UNITED STATES
FORM 10-Q
(Mark One)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
March 31, 2024
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
EDITAS MEDICINE, INC.
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Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.0001 par value per share EDIT The Nasdaq Stock Market LLC Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ The number of shares of Common Stock outstanding as of Condensed Consolidated Balance Sheets as of Condensed Consolidated Statements of Operations for the three Condensed Consolidated Statements of Comprehensive Loss for the three Condensed Consolidated Statements of Stockholders’ Equity for the three Condensed Consolidated Statements of Cash Flows for the (617) ⌧☒ No ◻☐⌧☒ No ◻☐Large accelerated filer ⌧☒⌧☒July 28, 2023May 3, 2024 was 81,632,619.PagePage3333June 30, 2023March 31, 2024 and December 31, 2022202333 and six months ended June 30, 2023March 31, 2024 and 2022202344 and six months ended June 30, 2023March 31, 2024 and 2022202355 and six months ended June 30, 2023March 31, 2024 and 2022202366sixthree months ended June 30, 2023March 31, 2024 and 202220237798161425262626272827272827282828292930
June 30, December 31, 2023 2022 ASSETS Current assets: Cash and cash equivalents $ 220,817 $ 141,522 Marketable securities 211,151 202,752 Accounts receivable 2,286 5,145 Prepaid expenses and other current assets 6,724 7,335 Total current assets 440,978 356,754 Marketable securities 48,065 93,097 Property and equipment, net 12,846 15,569 Right-of-use assets 34,811 43,648 Restricted cash and other non-current assets 5,253 5,253 Total assets $ 541,953 $ 514,321 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 8,066 $ 9,511 Accrued expenses 27,896 31,296 Deferred revenue, current 8,221 8,221 Operating lease liabilities 10,330 11,082 Total current liabilities 54,513 60,110 Operating lease liabilities, net of current portion 26,856 32,864 Deferred revenue, net of current portion 60,667 60,667 Total liabilities 142,036 153,641 Stockholders’ equity Preferred stock, $0.0001 par value per share: 5,000,000 shares authorized; no shares issued or outstanding — — Common stock, $0.0001 par value per share: 195,000,000 shares authorized; 81,616,909 and 68,847,382 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively 8 7 Additional paid-in capital 1,569,651 1,442,405 Accumulated other comprehensive loss (2,285) (3,601) Accumulated deficit (1,167,457) (1,078,131) Total stockholders’ equity 399,917 360,680 Total liabilities and stockholders’ equity $ 541,953 $ 514,321 Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Collaboration and other research and development revenues $ 2,887 $ 6,362 $ 12,738 $ 13,134 Operating expenses: Research and development 29,779 43,659 67,583 81,635 General and administrative 17,202 16,937 40,211 36,483 Total operating expenses 46,981 60,596 107,794 118,118 Operating loss (44,094) (54,234) (95,056) (104,984) Other income, net: Other (expense) income, net (7) 235 (1,590) 1 Interest income, net 3,811 546 7,320 1,015 Total other income, net 3,804 781 5,730 1,016 Net loss $ (40,290) $ (53,453) $ (89,326) $ (103,968) Net loss per share, basic and diluted $ (0.56) $ (0.78) $ (1.27) $ (1.52) Weighted-average common shares outstanding, basic and diluted 71,376,678 68,640,858 70,157,204 68,563,348 Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Net loss $ (40,290) $ (53,453) $ (89,326) $ (103,968) Other comprehensive loss: Unrealized (loss) gain on marketable debt securities (6) (878) 1,316 (2,894) Comprehensive loss $ (40,296) $ (54,331) $ (88,010) $ (106,862) Accumulated Additional Other Other Total Common Stock Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Capital (Loss) Gain Deficit Equity Balance at December 31, 2022 68,847,382 $ 7 $ 1,442,405 $ (3,601) $ (1,078,131) $ 360,680 Exercise of stock options — — — — Vesting of restricted common stock awards 146,209 — — — — — Stock-based compensation expense — — 4,507 — — 4,507 Unrealized gain on marketable debt securities — — — 1,322 — 1,322 Net loss — — — — (49,036) (49,036) Balance at March 31, 2023 68,993,591 $ 7 $ 1,446,912 $ (2,279) $ (1,127,167) $ 317,473 Issuance of common stock from public offering, net commissions, underwriting discounts and offering costs 12,500,000 1 117,078 — — 117,079 Exercise of stock options 3,122 — 11 — — 11 Stock-based compensation expense — — 5,215 — — 5,215 Vesting of restricted common stock awards 64,492 — — — — — Issuance of common stock under employee stock purchase plan 55,704 — 435 — — 435 Unrealized loss on marketable debt securities — — — (6) — (6) Net loss — — — — (40,290) (40,290) Balance at June 30, 2023 81,616,909 $ 8 $ 1,569,651 $ (2,285) $ (1,167,457) $ 399,917 Accumulated Additional Other Other Total Common Stock Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Capital (Loss) Gain Deficit Equity Balance at December 31, 2021 68,435,257 $ 7 $ 1,411,827 $ (493) $ (857,699) $ 553,642 Exercise of stock options 12,573 — 218 — — 218 Vesting of restricted common stock awards 154,834 — — — — — Stock-based compensation expense — — 11,431 — — 11,431 Unrealized loss on marketable debt securities — — — (2,016) — (2,016) Net loss — — — — (50,515) (50,515) Balance at March 31, 2022 68,602,664 $ 7 $ 1,423,476 $ (2,509) $ (908,214) $ 512,760 Exercise of stock options 20 — — — — — Vesting of restricted common stock awards 77,884 — — — — — Stock-based compensation expense — — 6,618 — — 6,618 Issuance of common stock under employee stock purchase plan 37,866 — 367 — — 367 Unrealized loss on marketable debt securities — — — (878) — (878) Net loss — — — — (53,453) (53,453) Balance at June 30, 2022 68,718,434 $ 7 $ 1,430,461 $ (3,387) $ (961,667) $ 465,414 Six Months Ended June 30, 2023 2022 Cash flow from operating activities Net loss $ (89,326) $ (103,968) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 9,722 18,049 Depreciation 3,084 3,156 Loss on disposal of fixed assets 1,583 — Other non-cash items, net (1,473) 57 Changes in operating assets and liabilities: Accounts receivable 2,859 (446) Prepaid expenses and other current assets 611 (908) Right-of-use assets 8,837 5,507 Other non-current assets — (719) Accounts payable (1,256) 1,252 Accrued expenses (2,360) 402 Deferred revenue — (3,333) Operating lease liabilities (6,760) (6,121) Net cash used in operating activities (74,479) (87,072) Cash flow from investing activities Purchases of property and equipment (3,173) (2,880) Proceeds from the sale of equipment — 18 Purchases of marketable securities (68,183) (183,519) Proceeds from maturities of marketable securities 107,605 238,750 Net cash provided by investing activities 36,249 52,369 Cash flow from financing activities Proceeds from offering of common stock, net of issuance costs 117,079 — Proceeds from exercise of stock options 11 218 Proceeds from issuance of common stock under employee stock purchase plan 435 367 Net cash provided by financing activities 117,525 585 Net increase (decrease) in cash, cash equivalents, and restricted cash 79,295 (34,118) Cash, cash equivalents, and restricted cash, beginning of period 145,399 207,396 Cash, cash equivalents, and restricted cash, end of period $ 224,694 $ 173,278 Supplemental disclosure of cash and non-cash activities: Fixed asset additions included in accounts payable and accrued expenses $ 212 $ 127 Offering expenses included in accounts payable and accrued expenses 230 — Cash paid in connection with operating lease liabilities 5,738 7,089 Right-of-use assets obtained in exchange of operating lease obligations 1,069 — conjunction with the Company’s license agreement with Vertex Pharmaceuticals, Inc. (“Vertex”). The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Editas Securities Corporation and Editas Medicine, LLC. All intercompany transactions and balances Allowance Gross Gross Amortized for Credit Unrealized Unrealized Fair June 30, 2023 Cost Losses Gains Losses Value Cash equivalents and marketable securities: Money market funds $ 220,817 $ — $ — $ — $ 220,817 Government agency securities 182,221 — — (1,829) 180,392 Corporate notes/bonds 49,454 — — (413) 49,041 Commercial paper 22,402 — — (32) 22,370 U.S. Treasuries 7,424 — — (11) 7,413 Total $ 482,318 $ — $ — $ (2,285) $ 480,033 Allowance Gross Gross Amortized for Credit Unrealized Unrealized Fair December 31, 2022 Cost Losses Gains Losses Value Cash equivalents and marketable securities: Government agency securities $ 161,902 $ — $ 11 $ (2,556) $ 159,357 Money market funds 141,522 — — — 141,522 Corporate notes/bonds 57,575 — 2 (694) 56,883 U.S. Treasuries 50,019 — 3 (229) 49,793 Commercial paper 29,954 — 3 (141) 29,816 Total $ 440,972 $ — $ 19 $ (3,620) $ 437,371 Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable June 30, Identical Assets Inputs Inputs Financial Assets 2023 (Level 1) (Level 2) (Level 3) Cash equivalents: Money market funds $ 220,817 $ 220,817 $ — $ — Marketable securities: Government agency securities 180,392 — 180,392 — Corporate notes/bonds 49,041 — 49,041 — Commercial paper 22,370 — 22,370 — U.S. Treasuries 7,413 7,413 — — Restricted cash and other non-current assets: Money market funds 3,877 3,877 — — Total financial assets $ 483,910 $ 232,107 $ 251,803 $ — Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs Financial Assets 2022 (Level 1) (Level 2) (Level 3) Cash equivalents: Money market funds $ 141,522 $ 141,522 $ — $ — Marketable securities: Government agency securities 159,357 — 159,357 — Corporate bonds 56,883 — 56,883 — U.S. Treasuries 49,793 49,793 — — Commercial paper 29,816 — 29,816 — Restricted cash and other non-current assets: Money market funds 3,877 3,877 — — Total financial assets $ 441,248 $ 195,192 $ 246,056 $ — As of June 30, December 31, 2023 2022 External research and development expenses $ 17,976 $ 16,452 Employee related expenses 6,412 10,140 Intellectual property and patent related fees 1,527 1,809 Professional service expenses 1,903 1,260 Other expenses 78 1,635 Total accrued expenses $ 27,896 $ 31,296 Property and equipment, net consisted of the following (in thousands): As of June 30, December 31, 2023 2022 Laboratory equipment $ 24,683 $ 24,407 Leasehold improvements 9,648 9,761 Computer equipment 875 875 Construction-in-progress 653 1,573 Furniture and office equipment 264 264 Software 215 215 Total property and equipment 36,338 37,095 Less: accumulated depreciation (23,492) (21,526) Property and equipment, net $ 12,846 $ 15,569 For the six months ended June 30, 2023 Balance at December 31, 2022 Additions Deductions Balance at June 30, 2023 Accounts receivable $ 5,145 $ 2,141 $ (5,000) $ 2,286 Contract liabilities: Deferred revenue $ 68,888 $ — $ — $ 68,888 and $50.2 million as long-term deferred revenue in the accompanying consolidated balance sheets. Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Research and development $ 2,525 $ 3,064 $ 4,611 $ 6,758 General and administrative 2,690 3,554 5,111 11,291 Total stock-based compensation expense $ 5,215 $ 6,618 $ 9,722 $ 18,049 Weighted Average Grant Date Fair Value Shares Per Share Unvested restricted stock unit awards as of December 31, 2022 1,499,070 $ 18.70 Issued 1,071,802 $ 8.79 Vested (210,701) $ 19.70 Forfeited (277,083) $ 20.98 Unvested restricted stock unit awards as of June 30, 2023 2,083,088 $ 13.20 March 31, 2024: Weighted Average Remaining Aggregate Intrinsic Shares Exercise Price Contractual Life (years) Value Outstanding at December 31, 2022 5,276,148 $ 23.99 8.0 $ 401,529 Granted 1,730,319 $ 8.79 Exercised (3,122) $ 3.38 Cancelled (815,014) $ 29.66 Outstanding at June 30, 2023 6,188,331 $ 19.25 7.7 $ 466,217 Exercisable at June 30, 2023 2,550,662 $ 26.55 5.8 $ 321,139 March 31, 2024: For the three and six months ended June 30, 2023 2022 Unvested restricted stock unit awards 2,083,088 1,455,400 Outstanding stock options 6,188,331 5,025,062 Total 8,271,419 6,480,462 The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, We are a clinical stage year-end 2024. an undisclosed indication by year-end 2024. gene editing, seeking to identify potential product candidates, and undertaking preclinical 2020, and payments received in conjunction with our license agreement with Vertex. We also anticipate increased expenses related to reimbursement of third-party patent-related expenses and expenses associated with operating as a public company, including costs for audit, legal, regulatory, and tax-related services, director and significant. Three Months Ended June 30, 2023 2022 Dollar Change Percentage Change Collaboration and other research and development revenues $ 2,887 $ 6,362 $ (3,475) (55) % Operating expenses: Research and development 29,779 43,659 (13,880) (32) % General and administrative 17,202 16,937 265 2 % Total operating expenses 46,981 60,596 (13,615) (22) % Other income, net: Other (expense) income, net (7) 235 (242) n/m Interest income, net 3,811 546 3,265 n/m Total other income, net 3,804 781 3,023 n/m Net loss $ (40,290) $ (53,453) $ 13,163 (25) % Collaboration and other research and development revenues Three Months Ended June 30, 2023 2022 Dollar Change Percentage Change Employee related expenses $ 10,312 $ 11,740 $ (1,428) (12) % External research and development expenses 7,117 19,937 (12,820) (64) % Facility expenses 5,299 4,555 744 16 % Other expenses 3,519 1,848 1,671 90 % Stock-based compensation expenses 2,525 3,064 (539) (18) % Sublicense and license fees 1,007 2,515 (1,508) (60) % Total research and development expenses $ 29,779 $ 43,659 $ (13,880) (32) % approximately $0.8 million in increased stock-based compensation expenses due to the achievement of certain performance-based vesting of restricted stock units; by approximately $0.5 million in decreased facility expenses. Three Months Ended June 30, 2023 2022 Dollar Change Percentage Change Employee related expenses $ 4,625 $ 4,233 $ 392 9 % Professional service expenses 4,503 2,614 1,889 72 % Intellectual property and patent related fees 2,886 3,437 (551) (16) % Stock-based compensation expenses 2,690 3,554 (864) (24) % Facility and other expenses 2,498 3,099 (601) (19) % Total general and administrative expenses $ 17,202 $ 16,937 $ 265 2 % The approximately $1.1 million in decreased intellectual property and patent related fees due to reduced legal activity. by the following: Six Months Ended June 30, 2023 2022 Dollar Change Percentage Change Collaboration and other research and development revenues $ 12,738 $ 13,134 $ (396) (3) % Operating expenses: Research and development 67,583 81,635 (14,052) (17) % General and administrative 40,211 36,483 3,728 10 % Total operating expenses 107,794 118,118 (10,324) (9) % Other income, net Other (expense) income, net (1,590) 1 (1,591) n/m Interest income, net 7,320 1,015 6,305 n/m Total other income, net 5,730 1,016 4,714 n/m Net loss $ (89,326) $ (103,968) $ 14,642 (14) % Six Months Ended June 30, 2023 2022 Dollar Change Percentage Change Employee related expenses $ 23,772 $ 23,735 $ 37 n/m External research and development expenses 19,518 34,623 (15,105) (44) % Facility expenses 10,980 9,062 1,918 21 % Other expenses 6,390 3,968 2,422 61 % Stock-based compensation expenses 4,611 6,758 (2,147) (32) % Sublicense and license fees 2,312 3,489 (1,177) (34) % Total research and development expenses $ 67,583 $ 81,635 $ (14,052) (17) % Six Months Ended June 30, 2023 2022 Dollar Change Percentage Change Professional service expenses $ 13,506 $ 4,562 $ 8,944 n/m Employee related expenses 8,752 8,358 394 5 % Intellectual property and patent related fees 7,918 6,904 1,014 15 % Stock-based compensation expenses 5,111 11,291 (6,180) (55) % Facility and other expenses 4,924 5,368 (444) (8) % Total general and administrative expenses $ 40,211 $ 36,483 $ 3,728 10 % Liquidity and Capital Resources Six Months Ended June 30, 2023 2022 Net cash (used in) provided by: Operating activities $ (74,479) $ (87,072) Investing activities 36,249 52,369 Financing activities 117,525 585 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 79,295 $ (34,118) Net Cash (Used in) Provided by Investing Activities commenced for accounting purposes and it is not expected to commence until the second quarter of 2024. The We may terminate the license and service agreement in our discretion upon twelve months' prior written notice. Changes in Internal Control over Financial Reporting Description of Exhibit 31.2* 32.1+ 101* The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended 104* EDITAS MEDICINE, INC. /s/ Erick Lucera Erick Lucera Chief Financial OfficerMarch 31,
2024December 31,
2023ASSETS Current assets: Cash and cash equivalents $ 69,227 $ 123,652 Marketable securities 226,944 199,459 Accounts receivable 245 10,187 Prepaid expenses and other current assets 9,139 7,531 Total current assets 305,555 340,829 Marketable securities 80,605 104,024 Property and equipment, net 13,257 12,032 Right-of-use assets 31,443 33,680 Restricted cash and other non-current assets 9,487 8,588 Total assets $ 440,347 $ 499,153 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 7,966 $ 8,269 Accrued expenses 31,481 34,563 Deferred revenue, current 14,684 8,221 Operating lease liabilities 12,356 12,164 Total current liabilities 66,487 63,217 Operating lease liabilities, net of current portion 21,783 24,372 Deferred revenue, net of current portion 54,204 60,667 Other non-current liabilities 3,473 1,800 Total liabilities 145,947 150,056 Stockholders’ equity Preferred stock, $0.0001 par value per share: 5,000,000 shares authorized; no shares issued or outstanding — — Common stock, $0.0001 par value per share: 195,000,000 shares authorized; 82,234,951 and 81,767,263 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively 8 8 Additional paid-in capital 1,588,018 1,580,241 Accumulated other comprehensive (loss) income (326) 198 Accumulated deficit (1,293,300) (1,231,350) Total stockholders’ equity 294,400 349,097 Total liabilities and stockholders’ equity $ 440,347 $ 499,153 Three Months Ended
March 31,2024 2023 Collaboration and other research and development revenues $ 1,135 $ 9,851 Operating expenses: Research and development 48,787 37,804 General and administrative 19,339 23,008 Total operating expenses 68,126 60,812 Operating loss (66,991) (50,961) Other income, net: Other income (expense), net 6 (1,584) Interest income, net 5,035 3,509 Total other income, net 5,041 1,925 Net loss $ (61,950) $ (49,036) Net loss per share, basic and diluted $ (0.76) $ (0.71) Weighted-average common shares outstanding, basic and diluted 81,938,839 68,924,180 Three Months Ended
March 31,2024 2023 Net loss $ (61,950) $ (49,036) Other comprehensive loss: Unrealized (loss) gain on marketable debt securities (524) 1,322 Comprehensive loss $ (62,474) $ (47,714) Common Stock Additional
Paid-In
CapitalAccumulated
Other
Comprehensive
Income (Loss)Accumulated
DeficitTotal
Stockholders’
EquityShares Amount Balance at December 31, 2023 81,767,263 $ 8 $ 1,580,241 $ 198 $ (1,231,350) $ 349,097 Exercise of stock options 21,975 — 192 — — 192 Vesting of restricted common stock awards 445,713 — — — — — Stock-based compensation expense — — 7,585 — — 7,585 Unrealized loss on marketable debt securities — — — (524) — (524) Net loss — — — — (61,950) (61,950) Balance at March 31, 2024 82,234,951 $ 8 $ 1,588,018 $ (326) $ (1,293,300) $ 294,400 Common Stock Additional
Paid-In
CapitalAccumulated
Other
Comprehensive
LossAccumulated
DeficitTotal
Stockholders’
EquityShares Amount Balance at December 31, 2022 68,847,382 $ 7 $ 1,442,405 $ (3,601) $ (1,078,131) $ 360,680 Exercise of stock options — — — — — — Vesting of restricted common stock awards 146,209 — — — — — Stock-based compensation expense — — 4,507 — — 4,507 Unrealized loss on marketable debt securities — — — 1,322 — 1,322 Net loss — — — — (49,036) (49,036) Balance at March 31, 2023 68,993,591 $ 7 $ 1,446,912 $ (2,279) $ (1,127,167) $ 317,473 Three Months Ended
March 31,2024 2023 Cash flow from operating activities Net loss $ (61,950) $ (49,036) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 7,585 4,507 Depreciation 1,409 1,544 Loss on disposal of fixed assets — 1,583 Net amortization of premiums and discounts on marketable securities (1,716) (693) Changes in operating assets and liabilities: Accounts receivable 9,942 4,903 Prepaid expenses and other current assets (1,607) 1,558 Right-of-use assets 2,237 7,304 Other non-current assets (899) (1,500) Accounts payable (1,456) (557) Accrued expenses (2,694) 1,427 Operating lease liabilities (2,396) (6,808) Other current and non-current liabilities, net 1,673 — Net cash used in operating activities (49,872) (35,768) Cash flow from investing activities Purchases of property and equipment (1,871) (1,840) Purchases of marketable securities (86,224) (40,798) Proceeds from maturities of marketable securities 83,350 65,905 Net cash (used in) provided by investing activities (4,745) 23,267 Cash flow from financing activities Proceeds from exercise of stock options 192 — Net cash provided by financing activities 192 — Net decrease in cash, cash equivalents, and restricted cash (54,425) (12,501) Cash, cash equivalents, and restricted cash, beginning of period 127,529 145,399 Cash, cash equivalents, and restricted cash, end of period $ 73,104 $ 132,898 Cash and cash equivalents, end of period 69,227 129,021 3,877 3,877 Cash, cash equivalents, and restricted cash, end of period $ 73,104 $ 132,898 Supplemental disclosure of cash and non-cash activities: Fixed asset additions included in accounts payable and accrued expenses $ 1,644 $ 370 Cash paid in connection with operating lease liabilities 3,847 3,897 Remeasurement of operating lease liabilities and right-of-use assets due to lease modification 794 (3,781) 7genomegene editing company dedicated to developing potentially transformative genomic medicines to treat a broad range of serious diseases. The Company was incorporated in the state of Delaware in September 2013. Its principal offices are in Cambridge, Massachusetts.Inc., a wholly-owned subsidiary of the Bristol-Myers Squibb Company (“BMS”), and payments received under a strategic alliance and option agreement with Allergan Pharmaceuticals International Limited which was terminated(together with its affiliates, “Allergan”) and payments received in August 2020.June 30, 2023,March 31, 2024, the Company has not sold any shares of its common stock under the ATM Facility.TheAs of May 8, 2024, the issuance date of the consolidated financial statements, the Company expects that its existing cash, cash equivalents and marketable securities at June 30, 2023 will enable itbe sufficient to fund its operating expenses and capital expenditure requirements intofor at least twelve months from the third quarterissuance date of 2025.the consolidated financial statements. The Company had an accumulated deficit of $1.2$1.3 billion at June 30, 2023,March 31, 2024, and will require substantial additional capital to fund its operations. The Company has never generated any product revenue. There can be no assurance that the Company will be able to obtain additional debt or equity financing or generate product revenue or revenues from collaborative partners, on terms acceptable to the Company, on a timely basis or at all. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations, and financial condition.20222023 (the “Annual Report”).8June 30,March 31, 2024 and 2023 and 2022 are referred to as the secondfirst quarter of 20232024 and 2022,2023, respectively. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.June 30, 2023March 31, 2024 (in thousands):Amortized
CostAllowance
for Credit
LossesGross
Unrealized
GainsGross
Unrealized
LossesFair
ValueCash equivalents and marketable securities: Government agency securities $ 59,302 $ — $ — $ (202) $ 59,100 U.S. Treasuries 223,583 — 66 (136) 223,513 Money market funds 69,227 — — — 69,227 Corporate notes/bonds 24,990 — — (54) 24,936 Commercial paper — — — — — Total $ 377,102 $ — $ 66 $ (392) $ 376,776 20222023 (in thousands):Amortized
CostAllowance
for Credit
LossesGross
Unrealized
GainsGross
Unrealized
LossesFair
ValueCash equivalents and marketable securities: Government agency securities $ 103,507 $ — $ — $ (327) $ 103,180 Money market funds 123,652 — — — 123,652 Corporate notes/bonds 30,920 — — (86) 30,834 U.S. Treasuries 168,858 — 611 — 169,469 Commercial paper — — — — — Total $ 426,937 $ — $ 611 $ (413) $ 427,135 June 30, 2023,March 31, 2024, the Company did not hold any marketable securities that had been in an unrealized loss position for more than twelve months. Furthermore, the Company has determined that there were no material changes in the credit risk of the debt securities. As of June 30, 2023,March 31, 2024, the Company holds 3013 securities with an aggregate fair value of $48.1$80.6 million that had remaining maturities greater than one year.sixthree months ended June 30, 2023March 31, 2024 or 2022.9June 30, 2023March 31, 2024 were as follows (in thousands):March 31,
2024Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)Significant
Other
Observable
Inputs
(Level 2)Significant
Unobservable
Inputs
(Level 3)Cash equivalents: Money market funds $ 69,227 $ 69,227 $ — $ — Marketable securities: Government agency securities 59,100 — 59,100 — Corporate notes/bonds 24,936 — 24,936 — U.S. Treasuries 223,513 223,513 — — Restricted cash and other non-current assets: Money market funds 3,877 3,877 — — Total financial assets $ 380,653 $ 296,617 $ 84,036 $ — 20222023 were as follows (in thousands):December 31,
2023Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)Significant
Other
Observable
Inputs
(Level 2)Significant
Unobservable
Inputs
(Level 3)Cash equivalents: Money market funds $ 123,652 $ 123,652 $ — $ — Marketable securities: Government agency securities 103,180 — 103,180 — Corporate notes/bonds 30,834 — 30,834 — U.S. Treasuries 169,469 169,469 — — Restricted cash and other non-current assets: Money market funds 3,877 3,877 — — Total financial assets $ 431,012 $ 296,998 $ 134,014 $ — 10March 31,
2024December 31,
2023External research and development expenses $ 19,122 $ 16,204 Employee related expenses 8,649 11,280 Sublicense and license fees 486 5,063 Intellectual property and patent related fees 2,174 983 Professional service expenses 432 750 Other expenses 618 283 Total accrued expenses $ 31,481 $ 34,563 March 31,
2024December 31,
2023Laboratory and manufacturing equipment $ 25,791 $ 25,043 Leasehold improvements 9,773 9,648 Computer equipment 1,076 1,062 Construction-in-progress 3,655 2,060 Furniture and office equipment 264 264 Software 272 215 Total property and equipment 40,831 38,292 Less: accumulated depreciation (27,574) (26,260) Property and equipment, net $ 13,257 $ 12,032 we, the Company entered into a Licenselicense and Service Agreementservice agreement pursuant to which weit will lease manufacturing space for ourits continued research and development activities. As of June 30, 2023,March 31, 2024, the lease has not commenced for accounting purposes and it is not expected to commence until the second quarter of 2024. The leaselicense and service agreement provides for total remaining lease payments of $87.8up to $85.4 million over a 10-year lease term. The Company may terminate the license and service agreement in its discretion upon twelve months' prior written notice.$1.6$2.0 million and $4.6$3.0 million in expense during the three and six months ended June 30,March 31, 2024 and 2023, respectively, for such reimbursement. The Company incurred an aggregate of $1.8 million and $3.9 million in expense during the three and six months ended June 30, 2022, respectively, for such reimbursement.88. Collaboration and Profit-Sharing Agreementsand Profit-Sharing Agreements” to the consolidated financial11June 30, 2023,March 31, 2024, the Company’s contract liabilities were primarily related to the Company’s collaboration with BMS. The following table presents changes in the Company’s accounts receivable and contract liabilities for the sixthree months ended June 30, 2023March 31, 2024 (in thousands):Balance at December 31, 2023 Additions Deductions Balance at March 31, 2024 Accounts receivable $ 10,187 $ 58 $ (10,000) $ 245 Contract liabilities: Deferred revenue $ 68,888 $ — $ — $ 68,888 and six months ended June 30, 2023,March 31, 2024, the Company did not recognize any collaboration revenue that had been allocated toof the $56.7 million transaction price. As of March 31, 2024, $6.5 million was classified as short-term deferred revenue from BMS.Three Months Ended
March 31,2024 2023 Research and development $ 2,908 $ 2,086 General and administrative 4,677 2,421 Total stock-based compensation expense $ 7,585 $ 4,507 sixthree months ended June 30, 2023:Shares Weighted Average Grant Date Fair Value Per Share Unvested restricted stock unit awards as of December 31, 2023 2,107,147 $ 11.96 Issued 1,300,125 $ 9.85 Vested (445,713) $ 12.66 Forfeited (232,725) $ 15.31 Unvested restricted stock unit awards as of March 31, 2024 2,728,834 $ 10.55 sixthree months ended June 30, 2023March 31, 2024 include 331,000392,100 units granted to certain employees that contain performance-based vesting provisions. The expense related to the performance-based vesting of restricted stock units was $3.4 million for the three months ended March 31, 2024. There was no expense related to the performance-based vesting of restricted stock units for the three months ended March 31, 2023. The Company recognizes the fair value of the performance-based units through the expected achievement date if the performance-based vesting provisions are deemed probable.June 30, 2023,March 31, 2024, total unrecognized compensation expense related to unvested restricted stock unit awards was $14.7$3.3 million, which the Company expects to recognize over a remaining weighted-average period of 2.672.94 years.12sixthree months ended June 30, 2023:Shares Weighted Average
Exercise PriceRemaining
Contractual Life (years)Aggregate Intrinsic
ValueOutstanding at December 31, 2023 6,149,645 $ 16.47 6.89 $ 3,195 Granted 1,982,225 $ 9.73 Exercised (21,975) $ 8.72 Cancelled (318,532) $ 14.95 Outstanding at March 31, 2024 7,791,363 $ 14.84 7.64 $ 296 Exercisable at March 31, 2024 2,912,017 $ 21.76 5.18 $ 241 June 30, 2023,March 31, 2024, total unrecognized compensation expense related to stock options was $31.5$1.2 million, which the Company expects to recognize over a remaining weighted-average period of 2.852.99 years.13March 31, 2024 2023 Unvested restricted stock unit awards 2,728,834 1,989,201 Outstanding stock options 7,791,363 6,159,208 Total 10,520,197 8,148,409 2022,2023, which was filed with the Securities and Exchange Commission (“SEC”) on February 22, 2023 (the28, 2024(the “Annual Report”).Overviewgenomegene editing company dedicated to developing potentially transformative genomic medicines to treat a broad range of serious diseases. We have developed a proprietary gene editing platform based on CRISPR technology and we continue to expand its capabilities. Our product development strategy is to target diseases where gene editing can be used to enable or enhance therapeutic outcomes for patients, while maximizing probability of technical, regulatory and commercial success. We are focused on advancing gene editing medicines to treat hemoglobinopathies, beginning with the continued development of our current ex vivoEDIT-301 renizgamglogene autogedtemcel (“reni-cel”) (formerly known as EDIT-301) program and leveraging the insights gained from this program to pursue next generation in vivo gene editing medicines targeting hematopoietic stem cells (“HSCs”). In parallel, weWe are also pursuing the development of in vivogene editing medicines for other organs and tissues that we believe will significantly differentiate our genomegene editing approach from the current standards of care for serious diseases. As part of these efforts, we are using existing strategic partnerships and collaborations and pursuing further opportunities to extend the reach of our intellectual property portfolio and access complementary technologies to expedite our drug discovery and clinical execution objectives.EDIT-301,reni-cel, is an experimental ex vivo gene-edited medicine to treat sickle cell disease (“SCD”), a severe inherited blood disease that causes premature death, and transfusion-dependent beta thalassemia (“TDT”), the most severe form of beta-thalassemia, another inherited blood disorder characterized by severe anemia. InWe are investigating reni-cel in a single Phase 1/2/3 clinical trial, referred to as the second quarterRUBY trial, for the treatment of severe SCD. In 2022, we dosed the first patient in our Phase 1/2 clinical trial of EDIT-301, which we refer to as ourthe RUBY trial, for the treatment of severe SCD, and in December 2022, announced initial clinical data from the first two patients treated in the RUBY trial. This clinical data supports human proof of concept by showing that EDIT-30114could safely increase expression of fetal hemoglobin to clinically meaningful levels and correct anemia in SCD patients. Afterafter completing sequential dosing of the first two patients, we commenced parallelconcurrent patient dosing in the first quarter of 20232023. We have completed enrollment of the adult cohort and remain on trackcontinue to dose 20 total patients by the end of 2023. We provided an update on the initial clinical data fromin the RUBY trialtrial. We also have enrolled multiple patients in June 2023 and expect to provide an additional clinical update by the end of 2023. adolescent cohort in the trial.April 2023,December 2021, the the U.S. Food and Drug Administration (“FDA”(the “FDA”) granted Orphan Drug Designation to EDIT-301 for the treatment of SCD.In December 2021, the FDA cleared our Investigational New Drug (“IND”) application for a Phase 1/2 clinical trial of EDIT-301reni-cel for the treatment of TDT. This trial, referredTDT, which we refer to as our EDITHAL trial, is designed to assess the safety, tolerability, and preliminary efficacyEdiTHALparallelconcurrent patient dosing in the second quarter of 2023. We provided an initialcontinue to enroll and dose patients in the trial.update on the first patient in the EDITHAL trialwhich remained consistent with and further confirmed earlier clinical results shared in June 2023 and December 2022, supports our belief that reni-cel can be a clinically differentiated, one-time, durable medicine that can provide life-changing clinical benefits to patients with SCD and TDT, specifically driving early and robust correction of anemia and sustained increases in fetal hemoglobin. For additional information regarding these clinical data, please see “Business—Our Gene Editing Medicine Programs—Ex Vivo Hemoglobinopathies” in the Annual Report. We remain on track to provide anpresent additional update by the end of 2023.In June 2023, we announced initial safety and efficacyclinical data from the first four patients with SCD treated with EDIT-301 inboth the RUBY trial and from the first TDT patient treatedEdiTHAL trials in the EDITHAL trial. In the RUBY trial, Patients 1 (male)mid-2024 and 2 (female) reached normal hemoglobin levels five months post-treatment with EDIT-301 and maintained a normal hemoglobin level at the 10- and six-month follow-ups, respectively. Each of these patients had fetal hemoglobin levels of greater than 40% persist during the same time frame. Patient 1’s total hemoglobin returned to a normal physiological level of 16.4g/dL (male normal range: 13.6–18.0 g/dL) at five months after infusion of EDIT-301 and has been maintained at this level at the 10-month follow-up. In addition, Patient 1’s fetal hemoglobin fraction increased from 5% at baseline to 45.4% five months after treatment with EDIT-301 and 43.4% at the 10-month follow-up. Patient 2’s total hemoglobin reached a normal physiological level of 12.7 g/dL (female normal range: 12.0–16.0 g/dL) at five months after infusion of EDIT-301 and fetal hemoglobin increased from 10.8% at baseline to 51.3% at the six-month follow-up. Patients 3 (female) and 4 (male) in the RUBY trial saw increases in total hemoglobin and fetal hemoglobin fractions at three and two months of follow up, respectively, that followed similar trajectories as those seen in the first two patients at the same timepoints. All four treated RUBY patients were free of vaso-occlusive events following infusion with EDIT-301. In the EDITHAL trial, the first patient (male) had successful neutrophil and platelet engraftment within 30 days of infusion, and, at one and a half months post-infusion, the patient’s response resembled that of the first four RUBY patients, achieving a fetal hemoglobin fraction of 34.9% representing 4 g/dL of total hemoglobin. EDIT-301 was well-tolerated and demonstrated a safety profile consistent with myeloablative conditioning with busulfan, the regimen that is necessary for current gene editing therapies for SCD and TDT, and autologous hematopoietic stem cell transplantfurther data by the four patients in the RUBY trial and the first patient in the EDITHAL trial. After EDIT-301 infusion, no serious adverse events occurred, and no adverse events reported were related to treatment with EDIT-301.also in the discovery stage in developing in vivoevaluating lipid nanoparticles for delivery of gene editing medicinescargo into multiple tissue types with multiple companies, and are also evaluating additional, next generation delivery technologies. We are on track to establish in vivo preclinical proof-of-concept for other organs and tissues.under-treated diseases. prevention of hematological malignancies. Under this agreement, we received an upfront payment and will be eligible for future development, regulatory and commercial milestone payments, as well as royalties on medicines utilizing the related intellectual property. new and existing partnerships to progress engineered cell medicines to treat various cancers. We are advancing alpha-beta T-cell experimental medicines for the treatment of solid and liquid tumors in collaboration with Bristol Myers Squibb Company (“BMS”) through its wholly owned subsidiary, Juno Therapeutics, Inc. (“Juno Therapeutics”). This collaboration, which leverages our Cas9 and AsCas12a platform technologies, has resulted in 1113 total programs. We have alsoIn March 2024, we entered into an amendment to extend the collaboration to November 2026, with options to extend the collaboration for up to an additional two years, and provided BMS the ability to select up to three new gene targets for research. We are also party to a non-exclusive collaboration and licensing agreement with Immatics N.V. to combine gamma-delta T cell adoptive cell therapies and gene editing to develop medicines for the treatment of cancer.15studies.studies and clinical trials. Except for EDIT-301,reni-cel, all of our ongoing research programs are still in the preclinical or research stage of development and the risk of failure of all of our research programs is high. We have not generated any revenue from product sales. We have primarily financed our operations through various equity financings, and payments received under our research collaboration with BMS, and our former strategic alliance with Allergan Pharmaceuticals International Limited (together with its affiliates, “Allergan”), which was terminated in August 2020.$89.3$62.0 million and $104.0$49.0 million for the sixthree months ended June 30,March 31, 2024 and 2023, and 2022, respectively. As of June 30, 2023,March 31, 2024, we had an accumulated deficit of $1.2$1.3 billion. We expect to continue to incur significant expenses and operating losses for the foreseeable future. Our net losses may fluctuate significantly from quarter to quarter and from year to year. We anticipate that our expenses will increase substantially as we progress the clinical development of EDIT-301; scale our manufacturing capabilities and expand capacity, including capacity at third-party manufacturers, for EDIT-301; further advancecontinue our current research programs and our preclinical development activities; progress the clinical development of reni-cel; seek to identify additional product candidatesresearch programs and additional research programs;product candidates; initiate preclinical testing and clinical trials for other product candidates we identify and develop; maintain, expand, and protect our intellectual property portfolio, including reimbursing our licensors for such expenses related to the intellectual property that we in-license from such licensors; further develop our gene editing platform; hire additional clinical, quality control, and scientific personnel; and incur additional costs associated with operating as a public company. We do not expect to be profitable for the year ending December 31, 20232024 or the foreseeable future.$135.5$136.0 million in payments, which have primarily consisted of the initial upfront and amendment payments, development milestone payments, research funding support and certain opt-in fees. We no longer receive research funding support from BMS.support. During the three months ended March 31, 2024, we recognized $0.5 million of revenue related to our collaboration with BMS, none of which was previously deferred. We did not recognize any revenue related to our collaboration with BMS during the three months ended March 31, 2023. As of June 30, 2023,March 31, 2024, we recorded $56.7 million of deferred revenue in relation to our collaboration with BMS, all of which is$6.5 million was classified as short-term deferred revenue and $50.2 million was classified as long-term deferred revenue on our condensed consolidated balance sheet. Under this collaboration, we will recognize revenue upon delivery of option packages to BMS or upon receipt of development milestone payments. We expect that our revenue will fluctuate from quarter-to-quarter and year-to-year as a result of the timing of when we deliver such option packages or receive such milestone payments.●employee related expenses including salaries, benefits, and stock-based compensation expense; ●costs under clinical trial agreements with investigative sites;●costs associated with conducting our preclinical, process and scale-up development, manufacturing, clinical and regulatory activities, including fees paid to third-party professional consultants, service providers and suppliers; 16●costs of purchasing lab supplies and non-capital equipment used in our preclinical activities and in manufacturing preclinical and clinical study materials;●costs for research and development activities under our collaboration agreements;●facility costs, including rent, depreciation, and maintenance expenses; and
•costs of purchasing lab supplies and non-capital equipment used in our preclinical activities and in manufacturing preclinical and clinical study materials;●fees for acquiring and maintaining licenses under our third-party licensing agreements, including any sublicensing or success payments made to our licensors.•●successful completion of preclinical studies, IND-enabling studies and natural history studies;●successful enrollment in, and completion of, clinical trials;●receipt of marketing approvals from applicable regulatory authorities;●establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;●obtaining and maintaining patent and trade secret protection and non-patent exclusivity;●launching commercial sales of a product, if and when approved, whether alone or in collaboration with others;●acceptance of a product, if and when approved, by patients, the medical community, and third-party payors;●effectively competing with other therapies and treatment options;●a continued acceptable safety profile following approval;●enforcing and defending intellectual property and proprietary rights and claims; and
successful completion of preclinical studies, IND-enabling studies and natural history studies;●achieving desirable medicinal properties for the intended indications.17The Broad Institute, Inc. and the President and Fellows of Harvard, College, we anticipate general and administrative expenses will continue to be significant.sixthree months ended June 30,March 31, 2024 and March 31, 2023, and 2022, other income, net consisted primarily of interest income partially offset by accretionand the amortization of premiums or discounts associated with otheron marketable securities.June 30,March 31, 2024 and 2023 and 2022June 30,March 31, 2024 and 2023, and 2022, together with the changes in those items in dollars (in thousands) and the respective percentages of change:Three Months Ended
March 31,Dollar Change Percentage Change 2024 2023 Collaboration and other research and development revenues $ 1,135 $ 9,851 $ (8,716) (88) % Operating expenses: Research and development 48,787 37,804 10,983 29 % General and administrative 19,339 23,008 (3,669) (16) % Total operating expenses 68,126 60,812 7,314 12 % Other income, net Other income (expense), net 6 (1,584) 1,590 n/m Interest income, net 5,035 3,509 1,526 43 % Total other income, net 5,041 1,925 3,116 n/m Net loss $ (61,950) $ (49,036) $ (12,914) 26 % 18decreased by $3.5 million, to $2.9were $1.1 million for the three months ended June 30, 2023,March 31, 2024 compared to $6.4$9.9 million for the same period in 2023. The decrease from the three months ended June 30, 2022. The decreaseMarch 31, 2023 is primarily attributable to the exercisesale of a program opt-in under our collaboration with BMSwholly-owned oncology assets and related licenses in the second quarter of 2022 for which there was no similar activity in the second quarter ofJanuary 2023.decreasedincreased by $13.9$11.0 million to $29.8$48.8 million for the three months ended June 30, 2023March 31, 2024 compared to $43.7$37.8 million for the same period in 2022.2023. The following table summarizes our research and development expenses for the three months ended June 30,March 31, 2024 and 2023, and 2022, together with the changes in those items in dollars (in thousands) and the respective percentages of change:Three Months Ended
March 31,Dollar Change Percentage Change 2024 2023 Employee related expenses $ 13,683 $ 13,459 $ 224 2 % External research and development 17,588 12,401 5,187 42 % Facility expenses 5,219 5,681 (462) (8) % Stock-based compensation expenses 2,908 2,086 822 39 % Sublicense and license fees 5,896 1,305 4,591 n/m Other expenses 3,493 2,872 621 22 % Total research and development expenses $ 48,787 $ 37,804 $ 10,983 29 % decreaseincrease in research and development expenses for the three months ended June 30, 2023March 31, 2024 compared to the three months ended June 30, 2022March 31, 2023 was primarily attributable to:•●approximately $12.8 million in decreased external research and development expenses related to our reprioritization and targeted focus on our EDIT-301 program;approximately $5.2 million in increased external research and development expenses primarily related to clinical and manufacturing costs related to the continued progression our reni-cel program;●approximately $1.5 million in decreased sublicense and license fees due to clinical milestone and sublicense fee payments under certain of our license agreements that occurred in the three months ended June 30, 2022 that did not occur for the same period in 2023;•●approximately $1.4 million in decreased employee-related expenses due to decreased headcount costs resulting from our reprioritization and related reduction in workforce in the first quarter of 2023; andapproximately $4.6 million in increased sublicense and license fees paid in connection with licensing activity;●approximately $0.5 million in decreased stock-based compensation expenses.•decreasesincreases were partially offset by:●approximately $1.7 million in increased other expenses related to increased consulting expenses; and●approximately $0.7 million in increased facility expenses primarily related to increased rent expense incurred in connection with a lease extension for office, manufacturing and lab space.increaseddecreased by $0.3$3.7 million to $17.2$19.3 million for the three months ended June 30, 2023March 31, 2024 compared to $16.9$23.0 million for the three months ended June 30, 2022.March 31, 2023. The following table summarizes ourJune 30,March 31, 2024 and 2023, and 2022, together with the changes in those items in dollars (in thousands) and the respective percentages of change:19Three Months Ended
March 31,Dollar Change Percentage Change 2024 2023 Employee related expenses $ 4,889 $ 4,127 $ 762 18 % Professional service expenses 2,915 9,002 (6,087) (68) % Intellectual property and patent related fees 3,946 5,032 (1,086) (22) % Stock-based compensation expenses 4,677 2,421 2,256 93 % Facility and other expenses 2,912 2,426 486 20 % Total general and administrative expenses $ 19,339 $ 23,008 $ (3,669) (16) % increasedecrease in general and administrative expenses for the three months ended June 30, 2023March 31, 2024 compared to the three months ended June 30, 2022March 31, 2023 was primarily attributable to:•●approximately $1.9 million in increased professional service expenses to support strategic business development activities; andapproximately $6.1 million in decreased professional service expenses related to one-time expenses to support strategic initiatives and business development activities in 2023; and●approximately $0.4 million in increased employee related expenses for executive recruitment fees.•increasesdecreases were partially offset by:•●approximately $0.9 million in decreased stock-based compensation expenses;approximately $2.3 million in increased stock-based compensation expenses due to the achievement of certain performance-based vesting of restricted stock units;●approximately $0.6 million in decreased facility and other expenses; and•●approximately $0.6 million in decreased intellectual property and patent related fees.approximately $0.8 million in increased employee related expenses related to increased headcount; andJune 30,March 31, 2024, and March 31, 2023 other income, net was $3.8$5.0 million and $1.9 million, respectively, which was primarily attributablerelates to interest income partially offset byand accretion of discounts and premiums associated with other marketable securities.For the three months ended June 30, 2022, other income, net was $0.8 million, which was primarily The increase is attributable to interest income, partially offset by accretion of discounts associated with other marketable securities.Comparison of the Six Months ended June 30, 2023increased invested balances and 2022The following table summarizes our results of operations for the six months ended June 30, 2023 and 2022, together with the changes in those items in dollars (in thousands) and the respective percentages of change:Collaboration and other research and development revenues20Collaboration and other research and development revenues slightly decreased by $0.4 million, to $12.7 million, for the six months ended June 30, 2023 from $13.1 million for six months ended June 30, 2022.Research and development expensesResearch and development expenses decreased by $14.0 million, to $67.6 million, for the six months ended June 30, 2023 from $81.6 million for the six months ended June 30, 2022. The following table summarizes our research and development expenses for the six months ended June 30, 2023 and 2022, together with the changes in those items in dollars (in thousands) and the respective percentages of change:The decrease in research and development expenses for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 was primarily attributable to:●approximately $15.1 million in decreased external research and development expenses related to our reprioritization and targeted focus on our EDIT-301 program;●approximately $2.1 million in decreased stock-based compensation expense due primarily to a reduction in the market price of our common stock, resulting in a lower valuation of equity awards granted in the six months ended June 30, 2023; and●approximately $1.2 million in decreased sublicense and license fees due to clinical milestone and sublicense fee payments under certain of our license agreements that occurred in the six months ended June 30, 2022 that did not occur for the same period in 2023.These decreases were partially offset by:●approximately $2.4 million in increased other expenses attributable to consulting and external fees; and●approximately $1.9 million in increased facility expenses primarily related to increased rent expense incurred in connection with a lease extension for office, manufacturing and lab space.21General and administrative expensesGeneral and administrative expenses increased by $3.7 million, to $40.2 million, for the six months ended June 30, 2023 from $36.5 million for the six months ended June 30, 2022. The following table summarizes our general and administrative expenses for the six months ended June 30, 2023 and 2022, together with the changes in those items in dollars (in thousands) and the respective percentages of change:The increase in general and administrative expenses for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 was primarily attributable to:●approximately $8.9 million in increased professional service expenses to support strategic business development activities;●approximately $1.0 million in increased intellectual property and patent related fees primarily resulting from increased legal fees related to the prosecution and maintenance of our patents; and●approximately $0.4 million in increased employee related expenses for executive recruitment fees.These increases were partially offset by:●approximately $6.2 million in decreased stock-based compensation expenses due primarily to a reduction in the market price of our common stock, resulting in a lower valuation of equity awards granted in the six months ended June 30, 2023; and●approximately $0.4 million in decreased facility and other expenses.Other income, netFor the six months ended June 30, 2023, other income, net was $5.7 million, which was primarily attributable to interest income, partially offset by accretion of discounts associated with other marketable securities.For the six months ended June 30, 2022, other income, net was $1.0 million, which was primarily attributable to interest income, partially offset by accretion of discounts associated with other marketable securities.22In June 2023, we completed a public offering in which we sold 12,500,000 shares of our common stock and received net proceeds of approximately $117.1 million after deducting underwriting discounts and commissions and other offering costs. As of June 30, 2023,March 31, 2024, we have raised an aggregate of $1.0 billion in net proceeds through the sale of shares of our common stock in public offerings and at-the-market offerings.offerings. We also have funded our business from payments received under our research collaboration with BMS, and our former strategic alliance with Allergan, which was terminated in August 2020. and payments received under the license agreement with Vertex. As of June 30, 2023,March 31, 2024, we had cash, cash equivalents and marketable securities of $480.0$376.8 million.June 30, 2023,March 31, 2024, we have not sold any shares of our common stock under the ATM Facility.BMS.BMS and our other collaboration and license agreements. Our ability to earn theapplicable milestone and other payments and the timing of earning these amounts are dependent upon the our development, regulatory and commercial activities and, as such, are uncertain at this time. As of June 30, 2023,March 31, 2024, our right to contingent payments under our collaboration agreement with BMS isand our license agreement with Vor Bio, as well as our contingent upfront payment and annual license fees with Vertex, are our only significant committed potential external source of funds.sixthree months ended June 30,March 31, 2024 and 2023 and 2022 (in thousands):Three Months Ended
March 31,2024 2023 Net cash (used in) provided by: Operating activities $ (49,872) $ (35,768) Investing activities (4,745) 23,267 Financing activities 192 — Net decrease in cash, cash equivalents, and restricted cash $ (54,425) $ (12,501) $74.5$49.9 million for the sixthree months ended June 30, 2023,March 31, 2024, which primarily consisted of operating expenses that related to increasing our research efforts, progressing our EDIT-301the focused progression of clinical and manufacturing activities in support of the reni-cel program, sublicense and license payments, and supporting business operations.$87.1$35.8 million for the sixthree months ended June 30, 2022,March 31, 2023, which primarily consisted of operating expenses that related toprogressing our preclinicalreni-cel program and clinical activities, sublicense and license fees, and increased costs as a result of staffing needs due to our expandingsupporting business operations.23$36.2$23.3 million for the sixthree months ended June 30,March 31, 2023, primarily related to proceeds from maturities of marketable securities of $107.6$65.9 million, partially offset by costs used to acquirepurchases of marketable securities of $68.2$40.8 million and purchases of property and equipment of $3.2$1.8 million.Net cash provided by investing activities was approximately $52.4 million for the six months ended June 30, 2022, primarily related to proceeds from maturities of marketable securities of $238.8 million, partially offset by costs used to acquire marketable securities of $183.5 million.$117.5$0.2 million for the sixthree months ended June 30, 2023, primarilyMarch 31, 2024, related to proceeds from offering of common stock of $117.1 million after deducting underwriting discounts and commissions and other offering costs, andthe proceeds received from issuance of common stock under the employee stock purchase plan of $0.4 million.Net cash provided by financing activities was approximately $0.6 million for the six months ended June 30, 2022 primarily related to proceeds received from issuance of common stock under our benefit program and exercises of options for our common stock.EDIT-301; scale our manufacturing capabilities and expand capacity, including capacity at third-party manufacturers, for EDIT-301; reni-cel; further advance our research programs and our preclinical development activities; seek to identify product candidates and additional research programs and additional product candidates;programs; initiate preclinical testing and clinical trials for other product candidates we identify and develop; maintain, expand, and protect our intellectual property portfolio, including reimbursing our licensors for expenses related to the intellectual property that we in-license from such licensors; hire additional clinical, quality control, and scientific personnel; and incur costs associated with operating as a public company. In addition, if weFurthermore, since 2016 we have incurred, and in future years we expect to continue to incur significant 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 our research and development programs or future commercialization efforts.at June 30, 2023on March 31, 2024, together with the near-term annual license fees and the contingent upfront payment payable under our license agreement with Vertex, will enable us to fund our operating expenses and capital expenditure requirements into the third quarter of 2025.2026. Our forecast of the period of time through which our existing cash and cash equivalents and investments will be adequate to support our operations is a forward-looking statement and involves significant risks and uncertainties. We have based this forecast on assumptions that may prove to be wrong, and actual results could vary materially from our expectations, which may adversely affect our capital resources and liquidity. We could utilize our available capital resources sooner than we currently expect. The amount and timing of future funding requirements, both near- and long-term, will depend on many factors, including, but not limited to:●the scope, progress, results, and costs of drug discovery, preclinical development, laboratory testing, and clinical or natural history study trials for the product candidates we develop;●the costs of progressing the clinical development of EDIT-301 to treat SCD and TDT;24
•the costs, timing, and outcome of regulatory review of the product candidates we develop;●the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights, and defending intellectual property-related claims;●the costs, timing, and outcome of regulatory review of the product candidates we develop;●the costs of future activities, including product sales, medical affairs, marketing, manufacturing, and distribution, for any product candidates for which we receive regulatory approval;●the success of our collaboration with BMS;●whether BMS exercises any of its options to extend the research program term and/or to additional research programs under our collaboration;●our ability to establish and maintain additional collaborations on favorable terms, if at all;●the extent to which we acquire or in-license other medicines and technologies;●the costs of reimbursing our licensors for the prosecution and maintenance of the patent rights in-licensed by us; and●the costs of operating as a public company.any product candidate thateven if we successfully identify and develop ifproduct candidates that are approved, we will require significant additional amounts in order to launch and commercialize our product candidates and may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of genomic medicines that we do not expect to be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.June 30, 2023,March 31, 2024, we had non-cancelable operating leases with future minimum lease payments for a total of $45.3$40.3 million, of which $7.0$11.5 million will be payable in 2023.2024. These minimum lease payments exclude our share of the facility operating expenses, real-estate taxes and other costs that are reimbursable to the landlord under the leases.Licenselicense and Service Agreementservice agreement pursuant to which we will lease manufacturing space for our continued research and development activities. As of June 30, 2023,March 31, 2024, the lease hashad not25leaselicense and service agreement provides for total remaining lease payments of $87.8up to $85.4 million over a 10-year lease term.June 30, 2023,March 31, 2024, we had cash and cash equivalents of $220.8$69.2 million, primarily held in money market mutual funds, and marketable securities of $259.2$307.6 million, primarily consisting of U.S. government-backed securities, commercial paper and corporate debt securities. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments, including cash equivalents, are in the form, or may be in the form of, money market funds or marketable securities and are or may be invested in U.S. Treasury and U.S. government agency obligations. Due to the short-term maturities and low risk profiles of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our investments.June 30, 2023March 31, 2024 were denominated in the United States dollar and we believe that we do not have any material exposure to foreign currency exchange rate risk.June 30, 2023.March 31, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2023,March 31, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.262720222023 (the “Annual Report”). Regardless of outcome, litigation or other legal proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.During the quarterly period covered by this report, Erick Lucera, our Chief Financial Officer, entered into a Rule 10b5-1 trading arrangement that is intended to qualify as an “eligible sell-to-cover transaction” (as described in Rule 10b5-1(c)(1)(ii)(D)(3) under the Exchange Act). This sell-to-cover arrangement, which was adopted on May 12, 2023, applies to restricted stock units (“RSUs”), whether vesting is based on the passage of time and/or the achievement of performance goals, granted on his start date, May 17, 2023, and any RSUs that may be granted from time to time thereafter (other than those which by their terms require us to withhold shares for tax withholding obligations in connection with vesting and settlement). This arrangement provides for the automatic sale of shares of our common stock that would otherwise be issuable on each settlement date of a covered RSU in an amount necessary to satisfy the applicable withholding obligation, with the proceeds of the sale delivered to us in satisfaction of the applicable withholding obligation. The number of shares that will be sold under this arrangement is not currently determinable as the number will vary based on the extent to which vesting conditions are satisfied, the market price of our common stock at the time of settlement and the potential future grant of additional RSUs subject to this arrangement. adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the quarterly period covered by this report.28Exhibit
Number10.1*Omnibus Amendment, dated as of February 5, 2024, by and among the Registrant, the Broad Institute, Inc., and the President and Fellows of Harvard College (incorporated by reference to Exhibit 10.36 to the Company's Annual Report on Form 10-K (File No. 001-37687) filed with the Securities and Exchange Commission on February 28, 2024).10.2*† 10.2*Separation Agreement, dated May 16, 2023, between the Registrant and Michelle Robertson.10.3*Employment Offer Letter, dated July 3, 2023, between the Registrant and Linda C. Burkly.31.1*June 30, 2023,March 31, 2024, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets (unaudited), (ii) Condensed Consolidated Statements of Operations (unaudited), (iii) Condensed Consolidated Statements of Comprehensive Loss (unaudited), (iv) Condensed Consolidated Statements of Stockholders’ Equity (unaudited), (v) Condensed Consolidated Statements of Cash Flows (unaudited) and (vi) Notes to Condensed Consolidated Financial Statements (unaudited), tagged as blocks of text and including detailed tags.The cover page fromCover Page Interactive Data File (Embedded within the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formattedInline XBRL document and included in Inline XBRL.** Filed herewith29By:Dated: August 2, 2023By:
(Principal Financial Officer)30