UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 20192022

OR

Commission File Number 001-37923

CRISPR THERAPEUTICS AG

(Exact name of Registrantregistrant as specified in its Charter)charter)

Registrant’s telephone number, including area code: +41+41 (0)41561 32 77

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

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

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

Indicate by check mark whether the Registrant: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 Registrantregistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES Yes☒ NO No☐

Indicate by check mark whether the Registrantregistrant has submitted electronically every Interactive Data File required to be submitted 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 Registrantregistrant was required to submit such files). YES Yes☒ NO No☐

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

If an emerging growth company, indicate by check mark if the Registrantregistrant 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 Registrantregistrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of the common shares held by non-affiliates of the Registrant was approximately $2.5$4.3 billion, based on the closing price on the Nasdaq Global Market of the Registrant’s common shares on June 28, 201930, 2022 (the last trading day of the Registrant’s second fiscal quarter of 2019)2022).

The number of the Registrant’s common shares outstanding as of February 7, 202016, 2023 was 60,845,708.78,646,679.

DOCUMENTS INCORPORATED BY REFERENCE

Table of Contents

i

Risk Factor Summary

Our business is subject to a number of risks and uncertainties of which you should be aware before making an investment decision in our business. These risks are discussed more fully in the “Risk Factors” section of this Annual Report on Form 10-K. These risks include, but are not limited to, the following:

ii

Throughout this Annual Report on Form 10-K, the “Company,” “CRISPR,” “CRISPR Therapeutics,” “we,” “us,” and “our,” except where the context requires otherwise, refer to CRISPR Therapeutics AG and its consolidated subsidiaries, and “our board of directors” refers to the board of directors of CRISPR Therapeutics AG.

“CRISPR Therapeutics” is aTherapeutics®” standard character mark and design logo, “COBALTTM,” “CRISPRXTM,” “CRISPR TXTM,” “CTX001TM,” “CTX110®,” “CTX112TM,” “CTX120TM,” “CTX121TM,” “CTX130TM,” “CTX131TM,” “CTX310TM,” “CTX320TM,” “CTX330TM,”“VCTX210TM” and “VCTX211TM,” are trademarks and registered trademarktrademarks of CRISPR Therapeutics AG. TheAll other trademarks for “CTX001^TM,” “CTX110^TM,” “CTX120^TM,” and “CTX130^TM” are pending in the United States and the trademark for “CRISPR Therapeutics” is pending in the European Union, or EU, Switzerland and the United Kingdom. Other brands, logos, names andregistered trademarks contained in this Annual Report on Form 10-K are the property of their respective owners. owners.Solely for convenience, trademarks, service marks and trade names referred to in this Annual Report on Form 10-K may appear without the ® or ™ symbols butand any such references areomission is not intended to indicate inwaiver of any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks, service marks and trade names.such rights.

Special Note Regarding Forward-Looking Statements and Industry Data

This Annual Report on Form 10-K contains “forward-looking statements” that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Annual Report on Form 10-K are forward-looking statements. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “potential,” “will,” “would” or the negative or plural of these words or similar expressions or variations, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Annual Report on Form 10-K 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 assumptions that could cause our actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled “Risk Factors,” set forth in Part I, Item 1A of this Annual Report on Form 10-K. You should not rely upon forward-looking statements as predictions of future events. Such forward-looking statements speak only as of the date of this report. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make or enter into.

You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report on Form 10-K completely and with the understanding that our actual future results, performance or achievements may be materially different from what we expect. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

iii

This Annual Report on Form 10-K includes statistical and other industry and market data, which we obtained from our own internal estimates and research, as well as from industry and general publications and research, surveys, and studies conducted by third parties. Industry publications, studies, and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from third‑party sources. While we believe our internal company research is reliable and the market definitions are appropriate, neither such research nor these definitions have been verified by any independent source.

iiiv

PART I

Item 1. Business.

BUSINESS

Overview

We are a leading gene editing company focused on the development of CRISPR/Cas9-based therapeutics. CRISPR/Cas9 stands for Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR)/CRISPR-asasociated protein ssociated protein 9 (Cas9) and is a revolutionary technology for gene editing, the process of precisely altering specific sequences of genomic DNA. We aim to apply this technology to disrupt, delete, correct and insert genes to treat genetically-definedgenetically defined diseases and to engineer advanced cellular therapies. We believe that our scientific expertise, together with our gene-editinggene editing approach, may enable an entirely new class of highly effective and potentially curative therapies for patients with both rare and common diseases for whom current biopharmaceutical approaches have had limited success. Our most advanced programs target the genetically-defined diseases transfusion-dependent beta thalassemia, or TDT, and severe sickle cell disease, or SCD, two hemoglobinopathies with high unmet medical need. We are also progressing several gene-edited allogeneic cell therapy programs, beginning with three allogeneic chimeric antigen receptor T cell, or CAR-T candidates for the treatment of hematological and solid tumor cancers.

The use of CRISPR/Cas9 for gene editing was derived from a naturally occurring viral defense mechanism in bacteria and has been described by leading scientific journals as a breakthrough technology. The application of CRISPR/Cas9 for gene editing was co-invented by one of our scientific founders, Dr. Emmanuelle Charpentier, the Acting and Founding Director of the Max Planck Unit for the Science of Pathogens in Berlin, Germany. Dr. Charpentier and her collaborators published work elucidating the mechanism by which the Cas9 endonuclease, a key component of CRISPR/Cas9, can be programmed to cut double-stranded DNA at specific locations. Dr. Charpentier and her collaborator, Dr. Jennifer Doudna of the University of California, Berkeley, shared the 2020 Nobel Prize in Chemistry for their groundbreaking work. We have acquired rights to the intellectual property encompassing CRISPR/Cas9 and related technologies from Dr. Charpentier and continue to strengthen our intellectual property estate through our own research and additional in-licensing efforts, furthering our leadership in the development of CRISPR/Cas9-based therapeutics.

We have established a portfolio of therapeutic programs in a broad range of disease areas across four core franchises: hemoglobinopathies, immuno-oncology, regenerative medicine and in vivo approaches. Our most advanced programs target the genetically defined diseases transfusion-dependent beta thalassemia, or TDT, and severe sickle cell disease, or SCD, two hemoglobinopathies with high unmet medical need. We are also progressing several gene-edited allogeneic cell therapy programs, including allogeneic chimeric antigen receptor T cell, or CAR T, candidates for the treatment of hematological and solid tumor cancers, and investigational, allogeneic, gene-edited, immune-evasive, stem cell-derived therapies for the treatment of type 1 diabetes, or T1D. In addition, we are advancing multiple programs leveraging in vivo editing approaches, initially for the treatment and prevention of cardiovascular disease.

Our product development and partnership strategies are designed to exploit the full potential of the CRISPR/Cas9 platform while maximizing the probability of successfully developing our product candidates. For our most advanced product candidates, we have taken an ex vivoapproach in which we edit cells outside of the human body using CRISPR/Cas9 before administering them to the patient. We are also pursuing selectIn contrast, for our in vivo applications, in whichediting programs, we deliver the CRISPR/Cas9-based therapeutic directly to target cells within the human body.

Hemoglobinopathies

Our lead product candidate, exagamglogene autotemcel, or exa-cel, formerly known as CTX001, is an investigational, autologous, ex vivo CRISPR gene-edited hematopoietic stem cell therapy that is being evaluated for patients suffering from TDT or severe SCD, in which a patient’s hematopoietic stem cells are engineeredex vivo to produce high levels of fetal hemoglobin (HbF; hemoglobin F) in red blood cells. HbF is a form of the oxygen-carrying hemoglobin that is naturally present at birth and is then replaced by the adult form of hemoglobin. The elevation of HbF by CTX001exa-cel has the potential to alleviateeliminate transfusion requirements for TDT patients and painful and debilitating sicklevaso-occlusive crises for SCD patients. CTX001Exa-cel is being developed under a co-developmentjoint development and co-commercializationcommercialization agreement between us and Vertex Pharmaceuticals Incorporated, or Vertex.

Beta Thalassemia

We and Vertex are investigating CTX001exa-cel in atwo ongoing Phase 1/22/3 open-label clinical trial, CLIMB THAL-111,trials that isare designed to assess the safety and efficacy of a single dose of CTX001exa-cel in patients ages 1812 to 35 with TDT non-beta zero/beta zero subtypes. The first(CLIMB-111) or SCD (CLIMB-121), respectively. Enrollment is complete for both CLIMB-111 and CLIMB-121. We and Vertex have also initiated two additional Phase 3 open-label clinical trials of exa-cel in pediatric patients with TDT (CLIMB-141) and SCD (CLIMB-151). Patients who received exa-cel in the trial will be treated sequentially and, pending data from the initial two patients, the trial will open for broader concurrent enrollment. CLIMB THAL-111 is designed to enroll up to 45 patients and follow patients for approximately two years after infusion. Each patientCLIMB-111, CLIMB-121, CLIMB-141 or CLIMB-151 will be asked to participate in a long-term, open-label follow-up study. CTX001trial, CLIMB-131, to evaluate the safety and efficacy of exa-cel. CLIMB-131 is designed to follow participants for up to 15 years after exa-cel infusion. In the second and fourth quarters of 2022, at the European Hematology Association Congress and American Society of Hematology Annual Meeting, respectively, we presented updated clinical data from CLIMB-111 and CLIMB-121 for 44 patients with TDT and 31 patients with SCD treated with exa-cel. For additional information regarding the clinical data, please see “Our Lead Hemoglobinopathies Product Candidate—exa-cel.”

1

Exa-cel has been granted Fast Track Designation bya number of regulatory designations from the U.S. Food and Drug Administration, or FDA, specifically Regenerative Medicine Advanced Therapy, or RMAT, Fast Track, Orphan Drug, and Rare Pediatric Disease designations for the treatment of both TDT and SCD. Exa-cel has also been granted Orphan Drug Designation from the European Commission, as well as orphan drugthe PRIority MEdicines, or PRIME, designation or ODD, byfrom the European Commission.

Enrollment is ongoing at multiple clinical trial sites globally. In the fourth quarter of 2019, we released preliminary clinical data from the first patient treated with CTX001 with TDT, and we expanded the TDT patient population for CTX001 to include beta zero/beta zero subtypes.  For additional information regarding the preliminary clinical data, please see “Business—Our Lead Hemoglobinopathies Product Candidate—CTX001.”

Sickle Cell Disease

We and Vertex are also investigating CTX001 in a Phase 1/2 open-label clinical trial, CLIMB SCD-121, that is designed to assess the safety and efficacy of a single dose of CTX001 in patients ages 18 to 35 with severe SCD. Similar to the trial in beta thalassemia, the first two patients in the trial will be treated sequentially and, pending data from the initial two patients, the trial will open for broader concurrent enrollment. CLIMB SCD-121 is designed to enroll up to 45 patients and follow patients for approximately two years after infusion. Each patient will be asked to participate in a long-term follow-up study. CTX001 has been granted Fast Track Designation by the FDAMedicines Agency, or EMA, for the treatment of SCD, as well as ODD by the European Commission.

Enrollment is ongoing at multiple clinical trial sites globally. In the fourth quarter of 2019, we released preliminary clinical data from the first patient treated with CTX001 with severeboth TDT and SCD. For additional information regarding the preliminary clinical data,impact of regulatory designations, please see “Business“—Business—Government RegulationsOur Lead Hemoglobinopathies Product Candidate—CTX001.” .”

In December 2022, we and Vertex completed regulatory submissions for exa-cel with the EMA and the Medicines and Healthcare products Regulatory Agency, or MHRA, in the EU and the UK, respectively, and both the EMA and the MHRA have validated the Marketing Authorization Application, or MAA, respectively. In addition, we and Vertex initiated the rolling submission of our Biologics Licensing Application, or BLA, in the United States in November 2022 and expect to complete the submission by the end of the first quarter of 2023.

Finally, building upon exa-cel, we have next-generation efforts in targeted conditioning regimens and in vivo editing of hematopoietic stem cells, either of which could broaden the number of patients that could benefit from our therapies.

Immuno-Oncology

We believe CRISPR/Cas9 has the potential to create the next generation of CAR-TCAR T cell therapies that may have a superior product profile compared to current autologous therapies and allow accessibility to broader patient populations. Drawing from the ex vivo gene-editinggene editing capabilities gained through our lead programs, we are advancing several immuno-oncology cell therapy programs.programs, including allogeneic CAR T programs targeting CD19 and CD70.

OurCD19 Franchise

CTX110, our lead immuno-oncology product candidate, CTX110, is a healthy donor-derived gene-edited allogeneic CAR-TCAR T investigational therapy targeting clusterCluster of differentiationDifferentiation 19, or CD19, for the treatment of CD19⁺ malignancies.CD19. We are investigating CTX110 in a Phase 1/2our CARBON clinical trial that istrials, which are designed to assess the safety and efficacy of CTX110 in adult patients with relapsed or refractory CD19-positive B-cell malignancies. malignancies who have received at least two prior lines of therapy. CTX110 has been granted RMAT designation by the FDA.

The Phase 1 CARBON clinical trial is being conducted in two parts – Part A and Part B. In Part A of the Phase 1 CARBON clinical trial, or Phase 1 Part A, patients were infused with a single dose of CTX110 across escalating dose levels following a standard lymphodepletion regimen, with an option to re-dose CTX110 based on clinical benefit. In Part B of the Phase 1 CARBON clinical trial, or Phase 1 Part B, patients received CTX110 at Dose Level (DL) 4 following standard lymphodepletion, as well as a consolidation dose of CTX110 at the same dose level between four and eight weeks after the initial dose for patients that demonstrated clinical benefit.

In the fourth quarter of 2022, we presented updated clinical data from Phase 1 Part A for 32 patients treated with CTX110, which showed the potential for CTX110 to achieve long-term durable complete remissions, or CRs, with a positively differentiated safety profile in heavily pre-treated patients, and described emerging data from Phase 1 Part B, which showed an encouraging efficacy profile with the potential to improve efficacy with the use of a consolidation dose. For additional information regarding the clinical data, please see “Our Lead Immuno-Oncology Product Candidate—CTX110.” Based on this emerging data from our Phase 1 CARBON clinical trial and discussions with regulatory agencies, we have expanded CARBON to include a Phase 2, potentially registrational, single-arm, multi-center, open-label clinical trial is designed to enroll up to 95that incorporates consolidation dosing. We have begun dosing patients and investigate several dose levels of CTX110. The trial is currently enrolling at multiple clinical trial sites globally.in this pivotal arm.

Our secondIn parallel with CTX110, we are advancing CTX112, a next-generation investigational, allogeneic CAR T product candidate targeting CD19. CTX112 includes two additional edits beyond CTX110, making use of the fact that our CRISPR/Cas9 platform enables us to innovate continuously by incorporating incremental edits into next-generation products. These edits target the genes encoding Regnase-1 and transforming growth factor-beta receptor type 2 (TGFBR2) with the aim of enhancing CAR T potency and reducing CAR T exhaustion. In the fourth quarter of 2022, the Investigational New Drug, or IND, application for CTX112 was cleared by the FDA.

2

CD70 Franchise

CTX130 is a healthy donor-derived gene-edited allogeneic CAR-T program, CTX120, targets B-cell maturationCAR T investigational therapy targeting Cluster of Differentiation 70, or CD70, an antigen or BCMA. We are investigating CTX120expressed on various solid tumors and hematologic malignancies. CTX130 is being investigated in atwo ongoing independent Phase 1, single-arm, multi-center, open-label clinical trialtrials that isare designed to assess the safety and efficacy of CTX120 in relapsed or refractory multiple myeloma. The multi-center, open-label clinical trial is designed to enroll up to 80 patients and investigate several dose levels of CTX120.CTX130 in adult patients. The COBALT-LYM trial is currently enrolling.evaluating the safety and efficacy of CTX130 for the treatment of relapsed or refractory T or B cell malignancies. The COBALT-RCC trial is evaluating the safety and efficacy of CTX130 for the treatment of relapsed or refractory clear cell renal cell carcinoma. CTX130 has received Orphan Drug Designation from the FDA for the treatment of T cell lymphoma and RMAT designation for the treatment of Mycosis Fungoides and Sézary Syndrome (MF/SS), subtypes of Cutaneous T cell Lymphoma (CTCL). In the second quarter of 2022, at the European Hematology Association Congress, we released initial clinical data from the ongoing COBALT-LYM trial for 18 patients with T cell lymphoma treated with CTX130 who had reached at least 28 days of follow-up. Also, in the fourth quarter of 2022, at the Society of Immuno-therapy in Cancer Annual Meeting, we released initial clinical data from the COBALT-RCC trial for 14 patients. For additional information regarding the clinical data, please see “CTX130.”

Our third gene-edited CAR-TIn parallel with CTX130, we are advancing CTX131, a next-generation investigational, allogeneic CAR T product candidate CTX130, targets CD70. CTX130 is in developmenttargeting CD70 for the potential treatment of both solid tumors such as renal cell carcinoma, and T-cell and B-cellcertain hematologic malignancies. CTX131 includes two additional edits beyond CTX130. These edits, the same used in CTX112, target the genes encoding Regnase-1 and TGFBR2 with the aim of enhancing CAR T potency and reducing CAR T exhaustion; and in the first quarter of 2023, the IND for CTX131 was cleared by the FDA.

Other ProgramsAdditional candidates

We are advancing several additional CAR T product candidates. For two such candidates, we have developed an innovative partnership model with leading cancer centers to validate the novel targets Cluster of Differentiation 83, or CD83, and glypican-3, or GPC3, in the clinic. In partnership with Moffitt Cancer Center, we are advancing an autologous CAR T candidate targeting CD83, which has potential to treat acute myeloid leukemia and other oncology and autoimmune indications. With Roswell Park Comprehensive Cancer Center, we are advancing a gene-edited, autologous CAR T candidate targeting GPC3, expressed in hepatocellular carcinoma. In both cases, our academic partners will conduct manufacturing and first-in-human clinical trials. This structure will enable us to assess the safety and activity of these targets rapidly. Based on the clinical results, we can choose to continue advancing these autologous programs internally or develop allogeneic versions to expand the opportunity further. In addition, beyond CAR T, we formed a collaboration with Nkarta, Inc., or Nkarta, that brings together our gene editing technology and cell therapy expertise with Nkarta’s leading natural killer (NK) cell discovery, development and manufacturing capabilities. As part of that collaboration we and Nkarta are co-developing and co-commercializing a donor-derived, gene-edited CAR-NK cell product candidate targeting CD70.

Regenerative Medicine.  Medicine

To further expand the applications of our ex vivo gene-editing expertise, we have increased our efforts in the field of regenerative medicine. Regenerative medicine, or the use of stem cells to repair or replace tissue or organ function lost due to disease, damage or age, holds thegreat potential to treat both rare and common diseases. We are pursuing gene-editing approaches to allowBuilding upon our ex vivo gene editing expertise, we have expanded our efforts in this field with a focus on allogeneic use of stem cell-derived therapies by enablinggene edited using CRISPR/Cas9 to enable immune evasion, improving existingimprove cell function, and directingdirect cell fate using CRISPR/Cas9.fate. Our first major effort in this area is in diabetes, together with our partner,and we and ViaCyte, Inc., which was acquired by Vertex in the third quarter of 2022, or ViaCyte.ViaCyte, are advancing a series of programs as part of a strategic collaboration for the discovery, development and commercialization of gene-edited stem cell therapies for the treatment of diabetes. We believe the combination of ViaCyte’s stem cell capabilities and our gene editing capabilities has the potential to enable a beta-cell replacement product candidate that may deliver durable benefit to patients without requiring concurrent immune suppression.

We have a multi-staged product strategy that leverages our CRISPR/Cas9 platform to advance multiple product candidates incorporating incremental edits designed to increase benefit. Our initial product candidate, VCTX210, is an investigational, allogeneic, gene-edited, immune-evasive, stem cell-derived product candidate for the treatment of T1D developed by applying our gene editing technology to ViaCyte’s proprietary stem cell capabilities. VCTX210 has gene edits designed to promote immune evasion and cell fitness. We and ViaCyte are investigating VCTX210 in an ongoing Phase 1 clinical trial that is designed to assess VCTX210’s safety, tolerability, and immune evasion in patients with T1D, and are in the follow-up stage for this clinical trial. Our next generation product candidate, VCTX211, is an investigational, allogeneic, gene-edited, stem cell-derived product candidate for the treatment of T1D, which incorporates additional gene edits that aim to further enhance cell fitness. In the fourth quarter of 2022, the Clinical Trial Application for VCTX211 was cleared by Health Canada and the Phase 1/2 clinical trial is ongoing.

3

In Vivo.Vivo

In addition to our ex vivo programs, we are pursuing a number of in vivo gene-editinggene editing programs. Our initial in vivo applications target diseasesgene editing strategy focuses on gene disruption and whole gene correction – the two technologies required to address the vast majority of the liver, lungmost prevalent severe monogenic diseases. We have established a leading platform for in vivo gene disruption, starting in the liver. We plan to advance a broad portfolio of programs across both rare and musclecommon diseases with this platform, starting with cardiovascular diseases, or CVD. Our lead investigational in vivo programs, CTX310 and leverage well-established delivery technologiesCTX320, target angiopoietin-related protein 3 (ANGPTL3) and lipoprotein(a) (Lp(a)), respectively, two validated targets for gene-based therapeutics, such asCVD. Gene editing has the potential to shift the treatment paradigm for CVD by recapitulating the proven benefit of natural human genetic variants in a single-dose format. In addition, we continue to develop an expansive whole gene correction platform, starting with using lipid nanoparticle-based delivery vehicles,nanoparticles, or LNPs,LNP, and adeno-associated viral vectors, or AAV, vectors.in the liver and advancing to AAV-free, homology-directed repair (HDR)-independent methodologies.

Strategic CRISPR-X

While we have made significant progress with our current portfolio of programs, we recognize that we need to continue to innovate to unlock the full potential of CRISPR gene editing and bring the potential of transformative therapies to even more patients. In 2022, we launched a new early-stage research team known as CRISPR-X that focuses on innovative research to develop next-generation editing modalities. CRISPR-X focuses on technologies to enable whole gene correction and insertion without requiring HDR or viral delivery of DNA, such as all-RNA gene correction, non-viral delivery of DNA and novel gene insertion techniques.

Partnerships

Given the numerous potential therapeutic applications for CRISPR/Cas9, we have partnered strategically to broaden the indications we can pursue and accelerate development of programs by accessing specific technologies and/or disease-area expertise. We maintain three broad strategic partnerships to develop gene editing-based therapeutics in specific disease areas. For additional information regarding certain of these partnerships, please see “Business—Strategic Partnerships and Collaborations.”

VertexVertex. . We established our initial collaboration agreement in 2015 with Vertex, which focused on TDT, SCD, cystic fibrosis and select additional indications. In December 2017, we entered into a joint development and commercialization agreement with Vertex pursuant to co-developwhich, among other things, we are co-developing and preparing to co-commercialize CTX001 as part of that collaboration. exa-cel for TDT and SCD. In June 2019,April 2021, we expandedand Vertex amended and restated our collaborationexisting joint development and commercialization agreement, pursuant to which, among other things, we will continue to develop and prepare to commercialize exa-cel for TDT and SCD in partnership with Vertex. We also entered into a strategic collaboration and license agreement with Vertex in June 2019 for the development and commercialization of products for the treatment of Duchenne muscular dystrophy, or DMD, and myotonic dystrophy type 1. For additional information regarding this partnership, please see “Business—Strategic Partnerships and Collaborations1, or DM1..”

ViaCyte. We entered into a research and collaboration agreement in September 2018 with ViaCyte to pursue the discovery, development and commercialization of gene-edited allogeneic stem cell therapies for the treatment of diabetes.diabetes, and in July 2021, we entered into a joint development and commercialization agreement with ViaCyte, or the ViaCyte JDCA. In connection with entering into the ViaCyte JDCA, our existing research collaboration agreement with ViaCyte expired in accordance with its terms. Under the ViaCyte JDCA, we and ViaCyte are jointly developing and will commercialize product candidates and shared products for use in the treatment of diabetes type 1, diabetes type 2 and insulin dependent/requiring diabetes, or the ViaCyte Collaboration Field, throughout the world. The combinationViaCyte JDCA includes, among other things, provisions relating to collaboration and program governance, clinical activities for the product candidates and shared products under the agreement and continuing research by the parties in the ViaCyte Collaboration Field. Unless otherwise mutually agreed, research costs incurred by a party will be solely borne by such party. The program expenses, as originally set forth in the research and collaboration agreement, as applicable, incurred through the date of ViaCyte’s stem cell capabilitiesfirst commercial sale of a shared product will be allocated 60% to us and our gene-editing capabilities has40% to ViaCyte. Following first commercial sale of a shared product, such program expenses will be shared equally between us and ViaCyte. Shared product revenues will be shared equally by us and ViaCyte. In the potentialthird quarter of 2022, Vertex announced it had acquired ViaCyte and the rights to enable a beta-cell replacement product that may deliver durable benefit to patients without the need for immune suppression. For additional information regarding this partnership, please see “Business—Strategic Partnerships and Collaborations.”ViaCyte Collaboration Field.

Bayer. InWe entered into an option agreement in the fourth quarter of 2019 we entered into a series of transactions pursuant to which we andwith Bayer Healthcare LLC, or Bayer, terminated our 2015 agreement, which created the joint venture Casebia Therapeutics Limited Liability Partnership, or Casebia, to discover, develop and commercialize CRISPR/Cas9 gene-editing therapeutics to treat the genetic causes of bleeding disorders, autoimmune disease, blindness, hearing loss and heart disease. In connection thereto, Casebia became a wholly-owned subsidiary of ours. We and Bayer also entered into a new option agreement pursuant to which Bayer has an option to co-develop and co-commercialize two products that we advance for the diagnosis, treatment, or prevention of certain autoimmune disorders, eye disorders, or hemophilia A disorders for a specified period of time, or, under certain circumstances, exclusively license such optioned products. For

Other Partnerships. We have entered into a number of additional information regarding this partnership, please see “Business—Strategic Partnershipscollaborations and Collaborationslicense agreements to support and complement our hematopoietic stem cell, immuno-oncology, regenerative medicine and. in vivo” programs and platform, including agreements with: Nkarta to co-develop and co-commercialize two donor-derived, gene-edited CAR-NK cell product candidates and a product candidate combining NK and T cells; Capsida Biotherapeutics, Inc. to develop in vivo gene editing therapies delivered with engineered AAV vectors for the treatment of amyotrophic lateral sclerosis and Friedreich’s ataxia; Moffitt Cancer Center and Roswell Park Comprehensive Cancer Center to advance autologous CAR T programs against new targets; MaxCyte, Inc. on ex vivo delivery

4

for our hemoglobinopathy and immuno-oncology programs; CureVac AG on optimized mRNA constructs and manufacturing for certain in vivo programs; and KSQ Therapeutics, Inc. on intellectual property for our allogeneic immuno-oncology programs.

Our mission is to create transformative gene-based medicines for serious human diseases. We believe that our highly experienced team, together with our scientific expertise, product development strategy, partnerships and intellectual property, position us as a leader in the development of CRISPR/Cas9-basedCRISPR-based therapeutics.

Gene Editing Background

There are thousands of diseases caused by aberrant DNA sequences. Traditional small molecule and biologic therapies have had limited success in treating many of these diseases because they fail to address the underlying genetic causes. Newer approaches such as RNA therapeutics and viral gene therapy more directly target the genes related to disease, but each has clear limitations. RNA-based therapies, such as mRNA and siRNA, face challenges with repeat dosing and related toxicities. Non-integrating viral gene therapy platforms, such as AAV, may have limited durability because they do not permanently change the genome and have limited efficacy upon re-administration due to resulting immune responses. Integrating viral gene therapy platforms, such as lentivirus, permanently alter the genome but do so randomly, which leads to the potential for undesirable mutations. Additionally, cells may recognize the transduced genes as foreign and respond by reducing their expression, limiting their efficacy. Thus, while our understanding of genetic diseases has increased tremendously since the mapping of the human genome, our ability to treat them effectively has been limited.

We believe gene editing has the potential to enable a next generation of therapeutics and provide potentially curative therapies to many genetic diseases through precise gene modification. Furthermore, the ability to alter DNA sequences precisely has applications beyond the treatment of genetically defined diseases. CRISPR/Cas9 gene editing could also enable the engineering of cell-based therapies to make them more efficacious, safer and available to a broader group of patients. Cell therapies have already begun to make a meaningful impact in certain diseases and gene editing could help accelerate that progress across diverse disease areas, including oncology and diabetes.

The process of gene editing involves precisely altering DNA sequences within the genomes of cells using enzymes to cut the DNA at specific locations. After a cut is made, natural cellular processes repair the DNA to either silence or correct undesirable sequences, potentially reversing their negative effects. Importantly, because the genome itself is modified in this process, the change is permanent in the patient.

Furthermore, the ability to alter DNA sequences precisely has applications beyond the treatment of genetically-defined diseases. CRISPR/Cas9 gene editing could also enable the engineering of genomes of cell-based therapies to make them more efficacious, safer and available to a broader group of patients. Cell therapies have already begun to make a meaningful impact in certain diseases and gene editing could help accelerate that progress across diverse disease areas, including oncology and diabetes.

Earlier generations of gene-editinggene editing technologies, such as zinc finger nucleases, or ZFNs, transcription-activator like effector nucleases, or TALENs, and meganucleases, rely on engineered protein-DNA interactions.interactions to govern the location of editing. While these systems were an important first step to demonstrate the potential of gene editing, their development has been challenging in practice due to the complexity of engineering protein-DNA interactions. In contrast, CRISPR/Cas9 is guided by RNA-DNA interactions, which are more predictable and straightforward to engineer and apply. In addition, given the advantagesAs a result, we have continued to invest in broadening our CRISPR platform so we can employ a variety of CRISPR/Cas systems, multiple academic groups have developed new technologies based on CRISPR/Cas9, such as base editing and prime editing. While still nascent, such new CRISPR/Cas-based technologies could have advantages over existing gene-editing technologies, including CRISPR/Cas9 technologies, in select applications.appropriate.

The CRISPR/Cas9 Technology

CRISPR/Cas9 evolved as a naturally occurring defense mechanism that protects bacteria against viral infections. Dr. Charpentier and her collaborators elucidated this mechanism and developed ways to adapt and simplify it for use in gene editing. In recognition of this groundbreaking work, Dr. Charpentier was awarded the 2020 Nobel Prize in Chemistry along with her collaborator, Dr. Jennifer Doudna of the University of California, Berkeley. The CRISPR/Cas9 technology they described consists of three basic components: CRISPR-associated protein 9, or Cas9, CRISPR RNA, or crRNA, and trans-activating CRISPR RNA, or tracrRNA. Cas9, in combination with these two RNA molecules, is described as “molecular scissors” that can make specific cuts and edits in selected double-stranded DNA.

Dr. Charpentier and her collaborators further simplified the system for use in gene editing by combining the crRNA and tracrRNA into a single RNA molecule called a guide RNA. The guide RNA binds to Cas9 and can be programmed to direct the Cas9 enzyme to a specific DNA sequence based on Watson-Crick base pairing rules. The CRISPR/Cas9 technology can be used to make cuts in DNA at specific sites of targeted genes, providing a powerful tool for developing gene editing-based therapeutics.

Once the DNA is cut, the cell uses naturally occurring DNA repair mechanisms to rejoin the cut ends. If a single cut is made, a process called non-homologous end joining can result in the addition or deletion of base pairs, disrupting the original DNA sequence and causing gene inactivation. A larger fragment of DNA can also be deleted by using two guide RNAs that target separate sites. After cleavage at each site, non-homologous end joining unites the separate ends, deleting the intervening sequence. Alternatively, if a DNA template is added alongside the CRISPR/Cas9 machinery, the cell can correct a gene or even insert a new gene through a process called homology directedhomology-directed repair.

5

CRISPR/Cas9 gene editing

We believe that CRISPR/Cas9 is a versatile technology that can be used to disrupt, delete, correct or insert genes. We intend to take advantage of the versatility and modularity of the CRISPR/Cas9 system to adapt and rapidly customize individual components for specific disease applications. Consequently, we believe that CRISPR/Cas9 may form the basis of a new class of therapeutics with the potential to treat both rare and common diseases. Given the advantages of CRISPR/Cas systems, multiple academic groups have developed new technologies based on CRISPR/Cas9, such as base editing and prime editing. While still nascent, such new CRISPR/Cas-based technologies could have advantages over existing gene editing technologies, including CRISPR/Cas9 technologies, in select applications. As a result, we have continued to invest in broadening our CRISPR platform so we can employ a variety of technologies as appropriate.

6

Our Pipeline

The following table summarizes the status of our product development pipeline:

Hematopoietic ProgramsHemoglobinopathies

Background

We are primarily utilizing ex vivo approaches to treat diseases related to the hematopoietic system, which is the system of organs and tissues, such as bone marrow, the spleen and lymph nodes, involved in the production of blood. Today, many of the hematopoietic system diseases we are targeting are treated with allogeneic hematopoietic stem cell transplants, or allo-HSCT. In performing allo-HSCT, physicians replace a patient’s blood-forming cells that contain the defective gene with cells obtained from a different person that contain the normal gene. Unfortunately, not all patients are able to be matched with suitable donors. Patients who do undergo allo-HSCT face a high risk of complications such as infections related to immunosuppression, transplant rejection and graft-versus-host disease, where immune cells in the transplanted tissue (the graft) recognize the recipient (the host) as “foreign” and begin to attack the host’s cells.

In contrast to allo-HSCT, our approach is to harvest stem cells directly from the patient, edit the target gene ex vivo, and reintroduce those same cells back into the patient. We believe this ex vivo gene-editing gene editing approach, which uses the patient’s own cells, may provide better results than allo-HSCT.

Our Lead Programs—Hemoglobinopathies

Hemoglobinopathies are a diverse group of inherited blood disorders that result from variations in the synthesis or structure of hemoglobin. Our lead program in hemoglobinopathies, for which we have partnered with Vertex, aims to develop a single, potentially curative CRISPR/Cas9-based therapy to treat both beta thalassemiaTDT and SCD. These diseases are caused by mutations in the gene encoding the beta globin protein. Beta globin is an essential component of hemoglobin, a protein in red blood cells that delivers oxygen and removes carbon dioxide throughout the body. Several factors make these attractive lead indications, including: (i) high unmet medical need, (ii) compelling market potential, (iii) well-understood genetics and (iv) the ability to employ an ex vivo gene disruption strategy.

7

Beta Thalassemia

Overview

Beta thalassemia is a blood disorder that is associated with a reduction in the production of hemoglobin. This disease is caused by mutations that give rise to the insufficient expression of the beta globin protein, which can lead to symptoms related not only to the lack of hemoglobin, but also to the buildup of unpaired alpha globin proteins in red blood cells. The severity of symptoms associated with beta thalassemia varies depending on the levels of functional beta globin present in the blood cells. The unpaired alpha globin chains are toxic to red blood cells and reduce red blood cell lifespan. In the most severe cases, described as beta thalassemia major, functional beta globin is either completely absent or reduced, resulting in severe anemia. In these patients, the bone marrow cannot keep pace with the destruction of red blood cells, and thus these patients require periodicregular blood transfusions. While chronic blood transfusions can be effective at addressing symptoms, they often lead to iron overload, progressive heart and liver failure, and eventually early death. Patients with mild forms of beta thalassemia may experience some mild anemia or even be asymptomatic. The total worldwide incidence of beta thalassemia is estimated to be 60,000 births annually, the total prevalence in the United States and the European Union, or EU, is estimated to be approximately 19,00016,000 and there are over 200,000 people worldwide who are alive and registered as receiving treatment for the disease.

Limitations of current treatment options

The most common treatment for beta thalassemia is chronic blood transfusions. PatientsTransfusion-dependent patients typically receive transfusions every two to four weeks and chronic administration of blood often leads to elevated levels of iron in the body, andwhich can cause organ damage over a relatively short period of time. Patients are often given iron chelators, or medicines to reduce iron levels in the blood, which are associated with their own significant toxicities. Low adherence to this burdensome regime often results in death by 30 years of age for patients with transfusion-dependent beta thalassemia. In developing countries, where chronic transfusions are not available, most patients die in early childhood. Also, a disease-modifying therapy for beta thalassemia, Reblozyl (luspatercept-aamt), recently received FDA approval.approval in 2019.

A potentially curative therapy for this diseasebeta thalassemia is allo-HSCT, but few patients elect to have this procedure given its associated morbidity and mortality.mortality and the lack of matched and willing donors. In addition, the European Medicines Agency, or EMA recently gave a conditional marketing authorization to Zynteglo (autologous CD34+ cells encoding βA-T87Q-globin gene), a lentiviral gene therapy developed by bluebird bio, for the treatment of certain patients with TDT.TDT in 2019, but in 2021 bluebird bio withdrew Zynteglo from the European market, after failing to reach agreement with health authorities on the treatment's price. The FDA approved Zynteglo in August 2022. We believe that our therapeutic approach could offer a potentially curative therapy for this devastating disease.

Sickle Cell Disease

Overview

SCD is an inherited disorder of red blood cells resulting from a specific mutation in the beta globin gene that causes abnormal red blood cell function. Under conditions of low oxygen concentration, the abnormal hemoglobin proteins aggregate within the red blood cells causing them to become sickled in shape and inflexible. These sickled cells obstruct blood vessels, restricting blood flow to organs, ultimately resulting in anemia, severe pain, infections, stroke, overall poor quality of life and early death. Patients also experience increased hemolysis, leading to anemia. The worldwide incidence of SCD is estimated to be 300,000 births annually and there are 20-25 million people worldwide with the disease. In the United States and the European Union, the total prevalence is estimated to be 100,000150,000 individuals.

Limitations of current treatment options

As with beta thalassemia, in regions where access to modern medical care is available,infrastructure can support it, standard treatment for patients with SCD who have high levels of hemolysis involves chronic blood transfusions, which has the same associated risks of iron overload and toxicities associated with chelation therapy.Two The FDA and/or EMA have approved several disease-modifying therapies for SCD as well, including hydroxyurea, Adakveo (crizanlizumab-tmca) and Oxbryta (voxelotor), also recently received FDA approval.. Allo-HSCT is another potential treatment option. While allo-HSCT provides the only potentially curative therapeutic path for SCD, it is often avoided given the significant risk of transplant-related morbidity and mortality in these patients.patients and the lack of matched and willing donors.

Our Gene-EditingGene Editing Approach

Our therapeutic approach to treating beta thalassemia and SCD employs gene editing to upregulate the expression of the gamma globin protein, a hemoglobin subunit that is commonly present only in newborn infants. Hemoglobin that contains gamma globin instead of beta globin protein is referred to as fetal hemoglobin, or HbF. In most individuals HbF disappears in infancy as gamma globin is replaced by beta globin through naturally occurring suppression of the gamma globin gene. The symptoms of beta thalassemia and SCD typically do not manifest until several months after birth, when the levels of HbF have declined considerably. Some patients with beta thalassemia or SCD have elevated levels of HbF that persist into adulthood, a condition known as hereditary persistence of fetal hemoglobin, or HPFH. Patients with HPFH are often asymptomatic, or experience much milder forms of disease.

8

This protective HPFH condition has been shown to result from specific changes to these patients’ genomic DNA, either in the region of the globin genes or in certain genetic regulatory elements that control the expression levels of the globin genes.

Relationship between level of HbF and morbidity in sickle cell disease and beta thalassemia

An alternative CRISPR/Cas9 approach to treating hemoglobinopathies would be to correct the mutated beta globin gene. We have chosen the HbF upregulation strategy as our initial approach given the relative technical simplicityefficiency and consistency of the gene disruption strategy involved, the ability of this strategy to counteract a wide variety of different beta globin mutations, including patients with beta thalassemia, and the natural history data supporting absence of symptoms in patients with high HbF levels.HPFH.

Our Lead Hemoglobinopathies Product Candidate—CTX001exa-cel

Our lead product candidate, CTX001,exa-cel, uses CRISPR/Cas9 to mimic the high levels of HbF that occur naturally in HPFH patients. To achieve this effect, CTX001exa-cel uses CRISPR/Cas9 to disrupt the erythroid specific enhancer of the BCL11A gene. This gene encodes the BCL11A protein, a critical factor that keeps HbF levels low in most individuals. Disrupting the BCL11A erythroid specific enhancer reduces BCL11A expression specifically in erythroid lineage cells, thereby upregulating expression of gamma globin and increasing HbF levels.

Our therapeutic approach involves isolating hematopoietic stem cells, or HSCs, which give rise to red blood cells, from a patient, treating those cells ex vivo with CRISPR/Cas9 to disrupt the BCL11A erythroid specific enhancer and reintroducing the edited cells back into the patient. We believe that once reintroduced into the patient, these genetically modified stem cells will produce red blood cells that contain high levels of HbF. In beta thalassemia, elevating HbF may reduce the toxicity of unpaired alpha globin chains, thereby increasing red blood cell lifespan. Consequently, CTX001 may haveexa-cel has the potential to reduce or even eliminate the need for transfusions in these patients. In SCD, elevated HbF may prevent a cell from sickling, and so achieving sufficiently high HbF in most red blood cells could significantly reduce or eliminate the symptoms associated with the disease.

We believe our CRISPR/Cas9 gene editing strategy may have significant advantages over other gene therapies in development for the treatment of hemoglobinopathies. For example, lentivirus-based treatments involve a random integration of one or more copies of the globin gene throughout the genome. The expression levels of the newly introduced gene can vary depending on the exact location of the DNA in the genome, leading to inconsistent and variable levels of expression. We believe our strategy may lead to more uniform globin expression across a high percentage of cells. In addition, with each random lentiviral integration, a mutation may be created, which may have an associated safety concern, including the oncogenetic potential. In contrast, CRISPR/Cas9 targets a specific genomic site for editing, and to date we have detected no off-target activity for our exa-cel guide RNA.

Preclinical studiesStudies

In preclinical studies, using CTX001, our CRISPR/Cas9 gene-editinggene editing process demonstrated the ability to edit HSCs with approximately 80% allelic editing efficiency at clinical scale in a bulk population of cells. We observed this high editing efficiency across all stem cell subsets, including in long-term repopulating HSCs. After in vitro erythroid differentiation, this editing resulted in HbF accounting for greater than 30% of total hemoglobin in edited cells, compared to approximately 10% HbF in the control arm of the study. On a per cell basis, more than 90% of cells had modifications at the desired location, with 76% of the cells having edits in both copies of the target gene and 16% of the cells having edits made on one copy of the target gene. We estimate that after in vitro erythroid differentiation this editing rate results in HbF expression levels of greater than 35% in cells that have edits on both copies of the target gene, and over 20% for cells edited at one gene.

Editing efficiency in human CD349⁺

 cells and resulting HbF ratio after in vitro erythroid differentiation

In preclinical mouse models designed to test the safety of CTX001,exa-cel, gene-edited HSCs maintained the ability to engraft long term and to differentiate into multiple lineages. Toxicology studies revealed no significant findings and no difference in the biodistribution of edited cells compared to controls. Finally, no off-target activity was detectable for the CTX001exa-cel guide RNA after assessing over 5,000 homology-based sites and over 2,000 homology-independent sites.

CTX001 engraftment in vivo in mice¹

We believe our CRISPR/Cas9 gene-editing strategy may have significant advantages over other gene therapies in development for the treatment of hemoglobinopathies. For example, lentivirus-based treatments involve a random integration of one or more copies of the globin gene throughout the genome. The expression levels of the newly introduced gene can vary depending on the exact location of the DNA in the genome, leading to inconsistent and variable levels of expression. We believe our strategy may lead to more uniform globin expression across a high percentage of cells. In addition, with each random lentiviral integration, a mutation may be created, which may have an associated safety concern, including the potential to cause cancer. In contrast, CRISPR/Cas9 targets a specific genomic site for editing, and we have detected no off-target activity for our CTX001 guide RNA.

Clinical Trials

We and Vertex are investigating CTX001exa-cel in two ongoing Phase 1/22/3 open-label clinical trials that are designed to assess the safety and efficacy of a single dose of CTX001exa-cel in patients ages 1812 to 35 with TDT, (CLIMB THAL-111)CLIMB-111, and severe SCD, (CLIMB SCD-121),CLIMB-121, respectively. On November 19, 2019,The first two patients in each clinical trial were treated sequentially and, following data from the initial two patients in each clinical trial indicating successful engraftment and an acceptable safety profile, that clinical trial opened for concurrent dosing. Both clinical trials are designed to follow patients for approximately two years after infusion. Enrollment is complete for both CLIMB-111 and CLIMB-121. We and Vertex have also initiated two additional Phase 3 open-label clinical trials of exa-cel in pediatric patients with TDT, CLIMB-141, and SCD, CLIMB-151. Patients who received exa-cel in CLIMB-111, CLIMB-121, CLIMB-141 or CLIMB-151 will be asked to participate in a long-term, open-label follow-up trial, CLIMB-131, to evaluate the safety and efficacy of exa-cel. CLIMB-131 is designed to follow participants for up to 15 years after exa-cel infusion.

Exa-cel has been granted a number of regulatory designations from the U.S. Food and Drug Administration, or FDA, specifically RMAT, Fast Track, Orphan Drug, and Rare Pediatric Disease designations for the treatment of both TDT and SCD. Exa-cel has also been granted Orphan Drug Designation from the European Commission, as well as PRIME designation from the European Medicines Agency, for the treatment of both TDT and SCD. In December 2022, we and Vertex announced positive safetycompleted regulatory submissions for exa-cel with the EMA and efficacy data fromMHRA in the EU and the UK, respectively, and both the EMA and the MHRA have validated the MAA, respectively. In addition, we and Vertex initiated the rolling submission of our BLA in the United States in November 2022 and expect to complete the submission by the end of the first two patients treated with CTX001 for TDT or severe SCD in these ongoing Phase 1/2 clinical trials.quarter of 2023.

Schematic of study procedures for the CLIMB THAL-111CLIMB-111 and CLIMB SCD-121CLIMB-121 Phase 1/22/3 clinical trials

CLIMB-111 Trial in TDT

The patientIn the second and fourth quarters of 2022, at the European Hematology Association (EHA) Congress and American Society of Hematology (ASH) Annual Meeting, respectively, we presented clinical data from 44 patients with TDT hastreated with exa-cel as of the β0/IVS-I-110 genotypeFebruary 2022 data cutoff. With a median follow-up of 11.9 months (range: 1.2 to 37.2 months), 42 of 44 patients with TDT treated with exa-cel were transfusion-free (0.8-36.2 months) and required 16.5 transfusions per year before enrolling in the clinical trial (annualized rate during the two patients who had not yet stopped transfusions had reduced transfusion volume by 75% and 89%, respectively. All 44 patients showed a similar pattern of response, with rapid and sustained increases in total hemoglobin and HbF, pancellular distribution of HbF, and reduction or elimination of packed red blood cell transfusions soon after exa-cel infusion. All 12 patients with the severe beta zero/beta zero genotype evaluable for elimination of transfusions were transfusion-free since last follow-up. In addition, the available bone marrow allelic editing data demonstrated durability over time. Consistent with this bone marrow allelic editing data, all 19 patients with greater than one year of follow-up as of the data cutoff date demonstrate a stable and durable response to treatment, including the first patient treated with exa-cel, who had a total hemoglobin level of 14.3 g/dL at last visit, three years prior to consenting for the trial). after exa-cel dosing.

10

Clinically Meaningful HbF and Total Hb Were Achieved Early and Maintained in TDT

Duration of Transfusion Independence After Exa-cel Infusion

11

The patient achieved successful neutrophil engraftment 33 days after CTX001 infusionsafety data from all 44 patients were generally consistent with an autologous stem cell transplant and platelet engraftment 37 days after infusion.myeloablative conditioning. Two patients experienced serious adverse events, or SAEs, occurred, neither of whichassessed by the principal investigator consideredas related or possibly related to CTX001. Theexa-cel. One patient had three SAEs wererelated to exa-cel of hemophagocytic lymphohistiocytosis (HLH; macrophage activation syndrome), acute respiratory distress syndrome, and headache, and one SAE of idiopathic pneumonia syndrome related to both exa-cel and busulfan. All events began peri-engraftment, occurred in the presencecontext of neutropeniaHLH and veno-occlusive liver disease attributedfully resolved with steroid and immunosuppressant treatment. Another patient had SAEs related to both exa-cel and busulfan conditioning, both of which subsequently resolved. This patient received a peripheral red blood cell transfusion one month followingdelayed neutrophil engraftment and thrombocytopenia. Both SAEs resolved and neutrophil engraftment was achieved on Day 56 without use of backup cells. All other patients achieved neutrophil engraftment within 43 days of exa-cel infusion. No SAEs related to exa-cel were reported in the infusionother patients.

CLIMB-121 Trial in Severe SCD

In the second and fourth quarters of CTX0012022, at the EHA Congress and ASH Annual Meeting, respectively, we presented clinical data from that point forward has been free from transfusions31 patients with SCD treated with exa-cel as of the nine month post-infusionFebruary 2022 data point,cutoff. With a median follow-up of 10.2 months (range: 2.0 to 32.3 months), all 31 patients had elimination of vaso-occlusive crises, or VOCs, after exa-cel infusion and remain VOC-free at last visit. All patients showed a similar pattern of response, with rapid and sustained increases in total hemoglobin and HbF, and pancellular distribution of HbF. Mean total hemoglobin levels of 11.9exceeded 12 g/dL 10.1 g/dL fetal hemoglobinby Month 4, with mean proportion of HbF above 40%. In addition, the available bone marrow allelic editing data demonstrated durability over time. All nine patients with greater than one year of follow-up as of the data cutoff date demonstrate a stable and 99.8% F-cells (erythrocytes expressing fetal hemoglobin).

Thedurable response to treatment, including the first patient with SCD experienced seven vaso-occlusive crises per year before enrollingtreated with exa-cel, who had a total hemoglobin level of 10.6 g/dL and HbF fraction of 41% at last visit, 30 months after exa-cel dosing.

Clinically Meaningful HbF and Total Hb Were Achieved Early and Maintained in SCD

12

Duration of Freedom from VOCs after Exa-cel Infusion

The safety data from all 31 patients were generally consistent with an autologous stem cell transplant and myeloablative conditioning. There were no SAEs considered related or possibly related to exa-cel, and the clinical trial (annualized rate duringmajority of non-serious adverse events were considered mild to moderate. After the two years priordata cut in February 2022, an adult patient with SCD developed pneumonia and respiratory failure following SARS-CoV-2 infection, resulting in death. The investigator assessed the events as due to consentingSARS-CoV-2 infection, with a potential contribution of busulfan lung injury, and unrelated to exa-cel.

Next-generation Efforts

Building upon exa-cel, we have next-generation efforts in targeted conditioning regimens, which could offer benefits over the myeloablative busulfan conditioning regimen currently used with exa-cel, as well as for the trial). The patient achieved neutrophil and platelet engraftment 30 days after CTX001 infusion. Three SAEs occurred, nonein vivo editing of hematopoietic stem cells, either of which could broaden the principal investigator considered related to CTX001. The SAEs were sepsis in the presencenumber of neutropenia, cholelithiasis and abdominal pain, all of which subsequently resolved. At four months after CTX001 infusion, the patient was free of vaso-occlusive crises and had total hemoglobin levels of 11.3 g/dL, 46.6% fetal hemoglobin and 94.7% F-cells.

These trials are ongoing and patients will be followed for approximately two years following infusion.that can benefit from our therapies.

Immuno-Oncology Programs

Over the past several years, interestInterest in the oncology community has grown rapidly in the field of immuno-oncology, or treatments that harness the immune system to attack cancer cells. Engineered immune cell therapy is one such approach, in which immune system cells such as T cells are genetically modified to enable them to recognize and attack cancerous cells.

Engineered cell therapy has demonstrated encouraging results leading to twomultiple approvals for autologous CD19-targeted CAR-T products, andCAR T products. These therapies may become an entirely new class of oncology therapeutics; however,therapeutics, but realizing this full potential will require overcoming some key challenges. Most engineered cell therapies in development require unique products to be created for each patient treated, an approach that has in the past proven challenging and cost prohibitive in the field of oncology. This bespoke manufacturing process takes time during which a patient’s disease can progress and sometimes fails to produce a viable product at all. Additionally, these versions of engineered cell therapies appear limited in their ability to treat solid tumors and have demonstrated sub-optimal safety profiles.a high rate of toxicities that require complicated management protocols. In contrast, allogeneic engineered T cellT-cell therapies can be administered “off-the-shelf” and thus could have immediate availability, because of their ability to be administered “off-the-shelf”, improved potency due to the use of healthy-donor starting material,access, simpler logistics, greater consistency since each batch yields many doses, improved access by avoiding the need for patient apheresis, and flexible dosing, whether through dose titration or re-dosing.

We expect that the cellular engineering strategies that are ultimately successful in immuno-oncology will involve multiple genetic modifications, an application for which we believe CRISPR/Cas9 will play a central role. While other gene-editinggene editing platforms could potentially be used for these purposes, CRISPR/Cas9 is particularly well-suited for multiplexed editing, which is the modification and/or insertion of multiple genes within a single cell. Current gene-editingGene editing techniques that require different protein enzymes for

13

each genetic modification may be limited in the number of edits they can make concurrently due to efficiency, cytotoxicity and/or manufacturing challenges. In contrast, CRISPR/Cas9 has the potential to efficiently make multiple edits using a single Cas9 protein and multiple small guide RNA molecules.

In our immuno-oncology cell therapies, we plan to useare using the multiplexing ability of CRISPR/Cas9 not onlyboth to enable allogeneic administration but alsoand to introduce additional genetic edits that aim to improve the efficacy andor safety profile of these product candidates. SuchFurthermore, we are leveraging our CRISPR platform to enable a process of continuous innovation in which we incorporate incremental edits could include the removal of immune checkpoints or introduction of safety elements.into next-generation products to try to increase treatment benefit further. We continue to expand our multiplexing capabilities to help us realize the full potential of engineered cell therapy in immuno-oncology across all tumor types, including solid tumors. Given the important role we believe CRISPR/Cas9 will play in engineered cell therapy going forward we have thus far elected to retain full ownership of our immuno-oncologyallogeneic CAR T cell programs.

In addition, multiple groups have begun to demonstrate the utility of other immune cells, such as natural killer, or NK, cells, in immuno-oncology therapy. To expand our efforts in gene-edited immune cell therapy beyond T cells, we formed a collaboration with Nkarta that brings together our gene editing technology and cell therapy expertise with Nkarta’s leading NK cell discovery, development and manufacturing capabilities. We and Nkarta are co-developing and co-commercializing two donor-derived, gene-edited CAR-NK cell product candidates, one of which targets CD70. Additionally, we are co-developing and co-commercializing a product candidate combining NK and T cells to harness the unique advantages of both cell types.

Our Lead Immuno-Oncology Product Candidate—CTX110

Our lead immuno-oncology product candidate, CTX110, is a healthy donor-derived gene-edited allogeneic CAR-T cellCAR T investigational therapy targeted towardtargeting CD19-positive malignancies, such as certain lymphomas and leukemias. A primary aim of CTX110 is to overcome the inefficiency and cost of creating a unique product for each patient with a given tumor type by treating many different patients from a single batch, which we refer to as being an “off-the-shelf” therapy. To generate CTX110, we make three modifications to T cells taken from healthy donors using our gene-editinggene editing technology: (i) the T cellT-cell receptor, or TCR, is eliminated to reduce the risk of graftGraft versus host disease,Host Disease, or GvHD, from the product candidate, (ii) a CD19-directed CAR is inserted site-specifically into the TRAC gene and (iii) the class I major histocompatibility complex, MHC I, is removed from the cell surface in order to improve the persistence of the CAR-TCAR T cells in an “off-the-shelf” setting. We believe this approach will have advantages over other allogeneic CAR-TCAR T products in development that semi-randomly insert the CAR using an integrating virus and do not include the MHC I knockout to increase persistence.

As shown in the figure below, we have demonstrated the ability to perform the edits necessary to generate CTX110 at high efficiency, and that in preclinical testing CTX110 prolonged the survival of mice with a CD19-positive xenograft tumor model that is comparable to what is seen with the current generationCTX110: Differentiated CRISPR-Edited Allogeneic CAR-T products.

Efficient production of CTX110 via multiplexed editing and prolonged survival of CTX110-treated mice in a disseminated Nalm6 xenograft tumor modelDesign

Clinical Trials

We are currently investigating CTX110 in a Phase 1/2our CARBON clinical trial that istrials, which are designed to assess the safety and efficacy of CTX110 in adult patients with relapsed or refractory CD19-positive B-cell malignancies. Themalignancies who have received at least two prior lines of therapy. Based on emerging data from our Phase 1 CARBON clinical trial and discussions with regulatory agencies, we have expanded CARBON to include a Phase 2, potentially registrational, single-arm, multi-center, open-label clinical trial is designed to enroll up to 95that incorporates consolidation dosing. We have begun dosing patients and investigate several dose levels of CTX110. in this pivotal arm. CTX110 has been granted RMAT designation by the FDA.

14

The Phase 1 clinical trial is currently enrollingbeing conducted in two parts – Part A and Part B. In Phase 1 Part A, patients were infused with a single dose of CTX110 ranging from Dose Level (DL) 1 (30 million CAR+ T cells) to DL4 (600 million CAR+ T cells) following a standard lymphodepletion regimen, with an option to re-dose CTX110 based on clinical benefit. In Phase 1 Part B, patients received CTX110 at multipleDL4 following standard lymphodepletion, as well as a consolidation dose of CTX110 at the same dose level between four and eight weeks after the initial dose for patients that demonstrated clinical trial sites globally.benefit.

CTX120CARBON Part A Trial Design

Our second  

gene-edited allogeneic CAR-T cell product candidate,In December 2022, at the ASH Annual Meeting, we shared updated clinical data from Phase 1 Part A. As of the October 6, 2022 data cutoff, 32 patients with large B-cell lymphoma, or CTX120, is targeted towards BCMALBCL, had been treated with CTX110 in Phase 1 Part A and iswere included in development for the treatmentanalysis. All 32 patients had aggressive LBCL, including DLBCL NOS, high grade lymphomas, and tFL. Most patients were refractory to their last line of relapsedtherapy before entering the trial and 47% of patients had received three or refractory multiple myeloma. BCMA has attractive properties for CAR-T cell therapy, namely expression on the surface of B-lineage cells, especially the plasma cells involved in multiple myeloma, and absence from other tissues and cell types. As a result, BCMA has become a promising target for autologous CAR-T cell therapy. We believe an allogeneic approach may have distinct advantages over autologous CAR-T in multiple myeloma given the poor health of patient T cells following manymore lines of prior therapy. Patients were infused with a single CTX110 infusion following three days of a standard lymphodepletion regimen consisting of fludarabine (30 mg/m2/day) and cyclophosphamide (500 mg/m2/day). Patients could receive an additional infusion of CTX110 if they achieved initial clinical benefit and subsequently progressed. Additionally, a subset of patients was eligible for a second planned infusion of CTX110 on Day 35.

To generate CTX120, we make15

CARBON Part A Patient Baseline Characteristics

Responses Rates Observed with CTX110 in CARBON Phase 1 Part A

CTX110 showed encouraging clinical activity in Phase 1 Part A, with a 67% overall response rate, or ORR, and 41% complete response, or CR, rate among patients treated with at least one infusion of CTX110 at DL3 and above (n = 27). Three patients have achieved and maintained a complete response for more than 2 years, demonstrating the same three modifications to healthy-donor T cells as we dopotential for CTX110 but insertto produce durable remissions. The six-month CR rate following single infusions of CTX110 at DL3 and above was 19%. Finally, unlike autologous CAR T therapies, almost all enrolled patients received treatment with CTX110, with just 2 of 34 enrolled patients not treated due to intercurrent infections of coronavirus and pneumonia.

16

Durable Responses Observed with CTX110 in CARBON Phase 1 Part A

CTX110 Was Well Tolerated Across All Dose Levels in CARBON Phase 1 Part A

CTX110 was well tolerated across all dose levels in Phase 1 Part A. There were no dose-limiting toxicities and no Graft versus Host Disease, or GvHD, or infusion reactions of any grade. All cases of cytokine release syndrome (CRS) were Grade 1 or 2 per the American Society for Transplantation and Cellular Therapy (ASTCT) criteria. Grade 3 or higher infections occurred in 13% of patients, including one patient who died with HHV6 encephalitis and one infection considered possibly related to CTX110. Seven patients experienced serious adverse events attributed to CTX110, which includes CRS, immune effector cell-associated neurotoxicity syndrome (ICANS), and febrile neutropenia. Among the 13 patients who received a BCMA-specific CAR. second infusion of CTX110, there was no change in the overall safety profile.CTX120 leverages many

17

Emerging data from Phase 1 Part B supports the advancement of CTX110 to a potentially registrational trial. In December 2022, we provided a high-level summary and described this emerging data from Phase 1 Part B and shared our observations as follows: we observed (1) an encouraging efficacy profile with several patients in ongoing complete response beyond six months; (2) clear evidence of the capabilitiesbenefits of consolidation dosing, with deepening of complete responses and reagents developed forconversions of stable disease and partial response to ongoing complete responses after the second dose of CTX110; (3) a safety profile consistent with Phase 1 Part A, confirming the tolerability of the consolidation regimen; and (4) peak expansion and overall pharmacokinetics that were comparable between the initial and consolidation doses.

CTX112

In parallel with CTX110, accelerating its pathwe are advancing CTX112, a next-generation investigational, allogeneic CAR T product candidate targeting CD19. CTX112 includes two additional edits beyond CTX110, leveraging the fact that our CRISPR/Cas9 platform enables us to innovate continuously by incorporating incremental edits into development. As depicted innext-generation products. These edits target the figure below,genes encoding Regnase-1 and transforming growth factor-beta receptor type 2 (TGFBR2) with the aim of enhancing CAR T potency and reducing CAR T exhaustion. Editing Regnase-1 removes an intrinsic "brake” on T cell function while editing TGFBR2 removes a key extrinsic “brake” on T cell anti-tumor activity. We identified this combination of edits through systematic screening of dozens of novel and previously described genes. Together these edits significantly improve potency in preclinical studiesmodels, as described for another next-generation investigational program in “CTX131.” In the fourth quarter of CTX120, we observe complete elimination of2022, the IND application for CTX112 was cleared by the FDA.

CTX130

An additional immuno-oncology candidate, CTX130, is a xenograft multiple myeloma tumor model in all mice treated with CTX120.

Elimination of a subcutaneous RPMI-8226 multiple myeloma model by CTX120

We are currently investigating CTX120 in a Phase 1 clinical trial that is designed to assess the safety and efficacy of CTX120 in relapsed or refractory multiple myeloma. The multi-center, open-label clinical trial is designed to enroll up to 80 patients and investigate several dose levels of CTX120. The trial is currently enrolling at a clinical trial site in the United States.

CTX130

Our thirdhealthy donor-derived gene-edited allogeneic CAR-T cell product candidate, or CTX130, is targeted towards CD70 and is in development for the treatment of both solid tumors, such as renal cell carcinoma, and T-cell and B-cell hematologic malignancies.CAR T investigational therapy targeting CD70. Several cancers express CD70, including non-Hodgkin’s lymphoma, certain T cellT-cell lymphomas, renal cell carcinoma, glioblastoma and pancreatic, lung and ovarian cancers, while normal tissues do not express or show extremely limited expression of CD70. This target enables us to transition from hematological cancers,malignancies, such as non-Hodgkin’sT-cell lymphoma, to solid tumor cancers, such as renal cell carcinoma.

To generate CTX130, we plan to include additional edits beyondmake the same three modifications used in CTX110 and CTX120.(but with a CAR targeting CD70 rather than CD19), plus add a knockout of the CD70 gene in the T cells to increase CAR T cell function. As shown in the figure below, inin preclinical studies, of CTX130 we observe complete eliminationeliminated or severely reduced growth of a xenograft model of renal cell carcinoma in all mice treated, with CTX130.both initially and upon re-challenge. In addition, CTX130 showed improved function over CAR T cells where the CD70 gene remains intact.

Elimination18

Additional edit improved the performance of CTX130 against a subcutaneous A498 renal cell carcinoma model

Clinical Trials

We are currently investigating CTX130 in two ongoing independent Phase 1, single-arm, multi-center, open-label clinical trials, COBALT-LYM and COBALT-RCC, that are designed to assess the safety and efficacy of several dose levels of CTX130 in adult patients. CTX130 has received Orphan Drug Designation from the FDA for the treatment of T cell lymphoma and RMAT designation for the treatment of Mycosis Fungoides and Sézary Syndrome (MF/SS).

The COBALT-LYM trial is designed to evaluate the safety and efficacy of CTX130 in adult patients with relapsed or refractory T or B cell malignancies. Dose escalation of CTX130 was performed in adult patients with relapsed or refractory T cell lymphoma with at least 10% expression of CD70. Given the inherent difficulties and potential risks of manufacturing a CAR T therapy from a patient’s own diseased T cells, allogeneic cellular therapy approaches for T cell lymphoma have greater potential to address the unmet need in this patient population. Patients in COBALT-LYM received three days of a standard lymphodepletion regimen consisting of fludarabine (30 mg/m2/day) and cyclophosphamide (500 mg/m2/day), followed by a single infusion of CTX130. Patients who showed clinical benefit from the first CTX130 infusion were eligible to be re-dosed following disease progression. The primary endpoints include safety as measured by the incidence of dose-limiting toxicities and ORR. Key secondary endpoints include progression free survival and overall survival.

COBALT-LYM Trial Design

19

In June 2022, at the EHA Congress, we shared initial clinical data from COBALT-LYM. As of the April 26, 2022, data cutoff, 19 patients with T cell malignancies had been enrolled, of which 18 patients had received CTX130 with at least 28 days of follow-up and were included in the analysis. Prior to enrollment, all patients were heavily pre-treated, with a median of four systemic therapies. Additionally, all patients were refractory to their last line of therapy. Eight patients had peripheral T-cell lymphoma (PTCL) and 10 patients had cutaneous T-cell lymphoma (CTCL).

Clinically meaningful responses were observed with CTX130, with a higher percentage of patients responding at higher dose levels. Disease assessment was performed by investigator review according to the 2014 Lugano Response Criteria for PTCL or the International Society for Cutaneous Lymphoma Response Criteria (Olsen criteria) for CTCL, as appropriate. At DL3 and above, the ORR was 70% and the CR rate was 30%. In addition, 90% of patients at DL3 and above had clinical benefit, defined as a stable disease or better. Median CD70 expression among the patients was 90%, but responses were observed across all levels of CD70 expression. Responses were largely consistent in both PTCL and CTCL, with ORRs of 80% and 60%, respectively, at DL3 and above. Broad activity and deep responses were seen in all disease compartments, including the lymph nodes, skin and blood, in patients with CTCL following treatment with CTX130.

20

Responses Rates Observed with CTX130 in COBALT-LYM

Responses Observed Across All Compartments in CTCL

CTX130 was well tolerated across all dose levels. There were no cases of GvHD, no dose-limiting toxicities, and no instances of tumor lysis syndrome (TLS). All cases of CRS and ICANS were Grade 1 or 2 per the ASTCT criteria and either required no specific intervention or resolved following standard CRS management. Neither the frequency nor severity of CRS has increased in patients who were re-dosed with CTX130. There was a sudden death in one patient with William’s syndrome in the context of a lung infection, deemed unrelated to CTX130. There were no treatment related deaths in the trial.

21

CTX130 Was Well Tolerated Across All Dose Levels in COBALT-LYM

In addition to COBALT-LYM, CTX130 is also being evaluated in the COBALT-RCC trial, which is designed to evaluate the safety and efficacy of CTX130 for the treatment of relapsed or refractory renal cell carcinoma. Dose escalation of CTX130 was performed in adult patients with unresectable or metastatic renal cell carcinoma with clear cell differentiation. As with COBALT-LYM, patients received three days of a standard lymphodepletion regimen consisting of fludarabine (30 mg/m2/day) and cyclophosphamide (500 mg/m2/day), followed by a single infusion of CTX130. Patients who demonstrated a response from the first CTX130 infusion could be re-dosed upon disease progression, and those demonstrating clinical benefit in the presence of stable or progressive disease could also receive re-dosing. The primary endpoints include safety as measured by the incidence of dose-limiting toxicities and ORR. Key secondary endpoints include best overall response, progression free survival and overall survival.

In November 2022, at the Society of Immunotherapy in Cancer Annual Meeting, we shared preliminary clinical data from COBALT-RCC. As of the May 2, 2022 data cutoff, 14 patients with stage IV clear cell renal cell carcinoma had been enrolled, of which all patients had received CTX130 and were included in the safety analysis, while 13 patients were evaluated for efficacy. Prior to enrollment, all patients were heavily pre-treated, with a median of three systemic therapies.

CTX130 showed encouraging antitumor activity in COBALT-RCC. One patient experienced a durable complete response, the first to be achieved with allogeneic CAR T cell therapy in patients with relapsed/refractory solid tumors. This patient remained in ongoing complete response through Month 18 at the time of data cutoff. Overall, CTX130 achieved a 77% disease control rate, with nine patients achieving stable disease, in a heavily pretreated renal cell carcinoma patient population. The longest duration of stable disease achieved was observed for 7.8 months and was ongoing at the time of data cutoff. During periods of stable disease, patients did not receive any other anticancer therapies. CTX130 demonstrated typical pharmacokinetics, with peak expansion occurring at a median of Day 10.

CTX130 was well tolerated across all dose levels. There were no cases of GvHD, no dose-limiting toxicities, no instances of ICANS, and no instances of TLS. All cases of CRS were Grade 1 or 2 per the ASTCT criteria and either required no specific intervention or resolved following standard CRS management. Neither the frequency nor severity of CRS has increased in patients who were re-dosed with CTX130. Three patients had SAEs of infections, all unrelated to CTX130, including Grade 5 pneumonia with Grade 4 dyspnea resulting in the death of one patient. There were no treatment-related deaths in the trial.

This first-in-human clinical trial exploring CD70-targeting CAR T cell therapy in clear cell renal cell carcinoma showed a tolerable safety profile with no off-target toxicities and encouraging antitumor activity. These preliminary results from the COBALT-RCC study represent a clinically meaningful proof-of-concept for further exploration of CD70-targeting CAR T cells in renal cell carcinoma and other CD70-positive malignancies and underscore the potential of further increasing potency.

CTX131

In parallel with CTX130, we are advancing CTX131, a next-generation investigational, allogeneic CAR T product candidate targeting CD70 for the potential treatment of both solid tumors and certain hematologic malignancies. CTX131 includes two additional edits beyond CTX130. These edits, the same used in CTX112, target the genes encoding Regnase-1 and TGFBR2, with the aim of enhancing CAR T potency and reducing CAR T exhaustion. Together these edits synergistically improve potency approximately 10-fold in preclinical models, as shown below. In the first quarter of 2023, the IND for CTX131 was cleared by the FDA.

22

CTX131 Shows Enhanced Potency, with the Regnase-1 and TGFBR2 Edits Increasing Potency Approximately 10-fold

Regenerative Medicine Programs

Regenerative medicine, or the use of stem cells to repair or replace tissue or organ function lost due to disease, damage or age, holds potential to treat both rare and common diseases. The field is approaching the point where clinical proofs of concept may beginhave begun to emerge. Most of these efforts use unmodified stem cells, and the potential to genetically engineer these cells via gene editing is large. We are pursuing gene-editing approaches to allow allogeneic use of stem cell-derived therapies by enablingusing CRISPR/Cas9 gene editing to enable immune evasion, improving existingimprove cell function, and directingdirect cell fate using CRISPR/Cas9.fate. Our first major effort in this area is in diabetes together with our partner, ViaCyte.and we and ViaCyte, are advancing a series of programs as part of a strategic collaboration for the discovery, development, and commercialization of gene-edited stem cell therapies for the treatment of diabetes.

ViaCyte Collaboration in Diabetes

ClinicalClinical data with islet transplants indicate that beta-cell replacement approaches may offer benefit to patients with insulin-requiring diabetes. ViaCyte has pioneered the approach of generating pancreatic-lineage cells from stem cells and delivering them safely and efficiently to patients. PEC-Direct, ViaCyte’s leadViaCyte previously evaluated an unedited product candidate currently being evaluated in the clinic, usesusing a non-immunoprotective delivery device that permits direct vascularization of the cell therapy. This approach hasEncouragingly, clinical proof-of-concept data with this earlier product candidate showed that the potential to deliver durable benefit; however,cell therapy could produce insulin in people with T1D. However, because thea patient’s immune system will identify these cells as foreign, PEC-Direct willpatients would require long-term immunosuppression to avoid rejection. As a result, PEC-Direct is being developed as a therapy for the subset of patients with type 1 diabetes at high risk for complications.

Our gene-editinggene editing technology offers the potential to protect the transplanted cells from the patient’s immune system by ex vivoediting of immune-modulatoryimmuno-modulatory genes within the stem cell line used to produce the pancreatic-lineage cells. We believe that the speed, specificity and multiplexing efficiency of CRISPR/Cas9 make our technology well suited to this task. We have established expertise inIn addition, our CRISPR platform enables a process of continuous innovation, with incremental edits incorporated into next-generation product candidates with the aim of increasing treatment benefit further.

This feature of the CRISPR/Cas9 platform has led us to pursue a multi-staged product strategy. Our initial product candidate, VCTX210, is an investigational, allogeneic, gene-edited, immune-evasive, stem cell-derived product candidate for the treatment of T1D developed by applying our gene editing through our allogeneic CAR-T programs. The combination oftechnology to ViaCyte’s proprietary stem cell capabilitiescapabilities. VCTX210 incorporates four gene edits designed to promote immune evasion and our gene-editing capabilitiescell fitness: knock-out of B2M and TXNIP and knock-in of PD-L1 and HLA-E. We and ViaCyte are investigating VCTX210 in an ongoing Phase 1 clinical trial that is designed to assess VCTX210’s safety, tolerability, and immune evasion in patients with T1D, and are in the follow-up stage for this clinical trial. Our next investigational product candidate, VCTX211, incorporates two additional gene edits beyond those in VCTX210 that aim to enhance cell fitness further: knock-in of both MANF and A20 to improve graft acceptance and beta cell proliferation and provide protection from cytokine induced apoptosis. Collectively, these edits improve the ability of beta cells to evade the immune system in vitro and in vivo in preclinical models, as shown below. In addition, VCTX211 has been shown to reverse hyperglycemia in a diabetic rat model. In the potential to enablefourth quarter of 2022, the Clinical Trial Application for VCTX211 was cleared by Health Canada and the Phase 1/2 clinical trial is ongoing.

23

VCTX211 Cells Evade Immunity In Vitro and In Vivo

VCTX211 Reverses Hyperglycemia in a beta-cell replacement product that may deliver durable benefit to patients without the need for immune suppression.Diabetic Rat Model

In Vivo ProgramsApproaches

We are also pursuing treatments for several genetic diseases beyond the hemoglobinopathies. Most of these programs involve believe that in vivo gene editing, or delivery of a CRISPR/Cas9-based therapeutic directly to tissues within the human body. Our initial body, has reached a threshold for clinical translation. As a result, we have established a leading platform for in vivo applications will leverage well-established delivery technologies, such as LNPs and AAV vectors.

We are pursuing liver diseases because delivery of nucleic acid therapies into gene editing in the liver has beenand are rapidly advancing a broad portfolio of in vivo programs for both rare and common diseases towards clinical trials. Our lead in vivo programs target the liver to take advantage of clinically established and validated delivery technologies, principally LNPs, that are now available. LNPs have several advantages that make them well-suited for delivering CRISPR/Cas9 in vivo, including efficient and safe delivery to the liver, large cargo size and transient cargo expression. Within the liver, we are pursuing diseases that are amenable to a gene disruption strategy and have well-understood genetic linkages, such as cardiovascular disease via genetic targets like ANGPTL3, LPA, and PCSK9. We believe this proofapproach of leveraging existing proofs of concept reduces the challenges associated with delivering CRISPR/Cas9-based therapeutics in vivo.

Beyond the liver, for delivery to hematopoietic stem cells, the central nervous system, and other extrahepatic tissues, we are pursuing additional delivery technologies, including adeno-associated virus (AAV) vectors and further advancements to nanoparticle technology. Through internal efforts and external collaborations, we are developing new delivery modalities to support future in vivo therapeutics.

24

Cardiovascular and Dyslipidemia Programs

Cardiovascular disease (CVD) is the leading cause of death globally, accounting for over 30% of all deaths, or nearly 18 million people, in 2019. CVD includes heart failure, stroke, atherosclerotic cardiovascular disease (ASCVD), aortic valve calcification and more. Dyslipidemias are a leading cause of CVD. Dyslipidemias are characterized by abnormally high levels of lipids, including cholesterol, lipoproteins and triglycerides, in the blood stream. Three of the most common dyslipidemias are hypercholesterolemia, hypertriglyceridemia and elevated lipoprotein(a), or Lp(a).

We are developing in vivo editing therapies to treat CVD by lowering levels of key lipids like low density lipoprotein (LDL)-cholesterol (LDL-C), triglycerides and Lp(a). We have chosen to pursue this area given: (1) proven benefit based on natural human genetics and antibody and RNA therapeutics; (2) the opportunity to shift the treatment paradigm with a single-dose, potentially lifetime durable editing approach; (3) the ability to use development paths starting with severe disease and expanding to much larger patient populations; and (4) the potential for combination therapy across programs.

CTX310 – ANGPTL3

Our lead investigational in vivo program, CTX310, for which we are currently conducting IND-enabling studies, targets the gene encoding angiopoietin-related protein 3 (ANGPTL3) for the treatment and prevention of CVD. ANGPTL3 plays an important role in lipid metabolism by inhibiting an enzyme called lipoprotein lipase (LPL). LPL is the main enzyme that breaks down triglyceride-enriched lipoproteins like chylomicrons, very low density lipoprotein (VLDL) and LDL. By preventing LPL from hydrolyzing these lipoproteins, ANGPTL3 activity increases the level of circulating triglycerides. Reducing ANGPTL3 expression by disrupting the ANGPTL3 gene increases LPL expression and thereby reduces triglyceride-rich lipoproteins, as well as LDL-C. This mechanism has been validated through natural history studies, as individuals with natural loss-of-function variants of ANGPTL3 have lower triglyceride levels, lower LDL-C levels, and a lower risk of coronary artery disease. CTX310, which consists of messenger RNA encoding Cas9 and a guide RNA targeting ANGPTL3 delivered via LNP, aims to recapitulate this effect by disrupting the ANGPTL3 gene. CTX310 has been shown to decrease ANGPTL3 protein levels by nearly 90% in non-human primates (NHPs), leading to a greater than 50% reduction in serum triglycerides.

Approximately 90% reduction in serum ANGPTL3 protein resulting in >50% reduction in serum triglycerides in NHPs following treatment with CTX310

CTX320 – Lp(a)

Our second investigational in vivo program, CTX320, targets another protein associated with CVD: Lp(a). Lp(a) is a lipoprotein consisting of an LDL-like particle covalently bound to a protein called apolipoprotein(a), or apo(a). Lp(a) transports cholesterol in the blood and is highly atherogenic. It can infiltrate and bind to components of the extracellular matrix in the inner layers of the aortic valve and other areas of the circulatory system, resulting in increases in inflammation and fatty deposits that over time lead to a weakened aortic valve and other serious symptoms contributing to CVD. Lp(a) is its own independent risk factor for CVD. High concentrations of Lp(a), as well as genetic variants associated with high Lp(a) concentrations, are both associated with CVD. Elevated levels of Lp(a) above 50 mg/dL are directly associated with aortic valve calcification disease (AVCD). Up to 20% of adults in the United States have Lp(a) levels above 50 mg/dL and over 1 million adults in the United States have AVCD. Additionally, 30% of patients with familial hypercholesterolemia have elevated Lp(a) levels. To date, there are no Lp(a) lowering therapies approved by the

25

FDA. CTX320 consists of a guide RNA targeting LPA, the gene encoding apo(a), and messenger RNA encoding Cas9 delivered via LNP. By reducing levels of apo(a), CTX320 should reduce plasma levels of Lp(a) substantially, as supported by preclinical data showing that treatment with CTX320 decreases Lp(a) levels by over 90% in NHPs.

Hypercholesterolemia

Hypercholesterolemia is defined by levels of LDL-C, also known as “bad cholesterol,” above 130 mg/dL and is associated with increased risk of heart disease and stroke. In hypercholesterolemia, high levels of LDL-C accumulate in blood vessels, leading to atherosclerosis. Treatment aims to reduce LDL-C levels to below 100 mg/dL with 70 mg/dL as the ultimate goal, but some patients cannot achieve this level of reduction through existing means. Patients with LDL-C levels above 200 mg/dL are considered to have familial hypercholesterolemia (FH). Patients with FH have one or more genetic mutations that contribute to the liver. Withindisease in addition to diet and lifestyle. Patients with FH cannot metabolize LDL-C effectively, leading to high levels of circulating LDL-C, in some cases exceeding 1000 mg/dL. FH can be subcategorized by mutation status into heterozygous and homozygous familial hypercholesterolemia (HeFH and HoFH). HoFH patients have the most severe phenotype, with LDL-C levels usually exceeding 400 mg/dL. HoFH patients often suffer from CVD early in life and have an average life expectancy of 33 years if untreated. HoFH has a prevalence of 1 in 200,000 to 1,000,000 adults.

Hypertriglyceridemia

Hypertriglyceridemia is clinically defined as having triglyceride levels above l50 mg/dL. The most severe patients can have levels exceeding 2000 mg/dl. Hypertriglyceridemia is associated with CVD and acute pancreatitis. Like LDL-C, triglyceride levels can be affected by diet and lifestyle choices and treated with common therapies. However, over three million adults in the United States still have severe hypertriglyceridemia (sHTG). Known genetic conditions can cause sHTG, including familial chylomicronemia syndrome (FCS) and multifactorial chylomicronemia syndrome (MCS). There are parallels between FCS/MCS and HoFH/HeFH. FCS is the only true monogenic form of hypertriglyceridemia and is associated with extreme levels of triglycerides exceeding 885 mg/dL. The prevalence of FCS is 1 in 200,000 to 300,000 individuals in the United States and EU. MCS is polygenic in nature, meaning that the genetic underpinnings causing the disease vary among individuals, and is clinically defined as having triglyceride levels between 150 and 885 mg/dL. MCS has a prevalence of 1 in 600 to 1,000 individuals.

Additional In Vivo Programs

Building upon CTX310 and CTX320, we have a number of earlier stage investigational in vivo programs leveraging gene disruption in the liver for both rare and common diseases. These include CTX330, which targets PCSK9, a well understood target for CVD with robust data from natural human genetics and other therapeutic modalities. In addition, we have programs focused on gene correction in the liver, including for hemophilia A. Beyond the liver, we have programs targeting hematopoietic stem cells, the central nervous system, and other tissues. For instance, in collaboration with Capsida, we are pursuing diseases that have well understood genetic linkages, such as Glycogen Storage Disease Type Ia,developing in vivo gene editing therapies for the treatment of amyotrophic lateral sclerosis (ALS) and Friedreich’s ataxia. Capsida’s high-throughput AAV engineering platform aims to generate capsids optimized to target specific tissue types and limits transduction of tissues and cell types not relevant to the target disease, potentially improving the activity and tolerability of our gene editing investigational therapies. The combination of our technologies could thereby enable best-in-class therapies for these devastating neurodegenerative diseases.

Hemophilia A

Hemophilia A is a rare, typically X-linked, recessive bleeding disorder caused by insufficient or GSDIa. Evidence suggests that correctionnonfunctioning coagulation protein, factor VIII (FVIII). Hemophilia A is the most common type of hemophilia disorder comprising 80-85% of the mutant genetotal hemophilia population and accounting for 900,000 people worldwide, including 1 in only a small percentage of liver cells may have a significant therapeutic effect in this disease, which makes the gene correction strategy feasible.

Glycogen Storage Disease Ia

GSDIa, also known as Von Gierke disease, is an autosomal recessive inborn error of glucose metabolism caused by a mutation in the G6PC gene, which encodes the glucose-6-phosphatase protein, or G6Pase.every 4-10,000 male births. In patients with GSDIa, thehemophilia A, lack of G6Pase prevents the release of glucose from the liver, resulting in accumulation of a large chain form of glucose known as glycogen. The inability of patients with GSDIa to regulate glucose levels leads to hypoglycemia, or low blood glucose, and high levels of lactic acid when patients are not eating, requiring patients to adhere to burdensome dietary regimes. GSDIa patients also face long-term risks such as growth delay, neuropathy and kidney stones. Additionally,effective clotting due to deficient functional FVIII activity may present in patients as: easy bruising and swelling, prolonged bleeding after injuries, surgeries, or recurrent bleeding prior to wound healing and, in moderate and severe hemophilia, spontaneous hemorrhage.

Severity of disease has traditionally been defined based on the accumulationresidual amount of glycogenFVIII in the liver, 70% to 80% of patients over 25blood with mild defined as >5-40%, moderate as 1-5%, and severe as <1%. Normal values for FVIII are between 50-150%. Individuals with severe hemophilia A are typically diagnosed within the first two years of life. Without prophylactic treatment, patients suffering severe disease may average up to two to five spontaneous bleeding episodes per month, including joint bleeding and deep muscle hematomas. Patients with moderate disease are usually diagnosed by age will develop hepatocellular adenomas,five and have spontaneous bleeding at a typerate of non-cancerous growthonce a month to once a year and suffer from prolonged bleeding after injuries. Individuals with mild disease are diagnosed later in life and do not have spontaneous bleeding but exhibit abnormal bleeding after surgeries and other procedures.

26

Current standard of care for hemophilia A includes the liver,use of plasma-derived or recombinant clotting factor concentrate to prevent uncontrolled bleeding. Several gene therapies are being investigated in clinical trials, most of which approximately 10% will progressaim to hepatocellular carcinoma,deliver a potentially fatal liver cancer. There are approximately 1,000 new casesfunctional copy of GSDIa per year worldwide.

There are currently no disease-modifying treatment options for patients with GSDIa. Any disruptionthe F8 gene into target cells using AAV vectors. One of these gene therapies, Roctavian, received conditional approval by the EMA in carbohydrate deliveryAugust 2022. However, because AAV vectors do not integrate into a patient’s genome, transduced cells may lead to low blood sugar levels, which can cause life-threatening consequences including seizure, coma and death. To minimize the risk of acute complications, patients are required to adhere to highly burdensome, lifelong dietary regimens suchlose episomal AAV as overnight administration of uncooked cornstarch or a slow-release carbohydrate product such as Glycosade. These regimens have a high rate of non-compliance,they divide, leading to increased riskdeclining FVIII levels and waning therapeutic benefit. In addition, the immunogenic nature of serious long-term complications.

WeAAV vectors means that in most cases patients cannot receive additional infusions of the therapy. In contrast, we are developing a CRISPR/Cas9gene-edited product candidate to correcttreat hemophilia A that uses CRISPR/Cas9 to insert a functional F8 gene into a specific location in a patient’s genome. This approach is intended as a one-time curative therapy where direct insertion of the mutation in GSDIa patients. Animal model experiments have demonstrated that the additionF8 gene will lead to lifelong production of functional copiesFVIII protein.

CRISPR-X: Further Unlocking the Potential of Our Gene Editing Platform

While we have made significant progress with our current portfolio of programs, we recognize that we need to continue to innovate to unlock the G6PCfull potential of CRISPR gene can correct the deficiency of G6Pase protein in GSDIaediting and bring transformative therapies to even more patients. In 2022, we launched a new early-stage research team known as CRISPR-X that as little as 3% of normal levels of G6Pase can restore the equilibrium of glucose and glycogen in the bloodstream and liver. Our approach isfocuses on innovative research to correct the G6PCdevelop next-generation gene directly in its native location. We believe this directediting modalities. CRISPR-X focuses on technologies to enable whole gene correction will resultand insertion without requiring homology-directed repair, which occurs at low efficiency in appropriate expression of the G6Pase protein. Other methods rely on adding copies of the gene throughmany cells, or viral delivery methods,of a DNA template, which we believe may lead to overexpressioncreates toxicity risks and technical challenges. These technologies include all-RNA gene correction, non-viral delivery of the G6Pase proteinDNA and ineffective control of glucose levels.novel editing and insertion techniques. These efforts complement our existing platform capabilities, such as guide RNA selection, on- and off-target assessment and multiplexing.

Vertex Partnered Programs

We have partnered certain of our programs in other disease areas, such as Duchenne muscular dystrophy, or DMD, myotonic dystrophy type 1, or DM1, and cystic fibrosis, or CF. We have entered into collaboration agreements with respect to these three programs with Vertex, a global leader in rare diseases with extensive disease area expertise in CF. CF, and we retain the option to co-develop and co-commercialize products for the treatment of DM1. We believe that our CRISPR/Cas9 gene-editinggene editing technology is well suited to address DMD, DM1 and CF, all of which have significant patient populations with high unmet medical need.

Duchenne Muscular Dystrophy (DMD)

DMD is an X-linked recessive genetic disease caused by mutations in the dystrophin gene, which results in a lack of the dystrophin protein. Because dystrophin plays a key structural role in muscle fiber function, the absence of this protein in muscle cells leads to significant cell damage and ultimately causes muscle cell death and fibrosis. Patients with the disease experience muscle degeneration, loss of mobility and premature death. DMD is among the most prevalent severe genetic diseases, occurring in one in 3,300 male births worldwide. There are currently two approved disease-modifying therapies in the United States for the treatment of DMD, one for patients who have confirmed mutations of the dystrophin gene amenable to exon 51 skipping and one for patients who have confirmed mutations of the dystrophin gene amenable to exon 53 skipping. These mutations affect about 13% and 8% of the DMD population, respectively.

Myotonic dystrophy type 1 (DM1)

DM1 is an autosomal genetic disease caused by the expansion of a CTG trinucleotide repeat in the noncoding region of the DMPK gene. The disease affects the skeletal and smooth muscle, as well as other organ systems, such as the eye, heart, endocrine system, and central nervous system. The clinical manifestations of DM1 span a continuum from mild to severe. Based on these phenotypes, DM1 is classified into three somewhat overlapping forms: mild, classic, and congenital. Patients with mild DM1 have normal lifespans and typically develop cataracts, and experience mild sustained muscle contractions, or myotonia. Those with classic DM1 tend to have muscle weakness and wasting, myotonia, cataracts and often abnormalities in cardiac conduction, and may become physically disabled and have shortened lifespans. Patients with congenital DM1 commonly have intellectual disability and typically have hypotonia and severe generalized weakness at birth, often with respiratory insufficiency and early death. DM1 affects around 1 in 8,000 people worldwide. No approved therapies exist to treat the underlying disease; instead, most interventions to date aim to address specific symptoms of the disease.

Cystic Fibrosis (CF)

CF is a progressive disease caused by mutations in the cystic fibrosis transmembrane regulator, or CFTR, gene resulting in the loss or reduced function of the CFTR protein. Patients with CF develop thick mucus in vital organs, particularly in the lungs, pancreas and gastrointestinal tract. As a result, CF patients experience chronic severe respiratory infections, chronic lung inflammation, poor absorption of nutrients, progressive respiratory failure and early mortality. The median age of death from CF in the United States was 31 years in 2017, with most deaths resulting from respiratory failure. CF is an orphan disease that is estimated to effectaffect more than 70,000 patients in the United States and Europe. CF patients require lifelong treatment with multiple daily medications and hours of self-care. They often require frequent hospitalizations and sometimes even lung transplantation, which can prolong survival but is not curative.

27

Bayer Partnered Programs

We are also investigating programs for the diagnosis, treatment, or prevention of certain autoimmune disorders and eye disordersdisorders. For these and the program for hemophilia A disorders from whichdescribed above, Bayer has options to either co-develop and co-commercialize two products with us or, under certain circumstances, exclusively license such optioned products.

Further Unlocking the Potential of Our CRISPR/Cas9 Platform

We are working to optimize our CRISPR/Cas9 platform. Our key areas of focus are described below.

Nuclease Engineering

The Cas9 nucleases found in nature are highly efficient and specific. We believe that for many gene-editing applications, the naturally occurring Cas9 variants have all the properties required to support an effective therapeutic. However, we also see potential in certain disease areas and organ systems where modified versions of Cas9 may be more effective, and we are working internally and through our external collaborations to engineer Cas9.

Our research and development efforts seek to enhance several characteristics of Cas9, including size, specificity, immunogenicity and ability to support different types of editing strategies. We believe that the process of optimizing these different parameters may yield novel Cas9 versions with different properties, each of which may be best suited to a certain disease area or type of genetic editing.

Guide RNA Optimization

Selecting the sequence for guide RNAs is a critical step in the process of designing our product candidates. Once we have chosen a gene-editing strategy, we seek to identify guide RNAs that will perform the desired edit with high efficiency and with undetectable or extremely low off-target cutting. While computational models can predict efficiency and off-target effects with reasonable accuracy, we believe that a combination of computation and experimental approaches is necessary to reliably select the best possible guide RNAs.

Our guide RNA selection process combines bioinformatics and experimental assays to enable the screening of large numbers of guide RNAs in each experiment. This process starts with proprietary bioinformatics algorithms that select a large pool of guide RNAs that are predicted to have desired properties. These guides are then tested for target site cutting efficiency using a high-throughput screening platform in a model cell line. The most efficient guides are then put through two screening processes for possible off-target effects. First, bioinformatics algorithms are used to identify the 10 to 20 sites in the genome that are most likely to show off-target effects, and these sites are examined through high-throughput assays for empirical off-target cutting. Second, homology-independent screening is performed to identify any potential off-target cutting, even at unpredicted locations. Finally, a small subset of guides with the highest efficiency and lowest off-target potential are tested in the cell type of therapeutic interest before choosing a lead guide or guides for our program.

Advanced Editing

While gene correction is achievable today using CRISPR/Cas9, it is more difficult and has lower efficacy than the more straightforward gene disruption strategy. Our initial gene correction programs target diseases in which therapeutic efficacy can be achieved through correction of only a small percentage of cells, while other potential indications may require correction of a significantly higher percentage of cells. We are working to increase the efficiency of gene correction to facilitate the potential treatment of these additional indications.

A central focus of our development efforts is to optimize the correction rates in cell types where rates of correction are typically low. Some of this optimization is being done internally, to test the influence of different parameters of the CRISPR/Cas9 system on correction efficiency. We are also collaborating more broadly with leaders in the DNA repair field, to explore other approaches to optimize correction rates.

We are also focused on expanding our ability to perform multiple edits simultaneously. In contrast to other gene-editing technologies, which require extensive protein engineering and an additional construct for each new genetic target, CRISPR/Cas9 only requires a new guide RNA using simple Watson-Crick base pairing to target a new genetic locus. As a result, one can easily perform many edits at once using CRISPR/Cas9, a process known as multiplexing. We believe multiplexing holds promise in cell therapies, where making several modifications may lead to a safer and more efficacious therapy. Our research efforts in this area emphasize developing strategies to keep editing rates high while multiplexing without increasing the risk of off-target activity.

Synthetic Biology

The application of engineering principles to biological systems, broadly known as synthetic biology, could facilitate the development of improved cellular therapeutics. Novel strategies and tools in this area, such genetic circuits to regulate gene expression based on Boolean logic, may allow us to control specific cellular activity, such as the secretion of a protein, in response to a selected input, such as an administered small molecule or a marker sensed on a cell surface. We believe synthetic biology holds promise when combined with CRISPR/Cas9 gene editing because CRISPR/Cas9 enables the precise engineering of such circuits into the genomes of cell therapies in order to improve their therapeutic properties. Given this potential, we have active efforts to develop and test such synthetic biology tools for incorporation into future immuno-oncology and regenerative medicine cell therapies.

Strategic Partnerships and Collaborations

We intend to develop CRISPR/Cas9-based therapeutics both independently and in collaboration with current and potential future corporate partners. We view strategic partnerships as a core component of our strategy, allowing us to access capabilities and resources in support of our therapeutic programs. We have established threemaintain broad strategic partnerships to develop gene editing-based therapeutics in specific disease areasareas.

Vertex

We have entered into a series of agreements with Vertex that contemplate certain research, development, manufacturing and commercialization activities involving various targets. Since October 2015, we have entered into a Strategic Collaboration, Option and License Agreement, as amended in 2017 and 2019, or the 2015 Collaboration Agreement; a Joint Development and
Commercialization Agreement, or JDA;the Vertex JDA, which was amended and restated in April 2021, or the A&R Vertex JDCA; and a Strategic Collaboration and License Agreement, as amended in April 2021, or the 2019 Collaboration Agreement.

2015 Collaboration Agreement

Pursuant to the 2015 Collaboration Agreement, we agreed to provide technology and options to obtain licenses relating to our CRISPR/Cas technology to Vertex in exchange for a $75.0 million upfront payment. In 2015, in connection with the initial entry into the 2015 Collaboration Agreement, Vertex also made a $30.0 million equity investment in us.

The initial focus of the 2015 Vertex collaboration was to use CRISPR/Cas9 technology to discover and develop gene-based treatments for hemoglobinopathies and cystic fibrosis. In 2017, Vertex exercised its option to co-develop and co-commercialize the hemoglobinopathies program for which net profits and losses, as applicable, will be shared equally by the parties.program. Matters relating to hemoglobinopathies targets are governed by the JDA,A&R Vertex JDCA, as summarized below. Further discovery efforts focused on a specified number of other genetic targets. Under the 2015 Collaboration Agreement, Vertex had the option to exclusively license treatments for a specified number of collaboration targets that emerged from the four-year research collaboration under certain of our platform and background intellectual property to develop, manufacture, commercialize, sell and use therapeutics directed to each such collaboration target. We were responsible for discovery activities, and the related expenses were fully funded by Vertex.

In October 2019, Vertex exercised the remaining options granted to it under the 2015 Collaboration Agreement to exclusively in-license three additional targets for the development of gene-based treatments using CRISPR-based gene editing. The targets include the cystic fibrosis transmembrane conductance regulator gene and two undisclosed targets. Under the terms of the 2015 Collaboration Agreement, we received an upfront payment of $30.0 million in connection with the option exercise and have the potential to receive up to $410.0 million in development, regulatory and commercial milestones, as well as royalty payments in the single digits to low teens on net product sales for each of the three targets. The milestone and royalty payments are each subject to reduction under certain specified conditions set forth in the 2015 Collaboration Agreement. For these targets, Vertex is solely responsible for all research, development, manufacturing and global commercialization activities and Vertex received exclusive rights to develop and commercialize products related to these targets globally. The research term of the 2015 Collaboration Agreement has expired, and Vertex no longer holds rights to in-license additional targets under the 2015 Collaboration Agreement.

Either party can terminate the 2015 Collaboration Agreement upon the other party’s material breach, subject to specified notice and cure provisions. Vertex also has the right to terminate the 2015 Collaboration Agreement for convenience at any time upon 90 days’ written notice prior to any product receiving marketing approval and upon 270 days’ notice after a product has received marketing approval. We may also terminate the 2015 Collaboration Agreement in the event Vertex challenges any of our patent rights.

Absent early termination, the 2015 Collaboration Agreement will continue until the expiration of the Vertex’s payment obligations under the 2015 Collaboration Agreement.

Joint Development Agreement

In December 2017, we entered into the Vertex JDA with Vertex pursuant to which the parties agreed to, among other things, co-develop and co-commercialize exa-cel and other product candidates specified in the Vertex JDA. In April 2021, we and Vertex agreed to amend and restate the Vertex JDA and entered into the A&R Vertex JDCA, pursuant to which the parties agreed to, among other things, (a) adjust the governance structure for the collaboration and adjust the responsibilities of each party thereunder; (b) adjust the allocation of net profits and net losses between the parties with respect to exa-cel only; and (c) exclusively license (subject to our

28

reserved rights to conduct certain activities) certain intellectual property rights to Vertex relating to the specified product candidates and products (including exa-cel) that may be researched, developed, manufactured and commercialized under such agreement.

The A&R Vertex JDCA includes, among other things, provisions relating to the following:

Governance; Activities. We and Vertex disbanded the previously established collaboration strategy team and all working groups established by such team and established the following committees: (i) a joint oversight committee to provide high-level oversight and (ii) a transition committee to provide for forum planning, discussing and sharing information regarding certain transition activities until completion of such activities. Each of the new committees contain an equal number of representatives from each of CRISPR and Vertex. The initial focusA&R Vertex JDCA provides that, subject to the terms and conditions of such agreement, Vertex has the right to conduct all research, development, manufacturing and commercialization activities relating to the specified product candidates and products (including exa-cel) throughout the world subject to our reserved right to conduct certain activities. We will continue to participate in certain aspects of such activities in an observer capacity unless and to the extent otherwise agreed to by the parties.

Financial Terms. In the second quarter of 2021, in connection with the closing of the JDA is fortransaction contemplated by the development of CTX001 for TDT and SCD. In connection with entering into the JDA,A&R Vertex JDCA, we received a $7.0$900 million up-front payment from Vertex and subsequently receivedVertex. Additionally, we are eligible to receive a one-time low seven-digit$200 million milestone payment upon the dosingreceipt by Vertex of the second patient in a clinical trial withfirst marketing approval of the initial product candidate.candidate from the FDA or the European Commission. The net profits and net losses, as applicable, incurred under the JDA willA&R Vertex JDCA with respect to all product candidates and products specified in the A&R Vertex JDCA other than exa-cel shall be shared equally between us and Vertex.

The JDA includes, among other things, provisions relating With respect to exa-cel only, the following:

Governance. Wenet profits and net losses, as applicable, incurred under the A&R Vertex JDCA through July 1, 2021 in connection with the initial shared product (i.e., exa-cel) were shared equally between us and Vertex, will formand beginning July 1, 2021, the following committees: (i)net profits and net losses, as applicable, incurred under the A&R Vertex JDCA are allocated 40% to CRISPR and 60% to Vertex. In addition, the A&R Vertex JDCA allows us to defer a joint steering committeeportion of our share of costs under the arrangement if spending on the exa-cel program exceeds specified amounts. Any deferred amounts are only payable to provide high-level oversight and decision making regarding the activities covered by the JDA, (ii) a joint development committee to provide oversight and decision making-making regarding development activities, (iii) a joint commercialization committee to provide oversight and decision-making regarding commercialization activities and (iv) a joint manufacturing committee to provide oversight and decision-making regarding manufacturing activities. EachVertex as an offset against future profitability of the committees will contain an equal number of representatives from each of usexa-cel program and Vertex.the amounts payable are capped at a specified maximum amount per year.

Commercialization. The JDA provides that we will be the responsible for commercialization activities in the United States and Vertex will be responsible for commercialization activities outside of the United States.Termination

Termination.. Either party can terminate the JDAA&R Vertex JDCA upon the other party’s material breach, subject to specified notice and cure provisions, or, in the case of Vertex, in the event that we become subject to specified bankruptcy, winding up or similar circumstances. Either party may terminate the JDAA&R Vertex JDCA in the event the other party commences or participates in any action or proceeding challenging the validity or enforceability of any patent that is licensed to such challenging party pursuant to the JDA.A&R Vertex JDCA. Vertex also has the right to terminate the JDAA&R Vertex JDCA for convenience at any time after giving prior written notice.

If circumstances arise pursuant to which a party would have the right to terminate the JDAA&R Vertex JDCA on account of an uncured material breach, such party may elect to keep the JDAA&R Vertex JDCA in effect and cause such breaching party to be treated as if it had exercised its opt-out rights with respect to the products associated with such uncured material breach (described below) and the royalties payable to the breaching party would be reduced by a specified percentage.

Opt-Out Rights. Either party may opt of out of the development of a product candidate under the JDAA&R Vertex JDCA after predetermined points in the development of the product candidate, on a candidate-by-candidate basis. In the event of such opt-out, the party opting-outopting out will no longer share in the net profits and net losses associated with such product candidate and, instead, the opting outopting-out party will be entitled to high single to mid- teenmid-teen percentage royalties on the net sales of such product, if commercialized.

2019 Collaboration Agreement

OnIn June 6, 2019, we and Vertex entered the 2019 Collaboration Agreement, pursuant to which we and Vertex agreed to collaborate to develop and commercialize products for the treatment of DMD and DM1. We and Vertex amended the 2019 Collaboration Agreement in April 2021.

The 2019 Collaboration Agreement includes, among other things, provisions relating to the following:

Governance. We and Vertex will form a joint advisory committee to provide high-level oversight and coordination of the activities covered by the 2019 Collaboration Agreement.

Development and Commercialization. The 2019 Collaboration Agreement provides that Vertex will be responsible for development and commercialization activities, subject to our option, exercisable during a specified exercise period, to co-develop and co-commercialize products for the treatment of DM1.

Financial Terms. In connection with entering into the 2019 Collaboration Agreement, we received a $175.0 million up-front payment from Vertex. We are eligible to receive milestone payments from Vertex of up to $825.0$775.0 million in the aggregate, depending on the numbers and types of products that achieve pre-determined development and commercial milestones. We are also eligible to receive royalties on the sales of products ranging from the low single digits to the low double digits.

Co-Development and Co-Commercialization Option. If we elect to co-develop and co-commercialize products for the treatment of DM1, we would reimburse Vertex for fifty percent (50%) of the DM1 research and development costs incurred by Vertex and

29

would be responsible for fifty percent (50%) of such costs going forward. We would receive, in lieu of further milestone or royalty payments associated with DM1 development and commercialization activities, fifty percent (50%) of all profits from sales of such products and would be responsible for fifty percent (50%) of all losses.

Termination. Either party may terminate the 2019 Collaboration Agreement upon the other party’s material breach, subject to specified notice and cure provisions. We may also terminate the 2019 Collaboration Agreement in the event Vertex commences or participates in any action or proceeding challenging the validity or enforceability of any patent that is licensed to Vertex pursuant to the 2019 Collaboration Agreement. Vertex may also terminate the 2019 Collaboration Agreement upon our bankruptcy or insolvency, or for convenience at any time, after giving written notice.

If circumstances arise pursuant to which Vertex would have the right to terminate the 2019 Collaboration Agreement on account of an uncured material breach, Vertex may elect to keep the 2019 Collaboration Agreement in effect and reduce by a specified percentage the applicable royalties payable in respect of the product(s) that are the subject of the breach.

Bayer

In December 2015,2019, we and Bayer entered into a joint venturean option agreement, or the Joint Venture2019 Option Agreement, pursuant to which we andin connection with the termination of our joint venture with Bayer established Casebia to discover, develop and commercialize CRISPR/Cas9 gene-editinggene editing therapeutics to treat the genetic causes of bleeding disorders, autoimmune disease, blindness, hearing loss and heart disease.certain diseases. Under the Joint Venture Agreement, Bayer made available its protein engineering expertise and relevant disease know-how and we made available our proprietary CRISPR/Cas9 gene-editing technology and intellectual property. We and Bayer each held a 50% partnership interest in Casebia.

In December 2019, we, Bayer, certain subsidiaries and affiliates of us and Bayer, and Casebia entered into a series of transactions by which, among other things, Casebia became a wholly-owned subsidiary of ours; we and Bayer terminated the joint venture; and we and Bayer entered into a new option agreement, or the 2019 Option Agreement.

Retirement Agreement,

On December 13, 2019, we, Bayer and Casebia entered into an agreement, or the Retirement Agreement, pursuant to which Casebia retired Bayer’s outstanding partnership interests in exchange for up to $22.0 million returned from Casebia operating cash less certain estimated interim operating expenses, subject to potential post-closing adjustments, or the Retirement.

In connection with the Retirement, our wholly-owned subsidiary simultaneously acquired a 1% partnership interest in Casebia in exchange for a capital contribution in an amount equal to 1% of the fair market value of Casebia. Accordingly, after effecting the Retirement, we and our wholly-owned subsidiary own 100% of the partnership interests in Casebia. The completion of the Retirement occurred simultaneously with the signing of the Retirement Agreement.  

The Retirement Agreement contains customary representations and warranties and other customary terms for a transaction of this type.  

In connection with the Retirement, the parties also entered into certain other ancillary agreements, including a joint venture termination agreement and option agreement, each summarized below.

Joint Venture Termination Agreement

In connection with entering into the Retirement Agreement, we, Bayer, certain subsidiaries and affiliates of us and Bayer, and Casebia entered into an agreement, or the Joint Venture Termination Agreement, pursuant to which we and Bayer agreed to terminate the Joint Venture Agreement consistent with the terms of such agreement.

Under the Joint Venture Termination Agreement, Casebia-owned patents, know-how and technology are now co-owned by us and Bayer, subject to certain exclusive licenses granted therein. In addition, the parties modified their rights and obligations under an amended and restated intellectual property management agreement and terminated other agreements between the parties related to the joint venture, including the CRISPR IP Contribution Agreement with Casebia, dated as of March 16, 2016, pursuant to which we and certain of our affiliated entities granted Casebia an exclusive, worldwide, fully paid-up, royalty-free license, including the right to sublicense, to the use of our CRISPR/Cas technology to research, develop, produce, commercialize and sell products in certain fields and the existing Option Agreement, dated as of March 16, 2016, by and between us, Bayer and Casebia.

2019 Option Agreement

In connection with entering into the Retirement Agreement and the Joint Venture Termination Agreement, we and Bayer also entered into the 2019 Option Agreement pursuant to which Bayer obtained an option (exercisable during a specified exercise period defined by future events, but in no event longer than five years after the effective date of the 2019 Option Agreement) to co-develop and co-commercialize two products for the diagnosis, treatment, or prevention of certain autoimmune disorders, eye disorders, or hemophilia A disorders. In the event Bayer elects to co-develop and co-commercialize a product, the parties will negotiate and enter into a co-development and co-commercialization agreement, or a Co-Commercialization Agreement, for such product, and Bayer would be responsible for 50% of the research and development costs incurred by us for such product going forward. Bayer would receive 50% of all profits from sales of such product and would be responsible for 50% of all losses.

If Bayer elects to exercise its option to co-develop and co-commercialize a product, Bayer will make a one-time $20.0 million payment, or the Option Payment, to us that will become non-refundable once the parties execute a Co-Commercialization Agreement with respect to such optioned product. The Option Payment is payable only once with respect to the first time Bayer exercises an option under the 2019 Option Agreement.

In addition, following Bayer’s exercise of its option and/or the execution of a Co-Commercialization Agreementco-commercialization agreement for an optioned product, for a period beginning on the effective date of such Co-Commercialization Agreementco-commercialization agreement and ending on the earlier of the three-month anniversary of such effective date or during the 90-day negotiation process of such Co-Commercialization Agreement,co-commercialization agreement, Bayer has a right to negotiate an exclusive license to develop and commercialize such optioned product. If Bayer exercises such right, the parties will enter into an exclusive license agreement for such optioned product on terms mutually agreeable to the parties. Further, the Option Payment paid for such optioned product would become credited against payments due under such exclusive license or any other exclusive license entered into in connection with the 2019 Option Agreement.

Either party may terminate the 2019 Option Agreement upon the other party’s material breach, subject to specified notice and cure provisions. We may also terminate the 2019 Option Agreement in the event Bayer commences or participates in any action or proceeding challenging the validity or enforceability of any CRISPR patent necessary or useful for the research, development, manufacture or commercialization of a product that is the subject of the 2019 Option Agreement. Bayer may also terminate the 2019 Option Agreement upon our bankruptcy or insolvency, or for convenience at any time, after giving written notice.

ViaCyte

In September 2018, we and ViaCyte entered into a research collaboration agreement, or the ViaCyte Collaboration Agreement. PursuantThe foregoing descriptions of our strategic agreements are qualified in their entirety by reference to the ViaCyte Collaboration Agreement, we and ViaCyte established a research plan, or the Research Plan, for the purposefull text of designing and advancing allogeneic cell therapies derived from gene edited human stem cells for use in the treatmentsuch agreements, copies of diabetes type 1, diabetes type 2 and insulin dependent diabetes, or the Field.

For purposes of carrying out the parties’ respective activities under the Research Plan, each party granted the other party a non-exclusive, royalty free, fully-paid, worldwide licensewhich are filed as exhibits to perform those activities during the research term. In addition, each party also granted the other party a non-exclusive license to research, develop, manufacture and commercialize products and product candidates for use in the Field, which is exercisable only upon the occurrence of certain termination events.

We and ViaCyte have formed a Joint Research Committee, or the JRC, comprised of three representatives from each of us and ViaCyte to review the progress of the research activities. All decisions by the JRC are made by consensus subject to specified dispute resolutions procedures. Each party to the ViaCyte Collaboration Agreement will be responsible for the costs incurred in connection with their respective activities set forth in the Research Plan. During the Research Term, neither party nor any of its affiliates may, alone or in conjunction with a third party, conduct discovery, research, development, manufacturing or commercialization activities with respect to any product which employs allogeneic cell therapy derived from gene-edited human stem cell for use in the Field.

Pursuant to the ViaCyte Collaboration Agreement, in 2018 we issued an aggregate of 380,148 shares and paid an aggregate of $1.2 million to ViaCyte in satisfaction of our upfront payment obligations. Refer to Note 7 of the notes to our consolidated financial statements included in this Annual Report on Form 10-K for additional information.10-K.

Either party may terminate the ViaCyte Collaboration Agreement for convenience or uncured material breach, upon notice of a specified period. Either party may also terminate the ViaCyte Collaboration Agreement upon notice if the other challenges the enforceability, validity or scope of any patent rights belonging to the other party, unless the challenging party withdraws or causes the challenge to be withdrawn within a specified period. The ViaCyte Collaboration Agreement also may be terminated by either party upon the insolvency of the other party. In the event either party is acquired by specified third parties the ViaCyte Collaboration Agreement may be terminated, at the election of the non-acquired party, upon the closing of such acquisition.

Intellectual Property

We strive to protect and enhance the proprietary technology, inventions, know-how and improvements that we believe are commercially important to our business by seeking, maintaining, and defending patent rights, whether developed internally or licensed from third parties, that cover our gene-editinggene editing technology, and existing and planned therapeutic programs. We also rely on trade secret protection and confidentiality agreements to protect our proprietary technologies and know-how to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection, as well as continuing technological innovation and seeking in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of gene editing. We additionally rely on trademark protection, copyright protection and regulatory protection available via orphan drug designations, data exclusivity, market exclusivity, and, if relevant, patent term extensions. Our success will depend significantly on our ability to obtain and maintain patent and other proprietary protection for our technology, our ability to defend and enforce our intellectual property rights and our ability to operate without infringing any valid and enforceable patents and proprietary rights of third parties. We also

30

protect the integrity and confidentiality of our data, know-how and trade secrets by maintaining physical security of our premises and physical and electronic security of our information systems.

In-Licensed Intellectual Property from Dr. Charpentier

In April 2014, pursuant to an exclusive license with Dr. Charpentier, we licensed certain rights to a worldwide patent portfolio which covers various aspects of our genomegene editing platform technology including, for example, compositions of matter including additional(e.g., CRISPR/TRACR/Cas9 complexes,systems) and methods of use, including theirthe use in targeting or cutting DNA.of CRISPR/Cas9 systems for gene editing. We refer to this worldwide patent portfolio as the “Patent Portfolio”. This Patent Portfolio to-date includes, for example, more than ninety-five (95) granted or allowed patents in the United States, United Kingdom, Canada, Germany, Europe, Japan, China, India, Ukraine, New Zealand, Singapore, Australia, Mexico, Tunisia, Hong Kong, Israel, Peru, the Philippines, and South Africa and pending patent applications in the United States, Europe, Canada, Mexico, Australia and other selected countries in Central America, South America, Asia and Africa. This license is limited to therapeutic products such as pharmaceuticals and biologics and any associated companion diagnostics, for the treatment or prevention of human diseases, disorders, or conditions. For further information about this license, please see “Business – “Business— License Agreements—CRISPR License with Dr. Charpentier.Charpentier.”

In addition to Dr. Charpentier, the Patent Portfolio has named inventors who assigned their rights either to the Regents of the University of California, or California, or the University of Vienna, or Vienna. California’s rights are subject to certain overriding obligations to the sponsors of its research, including the Howard Hughes Medical Institute and the U.S. Government. Caribou Biosciences, or Caribou, had reported that it had an exclusive license to patent rights from California and Vienna, subject to a retained right to allow non-profit entities to use the inventions for research and educational purposes. Intellia Therapeutics, Inc., or Intellia Therapeutics, had reported that it had an exclusive license to such rights from Caribou in certain fields. We refer collectively to Dr. Charpentier, California, and Vienna as the “CVC Group”.

In January 2016, We are subject to quasi-litigation, inter partes administrative proceedings in the U.S. Patent and Trademark Office, or USPTO, declared an interference (Interference No. 106,048, or ‘048 interference) between one ofand the pending U.S. patent applications (now issued as U.S.European Patent No. 10,266,850) included inOffice involving the Patent Portfolio and twelve issued U.S. patents owned jointly by the Broad Institute and Massachusetts Institute of Technology and, in some instances, the President and Fellows of Harvard College, which we refer to individually and collectively as the Broad. The interference was redeclared in March 2016 to add a U.S. patent application owned by the Broad. An interference is a proceeding conducted at the USPTO by the Patent Trial and Appeal Board, or PTAB, to determine which party was the first to invent subject matter claimed by at least two parties.

Following motions by the parties and other procedural matters, the PTAB concluded in February 2017 that the ‘048 interference should be terminated without deciding which party was the first to invent. In its decision, the PTAB concluded that the claim sets presented by the two parties were considered patentably distinct from each other because the involved CVC Group patent application’s claims were broader in scope in that they were not restricted to use in eukaryotic cells, whereas Broad’s claims were so limited.  In April 2017, the CVC Group appealed the PTAB decision to the U.S. Court of Appeals for the Federal Circuit, or the Federal Circuit. In the appeal, the CVC Group asked the court to review and reverse the PTAB’s February 2017 decision, which terminated the interference without determining which inventors first invented the use of the CRISPR/Cas9 genome editing technology in eukaryotic cells. The Federal Circuit conducted a hearing on the appeal on April 30, 2018, and on September 10, 2018, affirmed the PTAB’s decision to terminate the interference proceeding. As a result of the Federal Circuit’s decision, U.S. Serial No. 13/842,859, which was previously considered allowable, was released from the interference and issued as U.S. Patent No. 10,266,850.  

In June 2019, we received notification that the USPTO initiated a new interference proceeding at the PTAB, which the PTAB redeclared in August 2019 (Interference No. 106,115, or ‘115 interference). The ‘115 interference involves fourteen (14) pending U.S. patent applications co-owned by the CVC Group and thirteen (13) patents and a patent application owned by the Broad. Specifically, the PTAB declared the ‘115 interference between the CVC Group’s pending U.S. Patent Application Nos. 15/947,680; 15/947,700; 15/947,718; 15/981,807; 15/981,808; 15/981,809; 16/136,159; 16/136,165; 16/136,168; 16/136,175; 16/276,361; 16/276,365; 16/276,368; and 16/276,374, and the Broad’s U.S. Patent Nos. 8,697,359; 8,771,945; 8,795,965; 8,865,406; 8,871,445; 8,889,356; 8,895,308; 8,906,616; 8,932,814; 8,945,839; 8,993,233; 8,999,641; 9,840,713, and U.S. Patent Application No. 14/704,551. This list includes the same twelve Broad patents and application that were involved in the ‘048 interference. In contrast, none of the issued U.S. patents the CVC Group owns are subject to this proceeding.  The CVC Group’s inventions that are the subject of the ‘115 interference were first filed with the USPTO in May of 2012, while the Broad filed its first application seven months later in December of 2012.  However, the 14 CVC Group patent applications that are involved in the current interference are continuing patent applications that were filed in 2018 and claim priority to the CVC Group’s original 2012 filing, while the Broad’s involved patents and patent application were filed between 2013 and 2015.  Because the PTAB accorded neither party the benefit of any of its first filing dates, but instead accorded only the benefit of the actual filing dates of the involved patents and patent applications, the CVC Group was by default named the Junior Party.  Both parties have filed motions requesting benefit of their earliest priority dates (the CVC Group in May 2012 and the Broad in December 2012) during the interference proceeding.

We expect the CVC Group will continue to prosecute patent claims covering inventions included in the Patent Portfolio, which could also result in additional allowable or issued patents in the United States, Europe or other foreign jurisdictions.  The patents and patent applications within the Patent Portfolio are, or may in the future be, subject to further intellectual property proceedings and disputes in the U.S.  The CVC Group, Broad or other parties could seek a new interference involving some or all of the technology in the Patent Portfolio, and any existing or new patents could be the subject of other challenges to their validity of enforceability. If an interference was declared, either party could appeal an adverse decision to the Federal Circuit. In any case, it may be years before there is a final determination on priority. Pursuant to the terms of the license agreement with Dr. Charpentier, we are responsible for covering or reimbursing Dr. Charpentier’s patent prosecution, defense and related costs associated with our in-licensed technology.

The patents and patent applications within the Patent Portfolio are, or may in the future be, involved in proceedings similar to interferences or priority disputes in Europe or other foreign jurisdictions. For example, the Opposition Division has initiated opposition proceedings against European Patent Nos. EP 2,800,811 B1, EP 3,241,902 B1 and EP 3,401,400.  The EPO opposition proceedings may involve issues including, but not limited to, procedural formalities related to filing the European patent application, priority, and the patentability of the involved claims.  We cannot be certain which of these results, if any, will actually occur or at what time, and the effects that any such results may have on us and our intellectual property position are currently unknown.

Portfolio. For further information regarding risks regarding the interference and patent rights held by third parties,these proceedings, please see “Risk“Risk Factors—Risks Related to Intellectual Property.Property.”

On December 15, 2016, we entered into a Consent to Assignments, Licensing and Common Ownership and Invention Management Agreement, or the IMA, with California, Vienna, Dr. Charpentier, Intellia Therapeutics, Caribou, ERS Genomics Ltd., or ERS, and our wholly-owned subsidiary TRACR Hematology Ltd., or TRACR. Under the IMA, California and Vienna retroactively consent to Dr. Charpentier’s licensing of her rights to the CRISPR/Cas9 intellectual property, pursuant to our license with Dr. Charpentier, to us, TRACR, and ERS, in the United States and globally. The IMA also provides retroactive consent of co-owners to sublicenses granted by us, TRACR and other licensees, prospective consent to sublicenses they may grant in future, retroactive approval of prior assignments by certain parties, and provides for, among other things, (i) good faith cooperation among the parties regarding patent maintenance, defense and prosecution, (ii) cost-sharing arrangements, and (iii) notice of and coordination in the event of third-party infringement of the subject patents and with respect to certain adverse claimants of the CRISPR/Cas9 intellectual property. Unless earlier terminated by the parties, the IMA will continue in effect until the later of the last expiration date of the patents underlying the gene-editinggene editing technology, or the date on which the last underlying patent application is abandoned. For further information regarding the effects of joint ownership in the United States and in other jurisdictions worldwide, please see “Risk“Risk Factors – —The Intellectual Property That Protects Our Core Gene-EditingGene Editing Technology Is Jointly Owned, And Our License Is From Only One Of The Joint Owners, Materially Limiting Our Rights In The United States And In Other Jurisdictions.”

CRISPR-Owned Intellectual Property

In addition to the Patent Portfolio, we have a broad intellectual property estate that includes numerous patent families covering key aspects of our CRISPR/Cas9 technologies and development programs which is intended to provide multiple layers of protection. These patent families encompass filings covering our development programs (such as composition of matter, method of use, manufacturing processes, dosing and formulations), the use and improvement modifications of CRISPR/Cas9 systems for gene editing (such as improvements to component systems including nucleases and single or modified guide RNAs), technologies for delivering protein/nucleic acid complexes and RNA into cells (such as improved viral vector systems and self‑inactivating systems), and technology relevant to stem cell-based therapies.

Overall, our intellectual property estate includes over 40one hundred (100) active patent families and approximately 25over forty (40) granted or allowed patents in the United States, United Kingdom,China, Europe, Japan, China, Ukraine, New Zealand, Singapore, Australia, Mexico, Tunisia, Hong Kong, Israel and South Africa, and pending patent applications in the United States, Europe, Australia, Canada, China, Japan, Mexico and other selected countries in Central America, South America, the Middle East, Asia and Africa. The granted patents and any other patents that may ultimately issue from these patent families are expected to expire starting in 2033, not including any applicable patent term extensions.

Our U.S. trademark estate consists of 8over twenty (20) pending applications, including for CTX001, CTX101, CTX110, CTX120, CTX130, andexample, for COBALT, CRISPRX, CRISPR THERAPEUTICS, CRISPR TX, CTX001, CTX130, VCTX210, and VCTX211, as well as severalseven U.S. registrations, including for CRISPR THERAPEUTICS, and the CRISPR THERAPEUTICS logo.logo, and CTX110. Our international trademark estate consists of 15multiple pending applications and 3 International Registrations,registrations, including a pending application for CRISPR THERAPEUTICS in the EU, Switzerland,Germany and UK.four registrations in UK, Italy, Spain and Benelux, and twelve (12) registrations for CRISPR THERAPEUTICS & DESIGN in Brazil, Benelux, Germany, Hong Kong, Italy, South Africa and Spain and three pending applications for COBALT in

31

Hong Kong and South Africa. We also have six International Registrations, including for CTX001, CTX101, and the CRISPR THERAPEUTICS logoCTX112 designating the EU, Switzerland, and UK, CTX131 designating the EU, Switzerland, and UK, and CRISPR THERAPEUTICS logo designating Canada, Switzerland, Japan, Korea, Mexico, Russia, Singapore, and UK.

Patent Assignment Agreement

In November 2014, we entered into a patent assignment agreement with Dr. Charpentier, Dr. Ines Fonfara and Vienna, or the Patent Assignment Agreement. Under the Patent Assignment Agreement, Dr. Charpentier, Dr. Fonfara and Vienna assigned to us all rights to a family of patent applications relating to certain compositions of matter, including additional CRISPR/TRACR/Cas9 complexes, and methods of use, including their use in targeting or cutting DNA.

As consideration for the patent rights assigned to us, we agreed to pay an upfront payment, milestone payments beginning with the filing of a U.S. Investigational New Drug application or its equivalent in another country, a minimum annual royalty, a low single-digit royalty on net sales of products whose manufacture, use, sale, or importation is covered by the assigned patent rights, and a low single-digit percentage of licensing revenues.

We are obligedobligated to use commercially reasonable efforts to obtain regulatory approval to market a product whose manufacture, use, sale, or importation is covered by the assigned patent rights, including but not limited to an obligation to use commercially reasonable efforts to file a U.S. Investigational New Drug application (or its equivalent in a major market country) by November 2021.

License Agreements

CRISPR License With Dr. Charpentier

In April 2014, we entered into a license agreement, or the Charpentier License Agreement, with Dr. Charpentier, one of our co-founders, pursuant to which we received an exclusive license under Dr. Charpentier’s joint ownership interest in the Patent Portfolio, to research, develop and commercialize therapeutic products such as pharmaceuticals or biological preparations, and any associated companion diagnostics, for the treatment or prevention of human diseases, disorders, or conditions, other than hemoglobinopathies, which we refer to as the CRISPR Field. The license is exclusive, even as to Dr. Charpentier, except that she retains a non-transferable right to use the technology for her own research purposes and in research collaborations with academic and non-profit partners. The exclusive license is granted only under Dr. Charpentier’s interest in the patent applications and the exclusivity is not granted under any other joint owner’s interest. Additionally, the Charpentier License Agreement granted us an exclusive, worldwide, royalty-free sublicense, including the right to sublicense, to research, develop, produce, commercialize and sell therapeutic products relating to the CRISPR Field which incorporate any intellectual property that TRACR develops under its license with Dr. Charpentier. In turn, we granted to Dr. Charpentier an exclusive license with the obligation to sublicense to TRACR any intellectual property we develop under the license with Dr. Charpentier for treatment and prevention of hemoglobinopathies in humans, including, without limitation, sickle cell disease and thalassemia.

Under the terms of the Charpentier License Agreement, as consideration for the license, Dr. Charpentier received a technology transfer fee, an immaterial annual maintenance fee, immaterial milestone payments that will be due after the initiation of clinical trials, a low single digit percentage royalty on net sales of licensed products, and a low single digit percentage royalties of sublicensing revenue. We are obligated to use commercially reasonable efforts to obtain regulatory approval to market a licensed therapeutic product. CRISPRWe must use commercially reasonable efforts to file a U.S. Investigational New Drug application (or its equivalent in a major market country for a therapeutic product in the CRISPR field) by April 2021. In addition, CRISPRwe must use commercially reasonable efforts to file a U.S. Investigational New Drug application (or its equivalent in a major market country) for a therapeutic product in the CRISPR field by April 2024.

Unless terminated earlier, the term of the Charpentier License Agreement will expire on a country-by-country basis, upon the expiration of the last to expire valid claim of the Patent Portfolio in such country. We have the right to terminate the agreement at will upon 60 days’ written notice to Dr. Charpentier. We and Dr. Charpentier may terminate the agreement upon 90 days’ notice in the event of a material breach by the other party, which is not cured during the 90-day notice period. Dr. Charpentier may terminate the license agreement immediately if we challenge the enforceability, validity, or scope of any Patent Portfolio.

TRACR License With Dr. Charpentier

In April 2014, concurrently with our license agreement with Dr. Charpentier, TRACR entered into a license agreement, or the TRACR License Agreement, with Dr. Charpentier, a minority shareholder of TRACR, under the Patent Portfolio. Pursuant to the TRACR License Agreement, TRACR was granted an exclusive, worldwide, royalty-bearing license, including the right to sublicense, to research, develop, produce, commercialize and sell therapeutic and diagnostic products for the treatment and prevention of hemoglobinopathies in humans, including sickle cell disease and thalassemia, or the TRACR Field. TRACR also received a non-exclusive, worldwide, royalty-free license, including the right to sublicense, to carry out internal pharmaceutical research for

32

therapeutic products outside of the TRACR Field and an exclusive, worldwide, royalty-free sublicense, including the right to sublicense, to research, develop, produce, commercialize and sell therapeutic products relating to the TRACR Field which incorporate any intellectual property that CRISPR develops under its license with Dr. Charpentier. In turn, TRACR granted to Dr. Charpentier an exclusive license to sublicense to CRISPR any intellectual property that TRACR develops under the license with Dr. Charpentier for use in the CRISPR Field.

TRACR is obligated to use commercially reasonable efforts to research, develop, and commercialize at least one therapeutic product for the prevention or treatment of human disease under the license agreement. TRACR must use commercially reasonable efforts to file a U.S. Investigational New Drug application (or its equivalent in a major market country) for a therapeutic product in the TRACR field by April 2021. In addition, TRACR must use commercially reasonable efforts to file a U.S. Investigational New Drug application (or its equivalent in a major market country) for a therapeutic product in the TRACR field by April 2024. TRACR is solely responsible for all clinical, regulatory and development costs.

Under the TRACR License Agreement, Dr. Charpentier is entitled to receive immaterial clinical and regulatory milestone payments per product that TRACR commercializes. TRACR is also required to pay Dr. Charpentier low single digit percentage royalties on the net sales of any approved therapeutic or diagnostic products, made by it, its affiliates, or its sublicensees and low single-digit percentage royalties on sublicensing revenue.

Unless terminated earlier, the term of the license agreement will expire on a country-by-country basis, upon the expiration of the last to expire valid claim of the Patent Portfolio in such country. TRACR has the right to terminate the agreement at will upon 60 days’ written notice to Dr. Charpentier. TRACR and Dr. Charpentier may terminate the agreement upon 90 days’ notice in the event of a material breach by the other party, which is not cured during the 90-day notice period. Dr. Charpentier may terminate the license agreement immediately if TRACR challenges the enforceability, validity, or scope of any Patent Right.

Enabling Technologies

InWe have entered into a number of additional collaborations and license agreements to support ofand complement our lead ex vivo and in vivo programs, including agreements related to: technologies to deliver CRISPR/Cas9 ex vivo and in vivo; additions to our hematopoietic stem cell and in vivo programs, including a grant to advance gene editing therapies for HIV; and enhancements to our immuno-oncology and regenerative medicine cell therapy programs and platform. For example, we have entered into agreements with Nkarta, Inc. to co-develop and co-commercialize two donor-derived, gene-edited CAR-NK cell product candidates and a commercial license agreementproduct candidate combining NK and T cells; Capsida Biotherapeutics, Inc. to develop in vivo gene editing therapies delivered with engineered AAV vectors for the treatment of amyotrophic lateral sclerosis and Friedreich’s ataxia; Moffitt Cancer Center and Roswell Park Comprehensive Cancer Center to advance autologous CAR T programs against new targets; MaxCyte Incorporated or MaxCyte. The license provides CRISPRon ex vivo delivery for our hemoglobinopathy and Casebia a non-exclusive commercial-use right to MaxCyte’s cell engineering platform to develop CRISPR/Cas9-based therapiesimmuno-oncology programs; CureVac AG on optimized mRNA constructs and manufacturing for hemoglobin-related diseasescertain in vivo programs; and severe combined immunodeficiency. Our lead program, CTX001, utilizes MaxCyte’s Flow Electroporation Technology to deliver CRISPR/Cas9 components to hematopoietic stem cells. In November 2018, we expanded our existing relationship with MaxCyte to deploy MaxCyte’s Flow Electroporation Technology to develop CRISPR/Cas9-based therapies in immuno-oncology.

In support of our allogeneic CAR-T platform, we have entered into a license agreement with KSQ Therapeutics Incorporated or KSQ, whereby we gained access to KSQon intellectual property for editing certain novel gene targets in our allogeneic oncologyimmuno-oncology programs.

Manufacturing

The manufacturing processes for cell and genetic therapies are complex and require customized systems, equipment, facilities and expertise for each program and therapy. In the second quarter of 2020, we announced an investment to construct our own cell therapy programs,manufacturing facility in Framingham, Massachusetts for clinical and KSQ gained access tocommercial production of our intellectual property for editing novel gene targets identified by KSQ as part of its currentproduct candidates and future engineered tumor infiltrating lymphocyte cell programs.

We have also formed several collaborations to support our in vivo programs. We have a collaboration with CureVac AG, or CureVac, to develop novel Cas9 mRNA constructs with improved properties for gene editing in the liver, such as increased potency, decreased duration of expression and reduced potential for immunogenicity. As part of the collaboration, CureVac will provide mRNA manufacturing through clinical development and commercialization.

We have also entered into a development and option agreement with StrideBio, Inc., or StrideBio, to develop novel AAV vectors for in vivo gene-editing applications. Under the agreement, StrideBio will use its proprietary structure-guided evolution platform to develop AAV vectors with improved properties, such as tissue specificity and reduced susceptibility to immune responses. Under this agreement we have the option to exclusively license AAV vectors with desired propertiescertain components thereof for certain of our in vivoprograms. In February 2019,the fourth quarter of 2021, we expanded our existing relationshipcompleted construction of this facility, and currently we are progressing the regulatory validation activities required to bring this facility into compliance with StrideBiocurrent Good Manufacturing Practice, or cGMP, and to develop AAV vectorsenable us to produce cell therapy product supply suitable for additional undisclosed applications.

We also entered into a multi-year research collaboration and license agreement with ProBioGen AG, or ProBioGen, focused on the development of novel in vivo delivery modalities for CRISPR/Cas9 leveraging ProBioGen’s existing technology and expertise. The collaboration includes a license option for CRISPR Therapeutics upon successful completion of the research goals.

Additionally, we have access to non-viral delivery technology through an exclusive license from the Massachusetts Institute of Technology to a family of LNP technologies developedhuman administration in the lab of Dr. Daniel G. Anderson, a scientific founder of CRISPR Therapeutics.future. The facility comprises approximately 50,249 square feet.

Manufacturing

We will continue to rely on external manufacturing capabilities realized via contract manufacturing organization relationships in the United States and abroad. We have entered into certain manufacturing and supply arrangements with third-party suppliers to support production of our product candidates and their components. We plan to continue to rely on qualified third-party organizations to produce or process bulk compounds, formulated compounds, viral vectors or engineered cells for IND-supporting activities and early stage clinical trials. We expect that commercial quantities of any compound, vector, or engineered cells that we may seek to develop will be manufactured in facilities and by processes that comply with FDA and other regulations. At the appropriate time in the product development process, we will determine whether to establishutilize our own manufacturing facilitiesfacility or continue to rely on third parties to manufacture commercial quantities of any products that we may successfully develop. Outside of the United States

We continue to expect to make significant investment in our manufacturing capabilities in Framingham, Massachusetts and Europe, where appropriate, we may electin partnerships with third-party organizations for our gene editing programs in order to continue to advance and, in the future, to utilize strategic partners, distributors or contract sales forces to assist in the commercialization of our products. commercialize these programs.

33

In certain instances, we may consider building our own commercial infrastructure.

Asaddition, as product candidates advance through our pipeline, our commercial plans may change. In particular, some of our research programs target potentially larger indications. Data, the size of the development programs, the size of the target market, the size of a commercial infrastructure and manufacturing needs may all influence our strategies in the United States, Europe and the rest of the world. Outside of the United States and Europe, where appropriate, we may elect in the future to utilize strategic partners, distributors or contract sales forces to assist in the commercialization of our products. In certain instances, we may consider building our own commercial infrastructure.

Competition

The biotechnology and pharmaceutical industries, including in the gene editing, gene therapy and cell therapy fields, are characterized by rapidly advancing technologies, intense competition and a strong emphasis on intellectual property and proprietary products. While we believe that our technology, development experience and scientific knowledge provide us with competitive advantages, we currently face, and will continue to face, substantial competition from many different sources, including large pharmaceutical, specialty pharmaceutical and biotechnology companies; academic institutions and governmental agencies; and public and private research institutions, some or all of which may have greater access to capital or resources than we do. For any products that we may ultimately commercialize, not only will we compete with any existing therapies and those therapies currently in development, but we will also have to compete with new therapies that may become available in the future.

We compete in the segments of the pharmaceutical, biotechnology and other related markets that utilize technologies encompassing genomic medicines to create therapies, including gene editing, gene therapy and cell therapy. In addition, we compete with companies working to develop therapies in areas related to our specific research and development programs.

Our platform and product focus is on the development of therapies using CRISPR/Cas9 gene-editinggene editing technology. We are aware of several companies focused on developing therapies in various indications using CRISPR/Cas9 gene-editinggene editing technology, including Intellia Therapeutics and Editas Medicine. In addition, several academic groups have developed new gene-editinggene editing technologies based on CRISPR/Cas9, such as base editing and prime editing, that may have utility in therapeutic development. Companies seeking to develop therapies based on these technologies include Beam Therapeutics and Prime Medicine.

There are also companies developing therapies using additional gene-editinggene editing technologies, such as TALENs, meganucleases and ZFNs. These companies include 2seventy bio, Allogene Therapeutics, bluebird bio, Cellectis, Precision BioSciences and Sangamo Therapeutics.

We are also aware of companies developing therapies in various areas related to our specific research and development programs. In hemoglobinopathies, these companies include Acceleron Pharma, AruvantBeam Therapeutics, bluebird bio, Editas Medicine, Global Blood Therapeutics,Graphite Bio, Merck, Novartis Pharmaceuticals, Orchard Therapeutics,Pfizer, and Sangamo Therapeutics. In immuno-oncology, these companies include 2seventy bio, Adicet Bio, Allogene Therapeutics, bluebird bio, Bristol Myers Squibb, Caribou Biosciences, Cellectis, Century Therapeutics, Fate Therapeutics, Gilead Sciences, Legend Biotech, Novartis Pharmaceuticals, Poseida Therapeutics and Precision BioSciences. In regenerative medicine, these companies include BlueRock Therapeutics (acquired by Bayer in 2019), Sana Biotechnology and Semma Therapeutics (acquired by Vertex in 2019). In in vivo, these companies include Editas Medicine,Alnylam Pharmaceuticals, Arrowhead Pharmaceuticals, BioMarin Pharmaceutical, Intellia Therapeutics, Sarepta Therapeutics, UltragenyxIonis Pharmaceuticals, Regeneron Pharmaceuticals and Verve Therapeutics.

Gene editing is a highly active field of research and new technologies, related or unrelated to CRISPR, may be discovered and create new competition. These new technologies could have advantages over CRISPR/Cas9 gene editing in some applications and there can be no certainty that other gene-editinggene editing technologies will not be considered better or more attractive than our technology for the development of products. For example, Editas has exclusively licensed a CRISPR system involving a different CRISPR-associated nuclease, Cas12a (Cpf1), which can also edit human DNA, as well as advanced forms of Cas9. Editas and certain of its scientific founders have asserted that Cas12a may work better than Cas9 in some cases. Cas9 may be determined to be less attractive than Cas12a or other CRISPR proteins, such as Cas12a or novel Cas enzymes that have yet to be discovered. Multiple academic labs and companies have also published ondiscovered, or other CRISPR-associated nuclease variants that can edit human DNA.DNA, such as base editors and prime editors.

Gene editing is a highly active field of research and new technologies, related or unrelated to CRISPR, may be discovered and create new competition. These new technologies could have advantages over CRISPR/Cas9 gene editing in some applications and there can be no certainty that other gene editing technologies will not be considered better or more attractive than our technology for the development of products. For example, Cas9 may be determined to be less attractive than other CRISPR proteins, such as Cas12a or novel Cas enzymes that have yet to be discovered, or other CRISPR-associated nuclease variants that can edit human DNA, such as base editors and prime editors.

In addition to competition from other gene-editinggene editing therapies or gene or cell therapies, any product we may develop may also face competition from other types of therapies, such as small molecule, antibody or protein therapies. In addition, new scientific discoveries may cause CRISPR/Cas9 technology, or gene editing as a whole, to be considered an inferior form of therapy.

34

In addition, many of our current or potential competitors, either alone or with their collaboration partners, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical, biotechnology, and gene and cell therapy industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient, have broader acceptance and higher rates of reimbursement by third partythird-party payors or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Additionally, technologies developed by our competitors may render our potential product candidates uneconomical or obsolete, and we may not be successful in marketing any product candidates we may develop against competitors. The key competitive factors affecting the success of all of our programs are likely to be their efficacy, safety, convenience, and availability of reimbursement.

If our current programs are approved for the indications for which we are currently planning clinical trials, they may compete with other products currently under development, including gene editing, gene therapy, and cell therapy products. Competition with other related products currently under development may include competition for clinical trial sites, patient recruitment, and product sales. In addition, due to the intense research and development taking place in the gene-editinggene editing field, including by us and our competitors, the intellectual property landscape is in flux and highly competitive. There may be significant intellectual property related litigation and proceedings relating to our owned and in-licensed, and other third party,third-party, intellectual property and proprietary rights in the future. For example, see our discussion of the ‘048 interference, the ‘115 interference and European opposition proceedings above in “Business—“Risk Factors—Risks Related to Intellectual Property—In-LicensedThird-party Claims Of Intellectual Property from Dr. CharpentierInfringement Against Us, Our Licensors Or Our Collaborators May Prevent Or Delay Our Product Discovery and Development Efforts.” and in “Legal Proceedings.”

Furthermore, we may be involved in other interference proceedings or other disputes in the future. For example, Toolgen Inc., or Toolgen, filed Suggestions of Interference in the USPTO on April 13, 2015, and December 3, 2015, suggesting that they believe some of the claims in pending U.S. applications owned by Toolgen (U.S. Serial No. 14/685,568 and U.S. Serial No. 14/685,510, respectively) interfere with certain claims in five of the Broad patents previously involved in the interference with Dr. Charpentier, California and Vienna. The USPTO may, in the future, declare an interference between our patent application and one or more Toolgen, patent applications. We are also aware of additional third parties that have pending patent applications relating to CRISPR technologies, which similarly may or may not lead to further interference proceedings. For example Vilnius University, or Vilnius, has filed applications in the United States and in other jurisdictions (published internationally as WO2013/141680 and WO2013/142578 and granted as a patent in the United States as U.S. Patent No. 9,637,739), Harvard University, or Harvard, has filed applications in the United States and in other jurisdictions (published internationally as WO2014/099744 and granted as a patent in the United States as U.S. Patent No. 9,023,649), and Sigma-Aldrich has filed applications in the United States and in other jurisdictions (published internationally as WO2014/089290), each claiming aspects of gene-editing technology based on applications claiming priority to provisional filings in 2012. Numerous other filings are based on provisional applications filed after 2012.Government Regulation

The Broad, Toolgen, Vilnius, Harvard, Sigma-Aldrich and other parties routinely file international counterparts of their U.S. applications, some of which have been granted or could in the future be granted in Europe and/or other non-U.S. jurisdictions. We and third parties have initiated opposition proceedings against some of these grants, and we may in the future oppose other grants to these or other applicants. For example, we and eight other entities opposed the Broad’s EP 2,771,468, or the ‘468 patent.  The ‘468 patent was revoked in January 2018; the decision was appealed by the patentees and the appeal will be heard in January 2020. In addition to the ‘468 patent, three other of the Broad’s European patents have been revoked (EP 2,764,103, 2,784,162 and 2,931,898); and two have been maintained but in amended form with substantial limitations in the scope of claims.  Oppositions are also now pending with respect to a number of other patents granted to them in Europe. Similarly, our intellectual property may in the future become involved in opposition proceedings in Europe or other jurisdictions. For example, issued European patents we in-licensed from Dr. Charpentier have been opposed by multiple third parties. The oppositions to the European patents could lead to the revocation of the patents in whole or in part, or could lead to the claims being narrowed in a way that could impair or preclude our ability to enforce the patents against competitors in Europe.

Government Regulation

Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the EU, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products, including biological products. Some jurisdictions outside of the United States also regulate the pricing of such products. The processes for obtaining marketing approvals in the United States and in other countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.

Licensure and Regulation of Biologics in the United States

In the United States, our product candidates are regulated as biological products, or biologics, under the Public Health Service Act, or PHSA, and the Federal Food, Drug, and Cosmetic Act, or FDCA, and their implementing regulations. The failure to comply with the applicable U.S. requirements at any time during the product development process, including nonclinical testing, clinical testing, the approval process or post-approval process, may subject an applicant to delays in the conduct of a study, regulatory review and approval, and/or administrative or judicial sanctions. These sanctions may include, but are not limited to, the FDA’s refusal to allow an applicant to proceed with clinical testing, refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, untitled or warning letters, adverse publicity, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, and civil or criminal investigations and penalties brought by the FDA or the Department of Justice or other governmental entities.

An applicant seeking approval to market and distribute a new biologic in the United States generally must satisfactorily complete each of the following steps:

Preclinical Studies and Investigational New Drug Application

Before testing any biologic product candidate in humans, including a gene therapy product candidate, the product candidate must undergo preclinical testing. Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate the potential for efficacy and toxicity in animals. The conduct of the preclinical tests and formulation of the compounds for testing must comply with federal regulations and requirements. The results of the preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND application. The IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA imposes a clinical hold based on concerns or questions about the product or conduct of the proposed clinical trial, including concerns that human research subjects would be exposed to unreasonable and significant health risks. In that case, the IND sponsor and the FDA must resolve any outstanding FDA concerns before the clinical trials can begin.

As a result, submission of the IND may result in the FDA not allowing the trials to commence or not allowing the trial to commence on the terms originally specified by the sponsor in the IND. If the FDA raises concerns or questions either during this initial 30-day period, or at any time during the conduct of the IND study, including safety concerns or concerns due to non-compliance, it may impose a partial or complete clinical hold. This order issued by the FDA would either delay either a proposed clinical study or cause suspension of an ongoing study, or in the case of a partial clinical hold limit a study, until all outstanding concerns have been adequately addressed and the FDA has notified the company that investigations may proceed or recommence but only under terms authorized by the FDA. This could cause significant delays or difficulties in completing planned clinical studies in a timely manner.

Human Clinical Trials in Support of a BLA

Clinical trials involve the administration of the investigational product candidate to healthy volunteers or patients with the disease to be treated under the supervision of a qualified principal investigator in accordance with GCP requirements. Clinical trials are conducted under study protocols detailing, among other things, the objectives of the study, inclusion and exclusion criteria, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and subsequent protocol amendments must be submitted to the FDA as part of the IND.

A sponsor who wishes to conduct a clinical trial outside the United States may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. If a non-U.S. clinical trial is not conducted under an IND, the sponsor may submit data from a well-designed and well-conducted clinical trial to the FDA in support of the BLA so long as the clinical trial is conducted in compliance with GCP and the FDA is able to validate the data from the study through an onsite inspection if the FDA deems it necessary.

Further, each clinical trial must be reviewed and approved by an IRB either centrally or individually at each institution at which the clinical trial will be conducted. The IRB will consider, among other things, clinical trial design, subject informed consent, ethical factors, and the safety of human subjects. An IRB must operate in compliance with FDA regulations. The FDA or the clinical trial sponsor may suspend or terminate a clinical trial at any time for various reasons, including a finding that the clinical trial is not being conducted in accordance with FDA requirements or the subjects or patients are being exposed to an unacceptable health risk.

36

Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. Clinical testing also must satisfy extensive GCP rules and the requirements for informed consent. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group may recommend continuation of the study as planned, changes in study conduct, or cessation of the study at designated check points based on access to certain data from the study. Finally, research activities

In addition to the submission of an IND to the FDA before initiation of a clinical trial in the United States, certain human clinical trials involving infectious agents, hazardous chemicals, recombinant DNA, and genetically altered organisms and agents may beor synthetic nucleic acid molecules are subject to review and approvaloversight of an Institutional Biosafety Committee,institutional biosafety committees, or IBC, a local institutional committee that reviews and oversees basic and clinical research conducted at that institution established underIBCs, as set forth in the National Institutes of Health, or NIH Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules, or NIH Guidelines. Under the NIH Guidelines, recombinant and synthetic nucleic acids are defined as: (i) molecules that are constructed by joining nucleic acid molecules and that can replicate in a living cell (i.e., recombinant nucleic acids); (ii) nucleic acid molecules that are chemically or by other means synthesized or amplified, including those that are chemically or otherwise modified but can base pair with naturally occurring nucleic acid molecules (i.e., synthetic nucleic acids); or (iii) molecules that result from the replication of those described in (i) or (ii). Specifically, under the NIH Guidelines, supervision of human gene transfer trials includes evaluation and assessment by an IBC, a local institutional committee that reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at that institution. The IBC assessassesses the safety of the research and identifies any potential risk to public health or the environment.environment, and such review may result in some delay before initiation of a clinical trial. While the NIH Guidelines are not mandatory unless the research in question is being conducted at or sponsored by institutions receiving NIH funding of recombinant or synthetic nucleic acid molecule research, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them.

Clinical trials typically are conducted in three sequential phases, but the phases may overlap or be combined. Additional studies may be required after approval.

Progress reports detailing the results, if known, of the clinical trials must be submitted at least annually to the FDA. Written IND safety reports must be submitted to the FDA and the investigators within 15 calendar days of receipt by the sponsor or its agents after determining that the information qualifies for such expedited reporting. IND safety reports are required for serious and unexpected suspected adverse events, findings from other studies or animal or in vitro testing that suggest a significant risk to humans exposed to the drug, and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. Additionally, a sponsor must notify FDA within 7 calendar days after receiving information concerning any unexpected fatal or life-threatening suspected adverse reaction.

In some cases, the FDA may approve a BLA for a product candidate but require the sponsor to conduct additional clinical trials to further assess the product candidate’s safety and effectiveness after approval. Such post-approval trials are typically referred to as Phase 4 clinical trials. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of biologics approved under accelerated approval regulations. Failure to exhibit due diligence with regard to conducting Phase 4 clinical trials could result in withdrawal of approval for products.

Special Regulations and Guidance Governing Gene Therapy Products

It is possible that the procedures and standards applied to gene therapy products and cell therapy products may be applied to any CRISPR/Cas9 product candidates we may develop, but that remains uncertain at this point. The FDA has defined a gene therapy product as one that mediates its effects by transcription and/or translation of transferred genetic material or by specifically altering host (human) genetic sequences. Examples of gene therapy products include nucleic acids (e.g., plasmids, in vitro transcribed ribonucleic acid), genetically modified microorganisms (e.g., viruses, bacteria, fungi), engineered site specific nucleases used for human genome editing and ex vivo genetically modified human cells. The products may be used to modify cells in vivo or transferred to cells ex vivo prior to administration to the recipient. Within the FDA, the Center for Biologics Evaluation and Research, or CBER, regulates gene therapy products. Within the CBER, the review of gene therapy and related products is consolidated in the Office of Tissues and Advanced Therapies,Therapeutic Products, and the FDA has established the Cellular, Tissue and Gene Therapies

37

Advisory Committee to advise CBER on its reviews. The FDA and the NIH have published guidance documents with respect to the development and submission of gene therapy protocols.

Although the FDA has indicated that its guidance documents regarding gene therapies are not legally binding, we believe that our compliance with them is likely necessary to gain approval for any product candidate we may develop. The guidance documents provide additional factors that the FDA will consider at each of the above stages of development and relate to, among other things, the proper preclinical assessment of gene therapies; the chemistry, manufacturing, and control information that should be included in an IND application; the proper design of tests to measure product potency in support of an IND or BLA application; and measures to observe delayed adverse effects in subjects who have been exposed to investigational gene therapies when the risk of such effects is high. Further, the FDA usually recommends that sponsors observe subjects for potential gene therapy-related delayed adverse events. Depending on the product type, long term follow up can be up to 15 years or as little as five years.

Previously, if a gene therapy trial was conducted at, or sponsored by, institutions receiving NIH funding for recombinant DNA research, a protocol and related documentation were required to be submitted to, and the study registered with, the NIH Office of Biotechnology Activities, or OBA, pursuant to the NIH Guidelines prior to the submission of an IND to the FDA. In addition, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily followed them. The NIH would convene the Recombinant DNA Advisory Committee, or RAC, a federal advisory committee, to discuss protocols that raised novel or particularly important scientific, safety or ethical considerations at one of its quarterly public meetings. The OBA notified the FDA of the RAC’s decision regarding the necessity for full public review of a gene therapy protocol. RAC proceedings and reports are posted to the OBA web site and may be accessed by the public. In August 2018, the NIH published a notice in the Federal Register to seek public comment on its proposal to amend the NIH Guidelines to streamline oversight for human gene transfer clinical research protocols and reduce duplicative reporting requirements while focusing the NIH Guidelines more specifically on biosafety issues associated with research involving recombinant or synthetic nucleic acid molecules. The notice included proposed amendments to eliminate RAC review and reporting requirements to NIH for human gene transfer research protocols and to modify the roles and responsibilities of investigators, institutions, IBCs, the RAC, and the NIH to be consistent with these goals.  During the comment period and effective August 2018, the NIH stated it will no longer accept new human gene transfer protocols for the protocol registration process under the NIH Guidelines, or convene the RAC to review individual human gene transfer protocols.  The NIH Office of Science Policy also will not accept annual reports, safety reports, amendments or other documentation for any previously registered human gene transfer protocols under the NIH Guidelines.  In April 2019, NIH announced the updated guidelines, which reflect these proposed changes, and clarified that these trials will remain subject to the FDA’s oversight and other clinical trial regulations, and oversight at the local level will continue as set forth in the NIH Guidelines. Specifically, under the NIH Guidelines, supervision of human gene transfer trials includes evaluation and assessment by an IBC, a local institutional committee that reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at that institution. The IBC assesses the safety of the research and identifies any potential risk to public health or the environment, and such review may result in some delay before initiation of a clinical trial. Only after FDA, IBC and other relevant approvals are in place can these protocols proceed.

Compliance with cGMP and CGTP Requirements

Before approving a BLA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in full compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. The PHSA emphasizes the importance of manufacturing control for products like biologics whose attributes cannot be precisely defined.

For a gene therapy product, the FDA also will not approve the product if the manufacturer is not in compliance with CGTP. These requirements are found in FDA regulations that govern the methods used in, and the facilities and controls used for, the manufacture of human cells, tissues, and cellular and tissue-based products, or HCT/Ps, which are human cells or tissue intended for implantation, transplant, infusion, or transfer into a human recipient. The primary intent of the CGTP requirements is to ensure that cell and tissue-based products are manufactured in a manner designed to prevent the introduction, transmission, and spread of communicable disease. FDA regulations also require tissue establishments to register and list their HCT/Ps with the FDA and, when applicable, to evaluate donors through screening and testing.

Manufacturers and others involved in the manufacture and distribution of products, and those supplying products, ingredients, and components of them, must also register their establishments with the FDA and certain state agencies for products intended for the U.S. market, and with analogous health regulatory agencies for products intended for other markets globally. Both U.S. and non-U.S. manufacturing establishments must register and provide additional information to the FDA and/or other health regulatory agencies upon their initial participation in the manufacturing process. Any product manufactured by or imported from a facility that has not registered, whether U.S. or non-U.S., is deemed misbranded under the FDCA, and could be affected by similar as well as additional compliance issues in other jurisdictions. Establishments may be subject to periodic unannounced inspections by government authorities to ensure compliance with cGMPs and other laws. Manufacturers may also have to provide, on request, electronic or physical records regarding their establishments. Delaying, denying, limiting, or refusing inspection by the FDA or other governing health regulatory agency may lead to a product being deemed to be adulterated.

Review and Approval of a BLA

The results of product candidate development, preclinical testing, and clinical trials, including negative or ambiguous results as well as positive findings, are submitted to the FDA as part of a BLA requesting a license to market the product. The BLA must contain extensive manufacturing information and detailed information on the composition of the product and proposed labeling as well as payment of a user fee.

The FDA has 60 days after submission of the application to conduct an initial review to determine whether it is sufficient to accept for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review. Once the submission has been accepted for filing, the FDA begins an in-depth review of the application. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, or the PDUFA, the FDA has ten months in which to complete its initial review of a standard application and respond to the applicant, and six months for a priority review of the application. The FDA does not always meet its PDUFA goal dates for standard and priority BLAs. The review process may often be significantly extended by FDA requests for additional information or clarification. The review process and the PDUFA goal date may be extended by three months if the FDA requests or if the applicant otherwise provides through the submission of a major amendment additional information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date.

Under the PHSA, the FDA may approve a BLA if it determines that the product is safe, pure, and potent and the facility where the product will be manufactured meets standards designed to ensure that it continues to be safe, pure, and potent.

On the basis of the FDA’s evaluation of the application and accompanying information, including the results of the inspection of the manufacturing facilities and any FDA audits of nonclinical study and clinical trial sites to assure compliance with GLPs and GCPs, respectively, the FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. If the application is not approved, the FDA will issue a complete response letter, which will contain the conditions that must be met in order to secure final approval of the application, and when possible will outline recommended actions the sponsor might take to obtain approval of the application. Sponsors that receive a

38

complete response letter may submit to the FDA information that represents a complete response to the issues identified by the FDA. Such resubmissions are classified under PDUFA as either Class 1 or Class 2. The classification of a resubmission is based on the information submitted by an applicant in response to an action letter. Under the goals and policies agreed to by the FDA under PDUFA, the FDA has two months to review a Class 1 resubmission and six months to review a Class 2 resubmission. The FDA will not approve an application until issues identified in the complete response letter have been addressed. Alternatively, sponsors that receive a complete response letter may either withdraw the application or request a hearing.

The FDA may also refer the application to an advisory committee for review, evaluation, and recommendation as to whether the application should be approved. In particular, the FDA may refer applications for novel biologic products or biologic products that present difficult questions of safety or efficacy to an advisory committee. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates, and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

If the FDA approves a new product, it may limit the approved indications for use of the product. It may also require that contraindications, warnings or precautions be included in the product labeling. In addition, the FDA may call for post-approval studies, including Phase 4 clinical trials, to further assess the product’s safety after approval. The agency may also require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, including REMS, to help ensure that the benefits of the product outweigh the potential risks. REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe use, or ETASU. ETASU can include, but are not limited to, specific or special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patent registries. The FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs. After approval, many types of changes to the approved product, such as adding new indications, certain manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Fast Track, Breakthrough Therapy, Priority Review and Regenerative Advanced Therapy Designations

Expedited Programs

The FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs are referred to as fast track designation, breakthrough therapy designation, priority review, and regenerative medicine advanced therapy designation.

Specifically, the FDA may designate a product for fast track review if it is intended, whether alone or in combination with one or more other products, for the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition. For fast track products, sponsors may have greater interactions with the FDA and the FDA may initiate review of sections of a fast track product’s application before the application is complete. This rolling review may be available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a fast track product may be effective. The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user fees. However, the FDA’s time period goal for reviewing a fast track application does not begin until the last section of the application is submitted. In addition, the fast track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process, or if the designated drug development program is no longer being pursued.

Second, FDA has a new regulatory scheme allowing for expedited review of products designated as “breakthrough therapies.” A product may be designated as a breakthrough therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development process; providing timely advice to the product sponsor regarding development and approval; involving more senior staff in the review process; assigning a cross-disciplinary project lead for the review team; and taking other steps to design the clinical trials in an efficient manner.

Third, the FDA may designate a product for priority review if it is a product that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. The FDA determines, on a case-by-case basis, whether the proposed product represents a significant improvement when compared with other available therapies. Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting adverse reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation. A priority designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on a marketing application from ten months to six months.

Finally, the FDA can accelerate review and approval of products designated as regenerative medicine advanced therapies. A product is eligible for this designation if it is a regenerative medicine therapy that is intended to treat, modify, reverse or cure a serious

39

or life-threatening disease or condition and preliminary clinical evidence indicates that the product has the potential to address unmet medical needs for such disease or condition. The benefits of a regenerative medicine advanced therapy designation include early interactions with FDA to expedite development and review, benefits available to breakthrough therapies, potential eligibility for priority review and accelerated approval based on surrogate or intermediate endpoints.

In addition, under the Food and Drug Omnibus Reform Act of 2022 (“FDORA”), a platform technology incorporated within or utilized by a drug or biological product is eligible for designation as a designated platform technology if (1) the platform technology is incorporated in, or utilized by, a drug approved under a BLA; (2) preliminary evidence submitted by the sponsor of the approved or licensed drug, or a sponsor that has been granted a right of reference to data submitted in the application for such drug, demonstrates that the platform technology has the potential to be incorporated in, or utilized by, more than one drug without an adverse effect on quality, manufacturing, or safety; and (3) data or information submitted by the applicable person indicates that incorporation or utilization of the platform technology has a reasonable likelihood to bring significant efficiencies to the drug development or manufacturing process and to the review process. A sponsor may request the FDA to designate a platform technology as a designated platform technology concurrently with, or at any time after, submission of an IND application for a drug that incorporates or utilizes the platform technology that is the subject of the request. If so designated, the FDA may expedite the development and review of any subsequent original BLA for a drug that uses or incorporates the platform technology. Designated platform technology status does not ensure that a drug will be developed more quickly or receive FDA approval. In addition, the FDA may revoke a designation if the FDA determines that a designated platform technology no longer meets the criteria for such designation.

Accelerated Approval Pathway

The FDA may grant accelerated approval to a product for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. Products granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a product, such as an effect on IMM. The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints but has indicated that such endpoints generally could support accelerated approval where a study demonstrates a relatively short-term clinical benefit in a chronic disease setting in which assessing durability of the clinical benefit is essential for traditional approval, but the short-term benefit is considered reasonably likely to predict long-term benefit.

The accelerated approval pathway is most often used in settings in which the course of a disease is long and an extended period of time is required to measure the intended clinical benefit of a product, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. Thus, accelerated approval has been used extensively in the development and approval of products for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large trials to demonstrate a clinical or survival benefit.

The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the product’s clinical benefit.benefit, and the FDA is now permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval. As a result, a product candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, would allow the FDA to withdraw the product from the market on an expedited basis. All promotional materials for product candidates approved under accelerated regulations are subject to prior review by the FDA.

Post-Approval Regulation

If regulatory approval for marketing of a product or new indication for an existing product is obtained, the sponsor will be required to comply with all regular post-approval regulatory requirements as well as any post-approval requirements that the FDA has imposed as part of the approval process. The sponsor will be required to report certain adverse reactions and production problems to the FDA, provide updated safety and efficacy information and comply with requirements concerning advertising and promotional labeling requirements. Manufacturers are required to comply with applicable product tracking and tracing requirements. Manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP regulations, which impose certain procedural and documentation requirements upon manufacturers.

40

Accordingly, the sponsor and its third-party manufacturers must continue to expend time, money, and effort in the areas of production and quality control to maintain compliance with cGMP regulations and other regulatory requirements.

A product may also be subject to official lot release, meaning that the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution. If the product is subject to official lot release, the manufacturer must submit samples of each lot, together with a release protocol showing a summary of the history of manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot, to the FDA. The FDA may in addition perform certain confirmatory tests on lots of some products before releasing the lots for distribution. Finally, the FDA will conduct laboratory research related to the safety, purity, potency, and effectiveness of pharmaceutical products.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences of a failure to comply with regulatory requirements include, among other things:

The FDA strictly regulates marketing, labeling, advertising and promotion of licensed and approved products that are placed on the market. Pharmaceutical products may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

Orphan Drug Designation

Orphan drug designation in the United States is designed to encourage sponsors to develop products intended for rare diseases or conditions. In the United States, a rare disease or condition is statutorily defined as a condition that affects fewer than 200,000 individuals in the United States or that affects more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making available the biologic for the disease or condition will be recovered from sales of the product in the United States.

Orphan drug designation qualifies a company for tax credits and market exclusivity for seven years following the date of the product’s marketing approval if granted by the FDA. An application for designation as an orphan product can be made any time prior to the filing of an application for approval to market the product. A product becomes an orphan when it receives orphan drug designation from the Office of Orphan Products Development, or OOPD, at the FDA based on acceptable confidential requests made under the regulatory provisions. The product must then go through the review and approval process for commercial distribution like any other product.

A sponsor may request orphan drug designation of a previously unapproved product or new orphan indication for an already marketed product. In addition, a sponsor of a product that is otherwise the same product as an already approved orphan drug may seek and obtain orphan drug designation for the subsequent product for the same rare disease or condition if it can present a plausible hypothesis that its product may be clinically superior to the first drug. More than one sponsor may receive orphan drug designation for the same product for the same rare disease or condition, but each sponsor seeking orphan drug designation must file a complete request for designation.

The period of exclusivity begins on the date that the marketing application is approved by the FDA and applies only to the indication for which the product has been designated. The FDA may approve a second application for the same product for a different use or a second application for a clinically superior version of the product for the same use. The FDA cannot, however, approve the same product made by another manufacturer for the same indication during the market exclusivity period unless it has the consent of the sponsor or the sponsor is unable to provide sufficient quantities.

Pediatric Studies and Exclusivity

Under the Pediatric Research Equity Act of 2003 (PREA), as amended, a BLA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and

41

to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. Sponsors must also submit pediatric study plans prior to the assessment data. Those plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, any deferral or waiver requests, and other information required by regulation. The applicant, the FDA, and the FDA’s internal review committee must then review the information submitted, consult with each other, and agree upon a final plan. The FDA or the applicant may request an amendment to the plan at any time.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation.designation; however, they will apply to a BLA for a new active ingredient that is orphan-designated if the biologic is a molecularly targeted cancer product intended for the treatment of an adult cancer and is directed at a molecular target that the FDA determines to be substantially relevant to the growth or progression of a pediatric cancer.

Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity, including the non-patent and orphan exclusivity. This six-month exclusivity may be granted if a BLA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data. The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted. If reports of requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity or patent protection cover the product are extended by six months. This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application.

Biosimilars and Exclusivity

The Patient Protection and Affordable Care Act, or ACA, which was signed into law in March 2010, included a subtitle called the Biologics Price Competition and Innovation Act of 2009 or BPCIA. The BPCIA established a regulatory scheme authorizing the FDA to approve biosimilars and interchangeable biosimilars. The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars.

Under the BPCIA, a manufacturer may submit an application for licensure of a biologic product that is “biosimilar to” or “interchangeable with” a previously approved biological product or “reference product.” In order for the FDA to approve a biosimilar product, it must find that there are no clinically meaningful differences between the reference product and proposed biosimilar product in terms of safety, purity, and potency. For the FDA to approve a biosimilar product as interchangeable with a reference product, the agency must find that the biosimilar product can be expected to produce the same clinical results as the reference product, and (for products administered multiple times) that the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date of approval of the reference product. The FDA may not approve a biosimilar product until 12 years from the date on which the reference product was approved. Even if a product is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full BLA for such product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity, and potency of their product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products.products, and FDA may approve multiple “first” interchangeable products so long as they are all approved on the same first day of marketing. This exclusivity period, which may be shared amongst multiple first interchangeable products, lasts until the earlier of: (1) one year after the first commercial marketing of the first interchangeable product; (2) 18 months after resolution of a patent infringement suit instituted under 42 U.S.C. § 262(l)(6) against the applicant that submitted the application for the first interchangeable product, based on a final court decision regarding all of the patents in the litigation or dismissal of the litigation with or without prejudice; (3) 42 months after approval of the first interchangeable product, if a patent infringement suit instituted under 42 U.S.C. § 262(l)(6) against the applicant that submitted the application for the first interchangeable product is still ongoing; or (4) 18 months after approval of the first interchangeable product if the applicant that submitted the application for the first interchangeable product has not been sued under 42 U.S.C. § 262(l)(6). At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law.

42

Patent Term Restoration and Extension

A patent claiming a new biologic product may be eligible for a limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or Hatch-Waxman Amendments, which permits a patent restoration of up to five years for patent term lost during product development and FDA regulatory review. The restoration period granted on a patent covering a product is typically one-half the time between the effective date of an IND and the submission date of a marketing application, plus the time between the submission date of the marketing application and the ultimate approval date, less any time the applicant failed to act with due diligence. Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date. Only one patent applicable to an approved product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent in question. A patent that covers multiple products for which approval is sought can only be extended in connection with one of the approvals. The USPTO reviews and approves the application for any patent term extension or restoration in consultation with the FDA.

Regulation And Procedures Governing Approval Of Medicinal Products In The EUEurope

In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products. Whether or not it obtains FDA approval for a product, an applicant will need to obtain the necessary approvals by the comparable health regulatory authorities before it can commence clinical trials or marketing of the product in those countries or jurisdictions. Specifically, the process governing approval of medicinal products in the EUEurope generally follows the same lines as in the United States, although the approval of a medicinal product in the United States is no guarantee of approval of the same product in the EU,Europe, either at all or within the same timescale as approval may be granted in the United States. The process entails satisfactory completion of preclinical studies and adequate and well-controlled clinical trials to establish the safety and efficacy of the product for each proposed indication. It also requires the submission to the EMA, or the relevant competent authorities of a marketing authorization application, or MAA, and granting of a marketing authorization by the EMA or these authorities before the product can be marketed and sold in the EU.Europe.

Clinical Trial Approval

Pursuant to the currently applicable Clinical Trials Directive 2001/20/EC and Directive 2005/28/EC on GCP,An applicant for a system for the approval of clinical trialstrial authorization in the EU has been implemented through national legislation of the EU member states. Under this system, an applicant must obtain approval from the national competent national authority, or NCA, of an EU member stateMember State in which the clinical trial is to be conducted, or in multiple member statesMember States if the clinical trial is to be conducted in a number of member states.Member States. Furthermore, the applicant may only start a clinical trial at a specific study site after the ethics committee, or EC, has issued a favorable opinion in relation to the clinical trial. The clinical trial application must be accompanied by an investigational medicinal product dossier with supporting information prescribed by Directive 2001/20/EC and Directive 2005/28/EC and corresponding national laws of the relevant EU member states, and further detailed in applicable guidance documents.

In April 2014, the EU adopted a new Clinical Trials Regulation (EU) No 536/2014, which is set to replace the current Clinical Trials Directive 2001/20/EC.EC on 31 January 2022. It will overhauloverhauls the current system of approvals for clinical trials in the EU. Specifically, the new legislation, which will beis directly applicable in all EU member statesMember States (meaning that no national implementing legislation in each EU member stateMember State is required), aims at simplifying and streamlining the approval of clinical trials in the EU. For instance, the new Clinical Trials Regulation provides for a streamlined application procedure via a single-entry point and strictly defined deadlines for the assessment of clinical trial applications. It is expected that the new Clinical Trials Regulation (EU) No 536/2014 will come into effect following confirmation of full functionality of the Clinical Trials Information System, the centralized EU portal and database for clinical trials foreseen by the new Clinical Trials Regulation, through an independent audit.

Marketing Authorization

To obtain a marketing authorization for a product underin the EU, regulatory system, an applicant must submit an MAA, either under a centralized procedure administered by the EMAEU or one of the procedures administered by competent authorities in the EU member statesMember States (decentralized procedure, national procedure, or mutual recognition procedure). A marketing authorization may be granted only to an applicant established in the EU.EEA (comprising the EU Member States plus Iceland, Norway and Liechtenstein). Regulation (EC) No 1901/2006 provides that prior to obtaining a marketing authorization in the EU,EEA, an applicant must demonstrate compliance with all measures included in an EMA-approved Pediatric Investigation Plan,pediatric investigation plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, class waiver, or a deferral for one or more of the measures included in the PIP.

The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all EU member states (as well as Iceland, Norway and Liechtenstein).throughout the EEA. Pursuant to Regulation (EC) No. 726/2004, the centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products, or ATMPs, and products with a new active substance indicated for the treatment of certain diseases, including products for the treatment of cancer.cancer, HIV or AIDS, diabetes, neurodegenerative disorders, auto-immune and other immune dysfunctions and viral diseases. For those products for which the use of the centralized procedure is not mandatory, applicants may elect to use the centralized procedure where either the product contains a new active substance indicated for the treatment of other diseases, or where the applicant can show that the product constitutes a significant therapeutic, scientific or technical innovation or for which a centralized process is in the interest of patients at an EU level.

Specifically, the grant of marketing authorization in the EU for products containing viable human tissues or cells such as gene therapy medicinal products is governed by Regulation (EC) No 1394/2007 on advanced therapy medicinal products,ATMPs, read in combination with Directive

43

2001/83/EC of the European Parliament and of the Council, commonly known as the Community code on medicinal products. Regulation (EC) No 1394/2007 lays down specific rules concerning the authorization, supervision, and pharmacovigilance of gene therapy medicinal products, somatic cell therapy medicinal products, and tissue engineered products. Manufacturers of advanced therapy medicinal products must demonstrate the quality, safety, and efficacy of their products to the Committee for Advanced Therapies, or CAT, at the EMA, which conducts a scientific assessment of the MAA and provides an opinion regarding the application for marketing authorizationMAA for an advanced therapy medicinal product.ATMP. The European Commission grants or refuses marketing authorization in light of the opinion delivered by EMA.

Under the centralized procedure, theThe Committee for Medicinal Products for Human Use, or the CHMP, established at the EMA is responsible for conductingissuing a final opinion on whether an initial assessment of whether a productATMP meets the required quality, safety and efficacy requirements, and whether a product has a positive benefit/risk profile. Under the centralized procedure in the EU, the maximum timeframe for the evaluation of an MAA by the EMA is 210 days from receipt of a valid MAA, excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP. Clock stops may extend the timeframe of evaluation of an MAA considerably beyond 210 days. Where the CHMP gives a positive opinion, it provides the opinion, together with supporting documentation, to the European Commission, who make the final decision to grant a marketing authorization.authorization, which is issued within 67 days of receipt of the EMA's recommendation. Accelerated evaluation may be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation. If the CHMP accepts such a request, the time frame of 210 days for assessment will be reduced to 150 days (excluding clock stops), but it is possible that the CHMP may revert to the standard time limit for the centralized procedure if it determines that the application is no longer appropriate to conduct an accelerated assessment.

Now that the UK (which comprises Great Britain and Northern Ireland) has left the EU, Great Britain will no longer be covered by centralized marketing authorizations (under the Northern Ireland Protocol, centralized marketing authorizations will continue to be recognized in Northern Ireland). All medicinal products with a current centralized marketing authorization were automatically converted to Great Britain marketing authorizations on January, 1 2021. For a period of three years from January 1, 2021, the Medicines and Healthcare products Regulatory Agency, or MHRA, the UK medicines regulator, may rely on a decision taken by the European Commission on the approval of a new marketing authorization in the centralized procedure, in order to more quickly grant a new Great Britain marketing authorization. A separate application will, however, still be required.

PRIME scheme

In March 2016, the EMA now offers a scheme that is intendedlaunched an initiative to reinforcefacilitate development of product candidates in indications, often rare, for which few or no therapies currently exist, by, amongst other things, offering early dialogue with, and regulatory support from, EMA in orderthe EMA. The scheme is intended to stimulate innovation, optimize development and enable accelerated assessment of PRIority Medicines, or PRIME.  It is intended to buildPRIME, by building upon the scientific advice scheme and accelerated assessment procedure offered by EMA. The scheme is voluntary and eligibility criteria must be met for a medicine to qualify for PRIME.

The PRIME scheme is open to medicines under development and for which the applicant intends to apply for an initial marketing authorization application through the centralized procedure. Eligible products must target conditions for which there is an unmet medical need (meaning there is no satisfactory method of diagnosis, prevention or treatment in the EU or, if there is, the new medicine will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods or therapy or improving existing ones. Applicants will typically be at the exploratory clinical trial phase of development, and will have preliminary clinical evidence in patients to demonstrate the promising activity of the medicine and its potential to address, to a significant extent, an unmet medical need. In exceptional cases, applicants from the academic sector or SMEs (small and medium sized enterprises) may submit an eligibility request at an earlier stage of development if compelling non-clinical data in a relevant model provide early evidence of promising activity, and first in man studies indicate adequate exposure for the desired pharmacotherapeutic effects and tolerability.

If a medicine is selected for the PRIME scheme, the EMA:

Medicines that are selected for the PRIME scheme are also expected to benefit from the EMA’s accelerated assessment procedure at the time of application for marketing authorization. Where, during the course of development, a medicine no longer meets the eligibility criteria, support under the PRIME scheme may be withdrawn.

Regulatory 44

Data Protection in the EUand Market Exclusivity

In the EU, new chemical entitiesinnovate medicinal products approved on the basis of a complete independent data package qualify for eight years of data exclusivity upon grant of a marketing authorization and an additional two years of market exclusivity pursuant to Regulation (EC) No 726/2004, as amended, and Directive 2001/83/EC, as amended. Data exclusivity prevents regulatory authorities in the EUapplicants for authorizations of generics or biosimilars from referencing the innovator’s preclinical and clinical data to assesscontained in the dossier of the reference product when applying for a generic (abbreviated) application foror biosimilar marketing authorization in the EU, during a period of eight years.years from the date on which the reference product was first authorized in the EU. During the additional two-year period of market exclusivity, a generic marketing authorization applicationor biosimilar MAA can be submitted and the innovator’s data may be referenced, but no generic or biosimilar medicinal product can be marketed in the EU until the expiration of the market exclusivity period. The overall ten-year period will be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to authorization, isare held to bring a significant clinical benefit in comparison with existing therapies. There is no guarantee that a product will be considered by the EMA to be an innovative medicinal product, and products may qualify for data exclusivity. Even if a compoundproduct is considered to be a new chemical entityan innovative medicinal product so that the innovator gains the prescribed period of data exclusivity, another company maynevertheless could also market another version of the product if such company obtained a marketing authorization based on an MAA with a completecompletely independent data package of pharmaceutical tests, preclinical tests and clinical trials.

Periods of Authorization and Renewals

A centralized marketing authorization is valid for five years, in principle, and it may be renewed after five years on the basis of a reevaluation of the risk-benefit balance by the EMA or by the competent authority of the authorizing member state. To that end, the marketing authorization holder must provide the EMA or the competent authority withEU Member State for a consolidated version of the file in respect of quality, safety and efficacy, including all variations introduced since the marketing authorization was granted, at least nine months before the marketing authorization ceases to be valid.nationally authorized product. Once renewed, the marketing authorization is valid for an unlimited period, unless the European Commission or the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal period. Any authorization that is not followed by the actual placement of the drug on the EU market (in the case of the centralized procedure), or on the market of the authorizing member stateEU Member State, within three years after authorization ceases, to be valid.valid (the so-called sunset clause).

Regulatory Requirements after Marketing Authorization

Following approval, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of the medicinal product. These include compliance with the EU’s stringent pharmacovigilance or safety reporting rules, pursuant to which post-authorization studies and additional monitoring obligations can be imposed. In addition, the manufacturing of authorized products, for which a separate manufacturer’s license is mandatory, must also be conducted in strict compliance with the EMA’s GMP requirements and comparable requirements of other regulatory bodies in the EU, which mandate the methods, facilities, and controls used in manufacturing, processing and packing of drugs to assure their safety and identity. Finally, the marketing and promotion of authorized products, including advertising directed toward the prescribers of drugs, are strictly regulated in the EU under Directive 2001/83/EC, as amended. The advertising of prescription-only medicines to the general public is not permitted in the EU.

Orphan Drug Designation and Exclusivity

Regulation (EC) No 141/2000 and Regulation (EC) No 847/2000 provide that a product can be designated as an orphan drug by the European Commission if its sponsor can establish: thatestablish that: (1) the product is intended for the diagnosis, prevention or treatment of (i) a life-threatening or chronically debilitating condition; (2) either (a) such condition affecting notaffects no more than five (5) in ten thousand (10,000) persons in the EU when the application is made,made; or (ii) a life-threatening, seriously debilitating or serious and chronic condition in the EU and that without incentives(b) it is unlikely that the marketing of the drug in the EUproduct, without benefits derived from orphan status, would generate sufficient return in the EU to justify the necessary investment. For either of these conditions (i) and (ii), the applicant must demonstrate thatinvestment in its development; (3) there exists no satisfactory method of diagnosis, prevention, or treatment of thesuch condition in question that has been authorized for marketing in the EU or, if such method exists, the drugproduct will be of significant benefit to those affected by that condition.

An orphan drug designation provides a number of benefits, including fee reductions, regulatory assistance, and the ability to apply for a centralized EUEEA-wide marketing authorization. The grant of a marketing authorization for an orphan drug leads to a ten-year period of market exclusivity. During this market exclusivity period, neither the European Commission nor the member statesMember States can accept an application or grant a marketing authorization for the same therapeutic indication in respect of a “similar medicinal product.” A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication. The market exclusivity period for the authorized therapeutic indication may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan drug designation because, for example, the product is sufficiently profitable not to justify market exclusivity. There are a numberfew limited of derogations from the ten-year period of market exclusivity pursuant to which the European Commission may grant a marketing authorization for a similar medicinal product in the same therapeutic indication, including which are:

Regulatory Requirements after Marketing Authorization has been obtained

If an authorization for a medicinal product in the EU is obtained, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of the medicinal product. These include compliance with the EU’s stringent pharmacovigilance or safety reporting rules, pursuant to which post-authorization studies and additional monitoring obligations can be imposed. In addition, the manufacturing of authorized products, for which a separate manufacturer’s license is mandatory, must also be conducted in strict compliance with the applicable EU laws, regulations and

45

guidance, including Directive 2001/83/EC, Directive 2003/94/EC, Regulation (EC) No 726/2004 and the European Commission Guidelines for Good Manufacturing Practice. These requirements include compliance with EU cGMP standards when manufacturing medicinal products and active pharmaceutical ingredients, including the manufacture of active pharmaceutical ingredients outside of the EU with the intention to import the active pharmaceutical ingredients into the EU. Finally, the marketing and promotion of authorized products, including industry-sponsored continuing medical education and advertising directed toward the prescribers of drugs and/or the general public, are strictly regulated in the EU. The advertising of prescription-only medicines to the general public is not permitted in the EU.

The aforementioned EU rules are generally applicable in the EEA, which consists of the EU Member States, plus Norway, Liechtenstein and Iceland.

For other markets in which we might in the future seek to obtain marketing approval for the commercialization of products, there are other health regulatory regimes for seeking approval, and we would need to ensure ongoing compliance with applicable health regulatory procedures and standards, as well as other governing laws and regulations for each applicable jurisdiction.

General Data Protection Regulation

The collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the EU, including personal health data, is subject to the EU General Data Protection Regulation, or GDPR, which became effective on May 25, 2018. The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, ensuring certain accountability measures are in place and taking certain measures when engaging third-party processors. The GDPR also imposes strict rules on the transfer of personal data to countries outside the EU, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. Compliance with the GDPR will be a rigorous and time-intensive process that may increase the cost of doing business or require companies to change their business practices to ensure full compliance.

Brexit and the Regulatory Framework in the United Kingdom

On June 23, 2016, the electorate in the UK voted in favor of leaving the EU (commonly referred to as “Brexit”), and the UK formally left the EU on January 31, 2020. There was a transition period during which EU pharmaceutical laws continued to apply to the UK, which expired on December 31, 2020. However, the EU and the UK have concluded a trade and cooperation agreement, or TCA, which was provisionally applicable since January 1, 2021 and has been formally applicable since May 1, 2021. The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of GMP, inspections of manufacturing facilities for medicinal products and GMP documents issued, but does not foresee wholesale mutual recognition of UK and EU pharmaceutical regulations. At present, Great Britain has implemented EU legislation on the marketing, promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as amended) (under the Northern Ireland Protocol, the EU regulatory framework will continue to apply in Northern Ireland). The regulatory regime in Great Britain therefore aligns in many ways with EU regulations, however it is possible that these regimes will more significantly diverge in future now that Great Britain’s regulatory system is independent from the EU and the TCA does not provide for mutual recognition of UK and EU pharmaceutical legislation.

Furthermore, the EU's GDPR (subject to small amendments) was incorporated into UK law by virtue of section 3 of the European Union (Withdrawal) Act of 2018 and the Data Protection Act of 2018 in the United Kingdom “implements” and complements the EU’s GDPR. On June 28, 2021, the European Commission adopted an adequacy decision in respect of transfers of personal data to the United Kingdom for a four-year period (until 27 June 2025). Similarly, the United Kingdom has determined that it considers all of the EU and EEA Member States to be adequate for the purposes of data protection. This ensures data flows between the United Kingdom and the EU and EEA remain unaffected.

Coverage, Pricing and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we may seek regulatory approval by the FDA or other government authorities. In the United States and markets in other countries, patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use any product candidates we may develop unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of such product candidates. Even if any product candidates we may develop are approved, sales of such product candidates will depend, in part, on the extent to which third-party payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers,

46

and managed care organizations, provide coverage, and establish adequate reimbursement levels for, such product candidates. Factors a payor considers in determining reimbursement are based on whether the product is:

The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved. Third-party payors are increasingly challenging the prices charged, examining the medical necessity, and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs. Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the approved products for a particular indication.

In order to secure coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA or other comparable marketing approvals. Nonetheless, product candidates may not be considered medically necessary or cost effective. A decision by a third-party payor not to cover any product candidates we may develop could reduce physician utilization of such product candidates once approved and have a material adverse effect on our sales, results of operations and financial condition. Additionally, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor. Third-party reimbursement and coverage may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

The containment of healthcare costs also has become a priority of various federal, state and/or local governments, as well as other payors, within the U.S.United States and in other countries globally, and the prices of pharmaceuticals have been a focus in these efforts. Governments and other payors have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement, and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive marketing approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Outside the United States, ensuring adequate coverage and payment for any product candidates we may develop will face challenges. Pricing of prescription pharmaceuticals is subject to governmental control in many countries. Pricing negotiations with governmental authorities can extend well beyond the receipt of regulatory marketing approval for a product and may require us to conduct a clinical trial that compares the cost effectiveness of any product candidates we may develop to other available therapies. The conduct of such a clinical trial could be expensive and result in delays in our commercialization efforts.

In the EU, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies (so called health technology assessments, or HTAs) in order to obtain reimbursement or pricing approval. For example, the EU provides options for its member statesMember States to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. EU member statesMember States may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market. Other EU member statesMember States allow companies to fix their own prices for products, but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. Recently, many countries in the EU have increased the level of discounting required in relation to the pricing of pharmaceuticals and these efforts could continue as countries attempt to manage healthcare expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the EU. The downward pressure on health care costs in general, particularly prescription products, has become intense.

As a result, increasingly high barriers are being erected to the entry of new products. Political, economic, and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various EU member states,Member States, and parallel trade (arbitrage between low-priced and high-priced member states)Member States), can further reduce prices. Special pricing and reimbursement rules may apply to orphan drugs. Inclusion of orphan drugs in reimbursement systems tend to focus on the medical usefulness, need, quality and economic benefits to patients and the

47

healthcare system as for any drug. Acceptance of any medicinal product for reimbursement may come with cost, use and often volume restrictions, which again can vary by country. In addition, results-based rules of reimbursement may apply. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products, if approved in those countries.

Healthcare Law and Regulation

Healthcare providers and third-party payors play a primary role in the recommendation and prescription of pharmaceutical products that are granted marketing approval. Arrangements with providers, consultants, third-party payors, and customers are subject to broadly applicable fraud and abuse, anti-kickback, false claims laws, reporting of payments to physicians and teaching physicians and patient privacy laws and regulations and other healthcare laws and regulations that may constrain our business and/or financial arrangements. Restrictions under applicable federal and state healthcare laws and regulations, include the following:

Some state and other laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring pharmaceutical manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures. State and other laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. For example, in California, the California Consumer Protection Act, or CCPA, which went into effect on January 1, 2020, establishes a new privacy framework for covered businesses by creating an expanded definition of personal information, establishing new data privacy rights for consumers in the State of California, imposing special rules on the collection of consumer data from minors, and creating a new and potentially severe statutory damages framework for violations of the CCPA and for businesses that fail to implement reasonable security procedures and practices to prevent data breaches. While clinical trial data and information governed by HIPAA are currently exempt from the current version of the CCPA, other personal information may be applicable and possible changes to the CCPA may broaden its scope. In addition, a new California ballot initiative, the California Privacy Rights Act, or CPRA, was passed in November 2020. Effective starting on January 1, 2023, the CPRA imposes additional obligations on companies covered by the legislation and will significantly modify the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information. Further data privacy and security laws and regulations in foreign jurisdictions that may be more stringent than those in the United States (such as the European Union, which adopted the GDPR, which became effective in May 2018). Analogous state laws may additionally govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect.

Healthcare Reform

A primary trend in the U.S. healthcare industry and elsewhere is cost containment. There have been a number of federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for drugs and other medical products, government control and other changes to the healthcare system in the United States.

By way of example, the United States and state governments continue to propose and pass legislation designed to reduce the cost of healthcare. In March 2010, the United States Congress enacted the ACA, which, among other things, includes changes to the coverage and payment for products under government health care programs. Among the provisions of the ACA of importance to our potential product candidates are:

Other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, in August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2012 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers of up to 2% per fiscal year, whichyear. These reductions went into effect inon April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2029 unless additional Congressional action is taken.2031, in addition to a 4% pay-as-you-go or PAYGO sequester. Following a temporary suspension from May 1, 2020 through March 31, 2022 due to the coronavirus pandemic, a 1% payment reduction began April 1, 2022 through June 30, 2022, and the 2% payment reduction resumed on July 1, 2022. In addition, the Statutory Pay-As-You-Go Act of 2010, or PAYGO, requires that automatic payment cuts of 4% be applied to Medicare and affects certain providers. These cuts were slated to go into effect January 1, 2023, but the Consolidated Appropriations Act, 2023, further delayed these cuts until 2025. Further, in January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers, and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Since its enactment, there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future. Various portionsOn June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Prior to the Supreme Court’s decision, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA are currently undergoing legalmarketplace. The executive order also instructed certain governmental agencies to review and constitutional challenges in the Fifth Circuit Courtreconsider their existing policies and the United States Supreme Court; the Trump Administration has issued various Executive Orders which eliminated cost sharing subsidiesrules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and various provisionswaiver programs that would impose a fiscal burden on statesinclude work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices; and Congress has introduced several pieces of legislation aimed at significantly revising or repealing the ACA. It is unclear whetherhow other healthcare reform measures of the Biden administration or other efforts, if any, to challenge, repeal or replace the ACA will impact our business.

At the federal level, President Biden signed an Executive Order on July 9, 2021 affirming the administration’s policy to (i) support legislative reforms that would lower the prices of prescription drug and biologics, including by allowing Medicare to negotiate drug prices, by imposing inflation caps, and, by supporting the development and market entry of lower-cost generic drugs and biosimilars; and (ii) support the enactment of a public health insurance option. Among other things, the Executive Order also directs HHS to provide a report on actions to combat excessive pricing of prescription drugs, enhance the domestic drug supply chain, reduce the price that the Federal government pays for drugs, and address price gouging in the industry; and directs the FDA to work with states and Indian Tribes that propose to develop section 804 Importation Programs in accordance with the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and the FDA’s implementing regulations. FDA released such implementing regulations on September 24, 2020, which went into effect on November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada. On September 25, 2020, CMS stated drugs imported by states under this rule will not be overturned, repealed, replaced,eligible for federal rebates under Section 1927 of the Social Security Act and manufacturers would not report these drugs for “best price” or Average Manufacturer Price purposes. Since these drugs are not considered covered outpatient drugs, CMS further amended. We cannot predict whatstated it will not publish a National Average Drug Acquisition Cost for these drugs. If implemented, importation of drugs from Canada may materially and adversely affect further changes to the ACAprice we receive for any of our product candidates.

Further, on November 20, 2020 CMS issued an Interim Final Rule implementing the Most Favored Nation, or MFN, Model under which Medicare Part B reimbursement rates would have been be calculated for certain drugs and biologicals based on our business.the lowest price drug manufacturers receive in Organization for Economic Cooperation and Development countries with a similar gross domestic product per capita. However, on December 29, 2021 CMS rescinded the Most Favored Nations rule. Additionally, on December 2, 2020, HHS published a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The rule also created a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers. Pursuant to court order, the removal and addition of the aforementioned safe harbors were delayed and recent legislation imposed a moratorium on implementation of the rule until January 1, 2026. This deadline was further pushed back to January 1, 2027 by the Bipartisan Safer Communities Act and later to January 1, 2032 by the Inflation Reduction Act of 2022 ("IRA").

Further, CMS recently finalized regulations that give states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces. For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy, a type of prior authorization, for Part B drugs beginning January 1, 2020. It is unclear what type of impact, if any, efforts such as this will have on our business.

50

There has also been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several recent Congressional inquiries and proposed bills designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for pharmaceutical products. Individual states in the United States have also become increasingly active in enacting legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Beyond challenges to the ACA, other legislative measures have also been enacted that may impose additional pricing and product development pressures on our business. For example, on May 30, 2018, the Right to Try Act, was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a drug manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act, but the manufacturer must develop an internal policy and respond to patient requests according to that policy. We expect that additional foreign, federal and state healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.

The IRA was signed into law in August 2022. The IRA includes several provisions that will impact our business to varying degrees, including provisions that allow the U.S. government to negotiate and set price caps for Medicare Part B and Part D pricing for certain high-cost, single-source drugs and biologics without generic or biosimilar competition; reduce the out-of-pocket cap for

Medicare Part D beneficiaries to $2,000 starting in 2025, effectively eliminating the so-called “donut hole” for Medicare Part
D; require companies to pay rebates to Medicare for drug prices that increase faster than inflation; and delay the rebate rule that would limit the fees that pharmacy benefit managers can charge, among other areas. The effect of the IRA on our business and the healthcare industry in general is not yet known.

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs. These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

There have been, and likely will continue to be, legislative and regulatory proposals at the national level in the U.S.United States and other jurisdictions globally, as well as at some regional, state and/or local levels within the U.S.United States or other jurisdictions, directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. Such reforms could have an adverse effect on anticipated revenues from product candidates that we may successfully develop and for which we may obtain marketing approval and may affect our overall financial condition and ability to develop product candidates.

Additional Regulation

In addition to the foregoing, state, and federal laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health Act, the Resource Conservation and Recovery Act, and the Toxic Substances Control Act, affect our business. These and other laws govern the use, handling, and disposal of various biologic, chemical, and radioactive substances used in, and wastes generated by, operations. If our operations result in contamination of the environment or expose individuals to hazardous substances, we could be liable for damages and governmental fines. Equivalent laws have been adopted in third countries that impose similar obligations.

EmployeesHuman Capital

As of December 31, 2019,2022, we had 304458 full-time employees. No employees 104were represented by labor unions or subject to collective bargaining agreements. The majority of whomemployees were based in Boston, Massachusetts with additional employees based in Framingham, Massachusetts, Mission Bay, California, Switzerland and the United Kingdom. 97 employees held Ph.D., Pharm. D., or M.D. degrees, 252 of whom weredegrees. 391 engaged primarily in research and development or technical operations, and 52 of whom were67 engaged in business development, finance, information systems, facilities, human resources, legal functions, or administrative support. None of our employees is represented by a labor union, and none of our employees has entered into a collective bargaining agreement with us. We consider our employee relations to be good.

51

We are dedicated to conducting business with the highest standards of corporate responsibility. Our goal is to build a culture of diverse and passionate people striving to positively impact patients, our communities, and broader society. Our human capital resource priorities include attracting, recruiting, retaining, incentivizing and integrating our existing and new employees. We believe that a diverse, equitable, and inclusive workplace allows our company to best fulfill our mission. We are committed to continuing our efforts to increase diversity throughout our company and foster an inclusive work environment that supports our employees and the communities we serve. We have established a Diversity, Equity and Inclusion Committee that is working to amplify this focus at the company. In all the countries in which we operate, it is our policy to fully comply with all applicable laws regarding discrimination in the workplace. We are committed to recruiting the best people for the job regardless of gender, race, ethnicity, age, disability, sexual orientation, gender identity, cultural background, or religious belief.

The principal purposes of our comprehensive equity and cash compensation and benefits programs are to attract, motivate, retain, and reward new and existing employees. We do this by using a mix of compensation elements that balance achievement of our short-term goals with our long-term performance. In addition, employees are eligible to participate in our standard employee benefit plans, such as our retirement, health and welfare benefits plans, including medical, dental, and life and disability insurance plans. We also offer our employees the opportunity to participate in a tax-qualified retirement plan, or the 401(k) Plan, and have the ability to make matching contributions under the 401(k) Plan, which is competitive with other companies in our industry.

We consider our human capital resources strategy to be comprehensive and is built around our core way of working: collaborative, undaunted, entrepreneurial, and results-oriented. We foster a strong relationship with and among our employees with ongoing efforts such as employee surveys, training and development programs, and other programs, including skill development courses, manager training, leadership development opportunities, tuition reimbursement and robust online course training libraries for reference on a myriad of development topics. We also support cross-functional career development pathways, in addition to traditional promotions within functions in the organization. We plan to continue to evolve and add to our suite of human capital resources as we grow.

Special Note About the Coronavirus Pandemic

The ongoing coronavirus pandemic continues to have unpredictable impacts on global societies, economies, financial markets, and business practices around the world. The extent and duration of such effects remain uncertain and difficult to predict, particularly as virus variants continue to spread. We are actively monitoring and managing our response and evaluating the actual and potential impacts to our business operations, including on our ongoing and planned clinical trials. We will continue to work closely with our third-party vendors, collaborators, and other parties in order to seek to advance our programs and pipeline of product candidates, while keeping the health and safety of our employees and their families, partners, third-party vendors, healthcare providers, patients and communities a top priority. For discussion regarding the impact of the coronavirus pandemic on our business and financial results, please refer to our “Risk Factors” in Part I, Item 1A and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report on Form 10-K.

Information Available on the Internet

Investors and others should note that we announce material information to our investors using our investor relations website (https://crisprtx.gcs-web.com/), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media to communicate with the public about our company, our business, our product candidates and other matters. It is possible that the information we post on social media could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels listed on our investor relations website. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available on our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC at its website (https://www.sec.gov).

52

Item 1A. Risk Factors.

This report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in this report. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this report and in any documents incorporated in this report by reference.

You should carefully consider the following risk factors, together with all other information in this report, including our financial statements and notes thereto, and in our other filings with the Securities and Exchange Commission. If any of the following risks, or other risks not presently known to us or that we currently believe to not be significant, develop into actual events, then our business, financial condition, results of operations or prospects could be materially adversely affected. If that happens, the market price of our common shares could decline, and shareholders may lose all or part of their investment.

Risks Related to Our Financial Position and Need for Additional Capital

We Have Incurred Significant Operating Losses Since Our Inception And Anticipate That We Will Incur Continued Losses For The Foreseeable Future.

We have funded our operations through public and private offerings of our equity securities, private placements of our preferred shares, convertible loans and collaboration agreements with strategic partners. Since inception,While we have incurred significant operating losses. We generated net income of $66.9 millionwere profitable for the year ended December 31, 2019, but2021 due to an upfront payment associated with our net loss was $165.0 million and $68.4 million for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2019 and 2018,collaboration with Vertex, we had an accumulated deficit of $224.7 million and $291.6 million, respectively. Wedo not expect to continue to incur significant expenses and operating losses over the next several years and for the foreseeable future.be profitable in future years. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our shareholders’ deficit and working capital. We anticipate that our expenses will increase substantially if and as we:

As a result, we expect to continue to incur significant and increasing operating losses for the foreseeable future. Because of the numerous risks and uncertainties associated with developing gene-editinggene editing product candidates, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Even if we do become profitable, we may not be able to sustain or increase our profitability on a quarterly or annual basis. For example, while we were profitable for the year ended December 31, 2019 due to collaboration revenue from Vertex and our gain resulting from the consolidation of Casebia, we do not expect to sustain our profitability in future years.    

53

We Will Need To Raise Substantial Additional Funding, Which Will Dilute Our Shareholders. If We Are Unable To Raise Capital When Needed, We Would Be Forced To Delay, Reduce Or Eliminate Some Of Our Product Development Programs Or Commercialization Efforts.

The development of gene-editinggene editing product candidates is capital intensive. We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, initiate preclinical studies and clinical trials for and seek marketing approval for our product candidates. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution to the extent that such sales, marketing, manufacturing and distribution are not the responsibility of Bayer, ViaCyte, Vertex or other future collaborators. We may also need to raise additional funds sooner if we choose to pursue additional indications or geographies for our product candidates or otherwise expand more rapidly than we presently anticipate. In addition, relative to prior years when we were a private company, we expect to incur significant additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate certain of our research and development programs or future commercialization efforts.

As of December 31, 2019,2022 and 2018,2021, we had cash, cash equivalents and marketable securities of approximately $943.8$1,868.4 million and $456.6$2,379.1 million, respectively. In November 2019, we completed an offering of an aggregate of 4.9 million common shares, which were sold at a price to the public of $64.50 per share for aggregate net proceeds of $294.4 million, which were net of equity issuance costs of $20.7 million. With our cash, cash equivalents and marketable securities on hand as of December 31, 2019,2022, we expect cash, and cash equivalents and marketable securities to be sufficient to fund our current operating plan through at least the next 24 months.

Our future capital requirements will depend on, and could increase significantly as a result of, many factors, including:

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. We cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our shareholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities would dilute all of our shareholders and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a shareholder. The incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborators or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any product candidate, or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.

We Have A Limited Operating History, Which May Make It Difficult To Evaluate Our Technology And Product Development Capabilities And Predict Our Future Performance.

We were formed in October 2013, have no products approved for commercial sale and have not generated any revenue from product sales. Our ability to generate product revenue or profits, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidates, which may never occur. We may never be able to develop or commercialize a marketable product.

We are early in ouroverall development efforts are ongoing and the first clinical trial for any of our product candidates was initiated at the end of 2018. Each of our other programs requires additional discovery research and then preclinical development. All of ourOur programs require preclinical and clinical development,development; regulatory and marketing approval in multiple jurisdictions,jurisdictions; obtaining manufacturing supply, capacity, and expertise,expertise; building of a commercial organization,organization; substantial investment and significant marketing efforts before we generate any revenue from product sales. In addition, ourOur product candidates must be approved for marketing by the FDA or certain other health regulatory agencies, including the EMA, before we may commercialize any product.

Our limited operating history, particularly in light of the rapidly evolving gene-editinggene editing field, may make it difficult to evaluate our technology and industry and predict our future performance. Our short history as an operating company makes any assessment of our future success or viability subject to significant uncertainty. We will encounter risks and difficulties frequently experienced by early stage companies in rapidly evolving fields. If we do not address these risks successfully, our business will suffer. Similarly, we expect that our financial condition and operating results will fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. As a result, our shareholders should not rely upon the results of any quarterly or annual period as an indicator of future operating performance.

In addition, as an earlya development stage company, we have encountered unforeseen expenses, difficulties, complications, delays and other known and unknown circumstances. As we advance our product candidates, we will need to continue to transition from a company with a research focus to a company capable of supporting clinical development and if successful, commercial activities. We may not be successful in such a transition.

Our Ability To Use Tax Loss Carryforwards In Switzerland May Be Limited.

Under Swiss law, we are entitled to carry forward losses we incur for a period of seven years and we can offset future profits, if any, against such losses. Tax losses are only finally assessed by the tax authorities when offset with taxable profit (which will not be the case if we are loss making). If not used, these tax losses will expire seven years after the year in which they occurred. Due to our limited income, there is a high risk that the tax loss carry forwards will expire partly or entirely and as a result they would not be applied to reduce future cash tax payments. These carry forwards are fully reserved and will remain so until we become consistently profitable.

The effective corporate income tax rate in the Canton of Zug for 2019 amounts to 14.35% (federal, cantonal and communal). As already mentioned above, no tax ruling was filed with the Zug tax authorities for applying for the taxation as mixed company. However, up until and including the tax period 2019 a respective application for taxation as a mixed company can be made in the annual tax return and will be granted by the Zug tax authorities, assuming we fulfill the respective criteria. The effective corporate income tax rate as mixed company in the Canton of Zug ranges between 8.53% and 9.55% on the profit before taxes, depending on the number of full-time equivalents employed in Switzerland in a given year. The maximum tax rate applies in case we employ more than 30 full time equivalents by the end of a given year.

As of January 1, 2020, the Canton of Zug introduced its new law on the Swiss corporate tax reform. According to this new law, the ordinary effective corporate income tax rate has beenamount was reduced to 11.91% (federal, cantonal and communal) in 2020 and among others, the privileges for mixed companies have been abolished. Furthermore, a number of additional tax benefits are implemented, including but not limitedwas subsequently reduced to generous rules for companies, which were previously taxed as mixed companies (e.g. special tax rate or step up of the tax based followed by tax effective depreciations11.85% in the following years). Determining which of these options would be most favorable and to what extend these rules are beneficial for us, depends on the development of our taxable profit during this period and must be assessed in the upcoming year.2021.

55

Risks Related to Our Business, Technology and Industry

We Are Early In Our Development Efforts. It Will Be Many Years Before We Or Our Collaborators Commercialize A Product Candidate, If Ever. If We Are Unable To Advance Our Product Candidates To Clinical Development, Obtain Regulatory Approval And Ultimately Commercialize Our Product Candidates, Or Experience Significant Delays In Doing So, Our Business Will Be Materially Harmed.

We are early in ourOur development efforts are ongoing and have focused our research and development efforts to date on CRISPR/Cas9, gene-editinggene editing technology, identifying our initial targeted disease indications and our initial product candidates. Our future success depends heavily on the successful development of our CRISPR/Cas9 gene-editinggene editing product candidates. We have invested substantially all of our efforts and financial resources in the identification and preclinical development of our current product candidates. Our ability to generate product revenue which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidates, which may never occur. For example, our research programs, including those subject to our collaboration agreements with Vertex and ViaCyte and option agreement with Bayer, may fail to identify potential product candidates for clinical development for a number of reasons or may fail to successfully advance any product candidates through clinical development. Our research methodology may be unsuccessful in identifying potential product candidates, or our potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the productsproduct candidates impractical to manufacture, unmarketable, or unlikely to receive marketing approval. We currently generate no revenue from sales of any product and we may never be able to develop or commercialize a marketable product.

We must file U.S. investigational new drugInvestigational New Drug, or IND, applications, or INDs, clinical trial applications, or CTAs, or their equivalents with regulatory authorities to commence clinical trials. The filing of future CTAs or INDs for any other product candidate we develop is subject to the identification and selection of one or more guide RNARNAs with acceptable efficiency.efficiency, among other activities. In addition, commencing any of ourfuture clinical trialstrial is also subject to acceptance by the European regulatory authorities, or its equivalent, of our CTAs, or the FDA of our INDs, and finalizing the trial design based on discussions with the applicable regulatory authorities. In the event that the European regulatory authorities, FDA or their equivalent requires us to complete additional preclinical studies or we are required to satisfy other requests, our clinical trials may be delayed. Even after we receive and incorporate guidance from these regulatory authorities, they could disagree that we have satisfied their requirements to commence our clinical trial or change their position on the acceptability of our trial design or the clinical endpoints selected, which may require us to complete additional preclinical studies or clinical trials or impose stricter approval conditions than we currently expect.

To become and remain profitable, we must develop and commercialize product candidates with significant market potential, which will require us to be successful in a range of challenging activities. Our product candidates will require additional preclinical and clinical development,development; regulatory and marketing approval in multiple jurisdictions,jurisdictions; obtaining manufacturing supply, capacity, and expertise,expertise; building of a commercial organization,organization; substantial investment and significant marketing efforts before we generate any revenue from product sales. In addition, our product development programs must be approved for marketing by the FDA, EMA or certain other health regulatory agencies, before we may commercialize our product candidates. We may never succeed in any or all of these activities and, even if we do, we may never generate revenues that are significant or large enough to achieve profitability. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease our value and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in our value also could cause shareholders to lose all or part of their investment.

The success of our product candidates will depend on several factors, including the following:

Additionally, because our technology involves gene editing across multiple cell and tissue types, we are subject to many of the challenges and risks that gene therapies face, including:

If we do not succeed in one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates, which would materially harm our business. If we do not receive regulatory approvals for our product candidates, we may not be able to continue our operations.

Our CRISPR/Cas9 Gene-EditingGene Editing Product Candidates Are Based On A Relatively New Gene-EditingGene Editing Technology, Which Makes It Difficult To Predict The Time And Cost Of Development And Of Subsequently Obtaining Regulatory Approval, If At All. There Have Only Been A Limited Number Of Clinical Trials Of Product Candidates Based On Gene-EditingGene Editing Technology And No Gene-EditingGene Editing Products Have Been Approved In The United States Or In The EU.

CRISPR/Cas9 gene-editinggene editing technology is relatively new, and no products based on CRISPR/Cas9 or other similar gene-editinggene editing technologies have been approved in the United States or the EU and only a limited number of clinical trials of product candidates based on gene-editinggene editing technologies have been commenced. As such it is difficult to accurately predict the developmental challenges we may incur for our product candidates as they proceed through product discovery or identification, preclinical studies and clinical trials. For example, because we have only very limited data from clinical trials in CTX001,exa-cel, CTX110 and CTX130, we have not yet been able to fully assess safety in humans. In addition, because we have only recently commenced clinical trials for certain of our other product candidates, we have not yet been able to assess safety in humans. There may be long-term effects from treatment with any product candidates that we develop that we cannot predict at this time. Any product candidates we may develop will act at the level of DNA, and, because animal DNA differs from human DNA, testing of our product candidates in animal models may not be predictive of the results we observe in human clinical trials of our product candidates for either safety or efficacy. Also, animal models may not exist for some of the diseases we choose to pursue in our programs. As a result of these factors, it is more difficult for us to predict the time and cost of product candidate development, and we cannot predict whether the application of our gene-editinggene editing technology, or any similar or competitive gene-editinggene editing technologies, will result in the identification, development, and regulatory approval of any products. There can be no assurance that any development problems we experience in the future related to our gene-editinggene editing technology or any of our research and development programs will not cause significant delays or unanticipated costs, or that such development problems can be solved. Any of these factors may prevent us from completing our preclinical studies or any clinical trials that we may initiate or commercializing any product candidates we may develop on a timely or profitable basis, if at all.

The clinical trial requirements of the FDA, the EMA and other regulatory authorities and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of the product candidate. No products based on gene-editinggene editing technologies have been approved by regulators. As a result, the regulatory approval process for product candidates such as ours is uncertain and may be more expensive and take longer than the

57

approval process for product candidates based on other, better known or more extensively studied technologies. It is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our product candidates in either the United States or the EU or how long it will take to commercialize our product candidates. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product candidate to market could decrease our ability to generate sufficient product revenue, and our business, financial condition, results of operations and prospects may be harmed.

Our Engineered Allogeneic T cell Product Candidates Represent A Novel Approach To Cancer Treatment That Creates Significant Challenges For Us.

For our immuno-oncology programs, we are developing a pipeline of allogeneic T cell product candidates (including, for example, CTX110, CTX112, CTX130 and CTX131) that are engineered from healthy donor T cells to express chimeric antigen receptors, or CARs, and are intended for use in any patient with certain cancers. Unlike for autologous CAR T therapies, for allogeneic CAR T therapies, we are reliant on receiving healthy donor material to manufacture our product candidates. Healthy donor T cells vary in type and quality, and this variation makes producing standardized allogeneic CAR T product candidates challenging and makes the development and commercialization pathway of those product candidates uncertain.

We have developed screening processes designed to enhance the quality and consistency of T cells used in the manufacture of our CAR T cell product candidates, but our screening processes may fail to identify suitable donor material and we may discover failures with the material after production. We may also have to update our specifications for new risks that may emerge, such as to screen for new viruses.

We have strict specifications for donor material, which include specifications required by regulatory authorities. If we are unable to identify and obtain donor material that satisfy specifications, agree with regulatory authorities on appropriate specifications, or address variability in donor T cells, there may be inconsistencies in the product candidates we produce or we may be unable to initiate or continue ongoing clinical trials on the timelines we expect, which could harm our reputation and adversely impact our business and prospects.

In addition, approved autologous CAR T therapies and those under development have shown frequent rates of cytokine release syndrome, neurotoxicity, serious infections, prolonged cytopenia and hypogammaglobulinemia, and other serious adverse events that have resulted in patient deaths. We expect similar adverse events for our allogeneic CAR T product candidates. Moreover, patients eligible for allogeneic CAR T cell therapies but ineligible for autologous CAR T cell therapies due to aggressive cancer and inability to wait for autologous CAR T cell therapies may be at greater risk for complications and death from therapy. Our allogeneic CAR T cell product candidates may also cause unique adverse events related to the differences between the donor and patients, such as Graft versus Host Disease, or GvHD, or infusion reactions. GvHD results when allogeneic T cells start recognizing the patient’s normal tissue as foreign.

We have designed our CRISPR/Cas9 gene editing technology to eliminate the T-cell receptor from the healthy donor T cells to reduce the risk of GvHD from our product candidates, as well as to remove the class I major histocompatibility complex from the cell surface in order to limit the patient’s immune system from attacking the allogeneic T cells and to improve the persistence of the CAR T cells. However, the gene editing of our product candidates may not be successful in limiting the risk of GvHD or premature rejection by the patient. In addition, results of our immuno-oncology clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.

If significant GvHD or other adverse events are observed with the administration of our product candidates, or if any of the product candidates is viewed as less safe or effective than autologous therapies or other allogenic therapies, our ability to develop allogeneic therapies may be adversely affected.

The FDA, The NIH And The EMA Have Demonstrated Caution In Their Regulation Of Gene Therapy Treatments, And Ethical And Legal Concerns About Gene Therapy And Genetic Testing May Result In Additional Regulations Or Restrictions On The Development And Commercialization Of Our Product Candidates, Which May Be Difficult To Predict.

The FDA, NIH and the EMA have each expressed interest in further regulating biotechnology, including gene therapy and genetic testing. For example, the EMA advocates a risk-based approach to the development of a gene therapy product. Agencies at both the federal and state level in the United States, as well as the U.S. congressional committees and other governments or governing agencies, have also expressed interest in further regulating the biotechnology industry. Such action may delay or prevent commercialization of some or all of our product candidates.

58

Regulatory requirements in the United States and in other jurisdictions governing gene therapy products have changed frequently and may continue to change in the future. In January 2020, theThe FDA has issued several new guidance documents on gene therapy products. The FDA established the Office of Tissues and Advanced TherapiesTherapeutic Products within its Center for Biologics Evaluation and Research to consolidate the review of gene therapy and related products, and established the Cellular, Tissue and Gene Therapies Advisory Committee to advise this review. In addition to the government regulators, the IBC and IRB of each institution at which we conduct clinical trials of our product candidates, or a central IRB if appropriate, would need to review the proposed clinical trial to assess the safety of the trial. In addition, adverse developments in clinical trials of gene therapy productsproduct candidates conducted by others may cause the FDA or other oversight bodies to change the requirements for approval of any of our product candidates. Similarly, the EMA governs the development of gene therapies in the EU and may issue new guidelines concerning the development and marketing authorization for gene therapy products and require that we comply with these new guidelines. These regulatory review agencies and committees and the new requirements or guidelines they promulgate may lengthen the regulatory review process, require us to perform additional studies or trials, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our product candidates or lead to significant post-approval limitations or restrictions. As we advance our product candidates and seek regulatory approval, we will be required to consult with these regulatory agencies and committees and comply with applicable requirements and guidelines. If we fail to do so, we may be required to delay or discontinue development of such product candidates. These additional processes may result in a review and approval process that is longer than we otherwise would have expected. Delays as a result of an increased or lengthier regulatory approval process or further restrictions on the development of our product candidates can be costly and could negatively impact our or our collaborators’ ability to complete clinical trials and commercialize our current and future product candidates in a timely manner, if at all.

If Any Of The Product Candidates We May Develop Or The Delivery ModesAdministration Processes We Rely On CauseCauses Undesirable Side Effects, It Could Delay Or Prevent Their Regulatory Approval, Limit The Commercial Potential Or Result In Significant Negative Consequences Following Any Potential Marketing Approval.

Product candidates we may develop may be associated with undesirable or unacceptable side effects, unexpected characteristics or other serious adverse events, including death or off-target cuts of DNA, or the introduction of cuts in DNA at locations other than the target sequence. These off-target cuts could lead to disruption of a gene or a genetic regulatory sequence at an unintended site in the DNA, or, in those instances where we also provide a segment of DNA to serve as a repair template, it is possible that following off-target cut events, DNA from such repair template could be integrated into the genome at an unintended site, potentially disrupting another important gene or genomic element.

There also is the potential risk of delayed adverse events following exposure to gene-editinggene editing therapy due to persistent biologic activity of the genetic material or other components of products used to carry the genetic material. Possible adverse side effects that could occur with treatment with gene-editinggene editing products include an immunologic reaction after administration which could substantially limit the effectiveness of the treatment. Additionally, immunotherapy,

Immunotherapy, and its method of action of harnessing the body’s immune system, is powerful and could lead to serious side effects that we only discover in clinical trials. Unforeseen side effects could arise either during clinical development or, if such side effects are more rare, after our product candidates have been approved by regulatory authorities and the approved product has been marketed, resulting in the exposure of additional patients. If our CRISPR/Cas9 gene-editinggene editing technology demonstrates a similar effect, we may decide or be required to halt or delay preclinical development or clinical development of our product candidates.

In addition to serious adverse events or side effects caused by any product candidate we may develop, the administration process or related procedures also can cause undesirable side effects. Patients who enroll in our exa-cel clinical trials have their own CRISPR/Cas9 edited-hematopoietic stem and progenitor cells, exa-cel, infused back into the patient as part of a stem cell transplant, a process which involves, among other things, a patient being treated with myeloablative busulfan conditioning. Patients undergoing stem cell transplants may also encounter side effects (ranging from mild to severe) that are unrelated to the administration of exa-cel. Patients who enroll in our immunotherapy trials undergo a lymphodepletion regimen, which generally includes fludarabine and cyclophosphamide that may cause serious adverse events. Because these regimens will cause a transient and sometimes prolonged immune suppression, patients will have an increased risk of certain infections that may be unable to be cleared by the patient and could ultimately lead to death. Any side effects may not be appropriately recognized or managed by the treating medical staff. We or our collaborators expect to have to educate medical personnel using any product candidates we may develop to understand the side effect profiles for our clinical trials and upon any commercialization of such product candidates. Inadequate recognition or management of the potential side effects of such product candidates could result in patient injury or death. If any suchundesirable or unacceptable side effects, unexpected characteristics or other serious adverse events occur, our clinical trials or commercial distribution of any product candidates or products we develop alone or with collaborators could be suspended or terminated.terminated, and our business and reputation could suffer substantial harm.

59

If in the future we are unable to demonstrate that such adverse events were caused by factors other than our product candidate, the FDA, EMA or other comparable health regulatory authorities could order us to cease further clinical studies of, or deny approval of, any product candidates we are able to develop for any or all targeted indications. Even if we are able to demonstrate that all future serious adverse events are not product-related, such occurrences could affect patient recruitment or the ability of enrolled patients to complete the trial. Moreover, if we elect, or are required, to delay, suspend or terminate any clinical trial of any product candidate, we may develop, the commercial prospects of such product candidates may be harmed and our ability to generate product revenues from any of these product candidates may be delayed or eliminated. Any of these occurrences may harm our ability to identify and develop product candidates, and may harm our business, financial condition, result of operations and prospects significantly.

Additionally, if we successfully develop a product candidate and it receives marketing approval, the FDA could require us to adopt a Risk Evaluation and Mitigation Strategy, or REMS, to ensure that the benefits of treatment with such product candidate outweighs the risks for each potential patient, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients, a communication plan to health care practitioners, extensive patient monitoring, or distribution systems and processes that are highly controlled, restrictive, and more costly than what is typical for the industry. Furthermore, if we or others later identify undesirable side effects caused by any product candidate that we develop, several potentially significant negative consequences could result, including:

Any of these events could prevent us from achieving or maintaining market acceptance of our gene-editinggene editing technology and any product candidates we may identify and develop and could have a material adverse effect on our business, financial condition, results of operations and prospects.

If We Experience Delays Or Difficulties In The Enrollment Of Patients In Clinical Trials, Our Receipt Of Necessary Regulatory Approvals Could Be Delayed Or Prevented.

We or our collaborators may not be able to initiate or continue clinical trials for any product candidates we identify or develop if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or analogous regulatory authorities outside the United States, or as needed to provide appropriate statistical power for a given trial. Enrollment may be particularly challenging for any rare genetically defined diseases we may target in the future. In addition, if patients are unwilling to participate in our gene-editinggene editing trials because of negative publicity from adverse events related to the biotechnology, gene therapy or gene-editinggene editing fields, competitive clinical trials for similar patient populations, clinical trials with competing products, or for other reasons, the timeline for recruiting patients, conducting studies and obtaining regulatory approval of any product candidates we may develop may be delayed. Moreover, some of our competitors may have ongoing clinical trials for product candidates that would treat the same indications as any product candidates we may develop, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ product candidates.

Patient enrollment is also affected by other factors, including:

Enrollment delays in our clinical trials may result in increased development costs for any product candidates we may develop, which would cause our value to decline and limit our ability to obtain additional financing. If we or our collaborators have difficulty enrolling a sufficient number of patients to conduct our clinical trials as planned, we may need to delay, limit, or terminate ongoing or planned clinical trials, any of which would have an adverse effect on our business, financial condition, results of operations, and prospects.

Our Business May Be Adversely Affected By A Pandemic, Epidemic Or Outbreak Of An Infectious Disease, Such As The Ongoing Coronavirus Pandemic And The Emergence of Additional Variants.

Our business could be adversely affected by health epidemics in regions where we have concentrations of clinical trial sites or other business activities and could cause significant disruption in the operations of third-party contract manufacturers and contract research organizations upon whom we rely, as well as our ability to recruit patients for our clinical trials. For example, the ongoing coronavirus pandemic continues to have unpredictable impacts on global societies, economies, financial markets, and business practices around the world.

The extent to which the ongoing coronavirus pandemic may impact our business, results of operations and future growth prospects will depend on a variety of factors and future developments, which are highly uncertain and cannot be predicted with confidence, including the duration, scope and severity of the pandemic, particularly as virus variants continue to spread. For example, we experienced, and may experience again, some temporary delays or disruptions due to the coronavirus pandemic, including pauses in and delays to patient dosing, limited or reduced patient access to ICU beds, hospitals and healthcare resources generally, delayed initiation of new clinical trial sites and limited on-site personnel support at various trial sites. In addition, certain of our third-party manufacturers and suppliers paused their operations in the early stages of the pandemic, and some have paused their operations again as additional waves of the coronavirus pandemic have impacted local communities and/or as a result of national and local regulations.

We are actively monitoring and managing our response and evaluating the actual and potential impacts to our business operations, including on our ongoing and planned clinical trials. We will continue to work closely with our third-party vendors, collaborators, and other parties in order to seek to advance our programs and pipeline of product candidates, while keeping the health and safety of our employees and their families, partners, third-party vendors, healthcare providers, patients and communities a top priority.

Positive Results From Early Preclinical Studies Or Preliminary Results from Clinical Trials Of Our Product Candidates Are Not Necessarily Predictive Of The Results Of Later Preclinical Studies And Any Future Clinical Trials Of Our Product Candidates. If We Cannot Replicate The Positive Results From Our Earlier Preclinical Studies Of Our Product Candidates In Our Later Preclinical Studies, Clinical Trials And Future Clinical Trials, We May Be Unable To Successfully Develop, Obtain Regulatory Approval For And Commercialize Our Product Candidates.

Any positive results from our preclinical studies or preliminary results from our clinical trials of our product candidates may not necessarily be predictive of the results from required later preclinical studies and clinical trials. Preliminary, interim and top-line data from clinical trials may change as more patient data become available. Preliminary, interim or top-line data from clinical trials are not necessarily predictive of final results, including the results submitted in support of approval in a BLA or equivalent submission outside the United States. Interim, top-line and preliminary data remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously announced. As a result, preliminary, interim and top-line data should be viewed with caution until the final data are available. Material adverse changes in the final data compared to the interim data could significantly harm our business prospects. Moreover, preliminary, interim and top-line data are subject to the risk that one or more of the clinical outcomes may materially change as more patient data become available when patients mature on study, patient enrollment continues or as other ongoing or future clinical trials with a product candidate further develop. For example, consistent with the FDA's recommendation, certain of our clinical trials include a 15 year follow-up observation period in which we will continue to collect patient data.

61

The information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically more extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure. Any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business. Similarly, even if we are able to complete our planned preclinical studies or any future clinical trials of our product candidates according to our current development timeline, the positive results from such preclinical studies and clinical trials of our product candidates may not be replicated in subsequent preclinical studies or clinical trial results.

Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development and we cannot be certain that we will not face similar setbacks. Similarly, many companies in the pharmaceutical and biotechnology industries have failed to receive regulatory approval despite completing registration trials. These setbacks have been caused by, among other things, preclinical and other nonclinical findings made while clinical trials were underway or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events. Moreover, preclinical, nonclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA or EMA approval.

Even If We Complete The Necessary Preclinical Studies And Clinical Trials, The Marketing Approval Process Is Expensive, Time-Consuming, And Uncertain And May Prevent Us From Obtaining Approvals For The Commercialization Of Any Product Candidates We May Develop. If We Are Not Able To Obtain, Or If There Are Delays In Obtaining, Required Regulatory Approvals, We Will Not Be Able To Commercialize, Or Will Be Delayed In Commercializing, Product Candidates We May Develop, And Our Ability To Generate Revenue Will Be Materially Impaired.

Any product candidates we may develop and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale, and distribution, are subject to comprehensive regulation by the FDA and other regulatory authorities in the United States, by EMA in the EU and by comparable authorities in other countries. Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate in a given jurisdiction. WeWhile we have multiple product candidates in clinical development and advanced preclinical development for a range of diseases, we have not yet submitted BLAs for any of our wholly-owned allogeneic CAR T product candidates to the FDA, or similar marketing applications to comparable foreign authorities. In the fourth quarter of 2022, we and Vertex completed regulatory submissions for exa-cel with the EMA and MHRA in the EU and the UK, respectively, for the potential treatment of SCD and TDT, and both the EMA and the MHRA have validated the respective Marketing Authorization Applications. In addition, we and Vertex initiated the BLA rolling submission to the FDA in November 2022, which we and Vertex expect to be complete by the end of the first quarter of 2023. However, we have not received approval or clearance to market any product candidates from regulatory authorities in any jurisdiction and it is possible that none of our product candidates or any product candidates we may seek to develop, alone or in conjunction with collaborators, in the future will ever obtain regulatory approval or clearance.

We have only limited experience in filingsubmitting and supporting the applications necessary to gain regulatory and marketing approvals andapprovals. We expect to rely on third-party contract research organizations, or CROs and/or regulatory consultants to assist us in this process. Securingprocess for our wholly-owned product candidates and, pursuant to our A&R Vertex JDCA, we have relied on Vertex for submitting such applications for our hemoglobinopathies product candidates. Submission of a BLA or other similar marketing applications to comparable foreign authorities and securing regulatory approval requires the submission of extensive preclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the biologic product candidate’s safety, purity, efficacy and potency.potency, also known as safety and effectiveness, for each desired therapeutic indication. A BLA must also include significant information regarding the chemistry, manufacturing and controls for the product candidate. Securing regulatory approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority. Should the FDA determine that an inspection is necessary for approval of a marketing application and an inspection cannot be completed during the review cycle due to restrictions on travel as a result of the coronavirus pandemic, the FDA has stated that it generally intends to issue a complete response letter or defer action on the application until an inspection can be completed.

62

In general, the FDA requires the successful completion of two pivotal trials to support approval of a BLA, but in certain circumstances, will approve a BLA based on only one pivotal trial; and our ability to submit and obtain approval of a BLA is ultimately an FDA review decision, which will be dependent upon the data available at such time, and the available data may not be sufficiently robust from a safety and/or efficacy perspective to support the submission or approval of a BLA. For example, there is no assurance that data obtained at the completion of any of our clinical trials, including for our ongoing wholly-owned product candidates, including CTX110 and CTX130, will indicate clinically meaningful benefit or support submission of a BLA, or will be sufficiently robust from a safety and/or efficacy perspective to support either accelerated or conditional approval or full approval. Moreover, there is no assurance that the data obtained to date in the ongoing CLIMB-111 and CLIMB-121 clinical trials of exa-cel and being submitted to the FDA on a rolling basis will be sufficiently robust from a safety and/or efficacy perspective to support either accelerated or conditional approval or full approval of a BLA. Depending on the outcome of these ongoing clinical trials, and robustness of the data submitted, once submitted, the FDA may require that we conduct additional or larger pivotal trials before we can submit or obtain approval of a BLA. Furthermore, if any undesirable or unacceptable side effects, unexpected characteristics or other serious adverse events occur, and if we are unable to demonstrate such adverse events were caused by factors other than our product candidate, the FDA, EMA or other comparable health regulatory authorities could suspend our clinical trial until we are able to gather sufficient information or order us to cease further clinical studies of our product candidate. If this were to occur this would likely result in delays in our ability to submit a BLA for regulatory approval. We may face similar challenges with foreign regulatory bodies.

Furthermore, failure of one or more clinical trials can occur at any stage in the clinical trial process. Any product candidates we develop may not be effective, may be only moderately effective, or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. Accordingly, the regulatory pathway for our product candidates is still uncertain, complex, and lengthy, and ultimately, approval may not be obtained. Even if our product candidates demonstrate safety and efficacy in clinical studies, regulatory delays or rejections may be encountered as a result of many factors, including changes in regulatory policy during the period of product development.

The process of obtaining marketing approvals, both in the United States and in other foreign jurisdictions, is expensive, may take many years if additional clinical trials are required, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity, and novelty of the product candidates involved. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. The FDA and comparable authorities in other countries have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit, or prevent marketing approval of a product candidate. Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

If we experience delays in obtaining approval or if we fail to obtain approval of any product candidates we may develop, the commercial prospects for those product candidates may be harmed, and our ability to generate revenues will be materially impaired.

We May Never Obtain FDA Approval For Any Of Our Product Candidates In The United States, And Even If We Do, We May Never Obtain Approval For Or Commercialize Any Of Our Product Candidates In Any Other Jurisdiction, Which Would Limit Our Ability To Realize Their Full Market Potential.

In order to eventually market any of our product candidates in any particular jurisdiction, we must establish and comply with numerous and varying regulatory requirements on a jurisdiction-by-jurisdiction basis regarding safety and efficacy. Approval by the FDA in the United States, if obtained, does not ensure approval by regulatory authorities in other countries or jurisdictions. Similarly, approval by foreign regulatory authorities does not ensure approval by the FDA. In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval in any other country. Approval processes vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking regulatory approval in multiple jurisdictions could result in difficulties and costs for us and require additional preclinical studies or clinical trials which could be costly and time-consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in certain countries. Regulatory approval processes outside the United States involve all of the risks associated with FDA approval. We do not have any product candidates approved for sale in any jurisdiction, including international markets, and, as a company, do not have experience in obtaining regulatory approval in international markets. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international markets are delayed, our target market will be reduced and our ability to realize the full market potential of our products will be unrealized.

63

Breakthrough Therapy Designation, Fast Track Designation, Regenerative Medicine Advanced Therapy Designation or Priority Review by the FDA, Orphan Drug Designation by the European Commission or PRIME Scheme by the EMA, Even If Granted for Any of Our Product Candidates, May Not Lead to a Faster Development, Regulatory Review or Approval Process, and It May Not Increase the Likelihood That Any of Our Product Candidates Will Receive Marking Approval.

We may seek a Breakthrough Therapy Designation for some of our product candidates. A breakthrough therapy is defined as a therapy that is intended, alone or in combination with one or more other therapies, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the therapy may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For therapies that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Therapies designated as breakthrough therapies by the FDA may also be eligible for priority review and accelerated approval. Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe one of our product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a Breakthrough Therapy Designation for a product candidate may not result in a faster development process, review or approval compared to therapies considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our product candidates qualify as breakthrough therapies, the FDA may later decide that such product candidates no longer meet the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

We have obtained and may seek Fast Track Designation for some of our product candidates. For instance, CTX001exa-cel has been granted Fast Track Designation by the FDA for the treatment of TDT and SCD. If a therapy is intended for the treatment of a serious or life-threatening condition and the therapy demonstrates the potential to address unmet medical needs for this condition, the therapy sponsor may apply for Fast Track Designation. The FDA has broad discretion whether or not to grant this designation, so even if we believe a particular product candidate is eligible for this designation; we cannot assure you that the FDA would decide to grant it. Even if we do receive Fast Track Designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures. For Fast Track products, sponsors may have greater interactions with the FDA and the FDA may initiate review of sections of a Fast Track product's marketing application before the application is complete. This rolling review may be available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a Fast Track product may be effective. The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user fees. However, the FDA's time period goal for reviewing an application does not begin until the last section of the application is submitted. The FDA may withdraw Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program. Fast Track Designation alone does not guarantee qualification for the FDA's priority review procedures.

We have obtained and may seek Regenerative Medicine Advanced Therapy, or RMAT designation for one or moresome of our product candidates. For instance, exa-cel has been granted RMAT designation by the FDA for the treatment of TDT and SCD, as well as CTX110 for the treatment of relapsed or refractory B-cell lymphoma and CTX130 for the treatment of Mycosis Fungoides and Sézary Syndrome (MF/SS). In 2017, the FDA established the RMAT designation as part of its implementation of the 21st Century Cures Act to expedite review of any drug that meets the following criteria: it qualifies as a RMAT, which is defined as a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or any combination product using such therapies or products, with limited exceptions; it is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and preliminary clinical evidence indicates that the drug has the potential to address unmet medical needs for such a disease or condition. Like Breakthrough Therapy Designation, RMAT designation provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate, and eligibility for rolling review and priority review. Products granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites, including through expansion to additional sites. There can be no assurance that the FDA would allow any of the product candidates we may develop to proceed on an accelerated approval pathway, and even if the FDA did allow such pathway, there can be no assurance that such submission or application will be accepted or that any expedited development, review or approval will be granted on a timely basis, or at all. RMAT-designated products that receive accelerated approval may, as appropriate, fulfill their post-approval requirements through the submission of clinical evidence, clinical trials, patient registries, or other sources of real world evidence, such as electronic health records; through the collection of larger confirmatory data sets; or via post-approval monitoring of all patients treated with such therapy prior to approval of the therapy. There is no assurance that we will be able to obtain RMAT designation for anyother of our product candidates. RMAT designation does not change the FDA's standards for product approval, and there is no assurance that such designation will result in expedited review or approval or that the approved indication will not be narrower than the indication covered by the designation. Additionally, RMAT designation can be revoked if the criteria for eligibility cease to be met as clinical data emerges. Further, even if we received accelerated approval, any post-approval studies required to confirm and verify clinical benefit may not show such benefit, which could lead to withdrawal of any approvals we have obtained. Receiving accelerated approval does not assure that the product’s accelerated approval will eventually be converted to a traditional approval. Moreover, under FDORA, the FDA is permitted to require, as appropriate, that a post-approval confirmatory study or studies be underway prior to approval or within a specified time period after

64

the date of approval for a product granted accelerated approval. FDORA also requires sponsors to send updates to the FDA every 180 days on the status of such studies, including progress toward enrollment targets, and the FDA must promptly post this information publicly. FDORA also gives the FDA increased authority to withdraw approval of a drug or biologic granted accelerated approval on an expedited basis if the sponsor fails to conduct such studies in a timely manner, send the necessary updates to the FDA, or if such post-approval studies fail to verify the drug’s predicted clinical benefit. Under FDORA, the FDA is empowered to take action, such as issuing fines, against companies that fail to conduct with due diligence any post-approval confirmatory study or submit timely reports to the agency on their progress.

If the FDA determines that a product candidate offers a treatment for a serious condition and, if approved, the product would provide a significant improvement in safety or effectiveness, the FDA may designate the product candidate for priority review. A priority review designation means that the goal for the FDA to review an application is six months, rather than the standard review period of ten months. The FDA has broad discretion with respect to whether or not to grant priority review status to a product candidate, so even if we believe a particular product candidate is eligible for such designation or status, the FDA may decide not to grant it. Moreover, a priority review designation does not necessarily result in expedited regulatory review or approval process or necessarily confer any advantage with respect to approval compared to conventional FDA procedures. Receiving priority review from the FDA does not guarantee approval within the six-month review cycle or at all.

We may seek orphan drug designation, or ODD, from the European Commission for one or more of our product candidates. For instance, CTX001 has been granted ODD by the European Commission for the treatment of TDT and SCD. An ODD provides a number of benefits, including fee reductions, regulatory assistance, and the ability to apply for a centralized EU marketing authorization. The grant of a marketing authorization for an orphan drug leads to a ten-year period of market exclusivity. During this market exclusivity period, neither the European Commission nor the member states can accept an application or grant a marketing authorization for the same therapeutic indication in respect of a “similar medicinal product.” However, the market exclusivity period for the authorized therapeutic indication may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for ODD because, for example, the product is sufficiently profitable not to justify market exclusivity. There are a number of derogations from the ten-year period of market exclusivity pursuant to which the European Commission may grant a marketing authorization for a similar medicinal product in the same therapeutic indication, including where the second applicant can establish that although their product is similar to the orphan medicinal product already authorized, the second product is safer, more effective or otherwise clinically superior. There is no assurance that we will be able to obtain ODD for any of our other product candidates. ODD does not change the standards for product approval, and there is no assurance that such designation will result in expedited review or approval.

Finally, we have obtained and may seek to qualify our product candidates under the PRIority MEdicines, or PRIME scheme from the EMA. For instance, exa-cel has been granted PRIME designation for the treatment of TDT and SCD. The PRIME scheme is open to medicines under development and for which the applicant intends to apply for an initial marketing authorization applicationMAA through the centralized procedure. Eligible products must target conditions for which where is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the EU or, if there is, the new medicine will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods or therapy or improving existing ones. There is no assurance that we will be able to obtain PRIME qualification for anyother of our product candidates. PRIME does not change the standards for product approval, and there is no assurance that such qualification will result in expedited review or approval. Moreover, where, during the course of development, a medicine no longer meets the eligibility criteria, support under the PRIME scheme may be withdrawn.

Gene-Editing Products Are NovelWe May Seek Designation For Our Platform Technology As A Designated Platform Technology, But We Might Not Receive Such Designation, And Even If We Do, Such Designation May Not Lead To A Faster Regulatory Review Or Approval Process.

We may seek designation for our platform technology as a designated platform technology. Under the Food and Drug Omnibus Reform Act of 2022 (“FDORA”), a platform technology incorporated within or utilized by a drug or biological product is eligible for designation as a designated platform technology if (1) the platform technology is incorporated in, or utilized by, a drug approved under a BLA; (2) preliminary evidence submitted by the sponsor of the approved or licensed drug, or a sponsor that has been granted a right of reference to data submitted in the application for such drug, demonstrates that the platform technology has the potential to be incorporated in, or utilized by, more than one drug without an adverse effect on quality, manufacturing, or safety; and (3) data or information submitted by the applicable person indicates that incorporation or utilization of the platform technology has a reasonable likelihood to bring significant efficiencies to the drug development or manufacturing process and to the review process. A sponsor may request the FDA to designate a platform technology as a designated platform technology concurrently with, or at any time after, submission of an IND application for a drug that incorporates or utilizes the platform technology that is the subject of the request. If so designated, the FDA may expedite the development and review of any subsequent original BLA for a drug that uses or incorporates the platform technology. Even if we believe our platform technology meets the criteria for such designation, the FDA may disagree and instead determine not to grant such designation. In addition, the receipt of such designation for a platform technology does not ensure that a drug will be developed more quickly or receive FDA approval. Moreover, the FDA may revoke a designation if the FDA determines that a designated platform technology no longer meets the criteria for such designation.

We May Be ComplexUnable To Obtain Orphan Drug Designation Or Exclusivity. If Our Competitors Are Able To Obtain Orphan Drug Exclusivity For Products That Constitute The Same Drug And Difficult To Manufacture. We Could Experience Manufacturing Problems That Result In Delays InTreat The Development Or Commercialization OfSame Indications As Our Product Candidates, Or Otherwise Harm Our Business.We May Not Be Able To Have Competing Products Approved By The Applicable Regulatory Authority For A Significant Period Of Time.

The manufacturing process usedWe have received orphan drug designation in the United States from the FDA for certain of our programs, including for CTX130 for the treatment of T-cell lymphomas. We also have received orphan drug designation from the FDA and the European Commission for exa-cel for the treatment of TDT and SCD. We may in the future seek orphan drug designation for certain of our other product candidates, but we may be unable to produce CRISPR/Cas9-basedmaintain orphan drug designation or obtain any benefits associated with orphan drug designation, including market exclusivity. Regulatory authorities in some jurisdictions, including the United States and the European Union, may designate drugs and biologics intended to treat relatively small patient populations as orphan drugs. Under the Orphan Drug Act of 1983, FDA may designate a product candidate as an orphan drug if it is intended to treat a rare disease or condition, which is defined as a disease or condition having a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. In the European Union, the European Commission after

65

recommendation from the EMA’s Committee for Orphan Medicinal Products grants orphan drug designation to promote the development of products that are intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than 5 in 10,000 persons in the European Union. Additionally, orphan designation is granted for products intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition and when, without incentives, it is unlikely that sales of the drug in the European Union would be sufficient to justify the necessary investment in developing the drug or biologic product. An orphan drug designation provides a number of benefits, including fee reductions, regulatory assistance, and in the European Union the ability to apply for a centralized EU marketing authorization.

Certain of our current product candidates and our future product candidates may target patient populations that are smaller than the numbers described above. If we request orphan drug designation for our product candidates, there can be complex,no assurances that FDA or the European Commission will grant any of our product candidates such designation. Additionally, the designation of any of our product candidates as they are novel and havean orphan product does not been validatedguarantee that any regulatory agency will accelerate regulatory review of, or ultimately approve, that product candidate, nor does it limit the ability of any regulatory agency to grant orphan drug designation to product candidates of other companies that treat the same indications as our product candidates prior to our product candidates receiving exclusive marketing approval.

Generally, if a product candidate with an orphan drug designation receives the first marketing approval for clinical and commercial production. Several factors could cause production interruptions, including equipment malfunctions, facility contamination, raw material shortagesthe indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA or contamination, natural disasters, disruptionthe European Commission from approving another marketing application for a product that constitutes the same drug treating the same indication for that marketing exclusivity period, except in utility services, human error or disruptionslimited circumstances. If another sponsor receives such approval before we do (regardless of our orphan drug designation), we will be precluded from receiving marketing approval for our product for the applicable exclusivity period. The applicable period is seven years in the operations of our suppliers.

Our product candidates will require processing stepsUnited States and 10 years in the European Union. The exclusivity period in the United States can be extended by six months if the sponsor submits pediatric data that are more complex than those requiredfairly respond to a written request from the FDA for most small molecule drugs. Moreover, unlike small molecules,such data. The exclusivity period in the physical and chemical properties of biologics generally cannotEuropean Union can be fully characterized. As a result, assaysreduced to six years if, at the end of the finished product may not be sufficient to ensurefifth year, it is established that the product will perform inno longer meets the intended manner. Accordingly, we will employ multiple steps to controlcriteria for orphan drug designation, because, for example, the manufacturing processproduct is sufficiently profitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be revoked if any regulatory agency determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the product to meet the needs of patients with the rare disease or condition.

Even if we obtain orphan drug exclusivity for a product candidate, that the process works andexclusivity may not effectively protect the product candidate from competition because different drugs can be approved for the same condition. In the United States, even after an orphan drug is made strictlyapproved, the FDA may subsequently approve another drug for the same condition if the FDA concludes that the latter drug is not the same drug, including if it is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care. In the European Union, marketing authorization may be granted to a similar medicinal product for the same orphan indication if:

There is no assurance that we will be able to obtain orphan drug designation for other of our other product candidates. Orphan drug designation does not change the standards for product approval, and consistently in compliance with the process. Problems with the manufacturing process, even minor deviations from the normal process, couldthere is no assurance that such designation will result in product defectsexpedited review or manufacturing failures that result in lot failures, product recalls, product liability claims or insufficient inventory. We may encounter problems achieving adequate quantities and quality of clinical grade materials that meet FDA, the EMA or other applicable standards or specifications with consistent and acceptable production yields and costs.approval.

In addition, the FDA, the EMA and other health regulatory authorities may require us to submit samples of any lot of any approved product together with the protocols showing the results of applicable tests at any time. Under some circumstances, the FDA, the EMA or other health regulatory authorities may require that we not distribute a lot until the relevant agency authorizes its release. Slight deviations in the manufacturing process, including those affecting quality attributes and stability, may result in unacceptable changes in the product that could result in lot failures or product recalls. Lot failures or product recalls could cause us to delay product launches or clinical trials, which could be costly to us and otherwise harm our business, financial condition, results of operations and prospects. Problems in our manufacturing process could restrict our ability to meet market demand for our products.

We also may encounter problems hiring and retaining directly or through contract manufacturing organizations the experienced scientific, quality-control and manufacturing personnel needed to operate our manufacturing processes, which could result in delays in production or difficulties in maintaining compliance with applicable regulatory requirements. Any problems in our manufacturing process or facilities could make us a less attractive collaborator for potential partners, including larger pharmaceutical companies and academic research institutions, which could limit our access to additional attractive development programs.  

Adverse Public Perception Of Gene Editing And Cellular Therapy Products May Negatively Impact Demand For, Or Regulatory Approval Of, Our Product Candidates.

Our product candidates involve editing the human genome. The clinical and commercial success of our product candidates will depend in part on public acceptance of the use of gene-editinggene editing therapies for the prevention or treatment of human diseases. Public attitudes may be influenced by claims that gene editing is unsafe, unethical, or immoral, and, consequently, our products may not gain the acceptance of the public or the medical community. Negative public reaction to gene therapy in general could result in greater government regulation and stricter labeling requirements of gene-editinggene editing products, including any of our product candidates, and could cause a decrease in the demand for any products we may develop. Adverse public attitudes may adversely impact our ability to enroll clinical trials. Moreover, our success will depend upon physicians prescribing, and their patients being willing to receive, treatments that involve the use of product candidates we may develop in lieu of, or in addition to, existing treatments with which they are already familiar and for which greater clinical data may be available.

66

In particular, gene-editinggene editing technology is subject to public debate and heightened regulatory scrutiny due to ethical concerns relating to the application of gene-editinggene editing technology to human embryos or the human germline. For example, in April 2016, a group of scientists reported on their attempts to edit the genome of human embryos to modify the gene for hemoglobin beta. This is the gene in which a mutation occurs in patients with the inherited blood disorder beta thalassemia. Although this research was purposefully conducted in embryos that were not viable, the work prompted calls for a moratorium or other types of restrictions on gene editing of human eggs, sperm, and embryos. Additionally, in November 2018, Dr. Jiankui He, a biophysics researcher who was an associate professor in the Department of Biology of the Southern University of Science and Technology in Shenzhen, China, reportedly claimed he had created the first human genetically edited babies, twin girls. This claim, and another that Dr. He had helped create a second gene-edited pregnancy, was subsequently confirmed by Chinese authorities and was negatively received by the public, in particular by those in the scientific community. News reports indicate that Dr. He was sentenced to three years in prison and fined $430,000 in December 2019 by the Chinese government for illegal medical practice in connection with such activities. In the wake of the claim, the World Health Organization established a new advisory committee to create global governance and oversight standards for human gene editing. The Alliance for Regenerative Medicine in Washington, D.C. has called for a voluntary moratorium on the use of gene-editinggene editing technologies, including CRISPR/Cas9, in research that involves altering human embryos or human germline cells and has also released principles for the use of gene editing in therapeutic applications endorsed by a number of companies that use gene-editinggene editing technologies. Similarly, the NIH has announced that it would not fund any use of gene-editinggene editing technologies in human embryos, noting that there are multiple existing legislative and regulatory prohibitions against such work, including the Dickey-Wicker Amendment, which prohibits the use of appropriated funds for the creation of human embryos for research purposes or for research in which human embryos are destroyed. Laws in the United Kingdom prohibit genetically modified embryos from being implanted into women, but embryos can be altered in research labs under license from the Human Fertilisation and Embryology Authority. Research on embryos is more tightly controlled in many other European countries.

Although we do not use our technologies to edit human embryos or the human germline, such public debate about the use of gene-editinggene editing technologies in human embryos and heightened regulatory scrutiny could prevent or delay our development of product candidates. More restrictive government regulations or negative public opinion would have a negative effect on our business or financial condition and may delay or impair our development and commercialization of product candidates or demand for any products we may develop. Adverse events in our preclinical studies or clinical trials or those of our competitors or of academic researchers utilizing gene-editinggene editing technologies, even if not ultimately attributable to product candidates we may identify and develop, and the resulting publicity could result in increased governmental regulation, unfavorable public perception, potential regulatory delays in the testing or approval of potential product candidates we may identify and develop, stricter labeling requirements for those product candidates that are approved, and a decrease in demand for any such product candidates.

If In The Future, We Are Unable To Establish Sales And Marketing Capabilities Or Enter Into Agreements With Third Parties To Sell And Market Products Based On Our Technologies, We May Not Be Successful In Commercializing Our Products If And When Any Products Candidates Are Approved And We May Not Be Able To Generate Any Revenue.

We do not currently have a sales or marketing infrastructure and, as a company, have no experience in the sale, marketing or distribution of therapeutic products. To achieve commercial success for any approved product candidate for which we retain sales and marketing responsibilities, we must build our sales, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. In the future, we may choose to build a focused sales and marketing infrastructure to sell, or participate in sales activities with our collaborators for, some of our product candidates, if any are approved.

There are risks involved with both establishing our own sales and marketing capabilities and entering into arrangements with third parties to perform these services. For example, recruiting and training a sales force is expensive and time consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.

Factors that may inhibit our efforts to commercialize our product candidates on our own include: