BEAM THERAPEUTICS INC. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve important risks, uncertainties and assumptions. Some of the numbers included herein have been rounded for the convenience of presentation. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed in "Risk Factors" in Part II, Item 1A. and elsewhere in this Quarterly Report on Form 10-Q, and in the "Risk Factors Summary" and "Item 1A. Risk Factors" section of our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2021 , or the 2021 Form 10-K.
Overview
We are a biotechnology company committed to establishing the leading, fully integrated platform for precision genetic medicines. Our vision is to provide life-long cures to patients suffering from serious diseases. To achieve this vision, we have assembled a platform that includes a suite of gene editing and delivery technologies and are in the process of developing internal manufacturing capabilities. Our suite of gene editing technologies is anchored by our proprietary base editing technology, which potentially enables a differentiated class of precision genetic medicines that target a single base in the genome without making a double-stranded break in the DNA. This approach uses a chemical reaction designed to create precise, predictable and efficient genetic outcomes at the targeted sequence. Our proprietary base editors have two principal components: (i) a clustered regularly interspaced short palindromic repeats, or CRISPR, protein, bound to a guide RNA, that leverages the established DNA-targeting ability of CRISPR, but is modified to not cause a double-stranded break, and (ii) a base editing enzyme, such as a deaminase, which carries out the desired chemical modification of the target DNA base. We believe this design contributes to a more precise and efficient edit compared to traditional gene editing methods, which operate by creating targeted double-stranded breaks in the DNA that can result in unwanted DNA modifications. We believe that the precision of our editors will dramatically increase the impact of gene editing for a broad range of therapeutic applications. To unlock the full potential of our base editing technology across a wide range of therapeutic applications, we are pursuing a broad suite of both clinically validated and novel delivery modalities, depending on tissue type, including: (1) electroporation for efficient delivery to blood cells and immune cells ex vivo; (2) lipid nanoparticles, or LNPs, for non-viral in vivo delivery to the liver and potentially other organs in the future; and (3) adeno-associated viral vectors, or AAV, for in vivo viral delivery to the eye and potentially other organs. The elegance of the base editing approach combined with a tissue specific delivery modality provides the basis for a targeted efficient, precise, and highly versatile gene editing system, capable of gene correction, gene modification, gene silencing or gene activation, and/or multiplex editing of several genes simultaneously. We are currently advancing a broad, diversified portfolio of base editing programs against distinct editing targets, utilizing the full range of our development capabilities. Furthermore, in addition to our portfolio, we are also pursuing an innovative, platform-based business model with the goal of further expanding our access to new technologies in genetic medicine and increasing the reach of our programs to more patients. Overall, we are seeking to build the leading integrated platform for precision genetic medicine, which may have broad therapeutic applicability and the potential to transform the field of precision genetic medicines.
Ex Vivo HSCs: Sickle cell disease and beta-thalassemia
We are advancing ex vivo base editing programs in which hematopoietic stem cells, or HSCs are collected from a patient, edited using electroporation, a clinically validated technology for the delivery of therapeutic constructs into harvested cells. These cells are infused back into the patient following a myeloablative conditioning regimen, such as treatment with busulfan, the standard of care in HSC transplantation today. Once reinfused, the HSCs begin repopulating a portion of the bone marrow in a process known as engraftment. The engrafted, edited HSCs give rise to progenitor cell types with the corrected gene sequences. We are pursuing a long-term, staged development strategy for our base editing approach to treat sickle cell disease that consists of advancing our ex vivo programs, BEAM-101 and BEAM-102, in Wave 1, improving patient conditioning regimens in Wave 2, and enabling in vivo base editing with delivery directly into HSCs of patients via LNPs in Wave 3. We believe this suite of technologies - base editing, improved conditioning and in vivo delivery for editing HSCs - can maximize the potential applicability of our sickle cell disease programs to patients as well as create a platform for the treatment of many other severe genetic blood disorders
Wave 1: Ex Vivo Base Editing via Autologous Transplant with BEAM-101 and BEAM-102
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We are using base editing to pursue the development of two complementary
approaches to treating sickle cell disease, a severe inherited blood disease
caused by a single point mutation, E6V, in the beta globin gene (BEAM-101 and
BEAM-102), and one approach to treat beta-thalassemia, another inherited blood
disorder characterized by severe anemia caused by reduced production of
functional hemoglobin due to insufficient expression of the beta globin protein
(BEAM-101).
BEAM-101: Recreating naturally-occurring protective mutations to activate fetal hemoglobin
BEAM-101 is an investigational, a patient-specific, autologous hematopoietic cell therapy which is designed to incorporate ex vivo base edits that mimic single nucleotide polymorphisms seen in individuals with hereditary persistence of fetal hemoglobin, or HPFH, to potentially alleviate the effects of mutations causing sickle cell disease or beta thalassemia. Our Investigational New Drug, or IND, application for BEAM-101 for the treatment of sickle cell disease has been cleared by theU.S. Food and Drug Administration , or FDA, and we are preparing to initiate a Phase 1/2 clinical trial designed to assess the safety and efficacy of BEAM-101 for the treatment of sickle cell disease, which we refer to as our BEACON-101 trial. The BEACON-101 trial is expected to include an initial "sentinel" cohort of three patients, treated one at a time to confirm successful engraftment, followed by dosing in up to a total of 45 patients. The clinical trial is designed to initially include patients between ages 18 and 35 with sickle cell disease who have received prior treatment with at least one disease-modifying agent with inadequate response or intolerance. Following mobilization, conditioning and HSC transplant with BEAM-101, patients will be assessed for safety and tolerability, with safety endpoints including the proportion of patients with successful neutrophil engraftment by day 42. Patients will also be assessed for efficacy, with efficacy endpoints including the change from baseline in severe vaso-occlusive events, transfusion requirements, hemoglobin F levels, and quality of life and ability to function. We have begun site selection and the institutional review board approval processes for the BEACON-101 trial and plan to enroll the first subject in the second half of 2022.
We have achieved proof-of-concept in vivo with long-term engraftment of base edited human CD34 cells in mice administered BEAM-101. Persistence of engraftment and high levels of editing have been confirmed in several preclinical studies, including in studies using material generated at a clinically relevant scale.
BEAM-102: Direct correction of the sickle cell mutation
Our second ex vivo base editing approach that we are developing for sickle cell disease, BEAM-102, is designed to directly correct the causative sickle mutation at position 6 of the beta globin gene. By making a single A-to-G edit, we have demonstrated in primary human CD34+ cells isolated from sickle cell disease patients the ability to create the naturally occurring HbG or "Makassar" variant of hemoglobin. This variant, which was identified in humans and first published in 1970, has the same function as the wild-type variant and does not cause sickle cell disease. Distinct from other approaches, cells that are successfully edited in this way are fully corrected, no longer containing the sickle protein. We have initiated IND-enabling studies for BEAM-102 and expect to submit an IND to the FDA for the treatment of sickle cell disease during the second half of 2022. During the second quarter of 2020, we published preclinical data on BEAM-102 demonstrating that our adenine base editors, or ABEs, can efficiently convert the causative Hemoglobin S, or HbS, point mutation, to HbG-Makassar, with high efficiency (more than 80%). In this preclinical study, theMakassar variant does not cause hemoglobin to polymerize and red blood cells to sickle and, therefore, edited cells are cured through elimination of the disease-causing protein. InDecember 2021 , we presented data from preclinical studies further characterizing theMakassar hemoglobin created by BEAM-102 and demonstrating biophysical and biochemical properties consistent with normal hemoglobin. Wave 2: Improved Conditioning In parallel with Wave 1 development, we also aim to improve the transplant conditioning regimen for sickle cell disease patients undergoing HSCT, reducing toxicity challenges associated with HSCT standard of care. Conditioning is a critical component necessary to prepare a patient's body to receive the ex vivo edited cells that must engraft in the patient's bone marrow in order to be effective. Today's conditioning regimens rely on nonspecific chemotherapy or radiation, which are associated with significant toxicities. We are collaborating with Magenta Therapeutics, Inc., or Magenta, to evaluate the potential utility of MGTA-117, Magenta's novel antibody drug conjugate, in combination with BEAM-101 and BEAM-102, as well as other base editing programs in hematology. MGTA-117 is designed to spare immune cells and precisely target hematopoietic stem and progenitor cells, or HSPCs, and has demonstrated high selectivity, potent efficacy, wide safety margins and broad tolerability in non-human primate, or NHP, models. We are also conducting our own research into novel conditioning strategies. Improved conditioning regimens could potentially be paired with BEAM-101 and BEAM-102, as well as other base editing programs in hematology.
Wave 3: In Vivo Base Editing via HSC-targeted LNPs
We are also exploring the potential for in vivo base editing programs for sickle cell disease, in which base editors would be delivered to the patient through an infusion of LNPs targeted to HSCs, eliminating the need for transplantation altogether. This approach could provide a more accessible option for patients, particularly in regions where ex vivo treatment is challenging. Building on our acquisition of Guide, we are using our proprietary DNA-barcoded LNP screening technology to enable high-throughput in vivo identification of LNPs with novel biodistribution and selectivity for target organs beyond the liver. InDecember 2021 , we announced 23 --------------------------------------------------------------------------------
we had screened more than 1,000 LNPs using this technology for potential to deliver to HSCs and had identified LNP-HSC1 as the most potent, with efficient transfection in both mice and NHPs.
Achieving Understanding of the Natural History of Sickle Trait (AUNT) Study
InMay 2022 , we announced the initiation of a sickle cell trait, or SCT, focused natural history study. Carriers of sickle cell disease, or those with SCT, have only one copy of the hemoglobin gene, have HbS levels between 25-45%, and are thought to have a benign condition. However, despite SCT impacting approximately 300 million people around the world, the key hematologic and clinical phenotypic characteristics and functional impacts from having SCT have been understudied in a prospective manner. As part of a long-term lifecycle strategy for our sickle cell disease programs, we, in collaboration with theNational Alliance of Sickle Cell Centers , theUniversity of Alabama , andJohns Hopkins Medical Center , have initiated the AUNT (Achieving Understanding of the Natural History of Sickle Trait) Study. The AUNT Study is designed to establish an understanding of the hematologic and clinical phenotype of people with SCT, including blood rheology, potential complications and genetic modifiers, in an effort to better understand the hematologic phenotype that is associated with good health and lack of organ dysfunction. The study is designed to enroll approximately 1,000 participants with SCT inthe United States who have been identified as family members of participants in theGlobal Research Network for Data and Discovery , a multi-institutional prospective registry comprising clinical and background data from more than 1,200 adult and pediatric individuals with sickle cell disease from 1999-2021. Ex vivo T cell therapies The starting material for our multiplex-edited allogeneic CAR-T cell products is white blood cells from a healthy donor, which are collected using a standard blood bank procedure known as leukapheresis. Using a single electroporation, we introduce the base editor as mRNA, and the guides encoding the target sequences. The edited cells are subsequently transduced with a lentivirus expressing the CAR. Once the T cells have been engineered, they are expanded and frozen. After the patient is lymphodepleted, the multiplex-edited, allogenic cell product is infused. We believe base editing is a powerful tool to simultaneously multiplex edit many genes without the unintended on-target effects that can result from simultaneous editing with nucleases through the creation of double-stranded breaks. The ability to create a large number of multiplex edits in T cells could endow CAR-T cells and other cell therapies with combinations of features that have the potential to dramatically enhance their therapeutic potential in treating hematological or solid tumors. The initial indications that we plan to target with our chimeric antigen receptor T-cell, or CAR-T, product candidates are relapsed, refractory T-cell acute lymphoblastic leukemia /T cell lymphoblastic lymphoma, or T-ALL/T-LL, a severe disease affecting children and adults, and Acute Myeloid Leukemia, or AML. We believe that our approach has the potential to produce higher response rates and deeper remissions than existing approaches. Our proof-of-concept preclinical studies have demonstrated the ability of base editors to efficiently modify up to eight genomic loci simultaneously in primary human T cells with efficiencies ranging from 85-95% as measured by flow cytometry of target protein knockdown. Importantly, these results were achieved without the generation of observed chromosomal rearrangements, as evaluated by sensitive methods such as UDiTaSTM or G-banded Karyotyping and with no observed loss of cell viability from editing. The proof-of-concept preclinical studies have also demonstrated robust T cell killing of target tumor cells both in vitro and in vivo. We plan to nominate a second CAR-T development candidate, in addition to BEAM-201, in 2022.
BEAM-201: Universal CD7-targeting CAR-T cells
BEAM-201 is a development candidate comprised of T cells derived from healthy donors that are simultaneously edited at TRAC, CD7, CD52 and PDCD1 and then transduced with a lentivirus encoding for an anti-CD7 CAR that is designed to create allogenic CD7 targeting CAR-T cells, resistant to both fratricide and immunosuppression. To our knowledge, BEAM-201 is the first investigational cell therapy featuring four simultaneous edits. We have initiated IND-enabling studies for BEAM-201 and expect to submit an IND to the FDA for the treatment of relapsed, refractory T-ALL/T-LL and potentially other CD7+ malignancies during the second half of 2022. CD5-targeting CAR-T cells
In
In vivo LNP
LNPs are a clinically validated technology for delivery of nucleic acid payloads
to the liver. LNPs are multi-component particles that encapsulate the base
editor mRNA and one or more guides and protect them from degradation while in an
external environment, enabling the transient delivery of the base editor in
vivo. Multiple third-party clinical trials have demonstrated the effective
delivery of silencing RNA to the liver using LNPs. Because only one dose of a
base editing therapy may be needed in a course of treatment, LNPs are a suitable
delivery modality that we believe is unlikely to face the complications seen
with chronic use of LNPs, such as those
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observed when delivering oligonucleotides or mRNA for gene therapy. All of the
components of the LNP, as well as the mRNA encoding the base editor, are
well-defined and can be manufactured synthetically, providing the opportunity
for scalable manufacturing.
We have developed several proprietary LNP formulations. In May 2021 , we
announced initial data from our evaluation of various LNP formulations and mRNA
production processes using an mRNA-encoding ABE and guide RNA to target the
ALAS1 gene, a surrogate payload for genetic liver diseases. These data showed
improved in vivo editing in the livers of NHPs from less than 10% initially to
52% at a total RNA dose of 1.5 mg/kg. Continued optimization of our LNP
formulations has demonstrated further increases in liver editing potency in
NHPs. In September 2021 , we presented data demonstrating up to 60% editing in
NHPs at a total RNA dose of 1.0 mg/kg. Data from our preclinical studies
demonstrated that these formulations were well tolerated by NHPs treated with
doses up to 1.5 mg/kg. Minimal to mild and transient liver enzyme elevations
were observed and resolved by day 15 post-treatment. Additionally, the
formulations showed promising interim stability, maintaining potency after three
months at -20?C and -80?C.
We are currently using LNP formulations to advance our programs for genetic
liver diseases, including Glycogen Storage Disease Type Ia, or GSDIa, also known
as Von Gierke disease, and Alpha-1 Antitrypsin Deficiency, or Alpha-1, and
chronic hepatitis B infection. In December 2021 , we nominated BEAM-301, a
liver-targeting LNP formulation of base editing reagents designed to correct the
R83C mutation, the most common disease-causing mutation of GSDIa, as our first
in vivo development candidate. We anticipate initiating IND-enabling studies for
BEAM-301 and nominating a second liver-targeted development candidate in 2022.
Liver diseases: glycogen storage disorder 1a, alpha-1 antitrypsin deficiency, and chronic hepatitis B infection
GSDIa
GSDIa is an inborn disorder of glucose metabolism caused by mutations in the G6PC gene, which results in low blood glucose levels that can be fatal if patients do not adhere to a strict regimen of slow-release forms of glucose, administered every one to four hours (including overnight). There are no disease modifying therapies available for patients with GSDIa. Our approach to treating patients with GSDIa is to apply base editing via LNP delivery to repair the two most prevalent mutations that cause the disease, R83C and Q347X. It is estimated that these two point mutations account for 900 and 500 patients, respectively, inthe United States , representing approximately 59% of all GSDIa patients inthe United States . Third party animal studies have shown that as little as 11% of normal G6Pase activity in liver cells is sufficient to restore fasting glucose; however, this level must be maintained in order to preserve glucose control and alleviate other serious, and potentially fatal, GSDIa sequelae. InOctober 2021 , we reported data from preclinical studies that support the potential of base editing to durably correct disease-causing mutations of GSDIa. We created a novel, humanized R83C knockout mouse model (huR83C), mimicking the abnormal metabolic phenotype of human GSDIa, and collaborated with theNational Institutes of Health , orNIH , to characterize the phenotype of these animals. The results demonstrated that newborn huR83C mice treated with our LNP-delivered ABE exhibited normal growth to the end of the study at three weeks of age without any hypoglycemia-induced seizures. In contrast, homozygous animals were unable to survive soon after birth in the absence of glucose supplementation. In addition, we observed editing efficiencies up to approximately 60% by next-generation sequencing of DNA isolated from the whole liver. InMay 2022 , an abstract announcing new preclinical data to be presented at theAmerican Society of Gene andCell Therapy (ASGCT) Annual Meeting was published. The data, which build on previously released preclinical results, demonstrated that in a GSDIa mouse model, treated mice, which otherwise have poor survival outcomes if left untreated, grew normally to at least 35 weeks following administration of BEAM-301, with survival ongoing in the study. Notably, as low as single digit percentage base-editing rates were sufficient to restore physiologically relevant levels of hepatic G6Pase activity, normalize serum metabolites and, most importantly, prevent hypoglycemia during a twenty-four hour fast in treated mice. In addition, preliminary assessments of observed off-target editing have suggested a favorable profile of BEAM-301.
Alpha-1
Alpha-1 is a severe inherited genetic disorder that can cause progressive lung and liver disease. The most severe form of Alpha-1 arises when a patient has a point mutation in both copies of the SERPINA1 gene at amino acid 342 position (E342K, also known as the PiZ mutation or the "Z" allele). With the high efficiency and precision of our base editors, we aim to utilize our ABEs to enable the programmable conversion of A-to-T and G-to-C base pairs and precisely correct the E342K point mutation back to the wild type sequence. In 2020, we showed the ability to directly correct the mutation causing Alpha-1, providing both in vitro and in vivo preclinical proof-of-concept for base editing to correct this disease. InMay 2022 , an abstract to be presented at ASGCT detailed our efforts to optimize both the ABE and the guide RNA used to correct the disease-causing PiZ mutation, with improvements over the original reagents leading to a greater than two-fold increase in observed editing potency and potentially therapeutically relevant increases in circulating alpha-1 antitrypsin in mice treated at doses that are expected to be clinically relevant (<1mg/kg). Further, similar results were observed in adult mice dosed at greater than 37 weeks, a treatment context more similar to what might be encountered in a clinical setting.
Hepatitis B Virus
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Hepatitis B virus, or HBV, causes serious liver infection that can become
chronic, increasing the risk of developing life-threatening health issues like
cirrhosis, liver failure or liver cancer. Chronic HBV infection is characterized
by the persistence of covalently closed circular DNA, or cccDNA, a unique DNA
structure that forms in response to HBV infection in the nuclei of liver cells.
Additionally, the HBV DNA can integrate into the human genome becoming a source
of hepatitis B surface antigen, or HBsAg. While currently available treatments
can manage HBV replication, they do not clear cccDNA from the infected liver
cells. This inability to prevent HBV infection rebound from cccDNA is a key
challenge to curing HBV. In September 2021 , we presented preclinical data that
demonstrated the potential of our cytosine base editors to reduce viral markers,
including HBsAg expression, and prevent viral rebound of HBV in in vitro models.
In vivo AAV
AAV is a clinically validated technology that has been extensively used for gene delivery to a variety of tissues. AAV is a small, non-pathogenic virus that can be repurposed to carry a therapeutic payload, making it a suitable vector for delivery of gene editing therapies. Several clinical trials have been conducted or are in progress with different AAV variants for multiple diseases, including diseases of the eye, liver, muscle, lung and central nervous system. We have an option to in-license a variety of AAV variants that could be selected for optimal distribution to multiple organs. Because our DNA base editors are larger than the approximate 4.5kb packaging limit of AAV vectors, we use a novel split intein technology that is designed to deliver the base editor and guide RNA by co-infection with two viruses, where each virus contains approximately one half of the editor.
Ocular disorders: Stargardt disease
We are currently evaluating AAV technology to correct one of the most prevalent mutations in the ABCA4 gene causing Stargardt disease, a progressive macular degeneration disease. This mutation is known as the G1961E point mutation and approximately 5,500 individuals inthe United States are affected. Disease modeling using tiny light stimuli through holes that are equivalent in size to a single photoreceptor cell, suggests that only 12%-20% of these cells are necessary to preserve vision. We anticipate, therefore, that editing percentages in the range of 12%-20% of these cells would be disease-modifying, since each edited cell will be fully corrected and protected from the biochemical defect associated with Stargardt disease. In a human retinal pigment epithelial cell line (ARPE-19 cells) in which we have knocked in the ABCA4 G1961E point mutation, we have demonstrated the precise correction of approximately 75% of the disease alleles at five weeks after dual infection with the split AAV system. InNovember 2021 , we announced that we have initiated preclinical studies in NHPs for our Stargardt program.
Delivery of genetic medicines
To complement our next-generation gene editing technologies, we are also making significant investments in a broad suite of delivery technologies designed to deliver gene editing or other nucleic acid payloads to the right cells and enable potentially curative therapy. These delivery technologies include ex vivo electroporation, nonviral vectors such as LNPs, and viral vectors such as AAVs. In our pipeline, we have initially focused on applications of these technologies where their delivery capabilities have already been clinically-validated by third parties, such as ex vivo editing of blood stem cells and LNP delivery to the liver. Longer term, we are also investing in more innovative delivery options, such as LNPs that could target other organs beyond the liver, or novel viral vectors beyond AAV. We have also developed critical enabling capabilities such as mRNA manufacturing and cell processing for autologous and allogeneic cell therapy. Consistent with this approach, our acquisition ofGuide Therapeutics, Inc. , or Guide, expanded our ability to explore new tissues and disease indications with our editing technologies. With Guide's proprietary screening technology, which utilizes DNA barcodes to enable high throughput in vivo LNP screening, we have a broad library of lipids and lipid formulations, and we have generated additional novel LNPs that we believe can accelerate novel nonviral delivery of gene editing or other nucleic acid payloads to tissues beyond the liver. For example, we have used our DNA barcoding technology to identify a family of LNPs for delivery of base editors to HSPCs in mice, and we have screened more than 1,000 LNPs to identify LNPs that achieve durable, dose-dependent mRNA transfection in HSPCs in mice and NHPs in preclinical studies.
Manufacturing of genetic medicines
To realize the full potential of base editors as a differentiated class of medicines and to enable our parallel investment strategy in multiple delivery modalities, we are building customized and integrated capabilities across discovery, manufacturing, and preclinical and clinical development. Due to the critical importance of high-quality manufacturing and control of production timing and know-how, we have taken steps toward establishing our own manufacturing facility, which will provide us the flexibility to manufacture a variety of different product modalities. We believe this investment will maximize the value of our portfolio and capabilities, the probability of technical success of our programs, and the speed at which we can provide potentially life-long cures to patients. InAugust 2020 , we entered into a lease agreement with Alexandria Real Estate Equities, Inc. to build a 100,000 square foot current cGMP compliant manufacturing facility inResearch Triangle Park, North Carolina intended to support a broad range of clinical programs. The initial estimate of the minimum amount of undiscounted lease payments due under this lease is$69.0 million . The 26 -------------------------------------------------------------------------------- tabular disclosure of minimum lease payments above under Note 7, Leases, does not include payments due under this lease. We anticipate that the facility will be operational in the first quarter of 2023. The project is facilitated, in part, by a Job Development Investment Grant approved by theNorth Carolina Economic Investment Committee, which authorizes potential reimbursements based on new tax revenues generated through the project. The facility is designed to support manufacturing for our ex vivo cell therapy programs in hematology and oncology and in vivo non-viral delivery programs for liver diseases, with flexibility to support manufacturing of our viral delivery programs, and ultimately, scale-up to support potential commercial supply.
For our initial waves of clinical trials, we expect to use CMOs with relevant manufacturing experience in genetic medicines.
Collaborations
We believe our collection of base editing, gene editing and delivery technologies has significant potential across a broad array of genetic diseases. To fully realize this potential, we have established and will continue to seek out innovative collaborations, licenses, and strategic alliances with pioneering companies and with leading academic and research institutions. Additionally, we have and will continue to pursue relationships that potentially allow us to accelerate our preclinical research and development efforts. These relationships will allow us to aggressively pursue our vision of maximizing the potential of base editing to provide life-long cures for patients suffering from serious diseases. In vivo collaborations Pfizer InDecember 2021 , we entered into a research collaboration agreement with Pfizer Inc., or Pfizer, focused on in vivo base editing programs for three targets for rare genetic diseases of the liver, muscle and central nervous system. The collaboration has an initial term of four years and may be extended for an additional one year on a program-by-program basis. Under the terms of the agreement, we will conduct all research activities through development candidate selection for three pre-specified, undisclosed targets, which are not included in our existing programs. Pfizer may opt in to exclusive, worldwide licenses to each development candidate, after which it will be responsible for all development activities, as well as potential regulatory approvals and commercialization, for each such development candidate. We have a right to opt in, at the end of Phase 1/2 clinical trials, upon the payment of an option exercise fee, to a global co-development and co-commercialization agreement with respect to one program licensed under the collaboration pursuant to which we and Pfizer would share net profits as well as development and commercialization costs in a 35%/65% ratio (Beam/Pfizer).
Apellis Pharmaceuticals
InJune 2021 , we entered into a research collaboration agreement with Apellis Pharmaceuticals, Inc., or Apellis, focused on the use of certain of our base editing technology to discover new treatments for complement system-driven diseases. Under the terms of the agreement, we will conduct preclinical research on up to six base editing programs that target specific genes within the complement system in various organs, including the eye, liver, and brain. Apellis has an exclusive option to license any or all of the six programs and will assume responsibility for subsequent development. We may elect to enter into a 50-50U.S. co-development and co-commercialization agreement with Apellis with respect to one program licensed under the collaboration.
Verve Therapeutics
InApril 2019 , we entered into a collaboration and license agreement, or the Verve Agreement, with Verve Therapeutics, Inc., or Verve, a company focused on gene editing for cardiovascular disease treatments. This collaboration allows us to more fully realize the potential of base editing in treating cardiovascular disease, a disease area outside of our core focus and where Verve has significant expertise. Under the terms of the Verve Agreement, Verve received exclusive worldwide licenses to use our base editing technology and certain gene editing and delivery technologies for human therapeutic applications against certain cardiovascular targets. In exchange, we received shares of Verve common stock. Additionally, we are eligible to receive milestone payments for certain clinical and regulatory events for licensed products, and we retain the option, after the completion of Phase 1 clinical trials, to participate in future development and commercialization, and share 50 percent ofU.S. profits and losses, for any licensed product directed against these targets. InJanuary 2021 , Verve announced it had selected VERVE-101 as its lead product to be developed initially for the treatment of heterozygous familial hypercholesterolemia, or HeFH, a potentially fatal genetic heart disease. Individuals with HeFH have a genetic mutation causing high LDL-C levels in the blood. Over time, high LDL-C builds up in the heart's arteries, resulting in reduced blood flow or blockage, and ultimately heart attack or stroke. Inactivation of the proprotein convertase subtilisin/kexin type 9, or PCSK9, gene has been shown to up-regulate LDL receptor expression, which leads to lower LDL-C levels. By making a single A-to-G change in the DNA genetic sequence of PCSK9, VERVE-101 aims to inactivate the target gene. InJanuary 2021 , Verve also reported preclinical proof-of-concept data in NHPs that demonstrated the successful use of ABEs to turn off PCSK9, and inJanuary 2022 , Verve announced it expects to submit an IND application for VERVE-101 in the second half of 2022.
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In July 2020 , we announced a research collaboration with the Institute of
Molecular and Clinical Ophthalmology Basel , or IOB. Founded in 2018 by a
consortium that includes Novartis, the University Hospital of Basel and the
University of Basel , IOB is a leader in basic and translational research aimed
at treating impaired vision and blindness. Clinical scientists at IOB have also
helped to develop better ways to measure how vision is impacted by Stargardt
disease.
Additionally, researchers at IOB have developed living models of the retina,
known as organoids, which can be used to test novel therapies. Under the terms
of the agreement with IOB, the parties will leverage IOB's unique expertise in
the field of ophthalmology along with our novel base editing technology to
advance programs directed to the treatment of certain ocular diseases, including
Stargardt disease.
Ex vivo collaborations
Sana Biotechnology
In October 2021 , we entered into an option and license agreement, or the Sana
Agreement, with Sana Biotechnology, Inc., or Sana, pursuant to which we granted
Sana non-exclusive research and development and commercial rights to our CRISPR
Cas12b technology to perform nuclease editing for certain ex vivo engineered
cell therapy programs. Under the terms of the Sana Agreement, licensed products
include certain specified allogeneic T cell and stem cell-derived products
directed at specified genetic targets, with certain limited rights for Sana to
add and substitute such products and targets. The Sana Agreement excludes the
grant of any Beam-controlled rights to perform base editing.
InJuly 2020 , we entered into an alliance agreement, or the BCH Agreement, withBoston Children's Hospital , or Boston Children's. Under the terms of the BCH Agreement, we will identify and sponsor research programs to be performed at Boston Children's, either solely by Boston Children's or by bothBoston Children's and us, to facilitate the development of certain disease-specific therapies using our proprietary base editing technology. Boston Children's will also serve as a clinical site to advance bench-to-bedside translation of our pipeline across certain therapeutic areas of interest, including programs in sickle cell disease and pediatric leukemias and exploration of new programs targeting other diseases.
Magenta Therapeutics
InJune 2020 , we announced a non-exclusive research and clinical trial collaboration agreement with Magenta Therapeutics Inc., or Magenta, to evaluate the potential utility of MGTA-117, Magenta's novel targeted antibody-drug conjugate, for conditioning of patients with sickle cell disease and beta-thalassemia receiving our base editing therapies. Conditioning is a critical component necessary to prepare a patient's body to receive the edited cells, which carry the corrected gene and must engraft in the patient's bone marrow in order to be effective. Today's conditioning regimens rely on nonspecific chemotherapy or radiation, which are associated with significant toxicities. MGTA-117 is designed to precisely target only hematopoietic stem and progenitor cells, to spare immune cells, and has shown high selectivity, potent efficacy, wide safety margins and broad tolerability in NHP models. MGTA-117 may be capable of clearing space in bone marrow to support long-term engraftment and rapid recovery in patients. Combining the precision of our base editing technology with the more targeted conditioning regimen enabled by MGTA-117 has the potential to further improve therapeutic outcomes for patients suffering from these severe diseases. Acquisitions InFebruary 2021 , we acquiredGuide Therapeutics, Inc. , or Guide, for upfront consideration in an aggregate amount of$120.0 million , excluding customary purchase price adjustments, in shares of our common stock, based upon the volume-weighted average price of the common stock over the ten trading-day period ending onFebruary 19, 2021 . In addition, Guide's former stockholders and optionholders are eligible to receive up to an additional$100.0 million in technology milestone payments and$220.0 million in product milestone payments, payable in our common stock.
COVID-19
With the ongoing concern related to the COVID-19 pandemic, we maintained our business continuity plans to address and mitigate the impact of the COVID-19 pandemic on our business. We expect to continue incurring additional costs to ensure we adhere to the guidelines instituted by theCenters for Disease Control and to provide a safe working environment to our onsite employees. The extent to which the COVID-19 pandemic impacts our business, our corporate development objectives, results of operations and financial condition, including the value of and market for our common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the duration, scope and severity of the pandemic, the existence and duration of any travel restrictions or business restrictions inthe United States and other countries, business closures and business disruptions, the effectiveness of actions taken inthe United States and other countries to contain and treat the disease, periodic spikes in infection rates, new strains of the virus that cause outbreaks of COVID-19, and the broad availability of effective vaccines and therapeutics. 28 -------------------------------------------------------------------------------- Disruptions to the global economy and supply chain, disruption of global healthcare systems, and other significant impacts of the COVID-19 pandemic could have a material adverse effect on our business, financial condition, results of operations and growth prospects. While the COVID-19 pandemic did not significantly impact our business or results of operations during the three months endedMarch 31, 2022 , the length and extent of the pandemic, its consequences, and containment efforts will determine its future impact on our operations and financial condition.
Critical accounting policies and significant judgements and estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we have prepared in accordance withU.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions. Our critical accounting policies are those policies which require the most significant judgments and estimates in the preparation of our condensed consolidated financial statements. We have determined that our most critical accounting policies are those relating to stock-based compensation, variable interest entities, fair value measurements, and leases. There have been no significant changes to our existing critical accounting policies and significant accounting policies discussed in the 2021 Form 10-K.
Financial operations overview
General
We were founded inJanuary 2017 and began operations inJuly 2017 . Since our inception, we have devoted substantially all of our resources to building our base editing platform and advancing development of our portfolio of programs, establishing and protecting our intellectual property, conducting research and development activities, organizing and staffing our company, business planning, raising capital and providing general and administrative support for these operations. To date, we have financed our operations primarily through the sales of our redeemable convertible preferred stock, proceeds from offerings of our common stock and payments received under collaboration and license agreements. We are an early-stage company, and all of our programs are at a preclinical or early clinical stage of development. To date, we have not generated any revenue from product sales and do not expect to generate revenue from the sale of products for the foreseeable future. Our revenue to date has been primarily derived from license and collaboration agreements with partners. Since inception we have incurred significant operating losses. Our net losses for the three months endedMarch 31, 2022 and 2021, were$69.2 million , and$201.6 million , respectively. As ofMarch 31, 2022 , we had an accumulated deficit of$837.5 million . We expect to continue to incur significant expenses and increasing operating losses in connection with ongoing development activities related to our internal programs and collaborations as we continue our preclinical and clinical development of product candidates; advance additional product candidates toward clinical development; build and operate our cGMP facility inNorth Carolina ; further develop our base editing platform; continue to make investments in delivery technology for our base editors, including the LNP technology we acquired through our acquisition of Guide; conduct research activities as we seek to discover and develop additional product candidates; maintain, expand, enforce, defend and protect our intellectual property portfolio; and continue to hire research and development, clinical, technical operations and commercial personnel. In addition, we expect to continue to incur the costs associated with operating as a public company. As a result of these anticipated expenditures, we will need to raise additional capital to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances, and licensing arrangements. We may be unable to raise additional funds or enter into such other agreements when needed on favorable terms or at all. Our inability to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. We can give no assurance that we will be able to secure such additional sources of capital to support our operations, or, if such capital is available to us, that such additional capital will be sufficient to meet our needs for the short or long term. Revenue Recognition InApril 2019 , we entered into a collaboration and license agreement, or the Verve Agreement, with Verve Therapeutics, Inc., or Verve, a company focused on gene editing for cardiovascular disease treatments. InJune 2021 , we entered into a research collaboration agreement, or the Apellis Agreement, with Apellis Pharmaceuticals, Inc., or Apellis, focused on the use of certain of our base editing technology to discover new treatments for complement system-driven diseases. InOctober 2021 , we entered into an option and license agreement, or the Sana Agreement, with Sana Biotechnology, Inc., or Sana, pursuant to which we granted Sana 29 -------------------------------------------------------------------------------- non-exclusive research and development and commercial rights to our CRISPR Cas12b technology to perform nuclease editing for certain ex vivo engineered cell therapy programs. InDecember 2021 , we entered into a research collaboration agreement, or the Pfizer Agreement, with Pfizer Inc., or Pfizer, focused on in vivo base editing programs for three targets for rare genetic diseases of the liver, muscle and central nervous system. We have not generated any revenue to date from product sales and do not expect to do so in the near future. During the three months endedMarch 31, 2022 and 2021, we recognized$8.4 million and$6.0 thousand of revenue, respectively.
Research and development expenses
Research and development expenses consist of costs incurred in performing research and development activities, which include:
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Expenses incurred in connection with investments in delivery technology for our base editors, including the LNP technology we acquired through our acquisition of Guide;
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the cost to obtain licenses to intellectual property, such as those withHarvard University , or Harvard,The Broad Institute, Inc. , orBroad Institute , Editas Medicine, Inc, or Editas, andBio Palette Co., Ltd. , or Bio Palette, and related future payments should certain success, development and regulatory milestones be achieved;
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personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation for employees engaged in research and development functions;
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expenses incurred in connection with the discovery and preclinical development of our research programs, including under agreements with third parties, such as consultants, contractors and contract research organizations;
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expenses incurred in connection with the initiation of clinical trials, including contract research organization costs and costs related to study preparation;
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expenses incurred in connection with regulatory filings;
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expenses incurred in connection with the building of our base editing platform;
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the cost of manufacturing materials for use in our preclinical studies, IND-enabling studies and clinical trials;
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laboratory supplies and research materials; and
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facilities, depreciation and other expenses which include direct and allocated expenses.
We expense research and development costs as incurred. Advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the benefits are consumed. In the early phases of development, our research and development costs are often devoted to product platform and proof-of-concept preclinical studies that are not necessarily allocable to a specific target.
We expect that our research and development expenses will increase substantially as we advance our programs through their planned preclinical and clinical development.
General and administrative expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, intellectual property, business development and administrative functions. General and administrative expenses also include legal fees relating to intellectual property and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel, and direct and allocated facility related expenses and other operating costs. We anticipate that our general and administrative expenses will increase in the future to support our increased research and development activities. We also expect to continue to incur costs associated with being a public company and maintaining controls over financial reporting, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq andSEC requirements, director and officer insurance costs, and investor and public relations costs.
Other income and expenses
Other income and expenses consist of the following items:
•
Change in fair value of derivative liabilities consists primarily of
remeasurement gains or losses associated with changes in success payment
liabilities associated with our license agreement with Harvard, dated as of
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Harvard License Agreement, and the license agreement with
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Change in fair value of non-controlling equity investments consists of mark-to-market adjustments related to our investments in equity securities.
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Change in fair value of contingent consideration liabilities consists of remeasurement of the fair market value of the technology and product contingent consideration liabilities related to the acquisition of Guide.
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Interest and other income (expense), consists primarily of interest income as well as interest expense related to our equipment financings.
Results of operations
Comparison of the three months ended
The following table summarizes our results of operations (in thousands):
Three Months Ended
2022 2021 Change
License and collaboration revenue $ 8,432 $ 6 $ 8,426
Operating expenses:
Research and development 65,410 190,106 (124,696 )
General and administrative 19,247 10,273 8,974
Total operating expenses 84,657 200,379 (115,722 )
Loss from operations (76,225 ) (200,373 ) 124,148
Other income (expense):
Change in fair value of derivative
liabilities 13,600 (1,900 ) 15,500
Change in fair value of non-controlling
equity investments (7,685 ) 1,039 (8,724 )
Change in fair value of contingent
consideration liabilities 452 (305 ) 757
Interest and other income (expense), net 644 (21 ) 665
Total other income (expense) 7,011 (1,187 ) 8,198
Net loss $ (69,214 ) $ (201,560 ) $ 132,346 License and collaboration revenue
License and collaboration revenue was approximately
Research and development expenses
Research and development expenses were$65.4 million and$190.1 million for the three months endedMarch 31, 2022 and 2021, respectively. The decrease of$124.7 million was primarily due to the following:
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A decrease of$155.0 million related to the write-off of in-process research and development asset acquired from Guide during the three months endedMarch 31, 2022 , as it was determined to be of no alternative future use.
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An increase of$10.8 million in personnel-related costs and$3.0 million in facility-related costs, including depreciation. These increases were due to the growth in the number of research and development employees from 182 atMarch 31, 2021 to 321 atMarch 31, 2022 , and their related activities, as well as the expense allocated to research and development related to our leased facilities.
•
An increase of
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An increase of
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An increase of
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An increase of$1.5 million in outsourced services, driven by process development spend and IND-enabling materials for BEAM-102, assay development and qualification for mRNA and gRNA for BEAM-101 and BEAM-201, toxicology studies related to BEAM-201 and initial clinical start-up activities for BEAM-101. 31 --------------------------------------------------------------------------------
•
An increase of
Research and development expenses are expected to continue to increase as we initiate clinical trials for BEAM-101, continue IND-enabling studies for BEAM-102 and BEAM-201, begin IND-enabling studies for BEAM-301, continue our current research programs, initiate new research programs, continue the preclinical and clinical development of our product candidates and conduct any future preclinical studies and begin to enroll patients in and conduct clinical trials for any of our product candidates.
General and administrative expenses
General and administrative expenses were$19.2 million and$10.3 million for the three months endedMarch 31, 2022 and 2021, respectively. The increase of$9.0 million was primarily due to the following:
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An increase of$5.2 million in stock-based compensation due to an increase in the number of general and administrative employees, as well as an increase in the value of our common stock during 2021.
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An increase of$3.4 million in personnel related costs and$0.1 million in facility-related costs, including depreciation, due to an increase in general and administrative employees from 34 employees as ofMarch 31, 2021 to 73 employees as ofMarch 31, 2022 , as well as the expense allocated to general and administrative expenses related to our leased facilities.
•
An increase of
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An increase of
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A decrease of
Change in fair value of derivative liabilities
During the three months endedMarch 31, 2022 , we recorded$13.6 million of other income related to the change in fair value of success payment liabilities due to a decrease in the price of our common stock for the three months endedMarch 31, 2022 . During the three months endedMarch 31, 2021 , we recorded$1.9 million of other expense due to an increase in the price of our common stock for the three months endedMarch 31, 2021 . A portion of the success payment obligations were paid inJune 2021 ; the remaining success payment obligations are still outstanding as ofMarch 31, 2022 and will continue to be revalued at each reporting period.
Change in fair value of non-controlling equity investments
During the three months endedMarch 31, 2022 and 2021, we recorded$7.7 million of other expense and$1.0 million of other income, respectively, as a result of changes in the value of our investment in Verve's common stock.
Change in contingent consideration liabilities
During the three months endedMarch 31, 2022 and 2021, we recorded$0.5 million of other income and$0.3 million of other expense, respectively, related to the change in fair value of the Guide technology and product contingent consideration liabilities. These changes are a result of an update in project timelines and the expected probability of achievement of the milestones.
Interest and other income (expense), net
Interest and other income (expense), net was
Liquidity and capital resources
Since our inception inJanuary 2017 , we have not generated any revenue from product sales, have generated only limited license and collaboration revenue from our license and collaboration agreements, and have incurred significant operating losses and negative cash flows from our operations. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and the clinical development of our product candidates. To date, we have funded our operations primarily through equity offerings. InJanuary 2021 , we issued and sold 2,795,700 shares of our common stock in a private placement at an offering price of$93.00 per share for aggregate gross proceeds of$260.0 million . We received$252.0 million in net proceeds after deducting offering expenses payable by us. To date, we have funded our operations primarily through equity offerings. InApril 2021 , we filed a universal shelf registration statement on Form S-3 with theSEC , or the 2021 Shelf, to register for sale an indeterminate amount of our common stock, preferred stock, debt securities, warrants and/or units in one or more offerings, which became effective upon filing with theSEC (File No. 333-254946). 32 -------------------------------------------------------------------------------- InApril 2021 , we entered into an at the market, or ATM, sales agreement, or the Sales Agreement, withJefferies LLC , or Jefferies, pursuant to which we were entitled to offer and sell, from time to time at prevailing market prices, shares of our common stock having aggregate gross proceeds of up to$300.0 million . We agreed to pay Jefferies a commission of up to 3.0% of the aggregate gross sale proceeds of any shares sold by Jefferies under the Sales Agreement. Between April andJuly 2021 , we sold 2,908,009 shares of our common stock under the Sales Agreement at an average price of$103.16 per share for aggregate gross proceeds of$300.0 million , before deducting commissions and offering expenses payable by us. InJuly 2021 , we and Jefferies entered into an amendment to the Sales Agreement to provide for an increase in the aggregate offering amount under the Sales Agreement, such that as ofJuly 7, 2021 , we may offer and sell shares of common stock having an aggregate offering price of an additional$500.0 million . As ofMarch 31, 2022 , we have sold 2,873,956 additional shares of our common stock under the amended Sales Agreement at an average price of$92.71 per share for aggregate gross proceeds of$266.5 million , before deducting commissions and offering expenses payable by us. InDecember 2021 , we entered into the Pfizer Agreement, which is focused on in vivo base editing programs for three targets for rare genetic diseases of the liver, muscle and central nervous system. Under the terms of the Pfizer Agreement, we will conduct all research activities through development candidate selection for three undisclosed targets, which are not included in our existing programs. Pursuant to the Pfizer Agreement, we received an upfront payment of$300.0 million inJanuary 2022 .
As of
We are required to make success payments toHarvard and Broad Institute based on increases in the per share fair market value of our Series A-1 Preferred Stock and Series A-2 Preferred Stock or, subsequent to our IPO, our common stock. The amounts due may be settled in cash or shares of our common stock, at our discretion. InMay 2021 , the first success payment measurements occurred and success payments toHarvard and Broad Institute were calculated to be$15.0 million and$15.0 million , respectively. We elected to make each payment in shares of our common stock and issued 174,825 shares to each ofHarvard and Broad Institute to settle these liabilities inJune 2021 . We may additionally oweHarvard and Broad Institute success payments of up to an additional$90.0 million each. We have not yet commercialized any of our product candidates, and we do not expect to generate revenue from the sale of our product candidates for the foreseeable future. We anticipate that we may need to raise additional capital in order to continue to fund our research and development, including our planned preclinical studies and clinical trials, building, maintaining and operating a commercial-scale cGMP manufacturing facility, and new product development, as well as to fund our general operations. As necessary, we will seek to raise additional capital through various potential sources, such as equity and debt financings or through corporate collaboration and license agreements. We can give no assurances that we will be able to secure such additional sources of capital to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs.
Cash flows
The following table summarizes our sources and uses of cash (in thousands):
Three Months
Ended
2022 2021
Net cash provided by (used in) operating activities
$ (38,578 ) Net cash used in investing activities (537,339 ) (279,626 ) Net cash provided by financing activities 55,676 253,274
Net change in cash, cash equivalents and restricted cash
Operating activities Net cash provided by operating activities for the three months endedMarch 31, 2022 was$218.5 million , consisting primarily of the collection of collaboration receivables of$300.0 million related to the Pfizer Agreement and an increase in other long-term liabilities of$8.3 million , in addition to noncash items consisting primarily of stock-based compensation expense of$18.0 million , a decrease in the fair value of a non-controlling equity investment of$7.7 million , depreciation and amortization expense of$3.3 million and a change in operating lease ROU assets of$2.0 million . These sources of cash were partially offset by our net loss of$69.2 million , decreases in accrued expenses and other liabilities of$16.5 million , deferred revenue of$8.4 million , operating lease liabilities of$1.8 million and accounts payable of$1.3 million , and an increase in prepaid expenses and other current assets of$9.2 million , as well as noncash items including decreases in the fair value of derivative liabilities of$13.6 million and in the fair value of contingent consideration liabilities of$0.5 million as well as amortization of investment premiums of$0.4 million . Net cash used in operating activities for the three months endedMarch 31, 2021 was$38.6 million , consisting primarily of our net loss of$201.6 million , a decrease in accrued expenses and other liabilities of$4.5 million , an increase in prepaid expenses and other current assets of$2.4 million , a decrease in accounts payable of$0.7 million and other non-cash items of$1.0 million ; offset by a change in operating lease liabilities of$6.1 million , and noncash expenses consisting primarily of in-process research and development expense of$155.0 million related to our acquisition of Guide, stock-based compensation expense of$4.6 million , change 33 --------------------------------------------------------------------------------
in operating lease ROU assets of
Investing activities
For the three months ended
For the three months endedMarch 31, 2021 , cash used in investing activities was primarily the net purchases of marketable securities of$268.8 million , and purchases of property and equipment of$11.5 million . We also received$0.6 million in cash from our acquisition of Guide, after the payment of acquisition costs. Financing activities Net cash provided by financing activities for the three months endedMarch 31, 2022 consisted primarily of proceeds from equity offerings of$54.0 million ,$1.4 million of proceeds from the issuance of common stock under benefit plans, and proceeds from the exercise of stock options of$0.8 million , offset in part by repayments of equipment financing liabilities of$0.6 million . Net cash provided by financing activities for the three months endedMarch 31, 2021 consisted primarily of proceeds from our private placement offering of$260.0 million and proceeds from the exercise of stock options of$1.8 million , offset in part by the payment of equity offering costs of$8.0 million and repayments of equipment financing liabilities of$0.5 million .
Funding requirements
Our operating expenses are expected to increase substantially as we continue to advance our portfolio of programs.
Specifically, our expenses will increase if and as we:
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initiate clinical trials of our product candidates, including our BEACON-101 trial;
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continue our research programs and our preclinical development of product candidates from our research programs;
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seek to identify additional research programs and additional product candidates;
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initiate preclinical studies and clinical trials for additional product candidates we identify and develop;
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maintain, expand, enforce, defend, and protect our intellectual property portfolio and provide reimbursement of third-party expenses related to our patent portfolio;
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seek marketing approvals for any of our product candidates that successfully complete clinical trials;
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establish a sales, marketing, and distribution infrastructure to commercialize any medicines for which we may obtain marketing approval';
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further develop our base editing platform;
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further develop delivery technology for our base editors, including the LNP technology we acquired through our acquisition of Guide;
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continue to hire additional personnel including research and development, clinical and commercial personnel;
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add operational, financial, and management information systems and personnel, including personnel to support our product development;
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acquire or in-license products, intellectual property, medicines and technologies; and
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build, maintain, and operate a commercial-scale cGMP manufacturing facility.
We expect that our cash, cash equivalents and marketable securities atMarch 31, 2022 will enable us to fund our current and planned operating expenses and capital expenditures for at least the twelve calendar months beginningMarch 31, 2022 and beyond such twelve-month period. We have based these estimates on assumptions that may prove to be imprecise, and we may exhaust our available capital resources sooner that we currently expect. Because of the numerous risks and uncertainties associated with the development our programs, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates.
Our future funding requirements will depend on many factors including:
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the cost of continuing to build our base editing platform;
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the costs of acquiring licenses for the delivery modalities that will be used with our product candidates;
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the scope, progress, results, and costs of discovery, preclinical development, laboratory testing, manufacturing and clinical trials for the product candidates we may develop;
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the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights, and defending intellectual property-related claims;
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the costs, timing, and outcome of regulatory review of the product candidates we develop;
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the costs of future activities, including product sales, medical affairs, marketing, manufacturing, distribution, coverage and reimbursement for any product candidates for which we receive regulatory approval;
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the success of our license agreements and our collaborations;
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our ability to establish and maintain additional collaborations on favorable terms, if at all;
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the achievement of milestones or occurrence of other developments that trigger payments under any collaboration agreements we are a party to or may become a party to;
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the payment of success liabilities toHarvard and Broad Institute pursuant to the respective terms of the Harvard License Agreement and theBroad Institute License Agreement, should we choose to pay in cash;
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the extent to which we acquire or in-license products, intellectual property, and technologies;
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the costs of obtaining, building, operating and expanding our manufacturing capacity; and;
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the impacts of the COVID-19 pandemic and our response to it.
A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Further, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and licensing arrangements. We do not have any committed external source of capital. We have historically relied on equity issuances to fund our capital needs and will likely rely on equity issuances in the future. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise capital through additional collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates, or we may have to grant licenses on terms that may not be favorable to us. If we are unable to raise additional capital through equity or debt financings when needed, we may be required to delay, limit, reduce, or terminate our product development or, if approved, future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We can give no assurance that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional funding will be sufficient to meet our needs.
Contractual obligations
We enter into contracts in the normal course of business with contract research organizations and other vendors to assist in the performance of our research and development activities and other services and products for operating purposes. These contracts generally provide for termination on notice, and therefore are cancelable contracts and not included in our calculations of contractual obligations and commitments. During the three months endedMarch 31, 2022 , there were no material changes to our contractual obligations and commitments described under Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2021 Form 10-K.
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