The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year endedDecember 31, 2020 , which was filed with theSecurities and Exchange Commission ("SEC") onFebruary 26, 2021 (the "Annual Report"). This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. All statements addressing our future operating performance and clinical development and regulatory timelines that we expect or anticipate will occur in the future, are forward-looking statements. There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements, including uncertainties inherent in the initiation and completion of pre-clinical studies and clinical trials and clinical development of our product candidates; availability and timing of results from pre-clinical studies and clinical trials; whether interim results from a clinical trial will be predictive of the final results of the trial or the results of future trials; expectations for regulatory approvals to conduct trials or to market products and availability of funding sufficient for our foreseeable and unforeseeable operating expenses and capital expenditure requirements. These and other risks are described in greater detail in our Annual Report under the captions "Risk Factor Summary" and "Risk Factors," in this Quarterly Report on Form 10-Q under the caption "Risk Factors," and in other filings that we may make with theSEC in the future. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we
may make. You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Overview We are a leading, clinical stage genome editing company dedicated to developing potentially transformative gene-editing medicines to treat a broad range of serious diseases. We have developed a proprietary gene-editing platform based on CRISPR technology and we continue to expand its capabilities. Our product development strategy is to target diseases of high unmet need where we aim to make differentiated, transformational medicines using our gene-editing platform. We are advancing in vivo gene-editing medicines, in which the medicine is injected or infused into the patient to edit the cells inside their body, ex vivo gene-edited cell medicines, in which cells collected from a patient are edited with our technology and then administered back to that same patient, and cellular therapy medicines, in which we use our technology to edit cells collected from a donor to develop medicines that can be administered to a separate patient. While our discovery efforts have ranged across several diseases and therapeutic areas, the areas where our programs are more mature are in our in vivo gene-editing medicines to treat ocular diseases, our ex vivo gene-edited cell medicines to treat hemoglobinopathies, and our cellular therapy medicines to treat cancer. In ocular diseases, our most advanced program is designed to address a specific genetic form of retinal degeneration called Leber congenital amaurosis 10 ("LCA10"), a disease for which we are not aware of any available therapies and only one other potential treatment is in clinical trials inthe United States andEurope . In mid-2019, we initiated our Phase 1/2 BRILLIANCE clinical trial for EDIT-101, an experimental gene-editing medicine to treat LCA10. We plan to enroll approximately 18 patients inthe United States andEurope in up to five cohorts. We have completed dosing of the first two cohorts, the adult low-dose and mid-dose cohorts. In the second quarter of 2021, we 15
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began enrolling patients in the adult high-dose cohort and, following the
endorsement by an independent data monitoring committee, the first of two
planned pediatric cohorts. We expect to complete dosing of both the adult
high-dose cohort and the pediatric mid-dose cohort in the first half of
2022. Initial clinical data from the first two cohorts is planned for
presentation in
For our ex vivo gene-edited cell medicines, our lead program is EDIT-301, an experimental medicine to treat sickle cell disease, a severe inherited blood disease that causes premature death, and beta-thalassemia, another inherited blood disorder characterized by severe anemia. InDecember 2020 , we submitted an investigational new drug application ("IND") to theU.S. Food and Drug Administration ("FDA") for the initiation of a Phase 1/2 clinical trial of EDIT-301, which we refer to as our RUBY trial, for the treatment of sickle cell disease. InJanuary 2021 , the FDA cleared the start of enrollment and dosing of patients in the first phase of the trial (which is designed to validate the safety and beneficial effects of the cell editing process). In parallel, the FDA imposed a partial clinical hold and requested we develop a potency assay to ensure that the characteristics of the product released are as expected and confirmed by clinical data collected in the first patients treated. The RUBY trial is currently screening patients for enrollment, and we expect to begin dosing in the trial by the end of 2021. We remain on track to submit an IND for EDIT-301 for the treatment of beta-thalassemia by the end of 2021. In cellular therapy medicines, we continue to develop our capabilities to generate cells from induced pluripotent stem cells to develop engineered cell medicines to treat cancer and are also advancing alpha-beta T cell experimental medicines. InMay 2015 , we entered into a collaboration withJuno Therapeutics, Inc. , a wholly-owned subsidiary of Bristol-Myers Squibb Company ("Juno Therapeutics"), a leader in the emerging field of immuno-oncology, to develop novel engineered alpha-beta T cell therapies for cancer and autoimmune diseases, which was amended and restated in each ofMay 2018 andNovember 2019 , at which time we also entered into a related license agreement withJuno Therapeutics , which we collectively refer to as our collaboration with them. InMarch 2017 , we entered into a strategic alliance and option agreement withAllergan Pharmaceuticals International Limited (together with its affiliates, "Allergan") to discover, develop, and commercialize new gene editing medicines for a range of ocular disorders. We received an aggregate of$130.0 million in payments under this agreement, which consisted of the initial upfront payment, an option exercise payment, and a milestone payment. We and Allergan subsequently entered into a co-development and commercialization agreement under which we agreed to co-develop and equally split profits and losses for EDIT-101 inthe United States . InAugust 2020 , we and Allergan terminated the strategic alliance and option agreement and the co-development and commercialization agreement, and we assumed full rights to EDIT-101 and responsibility for conducting the clinical trial. In connection with such termination, we and Allergan entered into a termination agreement, pursuant to which we made a one-time aggregate payment of$20.0 million to Allergan. Since our inception inSeptember 2013 , our operations have focused on organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio, assembling our core capabilities in gene editing, seeking to identify potential product candidates, and undertaking preclinical studies. Except for EDIT-101 and EDIT-301, all of our research programs are still in the preclinical or research stage of development and the risk of failure of all of our research programs is high. We have not generated any revenue from product sales. We have primarily financed our operations through various equity financings and payments received under our research collaboration withJuno Therapeutics and our strategic alliance with Allergan. Since inception, we have incurred significant operating losses. Our net losses were$112.0 million and$61.3 million for the six months endedJune 30, 2021 and 2020, respectively. As ofJune 30, 2021 , we had an accumulated deficit of$777.2 million . We expect to continue to incur significant expenses and operating losses for the foreseeable future. Our net losses may fluctuate significantly from quarter to quarter and from year to year. We anticipate that our expenses will increase substantially as we continue our current research programs and our preclinical development activities; progress the clinical development of EDIT-101 for the treatment of LCA10 and EDIT-301 for the treatment of sickle cell disease; seek to identify additional research programs and additional product candidates; initiate preclinical testing and clinical trials for other product candidates we identify and develop, including EDIT-301 for the treatment of beta-thalassemia; maintain, expand, and protect our intellectual property portfolio, including reimbursing our licensors for such expenses related to the intellectual property that we in-license from such licensors; further develop our genome 16 Table of Contents
editing platform; hire additional clinical, quality control, and scientific
personnel; and incur costs associated with operating as a public company. We do
not expect to be profitable for the year ending
Although we did not experience any significant impact on our financial condition, results of operations or liquidity due to the ongoing COVID-19 pandemic during the six months endedJune 30, 2021 , the pandemic continues to be dynamic and near-term risks to our business remain. Vaccines are being distributed and administered, but utilization of the vaccines has been varied and new variants of the virus are emerging that have shown to be more contagious, which has resulted in increased infection rates and may result in re-imposed governmental restrictions to reduce the spread of COVID-19. As a result, the ultimate impact of the COVID-19 pandemic continues to be highly uncertain and we do not yet know the full extent of potential delays or impacts on our business, our ability to continue to raise additional capital, the EDIT-101 or EDIT-301 clinical trials, ongoing preclinical activities, or the global economy as a whole. InMarch 2020 , we implemented a work from home policy, and restricted on-site activities at our facilities inMassachusetts andColorado to certain manufacturing, laboratory and related support activities in light of the COVID-19 pandemic. Under our return to onsite work plans, we have gradually resumed manufacturing, laboratory and related support activities at our facilities inMassachusetts andColorado , and anticipate a full reopening of our facilities in the third quarter of 2021 using a hybrid work model. We will continue to monitor and respond to the changing conditions created by the pandemic, with focus on prioritizing the health and safety of our employees and maintaining safe and reliable operations of our facilities.
Financial Operations Overview
Revenue
To date, we have not generated any revenue from product sales and we do not expect to generate any revenue from product sales for the foreseeable future. In connection with our collaboration withJuno Therapeutics , we have received an aggregate of$126.0 million in payments, which have primarily consisted of the initial upfront and amendment payments, development milestone payments, research funding support and certain opt-in fees. We no longer receive research funding support. As ofJune 30, 2021 , we recorded$85.0 million of deferred revenue in relation to our collaboration withJuno Therapeutics , of which$51.0 million is classified as long-term on our condensed consolidated balance sheet. During the six months endedJune 30, 2021 , we recognized$5.7 million of previously deferred revenue related to our collaboration withJuno Therapeutics . Under this collaboration, we will recognize revenue upon delivery of option packages toJuno Therapeutics or upon receipt of development milestone payments. We expect that our revenue will fluctuate from quarter-to-quarter and year-to-year as a result of the timing of when we deliver such option packages or receive such milestone payments.
For additional information about our revenue recognition policy related to the
For the foreseeable future we expect substantially all of our revenue will be
generated from our collaboration with
Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research and development activities, including our drug discovery efforts and preclinical studies and clinical trials under our research programs, which include:
? employee-related expenses including salaries, benefits, and stock-based
compensation expense;
? costs of funding research performed by third parties that conduct research and
development and preclinical and clinical activities on our behalf;
17 Table of Contents
? costs of purchasing lab supplies and non-capital equipment used in our
preclinical activities and in manufacturing preclinical study materials;
? consultant fees;
? facility costs, including rent, depreciation, and maintenance expenses; and
fees for acquiring and maintaining licenses under our third-party licensing
? agreements, including any sublicensing or success payments made to our
licensors.
Research and development costs are expensed as incurred. At this time, we cannot reasonably estimate or know
the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of any product candidates we may identify and develop. This is due to the numerous risks and uncertainties associated with developing such product candidates, including the uncertainty of:
? successful completion of preclinical studies, IND-enabling studies and natural
history studies;
? successful enrollment in, and completion of, clinical trials;
? receipt of marketing approvals from applicable regulatory authorities;
? establishing clinical, commercial manufacturing capabilities or making
arrangements with third-party manufacturers;
? obtaining and maintaining patent and trade secret protection and non-patent
exclusivity;
? launching commercial sales of a product, if and when approved, whether alone or
in collaboration with others;
? acceptance of a product, if and when approved, by patients, the medical
community, and third-party payors;
? effectively competing with other therapies and treatment options;
? a continued acceptable safety profile following approval;
? enforcing and defending intellectual property and proprietary rights and
claims; and
? achieving desirable medicinal properties for the intended indications.
A change in the outcome of any of these variables with respect to the development of any product candidates we develop would significantly change the costs, timing, and viability associated with the development of that product candidate. Research and development activities are central to our business model. We expect research and development costs to increase significantly for the foreseeable future as our development programs progress, including as we continue to progress the clinical development of EDIT-101 and EDIT-301 as well as supporting preclinical studies for our other research programs.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation for personnel in executive, finance, investor relations, business development, legal, corporate affairs, information technology, facilities and human resource functions. Other significant costs include corporate facility costs 18
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not otherwise included in research and development expenses, legal fees related to intellectual property and corporate matters, and fees for accounting and consulting services.
We anticipate that our general and administrative expenses will increase in the future to support continued research and development activities and potential commercialization of any product candidates we identify and develop. These increases will include increased costs related to the hiring of additional personnel and fees to outside consultants. We also anticipate increased expenses related to reimbursement of third-party patent-related expenses and expenses associated with operating as a public company, including costs for audit, legal, regulatory, and tax-related services, director and officer insurance premiums, and investor relations costs. With respect to reimbursement of third-party intellectual property-related expenses specifically, given the ongoing nature of the opposition and interference proceedings involving the patents licensed to us under our license agreements withThe Broad Institute, Inc. ("Broad") and the President and Fellows ofHarvard College ("Harvard"), we anticipate general and administrative expenses will continue to be significant.
Other Income, Net
For the six months ended
For the six months endedJune 30, 2020 , other income, net consisted primarily of changes in the fair value of equity securities, interest income and accretion of discounts associated with other marketable securities.
Critical Accounting Policies and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance withUnited States generally accepted accounting principles. The preparation of our condensed consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in estimates, if any, will be reflected in the condensed consolidated financial statements prospectively from the date of change in estimates. There have been no material changes to our critical accounting policies from those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report. 19 Table of Contents Results of Operations
Comparison of the Three Months ended
The following table summarizes our results of operations for the three months
ended
Three Months Ended June 30, 2021 2020 Dollar Change Percentage Change Collaboration and other research and development revenues$ 379 $ 10,749 $ (10,370) (96) % Operating expenses: Research and development 33,753 28,007 5,746 21 % General and administrative 22,027 14,081 7,946 56 % Total operating expenses 55,780 42,088 13,692 33 % Other income, net: Other (expense) income, net (1) 7,175 (7,176) n/m Interest income, net 146 592 (446) (75) % Total other income, net 145 7,767 (7,622) (98) % Net loss$ (55,256) $ (23,572) $ (31,684) n/m For our results of operations, we have included the respective percentage of changes, unless greater than 100% or less than (100)%, in which case we have denoted such changes as not meaningful (n/m).
Collaboration and other research and development revenues
Collaboration and other research and development revenues decreased by$10.3 million , to$0.4 million , for the three months endedJune 30, 2021 from$10.7 million for three months endedJune 30, 2020 . This decrease was primarily attributable to$7.6 million in revenue recognized pursuant to an out-license agreement we entered into during the second quarter of 2020 and a$0.8 million increase in revenue recognized in the second quarter of 2020 related to our strategic alliance with Allergan for which there was no similar revenue recognized in the second quarter 2021.
Research and development expenses
Research and development expenses increased by$5.8 million , to$33.8 million , for the three months endedJune 30, 2021 from$28.0 million for the three months endedJune 30, 2020 . The following table summarizes our research and development expenses for the three months endedJune 30, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change: Three Months Ended June 30, 2021 2020 Dollar Change Percentage Change External research and development expenses$ 13,852 $ 9,076 $ 4,776 53 % Employee related expenses 9,748 7,919 1,829 23 % Facility expenses 4,185 3,394 791 23 %
Stock-based compensation expenses 4,171 2,673
1,498 56 % Sublicense and license fees 648 3,730 (3,082) (83) % Other expenses 1,149 1,215 (66) (5) % Total research and development expenses$ 33,753 $ 28,007 $ 5,746 21 % 20 Table of Contents The increase in research and development expenses for the three months endedJune 30, 2021 compared to the three months endedJune 30, 2020 was primarily attributable to:
approximately
? expenses related primarily to the clinical and manufacturing development of
EDIT-101, EDIT-301, and our other programs;
approximately
? to an increase in the size of our workforce, including the expansion of our
research and development organization;
approximately
? primarily due to the hiring of our new Chief Scientific Officer and Chief
Regulatory Officer in the second quarter 2021; and
? approximately
These increases were partially offset by approximately$3.1 million in decreased sublicense and license fees related to fees owed to our licensors in connection with an out-license agreement entered into during the second quarter of 2020 and for which there was no similar fees owed in the second quarter 2021.
General and administrative expenses
General and administrative expenses increased by$7.9 million , to$22.0 million , for the three months endedJune 30, 2021 from$14.1 million for the three months endedJune 30, 2020 . The following table summarizes our general and administrative expenses for the three months endedJune 30, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change: Three Months Ended June 30, 2021 2020 Dollar Change Percentage Change Stock-based compensation expenses$ 9,355 $ 2,744 $ 6,611 n/m Intellectual property and patent related fees 4,754 3,640 1,114 31 % Employee related expenses 4,371 3,766 605 16 % Other expenses 2,232 1,950 282 14 % Professional service expenses 1,315 1,981 (666) (34) % Total general and administrative expenses$ 22,027 $ 14,081 $ 7,946 56 % The increase in general and administrative expenses for the three months endedJune 30, 2021 compared to the three months endedJune 30, 2020 was primarily attributable to:
approximately
? related primarily to the performance awards granted in 2021 to our Chief
Executive Officer that were achieved or deemed probable in the second quarter
of 2021;
? approximately
related fees;
approximately
? attributable to the separation of our former Chief Executive Officer from our
company in
Officer in 2021; and
? approximately
These increases were partially offset by approximately
21 Table of Contents Other income, net
For the three months ended
For the three months endedJune 30, 2020 , other income, net was$7.8 million , which was primarily attributable to the unrealized gains related to corporate equity securities, interest income and accretion of discounts associated with marketable securities.
Comparison of the Six Months ended
The following table summarizes our results of operations for the six months
ended
Six Months Ended June 30, 2021 2020 Dollar Change Percentage Change Collaboration and other research and development revenues$ 6,878 $ 16,472 $ (9,594) (58) % Operating expenses: Research and development 75,690 62,576 13,114 21 % General and administrative 43,471 31,852 11,619 36 % Total operating expenses 119,161 94,428 24,733 26 % Other income, net Other (expense) income, net 19 14,509 (14,490) n/m Interest income, net 280 2,151 (1,871) (87) % Total other income, net 299 16,660 (16,361) (98) % Net loss$ (111,984) $ (61,296) $ (50,688) 83 %
Collaboration and other research and development revenues
Collaboration and other research and development revenues decreased by$9.6 million , to$6.9 million , for the six months endedJune 30, 2021 from$16.5 million for six months endedJune 30, 2020 . This decrease was primarily attributable to$7.6 million in revenue recognized pursuant to an out-license agreement we entered into during the second quarter 2020 and$7.4 million in revenue recognized related to our strategic alliance with Allergan during the six months endedJune 30, 2020 , for which there was no similar revenue recognized during 2021. This was partially offset by$6.3 million in revenue recognized pursuant to our research collaboration withJuno Therapeutics during the six months endedJune 30, 2021 .
Research and development expenses
Research and development expenses increased by$13.1 million , to$75.7 million , for the six months endedJune 30, 2021 from$62.6 million for the six months endedJune 30, 2020 . The following table summarizes our research and development expenses for the six months endedJune 30, 2021 and 2020, together with the changes in those items in dollars (in thousands) and the respective percentages of change: Six Months Ended June 30, 2021 2020 Dollar Change Percentage Change External research and development expenses$ 27,513 $ 27,958 $ (445) (2) % Employee related expenses 19,749 16,517 3,232 20 % Sublicense and license fees 9,629 3,940 5,689 n/m
Stock-based compensation expenses 8,137 5,730
2,407 42 % Facility expenses 7,957 6,292 1,665 26 % Other expenses 2,705 2,139 566 26 % 22 Table of Contents
Total research and development expenses
The increase in research and development expenses for the six months ended
approximately
? related to the triggering of success payments under certain of our license
agreements upon the achievement of market capitalization-based milestones in
the first quarter of 2021;
approximately
? to an increase in the size of our workforce, including the expansion of our
research and development organization;
approximately
? primarily due to the hiring of our new Chief Scientific Officer and Chief
Regulatory Officer in the second quarter 2021;
? approximately
related to increased lab and manufacturing space; and
? approximately
These increases were partially offset by approximately$0.4 million in decreased external research and development expenses related to expenses incurred in the six months endedJune 30, 2020 under our profit-sharing arrangement with Allergan and expenses incurred related to an in-license arrangement entered into during the first quarter of 2020 for which there were no similar expenses in the six months endedJune 30, 2021 .
General and administrative expenses
General and administrative expenses increased by
Six Months Ended June 30, 2021 2020 Dollar Change Percentage Change Stock-based compensation expenses$ 17,593 $ 5,907 $ 11,686 n/m Intellectual property and patent related fees 9,869 9,012 857 10 % Employee related expenses 9,065 8,451 614 7 % Other expenses 4,252 3,992 260 7 % Professional service expenses 2,692 4,490 (1,798) (40) % Total general and administrative expenses$ 43,471 $ 31,852 $ 11,619 36 %
The increase in general and administrative expenses for the six months ended
approximately
related to the acceleration of vesting of certain equity awards held by our
? former Chief Executive Officer in connection with her separation from our
company inFebruary 2021 , as well as stock-based compensation expense recognized 23 Table of Contents
on the market and performance-based awards that were granted to our new Chief
Executive Officer and other certain employees in 2021;
? approximately
related fees;
approximately
? attributable to the separation of our former Chief Executive Officer from our
company in
Officer in 2021; and
? approximately
These increases were partially offset by approximately
Other income, net
For the six months ended
For the six months endedJune 30, 2020 , other income, net was$16.7 million , which was primarily attributable to the unrealized gains related to corporate equity securities, interest income and accretion of discounts associated with marketable securities.
Liquidity and Capital Resources
Sources of Liquidity
InMay 2021 , we entered into a common stock sales agreement withCowen and Company, LLC ("Cowen"), under which we from time to time can issue and sell shares of our common stock through Cowen in at-the-market offerings for aggregate gross sale proceeds of up to$300.0 million (the "ATM Facility"). As ofJune 30, 2021 , we have not sold any shares of our common stock under the
ATM Facility. InJanuary 2021 , we completed a public offering whereby we sold 3,500,000 shares of our common stock and received net proceeds of approximately$216.9 million . InFebruary 2021 , the underwriters in the public offering exercised their option to purchase an additional 525,000 shares, resulting in additional net proceeds to us of approximately$32.6 million . As ofJune 30, 2021 , we have raised an aggregate of$898.0 million in net proceeds through the sale of shares of our common stock in public offerings and at-the-market offerings. We also have funded our business from payments received under our research collaboration withJuno Therapeutics and our strategic alliance with Allergan, which was terminated inAugust 2020 . As ofJune 30, 2021 , we had cash, cash equivalents and marketable securities of$698.1 million . In addition to our existing cash, cash equivalents and marketable securities, we are eligible to earn milestone and other payments under our collaboration agreement withJuno Therapeutics . Our ability to earn the milestone payments and the timing of earning these amounts are dependent upon the timing and outcome of our development, regulatory and commercial activities and, as such, are uncertain at this time. As ofJune 30, 2021 , our right to contingent payments under our collaboration agreement withJuno Therapeutics is our only significant committed potential external source of funds. 24 Table of Contents Cash Flows
The following table provides information regarding our cash flows for the three
months ended
Six Months Ended June 30, 2021 2020 Net cash (used in) provided by: Operating activities$ (88,436) $ (84,942) Investing activities 8,035 120,637 Financing activities 278,553 214,200
Net increase in cash, cash equivalents, and restricted cash
The use of cash in all periods resulted primarily from our net losses adjusted for non-cash charges and changes in components of working capital.
Net cash used in operating activities was approximately$88.4 million for the six months endedJune 30, 2021 , which primarily consisted of operating expenses that relate to our on-going preclinical and clinical activities, patent costs and license fees, and increased costs as a result of staffing needs due to our expanding operations. These expenses were partially offset by cash inflows from license fees received in the period. Net cash used in operating activities was approximately$84.9 million for the six months endedJune 30, 2020 , which primarily consisted of operating expenses that relate to our on-going preclinical and clinical activities, patent costs and license fees, and increased costs as a result of staffing needs due to our expanding operations. These expenses were partially offset by cash inflows from license fees received in the period.
Net Cash Provided by Investing Activities
Net cash provided by investing activities was approximately$8.0 million for the six months endedJune 30, 2021 , primarily related to proceeds from maturities of marketable securities of$205.0 million , partially offset by costs used to acquire marketable securities of$194.2 million and purchases of property and equipment of$2.8 million .
Net cash provided by investing activities was approximately$120.6 million for the six months endedJune 30, 2020 , primarily related to proceeds from maturities of marketable securities of$191.0 million , partially offset by costs to acquire marketable securities of$66.4 million and costs to acquire property and equipment of$4.0 million .
Net Cash Provided by Financing Activities
Net cash provided by financing activities was approximately$278.6 million for the six months endedJune 30, 2021 and consisted of$249.5 million in net proceeds received from the offering of our common stock and$28.6 million in proceeds received from exercises of options for our common stock.
Net cash provided by financing activities was approximately
Funding Requirements We expect our expenses to increase in connection with our ongoing activities, particularly as we progress the clinical development of EDIT-101 and EDIT-301; further advance our current research programs and our preclinical development activities; seek to identify product candidates and additional research programs; initiate preclinical testing 25
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and clinical trials for other product candidates we identify and develop, including EDIT-301 for the treatment of beta-thalassemia; maintain, expand, and protect our intellectual property portfolio, including reimbursing our licensors for expenses related to the intellectual property that we in-license from such licensors; hire additional clinical, quality control, and scientific personnel; and incur costs associated with operating as a public company. In addition, if we obtain marketing approval for any product candidate that we identify and develop, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution to the extent that such sales, marketing, and distribution are not the responsibility of a collaborator. We do not expect to generate significant recurring revenue unless and until we obtain regulatory approval for and commercialize a product candidate. Furthermore, since 2016 we have incurred, and in future years we expect to continue to incur, significant costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts. We expect that our existing cash, cash equivalents and marketable securities as ofJune 30, 2021 and anticipated interest income will enable us to fund our operating expenses and capital expenditure requirements well into 2023. We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our future capital requirements will depend on many factors, including:
the scope, progress, results, and costs of drug discovery, preclinical
? development, laboratory testing, and clinical or natural history study trials
for the product candidates we develop;
? the costs of progressing the clinical development of EDIT-101 to treat LCA10;
? the costs of progressing the clinical development of EDIT-301 to treat sickle
cell disease;
? the costs of IND-enabling studies and initiating any clinical trial for
EDIT-301 to treat beta-thalassemia;
the costs of preparing, filing, and prosecuting patent applications,
? maintaining and enforcing our intellectual property and proprietary rights, and
defending intellectual property-related claims;
? the costs, timing, and outcome of regulatory review of the product candidates
we develop;
the costs of future activities, including product sales, medical affairs,
? marketing, manufacturing, and distribution, for any product candidates for
which we receive regulatory approval;
? the success of our collaboration with
? whether
program term and/or to additional research programs under our collaboration;
? our ability to establish and maintain additional collaborations on favorable
terms, if at all;
? the extent to which we acquire or in-license other medicines and technologies;
? the costs of reimbursing our licensors for the prosecution and maintenance of
the patent rights in-licensed by us; and
? the costs of operating as a public company.
Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive, and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, any product 26 Table of Contents candidate that we identify and develop, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of genomic medicines that we do not expect to be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. Further, our ability to continue to raise additional capital may be adversely impacted by potential worsening global economic conditions and potential disruptions to, and volatility in, the credit and financial markets inthe United States and worldwide resulting from the ongoing COVID-19 pandemic. 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. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders' ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. 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 funds 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 to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Contractual Obligations
The following table summarizes our significant contractual obligations as of
payment due date by period at
Less Than More than Total 1 Year 1 to 3 Years 3 to 5 Years 5 Years
Operating lease obligations (1)$ 35,735 $ 12,760 $ 20,513 $ 2,462 $ - Total$ 35,735 $ 12,760 $ 20,513 $ 2,462 $ -
Represents future minimum lease payments under our non-cancelable operating
(1) leases. The minimum lease payments above exclude our share of the facility
operating expenses and other costs that are reimbursable to the landlord
under the leases. The table above does not include potential milestone and success fees, sublicense fees, royalty fees, licensing maintenance fees, and reimbursement of patent maintenance costs that we may be required to pay under agreements we have entered into with certain institutions to license intellectual property. Our agreements to license intellectual property include potential milestone payments that are dependent upon the development of products using the intellectual property licensed under the agreements and contingent upon the achievement of development or regulatory approval milestones, as well as commercial milestones. We have not included such potential obligations in the table above because they are contingent upon the occurrence of future events and the timing and likelihood of such potential obligations are not known with certainty. For further information regarding these agreements, please see "Business-Our Collaborations and Licensing Strategy" in our Annual Report. 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 the table of contractual obligations and commitments.
Off-Balance Sheet Arrangements
We did not have, during the periods presented, and we do not currently have, any off-balance sheet
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arrangements, as defined under applicable
Effects of Inflation Inflation would generally affect our business by increasing our cost of labor and clinical trial costs. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the six months endedJune 30, 2021 or 2020.
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