two received a dose of HPV569 drug product with cell counts well below current standards in transplant practice and failed to engraft. All subjects enrolled in the study required significant transfusion support prior to treatment. Below is a summary of the results for the two subjects with successful engraftment:

All subjects from LG001 have been offered the possibility to enroll in the long term follow-up study, LTF-303, to evaluate long-term safety and efficacy post-transplant.

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We believe the efficacy and safety results of the LG001 Study provided clinical proof-of-concept, as the lentiviral vector used in the study shares many features with our current LentiGlobin vector. In addition, the results of the LG001 Study were helpful in informing the design of our HGB-205 and Northstar clinical studies. Additionally, with improvements we have introduced into the vector manufacturing and transduction processes, we expect to obtain a higher proportion of gene-therapy modified HSCs in the drug product manufactured for the patients treated in the HGB-205 and Northstar clinical studies compared to what was achieved in the LG001 Study, which we believe will translate into improved clinical efficacy and in improved clinical benefit by virtue of increased production of normally functioning hemoglobin.

The HGB-205 Phase I/II clinical study for ß-thalassemia major and severe sickle cell disease

The HGB-205 study is a Phase I/II clinical study to examine the safety and efficacy of our LentiGlobin product candidate in up to seven subjects with a diagnosis of ß-thalassemia major or severe SCD. Study subjects must be between five and 35 years of age with a diagnosis of ß-thalassemia major or severe SCD. In December 2013, we announced that the first subject with ß-thalassemia major had been treated in the HGB-205 study and in October 2014 we announced that the first subject with severe SCD had been treated in the European HGB-205 study. To be enrolled, subjects with ß-thalassemia must have received at least 100 mL/kg/year of pRBCs per year for the past two years. Those with SCD must have failed to achieve clinical benefit from treatment with hydroxyurea and have an additional poor prognostic risk factor (e.g., recurrent veno-occlusive crises or acute chest syndromes). All subjects must be eligible for allogeneic HSCT, but without a matched sibling allogeneic HSCT donor.

For all subjects, efficacy will be measured by RBC transfusion requirements per month and per year, post-transplant and the number of total in-patient hospitalization days (post-transplant discharge) at six, 12 and 24 months. For SCD patients only, efficacy will be measured by the number of vaso-occlusive crises or acute chest syndrome events at six, 12 and 24 months and evaluation of changes in the nature or frequency of the subject-specific main inclusion criteria.

Safety evaluations to be performed during the study include success and kinetics of HSC engraftment, incidence of transplant-related mortality post-treatment, overall survival, detection of vector-derived replication-competent lentivirus in any subject and characterization of events of insertional mutagenesis leading to clonal dominance or leukemia.

Preliminary Clinical Data from the HGB-205 Study

In December 2014, we presented preliminary clinical data from the HGB-205 study at the Annual Meeting of the American Society of Hematology, or ASH.  As of December 1, 2014, two subjects with β-thalassemia major had undergone infusion with LentiGlobin BB305 drug product in the HGB 205 study. Both of these subjects achieved rapid transfusion independence with near-normal hemoglobin levels and are producing steadily increasing amounts of ß-^T87Q-globin, similar to what may be expected from a successful allogeneic transplant, and as of December 1, 2014, had been free from the need for transfusions for 12 months and nine months, respectively. The third treated subject in the HGB-205 study, the first individual with sickle cell disease ever to be treated with gene therapy, has achieved engraftment, but at the time of the ASH annual meeting, it was too early post-transplant to draw any meaningful conclusions on clinical efficacy.  Below is a table summarizing the preliminary clinical data from the HGB-205 study presented at the ASH annual meeting in December 2014:

*VCN is an abbreviation for Vector Copy Number, which is a measurement of the mean number of viral vectors in a population of cells, in this case, of the LentiGlobin drug product prior to infusion of the study subject.   If more than one drug product was manufactured for a subject, the VCN of each drug product lot is quantified and the cell count is combined.

**Hemoglobin levels represent data from the six-month follow up visit. Nine-month visit hemoglobin data not yet available.

In the HGB-205 study, treatment with LentiGlobin has been well tolerated, with no gene therapy-related Grade 3 or greater adverse events observed as of December 1, 2014.

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The Northstar Phase I/II clinical study for ß-thalassemia major

The Northstar Study is a single-dose, open-label, non-randomized, multi-site Phase I/II clinical study in the United States, Australiafirst half of 2018.  We have an exclusive license to this program and Thailandthe related intellectual property from BCH.

Our preclinical research opportunities in severe genetic diseases

We believe our current gene therapy platform will enable us to evaluatedevelop and test new vectors based on similar viral vector backbones that carry different gene sequences for other severe genetic diseases. In this way, we believe that we can advance products efficiently through preclinical into clinical development. We may consider research and development programs targeting other monogenic, genetic diseases that involve cells derived from HSCs for use in the safetyex vivo setting. These programs may involve severe genetic and efficacyrare diseases that could be developed and potentially commercialized on our own.

In addition, we believe our expertise in gene editing and cell transduction also provides an opportunity to develop new products for use in the in vivo setting. In this case, homing endonucleases and MegaTALs that provide a highly specific and efficient way to modify DNA sequences to edit or insert genetic components would be delivered directly to the disease site (e.g., to the brain, liver or eye) or into the bloodstream of the LentiGlobin product candidate patient and, in increasing hemoglobin productionvivo deliver the genetic material to or modify those target cells. We believe in vivo gene editing opens up additional rare disease and eliminating or reducing transfusion dependence following treatment. In March 2014, we announced thatlarge market indications where this approach is more appropriate for the first subject with ß-thalassemia major had been treateddisease and targeted cells.

Our Opportunity in our Northstar Study.T Cell-Based Therapies for Cancer

Up to 15 adults will be enrolledWe are engaging in the study. Study subjects must be between 18discovery and 35 yearsdevelopment of age with a diagnosis of ß-thalassemia major and receive at least 100 mL/kg/year of pRBCs or greater than or equal to eight transfusions of pRBCs per year in each of the two years preceding enrollment. The subjects must also be eligible for allogeneic HSCT.  We are planning to amend the protocol for the Northstar Study to allow for the enrollment of adolescent subjects between 12 and 17 years of age.

Efficacy will be evaluated primarily by the production of ³2.0 g/dL of hemoglobin A containing ß^A-T87Q-globin for the six-month period between 18 and 24 months post-transplant. In order to allow for endogenous hemoglobin production following transplant, subjects will be transfused with RBCs only when total hemoglobin decreases below 7.0 g/dL. The rationale for the primary endpoint is that production of ³2.0 g/dL of hemoglobin A containing ß^A-T87Q-globin represents a clinically meaningful increase in endogenous hemoglobin production that would be expected to diminish transfusion requirements, and could result in transfusion independence in ß-thalassemia subjects.

Exploratory efficacy endpoints include RBC transfusion requirements (measured in milliliters per kilogram) per month and per year, post-transplant. Safety evaluations to be performed during the study include success and kinetics of HSC engraftment, incidence of transplant-related mortality post-treatment, overall survival, detection of vector-derived replication-competent lentivirus in any subject and characterization of events of insertional mutagenesis leading to clonal dominance or leukemia. Subjects will be monitored by regular screening. Each subject will remain on study for approximately 26 months from time of consent and then will be enrolled in a long-term follow-up protocol that will assess safety and efficacy beyond 24 months.

Preliminary Clinical Data from the Northstar Study

In December 2014, we presented preliminary clinical data from the Northstar Study at the ASH Annual Meeting.   As of December 1, 2014, five subjects with β-thalassemia major had undergone infusion with LentiGlobin BB305 drug product in the Northstar Study. The first two subjects treated in the Northstar Study had produced steadily increasing amounts of β-^T87Q-globin and, as of December 1, 2014, had been free from the need for transfusions for five months and three months, respectively. As of December 1, 2014, three additional subjects had been infused, but at the time of the ASH annual meeting, it was too early to draw any meaningful conclusions on clinical efficacy for these subjects.  Below is a table summarizing the preliminary clinical data from the Northstar Study presented at the ASH annual meeting in December 2014:

* VCN is an abbreviation for Vector Copy Number, which is a measurement of the mean number of viral vectors in a population of cells, in this case, of the LentiGlobin drug product prior to infusion of the study subject.   If more than one drug product was manufactured for a subject, the VCN of each drug product lot is quantified and the cell count is combined.

**Data includes two months of follow-up on safety only.

The HGB-206 clinical study for severe sickle cell disease

The HGB-206 Study is a single-dose, open-label, non-randomized, multi-site Phase I clinical study in the United States to evaluate the safety and efficacy of the LentiGlobin product candidate to treat severe SCD.  

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Up to 8 adults will be enrolled in the study. Study subjects must be ≥18 years of age with a diagnosis of sickle cell disease, with either β^S/β^S or β^S/β⁰ genotype. The sickle cell disease must be severe, as defined by recurrent severe venoocclusive events, acute chest syndrome, history of an overt stroke, or echocardiographic evidence of an elevated tricuspid regurgitant jet velocity, an indicator of pulmonary hypertension.  The subjects must also be eligible for HSCT.

Efficacy endpoints include changes in the frequency of severe vaso-occlusive crises, acute chest syndrome, and strokes or ischemic attacks.  Pharmacodynamic endpoints include measurements of transgene persistence and transgene expression.

Safety endpoints include monitoring for laboratory parameters and frequency and severity of adverse events; the success and kinetics of HSC engraftment; the incidence of treatment related mortality and overall survival; the detection of vector-derived replication-competent lentivirus in any subject; and the characterization of events of insertional mutagenesis leading to clonal dominance or leukemia.

Each subject will remain on study for approximately 26 months from time of consent and then will be enrolled in a long-term follow-up protocol that will assess safety and efficacy beyond 24 months.

Our CAR T Cell Oncology Opportunity

In March 2013, we announced a global strategic collaboration with Celgene Corporation to discover, develop and commercialize novel, disease-altering gene therapies in oncology. The collaboration focuses on applyingWe believe that our gene therapy technologyplatform can be applied to genetically modify a patient’s own T cells to target and destroy cancer cells.  Such modified T cells calledby recognizing specific

cell surface proteins, in the case of chimeric antigen receptor,receptors, or CAR T cells, have been shownCARs, or by academic researchers to have beneficial effectsrecognizing specific protein fragments derived from either intracellular or extracellular protein, in human clinical trials for patients with a varietythe case of lymphomas.  The multi-year research and development collaboration has the potential to lead to the development and commercialization of multiple CAR T cell products for a variety of liquid and solid tumor cancers.  We expect the first product candidate from this collaboration to enter clinical trials in early 2016.receptors, or TCRs.

Immune System and T Cells

The immune system recognizes danger signals and responds to threats at a cellular level. It is often described as having two arms. The first arm is known as the innate immune system, which recognizes non-specific signals of infection or abnormalities as a first line of defense. The innate immune system is the initial response to an infection, and the response is the same every time regardless of prior exposure to the infectious agent. The second arm is known as the adaptive immune system, which is composed of highly specific, targeted cells and provides long-term recognition and protection from infectious agents and abnormal processes such as cancer. The adaptive immune response is further subdivided into humoral, or antibody based, and cellular, which includes T cell-based immune responses.

The most significant components of the cellular aspect of the adaptive immune response are T cells, so called because they generally mature in the thymus. T cells are involved in both sensing and killing infected or abnormal cells, as well as coordinating the activation of other cells in an immune response. These cells can be classified into two major subsets, CD4+ T cells and CD8+ T cells, based on cell surface expression of the CD4 or CD8 glycoproteins. Both subsets of T cells have specific functions in mounting an immune response capable of clearing an infection or eliminating cancerous cells. CD4+ T cells, or helper T cells, are generally involved in coordinating the immune response by enhancing the activation, expansion, migration, and effector functions of other types of immune cells. CD8+ T cells, or cytotoxic T cells, can directly attack and kill cells they recognize as infected or otherwise abnormal, and are aided by CD4+ T cells. Both types of T cells are activated when their T cell receptor recognizes and binds to a specific protein structure expressed on the surface of another cell. This protein structure is composed of the major histocompatibility complex, or MHC, and a small protein fragment, or peptide, derived from either proteins inside the cell or on the cell surface. Circulating CD4+ and CD8+ T cells survey the body differentiating between MHC/peptide structures containing “foreign” peptides and those containing “self” peptides. A foreign peptide may signal the presence of an immune threat, such as an infection or cancer, causing the T cell to activate, recruit other immune cells, and eliminate the targeted cell.

Although the immune system is designed to identify foreign or abnormal proteins expressed on tumor cells, this process is either ineffective or defective in cancer patients. The defective process sometimes occurs when cancer cells closely resemble healthy cells and go unnoticed or if tumors lose their MHC protein expression. Additionally, cancer cells employ a number of mechanisms to escape immune detection to suppress the effect of the immune response. Some tumors also encourage the production of cells that suppress the immune response, such as regulatory T cells that block cytotoxic T cells that would normally attack the cancer.

History of Cancer Immunotherapy

Cancer has historically been treated with surgery, radiation, chemotherapy and hormone therapy. More recently, advances in understanding of the immune system’s role in cancer have led to immunotherapy becoming an important treatment approach. Cancer immunotherapy began with treatments that nonspecifically activated the immune system and had limited efficacy and/or

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significant toxicity. In contrast, new immunotherapy treatments can activate specific, important immune cells, leading to improved targeting of cancer cells, efficacy, and safety. Within the immunotherapy category, treatments have included cytokine therapies, antibody therapies, and adoptive cell transfer therapies.

In 1986, interferon-a became the first cytokine approved for cancer patients. In 1992, interleukin-2, or IL-2, was the second approved cytokine in cancer treatment, showing efficacy in melanoma and renal cell cancer. IL-2 does not kill cancer cells directly, but instead nonspecifically activates and stimulates the growth of the body’s own T cells which then combat the tumor. Although interferon-a, IL-2, and subsequent cytokine therapies represent important advances in cancer treatment, they are generally limited by toxicity and can only be used in a limited number of cancers and patients.

Cytokine-based therapies set the stage for immunotherapy, and antibody therapies represented the next significant advance, with targeted specificity and a generally better-tolerated side effect profile. Monoclonal antibodies, or mAbs, are designed to attach to proteins on cancer cells, and once attached, the mAbs can make cancer cells more visible to the immune system, block growth signals of cancer cells, stop new blood vessels from forming, or deliver radiation or chemotherapy to cancer cells. The first FDA approvedFDA-approved mAb specifically for cancer was Rituxanrituximab in 1997, and since then, many other antibodies have received approval, including Herceptin, Avastin, Campath, Erbitux,trastuzumab, bevacizumab, alemtuzumab, cetuximab, and Vectibix.panitumumab. More recently, antibodies have been conjugated with cytotoxic drugs to increase activity. The first approved antibody drug conjugate was Mylotarggemtuzumab ozogamicin in 2000, followed by Adcetrisbrentuximab vedotin in 2011 and Kadcyclatrastuzumab emtansine in 2013.

The next important advance has been the development of antibodies that target T cell checkpoint pathways, which are means by which cancer cells are able to inhibit or turn down the body’s immune response to cancer. These treatments have shown an ability to

activate T cells, shrink tumors, and improve patient survival. In 2011, Yervoyipilimumab became the first checkpoint inhibitor approved by the FDA. Recent clinical data from new checkpoint inhibitors such as nivolumab and Keytruda havepembrolizumab led to their approval by FDA (in 2015 and 2016) as treatments in multiple cancers and confirmed both the approach and the importance of T cells as promising tools for the treatment of cancer.

Despite these many advances, a significant unmet need in cancer still persists. We believe that the use of human cells as therapeutic entities to re-energize the immune system will be the next significant advancement in the treatment of cancer. These cellular therapies may avoid the long-term side effects associated with current treatments and have the potential to be effective regardless of the type of previous treatments patients have experienced.  We are developing our CAR T cell technology to useand TCR-based approaches using our lentiviral vector gene transfer technology and experience in order to deliver specifically and directly deliver a payload of potent anti-cancer agents to T cells, engineeredwhich may give them the ability to kill the cancer.

cancer cells.

Our CAR and TCR T TechnologyCell Technologies

Like our programs for HSCs, our CAR T technology usescell-based immunotherapies use a customized lentiviral vector to alter T cells ex vivo, or outside the body, so that the T cells can recognize specific proteins or protein fragments on the surface of cancer cells or other diseased cells in order to kill thosethese diseased cells.  T cells that have been genetically-engineered to make CAR or TCRs are designed to help a patient’s immune system overcome survival mechanisms employed by cancer cells. CAR T cell technology directs T cells to recognize cancer cells based on expression of specific cell surface antigens, whereas TCR T cell technology provides the T cells with a specific T cell receptor that recognizes protein fragments derived from either intracellular or extracellular proteins.

With both our CAR and TCR T technology,cell technologies, we harvest a patient’s white blood cells in a process called leukapheresis, activate certain T cells to grow and then the gene sequences for the CAR or TCR construct are transferred into the T cell DNA using a lentiviral vector. The number of cells is expanded until it reaches the desired dose. These genetically engineered cells, which will express the receptors that can recognize the specific proteins that are characteristic of specific cancers, are then infused back into the patient. Our entire T cell engineering process is rapid (complete in aroundapproximately ten days) and manufactures modified T cells in a sterile closed system.

When the engineered CAR T cell is returned to the cancer patient, it engages the target protein on the cancer cell, triggers a series of signals that result in tumor cell killing, through the production of anti-cancer cytokines, and undergoes multiple rounds of cell division to greatly expand the number of these anti-cancer T cells. These engineered T cells have the natural “auto-regulatory” capability of normal T cells and once the tumor cells containing the target proteinantigen are destroyed, the engineered T cells decrease in number, leavingbut with the potential to leave a smaller number of memory T cells in the body as a form of immune surveillance against potential tumor regrowth. The genetically-engineered CAR T cells are designed to supplement a patient’s immune system and can be further engineered to overcome immune evasion mechanisms employed by cancer cells.

Our CAR and TCR T cell technologytechnologies also bringsbring genomic engineering tools to the immunotherapy field.  UsingFor instance, we are exploring applications of our CAR and TCR T cell technologies in combination with novel proteins based on synthetic biology. These technologies may potentially allow our future T cell-based product candidates to detect the tumor microenvironment or, in the case of future CAR T cell product candidates, to be regulated by small molecules. In addition, using our gene editing homing endonuclease technology, we potentially have a number of additional options to manipulate the genome of the cancer patient’s T cells to further increase the specificity of the anti-tumor activity and to potentially make these cells even more potent.  Specificity and potency are essential to the development of CAR T cell therapies that can effectively treat solid tumor cancers such as breast, prostatelung and colon cancer.  Our cancer immunotherapy research group is staffed by scientists drawn from both industry and academic research centers that have pioneered the field of CAR T cell therapy.  This team is focused on the next generation of T cell engineering to discover and develop T cell product candidates to treat a variety of liquidhematologic and solid tumor malignancies. 

Our CAR T cell product candidates – bb2121 and bb21217

We are developing, in collaboration with Celgene, bb2121 and bb21217, our CAR T cell product candidates, with the goal for filing for regulatory approval in multiple myeloma on a global basis.  bb2121 and bb21217 both bind to BCMA, a cell surface protein expressed on cancer cells. Multiple myeloma is a hematologic malignancy that develops in the bone marrow in which normal antibody-producing plasma cells transform into myeloma. The growth of the cancer cells in the bone marrow blocks production of normal blood cells and antibodies, and also causes lesions that weaken the bone. BCMA is expressed on normal plasma cells, some mature B cells, and on malignant multiple myeloma cells, but is absent from other normal tissues. We believe BCMA presents an attractive immunotherapeutic target for our technology for a number of reasons. In December 2015, researchers from the NIH announced promising clinical data in multiple myeloma with an anti-BCMA CAR T cell therapy that established clinical proof-of-concept for the BCMA target using a gamma-retroviral vector.

We are conducting a Phase I clinical study of our bb2121 product candidate in the United States. Our product candidate bb2121 is the lead product candidate from our multi-year collaboration with Celgene. Since our collaboration arrangement with Celgene was

announced in March 2013, we have worked collaboratively to discover, develop and commercialize CAR T cell product candidates in oncology. The FDA and EMA have granted Orphan Drug status to both the bb2121 product candidate for the treatment of patients with relapsed/refractory multiple myeloma.  The FDA has granted Breakthrough Therapy designation and the EMA has granted PRIME eligibility to the bb2121 product candidate for relapsed/refractory multiple myeloma.

Our collaboration arrangement with Celgene was amended in June 2015 to focus on CAR T cell product candidates targeting BCMA. In February 2016, we exclusively licensed to Celgene the right to develop and commercialize our bb2121 product candidate and we expect to exercise our option to co-develop and co-promote this product candidate in the United States.  In February 2018, Celgene treated the first patient in a Phase 2 clinical trial of bb2121 in relapsed/refractory multiple myeloma, and Celgene plans to conduct additional clinical studies of bb2121 in earlier lines of treatment for multiple myeloma, including a planned international Phase III study of bb2121 in third line multiple myeloma.  Celgene has announced plans to file a BLA with the FDA in 2019 for bb2121 to treat relapsed/refractory multiple myeloma.  We retain an option to co-develop and co-commercialize this product candidate, as described more fully below under “Strategic collaborations—Our strategic alliance with Celgene.”

In September 2017, we initiated a Phase I clinical study of bb21217, the second anti-BCMA cell product candidate arising from our collaboration with Celgene, and Celgene exercised its option to obtain an exclusive worldwide license to develop and commercialize bb21217. The FDA has also granted Orphan Drug status to the bb21217 product candidate for the treatment of patients with relapsed/refractory multiple myeloma.

The CRB-401 study – Phase I clinical study in subjects with relapsed/refractory multiple myeloma

Our CRB-401 study is a single-dose, open-label, non-randomized, multi-site Phase I clinical study in the United States to examine the safety and efficacy of our bb2121 product candidate in up to 50 subjects with relapsed/refractory multiple myeloma. In order to be eligible for CRB-401, subjects must have received three prior regimens, including a proteasome inhibitor (PI; bortezomib or carfilzomib) and an immunomodulatory agent (IMiD;lenalidomide or pomalidomide), or be “double-refractory” to both a proteasome inhibitor and an immunomodulatory agent.  In the expansion cohort, subjects must have received at least a PI, and IMiD and daratumumab, and be refractory to their last time of therapy.

Following screening, enrolled subjects undergo a leukapheresis procedure to collect autologous T cells for manufacturing our bb2121 drug product. The bb2121 drug product is produced from each subject’s own blood cells, which are modified using a lentiviral vector encoding the anti-BCMA CAR. Following manufacture of the bb2121 drug product, subjects receive one cycle of lymphodepletion of cyclophosphamide and fludarabine prior to infusion of the bb2121 drug product.

The primary endpoint of the study is the incidence of adverse events and abnormal laboratory test results, including dose-limiting toxicities. The study also seeks to assess disease-specific response including: complete response (CR), very good partial response (VGPR), and partial response (PR) according to the International Myeloma Working Group Uniform Response Criteria for Multiple Myeloma. The study also seeks to determine the maximally tolerated dose and recommended dose for further clinical trials.

Each subject is followed for up to 60 months post-treatment, and then is enrolled in a long-term follow-up protocol that will assess safety and efficacy beyond the 60-month period.  In September 2017, we announced that the expansion cohort of the study has been initiated with first subject treated, and the final patient enrolled in the CRB-401 study was treated in February 2018.

Updated Clinical Data from the CRB-401 Study

In December 2017, we and Celgene Corporation presented updated results from our CRB-401 study at the ASH Annual Meeting. All data presented at this meeting and summarized below from our CRB-401 study are as of the data cut-off date of October 2, 2017. As of the data cut-off date, 21 subjects had been enrolled and dosed in the dose-escalation phase of the study, in four dose cohorts: 50 x 10⁶, 150 x 10⁶, 450 x 10⁶ and 800 x 10⁶ CAR-T cells. Subjects on study were heavily pre-treated, with a median of seven prior therapies, ranging from three to 14 prior lines of therapy. Eighteen subjects were enrolled and dosed in the active dose cohorts (150 x 10⁶, 450 x 10⁶ and 800 x 10⁶ CAR-T cells), with a median follow-up of 40 weeks (range: 6.6-69 weeks). Seventeen of these subjects achieved an objective response, of which 16 subjects achieved at least a very good partial response (VGPR), of which 10 subjects achieved a complete response or unconfirmed complete response.  Nine of the ten subjects who were evaluable for minimal residual disease status were found to be MRD-negative, one MRD positive patient did no obtain a response. Median progression-free survival has not been reached in the active dose cohorts. The progression-free survival at 6 months and 9 months was 81% and 71%, respectively. Three subjects of the 21 subjects in the dose-escalation phase of the study who initially responded to therapy subsequently experienced disease progression.

In the dose-escalation phase, 15/21 (71%) of subjects had cytokine release syndrome (CRS), mostly Grade 1 & 2, with 2 subjects experiencing Grade 3 CRS (9%). Four subjects received tocilizumab, 1 (Grade 2 CRS) received steroids and in each case the CRS

resolved within 24 hours. The most common treatment-emergent Grade 3-4 adverse event in 21 infused subjects were cytopenias commonly associated with lymphodepleting chemotherapy including neutropenia (86%), anemia (57%) and thrombocytopenia (43%). There were two deaths in the active cohorts at 22 and 69 weeks following infusion, respectively. The first was due to cardiac arrest and the second was due to myelodysplastic syndrome; both subjects were in a myeloma complete response at their last study assessment prior to death. Based on the findings during dose escalation, a dose expansion phase of 20 subjects has started testing doses between 150-450 x 10⁶ CAR-T cells. In the dose expansion phase, one subject treated at the 450 x 10⁶ CAR-T cells dose experienced Grade 4 neurotoxicity including focal cerebral edema and subarachnoid hemorrhage. This subject had a high tumor burden, and a history of subarachnoid hemorrhage. The event was successfully managed, and the subject remains in the response group. No other Grade 3/4 neurotoxicity was observed in the escalation or expansion cohort.

It should be noted that these data presented above are current as of data cut-off date and are preliminary in nature, and that our CRB-401 study is not complete. There is limited data concerning long-term safety and efficacy following treatment with our bb2121 drug product. These data may not continue for these subjects or be repeated or observed in this ongoing study or future studies involving our bb2121 product candidate. It is possible that subjects who initially respond to treatment with our bb2121 drug product may experience disease progression.

The CRB-402 study – Phase I clinical study in subjects with relapsed/refractory multiple myeloma

Our CRB-402 study is a single-dose, open-label, non-randomized, multi-site Phase I clinical study in the United States to examine the safety and efficacy of our bb21217 product candidate in up to 50 subjects with relapsed/refractory multiple myeloma. In order to be eligible for CRB-402, subjects must have received three prior regimens, including a proteasome inhibitor (PI: bortezomib or carfilzomib) and immunomodulatory agent (IMid: lenalidomide or pomalidomide), or be “double-refractory” to both a proteasome inhibitor and an immunomodulatory agent.  In the expansion cohort, subjects must have received at least a PI, and IMiD and daratumumab, and be refractory to their last line of therapy.

Following screening, enrolled subjects undergo a leukapheresis procedure to collect autologous T cells for manufacturing our bb21217 drug product. The bb21217 drug product is produced from each subject’s own blood cells, which are modified using a lentiviral vector encoding the anti-BCMA CAR. Following manufacture of the bb21217 drug product, subjects receive one cycle of lymphodepletion of cyclophosphamide and fludarabine prior to infusion of the bb21217 drug product.

The primary endpoint of the study is the incidence of adverse events and abnormal laboratory test results, including dose-limiting toxicities. The study also seeks to assess disease-specific response including: complete response (CR), very good partial response (VGPR), and partial response (PR) according to the International Myeloma Working Group Uniform Response Criteria for Multiple Myeloma. The study also seeks to determine the maximally tolerated dose and recommended dose for further clinical trials.

Each subject will be followed for up to 24 months post-treatment, and then will be enrolled in a long-term follow-up protocol that will assess safety and efficacy beyond the 24-month period. In September 2017, we announced the treatment of the first patient with relapsed/refractory multiple myeloma.  

Our other preclinical research opportunities in cancer

We are pursuing multiple programs that leverage the unique properties of lentiviral vectors to target T cells as a therapy for various cancers. This represents a direct application of our expertise in gene therapy and our capabilities, know-how and patents associated with lentiviral gene therapy and gene editing for ex vivo applications.

We are collaborating with Medigene AG, through its subsidiary Medigene Immunotherapies GmbH, to jointly discover and develop TCR product candidates directed against up to four antigens in the field of cancer. We are collaborating with TC BioPharm Limited in the research and development of gamma delta CAR T cells directed at hematologic and solid tumors targets.   We are also independently researching and developing other CAR T cell product candidates against a variety of targets relevant to both hematologic and solid tumors.

Our Gene Editing Opportunity

In June 2014, we acquired Pregenen, a privately-held biotechnology company headquartered in Seattle, Washington. Through the acquisition, we obtained rights to Pregenen’s gene editing technology platform and cell signaling technology, and have integrated

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these technologies and research team and expanded its discovery research efforts.  We are focused on utilizing homing endonuclease and megaTAL gene editing technologies in a variety of potential applications and disease areas, including for hematologyoncology and oncology.  hematology.  

Homing endonucleases and MegaTALs are novel enzymes that provide a highly specific and efficient way to silence, edit, or insert genetic components intomodify the genome of a target cell to potentially treat a variety of diseases.

All of the gene-editing technologies currently being explored by the pharmaceutical industry, including zinc finger nucleases, CRISPR/Cas9, and TALENs, share common features of a DNA binding domain and a DNA cleavage domain.  They all differ in specificity, size, ease of delivery and as naturally occurring versus engineered nucleases.  Homing endonucleases and megaTALs are the onlybased on a naturally-occurring class of DNA cleaving enzymes that function as monomeric naturally occurring proteins able to bind DNA in a sequence specific fashionsequence-specific manner and cleave their target sites.  MegaTALs are fusion proteins that combine homing endonucleases with the targeting domain of TALENs resulting in greater DNA sequence specificity and lower off target activity.site. We believe there are multiple advantages of homing endonucleases and MegaTALs compared to other gene editing technologies, most notably: they are naturally occurring gene-editing proteins, they are highly specific and efficient in cutting DNA and their compact size allows forsimplifies delivery of multiple proteins.to therapeutically relevant cell types.  We are using our gene editing platform, along with collaborations with multiple academic institutions, to potentially discover and develop next generation versions of our current ex vivo gene therapy product candidates, and to potentially expand into new disease indications.

Manufacturing

Our gene therapy platform has two main components: lentiviral vector production and the target cell transduction process, which results in drug product.

Our lentiviral manufacturing process

Our lentiviral vectors are assembled using a human cell line called HEK293T. The HEK293T cells are maintained in disposable flasks until sufficient cell mass has been generated to fill approximately 40 ten tray cell factories, or TTCFs, then transferred and allowed to adhere to the bottom of the trays.  Adherent cells are transfected with multiple plasmids encoding all the genetic material required to assemble the lentiviral vector carrying the functional gene of interest.  The transfected HEK293T cells then assemble our lentiviral vectors packaged with the functional gene of interest, which bud off into the cell culture media. The media containing the assembled vectors is harvested, purified, concentrated and formulated prior to freezing for storage. These finished lentiviral vectors are what is ultimately used to transduce the HSCstargeted cells isolated from the patient.

We believe that our lentiviral vectors have broad applicability, since the majority of the viral production system can remain the same, while we change only the therapeutic gene “cassette” depending on the disease. In other words, the vector “backbone” stays the same, while only the therapeutic gene and related sequences are changed. If we were to undertake drug development in an additional indication, we believe we could rapidly move forward using this lentiviral vector backbone and associated assays, simply by switching the therapeutic gene insert and associated control elements.

Although we intend to continue manufacturing our Lenti-D vectors in TTCFs, we are adapting our LentiGlobin, bb2121 and bb21217 vector production technology to a larger, suspension-based bioreactor processscalable production systems with the potential to scale from 100 to upwardssatisfy an increased number of 1,000 liters in a single production run.patients per manufacturing cycle. So far, we have demonstrated successful production of LentiGlobin, bb2121 and bb21217 vectors on a smallat pilot scale and have transferredare transferring the

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new process to a contract manufacturer to accommodate future demand for our drug candidates, if approved, in their current indications as well as those beyond our initial focus.

Our HSC transduction process—creating the gene-modified cellsHSCs (our drug product)

The ultimate product of our manufacturing processes is the patient’s own gene-modified HSC cells, which we refer to as our drug product. The process for producing drug product for our HSC-based product candidates is as follows:

The final step is to return the gene-modified HSCs to the patient. Just prior to dosing, theWe are e using our updated drug product is thawed and sampled for cellmanufacturing process with the objective of increasing the vector copy number and viability to ensure the dose administered meets a pre-defined minimum.

We rely exclusively onpercentage of transduced cells in the use of contract manufacturing organizations to manufacture our Lenti-D and LentiGlobin vectors and drug product candidates,in our ongoing Northstar-2 and do not own or operate anyNorthstar-3 Studies and our HGB-206 study under the amended protocol.

Our T cell transduction process—creating the gene-modified T cells (our drug product)

The ultimate product of our manufacturing processes is the patient’s own facilitiesgene-modified T cells, which we refer to as our drug product. The process for these purposes. However,producing drug product for our T cell-based product candidates is as follows:

The final step is to return the gene-modified T cells to the patient.  

Manufacturing Arrangements  

In November 2017, we purchased a partially completed manufacturing facility located in Durham, North Carolina for $11.5 million. We acquired this 125,000 square foot facility to provide manufacturing capacity for our lentiviral vectors in support of

our current and planned gene and cell therapy product candidates. We have also entered into multi-year agreements with manufacturing partners in the United States and Europe (Brammer Bio, Novasep and MilliporeSigma), which are partnering with us on production of lentiviral vector across all of our programs. In addition, we have entered into multi-year agreements with Lonza Houston, Inc. and apceth Biopharma to produce drug product for Lenti-D, LentiGlobin and bb21217.  Celgene manufactures drug product for bb2121.  We believe our team of technical personnel has extensive manufacturing, analytical and quality experience as well as strong project management discipline to effectively oversee these contract manufacturing and testing activities, and to compile manufacturing and quality information for our regulatory submissions.

Future applicationssubmissions and opportunities

The investments that we have made to industrialize our gene therapy platform, processes and manufacturing may have application to other severe genetic and rare diseases. We believe that we have the opportunity to pursue other disease indications that would take advantage of our know-how and other intellectual property, and expertise in three main areas:

We also are pursuing gene therapy programs that target other cell types, such as T cells, that leverage the unique properties of lentiviral vectors. Through our global partnership with Celgene, we are now developing gene therapy products by inserting novel gene sequences into a patient’s own T cells using lentiviral vectors for oncology. This represents a direct application of our expertise in gene therapy and our capabilities, know-how and patents associated with lentiviral gene therapy for ex vivo applications. As we further develop this program, we will investigate the opportunity to expand the application to other cell types for new potential indications.commercial launch.

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Strategic collaborations

Our objective is to develop and commercialize a next generation of products based on the transformative potential of gene therapy to treat patients with severe genetic and rare diseases and cancer. To access the substantial funding and other resources required to develop and commercialize gene therapy products in these diseases, we have formed, and intend to seek other opportunities to form, strategic alliancescollaborations with collaboratorsthird parties who can augment our industry leading gene therapy, T cell immunotherapy, lentiviral vector and gene-editing expertise. To date, we have focused on forging a limited number of significant strategic alliancescollaborations with leading pharmaceutical partnerscompanies and academic laboratoriesresearch centers where both parties contribute expertise to enable the discovery and development of potential gene therapy product candidates.

Our strategic alliancecollaboration with Celgene

In March 2013, we announced a strategic collaboration with Celgene Corporation to discover, develop and commercialize novelchimeric antigen receptor modified T cells, or CAR T cells, as potentially disease-altering gene therapies in oncology.oncology, which was amended and restated in June 2015, and amended again in February 2016 and in September 2017. The multi-year research and development collaboration focusesfocused on applying our expertise in gene therapy technology to genetically modify a patient’s ownCAR T cells,cell-based therapies, to target and destroy cancer cells.  Such modified T cells, which are called chimeric antigen receptor, orOur collaboration now focuses exclusively on anti-BCMA CAR T cells, have been shown to have beneficial effects in human clinical trials for patients with B cell lymphomas. The multi-year research andproduct candidates. We advanced our development collaboration has the potential to lead to the development and commercialization of multiple CAR T cell products.  We are currently planning to advanceour bb2121 product candidate, the first CAR T product candidate from our collaboration with Celgene, into clinical trials in earlyFebruary 2016. In February 2016, we exclusively licensed to Celgene the right to develop and commercialize our bb2121 product candidate, pursuant to Celgene’s exercise of its exclusive option under the collaboration arrangement. We have the obligation to continue conducting our ongoing CRB-401 study, but Celgene has the responsibility for the costs of further development and of commercialization. We retain an option to co-develop and co-promote the bb2121 product candidate in the United States. In September 2017, we initiated a Phase I clinical study of bb21217, the second anti-BCMA cell product candidate arising from our collaboration with Celgene, and Celgene exercised its option to obtain an exclusive worldwide license to develop and commercialize bb21217.

Under the terms of the collaboration, for any product candidate selected for development under the collaboration, we are and will be responsible for conducting and funding all research and development activities performed up through completion of the initial Phase I clinical study iffor the bb2121 and the bb21217 product candidates. Celgene has agreed to reimburse us a specified amount per patient in the event we and Celgene mutually agree to expand any Phase I clinical trial for any product candidate under the collaboration beyond a specified number of such product candidate.patients per clinical trial. This collaboration is governed by a joint steering committee, or JSC, formed by representatives from us and Celgene. The JSC, among other activities, reviews the collaboration program, reviews and evaluates product candidates and approves regulatory plans.

On a product candidate-by-product candidate basis, up through a specified period following completion ofenrollment for the first patient in an initial Phase I clinical study for such product candidate, we have granted Celgene an option to obtain an exclusive worldwide license to develop and commercialize such product candidate pursuant to a written agreement, the form of which we have already agreed upon. IfEffective as of February 2016, Celgene electshas exercised its option with respect to exercise thisthe bb2121 product candidate, and we have exclusively licensed to Celgene the worldwide rights to develop and commercialize the bb2121 product candidate. Effective as of September 2017, Celgene has exercised its option it must pay us an option fee, subjectwith respect to reduction ifthe bb21217 product candidate, and we have exclusively licensed to Celgene the worldwide rights to develop and commercialize the bb21217 product candidate.  We may elect to co-develop and co-promote thatthe bb2121 product candidate and the bb21217 candidate in the United States.States, provided that, if we do not exercise our option to co-develop and co-promote the bb2121 product candidate, then we will not be permitted to exercise our option to co-develop and co-promote any future product candidates under the collaboration.

Celgene is solely responsible for all costs and expenses of manufacturing and supplying the bb2121 and the bb21217 product candidates, and for any other product candidates arising from the collaboration that it exclusively licenses. Subject to customary “back-up” supply rights granted to Celgene, we have the sole right to manufacture or have manufactured supplies of vectors and associated payloads manufactured for incorporation into the optioned product candidates. Celgene will reimburse us for our costs to manufacture and supply such vectors and associated payloads, plus a modest mark-up.

In connection with its exercise of the option to exclusively in-license the bb2121 and the bb21217 product candidates, Celgene paid to us an option fee in the amount of $10.0 million and $15.0 million, respectively. In addition, for each product candidate that is in-licensed by Celgene, including bb2121 and bb21217, we will be eligible to receive up to $10.0 million in clinical milestone payments,

up to $117.0 million in regulatory milestone payments and up to $78.0 million in commercial milestone payments if we do not exercise our option to co-develop and co-promote in the option fee, Celgene wouldUnited States. We will also be obligatedeligible to pay us additional amounts based upon achievement of specified development and regulatory milestones andreceive a percentage of net sales as a royalty however, if we elect to co-develop and co-promote in the United States, this royalty only applies to sales outside the United States. The maximum option fee payable to us under these agreements, together with the maximum additional payments payable to us upon achievement of specified clinical, regulatory and commercial milestones, is $225 million, and the royalties payable to usa range from the mid-single digits to mid-teens.low-teens. The royalties payable to us are subject to certain reductions, including for any royalty payments required to be made by Celgene to acquire patent rights, with an aggregate minimum floor. Celgene will assume certain development obligations and must report on their progress in achieving these milestones on a quarterly basis.

If we do elect to co-develop and co-promote the product candidate within the United States, we would share equally in all costs relating to developing, commercializing and manufacturing the product candidate within the United States and we would share equally in the United States profits.

Celgene will be solely responsible for all costs Additionally, if we elect to co-develop and expenses of manufacturing and supplying any optioned product candidates. Subject to customary “back-up” supply rights granted to Celgene, we have the sole right to manufacture or have manufactured supplies of vectors and associated payloads manufactured for incorporation into the optionedco-promote a product candidate, then the milestones and royalties would decrease compared to those described above. Under this scenario, we would receive per product candidate up to $10.0 million in clinical milestone payments and outside of the United States, up to $54.0 million in regulatory milestone payments and up to $36.0 million in commercial milestone payments. In addition, to the extent any of the product candidates licensed by Celgene and co-developed and co-promoted by us are commercialized, we would reimbursebe entitled to receive tiered royalty payments ranging from the mid-single digits to low-teens based on a percentage of net sales generated outside of the United States. The royalties payable to us for our costsare subject to manufacture and supply such vectors and associated payloads, plus a modest mark-up.certain reductions, including any royalty payments required to be made by Celgene to acquire patent rights, with an aggregate minimum floor.

If Celgene does not exercise its option with respect to any product candidate prior to expiration of the applicable option period, then we have the right to develop that product candidate outside the scope of the collaboration, subject to a Celgene opt-in right to obtain a license to that product candidate, which right exists through a specified period following completion of a pivotal study for that product candidate.collaboration.

We received an initial up-front payment of $75.0 million from Celgene in connection with the collaboration.collaboration, plus an additional $25.0 million in connection with the amendment in June 2015. The collaboration term ends in March 2016, unless extended at Celgene’s option. Celgene may elect to extend the term twice, first for a period of two years and then for an additional period, in each case in consideration of a specified payment to us.June 2018. Either party may terminate the agreement upon written notice to the other party in the event of the other party’s uncured material breach. Celgene may terminate the agreement for any reason upon prior written notice to us. If the agreement is terminated, rights to product candidates in development at the time of such termination will be allocated to the parties through a mechanism included in the agreement. In addition, if Celgene terminates the agreement for our breach, any then- existing co-development and co-promotion agreement will be automatically terminated and

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replaced with a license agreement for such product candidate and any amounts payable by Celgene under any then-existing product license agreements will be reduced.

Baylor College of Medicine

Simultaneous with entering into the collaboration agreement with us, Celgene entered into a strategic collaboration with the Baylor College of Medicine, or Baylor, to discover, develop and commercialize CAR T cell products. We are not a party to this collaboration agreement, although, by virtue of our agreements with Celgene, the joint steering committee under the Baylor-Celgene collaboration agreement will include representatives selected by us, together with representatives selected by each of Celgene and Baylor. Under our collaboration agreement with Celgene, we may develop product candidates covered by the intellectual property rights of Baylor in this field, which intellectual property rights would be in-licensed by Celgene pursuant to its collaboration agreement with Baylor.

Call Option and Target Antigen License

During the initial three-year term of the collaboration and, if extended, during the first two-year extension term of the collaboration, in the event that we engage in a change in control transaction, including for such purposes a merger or consolidation of bluebird bio or the sale of all or substantially all of our assets, or if another person or entity or group of persons or entities acquires at least 50% of our voting capital stock, then Celgene has the right, but not the obligation, to terminate the collaboration agreement and obtain perpetual, non-terminable, worldwide, exclusive, fully paid-up licenses to all, but not less than all, of the product candidates previously identified under the collaboration agreement. We refer to this right to acquire such licenses as the call option.

Under the call option, the product candidates to which Celgene would have the right to acquire fully paid-up licenses include any product candidate previously licensed out of the collaboration during the term of the collaboration, any product candidate for which we have exercised our right to co-develop and co-promote the product candidate within the United States, any product candidate for which Celgene previously declined its option to obtain a license and any product candidate for which at least in vivo efficacy studies have been initiated or authorized by the JSC. The purchase price for such fully paid-up licenses would be determined pursuant to a binding arbitration process and would be paid on or about the consummation of the change in control transaction with our acquiror.

In addition, during the initial three-year term of the collaboration, but not during any extension of the collaboration agreement, in the event that we engage in a change in control transaction described above and Celgene exercises the call option described above, then, in addition to the right to acquire the fully paid-up licenses described above, Celgene would also have the right to obtain a perpetual, non-terminable, worldwide, exclusive license to our intellectual property to develop one or more CAR T cell products targeting one or more oncology associated target antigens identified by Celgene following the third anniversary of the collaboration agreement. There is no limit to the number of oncology associated target antigens Celgene may select under this license. Upon commercialization of any such product candidate so licensed by Celgene, Celgene would be obligated to pay us a specified milestone payment upon regulatory approval and a percentage of net sales as a royalty. We refer to this license agreement to develop one or more CAR T cell products targeting one or more oncology associated target antigens as the target antigen license.

The call option and the right to acquire a target antigen license may have the effect of delaying or preventing a change in control transaction involving us, or may reduce the number of companies interested in acquiring us. See “Item 1A. Risk Factors—Provisions in our collaboration agreement with Celgene Corporation may prevent or delay a change in control.”

Intellectual property

We strive to protect and enhance the proprietary technology, inventions, and improvements that are commercially important to the development of our business, including seeking, maintaining, and defending patent rights, whether developed internally or licensed from third parties. We also rely on trade secrets relating to our proprietary technology platform and on know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of gene therapy that may be important for the development of our business. We additionally rely on regulatory protection afforded through orphan drug designations, data exclusivity, market exclusivity, and patent term extensions where available.

Our commercial success may depend in part on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to our business; defend and enforce our patents; preserve the confidentiality of our trade secrets; and operate without infringing the valid enforceable patents and proprietary rights of third parties. Our ability to stop third parties from making, using, selling, offering to sell or importing our products may depend on the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities. With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of manufacturing the same.

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We have developed or in-licensed numerous patents and patent applications and possess substantial know-how and trade secrets relating to the development and commercialization of gene therapy products. Our proprietary intellectual property, including patent and non-patent intellectual property, is generally directed to, for example, certain genes, transgenes, methods of transferring genetic material into cells, genetically modified cells, processes to manufacture our lentivirus-based product candidates and other proprietary technologies and processes related to our lead product development candidates. As of January 31, 2015,2018, our patent portfolio includes the following:

Our objective is to continue to expand our portfolio of patents and patent applications in order to protect our gene therapy product candidates and lentiviral manufacturing process.processes. Examples of the products and technology areas covered by our intellectual property portfolio are described below. See also “—License agreements.” From time to time, we also evaluate opportunities to sublicense our portfolio of patents and patent applications that we own or exclusively license, and we may enter into such licenses from time to time.

Childhood Cerebral Adrenoleukodystrophy (CCALD)β-thalassemia/SCD

The CCALD platformβ-thalassemia/SCD program includes three patent portfolios, described below.

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ß-thalassemia/SCD

The ß-thalassemia/SCD platform includes three patent portfolios, described below.