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
Part I "Item 1A. Risk Factors" section of our Annual Report on Form 10-K for the
fiscal year ended
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.
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Wave 1: Ex Vivo Base Editing via Autologous Transplant with BEAM-101 and BEAM-102
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, 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 the
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, the
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 HSC
transplantation, or 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. In
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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. In
Achieving Understanding of the Natural History of Sickle Trait (AUNT) Study
In
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 in
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, allogeneic 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
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 allogeneic 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. At the end of
After Beam-201, we are focused on identifying the collection of multiplex base edits required to make cells fully allogeneic, with internal and external data suggesting a higher number of edits will be required to meet this goal. As a result, we do not expect to nominate a second CAR-T development candidate in 2022 and anticipate providing further updates in 2023.
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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 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
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
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, in
In
In
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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.
In
Hepatitis B Virus
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
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 in
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. In
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.
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Consistent with this approach, our acquisition of
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.
In
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
In
Apellis Pharmaceuticals
In
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Verve Therapeutics
In
In
In
In
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
In
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Magenta Therapeutics
In
Acquisitions
In
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 the
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 in
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 or six months ended
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 with
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.
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Financial operations overview General
We were founded in
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 six months
ended
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
In
We have not generated any revenue to date from product sales and do not expect
to do so in the near future. During the six months ended
Research and development expenses
Research and development expenses consist of costs incurred in performing research and development activities, which include:
•
Expenses incurred in connection with investments in delivery technology for our base editors, including the LNP technology we acquired through our acquisition of Guide;
•
the cost to obtain licenses to intellectual property, such as those with
•
personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation for employees engaged in research and development functions;
•
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;
•
expenses incurred in connection with regulatory filings;
•
expenses incurred in connection with the building of our base editing platform;
•
the cost of manufacturing materials for use in our preclinical studies, IND-enabling studies and clinical trials;
•
laboratory supplies and research materials; and
•
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 and
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
•
Change in fair value of non-controlling equity investments consists of mark-to-market adjustments related to our investments in equity securities.
•
Change in fair value of contingent consideration liabilities consists of remeasurement gains or losses associated with changes in the technology and product contingent consideration liabilities related to the acquisition of Guide.
•
Interest and other income (expense), consists primarily of interest income as well as interest expense related to our equipment financings.
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Results of operations
Comparison of the three months ended
The following table summarizes our results of operations (in thousands):
Three Months Ended June 30,
2022 2021 Change
License and collaboration revenue $ 16,652 $ 6 $ 16,646
Operating expenses:
Research and development 74,556 45,577 28,979
General and administrative 24,062 13,403 10,659
Total operating expenses 98,618 58,980 39,638
Loss from operations (81,966 ) (58,974 ) (22,992 )
Other income (expense):
Change in fair value of derivative
liabilities 12,200 (42,300 ) 54,500
Change in fair value of non-controlling
equity investments (4,124 ) 25,814 (29,938 )
Change in fair value of contingent
consideration liabilities (120 ) (741 ) 621
Interest and other income (expense), net 2,060 (52 ) 2,112
Total other income (expense) 10,016 (17,279 ) 27,295
Net loss $ (71,950 ) $ (76,253 ) $ 4,303 License and collaboration revenue
License and collaboration revenue was
Research and development expenses
Research and development expenses were
•
An increase of
•
An increase of
•
An increase of
•
An increase of
•
An increase of
•
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.
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General and administrative expenses
General and administrative expenses were
•
An increase of
•
An increase of
•
An increase of
•
An increase of
Change in fair value of derivative liabilities
During the three months ended
Change in fair value of non-controlling equity investments
During the three months ended
Change in contingent consideration liabilities
During the three months ended
Interest and other income (expense), net
Interest and other income (expense), net was
Comparison of the six months ended
The following table summarizes our results of operations (in thousands):
Six Months Ended June 30,
2022 2021 Change
License and collaboration revenue $ 25,084 $ 12 $ 25,072
Operating expenses:
Research and development 139,966 235,683 (95,717 )
General and administrative 43,309 23,676 19,633
Total operating expenses 183,275 259,359 (76,084 )
Loss from operations (158,191 ) (259,347 ) 101,156
Other income (expense):
Change in fair value of derivative liabilities 25,800 (44,200 ) 70,000
Change in fair value of non-controlling equity
investments (11,809 ) 26,852 (38,661 )
Change in fair value of contingent
consideration liabilities 332 (1,046 ) 1,378
Interest and other income (expense), net 2,704 (72 ) 2,776
Total other income (expense) 17,027 (18,466 ) 35,493
Net loss $ (141,164 ) $ (277,813 ) $ 136,649 License and collaboration revenue
License and collaboration revenue was
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Research and development expenses
Research and development expenses were
•
A decrease of
•
An increase of
•
An increase of
•
An increase of
•
An increase of
•
An increase of
•
An increase of
General and administrative expenses
General and administrative expenses were
•
An increase of
•
An increase of
•
An increase of
•
An increase of
•
An increase of
•
A decrease of
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Change in fair value of derivative liabilities
During the six months ended
Change in fair value of non-controlling equity investments
During the six months ended
Change in contingent consideration liabilities
During the six months ended
Interest and other income (expense), net
Interest and other income (expense), net was
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Liquidity and capital resources
Since our inception in
To date, we have funded our operations primarily through equity offerings. In
In
In
In
In
In
As of
We are required to make success payments to
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.
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Cash flows
The following table summarizes our sources and uses of cash (in thousands):
Six Months Ended June 30,
2022 2021
Net cash provided by (used in) operating activities
(538,601 ) (292,763 )
Net cash provided by financing activities 78,016 413,712
Net change in cash, cash equivalents and restricted cash
Operating activities
Net cash provided by operating activities for the six months ended
Net cash used in operating activities for the six months ended
Investing activities
For the six months ended
For the six months ended
Financing activities
Net cash provided by financing activities for the six months ended
Net cash provided by financing activities for the six months ended
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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:
•
initiate clinical trials of our product candidates, including our BEACON-101 trial;
•
continue our research programs and our preclinical development of product candidates from our research programs;
•
seek to identify additional research programs and additional product candidates;
•
initiate preclinical studies and clinical trials for additional product candidates we identify and develop;
•
maintain, expand, enforce, defend, and protect our intellectual property portfolio and provide reimbursement of third-party expenses related to our patent portfolio;
•
seek marketing approvals for any of our product candidates that successfully complete clinical trials;
•
establish a sales, marketing, and distribution infrastructure to commercialize any medicines for which we may obtain marketing approval;
•
further develop our base editing platform;
•
further develop delivery technology for our base editors, including the LNP technology we acquired through our acquisition of Guide;
•
continue to hire additional personnel including research and development, clinical and commercial personnel;
•
add operational, financial, and management information systems and personnel, including personnel to support our product development;
•
acquire or in-license products, intellectual property, medicines and technologies; and
•
build, maintain, and operate a commercial-scale cGMP manufacturing facility.
We expect that our cash, cash equivalents and marketable securities at
Our future funding requirements will depend on many factors including:
•
the cost of continuing to build our base editing platform;
•
the costs of acquiring licenses for the delivery modalities that will be used with our product candidates;
•
the scope, progress, results, and costs of discovery, preclinical development, laboratory testing, manufacturing and clinical trials for the product candidates we may 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, distribution, coverage and reimbursement for any product candidates for which we receive regulatory approval;
•
the success of our license agreements and our collaborations;
•
our ability to establish and maintain additional collaborations on favorable terms, if at all;
•
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;
•
the payment of success liabilities to
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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. We lease certain assets under noncancelable
operating and finance leases, which expire through 2038. The leases relate
primarily to office space and laboratory space in addition to equipment.
Aggregate future minimum commitments under these office and laboratory leases
and equipment leases are
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