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 and our final prospectus for our initial public offering filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, or the Securities Act, with the Securities and Exchange Commission, or SEC, on June 17, 2021. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. 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. You should carefully read the section entitled "Risk Factors" to gain an understanding of the important factors that could cause actual results to differ materially from our forward- looking statements.

Overview

We are a genetic medicines company pioneering a new approach to the care of cardiovascular disease, or CVD, transforming treatment from chronic management to single-course gene editing medicines. Despite advances in treatment over the last 50 years, CVD remains the leading cause of death worldwide. The current paradigm of chronic care is fragile-requiring rigorous patient adherence, extensive healthcare infrastructure and regular healthcare access-and leaves many patients without adequate care. Our goal is to disrupt the chronic care model for CVD by providing a new therapeutic approach with single-course in vivo gene editing treatments focused on addressing the root causes of this highly prevalent and life-threatening disease. Our initial two programs target PCSK9 and ANGPTL3, respectively, genes that have been extensively validated as targets for lowering blood lipids, such as low-density lipoprotein cholesterol, or LDL-C. We believe that single-course treatments could provide substantial health benefits that are sustained throughout the lifetimes of patients with or at risk for atherosclerotic cardiovascular disease, or ASCVD, the most common form of CVD.

We were incorporated in March 2018 and commenced operations shortly thereafter. Since our inception, we have devoted substantially all of our resources to building our gene editing capabilities 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 preferred stock and, most recently, common stock in our initial public offering, or IPO.

On June 21, 2021, we completed our IPO in which we issued and sold an aggregate of 16,141,157 shares of our common stock, including 2,105,368 shares of common stock sold pursuant to the underwriters' full exercise of their option to purchase additional shares, at a public offering price of $19.00 per share, for aggregate net proceeds of $281.6 million, after deducting underwriting discounts and estimated offering expenses payable by us. Upon completion of the IPO, all 256,682,054 shares of outstanding convertible preferred stock automatically converted into 27,720,923 shares of common stock. Through June 30, 2021, we had raised an aggregate of $523.2 million in gross proceeds from the sale of our preferred stock in private placements and common stock in our IPO.

We are a development-stage company, and all of our programs are at a preclinical stage of development. To date, we have not generated any revenue and do not expect to generate revenue from the sale of products for the foreseeable future. Since our inception, we have incurred significant operating losses. Our net losses for the three and six months ended June 30, 2021 were $53.0 million and $66.2 million, respectively, and $7.6 million and $13.2 million for the three and six months ended June 30, 2020, respectively. Our net loss for the year ended December 31, 2020 was $45.7 million. As of June 30, 2021, we had an accumulated deficit of $132.8 million.

Since our inception, we have incurred significant operating losses. We expect to continue to incur significant expenses and increasing operating losses in connection with ongoing development activities related to our portfolio of programs as we continue our preclinical development of product candidates; advance these product candidates toward clinical development; further develop our base editing technology and manufacturing capabilities; seek to discover and develop additional product candidates; maintain, expand enforcement, defend, and protect our intellectual property portfolio; hire research and development and clinical personnel; ultimately establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval; establish a commercial manufacturing source and secure supply chain capacity sufficient to provide commercial quantities of any product candidates for which we may obtain regulatory approval; and add operational, legal, compliance, financial and management information systems and personnel to support our research, product development, future commercialization efforts and operations as a public company.



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As a result, we will need substantial additional funding to support our continuing operations and pursue our 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 and other sources of capital, which may include collaborations or licensing arrangements with other companies or other strategic transactions. If we are unable to raise capital or obtain adequate funds when needed or on acceptable terms, we may be required to delay, limit, reduce or terminate our research and development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve profitability. Even if we are able to generate revenue from product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of June 30, 2021, we had cash, cash equivalents and marketable securities of $417.6 million. We believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements into 2024. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. To finance our operations beyond that point we will need to raise additional capital, which cannot be assured. See "Liquidity and capital resources."

Impact of COVID-19 on our business

In March 2020, COVID-19 was declared a global pandemic by the World Health Organization and to date, the COVID-19 pandemic continues to present a substantial public health and economic challenge around the world. The length of time and full extent to which the COVID-19 pandemic may directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain, subject to change and difficult to predict. We, our contract manufacturing organizations, or CMOs, and our contract research organizations, or CROs, experienced temporary reductions in the capacity to undertake research-scale production and to execute some preclinical studies. While these operations have since normalized, we, together with our CMOs and CROs, are closely monitoring the impact of the COVID-19 pandemic on these operations.

We also plan to continue to closely monitor the ongoing impact of the COVID-19 pandemic on our employees and our other business operations. In an effort to provide a safe work environment for our employees, we have, among other things, increased the cadence of sanitization of our office and lab facilities, implemented various social distancing measures in our offices and labs including replacing all in-person meetings with virtual interactions, and are providing personal protective equipment for our employees present in our office and lab facilities. We are continuing to monitor the impact and effects of the COVID-19 pandemic and our response to it, and we expect to continue to take actions as may be required or recommended by government authorities or as we determine are in the best interests of our employees and other business partners in light of the pandemic.

While the COVID-19 pandemic did not significantly impact our business or results for the three and six months ended June 30, 2021 and 2020, the length and extent of the pandemic, its consequences, and containment efforts will determine the future impact on our operations and financial condition.

License and collaboration agreements

We have obligations under various license and collaboration agreements to make potentially significant milestone and success payments in the future and to pay royalties on sales of any product candidates covered by those agreements that eventually achieve regulatory approval and commercialization. For information regarding these agreements, see Note 8, License agreements to our condensed consolidated financial statements included in this Quarterly Report.

Components of our results of operations

Revenue

To date, we have not generated any revenue. We do not expect to generate any revenue from the sale of products in the near future and unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates. If our development efforts for our product candidates are successful and result in regulatory approval or we successfully enter into license or collaboration agreements with third parties, we may generate revenue in the future from product sales, payments from third-party collaboration or license agreements, or any combination thereof.



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Operating expenses

Research and development expenses

Research and development expenses consist of costs incurred in performing research and development activities, which include:



?
the cost to obtain and maintain licenses to intellectual property, such as those
with the President and Fellows of Harvard College, or Harvard, The Broad
Institute, Inc., or Broad, Beam Therapeutics Inc., or Beam, Acuitas
Therapeutics, Inc., or Acuitas, and formerly Verily Life Sciences LLC (which
agreement was terminated effective June 26, 2020), and related future payments
should certain development and regulatory milestones be achieved;
?
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 CROs;
?
the cost of developing and validating our manufacturing process for use in our
preclinical studies and future clinical trials, including the cost of raw
materials used in our research and development activities;
?
the cost of laboratory supplies and research materials; and
?
facilities, depreciation and other expenses, which include direct and allocated
expenses for rent and maintenance of facilities and insurance.

We expense research and development costs as incurred. Nonrefundable 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 proof-of-concept studies that are not necessarily allocable to a specific target; therefore, we have not yet begun tracking our expenses on a program-by-program basis.

Research and development activities are central to our business model. We expect that our research and development expenses will continue to increase for the foreseeable future as we advance our programs and product candidates into and through clinical development, and as we continue to develop additional product candidates. We also expect our discovery research efforts and our related personnel costs will increase and, as a result, we expect our research and development expenses, including costs associated with stock-based compensation, will increase above historical levels. In addition, we may incur additional expenses related to milestone and royalty payments payable to third parties with whom we may enter into license, acquisition and option agreements to acquire the rights to future product candidates.

At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of, and obtain regulatory approval for, any of our product candidates or programs. The successful development of our product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development, including the following:



?
the timing and progress of preclinical and clinical development activities;
?
the number and scope of preclinical and clinical programs we decide to pursue;
?
raising additional funds necessary to complete preclinical and clinical
development of our product candidates;
?
the timing of filing and acceptance of investigational new drug applications, or
INDs, or comparable foreign applications that allow commencement of future
clinical trials for our product candidates;
?
the successful initiation, enrollment and completion of clinical trials;
?
our ability to achieve positive results from our future clinical programs that
support a finding of safety and effectiveness and an acceptable risk-benefit
profile in the intended patient populations of any product candidates we may
develop;
?
our ability to successfully develop, obtain regulatory approval for, and then
successfully commercialize, our product candidates for the expected indications
and patient populations;
?
our ability to hire and retain key research and development personnel;
?
the costs associated with the development of any additional product candidates
we develop or acquire through collaborations;

                                       17

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?
our ability to establish and maintain agreements with third-party manufacturers
for clinical supply for our clinical trials and commercial manufacturing, if our
product candidates are approved;
?
the terms and timing of any existing or future collaboration, license or other
arrangement, including the terms and timing of any milestone payments
thereunder;
?
our ability to establish and obtain intellectual property protection and
regulatory exclusivity for our product candidates and enforce and defend our
intellectual property rights and claims;
?
our ability to commercialize products, if and when approved, whether alone or in
collaboration with others;
?
our ability to maintain a continued acceptable safety, tolerability and efficacy
profile of our product candidates following approval; and
?
the effects of the COVID-19 pandemic.

A change in any of these variables with respect to any of our current or future product candidates could significantly change the costs, timing and viability associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any product candidate we may develop.

General and administrative expenses

General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits and 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 increased research and development activities. We also expect to incur increased costs associated with being a public company, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq and SEC requirements, director and officer insurance costs, and investor and public relations costs.

Other income (expense)

Change in fair value of preferred stock tranche liability

Change in fair value of preferred stock tranche liability consists primarily of remeasurement gains or losses associated with changes in the fair value of the tranche rights associated with our Series A Preferred Stock. The preferred stock tranche liability was settled as of March 31, 2020, and therefore, there will be no further remeasurement.

Change in fair value of antidilution rights liability

Change in fair value of antidilution rights liability consists of remeasurement gains or losses associated with changes in the antidilution rights liability associated with our license agreements with Harvard and Broad, or the Harvard/Broad License Agreement, and Broad, or the Broad License Agreement.

The antidilution rights represent the obligation to issue additional shares of common stock to Harvard and Broad following the completion of preferred stock financings and other equity financings, which was fully satisfied upon the closing of our IPO. At the inception of the agreements, the liability for the antidilution rights was recorded at fair value with the cost recorded as research and development expense and will be remeasured at each reporting period with changes recorded in other income (expense) while the instruments are outstanding.

The antidilution rights liability was partially satisfied in 2019 and 2020 and was fully satisfied during the three months ended June 30, 2021 with the issuance of an aggregate of an additional 878,098 shares of common stock upon the closing of our IPO.

Change in fair value of success payment liability

We are also obligated to pay to Harvard and Broad tiered success payments in the event our average market capitalization exceeds specified thresholds ascending from a high nine-digit dollar amount to $10.0 billion for a specified period of time, or sale of our company for consideration in excess of those thresholds. In the event of a change of control of our company or a sale of our company, we are required to pay any related success payment in cash within a specified period following such event. Otherwise, the success payments may be settled at our option in either cash or shares of our common stock, or a combination of cash and shares of our common stock. The maximum aggregate success payments that could be payable by us is $31.3 million. At inception of the agreements, the success payment liabilities were recorded



                                       18

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at fair value with the cost recorded as research and development expense and will be remeasured at each reporting period with charges recorded in other income (expense) while the instrument is outstanding.

Depending on our valuation, the fair value of the antidilution rights and success payment liabilities, and the corresponding changes in fair value that we record in our statements of operations, could fluctuate significantly from period to period.

Interest and other income (expense), net

Interest and other income primarily consisted of interest earned on our marketable securities and other miscellaneous income and expenses unrelated to our core operations.

Income tax

During the three and six months ended June 30, 2021 and 2020, we recorded a full valuation allowance on federal and state deferred tax assets since management does not forecast that we will be in a taxable position in the near future.

Results of operations

Comparison of three months ended June 30, 2021 and 2020

The following table summarizes our results of operations for the three months ended June 30, 2021 and 2020:





                                                        Three months ended
                                                                  June 30,
(in thousands)                                         2021           2020         Change
Operating expenses:
Research and development                        $    13,423     $    5,654     $    7,769
General and administrative                            3,541          1,032          2,509
Total operating expenses                        $    16,964     $    6,686     $   10,278
Other income (expense):
Change in fair value of antidilution rights
liability                                           (25,970 )         (863 )      (25,107 )
Change in fair value of success payment
liability                                           (10,036 )          (81 )       (9,955 )
Interest income and other income (expense),
net                                                       5             50            (45 )
Total other income (expense)                    $   (36,001 )   $     (894 )   $  (35,107 )
Net loss                                        $   (52,965 )   $   (7,580 )   $  (45,385 )

Research and development expenses

The following table summarizes our research and development expenses for the three months ended June 30, 2021 and 2020:





                                                                    Three months ended
                                                                              June 30,
(in thousands)                                                   2021             2020
Employee-related expenses                               $       4,113            1,520

Raw material costs and external expenses associated with manufacturing


  activities, including third-party contract
manufacturing organizations, or CMOs                            2,990                -

External expenses associated with preclinical studies performed by outside

consulting services, including third-party contract research organizations, or CROs

                                 3,681            2,452
Lab supplies used in research and development
activities                                                      1,138              563
Facility-related costs (including depreciation)                   821              474
License and milestone payments                                     25              292
Other research and development costs                              655              353
Total research and development expenses                 $      13,423     $      5,654

Research and development expenses were $13.4 million for the three months ended June 30, 2021, compared to $5.7 million for the three months ended June 30, 2020. The increase of approximately $7.8 million was primarily due to the following:



?

an increase in raw material costs and external expenses associated with developing and validating our manufacturing activities, including third-party CMOs, for use in our preclinical studies and future clinical trials of $3.0 million;



                                       19

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?
an increase in external expenses associated with preclinical studies (primarily
animal-study costs) performed by outside consulting services, including
third-party CROs, of $1.2 million;
?
an increase in personnel-related costs of $2.6 million driven by an increase in
headcount of employees involved in research and development activities;
?
an increase in lab supplies of $0.6 million due to increased headcount and
company growth;
?
an increase in facility-related costs (including depreciation) and other
allocated miscellaneous expenses of $0.4 million due to increased investment in
research and development;
?
an increase in other research and development costs of $0.3 million, primarily
due to an increase in professional fees and consulting fees in support of
increased investment in research and development activities; and
?
a decrease in research and development expense attributed to license and
milestone payments of $0.3 million.

We expect our research and development expenses will continue to increase as we continue our current research programs, initiate new research programs, continue our preclinical development of product candidates and conduct future clinical trials for any of our product candidates.

General and administrative expenses

General and administrative expenses were $3.5 million for the three months ended June 30, 2021, compared to $1.0 million for the three months ended June 30, 2020. The increase of approximately $2.5 million was primarily attributable to the following:



?
an increase of $1.7 million in personnel, facility and other expenses stemming
from an increase in headcount to support our growth;
?
an increase of $0.3 million in legal and professional service fees, primarily
due to increased professional fees for audit, tax and consulting services; and
?
an increase in other miscellaneous expenses of $0.5 million.

Other income (expense)

Change in fair value of antidilution rights liability

The change in fair value for the antidilution rights liability was primarily due to the settlement of the liability during the three months ended June 30, 2021 with the issuance of 878,098 shares of our common stock. The settlement amount was $32.5 million and resulted in a fair value adjustment to the antidilution rights liability of $26.0 million due to an increase in the fair value of the shares being issued upon settlement.

Change in fair value of success payments liability

The change in fair value for the success payments liability was primarily due to the increase in the fair value of our common stock, which resulted in a fair value adjustment of $10.0 million to other expense during the three months ended June 30, 2021. The success payment obligations are still outstanding as of June 30, 2021 and will continue to be revalued at the end of each reporting period.

Interest and other income (expense), net

The decrease of less than $0.1 million in the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was attributable to lower interest rates on our investments and an increase in loss on settlement of invoices in foreign currency compared to 2020.



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Comparison of six months ended June 30, 2021 and 2020

The following table summarizes our results of operations for the six months ended June 30, 2021 and 2020:





                                                         Six months ended
                                                                 June 30,
(in thousands)                                        2021           2020         Change
Operating expenses:
Research and development                        $   24,768     $   12,177     $   12,591
General and administrative                           6,257          1,878          4,379
Total operating expenses                        $   31,025     $   14,055     $   16,970
Other income (expense):
Change in fair value of preferred stock
tranche liability                                        -          2,507         (2,507 )
Change in fair value of antidilution rights
liability                                          (25,574 )       (1,745 )      (23,829 )
Change in fair value of success payment
liability                                           (9,654 )          (17 )       (9,637 )
Interest income and other income (expense),
net                                                     25            127           (102 )
Total other income (expense)                    $  (35,203 )   $      872     $  (36,075 )
Net loss                                        $  (66,228 )   $  (13,183 )   $  (53,045 )

Research and development expenses

The following table summarizes our research and development expenses for the six months ended June 30, 2021 and 2020:





                                                                     Six months ended
                                                                             June 30,
(in thousands)                                                  2021             2020
Employee-related expenses                               $      6,806     $      2,894

Raw material costs and external expenses associated with manufacturing


  activities, including third-party CMOs                       5,385                -

External expenses associated with preclinical studies performed by outside


  consulting services, including third-party CROs              7,691            5,243
Lab supplies used in research and development
activities                                                     1,869              958
Facility-related costs (including depreciation)                1,600              831
License and milestone payments                                    80            1,622
Other research and development costs                           1,337              629
Total research and development expenses                 $     24,768     $     12,177

Research and development expenses were $24.8 million for the six months ended June 30, 2021, compared to $12.2 million for the six months ended June 30, 2020. The increase of $12.6 million was primarily due to the following:



?
an increase in raw material costs and external expenses associated with
developing and validating our manufacturing activities, including third-party
CMOs, for use in our preclinical studies and future clinical trials of
$5.4 million;
?
an increase in external expenses associated with preclinical studies (primarily
animal-study costs) performed by outside consulting services, including
third-party CROs, of $2.4 million;
?
an increase in personnel-related costs of $3.9 million driven by an increase in
headcount of employees involved in research and development activities;
?
an increase in facility-related costs (including depreciation) and other
allocated miscellaneous expenses of $0.8 million due to increased investment in
research and development;
?
an increase in lab supplies of $0.9 million due to the increased headcount and
company growth;
?
an increase in other research and development costs of $0.7 million, primarily
due to an increase in professional fees and consulting fees in support of
increased investment in research and development activities; and
?
a decrease in research and development expense attributed to license and
milestone payments of $1.5 million, primarily due to a $1.0 million milestone
payment and $0.5 million payment relating to a collaboration agreement both
incurred during the six months ended June 30, 2020.

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We expect our research and development expenses will continue to increase as we continue our current research programs, initiate new research programs, continue our preclinical development of product candidates and conduct future clinical trials for any of our product candidates.

General and administrative expenses

General and administrative expenses were $6.3 million for the six months ended June 30, 2021, compared to $1.9 million for the six months ended June 30, 2020. The increase of $4.4 million was primarily attributable to the following:



?
an increase of $2.9 million in personnel, facility and other expenses stemming
from an increase in headcount to support our growth;
?
an increase of $0.8 million in legal and professional service fees, primarily
due to increased professional fees for audit, tax and consulting services;
?
an increase in facility related costs of $0.2 million; and
?
an increase in other miscellaneous expenses of $0.5 million.

Other income (expense)

Change in fair value of preferred stock tranche liability

The change in fair value of the preferred stock tranche liability was due to the modification of the remaining milestones and subsequent settlement of the preferred stock tranche liability in March 2020, resulting in the issuance of Series A Preferred Stock.

Change in fair value of antidilution rights liability

The change in fair value for the antidilution rights liability was primarily due to the settlement of the liability during the six months ended June 30, 2021 with the issuance of 878,098 shares of our common stock. The settlement amount was $32.5 million and resulted in a fair value adjustment to the antidilution rights liability of $25.6 million due to an increase in the fair value of the shares being issued upon settlement.

Change in fair value of success payments liability

The change in fair value for the success payments liability was primarily due to the increase in the fair value of our common stock which resulted in a fair value adjustment of $9.7 million to other expense during the six months ended June 30, 2021. The success payment obligations are still outstanding as of June 30, 2021 and will continue to be revalued at the end of each reporting period.

Interest and other income (expense), net

The decrease of $0.1 million in the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was attributable to lower interest rates on our investments and an increase in loss on settlement of invoices in foreign currency compared to 2020.

Liquidity and capital resources

Sources of liquidity and capital

Since our inception in 2018, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and, if successful, clinical development of our programs. To date, we have funded our operations primarily through equity offerings. Through June 30, 2021, we had raised an aggregate of $523.2 million in gross proceeds from sales of our preferred stock in private placements and common stock in our IPO. As of June 30, 2021, we had $417.6 million in cash, cash equivalents and marketable securities.

In June 2021, we completed our IPO in which we issued 16,141,157 shares of our common stock, including 2,105,368 shares of common stock sold pursuant to the underwriters' full exercise of their option to purchase additional shares, at a public offering price of $19.00 per share. We received net proceeds from our IPO of $281.6 million, after deducting underwriting discounts and offering expenses payable by us. In June 2021, we issued 878,098 shares of our common stock to Harvard and Broad as final settlement of the antidilution rights liability.



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Cash flows



The following table summarizes our sources and uses of cash for each period
presented:





                                                                    Six months ended
                                                                            June 30,
(in thousands)                                                    2021          2020
Cash used in operating activities                            $ (28,482 )   $ (13,966 )
Cash provided by (used in) investing activities                 30,203       (60,296 )
Cash provided by financing activities                          376,732        92,619

Net increase in cash, cash equivalents and restricted cash $ 378,453 $ 18,357






Operating activities

For the six months ended June 30, 2021, net cash used in operating activities was $28.5 million, consisting primarily of our net loss of $66.2 million and a decrease in our operating assets and liabilities of $0.5 million. These amounts were partially offset by the following non-cash changes: $25.6 million associated with the fair value change in antidilution rights liability, $9.7 million associated with the fair value change in success payments liability, stock-based compensation of $2.0 million, depreciation expense of $0.7 million and amortization of investment premiums of $0.4 million.

For the six months ended June 30, 2020, net cash used in operating activities was $14.0 million, consisting primarily of our net loss of $13.2 million and non-cash items of $2.5 million, primarily associated with the fair value change in the preferred stock tranche liability and a decrease in operating assets and liabilities of $0.8 million. These amounts were partially offset by the following non-cash changes: change in fair value of antidilution rights liability of $1.7 million, depreciation expense of $0.5 million, stock-based compensation of $0.2 million and amortization of investment premiums of $0.1 million.

Investing activities

For the six months ended June 30, 2021, net cash provided by investing activities was $30.2 million and consisted of maturities of marketable securities of $43.8 million, offset partially by purchases of property and equipment of $2.4 million, primarily related to lab equipment, and purchases of marketable securities of $11.2 million.

For the six months ended June 30, 2020, net cash used in by investing activities was $60.3 million and consisted of purchases of marketable securities of $73.1 million and purchases of property and equipment of $1.5 million, offset partially by maturities of marketable securities of $14.3 million.

Financing activities

For the six months ended June 30, 2021, net cash provided by financing activities was $376.7 million, consisting primarily of the net proceeds from the issuance of Series B Preferred Stock of $93.8 million, net proceeds from our IPO of $285.2 million and proceeds from exercises of stock options of $0.5 million, offset partially by payment of IPO expenses of $2.8 million.

For the six months ended June 30, 2020, net cash provided by financing activities was $92.6 million, received as net proceeds from the issuance of Series A Preferred Stock and Series A-2 Preferred Stock.

Funding requirements

Our operating expenses and future funding requirements are expected to increase substantially as we continue to advance our portfolio of programs.

Specifically, our expenses will increase if and as we:



?
continue our current research programs and our preclinical development of
product candidates from our current research programs;
?
seek to identify additional research programs and additional product candidates;
?
advance our existing and future product candidates into clinical development;
?
initiate preclinical studies and clinical trials for any additional product
candidates we identify and develop or expand development of existing programs
into additional patient populations;
?
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 regulatory and marketing approvals for any of our product candidates that
we develop;
?
seek to identify, establish and maintain additional collaborations and license
agreements, and the success of those collaborations and license agreements;
?
make milestone payments to Beam under our collaboration and license agreement
with Beam, to Acuitas under our non-exclusive license agreement with Acuitas,
under the Harvard/ Broad License Agreements, and under any additional future
collaboration or license agreements that we obtain;
?
ultimately establish a sales, marketing, and distribution infrastructure to
commercialize any drug products for which we may obtain marketing approval,
either by ourselves or in collaboration with others;
?
generate revenue from commercial sales of product candidates we may develop for
which we receive marketing approval;
?
further develop our base editing technology;
?
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;
?
satisfy any post-marketing requirements, such as a cardiovascular outcomes
trial;
?
establish commercial-scale current good manufacturing practices, or cGMP,
capabilities through a third-party or our own manufacturing facility; and
?
operate as a public company.

As of June 30, 2021, we had cash, cash equivalents and marketable securities of $417.6 million. We believe our existing cash, cash equivalents and marketable securities, will enable us to fund our operating expenses and capital expenditure requirements into 2024. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

Identifying potential product candidates and conducting preclinical testing and clinical trials is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for several years, if ever. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives.

Our expectation with respect to our ability to fund current planned operations is based on estimates that are subject to risks and uncertainties. Our operating plan may change as a result of many factors currently unknown to management and there can be no assurance that the current operating plan will be achieved in the time frame anticipated by us, and we may need to seek additional funds sooner than planned.

Adequate additional funds may not be available to us on acceptable terms, or at all. We do not have any source of committed external funds. Market volatility resulting from the COVID-19 pandemic or other factors could also adversely impact our ability to access capital as and when needed. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders 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 and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, selling or licensing our assets, making capital expenditures or declaring dividends and may require the issuance of warrants, which could potentially dilute the ownership interest of our stockholders.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution 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 grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed or on terms acceptable to us, 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

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During the three months ended June 30, 2021, there were no material changes to our contractual obligations and commitments from those described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations-Contractual Obligations and Commitments" in our final prospectus for our IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on June 17, 2021

Emerging growth company and smaller reporting company status

As an emerging growth company, or EGC, under the Jumpstart Our Business Startups Act of 2012, or JOBS Act, we may delay the adoption of certain accounting standards until such time as those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for EGCs include presentation of only two years of audited financial statements in a registration statement for an initial public offering, or IPO, an exemption from the requirement to provide an auditor's report on internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation, and less extensive disclosure about our executive compensation arrangements.

In addition, the JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an EGC to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We may remain classified as an EGC until December 31, 2026, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30 after we have filed an Annual Report on Form 10-K or if we have annual gross revenues of $1.07 billion or more in any fiscal year, we would cease to be an emerging growth company as of December 31 of the applicable year. We also would cease to be an EGC if we issue more than $1 billion of non-convertible debt over a three-year period.

We are also a "smaller reporting company" as defined in Rule 12b-2 under the Exchange Act. We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

Critical accounting policies and significant judgments

This 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 U.S. generally accepted accounting principles. The preparation of these financial statements and related disclosures 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 consolidated 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.

During the three months ended June 30, 2021, there were no material changes to our critical accounting policies from those described in our final prospectus for our IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on June 17, 2021.

Off-balance sheet arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission.



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Recently issued accounting pronouncements

See Note 2, "Summary of significant accounting policies - Recently issued accounting pronouncements" to our consolidated financial statements included in the final prospectus for our IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on June 17, 2021.

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