Prime Medicine (PRME) S-1/AIPO registration (amended)

We have not, and the underwriters have not, authorized anyone to provide any information or to make any representation other than those contained in this prospectus, any amendment or supplement to this prospectus or any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares of common stock offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus, any amendment or supplement to this prospectus or any applicable free writing prospectus is current only as of its date, regardless of its time of delivery or any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

For investors outside the United States: We have not, and the underwriters have not, done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside the United States.

Market data and certain other statistical information used throughout this prospectus are based on independent industry publications, governmental publications, reports by market research firms, or other independent sources that we believe to be reliable sources. Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. We are responsible for all of the disclosure contained in this prospectus, and we believe that these sources are reliable; however, we have not independently verified the

We intend to apply for various trademarks that we use in connection with the operation of our business. This prospectus may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names or products in this prospectus is not intended to, and does not imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the TM or SM symbols, but the omission of such references is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable owner of these trademarks, service marks and trade names.

Through and including                 , 2022 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Since inception, we have incurred significant operating losses. Our net loss was $2.5 million, $3.4 million, $165.4 million, $86.0 million, and $53.2 million for the period from September 13, 2019 (inception) to December 31, 2019, the years ended December 31, 2020 and 2021, and the six months ended June 30, 2021 and 2022, respectively. As of June 30, 2022, we had an accumulated deficit of $224.6 million. We have financed our operations primarily through private placements of our preferred stock. Substantially all of our losses have resulted from expenses incurred in connection with our research and development and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. The net losses we incur may fluctuate significantly from quarter to quarter. We anticipate that our expenses will increase substantially if and as we:

We have not initiated clinical development of any potential product candidate and expect that it will be many years, if ever, before we have a product candidate ready for commercialization. To become and remain profitable, we must develop and, either directly or through collaborators, eventually commercialize a therapy or therapies with market potential. This will require us to be successful in a range of challenging activities, including identifying product candidates, completing preclinical studies and clinical trials of product candidates, obtaining marketing approval for these product candidates, manufacturing, marketing and selling those therapies for which we may obtain marketing approval and satisfying any post-marketing requirements. We may never succeed in these activities and, even if we do, may never generate revenues that are significant or large enough to achieve profitability.

We have transitioned from research and development to early preclinical development for our most advanced potential product candidate. Because of the numerous risks and uncertainties associated with developing Prime Editing product candidates, we are unable to predict the extent of any future losses or when we will become profitable, if at all. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.

We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we identify, continue the research and development of, initiate preclinical studies and clinical trials of, and seek marketing approval for, product candidates. Because we have limited financial and managerial resources, we have prioritized our research programs and lead optimization efforts in specific indications among many potential options. Specifically, our initial development programs target blood, liver, eye, and neuromuscular indications, amongst others. As a result of this prioritization, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater clinical or commercial potential and we may need to reprioritize our focus in the future. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable therapies.

In addition, if we obtain marketing approval for any product candidates we may develop, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution to the extent that such sales, marketing, manufacturing and distribution are not the responsibility of a collaborator. Furthermore, upon the closing of this offering, we expect to incur additional 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 product development programs or future commercialization efforts.

As of June 30, 2022, our cash and cash equivalents and short-term investments were $180.6 million, excluding restricted cash, or $194.1 million, including restricted cash. We estimate that the net proceeds of this offering will be approximately $136.2 million, assuming an initial public offering price of $17.00 per share, the midpoint of the price range set forth on the cover of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We believe our existing cash and cash equivalents and short-term investments, together with the net proceeds from this offering, will be sufficient to fund our operating expenses and capital expenditure requirements into 2025. However, our operating plan may change as a result of factors currently

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize any product candidates we may develop. We cannot be certain that additional funding will be available on acceptable terms or at all. We have no committed source of additional capital and, if we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of any product candidates or other research and development initiatives. Our license and collaboration agreements and any future collaboration agreements may also be terminated if we are unable to meet the payment or other obligations under the agreements. We could be required to seek collaborators for potential product candidates earlier than we would otherwise plan or on terms that are less favorable than might otherwise be available. We could also be required to relinquish or license our rights to product candidates on unfavorable terms in certain markets where we otherwise would seek to pursue development or commercialization ourselves.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. 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, declaring dividends and possibly other restrictions. In addition, if we raise funds through additional license and collaboration agreements, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, technologies, future revenue streams, research programs or product candidates we may develop, or we may have to grant licenses on terms that may not be favorable to us.

We are an early-stage company. We were founded in September 2019 and commenced operations in July 2020. Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, acquiring and developing our platform and technology and identifying and beginning to advance preclinical testing of potential product candidates. All of our programs are still in the research or preclinical stage of development and their risk of failure is high. We have not yet demonstrated an ability to initiate or successfully complete any clinical trials, including large-scale, pivotal clinical trials, obtain marketing approvals, manufacture a commercial-scale therapy, arrange for a third party to do so on our behalf or conduct sales and marketing activities necessary for successful commercialization. Typically, it takes about 10 to 15 years to develop a new therapy from the time it is discovered to when it is available for treating patients.

Our limited operating history, particularly in light of the rapidly evolving gene editing field, may make it difficult to evaluate our technology and industry and predict our future performance. Our very short history as an operating company makes any assessment of our future success or viability subject to significant uncertainty. We will encounter risks and difficulties frequently experienced by very early stage companies in rapidly evolving fields. If we do not address these risks successfully, our business will suffer.

In addition, as a new business, we may encounter other unforeseen expenses, difficulties, complications, delays, and other known and unknown factors. We will need to transition from a company with a research focus to a company capable of supporting commercial activities. We may not be successful in such a transition.

Our ability to generate revenue from product sales and achieve profitability depends on our ability, alone or with collaborative partners, to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize, product candidates we may identify for development. We do not anticipate generating revenues from product sales for many years, if ever. Our ability to generate future revenues from product sales depends heavily on our, or our collaborators’, ability to successfully:

Our expenses could increase beyond expectations if we are required by the U.S. Food and Drug Administration, or the FDA, the European Medicines Agency, or the EMA, or other regulatory authorities to perform clinical and other studies in addition to those that we currently anticipate. Even if one or more of the product candidates we may develop are approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate. Additionally, such products may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives. Even if we are able to generate revenues from the sale of any approved product candidates, we may not become profitable and may need to obtain additional funding to continue operations.

Since our inception, we have incurred losses and we may never achieve profitability. To the extent that we continue to generate taxable losses, under current law, our unused U.S. federal net operating losses, or NOLs, may be carried forward to offset a portion of future taxable income, if any. Additionally, we continue to generate business tax credits, including research and development tax credits, which generally may be carried forward to

Significant outbreaks of contagious diseases and other adverse public health developments could have a material impact on our business operations and operating results. For example, the spread of COVID-19 has and identification of new variants of COVID-19 have affected segments of the global economy and our operations. As a result of the ongoing COVID-19 pandemic or similar public health crises that may arise, we may experience disruptions that could adversely impact our operations, research and development, and as we continue developing, any preclinical studies, clinical trials and manufacturing activities we may conduct, some of which may include:

For example, our laboratory-based personnel have been unable to maximize use of our existing laboratory space due to restrictions on density of people and other aspects of our work have been limited by the need for our staff to isolate.

In addition, the trading prices for biopharmaceutical companies have been highly volatile as a result of the ongoing COVID-19 pandemic and we may face similar volatility in our stock price after we complete this public offering. We cannot predict the scope and severity of any economic recovery after the COVID-19 pandemic abates,

We are focused on developing therapies utilizing gene editing technology, which is new and largely unproven. The Prime Editing technologies that we have licensed and that we are utilizing in our research programs have not yet been clinically tested, nor are we aware of any clinical trials for safety or efficacy having been completed by third parties using Prime Editing or similar technologies. The scientific evidence to support the feasibility of developing product candidates based on gene editing technologies is both preliminary and limited. Successful development of product candidates will require us to safely deliver a gene editor into target cells, optimize the efficiency and specificity of such product candidates and ensure the therapeutic selectivity of such product candidates. We may need to address other safety issues as well, and to demonstrate the full value of these products, we will need to achieve these goals with single administration and demonstrate a permanent correction. There can be no assurance that our Prime Editing platform will achieve these goals, lead to the development of genetic therapies or be successful in solving any or all of these issues.

Our future success is highly dependent on the successful development of gene editing technologies, cellular delivery methods and therapeutic applications of that technology. We may decide to alter or abandon our initial programs as new data become available and we gain experience in developing gene editing therapeutics. We cannot be sure that our technologies will yield satisfactory products that are safe and effective, scalable or profitable in our initial indications or any other indication we pursue. Adverse developments in the clinical development efforts of other gene editing technology companies could adversely affect our efforts or the perception of any product candidates we may develop by both investors and regulatory authorities.

Similarly, other gene therapy approaches may be determined to be more attractive than Prime Editing. Moreover, if we decide to develop gene editing technologies other than those involving Prime Editing, we cannot be certain we will be able to obtain rights to such technologies. Although both of our co-founders have entered into agreements with us pursuant to which they assign any inventions to us with respect to the services they perform for us, such assignment obligations are subject to certain limitations, and do not extend to their work in other fields or to the intellectual property arising from their employment with their respective academic and research institutions. To obtain intellectual property rights assigned by our co-founders to such institutions, we would need to enter into license agreements with such institutions, such as the Broad Institute, Inc., or Broad Institute, Howard Hughes Medical Institute, or HHMI, and Harvard University, or Harvard, which may not be available on commercially reasonable terms or at all. Additionally, our consulting agreement with David Liu is subject to (i) the policies and regulations of certain institutions and (ii) certain agreements between such co-founder and certain third parties, including Beam Therapeutics Inc., or Beam Therapeutics. Any of these factors could reduce or eliminate our commercial opportunity and could have a material adverse effect on our business, financial condition, results of operations and prospects.

Development activities in the field of gene editing are currently subject to a number of risks, including risks related to the ownership and use of certain intellectual property rights that are subject to patent interference proceedings in the United States and opposition proceedings in Europe. For additional information regarding the

Additionally, public perception and related media coverage relating to the adoption of new therapeutics or novel approaches to treatment, as well as ethical concerns related specifically to gene editing, may adversely influence the willingness of subjects to participate in clinical trials, or, if any therapeutic is approved, of physicians and patients to accept these novel and personalized treatments. Physicians, health care providers and third-party payors often are slow to adopt new products, technologies and treatment practices, particularly those that may also require additional upfront costs and training. Physicians may not be willing to undergo training to adopt these novel and potentially personalized therapies, may decide the particular therapy is too complex or potentially risky to adopt without appropriate training, and may choose not to administer the therapy. Furthermore, due to health conditions, genetic profile or other reasons, certain patients may not be candidates for the therapies. In addition, responses by federal and state agencies, Congressional committees and foreign governments to negative public perception, ethical concerns or financial considerations may result in new legislation, regulations or medical standards that could limit our ability to develop or commercialize any product candidates, obtain or maintain regulatory approval or otherwise achieve profitability. New government requirements may be established that could delay or prevent regulatory approval of any product candidates we may develop. It is impossible to predict whether legislative changes will be enacted, regulations, policies or guidance changed, or interpretations by agencies or courts changed, or what the impact of such changes, if any, may be. Based on these and other factors, health care providers and payors may decide that the benefits of these new therapies do not or will not outweigh their costs.

The time required to obtain approval for any of our potential product candidates from the FDA, the EMA or other comparable foreign regulatory authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of regulatory authorities. For more information on the regulatory approval process, see “Business—Government Regulation.” Clinical trials may fail to demonstrate that our product candidates are safe for humans and effective for indicated uses. Even if initial clinical trials in any of our product candidates we may develop are successful, such product candidates may fail to show the desired safety and efficacy in later stages of clinical development despite having successfully advanced through preclinical studies and initial clinical trials. There is a high failure rate for drugs and biologics proceeding through clinical trials. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in later stage clinical trials even after achieving promising results in earlier stage clinical trials.

Because gene editing is novel, the regulatory requirements that will govern any novel gene editing product candidates we develop may continue to evolve. Within the broader genetic therapy field, a limited number of gene therapy products have received marketing authorization from the FDA and the EMA to date. Even with respect to more established products that fit into the categories of gene therapies or cell therapies, the regulatory landscape is still developing. Regulatory requirements governing gene therapy products and cell therapy products have changed frequently and may continue to change in the future. Moreover, there is substantial, and sometimes uncoordinated, overlap in those responsible for regulation of existing gene therapy products and cell therapy products. For example, in the United States, the FDA has established the Office of Tissues and Advanced Therapies within its Center for Biologics Evaluation and Research, or CBER, to consolidate the review of gene therapy and related products, and the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its review. Gene therapy clinical trials may also be subject to review and oversight by an institutional biosafety committee, or IBC, a local institutional committee that reviews and oversees certain basic and clinical research conducted at the institution participating in the clinical trial. Although the FDA decides whether individual gene therapy protocols may proceed, the review process and determinations of other reviewing bodies, such as an IBC, can impede or delay the initiation of a clinical trial, even if the FDA has reviewed the trial and approved its initiation.

The same applies in the European Union. The EMA’s Committee for Advanced Therapies, or CAT, is responsible for assessing the quality, safety and efficacy of advanced-therapy medicinal products (i.e. gene therapy, somatic-cell therapy or tissue-engineered medicines). The role of the CAT is to prepare a draft opinion on an application for marketing authorization for a gene therapy medicinal candidate that is submitted to the Committee for Medicinal Products for Human Use, or CHMP, before CHMP adopts its opinion which is submitted to the European Commission for the final decision on whether to grant a marketing authorization or not. In the European Union, the EMA publishes guidelines for the development and evaluation of gene therapy medicinal products to assist in preparing marketing authorization applications, however these are continually under review. The EMA may issue new guidelines concerning the development and marketing authorization for gene therapy medicinal products and require that we comply with these new guidelines.

Adverse developments in post-marketing experience or in clinical trials conducted by others of gene therapy products, cell therapy products or products developed through the application of gene editing technology may cause the FDA, the EMA and other regulatory bodies to revise the requirements for development or approval of our potential product candidates or limit the use of products utilizing gene editing technologies, either of which could materially harm our business. In addition, the clinical trial requirements of the FDA, the EMA and other regulatory authorities and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of the potential products. The regulatory approval process for novel product candidates can be more expensive and take longer than for other, better known or more extensively studied pharmaceutical or other product candidates. Regulatory agencies administering existing or future regulations or legislation may not allow production and marketing of products utilizing gene editing technology in a timely manner or under technically or commercially feasible conditions. In addition, regulatory action or private litigation could result in expenses, delays or other impediments to our research programs or the commercialization of resulting products.

The regulatory review committees and advisory groups described above and the new guidelines they promulgate may lengthen the regulatory review process, require us to perform additional studies or trials, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of these treatment candidates or lead to significant post-approval limitations or restrictions. As we advance our research programs and develop future product candidates, we will be required to consult with these regulatory and advisory groups and to comply with applicable guidelines. If we fail to do so, we may be required to delay or discontinue development of any product candidates we identify and develop.

In order to proceed into clinical development of any product candidates we identify, we will need to submit INDs or clinical trial applications to regulatory authorities and obtain regulatory clearance to commence clinical development. Because the product candidates we identify are based on novel gene-editing technology, we may be unsuccessful in obtaining clearance from regulatory authorities to proceed into clinical development. In order to commence clinical development, we will need to identify success criteria and endpoints such that the FDA, the EMA or other regulatory authorities will be able to determine the clinical efficacy and safety profile of any product candidates we may develop. As we are initially seeking to identify and develop product candidates to treat diseases in which there is little clinical experience using new technologies, and while we may have opportunities to discuss our clinical development plans with regulatory authorities prior to commencing clinical development, there is heightened risk that the FDA, the EMA or other regulatory authorities may not consider the clinical trial endpoints that we propose to provide clinically meaningful results (reflecting a tangible benefit to patients). In addition, the resulting clinical data and results may be difficult to analyze. Even if the FDA does find our success criteria to be sufficiently validated and clinically meaningful, we may not achieve the pre-specified endpoints to a degree of statistical significance. This may be a particularly significant risk for many of the genetically defined diseases for which we plan to develop product candidates because many of these diseases such as Friedreich’s Ataxia have small patient populations, and designing and executing a rigorous clinical trial with appropriate statistical power is more difficult than with diseases that have larger patient populations. Furthermore, even if we do achieve the pre-specified

The success of our business depends primarily upon our ability to identify, develop and commercialize product candidates. We are very early in our development efforts and have focused our research and development efforts to date on our Prime Editing platform, developing our Prime Editors and identifying our initial targeted disease indications. Although we believe we can demonstrate many of the key advantages of Prime Editing, because we are very early in our development efforts, we are not yet certain of the results we may achieve, which may be important for registration and commercialization of our products. Such uncertainties include but are not limited to the actual size of the set of pathogenic mutations we can address, the level of editing efficiency we can produce, the degree of unwanted byproducts we may encounter, our ability to achieve editing success in a single administration or the permanence of our edits. We have also not yet shown that preclinical editing efficacy can result in clinically important effects, nor that results of biomarker studies in our preclinical models can translate into positive results in clinical trials. One particular form of Prime Editing that uses recombinases to insert targeted “gene-sized” DNA into the genome, is in an even earlier stage of research and development than our immediate target indications and our differentiation indications. We believe this promising form of Prime Editing needs more than one source of DNA as a template and may deliver with less efficacy.

In addition, although we believe Prime Editing will position us to rapidly expand our portfolio of product candidates beyond the initial product candidates we may develop after only minimal changes to the product candidate construct, we have not yet successfully developed any product candidate and our ability to expand our portfolio may never materialize.

Commencing clinical trials in the United States is also subject to acceptance by the FDA of our IND application and finalizing the trial design based on discussions with the FDA and other regulatory authorities. Even after we receive and incorporate guidance from these regulatory authorities, the FDA or other regulatory authorities could disagree that we have satisfied their requirements to commence our clinical trial or change their position on the acceptability of our trial design or the clinical endpoints selected, which may require us to complete additional

Some of our approaches may require interaction and approval from regulatory authorities beyond the specific requirements for individual product candidates. For example, our “march up the chromosome” personalized medicine approach may require the use of basket clinical studies, studies where more than one mutation in a disease are studied in a single clinical trial or even studies where mutations in different diseases are studied in a single clinical trial. Some of our approaches may also require studying more than one Prime Editor under a single IND or applying for registration for a suite of Prime Editor products to allow broad therapeutic coverage for a wide range of mutations in a single disease. It is also possible that using Prime Editing approaches in a wider, healthier population, as we propose in our “Blue Sky” approaches, may require different safety and regulatory thresholds from those required for smaller, more critically ill groups of patients.

Even if we complete the necessary clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize our potential product candidates in the United States or any other jurisdiction, if at all, and any such approval may be for a more narrow indication than we seek. In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval in any other country. We may conduct one or more of our clinical trials with one or more trial sites that are located outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of these data is subject to conditions imposed by the FDA, and there can be no assurance that the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept the data from any trial that we conduct outside the United States, it would likely result in the need for additional trials, which would be costly and time-consuming and could delay or permanently halt our development of the applicable product candidates. Similarly, marketing approval by the FDA in the United States, if obtained, does not ensure approval by regulatory authorities in other countries or jurisdictions. Approval processes vary among countries and can involve additional product candidate testing and validation and additional administrative review periods.

Commercialization of any product candidates we may develop will also require obtaining manufacturing supply, capacity and expertise; building of a commercial organization; and significant marketing efforts. If we do not successfully commercialize any product candidates we may develop, we could experience a material harm to our business.

Although we are currently in preclinical development, as we progress our programs we may not be able to initiate or continue clinical trials for any product candidates we identify or develop if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA, the EMA or other analogous regulatory authorities outside the United States, or as needed to provide appropriate statistical power for a given trial. Enrollment may be particularly challenging for some of the rare genetically defined diseases we are targeting in our most advanced programs. In addition, if patients are unwilling to participate in our gene editing trials because of negative publicity from adverse events related to the biotechnology, gene therapy or gene editing fields, competitive clinical trials for similar patient populations, clinical trials in competing products or for other reasons, the timeline for recruiting patients, conducting studies and obtaining regulatory approval of our potential product candidates may be delayed. Moreover, some of our competitors may have ongoing clinical trials for product candidates that would treat the same indications as our potential product candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ product candidates.

Patient enrollment is also affected by other factors, some of which may include:

In addition, our ability to successfully initiate, enroll and complete a clinical trial in any foreign country is subject to numerous risks unique to conducting business in foreign countries, some of which may include:

Enrollment delays in our clinical trials may result in increased development costs for our potential product candidates, which would cause the value of our Company to decline and limit our ability to obtain additional financing. If we or our collaborators have difficulty enrolling a sufficient number of patients to conduct our clinical trials as planned, we may need to delay, limit or terminate ongoing or planned clinical trials or entire clinical programs, any of which would have an adverse effect on our business, financial condition, results of operations and prospects.

To date, we have focused our efforts on our Prime Editing platform. However, there are numerous other companies advancing gene editing and gene therapy product candidates that are in preclinical or clinical development. Some of these other companies have previously undertaken research and development of gene editing technologies using clustered regularly interspaced short palindromic repeats, or CRISPR, or other forms such as base editing, zinc finger nucleases, or ZFNs, engineered meganucleases and transcription activator-like effector nucleases, or TALENs, but to date none has obtained marketing approval for a product candidate. There can be no certainty that Prime Editing technology will lead to the development of genetic therapies or that other gene editing technologies will not be considered better or more attractive for the development of therapies. For example, transposons, or “jumping genes,” can insert themselves into different places in the genome and carry specific DNA sequences to specific sites without the need for making double-stranded breaks in DNA, although such methods currently cannot target specific locations. In addition, Beam Therapeutics is developing novel base editing

Similarly, other new gene editing technologies that have not been discovered yet may be determined to be more attractive than Prime Editing. Moreover, if we decide to develop gene editing technologies other than those involving Prime Editing, we cannot be certain we will be able to obtain rights to such technologies. Although both of our co-founders who currently provide consulting and advisory services to us in the area of gene editing technologies have entered into agreements with us pursuant to which they assign to us any inventions with respect to the services they perform for us, such obligations are subject to limitations and do not extend to their work in other fields or to the intellectual property arising from their employment with their respective academic and research institutions. To obtain intellectual property rights assigned by these co-founders to such institutions, such as Broad Institute, HHMI and Harvard, we would need to enter into license agreements with such institutions, which may not be available on commercially reasonable terms or at all. Additionally, our consulting agreement with David Liu is subject to (i) the policies and regulations of certain institutions and (ii) certain agreements between such co-founder and certain third parties, including Beam Therapeutics. Furthermore, although our co-founders have long-term supporting or employment roles with us, a financial stake in our success and, in certain cases, non-competition clauses in their consulting or employment agreements, such non-competition obligation is limited to the field of any and all gene editing and technology. Therefore it is possible that they may in the future develop new technologies that are outside of the field of their non-competition obligations but may be competitive to our business. In addition, other companies may use Prime Editing to develop product candidates in areas they believe are not covered under our foundational licensed issued patent, patent applications or know-how. There are also a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications for which we have research programs, using approaches other than gene editing approaches. Any of these factors could reduce or eliminate our commercial opportunity, and could have a material adverse effect on our business, financial condition, results of operations and prospects.

We are very early in our development efforts and have focused our research and development efforts to date on research efforts and preclinical development. Currently, all of our programs are still in the research or preclinical stage of development. Our ability to generate product revenues, which we do not expect will occur for many years, if ever, will depend heavily on the successful development, marketing approval and eventual commercialization of our product candidates, which may never occur. We have not yet generated revenue from product sales or otherwise, and we may never be able to develop or commercialize a marketable product.

Commencing clinical trials in the United States is subject to acceptance by the FDA of an IND and finalizing the trial design based on discussions with the FDA and other regulatory authorities. In the event that the FDA requires us to complete additional preclinical studies or we are required to satisfy other FDA requests prior to commencing clinical trials, the start of our first clinical trials may be delayed or we may be unsuccessful obtaining clearance to proceed into clinical development. Even after we receive and incorporate guidance from these regulatory authorities, the FDA or other regulatory authorities could disagree that we have satisfied their requirements to commence any clinical trial or change their position on the acceptability of our trial design or the clinical endpoints selected, which may require us to complete additional preclinical studies or clinical trials, delay

Commercialization of any product candidates we may develop will require preclinical and clinical development; regulatory and marketing approval in multiple jurisdictions, including by the FDA and the EMA; manufacturing supply, capacity and expertise; a commercial organization; and significant marketing efforts. The success of product candidates we may identify and develop will depend on many factors, including the following:

If we do not succeed in one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize any product candidates we may develop, which would materially harm our business. If we are unable to advance our product candidates to clinical development, obtain regulatory approval and ultimately commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.

We are developing a broad set of delivery technologies to support our Prime Editing programs. This will lead to significant challenges to develop a corresponding set of technical capabilities in support of these programs. In

We have not tested any of our proposed delivery methods in clinical trials and any favorable results we may have may not be predictive of results that may be observed in later preclinical studies or clinical trials. Furthermore, we have not generated any clinical trial results to date. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their product candidates. Many product candidates that initially showed promise in early stage testing for treating a variety of diseases have later been found to lack efficacy or to cause side effects that prevented further clinical development of the product candidates.

Moreover, there have been only a very limited number of clinical trials involving the use of any gene editing technologies and none involving gene editing technology similar to our Prime Editing technology. It is impossible to predict when or if any product candidates we may develop will prove safe in humans. In the genetic therapy field, there have been several significant adverse events from gene therapy treatments in the past, including both the impact of the technology for editing, as well as the delivery methods used to convey the gene editing technology. These include a variety of safety concerns, including reported cases of leukemia, other cancers, significant morbidities and death. There can be no assurance that gene editing technologies such as our Prime Editing technology or the delivery methods we plan to use will not cause such undesirable side effects.

We cannot be sure that our Prime Editing technology or any of our planned delivery methods will not result in adverse effects in the long-term, such as improper editing of a patient’s DNA that leads to lymphoma, leukemia, other cancers or other aberrantly functioning cells or other as yet unidentified findings. Many times, side effects manifest or are only detectable after investigational products are tested in larger scale, pivotal clinical trials or, in some cases, after they are made available to patients on a commercial scale after approval. FDA guidance advises that patients treated with gene therapies undergo long-term follow-up observation for identification of potential adverse events for as long as 15 years. If additional clinical or long-term follow-up experience indicates that any of our potential product candidates have side effects or cause serious or life-threatening side effects, the development of the product candidate may fail or be delayed, or, if the product candidate has received regulatory approval, such approval may be revoked or limited. It is also possible that serious or life-threatening side effects may cause significant delay or altered perception of any product candidates we may develop, even if we are able to later show these effects are unrelated to our product candidates. Any adverse events may cause us to delay, limit or terminate other planned clinical trials, for example any that use a similar delivery method or those that use similar aspects of Prime Editing, any of which would have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, many product candidates that initially showed promise in early-stage testing have later been found to cause later side effects that prevented further clinical development of the product candidates.

Additionally, a significant risk in any gene editing product candidate is that “off-target” edits, or edits far from the intended site of gene editing, may occur, which could cause serious adverse events, undesirable side effects or unexpected characteristics. One major causative factor leading to “off target” edits is the formation of double-strand breaks during gene editing. If double-strand breaks were to occur, they can also lead to decreased cell viability in edited cells, and an increase large deletions or structural rearrangements of DNA, chromosomal translocations or joining of one chromosome to another. In certain uses of Prime Editing, such as the use of dual flaps methods, or in some cases of use of nick-guide RNAs, more than one edit occurs along the target site. Although our preliminary data suggests otherwise, it is possible that the use of these variations of Prime Editing could result in adverse effects similar to those observed with double-strand breaks. However, our current understanding of our mechanism of action, which is designed to prevent double-strand breaks with Prime Editing, and preliminary data in our experiments suggest this risk may be low. We have performed initial experiments using assays that can detect off-target edits, even when such edits occur at very low frequencies. Using these assays, as well as reviewing published results, off-target edits have been noted. Except for initial experiments, we have not yet performed these

There is also the potential risk of delayed adverse events following exposure to Prime Editing therapy due to the permanence of edits to DNA or due to other components of product candidates used to carry the genetic material. In addition, because Prime Editing makes a permanent change, the therapy cannot be withdrawn, even after a side effect is observed. These risks also apply to “on-target” mis-edits, also often called “indels,” or edits that are not intended but occur at the target site of gene correction, which might also have all of the above consequences, as well as yet unforeseen adverse effects.

Although we and others have demonstrated the ability to engineer gene editors which are designed to improve the specificity of their edits in a laboratory setting, we cannot be sure that our engineering efforts will be effective in any product candidates that we may develop. For example, we might not be able to engineer an editor to make the desired change, could diminish the effectiveness of an edit that we make or lead to adverse effects. To date, these types of adverse effects have not been observed in our ongoing experiments and programs. Some Prime Editing approaches, such as those that use mismatch repair, or MMR, inhibition, may potentially also lead to adverse effects. Since our inhibition of MMR for use in Prime Editing is likely to be transient, lasting at most hours to days, we believe the risk related to MMR inhibition is small.

We also cannot be sure that our Prime Editing technology or any of our planned delivery methods will not result in adverse effects including allergic reactions, other changes in safety parameters, increases in liver function tests or many other potential concerns noted in clinical trials. It is also possible that our Prime Editors or our delivery methods will result in significant immunogenicity that may lead to adverse effects and could also prevent any chance of reapplication of a delivery method, or gene editing method in the future, if needed.

In certain of our programs, we plan to use lipid nanoparticles, or LNPs, to deliver our Prime Editors. LNPs have been shown to induce oxidative stress in the liver at certain doses, as well as initiate systemic inflammatory responses that can be fatal in some cases. While we aim to continue to optimize our LNPs, there can be no assurance that our LNPs will not have undesired effects. Our LNPs could contribute, in whole or in part, to one or more of the following: immune reactions, infusion reactions, complement reactions, opsonation reactions, antibody reactions including IgA, IgM, IgE or IgG or some combination thereof, or reactions to the PEG from some lipids or PEG otherwise associated with the LNP. Certain aspects of our investigational therapies may induce immune reactions from either the mRNA or the lipid as well as adverse reactions within liver pathways or degradation of the mRNA or the LNP, any of which could lead to significant adverse events in one or more of our future clinical trials. Many of these types of side effects have been seen for legacy LNPs. There may be uncertainty as to the underlying cause of any such adverse event, which would make it difficult to accurately predict side effects in future clinical trials and would result in significant delays in our programs.

Our viral vectors including adeno-associated viruses, or AAVs, or lentiviruses, which are relatively new approaches used for disease treatment, also have known side effects, and for which additional risks could develop in the future. In past clinical trials that were conducted by others with non-AAV vectors, several significant side effects were caused by gene therapy treatments, including reported cases of leukemia and death. Other potential side effects could include an immunologic reaction and insertional oncogenesis, which is the process whereby the insertion of a functional gene near a gene that is important in cell growth or division results in uncontrolled cell division, which could potentially enhance the risk of malignant transformation. AAV vectors may also persist in the cell for long periods, potentially permanently, and may result in long-term adverse effects. If the vectors we use demonstrate a similar side effect or other adverse events, we may be required to halt or delay further clinical development of any potential product candidates. Furthermore, the FDA has stated that lentiviral vectors possess characteristics that may pose high risks of delayed adverse events. Such delayed adverse events may occur in other viral vectors, including AAV vectors, at a lower rate.

In addition to side effects and adverse events caused by any product candidates we may develop, the conditioning, administration process or related procedures which may be used in our electroporation pipeline also can cause adverse side effects and adverse events. A gene therapy patient is generally administered cytotoxic drugs to remove stem cells from the bone marrow to create sufficient space in the bone marrow for the modified stem cells to engraft and produce new cells. This procedure compromises the patient’s immune system. In the future, if we are unable to demonstrate that such adverse events were caused by the conditioning regimens used, administration process or related procedure, the FDA, the EMA or other regulatory authorities could order us to cease further development of, or deny approval of, any product candidates we may develop for any or all target indications. Even if we are able to demonstrate that adverse events are not related to the drug product or the administration of such drug product, such occurrences could affect patient recruitment, the ability of enrolled patients to complete the clinical trial or the commercial viability of any product candidates that obtain regulatory approval.

We may also consider additional delivery modes, which may carry additional known and unknown risks. For example, we intend to use novel split intein technology for AAV gene therapy that allows us to deliver the Prime Editor and guide RNA construct by co-infection with two viruses, where each virus contains one half of the editor. The scientific evidence to support the feasibility of developing product candidates based on this technology is both preliminary and limited. We also intend to use LNPs to deliver some of our Prime Editors. While LNPs have been used to deliver smaller molecules, such as RNAi, they have not been clinically proven to deliver large RNA molecules, such as the ones we intend to use for our Prime Editors. Furthermore, as with many AAV-mediated gene therapy approaches, certain patients’ immune systems might prohibit the successful delivery, thereby potentially limiting treatment outcomes of these patients. Even if initial clinical trials in any of our potential product candidates we may develop are successful, these product candidates we may develop may fail to show the desired safety and

In the future, if we are unable to demonstrate that any of the above adverse events were caused by factors other than our product candidates or our delivery methods, the FDA, the EMA or other regulatory authorities could order us to cease further development of, or deny approval of, any product candidates we are able to develop for any or all targeted indications. Even if we are able to demonstrate that all future serious adverse events are not product- and/or delivery-related, such occurrences could affect patient recruitment or the ability of enrolled patients to complete the trial or may cause significant delays to our programs and potential registration. Moreover, if we elect, or are required, to delay, suspend or terminate any clinical trials, the commercial prospects of such product candidates may be harmed and our ability to generate product revenues from any of these product candidates may be delayed or eliminated. Any of these occurrences may harm our ability to identify and develop product candidates, and may harm our business, financial condition, result of operations and prospects significantly.

The development and commercialization of new drug products is highly competitive. Moreover, the gene editing field is characterized by rapidly changing technologies, significant competition and a strong emphasis on intellectual property. We will face competition with respect to any product candidates that we may seek to develop or commercialize in the future from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent or other intellectual property protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications for which we have research programs. Some of these competitive products and therapies are based on scientific approaches that are the same as or similar to our approach, while others are based on entirely different approaches.

There are several companies utilizing CRISPR/Cas9 nuclease technology, including Caribou Biosciences, Inc., Editas Medicine, Inc., CRISPR Therapeutics AG, Intellia Therapeutics, Inc. and Graphite Bio, Inc., among others. Several additional companies such as Sangamo Therapeutics, Inc., Precision BioSciences, Inc. and bluebird bio, Inc. utilize alternative nuclease-based genome editing technologies, including ZFNs, engineered meganucleases and TALENs. Beam Therapeutics utilizes base editing technology. In addition, other private companies such as Tessera Therapeutics, Inc. and Tome Biosciences, Inc. have announced their work in recombinase DNA and RNA gene writers, although little is known publicly about their science or portfolio. Other companies have announced intentions to enter the gene editing field, such as Moderna, Inc. and Pfizer Inc. Most recently, new epigenetic editing companies have emerged, such as Chroma Medicine, Inc. and Tune Therapeutics, Inc. In addition, we face competition from companies utilizing gene therapy, oligonucleotides and cell therapy therapeutic approaches. Several companies such as Arbor Biotechnologies, Inc., Scribe Therapeutics Inc., Mammoth Biosciences, Inc. and Metagenomi, Inc. are actively searching for novel genome editing components and have reported the discovery of new DNA-cutting enzymes. Other companies are active in LNP delivery technologies and advancing those into therapeutics using genetic therapies, including Recode Therapeutics, Inc., Verve Therapeutics, Inc., Generation Bio Co. and Beam Therapeutics, among others.

Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future that are approved to treat the same diseases for which we may obtain approval for any product candidates we may develop. This may include other types of therapies, such as small molecule, antibody and/or protein therapies.

Many of our current or potential competitors, either alone or with their collaboration partners, may have significantly greater financial resources and expertise in research and development, manufacturing, conducting preclinical studies and clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical, biotechnology and gene therapy industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize product candidates that are safer, more effective, have fewer or less severe side effects, are more convenient, or are less expensive than any product candidates that we may develop or that would render any product candidates that we may develop obsolete or non-competitive. Our competitors also may obtain FDA or other regulatory approval for their product candidates more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Additionally, technologies developed by our competitors may render our potential product candidates uneconomical or obsolete, and we may not be successful in marketing any product candidates we may develop against competitors.

In addition, as a result of the expiration or successful challenge of our patent or other intellectual property rights, we could face risks relating to our ability to successfully prevent or delay launch of competitors’ products. The availability of our competitors’ products could limit the demand and the price we are able to charge for any product candidates that we may develop and commercialize.

Our potential therapeutic products involve editing the human genome and making permanent changes that may not be reversible. The clinical and commercial success of our potential products will depend in part on public understanding and acceptance of the use of gene editing therapy for the prevention or treatment of human diseases. Public attitudes may be influenced by claims that gene editing is unsafe, unethical or immoral, and, consequently, any product candidates we may develop may not gain the acceptance of the public or the medical community. Moreover, our success will depend upon physicians prescribing, and their patients being willing to receive, treatments that involve the use of product candidates we may develop in lieu of, or in addition to, existing treatments with which they are already familiar and for which greater clinical data may be available.

In addition, gene editing technology is subject to public debate and heightened regulatory scrutiny due to ethical concerns relating to the application of gene editing technology to human embryos or the human germline. For example, academic scientists in several countries, including the United States, have reported on their attempts to edit the gene of human embryos as part of basic research. In addition, in November 2018, Dr. Jiankui He, a Chinese biophysics researcher who was an associate professor in the Department of Biology of the Southern University of Science and Technology in Shenzhen, China, reportedly claimed he had created the first human genetically edited babies, twin girls. This claim, and another that Dr. He had helped create a second gene-edited pregnancy, was subsequently confirmed by Chinese authorities and was negatively received by the public, in particular those in the scientific community. News reports indicate that Dr. He was sentenced to three years in prison and fined $430,000 in December 2019 by the Chinese government for illegal medical practice in connection with such activities. In the wake of the claim, the World Health Organization established a new advisory committee to create global governance and oversight standards for human gene editing. The Alliance for Regenerative Medicine also released principles for the use of gene editing in therapeutic applications endorsed by a number of companies that use gene editing technologies.

Moreover, in an annual worldwide threat assessment report delivered to the U.S. Congress in February 2016, the U.S. Director of National Intelligence stated that research into gene editing that is conducted under different regulatory standards than those of Western countries probably increases the risk of the creation of potentially harmful biological agents or products, including weapons of mass destruction. He noted that given the broad

Although we do not, and will not use our technologies to edit human embryos or the human germline, such public debate about the use of gene editing technologies in human embryos and heightened regulatory scrutiny could prevent or delay our development of product candidates. More restrictive government regulations or negative public opinion would have a negative effect on our business or financial condition and may delay or impair our development and commercialization of product candidates or demand for any product candidates we may develop. Adverse events in our preclinical studies or clinical trials or those of our competitors or of academic researchers utilizing gene editing technologies, even if not ultimately attributable to product candidates we may identify and develop, and negative publicity could result in increased governmental regulation, unfavorable public perception, potential regulatory delays in the testing or approval of potential product candidates we may identify and develop, stricter labeling requirements for those product candidates that are approved, and a decrease in demand for any such product candidates.

We focus our research and product development on treatments for rare genetically defined diseases. Many of the product candidates we may develop are expected to target a single, often predominant mutation; as a result, the relevant patient population may therefore be small. Although we believe we can expand beyond our immediate target indications, this approach will require regulatory approval as discussed in the risk factor entitled “We are very early in our development efforts and may not be successful in identifying and developing potential product candidates. It will be many years before we or our collaborators commercialize a product candidate or generate any revenues, if ever.” Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with product candidates we may develop, are based on estimates. These estimates may prove to be incorrect and new studies may change the estimated incidence or prevalence of these diseases. The number of patients in the United States, Europe and elsewhere may turn out to be lower than expected, and patients may not be amenable to treatment with the product candidates we may develop, or may become increasingly difficult to identify or gain access to, all of which would adversely affect our business, financial condition, results of operations and prospects. Additionally, because of the potential that any product candidates we develop could cure a target disease, we may not receive recurring revenues from patients and may deplete the patient population prevalence through curative therapy.

Clinical trial and product liability lawsuits against us could divert our resources and could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

We will face an inherent risk of clinical trial and product liability exposure related to the testing of our product candidates in human clinical trials, and we will face an even greater risk if we commercially sell any products that we may develop. While we currently have no products in clinical trials or that have been approved for commercial sale, the future use of product candidates by us in clinical trials, and the sale of any approved products in the future, may expose us to liability claims. These claims might be made by patients that use the product, healthcare providers, pharmaceutical companies or others selling such products. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

We currently do not hold any clinical trial liability insurance coverage. We may need to obtain insurance coverage as we expand our clinical trials or if we commence commercialization of our product candidates. Insurance coverage is increasingly expensive. We may not be able to obtain and maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. If a successful clinical trial or product liability claim or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, our assets may not be sufficient to cover such claims and our business operations could be impaired.

We and any contract manufacturers and suppliers we engage are subject to numerous federal, state, and local environmental, health, and safety laws, regulations, and permitting requirements, including those governing laboratory procedures; the generation, handling, use, storage, treatment, and disposal of hazardous and regulated materials and wastes; the emission and discharge of hazardous materials into the ground, air, and water; and employee health and safety. Our operations involve the use of hazardous and flammable materials, including chemicals and biological and radioactive materials. Our operations also produce hazardous waste. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. Under certain environmental laws, we could be held responsible for costs relating to any contamination at our current or past facilities and at third-party facilities. We also could incur significant costs associated with civil or criminal fines and penalties.

Compliance with applicable environmental laws and regulations may be expensive, and current or future environmental laws and regulations may impair our research and product development efforts. In addition, we cannot entirely eliminate the risk of accidental injury or contamination from these materials or wastes. Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We carry specific biological or hazardous waste insurance coverage (under which we currently have an aggregate of approximately $2.0 million in coverage). However, in the event of contamination or injury, we could be held liable for damages or be penalized with fines in an amount exceeding our resources, and our clinical trials or regulatory approvals could be suspended, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

In addition, we may incur substantial costs in order to comply with current or future environmental, health, and safety laws, regulations, and permitting requirements. These current or future laws, regulations, and permitting requirements may impair our research, development, or production efforts. Failure to comply with these laws, regulations, and permitting requirements also may result in substantial fines, penalties, or other sanctions or business disruption, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Any third-party contract manufacturers and suppliers we engage will also be subject to these and other environmental, health, and safety laws and regulations. Liabilities they incur pursuant to these laws and regulations could result in significant costs or an interruption in operations, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Any product candidates we may develop will likely require processing steps that are more complex than those required for most chemical pharmaceuticals. For example, one component of our Prime Editors is guide RNA, known as a Prime Editing guide RNA, or pegRNA we currently obtain from partners and vendors; future needs could require additional pegRNA lengths or increased purity, beyond what our partners and vendors can currently supply. Moreover, unlike chemical pharmaceuticals, the physical and chemical properties of a biologic such as the product candidates we intend to develop generally cannot be fully characterized. As a result, assays of the finished product candidate may not be sufficient to ensure that the product candidate will perform in the intended manner. Problems with the manufacturing process, even minor deviations from the normal process, could result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims, insufficient inventory or potentially delay progression of our potential IND filings. If we successfully develop product candidates, we may encounter problems achieving adequate quantities and quality of clinical-grade materials that meet the FDA, the EMA or other comparable applicable foreign standards or specifications with consistent and acceptable production yields and costs. For example, the current approach of manufacturing AAV vectors may fall short of supplying required number of doses needed for advanced stages of preclinical studies or clinical trials, and the FDA may ask us to demonstrate that we have the appropriate manufacturing processes in place to support the higher-dose group in our preclinical studies or clinical trials. In addition, any product candidates we may develop will require complicated delivery methods, such as electroporation, LNPs or viral vectors, each of which will introduce additional complexities in the manufacturing process.

In addition, the FDA, the EMA and other regulatory authorities may require us to submit samples of any lot of any approved product together with the protocols showing the results of applicable tests at any time. Under some circumstances, the FDA, the EMA or other regulatory authorities may require that we not distribute a lot until the agency authorizes its release. Slight deviations in the manufacturing process, including those affecting quality attributes and stability, may result in unacceptable changes in the product that could result in lot failures or product recalls. Lot failures or product recalls could cause us to delay clinical trials or product launches, which could be costly to us and otherwise harm our business, financial condition, results of operations and prospects.

Furthermore, we intend to use novel technology for gene editing. Our novel Prime Editors have two main components that act together to edit DNA: (i) a Prime Editor protein, comprising a fusion between a Cas protein and a reverse transcriptase enzyme, and (ii) a pegRNA, that targets the Prime Editor to a specific genomic location and provides a template for making the desired edit to the target DNA sequence. Prime Editing leverages the established DNA-targeting capabilities of CRISPR-Cas proteins modified to nick, but not cause double-stranded DNA breaks, and combines these with the DNA synthesis capabilities of reverse transcriptase enzymes, which have been engineered to efficiently and precisely copy a pegRNA-encoded edited sequence into target DNA. The scientific evidence to support the feasibility of developing product candidates based on this technology is both preliminary and limited and has yet to be produced at a clinical scale.

We also may encounter problems hiring and retaining the experienced scientific, quality control and manufacturing personnel needed to manage our manufacturing process, which could result in delays in our production or difficulties in maintaining compliance with applicable regulatory requirements.

Given the nature of biologics manufacturing there is a risk of contamination during manufacturing. Any contamination could materially harm our ability to produce product candidates on schedule and could harm our results of operations and cause reputational damage. Some of the raw materials that we anticipate will be required in our manufacturing process are derived from biologic sources. Such raw materials are difficult to procure and may be subject to contamination or recall. A material shortage, contamination, recall or restriction on the use of biologically derived substances in the manufacture of any product candidates we may develop could adversely impact or disrupt the commercial manufacturing or the production of clinical material, which could materially harm our development timelines and our business, financial condition, results of operations and prospects.

Any problems in our manufacturing process or the facilities with which we contract could make us a less attractive collaborator for potential partners, including larger pharmaceutical companies and academic research institutions, which could limit our access to additional attractive development programs. Problems in third-party manufacturing process or facilities also could restrict our ability to ensure sufficient clinical material for any clinical trials we may be conducting or are planning to conduct and meet market demand for any product candidates we develop and commercialize.

Before obtaining marketing approval from regulatory authorities for the sale of any product candidates we may identify and develop, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete, and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results.

Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses. Many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their product candidates.

We and our collaborators, if any, may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize any product candidates we may identify and develop, including:

If we or our collaborators are required to conduct additional clinical trials or other testing of any product candidates we may develop beyond those that we currently contemplate, if we or our collaborators are unable to successfully complete clinical trials or other testing of any product candidates we may develop, or if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we or our collaborators may:

Product development costs will also increase if we or our collaborators experience delays in clinical trials or other testing or in obtaining marketing approvals. We do not know whether any clinical trials will begin as planned, will need to be restructured, or will be completed on schedule, or at all. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize any product candidates we may develop, could allow our competitors to bring products to market before we do, and could impair our ability to

We are developing product candidates in areas of unmet medical need where there are currently limited or no available therapeutic options and may receive requests in the future for right to try access or expanded access on a compassionate use basis to certain of our potential product candidates. It is possible for individuals or groups to target companies with disruptive social media campaigns related to a request for access to unapproved drugs for patients with significant unmet medical need. If we experience a similar social media campaign regarding our decision to provide or not provide access to any of our potential product candidates under an expanded access policy, our reputation may be negatively affected and our business may be harmed.

In addition, some patients who receive access to drugs prior to their commercial approval through compassionate use, expanded access programs or right to try access have life-threatening illnesses and have exhausted all other available therapies. The risk for serious adverse events in this patient population is high, which could have a negative impact on the safety profile of our potential product candidates if we were to provide them to these patients, which could cause significant delays or an inability to successfully commercialize our potential product candidates, which could materially harm our business. If we were to provide patients with our potential product candidates under an expanded access program, we may in the future need to restructure or pause any compassionate use and/or expanded access programs in order to perform the controlled clinical trials required for regulatory approval and successful commercialization of our potential product candidates, which could prompt adverse publicity or other disruptions related to current or potential participants in such programs.

We may seek third-party collaborators and strategic partners for the research, development, delivery, manufacturing and commercialization of certain of the product candidates we may develop. If we enter into any such arrangements with any third parties, we will likely have limited control over the amount and timing of resources that our collaborators dedicate to collaboration, including the development, delivery, manufacturing or commercialization of any product candidates we may seek to develop with them. Our ability to generate revenues from these arrangements will depend on our collaborators’ and strategic partners’ abilities to successfully perform the functions assigned to them in these arrangements. We cannot predict the success of any collaboration that we enter into.

Collaborations involving our research, development, expansion of our technology or for any product candidates we may develop pose numerous risks to us, including the following:

If our collaborations do not result in successful research or delivery approaches or successful development and commercialization of product candidates, or if one of our collaborators or strategic partners terminates its agreement with us, there may be adverse consequences. For example, we may not receive any future research funding or milestone or royalty payments under the collaboration. If we do not receive the funding we expect under these agreements, our development of product candidates could be delayed, and we may need additional resources to develop product candidates. In addition, if one of our collaborators or strategic partners terminates its agreement with us, we may find it more difficult to find a suitable replacement or attract a new collaboration, lose access to key technology or our development programs may be delayed or the perception of us in the business and financial communities could be adversely affected. All of the risks relating to product development, regulatory approval and commercialization described in this prospectus apply to the activities of our collaborators and strategic partners.

These relationships, or those like them, may require us to incur non-recurring and other charges, increase our near- and long-term expenditures, issue securities that dilute our existing stockholders, result in a loss of value to our

If conflicts arise between our corporate or academic collaborators or strategic partners and us, the other party may act in a manner adverse to us and could limit our ability to implement our strategies. Some of our academic collaborators and strategic partners are conducting multiple product development efforts within each area that is the subject of the collaboration with us. Our collaborators or strategic partners, however, may develop, either alone or with others, products in related fields that are competitive with the product candidates we may develop that are the subject of these collaborations with us. Competing products, either developed by the collaborators or strategic partners or to which the collaborators or strategic partners have rights, may result in the withdrawal of partner support for any product candidates we may develop.

Our collaborators or strategic partners could develop competing products, preclude us from entering into collaborations with their competitors, fail to obtain timely regulatory approvals, prevent us from obtaining timely regulatory approvals, terminate their agreements with us prematurely or fail to devote sufficient resources to the collaboration efforts, including development, delivery, manufacturing and commercialization of products. Any of these developments could harm our company and product development efforts.

We currently, and expect to continue to, rely on third parties, such as CROs, clinical data management organizations, medical institutions, preclinical laboratories and clinical investigators, to conduct some aspects of our research. For example, we may rely on a third party to conduct electroporation, to supply LNPs or AAVs, or to conduct some of our preclinical animal experiments. Any of these third parties may terminate their engagements with us at any time under certain criteria. If we need to enter into alternative arrangements, it may delay our product development activities.

Our reliance on these third parties for research and development activities will reduce our control over these activities but will not relieve us of our responsibilities. For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA, the EMA and other regulatory authorities require us and the study sites and investigators we work with to comply with standards, commonly referred to as GLPs and GCPs for conducting, recording and reporting the results of preclinical studies and clinical trials to assure, amongst other things, that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. In the United States, we also are required to register certain clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

Although we intend to design the clinical trials for our potential product candidates, CROs will conduct some or all of the clinical trials. As a result, many important aspects of our development programs, including their conduct and timing, will be outside of our direct control. Our reliance on third parties to conduct preclinical studies and future clinical trials will also result in less direct control over the management of data developed through preclinical studies and clinical trials than would be the case if we were relying entirely upon our own staff. Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities. Among other reasons that may delay or impact the development of our potential product candidates, outside parties may:

These factors may materially adversely affect the willingness or ability of third parties to conduct our preclinical studies and clinical trials and may subject us to unexpected cost increases that are beyond our control. If the CROs and other third parties do not perform such preclinical studies and future clinical trials in a satisfactory manner, breach their obligations to us or fail to comply with regulatory requirements, the development, regulatory approval and commercialization of our potential product candidates may be delayed, we may not be able to obtain regulatory approval and commercialize our potential product candidates or our development programs may be materially and irreversibly harmed. If we are unable to rely on preclinical and clinical data collected by our CROs and other third parties, we could be required to repeat, extend the duration of or increase the size of any preclinical studies or clinical trials we conduct and this could significantly delay commercialization and require greater expenditures.

We may also expect to rely on other third parties to store and distribute drug supplies for our future clinical trials. Any performance failure on the part of our distributors could delay clinical development or marketing approval of any product candidates we may develop or commercialization of our therapies, producing additional losses and depriving us of potential product revenue.

We do not have any manufacturing facilities at the present time. We currently rely on third-party manufacturers to manufacture many of our materials for research and may continue to do so for preclinical studies and possibly even clinical trials. We have not yet formulated our plans for commercial supply of any product candidates that we may develop or for which we or our collaborators may in the future obtain marketing approval, but our future decisions may be subject to similar risks to the ones discussed below.

We may be unable to establish any agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, some of which may include:

Third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside the United States. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocations, seizures or recalls of product candidates or therapies, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our therapies and harm our business, financial condition, results of operations and prospects.

Any therapies that we may develop may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us.

Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval. We do not currently have arrangements in place for redundant supply for bulk drug substances. If any third party-manufacturer with whom we contract fails to perform its obligations, we may be forced to manufacture the materials ourselves, for which we may not have the facilities or resources, or enter into an agreement with a different third party-manufacturer, which we may not be able to do on reasonable terms, if at all. In either scenario, our clinical trials supply could be delayed significantly as we establish alternative supply sources. In some cases, the technical skills required to manufacture our products or product candidates may be unique or proprietary to the original third party-manufacturer and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be unable to transfer such skills at all. In addition, if we are required to change third party-manufacturers for any reason, we will be required to verify that the new third party-manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations. We will also need to verify, such as through a manufacturing comparability study, that any new manufacturing process will produce our potential product candidates according to the specifications previously submitted to the FDA or another regulatory authority. The delays associated with the verification of a new third party-manufacturer could negatively affect our ability to develop product candidates or commercialize our products in a timely manner or within budget. Furthermore, a third party-manufacturer may possess technology related to the manufacture of our product candidate that such third party-manufacturer owns independently. This would increase our reliance on such third party-manufacturer or require us to obtain a license from such third party-manufacturer in order to have another third party-manufacturer manufacture our product candidates, which may not be available on commercially reasonable terms, or at all. In addition, changes in manufacturers often involve changes in manufacturing procedures and processes, which could require that we conduct bridging studies between our prior clinical supply used in our clinical trials and that of any new manufacturer. We may be unsuccessful in demonstrating the comparability of clinical supplies which could require the conduct of additional clinical trials.

Our current and anticipated future dependence upon others for the manufacture of any product candidates or therapies we may develop may adversely affect our future profit margins and our ability to commercialize any therapies that receive marketing approval on a timely and competitive basis.

For some of the product candidates we may develop, we may decide to collaborate with other pharmaceutical and biotechnology companies for the development and potential commercialization of those product candidates, which is a complex and time-consuming process to negotiate and document. Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator or strategic partner’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator or strategic partner’s evaluation of a number of factors. Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA, the EMA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and industry and market conditions generally. The collaborator or strategic partner may

We may also be restricted under existing collaboration agreements from entering into future collaboration agreements on certain terms with potential collaborators. In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators, which further increases competition we face in seeking potential collaborations.

We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are unable to do so, we may have to curtail the development of the product candidate for which we are seeking to collaborate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to develop product candidates or bring them to market and generate product revenue.

Our commercial success will depend in large part on our ability to obtain and maintain patent, trademark, trade secret and other intellectual property protection of our Prime Editing technology, product candidates and other technology, methods used to manufacture them and methods of treatment, as well as to successfully defend our patent and other intellectual property rights against third-party challenges. It is difficult and costly to protect our Prime Editing technology and product candidates, and we may not be able to ensure their protection. The development of our product candidates and technology is at an early stage and consequently, our patent portfolio is also at an early stage. For example, while we in-license one issued patent, we do not currently own any, or in-license any other, issued patents relating to our technology and product candidates and many of our and our licensors’ patent applications are either at the provisional stage or at an early stage in prosecution. Our ability to stop unauthorized third parties from making, using, selling, offering to sell, importing or otherwise commercializing our product candidates we may develop is dependent upon the extent to which we have established rights under valid and enforceable patents or trade secrets that cover these activities.

We seek to protect our proprietary position by in-licensing intellectual property relating to our platform technology and filing patent applications in the United States and abroad related to our Prime Editing technology and product candidates that are important to our business. If we or our licensors are unable to obtain or maintain patent protection with respect to our Prime Editing technology and product candidates we may develop, or if the scope of the patent protection secured is not sufficiently broad, third parties could develop and commercialize products and technology similar or identical to ours and our ability to commercialize any product candidates we may develop may be adversely affected.

The patent prosecution process is expensive, time-consuming and complex, and we may not be able to file, prosecute, maintain, enforce, defend or license all necessary or desirable patent applications at a reasonable cost or in a timely manner. In addition, we may not pursue or obtain patent protection in all relevant markets. It is also possible that we will fail to identify patentable aspects of our research and development output in time to obtain patent protection. Although we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and

No consistent policy regarding the scope of claims allowable in the field of genome editing, including for Prime Editing technologies such as our Prime Editing technology, has emerged in the United States. The scope of patent protection outside of the United States is also uncertain. Changes in either the patent laws or their interpretation in the United States and other countries may diminish our ability to protect our inventions, obtain, maintain, enforce and defend our intellectual property rights and, more generally, could affect the value of our intellectual property or narrow the scope of our owned and licensed patent rights. With respect to both in-licensed and owned intellectual property, we cannot predict whether the patent applications we and our licensors are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will be valid and enforceable and provide sufficient protection from third parties.

Moreover, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. Even if patent applications we license or own currently or in the future issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us, or otherwise provide us with any competitive advantage. Any patent applications that we own or in-license may, if issued as patents, be challenged, narrowed, circumvented, or invalidated by third parties. Consequently, we do not know whether any of our platform advances and product candidates we may develop will be protectable or remain protected by valid and enforceable patents. Our competitors or other third parties may be able to circumvent our patents that may be issued from our patent applications by developing similar or alternative technologies or products in a non-infringing manner. In addition, given the amount of time required for the development, testing and regulatory review of new product candidates, patents that may be issued protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

Some of our owned and in-licensed patent applications are, and may in the future be, co-owned with third parties. With respect to any patent applications co-owned by third parties, we may require exclusive licenses to such

We do not currently own any issued patents and are heavily reliant upon certain patent rights and proprietary technology we have licensed from third parties that are important or necessary to the development of our Prime Editing technology and product candidates. For example, we are a party to a license agreement with Broad Institute. In September 2019, we entered into a license agreement with Broad Institute, and in May 2020 and February 2021, we entered into amendments to such license agreement. Under the amended license agreement, or the Broad License Agreement, Broad Institute grants us certain rights and licenses under certain patent rights it owns or controls relating to our Prime Editing technology and product candidates. The Broad License Agreement imposes various diligence, milestone payment, royalty, insurance and other obligations on us. Our licenses are subject to Broad Institute’s inclusive innovation model, pursuant to which Broad Institute retains the right, in certain circumstances, to grant to third parties (other than specified competitors of ours) licenses under the licensed patent rights that would otherwise fall within the scope of the exclusive license granted to us. All gene targets, which are any human genes to which a program is directed, are subject to Broad Institute's march-in license, which means Broad Institute has the right to terminate our license to gene targets under certain conditions and could make one or more gene targets unavailable to us. However, once we initiate a program for a gene target, in accordance with the terms of the Broad License Agreement, Broad Institute loses the right to use its march-in license for such gene target, provided we continue to use commercially reasonable efforts to continue to progress such development. As such, we believe Broad Institute cannot exercise its march-in license with respect to any of our current programs for gene targets because such programs have been initiated in accordance with the terms and requirements of the Broad License Agreement. Internally, we determine when a program for a gene target has been initiated by considering factors such as whether a gene target has been identified as the subject of a program, how much time or resources have been dedicated to researching, developing, and/or designing and using reagents for a program, and the amount of preclinical testing in process for such program. For more information regarding the scope of our rights and obligations under the Broad License Agreement, see the section titled “Business—Our License and Collaboration Agreements—License Agreement with Broad Institute.” If we fail to comply with these or other obligations in our current or future license agreements, our licensors may have the right to terminate our license, in which event we would not be able to develop or market our Prime Editing technology or any other technology or product candidates covered by the intellectual property licensed under this agreement. Our business would be seriously harmed if any current or future licenses terminate, if our licensors fail to abide by the terms of the license, if our licensors fail to enforce licensed patents against infringing third parties, if the licensed patents or other rights are found to be invalid or unenforceable, or if we are unable to enter into necessary licenses on acceptable terms. If our license agreements terminate, or we experience a reduction or elimination of licensed rights under these agreements, we may have to negotiate new or reinstated licenses with less favorable terms or we may not have sufficient intellectual property rights to operate our business. Moreover, if certain of our license agreements terminate, we may be required to continue to license or assign certain of our intellectual property to the applicable counterparty.

Certain of the patent rights that we license from Broad Institute are co-owned by Broad Institute with Harvard and certain of the licensed patent rights are co-owned by Broad Institute, Harvard, and Massachusetts Institute of Technology, or MIT. In addition, some of the inventors of the licensed patent and patent applications are or were employees of HHMI, which retains certain rights to patents and patent applications invented by their employees. Our rights to our in-licensed patent and patent applications from Broad Institute are dependent, in part, on inter-institutional or other operating agreements between Broad Institute, Harvard, MIT and HHMI. If Broad Institute, Harvard, MIT or HHMI breaches or terminates such inter-institutional or operating agreements, our rights to such

Additionally, in September 2019, we established a strategic relationship with Beam Therapeutics, a biotechnology company developing gene editing products using its proprietary base editing technology. Under our license and collaboration agreement with Beam Therapeutics, or the Beam Collaboration Agreement, each party grants to the other certain exclusive and non-exclusive licenses and rights to certain Prime Editing, CRISPR and delivery technologies for use in certain specified fields. Activities performed by Prime and Beam Therapeutics under the Beam Collaboration Agreement may lead to co-owned patents and patent applications. For more information regarding the Broad License Agreement and the Beam Collaboration Agreement and our other material agreements related to our technology, see the section titled “Business—Our License and Collaboration Agreements.”

We do not control the preparation, filing, prosecution and maintenance of the patents and patent applications covering the technology that we license from Broad Institute or Beam Therapeutics. For example, pursuant to our licenses with Broad Institute and Beam Therapeutics, our licensors retain control of preparation, filing, prosecution and maintenance of their wholly-owned patents and patent applications. We rely on such licensors to determine inventorship and perfect priority of their patent applications. We cannot be certain that these patents and patent applications will be prepared, filed, prosecuted, maintained and defended in a manner consistent with the best interests of our business. If Broad Institute or Beam Therapeutics fails to prosecute or maintain such patents and patent applications or loses rights to such patents and patent applications, the rights we have licensed may be reduced or eliminated, our right to develop and commercialize any of our product candidates we may develop that are the subject of such licensed rights could be adversely affected and we may not be able to prevent third parties from making, using and selling competing products. In addition, we do not control all enforcement of the patents and patent applications we license from Broad Institute. It is possible that our licensors’ enforcement of patents against infringers or defense of such patents against challenges of validity or claims of enforceability may be less vigorous than if we had conducted them ourselves, or may not be conducted in accordance with our best interests.

In the event that any of our third-party licensors determines that, in spite of our efforts, we have materially breached a license agreement or have failed to meet certain obligations thereunder, it may elect to terminate the license agreement or, in some cases, one or more license(s) under the applicable license agreement and such termination would result in us no longer having the ability to develop and commercialize product candidates and technology covered by that license agreement or license. In the event of such termination of a third-party in-license, or if the underlying patent rights under a third-party in-license fail to provide the intended exclusivity, third parties may be able to seek regulatory approval of, and to market, products identical to ours. Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights. Any of these events could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

In addition, the agreements under which we currently license intellectual property rights from Beam Therapeutics and Broad Institute are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise under our existing license agreements or future license agreements into which we may enter could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology or broaden what we believe to be the scope of the licensor’s rights to our intellectual property and technology, or increase what we believe to be our financial or other obligations under the relevant agreement, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects. For example, we have exclusively licensed and sublicensed certain of our owned and licensed intellectual property rights to Beam Therapeutics under the Beam Collaboration Agreement in certain fields. Such agreement may be susceptible to multiple interpretations and the resolution of any contract interpretation disagreement could expand the field of exclusivity or other rights we have granted to Beam Therapeutics and therefore, narrow our field of exclusivity or rights with respect to such licensed intellectual property rights. Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates. As a result, any termination of or disputes over our intellectual property licenses could result in the loss of our ability to develop and commercialize our Prime Editing technology or other product candidates or we could lose other significant rights, any of which could have a material adverse effect on our business, financial conditions, results of operations and prospects. It is also possible that a third party could be granted limited licenses to some of the same technology, in certain circumstances.

We have in-licensed an issued U.S. patent and own and have in-licensed a number of patent applications that cover Prime Editing and related technologies. We and our licensors have filed patent applications intended to specifically cover our Prime Editing technology and uses with respect to treatment of particular diseases and conditions. While we in-license one issued patent, we do not currently own any, or in-license any other, issued U.S. patents.

Our in-licensed issued U.S. patent contains claims directed to methods of using Prime Editors. Our owned and in-licensed patent applications contain claims directed to compositions of matter for our Prime Editing product candidates, as well as methods directed to the use of such product candidates for gene therapy treatment. Method-of-use patents do not prevent a competitor or other third party from developing or marketing an identical product for an

Given that patent applications in the United States and other countries are confidential for a period of time after filing, at any moment in time, we cannot be certain that we or our licensors were in the past or will be in the future the first to file any patent application related to our Prime Editing technology or product candidates. In addition, some patent applications in the United States may be maintained in secrecy until the patents are issued. As a result, there may be prior art of which we or our licensors are not aware that may affect the validity or enforceability of a patent claim, and we or our licensors may be subject to priority disputes. For our in-licensed patent portfolios, we rely on our licensors to determine inventorship and to obtain and file inventor assignments of priority applications before their conversion as PCT applications. A failure to do so in a timely fashion may give rise to a challenge to entitlement of priority for foreign applications nationalized from such PCT applications. We or our licensors may in the future become a party to proceedings or priority disputes in Europe or other foreign jurisdictions. The loss of priority for, or the loss of, any European or other foreign patent rights could have a material adverse effect on the conduct of our business.

We may be required to disclaim part or all of the term of certain patents that may issue from our owned or in-licensed patent applications. There may be prior art of which we are not aware that may affect the validity or enforceability of a patent claim. There also may be prior art of which we or our licensors are aware, but which we or our licensors do not believe affects the validity or enforceability of a claim, which may, nonetheless, ultimately be found to affect the validity or enforceability of a claim. No assurance can be given that, if challenged, our in-licensed patent and patent applications, if issued, would be declared by a court, patent office or other governmental authority to be valid or enforceable, or that even if the patent claims were found to be not invalid or unenforceable, a

We or our licensors may be subject to claims that former employees, collaborators, or other third parties have an interest in our in-licensed issued patent or owned or in-licensed patent applications or other intellectual property as an inventor or co-inventor. If we or our licensors are unsuccessful in any interference proceedings or other priority, validity (including any patent oppositions), inventorship or ownership disputes to which we or they are subject, we may lose valuable intellectual property rights through the loss of part or all of our owned or licensed patent rights, the loss of exclusive ownership of or the exclusive right to use our owned or in-licensed patent rights, or the narrowing, invalidation, or unenforceability of our or our licensors’ patent claims. In the event of loss of patent rights as a result of any of these disputes, we may be required to obtain and maintain licenses from third parties, including parties involved in any such interference proceeding or other priority, inventorship or ownership disputes. Such licenses may not be available on commercially reasonable terms or at all, or may be non-exclusive. If we are unable to obtain and maintain such licenses, we may need to cease the development, manufacture and commercialization of one or more of our product candidates. The loss of exclusivity or the narrowing of our patent rights could limit our ability to stop others from using or commercializing similar or identical technology and product candidates. Even if we or our licensors are successful in an inventorship or ownership dispute, it could result in substantial costs and be a distraction to management and other employees. Any of the foregoing could result in a material adverse effect on our business, financial condition, results of operations, or prospects.

We have limited intellectual property rights outside the United States. Filing, prosecuting and defending patents on our Prime Editing technologies and product candidates in all countries throughout the world would be prohibitively expensive and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. The laws of foreign countries do not protect intellectual property rights to the same extent as federal and state laws of the United States, even in jurisdictions where we or our licensors do pursue patent protection. In addition, our intellectual property license agreements may not always include worldwide rights. Consequently, we or our licensors may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Third parties may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as that in the United States. These products may compete with our product candidates and patents that may issue from our or our licensors’ pending patent applications or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology and pharmaceutical products, which could make it difficult for us to stop the infringement of our future patents or marketing of competing products by third parties in violation of our intellectual property and proprietary rights generally. Proceedings to enforce our future patents or our licensors’ patent or future patents and intellectual property rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our future patents or our licensors’ patent or future patents at risk of being invalidated or interpreted narrowly and our or our licensors’ patent applications at risk of not issuing and could provoke third parties to assert claims against us or our licensors. We may not prevail in any lawsuits that we or our licensors initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Moreover, the initiation of proceedings by third parties to challenge the scope or validity of our or our licensors’ patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business. Accordingly, our or our licensors’ efforts to enforce our or our licensors’ intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we or our licensors are forced to grant one or more licenses to third parties with respect to any patent or future patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.

We currently have rights to intellectual property, through licenses from third parties, to identify and develop product candidates, and we expect to seek to expand our product candidate pipeline in part by in-licensing additional rights to key technologies. The future growth of our business will depend in part on our ability to in-license or otherwise acquire the rights to additional product candidates and technologies. Although we have succeeded in licensing technologies from Beam Therapeutics and Broad Institute in the past, we cannot guarantee that we will be able to in-license or acquire additional rights to any product candidates or technologies from Beam Therapeutics, Broad Institute, or other third parties on acceptable terms or at all. For example, Broad Institute is developing improvements to the Prime Editing technology for which we may find it necessary or useful to obtain a license. In addition, our agreements with Beam Therapeutics and Broad Institute provide that our fields of use excludes particular fields. If we determine that rights to such fields are necessary to commercialize our technology or product

Furthermore, there has been extensive patenting activity in the field of gene editing. Pharmaceutical companies, biotechnology companies and academic institutions are competing with us or are expected to compete with us in the in the field of gene editing technology and filing patent applications potentially relevant to our business and we are aware of certain third-party patent applications that, if issued, may allow the third party to circumvent our patent rights. For example, we are aware of several third-party patents and patent applications, that if issued, may be construed to cover or be relevant to our Prime Editing technology and product candidates. In order to market our product candidates, we may find it necessary or prudent to obtain licenses from such third-party intellectual property holders. However, we may be unable to secure such licenses or otherwise acquire or in-license any compositions, methods of use, processes, or other intellectual property rights from third parties that we identify as necessary for product candidates we may develop and our Prime Editing technology. We may also require licenses from third parties for certain additional technologies, including technologies relating to Prime Editing, such as guide RNA modification, target sequences, Cas proteins such as Cas9, reverse transcriptases, as well as delivery technologies for product candidates we may develop.

Additionally, we may collaborate with academic institutions to accelerate our research or development under written agreements with these institutions. In certain cases, these institutions may provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. Even if we hold such an option, we may be unable to negotiate a license from the institution within the specified timeframe or under terms that are acceptable to us. If we are unable to do so, such institution may offer the intellectual property rights to others, potentially blocking our ability to pursue our program.

The licensing or acquisition of third-party intellectual property rights is a highly competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all. If we are unable to successfully obtain rights to required third party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of the relevant program or product candidate, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

The field of gene editing is still in its infancy, and no such therapeutic product candidates have reached the market. Due to the intense research and development that is taking place by several companies, including us and our competitors, in this field, the intellectual property landscape is evolving and in flux, and it may remain uncertain for the coming years. There may be significant intellectual property related litigation and proceedings relating to our owned and in-licensed, and other third-party, intellectual property and proprietary rights in the future.

As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our Prime Editing technology and product candidates may give rise to claims of infringement of the patent rights of others. Moreover, it is not always clear to industry participants, including us, which patents cover various types of therapies, products or their methods of use or manufacture. There may be third-party patents of which we are currently unaware with claims to technologies, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates. Because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that our product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents.

Our ability to commercialize our product candidates may be adversely affected if we require but cannot obtain a license to these patents. We may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be nonexclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments. If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, we may be unable to commercialize our Prime Editing technology or product candidates or such commercialization efforts may be significantly delayed, which could in turn significantly harm our business.

Because of the large number of patents issued and patent applications filed in our field, third parties may allege they have patent rights encompassing our product candidates, technologies or methods. Third parties may assert that we are employing their proprietary technology without authorization and may file patent infringement claims or lawsuits against us, and if we are found to infringe such third-party patents, we may be required to pay damages, cease commercialization of the infringing technology, or obtain a license from such third parties, which may not be available on commercially reasonable terms or at all. In addition, we have in the past, and may in the future, receive an offer for license from third parties regarding their proprietary intellectual property for which they may believe encompass our product candidates and technologies. We will evaluate such offers for relevance to our business.

Even if we believe third-party claims that we or our technology or product candidates are infringing, misappropriating or otherwise violating such third party's intellectual property are without merit, there is no assurance that a court would find in our favor on questions of infringement, validity, enforceability, or priority. A court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, which could materially and adversely affect our ability to commercialize our product candidates and any other product candidates or technologies covered by the asserted third-party patents. In order to successfully challenge the validity of any such U.S. patent in federal court, we would need to overcome a presumption of validity. As this burden is a high one requiring us to present clear and convincing evidence as to the invalidity of any such U.S. patent claim, there is no assurance that a court of competent jurisdiction would invalidate the claims of any such U.S. patent. Further, even if we were successful in defending against any such claims, such claims could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business. If we are found to infringe a third party’s intellectual property rights, and we are unsuccessful in demonstrating that such patents are invalid or unenforceable, we could be forced, including by court order, to cease developing, manufacturing and commercializing the infringing technology or product candidates. In addition, we could be found liable for significant monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent or other intellectual property right. We also could be required to obtain a license from such third party to continue developing, manufacturing and marketing product candidates we may develop and our technology. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments. If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, we may be unable to commercialize our Prime Editing technology or product candidates or such commercialization efforts may be significantly delayed, which could in turn significantly harm our business. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar material adverse effect on our business, financial condition, results of operations and prospects.

Defense of third-party claims of infringement of misappropriation, or violation of intellectual property rights involves substantial litigation expense and would be a substantial diversion of management and employee time and resources from our business. Some third parties may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations or could otherwise have a material adverse effect on our business, financial condition, results of operations and prospects. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Any of the foregoing events could have a material adverse effect on our business, financial condition, results of operations and prospects.

Competitors and other third parties may infringe, misappropriate or otherwise violate our future patents or the patent or future patents of our licensors, or we may be required to defend against claims of infringement, misappropriation or other violation. In addition, our future patents, or the issued or future patents of our licensors also may become involved in inventorship, priority, validity or enforceability disputes. Countering or defending against such claims can be expensive and time consuming. In an infringement proceeding, a court may decide that a patent owned or in-licensed by us is invalid or unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our future owned patents and in-licensed patent and future patents do not cover the technology in question. An adverse result in any litigation proceeding could put one or more of our future owned patents or in-licensed patent or future patents at risk of being invalidated or interpreted narrowly.

Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our personnel from their normal responsibilities.

Periodic maintenance fees, renewal fees, annuity fees and various other government fees on patents and applications are due to be paid to the USPTO and foreign patent agencies outside of the United States over the lifetime of our in-licensed patent, owned or licensed patent applications and patents that may issue from such applications. In certain circumstances, we rely on our licensors to pay these fees due to U.S. and non-U.S. patent agencies. The USPTO and foreign patent agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process. We are also dependent on our licensors to take the necessary action to comply with these requirements with respect to our licensed intellectual property. While an inadvertent lapse or non-compliance with such requirements can sometimes be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which non-compliance can result a partial or complete loss of patent rights in the relevant jurisdiction. Were a noncompliance event to occur, third parties might be able to enter the market with similar or identical products or technology, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

As is the case with other biotech and pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain.

Depending upon the timing, duration and specifics of any FDA marketing approval of product candidates we may develop, one or more of our U.S. patents may be eligible for limited PTE under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments. The Hatch-Waxman Amendments provides a PTE term of up to five years as compensation for patent term lost during the FDA regulatory review process. A PTE cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent per product may be extended and only those claims covering the approved product, a method for using it, or a method for manufacturing it may be extended. However, even if we were to seek a PTE, it may not be granted because of, for example, the failure to exercise due diligence during the testing phase or

In addition to seeking patent protection for our technology and product candidates, we also rely on know-how and trade secret protection, as well as confidentiality agreements, non-disclosure agreements and invention assignment agreements with our employees, consultants and third-parties, to protect our confidential and proprietary information, especially where we do not believe patent protection is appropriate or obtainable.

It is our policy to require our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties to execute confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements generally provide that all confidential information concerning our business or financial affairs developed by or made known to the individual or entity during the course of the party’s relationship with us is to be kept confidential and not disclosed to third parties, except in certain specified circumstances. In the case of employees, the agreements generally provide that all inventions conceived by the individual, and that are related to our current or planned business or research and development or made during normal working hours, on our premises or using our equipment or proprietary information, are our exclusive property. In the case of consultants and other third parties, the agreements generally provide that all inventions conceived in connection with the services provided are our exclusive property. However, we cannot guarantee that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary technology and processes or who were involved in the development of intellectual property. Additionally, the assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. Any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. We may not be able to prevent the unauthorized disclosure or use of our technical know-how or other trade secrets by the parties to these agreements. Monitoring unauthorized uses and disclosures is difficult and we do not know whether the steps we have taken to protect our proprietary technology will be effective. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable.

In addition to contractual measures, we try to protect the confidential nature of our proprietary information through other appropriate precautions, such as physical and technological security measures. However, trade secrets and know-how can be difficult to protect and we do not have a formal trade secret policy at this time. These measures may not, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access, provide adequate protection for our proprietary information. Our security measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a third party, and any recourse we might take against this type of misconduct may not provide an adequate remedy to protect our interests fully. In addition, trade secrets may be independently developed by others in a manner that could prevent us from receiving legal recourse. If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any of that information was independently developed by a third party, our competitive position could be harmed.

In addition, some courts inside and outside the United States are sometimes less willing or unwilling to protect trade secrets. If we choose to go to court to stop a third party from using any of our trade secrets, we may incur substantial costs. Even if we are successful, these types of lawsuits may consume our time and other resources. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

As is common in the biotechnology and biopharmaceutical industries, we employ individuals who were previously employed at universities or other biotechnology or biopharmaceutical companies, including our competitors or potential competitors. Although no claims against us are currently pending, and although we try to ensure that our employees, consultants, independent contractors or other third parties do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants, independent contractors or other third parties have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third parties. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. This type of litigation or proceeding could substantially increase our operating losses and reduce our resources available for development activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Certain third parties, including our competitors, may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other intellectual property related proceedings could adversely affect our ability to compete in the marketplace.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage. For example:

Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and prospects.

The FDA, the EMA and the NIH have each expressed interest in further regulating biotechnology, including gene therapy and genetic testing. For example, the EMA advocates a risk-based approach to the development of a gene therapy product. Agencies at both the federal and state level in the United States, as well as the U.S. congressional committees and other governments or governing agencies, have also expressed interest in further regulating the biotechnology industry. Such action may delay or prevent commercialization of any product candidates we may develop. Additionally, gene therapies may be associated with undesirable or unacceptable side effects, unexpected characteristics or other serious adverse events, including death, off-target cuts of DNA, or the introduction of cuts in DNA at locations other than the target sequence. These off-target cuts could lead to disruption of a gene or a genetic regulatory sequence at an unintended site in the DNA, or, in those instances where we also provide a segment of DNA to serve as a repair template, it is possible that following off-target cut events, DNA from such repair template could be integrated into the genome at an unintended site, potentially disrupting another important gene or genomic element. There also is the potential risk of delayed adverse events following exposure to gene therapies due to persistent biologic activity of the genetic material or other components of products used to carry the genetic material. Due to concerns from regulatory agencies on the development of gene therapies and their potential for unknown long-term effects, participants in gene-therapy clinical trials may also require long-term follow-up for as long as 15 years.

Regulatory requirements in the United States and in other jurisdictions governing gene therapy products have changed frequently and may continue to change in the future. In January 2020, the FDA issued several new guidance documents on gene therapy products, and in March 2022, the FDA published a draft guidance document providing recommendations for human genome editing gene therapy products. The FDA established the Office of Tissues and Advanced Therapies within its Center for Biologics Evaluation and Research to consolidate the review of gene therapy and related products and established the Cellular, Tissue and Gene Therapies Advisory Committee to advise this review. In addition to the government regulators, the IBC and IRB of each institution at which we will conduct clinical trials of our potential product candidates, or a central IRB if appropriate, would need to review the proposed clinical trial to assess the safety of the trial. In addition, adverse developments in clinical trials of gene therapy product candidates conducted by others may cause the FDA or other oversight bodies to change the requirements for approval of any of our potential product candidates. Similarly, the EMA governs the development of gene therapies in the European Union and may issue new guidelines concerning the development and marketing authorization for gene therapy products and require that we comply with these new guidelines. These regulatory review agencies and committees and the new requirements or guidelines they promulgate may lengthen the regulatory review process, require us to perform additional studies or trials, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of any product candidates we may develop or lead to significant post-approval limitations or restrictions. As we advance our potential product candidates, we will be required to consult with these regulatory agencies and committees and comply with applicable requirements and guidelines. If we fail to do so, we may be required to delay or discontinue development of such product candidates. These additional processes may result in a review and approval process that is longer than we otherwise would have expected. Delays as a result of an increased or lengthier regulatory approval process or further restrictions on the development of our potential product candidates can be costly and could negatively impact our or our collaborators’ ability to complete clinical trials and commercialize our current and future product candidates in a timely manner, if at all.

Any product candidate for which we obtain marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, advertising and promotional activities for such product, will be subject to continual requirements of and review by the FDA, the EMA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, facility registration and drug listing requirements, cGMP requirements relating to quality control, quality assurance and corresponding maintenance of records and documents, applicable product tracking and tracing requirements and requirements regarding the distribution of samples to physicians and recordkeeping. In addition, our manufacturing and testing facilities will be required to undergo pre-license inspections and pre-approval inspections. Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the products may be marketed or to the conditions of approval, or contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the products.

Accordingly, assuming we, or any collaborators we may have, receive marketing approval for one or more product candidates we develop, we, and such collaborators, and our and their contract manufacturers will continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance and quality control. If we and such collaborators are not able to comply with post-approval regulatory requirements, we and such collaborators could have the marketing approvals for our products withdrawn by regulatory authorities and our, or such collaborators’, ability to market any future products could be limited, which could adversely affect our ability to achieve or sustain profitability. Furthermore, the cost of compliance with post-approval regulations may have a negative effect on our business, operating results, financial condition and prospects.

Reductions in government operations may delay necessary manufacturing facility inspections by regulators and adversely affect the supply of any product candidates we may develop. Since March 2020 when foreign and domestic inspections of facilities were largely placed on hold, the FDA has been working to resume pre-pandemic levels of inspection activities, including routine surveillance, bioresearch monitoring and pre-approval inspections. Should the FDA determine that an inspection is necessary for approval and an inspection cannot be completed during the review cycle due to restrictions on travel, and the FDA does not determine a remote interactive evaluation to be adequate, the agency has stated that it generally intends to issue, depending on the circumstances, a complete response letter or defer action on the application until an inspection can be completed. During the COVID-19 public health emergency, a number of companies announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their applications. Regulatory authorities outside the U.S. may adopt similar restrictions or other policy measures in response to the ongoing COVID-19 pandemic and may experience delays in their regulatory activities.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA and other agencies may also slow the time necessary for biologics or modifications to approved biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.

In the United States and some foreign jurisdictions, there have been and continue to be ongoing efforts to implement legislative and regulatory changes regarding the healthcare system. Such changes could prevent or delay marketing approval of any product candidates that we may develop, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval. Although we cannot predict what healthcare or other reform efforts will be successful, such efforts may result in more rigorous coverage criteria, in additional downward pressure on the price that we, or our future collaborators, may receive for any approved products or in other consequences that may adversely affect our ability to achieve or maintain profitability.

Within the United States, the federal government and individual states have aggressively pursued healthcare reform, as evidenced by the passing of the Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the ACA, and the ongoing efforts to modify or repeal that legislation. The ACA substantially changed the way healthcare is financed by both governmental and private insurers and contains a number of provisions that affect coverage and reimbursement of drug products and/or that could potentially reduce the demand for pharmaceutical products such as increasing drug rebates under state Medicaid programs for brand name prescription drugs and extending those rebates to Medicaid managed care and assessing a fee on manufacturers and importers of brand name prescription drugs reimbursed under certain government programs, including Medicare and Medicaid. Other aspects of healthcare reform, such as expanded government enforcement authority and heightened standards that could increase compliance-related costs, could also affect our business. Modifications have been implemented under the former Trump administration and additional modifications or repeal may occur.

There have been executive, judicial and congressional challenges to certain aspects of the ACA. On February 10, 2021, the Biden administration withdrew the federal government’s support for overturning the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Prior to the Supreme Court’s decision, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace, from February 15, 2021 through August 15, 2021. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. It is unclear how other healthcare reform measures of the Biden administration or other efforts, if any, to challenge, repeal or replace the ACA will impact our business. There is no assurance that federal or state health care reform will not adversely affect our future business and financial results, and we cannot predict how future federal or state legislative, judicial or administrative changes relating to healthcare reform will affect our business.

In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, on March 22, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100 percent of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024. On August 2, 2011, the U.S. Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers of 2% per fiscal year. These reductions went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension that lasted from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic. Following the suspension, a 1% payment reduction began April 1, 2022, lasting through June 30, 2022. The 2% payment reduction resumed on July 1, 2022. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. The Bipartisan Budget Act, or BBA, also amended the ACA, effective January 1, 2019, by increasing the point-of-sale discount that is owed by

Furthermore, the prices of prescription pharmaceuticals in the United States and foreign jurisdictions is subject to considerable legislative and executive actions and could impact the prices we obtain for our products, if and when licensed. At the U.S. federal level, the former Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives. For example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related to prescription drug pricing that seek to implement several of the administration’s proposals. As a result, the FDA released a final rule on September 24, 2020, effective November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada. Furthermore, on November 20, 2020, the U.S. Department of Health and Human Services, or HHS, finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Medicare Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed until January 1, 2023. On November 20, 2020, CMS, issued an interim final rule implementing the Trump administration’s Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021. On December 28, 2020, the U.S. District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule. It is unclear whether the Biden administration will work to reverse these measures or pursue similar policy initiatives.

In addition to pricing regulations, reforms of regulatory approval frameworks may adversely affect our pricing strategy. For example, on July 9, 2021, President Biden issued an executive order directing the FDA to, among other things, continue to clarify and improve the approval framework for biosimilars, including the standards for interchangeability of biological products, facilitate the development and approval of biosimilar and interchangeable products, clarify existing requirements and procedures related to the review and submission of BLAs, and identify and address any efforts to impede biosimilar competition. Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. It is difficult to predict the future legislative landscape in healthcare and the effect on our business, results of operations, financial condition and prospects. However, we expect that additional state and federal healthcare reform measures will be adopted in the future, particularly in light of the new presidential administration. Furthermore, it is possible that additional governmental action is taken in response to the ongoing COVID-19 pandemic. At the state level, legislatures have also been increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

In the European Union, similar political, economic and regulatory developments may affect our ability to profitably commercialize our potential product candidates. In markets outside of the United States and the European Union, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. In some countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of any product candidates we may develop to other available

The FDA and comparable foreign regulatory authorities offer certain designations for product candidates that are designed to encourage the research and development of product candidates that are intended to address conditions with significant unmet medical need. These designations may confer benefits such as additional interaction with regulatory authorities, a potentially accelerated regulatory pathway and priority review. However, there can be no assurance that we will successfully obtain such designations for any product candidates. In addition, while such designations could expedite the development or approval process, they generally do not change the standards for approval. Even if we obtain such designations for one or more of our potential product candidates, there can be no assurance that we will realize their intended benefits. For example, we may seek fast track designation for some of our potential product candidates. If a therapy is intended for the treatment of a serious or life threatening condition and the therapy nonclinical or clinical data demonstrates the potential to address unmet medical needs for this condition, the therapy sponsor may apply for fast track designation. The FDA has broad discretion whether or not to grant this designation, so even if we believe a particular product candidate is eligible for this designation, there can be no assurance that the FDA would decide to grant it. Even if we do receive fast track designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures, and receiving a fast track designation does not provide assurance of ultimate FDA approval. In addition, the FDA may withdraw fast track designation if it believes that the designation is no longer supported by data from our clinical development program. Additionally, we may seek a breakthrough therapy designation for some of our potential product candidates. A breakthrough therapy is defined as a therapy that is intended, alone or in combination with one or more other therapies, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the therapy may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For therapies that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Therapies designated as breakthrough therapies by the FDA may also be eligible for accelerated approval. Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe one of our potential product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a breakthrough therapy designation for a product candidate may not result in a faster development process, review or approval compared to therapies considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our potential product candidates qualify as breakthrough therapies, the FDA may later decide that such product candidates no longer meet the conditions for qualification. In addition, we may seek a regenerative medicine advanced therapy, or RMAT, designation for some of our potential product candidates. An RMAT is defined as cell therapies, therapeutic tissue engineering products, human cell and tissue products and combination products using any such therapies or products. Gene therapies, including genetically modified cells that lead to a durable modification of cells or tissues may meet the definition of a regenerative medicine therapy. The RMAT program is intended to facilitate efficient development and expedite review of RMATs, which are intended to treat, modify, reverse or cure a serious or life-threatening disease or condition. A new drug application or a biologics license application, or BLA, for an RMAT may be eligible for priority review or accelerated approval through (1) surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit or (2) reliance upon data obtained from a meaningful number of sites. Benefits of such designation also include early interactions with FDA to discuss any potential surrogate or intermediate endpoint to be used to support accelerated approval. A regenerative medicine therapy that is granted accelerated approval and is subject to post-approval requirements may fulfill such requirements through the submission of clinical evidence, clinical trials, patient registries or other sources of real world evidence, such as electronic health records; the collection of larger confirmatory data sets; or post-approval

In the future, we may also seek approval of product candidates under the FDA’s accelerated approval pathway. A product may be eligible for accelerated approval if it is designed to treat a serious or life-threatening disease or condition and generally provides a meaningful advantage over available therapies upon a determination that the product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or IMM, that is reasonably likely to predict an effect on IMM or other clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a given disease, such as IMM. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit. The accelerated approval pathway may be used in cases in which the advantage of a new drug over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective. If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verity and describe the drug’s clinical benefit. If the sponsor fails to conduct such studies in a timely manner or if such post-approval studies fail to verify the drug’s predicted clinical benefit, the FDA may withdraw its approval of the drug on an expedited basis. In addition, for products being considered for accelerated approval, the FDA generally requires, unless otherwise informed by the Agency, that all advertising and promotional materials intended for dissemination or publication within 120 days of marketing approval be submitted to the Agency for review during the pre-approval review period. There can be no assurance that FDA would allow any of the product candidates we may develop to proceed on an accelerated approval pathway, and even if FDA did allow such pathway, there can be no assurance that such submission or application will be accepted or that any expedited development, review or approval will be granted on a timely basis, or at all. Moreover, even if we received accelerated approval, any post-approval studies required to confirm and verify clinical benefit may not show such benefit, which could lead to withdrawal of any approvals we have obtained. Receiving accelerated approval does not assure that the product’s accelerated approval will eventually be converted to a traditional approval.

If the FDA determines that a product candidate offers a treatment for a serious condition and, if approved, the product would provide a significant improvement in safety or effectiveness, the FDA may designate the product candidate for priority review. A priority review designation means that the goal for the FDA to review an application is six months, rather than the standard review period of ten months. We may request priority review for the product candidates that we may develop. The FDA has broad discretion with respect to whether or not to grant priority review status to a product candidate, so even if we believe a particular product candidate is eligible for such designation or status, the FDA may decide not to grant it. Moreover, a priority review designation does not necessarily result in an expedited regulatory review or approval process or necessarily confer any advantage with respect to approval compared to conventional FDA procedures. Receiving priority review from the FDA does not guarantee approval within the six-month review cycle or at all.

In addition, in the European Union, we may seek to participate in the PRIME scheme for our product candidates. The PRIority MEdicines, or PRIME, scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation, where the marketing authorization application will be made through the centralized procedure in the European Union. Eligible products must target conditions for which where is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the European Union or, if there is, the new medicine will bring a major

Under the Orphan Drug Act, the FDA may designate a product candidate as an orphan drug if it is a drug or biologic intended to treat a rare disease or condition. A similar regulatory scheme governs approval of orphan product candidates by the EMA in the European Union. Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA or the EMA (as applicable) from approving another marketing application for another similar product candidate for the same orphan therapeutic indication for that time period. The applicable period is seven years in the United States and ten years in the European Union. The exclusivity period in the European Union can be reduced to six years if at the end of the fifth year it is determined that a product no longer meets the criteria for orphan drug designation, including if the product is sufficiently profitable so that market exclusivity is no longer justified.

In order for the FDA to grant orphan drug exclusivity to one of our potential product candidates, the agency must find that the product candidate is indicated for the treatment of a condition or disease that affects fewer than 200,000 individuals in the United States or that affects 200,000 or more individuals in the United States and for which there is no reasonable expectation that the cost of developing and making the product candidate available for the disease or condition will be recovered from sales of the product in the United States. The FDA may conclude that the condition or disease for which we seek orphan drug exclusivity does not meet this standard. Even if we obtain orphan drug exclusivity for a product candidate, that exclusivity may not effectively protect the product candidate from competition because different product candidates can be approved for the same condition. In addition, even after an orphan drug is approved, the FDA can subsequently approve the same product candidate for the same condition if the FDA concludes that the later product candidate is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care compared with the product that has orphan exclusivity. Orphan drug exclusivity may also be lost if the FDA or EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the product to meet the needs of the patients with the rare disease or condition.

We are subject to numerous laws and regulations in each jurisdiction outside the United States in which we operate. The creation, implementation and maintenance of international business practices compliance programs is costly and such programs are difficult to enforce, particularly where reliance on third parties is required.

The Foreign Corrupt Practices Act, or FCPA, prohibits any U.S. individual or business from paying, offering, authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in the United States to comply with certain accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations. The anti-bribery provisions of the FCPA are enforced primarily by the Department of Justice. The SEC is involved with enforcement of the books and records provisions of the FCPA.

Similarly, the U.K. Bribery Act 2010 has extra-territorial effect for companies and individuals having a connection with the United Kingdom. The U.K. Bribery Act prohibits inducements both to public officials and private individuals and organizations. Compliance with the FCPA and the U.K. Bribery Act is expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, the FCPA presents particular challenges in the pharmaceutical industry, because, in many countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials. Certain payments to hospitals in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions.

Various laws, regulations and executive orders also restrict the use and dissemination outside of the United States, or the sharing with certain non-U.S. nationals, of information classified for national security purposes, as well as certain products and technical data relating to those products. Our expansion outside of the United States has required, and will continue to require, us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, manufacturing or selling certain drugs and drug candidates outside of the United States, which could limit our growth potential and increase our development costs. The failure to comply with laws governing international business practices may result in substantial penalties, including suspension or debarment from government contracting. Violation of the FCPA can result in significant civil and criminal penalties. Indictment alone under the FCPA can lead to suspension of the right to do business with the U.S. government until the pending claims are resolved. Conviction of a violation of the FCPA can result in long-term disqualification as a government contractor. The termination of a government contract or relationship as a result of our failure to satisfy any of our obligations under laws governing international business practices would have a negative impact on our operations and harm our reputation and ability to procure government contracts. The SEC also may suspend or bar issuers from trading securities on U.S. exchanges for violations of the FCPA’s accounting provisions.

We are subject to data privacy and protection laws, rules, regulations, policies, standards and contractual obligations that apply to the collection, transmission, storage, use, disclosure, transfer, maintenance and other processing of sensitive, personal and personally-identifying information, which, among other things, impose certain requirements relating to the privacy, security, transmission and other processing of personal information, including comprehensive regulatory systems in the United States and European Union. The legislative and regulatory landscape for privacy and data protection continues to evolve in jurisdictions worldwide, and there has been an increasing focus on privacy and data protection issues with the potential to affect our business. However, our data privacy program is in its early stages and we have not yet assessed the applicability of and our compliance with data privacy-related laws, rules and regulations. As a result, we cannot guarantee that we are and have been in compliance with all applicable data privacy and protection laws, rules regulations, policies and standards, and we may need to expend significant resources to implement privacy compliance measures. Additionally, we rely on certain third-party vendors to process certain confidential, sensitive or personal information on our behalf. Failure by us or our third-party vendors to comply with any of these laws, rules, regulations, contractual obligations or standards could result in notification obligations, enforcement actions, regulatory investigations or inquiries, significant fines, imprisonment of company officials and public censure, litigation and claims for damages by affected individuals, customers or business partners, damage to our reputation and loss of goodwill, any of which could have a material adverse effect on our business, financial condition, results of operations or prospects.

There are numerous U.S. federal and state laws, rules and regulations related to the privacy and security of personal information. In particular, regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996, or HIPAA, establish privacy and security standards that limit the use and disclosure of individually identifiable health information, or protected health information, and require the implementation of administrative, physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity and availability of electronic protected health information. Additionally, laws in all 50 states require businesses to provide notice to customers whose personally identifiable information has been disclosed as a result of a data breach. Determining whether personal information has been handled in compliance with applicable privacy standards and our contractual obligations can be complex and may be subject to changing interpretation.

If we are unable to properly protect the privacy and security of personal information, we could be alleged or actually found to have breached our contracts. Furthermore, if we fail to comply with applicable privacy laws, including applicable HIPAA privacy and security standards, we could face significant civil and criminal penalties. HHS has the discretion to impose penalties without attempting to resolve violations through informal means, and such enforcement activity can result in financial liability and reputational harm, and responses to such enforcement activity can consume significant internal resources. In addition, state attorneys general are authorized to bring civil actions seeking either injunctions or damages in response to violations that threaten the privacy of state residents. We cannot be sure how these laws, rules and regulations will be interpreted, enforced or applied to our operations. In addition to the risks associated with enforcement activities and potential contractual liabilities, our ongoing efforts to comply with evolving laws, rules and regulations at the international, federal and state level may be costly and require ongoing modifications to our policies, procedures and systems.

We make public statements about our use, collection, disclosure and other processing of personal information through our privacy policies, information provided on our website and press statements. Although we endeavor to comply with our public statements and documentation, we may at times fail to do so or be alleged to have failed to do so. The publication of our privacy policies and other statements that provide promises and assurances about data privacy and security can subject us to potential government or legal action if they are found to be deceptive, unfair or misrepresentative of our actual practices.

Data privacy remains an evolving landscape at both the domestic and international level, with new laws, rules and regulations coming into effect and continued legal challenges, and our efforts to comply with the evolving data protection laws, rules and regulations may be unsuccessful. It is possible that these laws, rules and regulations may

We are highly dependent on Keith Gottesdiener, our President and Chief Executive Officer, David R. Liu and Andrew Anzalone, our Co-Founders, Jeremy Duffield, our Chief Scientific Officer, Ann Lee, our Chief Technical Officer, as well as the other principal members of our management and scientific teams. Dr. Gottesdiener, Dr. Liu, Dr. Anzalone and Dr. Lee and such other principal members are engaged “at will,” meaning we or they may terminate the relationship at any time. We do not maintain “key person” insurance for any of our executives or other employees. The loss of the services of any of these persons could impede the achievement of our research, development and commercialization objectives.

Following this offering, Dr. Liu will continue to serve on our Scientific Advisory Board and as our paid consultant and will retain his position and affiliation with Harvard, HHMI and Broad Institute. Furthermore, Dr. Liu is one of our principal stockholders. Dr. Liu’s positions at Harvard, HHMI and Broad Institute could result in, or may create the appearance of, conflicts of interest related to our license of intellectual property rights from Harvard , HHMI and Broad Institute and other contractual relationships we may enter into from time to time with Harvard, HHMI and Broad Institute. For more information, see “Business—Team— Relationship with David Liu, Ph.D.”

Recruiting and retaining qualified scientific, clinical, manufacturing and sales and marketing personnel will also be critical to our success. In addition, our company-building efforts and establishment of a company culture will also be important to developing an innovative company in a high-evolving area. We may not be able to succeed in these efforts to build Prime Medicine as an attractive and exciting place to build a career or to attract and retain these types of personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors, including our scientific co-founders, may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. The inability to recruit, or loss of services of, certain executives, key employees, consultants or advisors, may impede the progress of our research, development and commercialization objectives and have a material adverse effect on our business, financial condition, results of operations and prospects.

As of September 30, 2022, we had more than 150 full-time employees, of which 77 have M.D. or Ph.D. degrees. Within our workforce, 134 employees are engaged in research and development and 24 are engaged in business development, finance, legal, and general management and administration. In connection with the growth and advancement of our pipeline and becoming a public company, we expect to increase the number of our employees and the scope of our operations, particularly in the areas of drug development, regulatory affairs and sales and marketing. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities, and continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expected expansion of our operations or recruit and train additional qualified personnel. Moreover, our current physical laboratory space may be insufficient for our near-term research and development hiring plans, and the expected physical expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.

As a growing biotechnology company, we are actively pursuing new platforms and product candidates in many therapeutic areas and across a wide range of diseases. Successfully developing product candidates for and fully understanding the regulatory and manufacturing pathways to all of these therapeutic areas and disease states requires a significant depth of talent, resources and corporate processes in order to allow simultaneous execution across multiple areas. Due to our limited resources, we may not be able to effectively manage this simultaneous execution and the expansion of our operations or recruit and train additional qualified personnel. This may result in weaknesses in our infrastructure, give rise to operational mistakes, legal or regulatory compliance failures, loss of business opportunities, loss of employees and reduced productivity among remaining employees. The physical expansion of our operations may lead to significant costs and may divert financial resources from other projects, such as the development of our potential product candidates. If our management is unable to effectively manage our expected development and expansion, our expenses may increase more than expected, our ability to generate or increase our revenue could be reduced and we may not be able to implement our business strategy. Our future financial performance and our ability to compete effectively and commercialize any product candidates we may develop will depend in part on our ability to effectively manage the future development and expansion of our company.

Pursuant to our 2019 Stock Option and Grant Plan, or the 2019 Plan, we are authorized to grant equity awards, including stock options and stock appreciation rights, to our employees, directors and consultants. The administrator of the 2019 Plan (which we expect will be, as is customary, our compensation committee) is authorized to exercise its discretion to reduce the exercise price of stock options or stock appreciation rights or effect the repricing of such awards. Although we do not anticipate needing to exercise this discretion in the near term, or at all, if the administrator of the 2019 Plan were to exercise such discretion without seeking prior stockholder approval, certain proxy advisory firms or institutional investors may be unsupportive of such actions and publicly criticize our compensation practices, and proxy advisory firms may recommend an “against” or “withhold” vote for members of our compensation committee. In addition, if we are required to hold an advisory vote on named executive officer compensation (known as the “say-on-pay” vote) at the time of, or subsequent to, any such repricing, it is likely that proxy advisory firms would issue an “against” recommendation on our say on pay vote and institutional investors may not be supportive of our say-on-pay vote. If proxy advisory firms or institutional investors are successful in aligning their views with our broader stockholder base and we are required to make changes to the composition of our board and its committees, or if we need to make material changes to our compensation and corporate governance practices, our business might be disrupted and our stock price might be negatively impacted. Even if we are able to successfully rationalize the exercise of such discretionary power, defending against any “against” or “withhold”

In addition, if the administrator of the 2019 Plan does determine to reprice stock options or stock appreciation rights, even absent negative reactions from proxy advisory firms and institutional investors, management attention may be diverted and we could incur significant costs, including accounting and administrative costs and attorneys’ fees. We may also be required to recognize incremental compensation expense as a result of such repricing. These actions could cause our stock price to decrease and experience periods of increased volatility, which could result in material adverse consequences to our business.

Our board of directors has determined not to make any further awards under the 2019 Plan following the closing of this offering.

Our internal computer and information technology systems and those of our current and any future third-party vendors, collaborators, contractors, consultants or other third parties, are vulnerable to damage or interruption from, among other things, computer viruses, computer hackers, phishing attacks, ransomware, malware, social engineering, malicious code, employee theft, fraud, misconduct or misuse, denial-of-service attacks, sophisticated nation-state and nation-state-supported actors, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we seek to protect our information technology systems from system failure, accident and security breach, we have in the past and may in the future experience phishing and other security incidents which could result in a disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary, personal or confidential information or other disruptions. For example, the loss of clinical trial data from future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

Controls employed by our information technology department and other third parties could prove inadequate, and our ability to monitor such third parties’ data security practices is limited. Due to applicable laws, rules, regulations and standards or contractual obligations, we may be held responsible for any information security failure or cybersecurity attack attributed to our third-party vendors as they relate to the information we share with them.

If we were to experience a cybersecurity breach or other security incident relating to our information systems or data, the costs, time and effort associated with the investigation, remediation and potential notification of the breach to counterparties, regulators and data subjects could be material. We may incur significant costs in an effort to detect and prevent security incidents, and we may face increased costs and requirements to expend substantial resources in the event of an actual or perceived security incident. In addition, techniques used to sabotage or to obtain unauthorized access to networks in which data is stored or through which data is transmitted change frequently, become more complex over time and generally are not recognized until launched against a target. As a result, we and our third-party vendors may be unable to anticipate these techniques or implement adequate preventative measures quickly enough to prevent either an electronic intrusion into our systems or services or a compromise of critical information. We cannot guarantee that we will be able to detect or prevent any such incidents, and, our remediation efforts may not be successful or timely. Our efforts to improve security and protect data from compromise may also identify previously undiscovered instances of data breaches or other cybersecurity incidents. If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology and cybersecurity infrastructure, we could suffer significant business disruption, including transaction errors, supply chain or manufacturing interruptions, processing inefficiencies, data loss or the loss of or damage to intellectual property or other proprietary, personal or confidential information. Additionally, we do not currently maintain cybersecurity insurance, and any insurance we may maintain in the future against the risk of this type of loss in the future may not be sufficient to cover actual losses, or may not apply to the circumstances relating to any particular loss.

To the extent that any disruption or security breach were to result in a loss of, or damage to, our or our third-party vendors’, collaborators’, contractors’, consultants’ or other third parties’ data, including personal data, or applications or inappropriate disclosure, loss, destruction or alteration of, or access to, confidential, personal or proprietary information, we could incur significant liability including litigation exposure, substantial penalties and fines, we could become the subject of regulatory action, inquiry or investigation, our competitive position could be harmed, we could incur significant reputational damage and the further development and commercialization of any product candidates we may develop could be delayed. Any of the above could have a material adverse effect on our business, financial condition, results of operations or prospects.

Before this offering, there was no public trading market for our common stock. If a market for our common stock does not develop or is not sustained, it may be difficult for you to sell your shares of common stock at an attractive price or at all. We cannot predict the prices at which our common stock will trade. It is possible that in one or more future periods our results of operations may be below the expectations of public market analysts and investors, and, as a result of these and other factors, the price of our common stock may fall.

If you purchase common stock in this offering, you will incur immediate and substantial dilution of $12.91 per share, representing the difference between the assumed initial public offering price of $17.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, and our pro forma as adjusted net tangible book value per share as of June 30, 2022 after giving effect to this offering. Moreover, we issued options in the past that allow the holders to acquire common stock at prices significantly below the assumed initial public offering price. As of June 30, 2022, there were 3,593,533 shares subject to outstanding options with a weighted-average exercise price of $4.82 per share. To the extent that these outstanding options are ultimately exercised, the underwriters exercise their option to purchase additional shares or further vesting of restricted stock occurs, you will incur further dilution. For a further description of the dilution you will experience immediately after this offering, see “Dilution.”

The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not currently have and may never obtain research coverage by industry or financial analysts. If no or few analysts commence coverage of us, the trading price of our stock would likely decrease. Even if we do obtain analyst coverage, if one or more of the analysts covering our business downgrade their evaluations of our stock, the price of our stock could decline. If one or more of these analysts cease to cover our stock, we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.

Our stock price could decline as a result of sales of a large number of shares of our common stock after this offering or the perception that these sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Upon completion of this offering, 94,336,033 shares of our common stock will be outstanding (or 95,671,033 shares of common stock will be outstanding assuming exercise in full of the underwriters’ option to purchase additional shares), based on our shares outstanding as of June 30, 2022. All shares of common stock expected to be sold in this offering will be freely tradable without restriction or further registration under the Securities Act of 1933, as amended, or Securities Act, unless held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act. The resale of the remaining 84,937,964 shares, or approximately 99 percent of our outstanding shares

Upon completion of this offering, the holders of approximately 62,728,599 shares, or approximately 73 percent, of our common stock, will have rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register the offer and sale of all shares of common stock that we may issue under our equity compensation plans. Once we register the offer and sale of shares for the holders of registration rights and shares to be issued under our equity incentive plans, they can be freely sold in the public market upon issuance, subject to the lock-up agreements described in the section entitled “Underwriting” included elsewhere in this prospectus.

In addition, in the future, we may issue additional shares of common stock or other equity or debt securities convertible into common stock in connection with a financing, acquisition, litigation settlement, employee arrangements or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and could cause our stock price to decline.

After this offering, our directors and executive officers and their affiliates will beneficially own shares representing approximately 67% percent of our outstanding common stock. As a result, these stockholders, if they act together, will be able to influence our management and affairs and all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control of our company and might affect the market price of our common stock.

The initial public offering price for our common stock was determined through negotiations with the underwriters. This initial public offering price may vary from the market price of our common stock after the offering. As a result, you may not be able to sell your common stock at or above the initial public offering price. The market price for our common stock may be influenced by those factors discussed in this “Risk Factors” section and many others, some of which may include:

In recent years, the stock market in general and the market for pharmaceutical and biotechnology companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to changes in the operating performance of the companies whose stock is experiencing those price and volume fluctuations. In particular, in relation to uncertainty around inflation and the U.S. Federal Reserve’s measures to slow inflation, the stock market has been exceptionally volatile. Market and industry factors may seriously affect the market price of our common stock, regardless of our actual operating performance. These fluctuations may be even more pronounced in the trading market for our stock shortly following this offering. Following periods of such volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Because of the potential volatility of our stock price, we may become the target of securities litigation in the future.

Securities litigation could result in substantial costs and divert management’s attention and resources from our business.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may remain an emerging growth company for up to five years. For so long as we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption, and, therefore, while we are an emerging growth company we will not be subject to the new or revised accounting standards at the same time that they become applicable to other public companies that are not emerging growth companies. As a result of this election, our financial statements may not be comparable to those of other public companies that comply with new or revised accounting pronouncements as of public company effective dates. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this offering is less than $700 million and our annual revenue is less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock 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. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

As a public company, and particularly after we are no longer an “emerging growth company,” we will incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The Nasdaq Global Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. We expect that we will need to hire additional accounting, finance and other personnel in connection with our becoming, and our efforts to comply with the requirements of being, a public company. Our management and other personnel will need to devote a substantial amount of time towards maintaining compliance with these requirements. These requirements will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that the rules and regulations applicable to us as a public company may make it more difficult and more expensive for us to obtain director and officer liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors. We are currently evaluating these rules and regulations and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new

Pursuant to SOX Section 404, we will be required to furnish a report by our management on our internal control over financial reporting beginning with our second filing of an Annual Report on Form 10-K with the SEC after we become a public company. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with SOX Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants, adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by SOX Section 404. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

You should not rely on an investment in our common stock to provide dividend income. We do not anticipate that we will pay any dividends to holders of our common stock in the foreseeable future. Instead, we plan to retain any earnings to maintain and expand our existing operations. In addition, any future credit facility may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any return on their investment. As a result, investors seeking cash dividends should not purchase our common stock.

The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S. Treasury Department. Changes to tax laws (which changes may have retroactive application) could adversely affect our business and our financial condition. In recent years, many such changes have been made and changes are likely to continue to occur in the future. We cannot predict whether, when, in what form or with what effective dates, tax laws, regulations and rulings may be enacted, promulgated or decided or whether they could increase our tax liability or require changes in the manner in which we operate in order to minimize increases in our tax liability.

Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. In connection with this offering, we intend to begin the process of documenting, reviewing and improving our internal controls and procedures for compliance with Section 404 of the Sarbanes-Oxley Act of 2002, or SOX, which will require annual management assessment of the effectiveness of our internal control over financial reporting.

Implementing any appropriate changes to our internal controls may distract our officers and employees, entail substantial costs to modify our existing processes and take significant time to complete. These changes may not,

In preparing our financial statements as of and for the years ended December 31, 2019 and 2020, we identified a material weakness in our internal control over financial reporting that existed as of the end of those periods, and which remains unremediated as of June 30, 2022. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Specifically, we did not design and maintain effective controls over segregation of duties commensurate with our financial reporting requirements, as certain personnel have access to edit financial information without an independent review. This material weakness did not result in a misstatement to the consolidated financial statements. However, this material weakness could result in a misstatement of substantially all of the financial statement accounts and disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. 

We cannot assure you that we will be successful in fully remediating this material weakness, or that additional material weaknesses in our internal control over financial reporting will not be identified in the future. Our failure to design, implement and maintain effective internal control over financial reporting could result in misstatements in our financial statements that could result in a restatement of our financial statements, and could cause us to fail to meet our reporting obligations.

The process of designing and implementing effective internal control over financial reporting is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources that are adequate to satisfy our reporting obligations. We have not performed a formal evaluation of our internal control over financial reporting, as required by the rules and regulations of the SEC, nor are we required to have an independent registered public accounting firm perform an audit of our internal control over financial reporting as of any balance sheet date or for any period reported in our financial statements. Presently, we are not an accelerated filer, as such term is defined by Rule 12b-2 of the Exchange Act, and therefore, our management is not presently required to perform an annual assessment of the effectiveness of our internal control over financial reporting. Our independent registered public accounting firm will first be required to attest to the effectiveness of our internal control over financial reporting for our Annual Report on Form 10-K for the first year we are no longer an "emerging growth company” or a “smaller reporting company.” Failure to comply with the rules and regulations of the SEC could potentially subject us to sanctions or investigations by the SEC, the applicable stock exchange or other regulatory authorities, which would require additional financial and management resources. We have begun the process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with the rules and regulations of the SEC in the future, but we may not be able to complete our evaluation, testing and any required remediation in a timely fashion. An independent assessment of the effectiveness of our internal control over financial reporting could detect deficiencies in our internal control over financial reporting that our management’s assessment might not. Undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation.

Our third amended and restated certificate of incorporation, amended and restated by-laws and Delaware law contain provisions that may have the effect of discouraging, delaying or preventing a change in control of us or changes in our management that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. Our third amended and restated certificate of incorporation, which will become effective immediately prior to the closing of this offering, and by-laws, which will become effective upon the effectiveness of the registration statement of which this prospectus is a part, include provisions that:

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock.

In addition, because we are incorporated in the State of Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware, or the DGCL, which prohibits a person who owns in excess of 15 percent of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15 percent of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

Any provision of our third amended and restated certificate of incorporation, amended and restated by-laws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

Pursuant to our amended and restated bylaws that will become effective upon the effectiveness of our registration statement, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for any state law claims for (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of or based on a breach of a fiduciary duty owed by any director, officer or other employee of ours to us or our stockholders; (iii) any action asserting a claim pursuant to any provision of the DGCL, our third amended and restated certificate of incorporation or our amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or (iv) any action asserting a claim governed by the internal affairs doctrine, or the Delaware Forum Provision. The Delaware Forum Provision will not apply to any causes of action arising under the Securities Act or the Securities Exchange Act of 1934, as amended, or the Exchange Act. Our amended and restated bylaws further provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, the Exchange Act, the respective rules and regulations promulgated thereunder or the Federal Forum Provision. In addition, our amended and restated bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

We recognize that the Delaware Forum Provision and the Federal Forum Provision in our amended and restated bylaws may impose additional litigation costs on stockholders in pursuing any such claims, particularly if the stockholders do not reside in or near the State of Delaware. Additionally, the forum selection clauses in our amended and restated bylaws may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage the filing of lawsuits against us and our directors, officers and employees, even though an action, if successful, might benefit our stockholders. In addition, while the Delaware Supreme Court ruled in March 2020 that federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court are “facially valid” under Delaware law, there is uncertainty as to whether other courts will enforce our Federal Forum Provision. If the Federal Forum Provision is found to be unenforceable, we may incur additional costs associated with resolving such matters. The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid. The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.

We cannot specify with certainty the particular uses of the net proceeds we will receive from this offering. Our management will have wide discretion in the application of the net proceeds, including for any of the purposes described in “Use of Proceeds.” Accordingly, you will have to rely upon the judgment of our management with respect to the use of the proceeds, with only limited information concerning management’s specific intentions. Our management may spend a portion or all of the net proceeds from this offering in ways that our stockholders may not desire or that may not yield a favorable return. The failure by our management to apply these funds effectively could harm our business, financial condition, results of operations and prospects. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. A severe or prolonged economic downturn or additional global financial crises could result

Our facilities are located in Massachusetts. We have not undertaken a systematic analysis of the potential consequences to our business and financial results from a major flood, power loss, terrorist activity, pandemics or other disasters and do not have a recovery plan for such events. In addition, we do not carry sufficient insurance to compensate us for actual losses from interruption of our business that may occur, and any losses or damages incurred by us could harm our business. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.

This prospectus, including the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” contains express or implied forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this prospectus include, but are not limited to, statements about:

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the

The forward-looking statements in this prospectus represent our views as of the date of this prospectus. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this prospectus.

This prospectus also contains estimates, projections and other information concerning our industry, our business and the markets for our product candidates. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from our own internal estimates and research as well as from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources. While we are not aware of any misstatements regarding any third-party information presented in this prospectus, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties and are subject to change based on various factors, including those discussed under the section entitled “Risk factors” and elsewhere in this prospectus.

We estimate that the net proceeds to us from the sale of 8,900,000 shares of our common stock in this offering will be approximately $136.2 million, or approximately $157.3 million if the underwriters exercise in full their option to purchase additional shares, assuming an initial public offering price of $17.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

A $1.00 increase (decrease) in the assumed initial public offering price of $17.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by $8.3 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. An increase (decrease) of 1.0 million shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) net proceeds to us from this offering by $15.8 million, assuming no change in the assumed initial public offering price per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We do not expect that a change in the offering price or the number of shares by these amounts would have a material effect on our intended uses of the net proceeds from this offering, although it may impact the amount of time prior to which we may need to seek additional capital.

As of June 30, 2022, we had cash and cash equivalents and short-term investments of $180.6 million, excluding restricted cash, or $194.1 million, including restricted cash. We currently intend to use the net proceeds from this offering, together with our existing cash and cash equivalents, as follows:

Based on our current plans, we believe our existing cash and cash equivalents and short-term investments, together with the net proceeds from this offering, will be sufficient to fund our operating expenses and capital expenditure requirements into 2025.

All of our programs are currently in preclinical stage of development. At our current stage of preclinical development, a large proportion of our activities are cross-program (e.g. development of manufacturing, animal experiments) and generally are not allocated to specific programs or product candidates, unlike a company in the clinical development stage. As a result, and due to the number of our programs currently in preclinical development, we currently are unable to specify to what stage of development the proceeds from this offering and our current cash, cash equivalents, and short-term investments will bring any particular program. The expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the closing of this offering or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our research and development, the status of and results from preclinical studies or clinical trials we may commence in the future, as well as any collaborations that we may enter into with third parties for our product candidates or strategic opportunities that become available to us, and any unforeseen cash needs. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering. We expect the net proceeds from this

Pending our use of proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation instruments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.

We have never declared or paid any cash dividends on our capital stock. We currently intend to retain any future earnings to fund the development and expansion of our business, and therefore we do not anticipate paying cash dividends on our common stock in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our results of operations, financial condition, capital requirements and other factors deemed relevant by our board of directors.

The following table sets forth our cash and cash equivalents and our capitalization as of June 30, 2022:

The pro forma as adjusted information below is illustrative only, and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read the information in this table together with our consolidated financial statements and the related notes included elsewhere in this prospectus and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this prospectus.

The number of shares of our common stock outstanding after this offering is based on 85,436,033 shares (which includes 11,995,985 shares of unvested restricted common stock) of our common stock outstanding as of June 30, 2022, after giving effect to the automatic conversion of all outstanding shares of our Series A and Series B convertible preferred stock into an aggregate of 51,923,764 shares of our common stock upon the completion of this offering, and excludes:

Our historical net tangible book (deficit) as of June 30, 2022 was $(198.3) million, or $(9.22) per share of our common stock. Our historical net tangible book deficit per share is the amount of our total tangible assets less our total liabilities and the carrying values of our convertible preferred stock, which is not included within stockholders’ deficit. Our historical net tangible book deficit per share represents historical net tangible book deficit divided by the 21,516,284 shares of our common stock outstanding (which excludes 11,995,985 shares of unvested restricted common stock) as of June 30, 2022.

Our pro forma net tangible book value as of June 30, 2022 was $197.5 million, or $2.69 per share of our common stock. Pro forma net tangible book value represents the amount of our total tangible assets less our total liabilities, after giving effect to the automatic conversion of all outstanding shares of our Series A and Series B convertible preferred stock into an aggregate of 51,923,764 shares of common stock upon the completion of this offering. Pro forma net tangible book value per share represents pro forma net tangible book value divided by the total number of shares outstanding (which excludes 11,995,985 shares of unvested restricted common stock) as of June 30, 2022, after giving effect to the pro forma adjustment described above.

After giving further effect to our issuance and sale of shares of our common stock in this offering at an assumed initial public offering price of $17.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of June 30, 2022 would have been $336.9 million, or $4.09 per share. This amount represents an immediate increase in pro forma as adjusted net tangible book value per share of $1.40 to our existing stockholders and immediate dilution of $12.91 in pro forma as adjusted net tangible book value per share to new investors purchasing common stock in this offering.

Dilution per share to new investors is determined by subtracting pro forma as adjusted net tangible book value per share after this offering from the initial public offering price per share paid by new investors. The following table illustrates this dilution on a per share basis (without giving effect to any exercise by the underwriters of their option to purchase additional shares):

The number of shares of our common stock outstanding after this offering is based on 85,436,033 shares (which includes 11,995,985 shares of unvested restricted common stock) of our common stock outstanding as of June 30, 2022, after giving effect to the automatic conversion of all outstanding shares of our Series A and Series B convertible preferred stock into an aggregate of 51,923,764 shares of our common stock upon the completion of this offering, and excludes:

To the extent that new stock options are issued or any outstanding options are exercised, or we issue additional shares of common stock in the future, there will be further dilution to new investors. In addition, we may choose to raise additional capital because of market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

We are a biotechnology company committed to delivering a new class of differentiated one-time curative genetic therapies to address the widest spectrum of diseases by deploying our Prime Editing technology, which we believe is a versatile, precise, efficient and broad gene editing technology.

Genetic mutations implicated in disease are diverse and can range from errors of a single base, known as point mutations, to errors that extend beyond a single base, such as insertions, deletions, duplications, or combinations thereof. Other mutations can affect regulatory sequences that control the function of genes and can affect the function of larger biochemical and genetic pathways. Furthermore, natural genetic variations, revealed by population-level genomic studies, are known to protect against or to increase risk of disease. To maximize the impact of these genetic insights, we believe the ability to alter the human genome at the foundational level may confer the greatest therapeutic impact on human disease.

Since our inception in September 2019, we have devoted substantially all of our efforts on organizing and staffing our company, business planning, raising capital, research and development activities, developing our Prime Editing platform, building our intellectual property portfolio and providing general and administrative support for these operations. To date, we have financed our operations primarily with proceeds from sales of preferred stock. Through June 30, 2022, we had received gross proceeds of $315.8 million from sales of preferred stock.

We have incurred significant operating losses since inception. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of any product candidates we may develop. We generated net losses of $2.5 million, $3.4 million, $165.4 million, $86.0 million, and $53.2 million for the period from September 13, 2019 (inception) to December 31, 2019, the years ended December 31, 2020 and 2021, and the six months ended June 30, 2021 and 2022, respectively. As of June 30, 2022, we had an accumulated deficit of $224.6 million. We expect to continue to incur significant expenses for at least the next several years if and as we:

We will not generate revenue from product sales unless and until we successfully initiate and complete clinical development and obtain regulatory approval for any product candidates. If we obtain regulatory approval for any of our product candidates and do not enter into a commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, manufacturing, marketing, and distribution. Further, following the completion of this offering, we expect to incur additional costs associated with operating as a public company, including increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs as well as investor and public relations expenses associated with being a public company.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of private and public equity offerings, debt financings, or other capital sources, which may include additional collaborations with other companies, marketing, distribution or licensing arrangements with third parties, or other strategic transactions. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, reduce or eliminate the development and commercialization of any product candidates that we may identify or delay our pursuit of potential in-licenses or acquisitions.

Because of the numerous risks and uncertainties associated with product development, we are unable to accurately predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate 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.

We believe our existing cash and cash equivalents and short-term investments, together with the net proceeds from this offering, will be sufficient to fund our operating expenses and capital expenditure requirements into 2025. 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. See “—Liquidity and Capital Resources.” and “Risk Factors—Risks Related To Our Financial Position and Need for Additional Capital.”

We are subject to a number of risks associated with the COVID-19 global pandemic, including potential delays associated with our ongoing preclinical studies and anticipated clinical trials. COVID-19 may have an adverse

In September 2019, we entered into a license agreement with Broad Institute, and in May 2020 and February 2021, we entered into amendments to the license agreement, for certain patents related to delivery or targeting of DNA, or the Broad License Agreement. Under the Broad License Agreement, Broad Institute grants to us (i) an exclusive, worldwide license under the licensed patent rights solely to offer for sale, sell, have sold and import products covered by such licensed patent rights, or licensed products, solely for use within the Prime Broad Field, as defined below (subject to certain specified limitations and exclusions with respect to certain applications), (ii) a non-exclusive, worldwide license under the licensed patent rights solely to make, have made, offer for sale, sell, have sold, and import licensed products solely for use in the Prime Broad Field, (iii) a non-exclusive, worldwide license under the licensed patent rights solely to make, have made, offer for sale, sell, have sold and import other products that are enabled by (a) the licensed patent rights or (b) the use of certain materials transferred to us by Broad Institute, solely for the prevention or treatment of human diseases and (iv) a non-exclusive, worldwide license solely for internal research. Further, with respect to DNA delivery or targeting applications covered by the licensed patent rights, the exclusive license granted to us by Broad Institute is limited only to “prime editor” products and specifically excludes applications relating to the production or processing of small or large molecules, including for the prevention or treatment of human disease. Under the Broad License Agreement, we also have the right to grant sublicenses to our affiliates and third parties, subject to certain requirements. We are obligated to use commercially reasonable efforts to develop, seek marketing approval for, and commercialize licensed products in the field. As partial consideration for the license, we made an upfront payment of $0.5 million to Broad Institute.

Concurrently with the Broad License Agreement, we entered into a subscription agreement with Broad Institute, or the Broad Subscription Agreement. Under the Broad Subscription Agreement, as additional consideration for the license, we issued 623,529 shares of common stock, with a fair value of $39,000, to Broad Institute, representing 5.0 percent of our then outstanding capital stock on a fully diluted basis. The Broad Subscription Agreement also obligated us to issue additional shares of common stock to Broad Institute without additional consideration to maintain Broad Institute’s ownership of us at 5.0 percent on a fully-diluted basis, if at any time prior to the achievement of an equity financing up to $100.0 million, we issue additional securities that would cause Broad Institute shares of common stock to be less than 5.0 percent of our outstanding capital stock on a fully-diluted basis, or the Anti-Dilution Obligation. Upon the achievement of the $100.0 million of equity financing in connection with the closing of the fourth tranche of our Series A preferred stock, we fully settled the Anti-Dilution Obligation, which resulted in the issuance of 2,498,850 shares of common stock to Broad Institute with a fair value of $7.5 million.

We also granted certain preemptive rights to Broad Institute, under which if after we reach the financing threshold of $100.0 million, we propose to offer or sell any new securities, then Broad Institute shall have the right to purchase from us the portion of such new securities that would allow Broad Institute to maintain its 5.0 percent ownership in us. In April 2021, we exceeded the financing threshold with the fourth issuance of the Series A preferred stock. In connection with the fourth closing of Series A preferred stock, Broad Institute purchased an additional 761,844 shares of Series A preferred stock, at a price of $1.00 per share for gross proceeds of $0.8 million, to maintain its 5.0 percent ownership in us.

Under the Broad License Agreement, we are required to use commercially reasonable efforts to develop licensed products in the Prime Broad Field in accordance with a development plan that we prepared and submitted to Broad Institute. We are also obligated to pay Broad Institute an annual license maintenance fee ranging from the low to mid five-figures to the low six-figures, depending on the particular calendar year, for the term of the agreement.

Broad Institute is entitled to receive mid-single digit percentage royalties on net sales of licensed products, and low single-digit percentage royalties of enabled products. Royalties payable to Broad Institute are subject to customary offsets and reductions with respect to a product in a given country, to a floor. On a country-by-country and product-by-product basis, the royalty term for a product in a country will terminate on the latest of (i) the expiration of the last to expire valid claim of an issued patent or pending patent application within the licensed patent rights covering such product in such country, (ii) the period of regulatory exclusivity for such product in such country or (iii) 10 years after the first commercial sale of such product in such country.

Unless earlier terminated, the Broad License Agreement will remain in effect until the later of (i) the last to expire valid claim of an issued patent or pending patent application within the licensed patent rights covering our licensed products or (ii) the expiration of the last royalty term for a licensed product in a country. We can terminate the Broad License Agreement for our convenience following prior written notice to Broad Institute. Each party may terminate the Broad License Agreement for the other party’s uncured material breach. Broad Institute may also immediately terminate the Broad License Agreement (i) to the extent we (or our affiliates or sublicensees) challenge a licensed patent right, (ii) upon our bankruptcy or insolvency or (iii) if we fail to procure and maintain insurance.

In May 2021, we executed an exclusive option agreement with Broad Institute, or the Broad Option Agreement, pursuant to which, Broad Institute granted to us an exclusive option to negotiate an amendment to the Broad License Agreement to include certain additional patent rights relating to Prime Editing improvements to our license thereunder (subject to certain specific limitations and exclusions with respect to certain applications), or the Exclusive Option.

In connection with the Broad Option Agreement, Broad Institute also granted to us, during the option period, a limited, non-exclusive license under the new patent rights solely for research purposes to evaluate whether to exercise our option (subject to certain specified exceptions). We paid a upfront fee of $0.1 million to Broad Institute under the agreement upon execution of the agreement.

We may terminate the Broad Option Agreement for convenience by giving advance written notice of termination to Broad Institute. Broad Institute has the right to terminate the agreement if we (i) fail to make a payment to Broad Institute under the option agreement and fail to cure such non-payment within a certain time period, (ii) are otherwise in material breach of the option agreement and fail to cure within a certain time period, or (iii) become insolvent.

Our option expires in November 2022, unless we mutually agree in writing with Broad Institute to extend such expiration date. Through June 30, 2022, we have not exercised our Exclusive Option.

In February 2021, we committed to donate $5.0 million to Broad Institute and Harvard annually for 14 years, commencing in 2021, or the Pledge. The Pledge is intended to be used for research and development related to new genome editing technologies, for example Prime Editing, improve on existing genome-editing technologies, identify delivery mechanisms for these technologies and apply these technologies to the understanding and treatment of rare genetic diseases. We can terminate the Pledge at our discretion, subject to providing one year of funding from the date of termination. In August 2022, we amended and restated the Pledge to clarify that the funds may be used by the laboratory of David Liu, who is a member of Broad Institute and a faculty member at Harvard.

In September 2019, we entered into a collaboration and license agreement, or the Beam Collaboration Agreement, with Beam Therapeutics Inc., or Beam, to collaborate on the research, development, manufacture and commercialization of certain Prime Editing products within a specified field and provide each other with access and licenses to certain proprietary technology to advance the other’s progress. Under the Beam Collaboration Agreement, each party agreed to provide each other with access to, and licenses under, certain technology, know-how and patent rights controlled by each party for a limited number of years after the effective date, known as the initial term, and certain improvements thereto. Under the Beam Collaboration Agreement, we grant to Beam an exclusive (even as to us and our affiliates), worldwide license under (i) certain prime editing technology, know-how and patent rights that we control during the initial term, and improvements thereto that we control for a specified number of years following the initial term, and (ii) our interest in certain jointly-owned collaboration technology, in each case, solely to develop, make, have made, use, offer for sale, sell, import and commercialize licensed products only in the Beam field. Beam also grants to us certain non-exclusive, worldwide licenses under certain technology, know-how and patent rights, including under certain CRISPR or delivery-related technology, know-how and patent rights, that it controls during the initial term, and improvements thereto that Beam controls for a specified number of years following the initial term, solely to develop, make, have made, use, offer for sale, sell, import and commercialize products only in the Prime field. As partial consideration for the Beam Collaboration Agreement, Beam agreed to pay us, upon its election to continue its collaboration with us on the first anniversary of the Beam Collaboration Agreement, $5.0 million worth of its own shares of common stock which such shares were issued to us on October 6, 2020.

Before and within a short period of time after the filing of an IND for a development candidate being developed under the Beam Collaboration Agreement, Beam has the option to designate up to a mid-single digit number of licensed products for which we are not permitted to exercise our profit share right, or the Beam Option (described below). Under the Beam Collaboration Agreement, a licensed product for which we have not exercised our profit share option or for which Beam has exercised the Beam Option is referred to as a protected product. Beam must exercise its option within 30 days following the filing of an IND for such product. Unless we exercise our profit sharing option for a licensed product, Beam is solely responsible for the development and commercialization of licensed products in the Beam field under the Beam Collaboration Agreement. If Beam exercises its option for a protected product, Beam will owe us a payment of $5.0 million if the product is developed for non-sickle cell disease or $10.0 million if the product is developed for sickle cell disease.

On a licensed product-by-licensed product basis, we have the right to elect to share equally with Beam in the profits and losses in the United States for Beam’s licensed products. We may exercise such right for each licensed product within a specified period of time. Any such licensed product for which we exercise our right we refer to as a collaboration product. If we exercise such right, we agree to share equally in the costs, profits and losses of each such collaboration product in the United States, rather than receiving milestones and royalties based on development and sales thereof by Beam in the United States. For clarity, we are still entitled to receive milestones and royalties on the development and sale of each such collaboration product outside the United States. We also have the right to elect, within a specified time period, at least one year prior to the expected filing of an NDA, to co-promote with Beam each collaboration product in the United States, in addition to sharing in the profits and losses. To the extent we exercise our co-promote option with respect to a given collaboration product, we and Beam must use commercially reasonable efforts to commercialize such collaboration product, in each case, in the Beam field in the major markets in which marketing authorization has been obtained. After we have exercised our right to profit share on a collaboration product, we are able to, at any time during the term of the Beam Collaboration Agreement, on a collaboration product-by-collaboration product basis, opt-out of the profit and loss share and co-promotion activities with respect to any collaboration product with prior written notice to Beam within a certain time period.

We are entitled to receive development milestone payments from Beam on Beam’s development of protected products (which, for clarity, includes any licensed product for which we have not exercised our profit share option) and collaboration products. For protected products, we are entitled to receive up to a total of $35.5 million on a protected product-by-protected product basis based on Beam’s development of such protected product and, for collaboration products, up to a total of $17.8 million on a collaboration product-by-collaboration product basis based on Beam’s development of such collaboration product outside of the United States, in each case, with such amounts

The sickle cell disease product partnered with Beam is a licensed product under the Beam Collaboration Agreement. Beam has not designated this product as a protected product and we have not received any development or sales-based milestones with respect to Beam’s exploitation thereof.

Beam is obligated to pay to us tiered royalties ranging from a high-single digit percentage to a low double-digit percentage, but less than teens on net sales of protected products worldwide on a protected product-by-protected product basis and net sales of collaboration products outside of the United States on a collaboration product-by-collaboration product basis. Our royalties are subject to customary offsets and reductions, to a floor that takes into account any royalties we are obligated to pay to our third party licensors, including Broad Institute. In addition, certain of the rights licensed under the Beam Collaboration Agreement are sublicensed from third parties, and Beam agrees to reimburse us for certain payments we are required to make to our third party licensors attributable to Beam’s exercise of any sublicense we grant to Beam, including payments we make to Broad Institute under the Broad License Agreement.

If we develop a product that is covered by the technology, know-how or patent rights that Beam licenses to us under the Beam Collaboration Agreement, which we refer to as a Prime product, we are obligated to pay to Beam a low single digit percentage royalty on our worldwide net sales of such any product on a Prime product-by-Prime product and country-by-country basis, subject to certain customary reductions, to a floor.

Unless earlier terminated in accordance with its terms, the Beam Collaboration Agreement will expire on the later of (a) expiration of the last royalty term for a product on which a party is obligated to pay royalties to the other party or (b) with respect to any collaboration product, the date on which neither party is developing or commercializing any such collaboration product in the United States. See “Business—Our License and Collaboration Agreements.”

In connection with the Beam Collaboration Agreement, concurrently in September 2019, we also entered into a mutual subscription agreement, or the Beam Mutual Subscription Agreement. Under the Beam Mutual Subscription Agreement, if Beam elected to continue its collaboration with us, on the first anniversary of the collaboration agreement, we were obligated to grant Beam 1,608,337 shares of our common stock that represented an amount equal to 5.0 percent of the 100 million shares of Series A preferred stock that we had issued or committed to issue as of the effective date, as part of our first preferred stock offering. In connection with the Beam Mutual Subscription Agreement, on October 6, 2020, we issued to Beam an aggregate of 1,608,337 shares of our common stock with a fair value of $0.2 million.

In December 2021, we entered into a research collaboration and exclusive option agreement with Myeloid Therapeutics Inc., or Myeloid, and such agreement, the Myeloid Agreement. Under the Myeloid Agreement, we collaborate with Myeloid, a related party, on the research and development of LINE-1 retrotransposon technology. This retrotransposon-based approach is complementary to Prime Editing and, if successfully deployed alongside Prime Editing, could expand the applicability of our technologies towards our goal of more broadly addressing human diseases. In connection with the Myeloid Agreement, we also entered into a subscription agreement with Myeloid under which we were obligated to issue an aggregate of 1,101,525 shares of our common stock as additional consideration for the license.

Myeloid grants to us an exclusive option, exercisable during the research term and for 60 days thereafter, to obtain ownership of certain patent rights and know-how owned by Myeloid that relate to LINE-1 retrotransposon technology. If we exercise our option, in addition to assigning us ownership of the applicable patent rights and

Through June 30, 2022, we have not exercised our option. Following the exercise of our option, we agree to grant Myeloid, in addition to certain other licenses, an exclusive, worldwide license under the assigned patent rights and know-how to develop and commercialize products in the field of myeloid cells and myeloid cell engineering, or the Myeloid Field.

Upon entering into the Myeloid Agreement, Myeloid was entitled to receive an upfront payment of $30.0 million in cash and an aggregate of 1,101,525 shares of our common stock, with a then fair value of $12.0 million, both of which Myeloid received in January 2022. If the research agreement meets its goals, then (i) during the research term, Myeloid is entitled to cash payments of up to $35.0 million in the aggregate upon the achievement of certain milestones reflecting the technology’s development; and (ii) if we exercise our option, we agree to pay to Myeloid an option exercise fee of $80.0 million in cash, and shares of our common stock with a then fair value of $30.0 million. Additionally, if the research collaboration meets its goal and we exercise our option, and we are able to proceed with the development and commercialization of a product that is covered by (a) the patent rights or know-how subject to our option or (b) the patent rights or know-how developed by one or both of the parties during the research term related to LINE-1 retrotransposon technology, or, collectively, a Prime Product, Myeloid would be eligible to receive, for the first five Prime Products, development and regulatory milestone payments of up to $120.0 million on a Prime Product-by-Prime Product basis and sales-based milestone payments of up to $210.0 million on a Prime Product-by-Prime Product basis.

Myeloid is also eligible to receive tiered low to mid single-digit percentage royalties on our annual aggregate global net sales of Prime Products on a Prime Product-by-Prime Product and country-by-country basis, subject to customary offsets and reductions to a floor. On a country-by-country and Prime Product-by-Prime Product basis, the period during which royalties will be paid will continue until the latest of (i) the expiration date of the last to expire valid claim of an issued patent or pending patent application within the patent rights subject to our option or the patent rights developed by one or both of the parties during the research term related to LINE-1 retrotransposon technology, in each case, covering the applicable Prime Product, (ii) loss of regulatory exclusivity for such Prime Product in such country, or (iii) ten (10) years after the first commercial sale of such Prime Product in such country.

Following the exercise of our option and for a period of two years thereafter, Myeloid will have the right to select up to three targets, subject to certain exclusions, for the development and commercialization of products directed at such targets in all fields and we will be eligible to receive the development, regulatory and sales-based milestone payments and royalty payments as set forth above from Myeloid with respect to such products.

Unless earlier terminated based on customary termination rights, the Myeloid Agreement will continue on a Prime Product-by-Prime Product and country-by-country basis until the expiration of the royalty term for such Prime Product in such country. If we exercise our option, neither party will have the right to terminate the Myeloid Agreement for any reason.

We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products for the foreseeable future. Our revenues to date have been generated through the Beam Collaboration Agreement, as set forth above. In the future, we may generate additional revenue from collaboration, grant or license agreements we have entered into, or may enter into, with respect to our product candidates, as well as product sales from any approved product. Our ability to generate product revenues will depend on the successful development and eventual commercialization of any product candidates that we identify. If we fail to complete the development of any future product candidates in a timely manner or to obtain regulatory approval for such product candidates, our ability to generate future revenue and our results of operations and financial position would be materially adversely affected.

We also evaluated whether the Beam Option and our right to elect collaboration products in the Beam Collaboration Agreement represented material rights that would give rise to a performance obligation and concluded that neither the Beam Option nor our right to elect collaboration products convey a material right to Beam and therefore are not considered separate performance obligations within the Beam Collaboration Agreement. There have been no protected products or collaborations products to date. Under the Beam Collaboration Agreement, we are eligible to receive certain milestones and royalties regardless of whether any options are exercised, which are considered variable consideration. At each reporting period, we evaluate whether milestones are considered probable of being reached and, to the extent that a significant reversal would not occur in future periods, estimate the amount to be included in the transaction price. During the years ended December 31, 2020 and 2021, and the six months ended June 30, 2021 and 2022, we did not receive any milestone payments and all variable consideration related to the Beam Collaboration Agreement remained fully constrained.

We recognized revenue for the license performance obligations at a point in time, that is upon the first anniversary of the effective date when Beam elected to continue its collaboration with us. We determined that the joint research committee performance promise is immaterial in the context of the contract.

Research and development expenses consist primarily of costs incurred in connection with the development and research of our immediate target indications and our differentiation target indications. These expenses include:

We measure and recognize asset acquisitions or licenses to intellectual property that are not deemed to be business combinations based on the cost to acquire or license the asset or group of assets, which includes transaction costs. Goodwill is not recognized in asset acquisitions or transaction to license intellectual property. In an asset acquisition or license to intellectual property, the cost allocated to acquire in-process research and development, or IPR&D, with no alternative future use is recognized as research and development expense on the acquisition date. For the period from September 13, 2019 (inception) to December 31, 2019, we recorded $0.7 million of research and

Upfront and milestone payments made are accrued for and expensed when the achievement of the milestone is probable up to the point of regulatory approval. Milestone payments made upon regulatory approval will be capitalized and amortized over the remaining useful life of the related product.

We expense all research and development costs in the periods in which they are incurred. Most of our research and development expenses have been related to early stage development activities. We have not reported program costs because we have not historically tracked or recorded our research and development expenses on a program-by-program basis, as we do not currently have any product candidates. In the future, external research and development costs for any individual product candidate will be tracked commencing upon product candidate nomination. We do not allocate employee costs, costs associated with our discovery efforts, laboratory supplies, and facilities expenses, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple programs and our platform and, as such, are not separately classified.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing any future product candidates, including investments in manufacturing, as we advance any product candidates we may identify and begin to conduct clinical trials. The success of product candidates we may identify and develop will depend on many factors, including the following:

Any changes in the outcome of any of these variables with respect to the development of product candidates that we may identify could mean a significant change in the costs and timing associated with the development of such candidates. For example, if the FDA or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect, or if we experience significant delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial resources and time to complete clinical development of that therapeutic candidate. We may never obtain regulatory approval for any of our candidates, and, even if we do, drug commercialization takes several years and millions of dollars in development costs.

Following consummation of this offering, certain bonuses will become payable, and certain performance-based restricted stock awards and options to purchase common stock will vest and we will record approximately $0.9 million of compensation expense as research and development expenses on the closing date of the offering.

General and administrative expenses consist primarily of salaries and personnel-related costs, including stock-based compensation, for our personnel in executive, legal, finance and accounting, human resources and other administrative functions. General and administrative expenses also include legal fees relating to patents and corporate matters; professional fees paid for accounting, auditing, consulting and tax service; insurance costs; office and information technology costs; and facilities, depreciation and other general and administrative expenses, which include direct or allocated expenses for rent and maintenance of facilities and utilities.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support development of product candidates and our continued research activities. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs as well as investor and public relations expenses associated with being a public company. We also expect to incur additional intellectual property-related expenses as we file patent applications to protect innovations arising from our research and development activities.

Following consummation of this offering, certain performance-based restricted stock awards will vest and we will record approximately $0.2 million of compensation expense as general and administrative expenses on the closing date of the offering.

Our Series A preferred stock purchase agreement obligated the Series A investors to participate in subsequent offerings of Series A preferred stock upon satisfaction of certain conditions, or the preferred stock tranche right. The preferred stock tranche right was classified as a liability and initially recorded at fair value upon the issuance date of the right. The liability was subsequently remeasured to fair value at each reporting date and immediately prior to being settled, and changes in fair value of the preferred stock tranche right liability were recognized as a component of other income (expense), net in our consolidated statements of operations and comprehensive loss. In 2020, we closed the second tranche Series A preferred stock financing and in April 2021, we closed the third and fourth tranche Series A preferred stock financings, resulting in full settlement of the preferred stock tranche right, upon both of which we issued additional shares of Series A preferred stock. Immediately prior to the issuance of such shares, the preferred stock tranche right liability was remeasured to fair value with the change in fair value recognized as a component of other income (expense), net.

As a result of the preferred stock tranche right settlement in April 2021, we will no longer recognize changes in the fair value of the preferred stock tranche liability in our consolidated statements of operations and comprehensive loss.

As a result of the achievement of $100.0 million in equity financing upon the fourth Series A preferred stock closing, we fully settled the Anti-Dilution Obligation and will no longer recognize changes in the fair value of the Anti-Dilution Obligation in our consolidated statements of operations and comprehensive loss.

In connection with the Beam Collaboration Agreement, Beam issued 200,307 shares of Beam common stock to us on October 6, 2020. Our related party short-term investment is recorded at fair value based upon quoted market prices at each reporting date. Unrealized and realized gains and losses on this investment subsequent to its initial recognition are recognized as a component of other income (expense) in the consolidated statements of operations and comprehensive loss.

Other income (expense), net consists of the change in the fair value of the shares we were entitled to receive from our related party Beam from the first anniversary of the Beam Collaboration Agreement through the date we received the shares from Beam, October 6, 2020. In connection with the Beam Collaboration Agreement, Beam granted 200,307 shares of Beam common stock to us. We were entitled to receive the shares of Beam upon the first anniversary of the Beam Collaboration Agreement in September 2020. We received the shares of Beam on October 6, 2020. The change in the fair value of the shares from September through our receipt on October 6, 2020 is included as other income (expense), net in the consolidated statements of operations and comprehensive loss. As the shares were received on October 6, 2020, we no longer recognize changes in the fair value of the Beam shares we were entitled to receive.

For the period from September 13, 2019 (inception) to December 31, 2019 and the years ended December 31, 2020 and 2021, we recorded an income tax provision (benefit) of $4,000, $1.9 million and $(0.5) million, respectively. For the six months ended June 30, 2021, we recorded an income tax provision of $0.5 million and for the six months ended June 30, 2022 we recorded an income tax benefit of $1.0 million. The income tax benefits for the year ended December 31, 2021 and the six months ended June 30, 2022, and the income tax provision for the six months ended June 30, 2021 are a result of changes associated with the unrealized gains on investments. We recorded a full valuation allowance of our net deferred tax assets as of December 31, 2021 and June 30, 2022, respectively, as we believed it was more likely than not we would not be able to utilize our deferred tax assets prior to their expiration.

As of December 31, 2021, we had U.S. federal NOL carryforwards of $41.8 million, which may be available to reduce future taxable income which do not expire. In addition, as of December 31, 2021, we had state NOL carryforwards of $40.9 million, which may be available to reduce future taxable income, and expire at various times beginning in 2039. As of December 31, 2021, we also had U.S. federal and state research and development tax credit carryforwards of $1.3 million and $0.4 million, respectively, which may be available to reduce future tax liabilities and expire at various dates beginning in 2040 and 2035, respectively.

The following table summarizes our results of operations for the six months ended June 30, 2021 and 2022:

No collaboration revenue was recognized for the six months ended June 30, 2021 and 2022.

Research and development expenses were $10.3 million for the six months ended June 30, 2021, compared to $32.6 million for the six months ended June 30, 2022. The increase of $22.4 million was primarily due to an increase of $9.8 million in personnel-related expense driven by new hires in research and development, an increase of $8.0 million in lab supplies and services expense due to continued discovery efforts and expansion of our research and development activities, an increase of $4.0 million facility related expense primarily due to the expansion of our office and laboratory space through new facilities being leased, and an increase of $0.6 million in professional and consultant fees as we prepare to become and operate as a public company.

General and administrative expenses were $3.7 million for the six months ended June 30, 2021, compared to $13.6 million for the six months ended June 30, 2022. The increase of $9.9 million was primarily due to an increase of $4.3 million of personnel-related expense primarily due to compensation related costs related to new hires to support our expanding operations, $3.7 million in professional and consultant fees as we prepare to become and operate as a public company, and an increase of $1.9 million of facility and IT related expenses primarily due to newly signed office leases to support our expanded general and administrative staff.

The change in fair value of the preferred stock tranche right liability decreased by $74.3 million from the six months ended June 30, 2021 compared to the six months ended June 30, 2022. The decrease was primarily due to a $1.55 increase in the per share fair value of the underlying preferred stock used to determine the fair value of the preferred stock tranche right from December 31, 2020 to June 30, 2021, with no corresponding change in the six months ended June 30, 2022 due to the preferred stock tranche right being settled in full upon the satisfaction of certain conditions in April 2021.

The change in fair value of the Anti-Dilution Obligation decreased by $6.7 million from the six months ended June 30, 2021 compared to the six months ended June 30, 2022. The decrease was primarily due to a $2.68 increase in the per share fair value of our common stock used to determine the fair value of the Anti-Dilution Obligation from December 31, 2020 through the settlement date in connection with the fourth Series A preferred stock closing in 2021, with no corresponding change in the six months ended June 30, 2022.

The change in fair value of related party short-term investment decreased by $17.6 million from the six months ended June 30, 2021 compared to the six months ended June 30, 2022. The decrease was due to a $40.98 decrease in the stock price from December 31, 2021 to June 30, 2022, as compared to the $47.07 increase in the stock price of the Beam stock from December 31, 2020 to June 30, 2021 .

The amount of other income (expense), net for the six months ended June 30, 2022 was insignificant.

We recorded an income tax provision of $0.5 million for the six months ended June 30, 2021 and an income tax benefit of $1.0 million for the six months ended June 30, 2022.

The following table summarizes our results of operations for the years ended December 31, 2020 and 2021:

Related party collaboration revenue was $5.2 million for the year ended December 31, 2020, consisting of $5.4 million of consideration received in the form of Beam shares in connection with the Beam Collaboration Agreement, offset by shares of our common stock that we issued to Beam with a then fair value of $0.2 million, and was recognized upon the first anniversary of the effective date of the agreement, when Beam elected to continue its collaboration with us. No collaboration revenue was recognized for the year ended December 31, 2021.

Research and development expenses were $3.0 million for the year ended December 31, 2020, compared to $70.6 million for the year ended December 31, 2021. The increase of $67.6 million was primarily due to an increase of $47.3 million in license, intellectual property fees and other primarily due to $42.0 million of an upfront expense under the Myeloid Agreement and $5.3 million under the Broad License Agreement (including amounts associated with the Pledge, as described above), an increase of $9.6 million in personnel-related expense driven by approximately 50 new hires in research and development, an increase of $5.6 million lab supplies expense due to continued discovery efforts and expansion of our research and development activities and an increase of $4.6 million facility related expense primarily due to the expansion of our office and laboratory space through new facilities being leased.

General and administrative expenses were $3.2 million for the year ended December 31, 2020, compared to $13.9 million for the year ended December 31, 2021. The increase of $10.8 million was primarily due to an increase of $6.1 million in professional and consultant fees as we prepare to become and operate as a public company, an increase of $2.6 million of personnel-related expense primarily due to compensation related costs related to eight new hires to expand upon our administrative staff functions and an increase of $2.0 million of facility related expenses primarily due to newly signed office leases to support our expanded general and administrative staff.

The change in fair value of the preferred stock tranche right liability increased by $63.4 million from the year ended December 31, 2020 compared to the year ended December 31, 2021. The increase was primarily due to a $1.55 increase in the per share fair value of the underlying preferred stock used to determine the fair value of the preferred stock tranche right from December 31, 2020 through the settlement date in April 2021, as compared to the $0.33 increase in per share fair value of the underlying preferred stock used to determine the fair value of the preferred stock tranche right from December 31, 2019 to December 31, 2020.

The change in fair value of the Anti-Dilution Obligation increased by $6.0 million from the year ended December 31, 2020 compared to the year ended December 31, 2021. The increase was primarily due to a $2.68 increase in the per share fair value of our common stock used to determine the fair value of the Anti-Dilution Obligation from December 31, 2020 through the settlement date in connection with the fourth Series A preferred stock closing, as compared to the $0.28 increase in the per share fair value of our common stock used to determine the fair value of the Anti-Dilution Obligation from December 31, 2019 to December 31, 2020.

The change in fair value of related party short-term investment decreased by $11.3 million from the year ended December 31, 2020 compared to the year ended December 31, 2021. The decrease was primarily due to a $1.95 decrease in the stock price of the Beam stock from December 31, 2020 to December 31, 2021 as compared to the $54.25 increase in the per share value of Beam common stock used to determine the fair value of related party short-term investments from October 6, 2020, the date on which we received the Beam shares, to December 31, 2020.

The change in other income (expense), is due to the unrealized loss of $0.1 million recognized in the year ended December 31, 2020 related to the change in the fair value of the Beam shares we were entitled to receive for the period from the first anniversary date of the Beam Collaboration agreement, or September 26, 2020, through October 6, 2020, when we received the Beam shares due to a decrease in the stock price of the Beam stock. There is no similar unrealized loss in the year ended December 31, 2021 as any change in the fair value of the shares received subsequent to October 6, 2020 is included in the change in fair value of related party short-term investment.

For the years ended December 31, 2020 and 2021, we recorded an income tax provision (benefit) of $1.9 million and $(0.5) million, respectively. The deferred income tax provision for the year ended December 31, 2020 was attributable to releasing our valuation allowance on our deferred tax assets as we were in a net deferred tax liability position, primarily due to our recognition of an unrealized gain on our related party short term investment. The deferred income tax benefit for the year ended December 31, 2021 was attributable to recording a valuation allowance on our deferred tax assets and liabilities due to being in a net deferred tax asset position.

The following table summarizes our results of operations for the period from September 13, 2019 (inception) to December 31, 2019 and the year ended December 31, 2020:

Related party collaboration revenue was zero for the period from September 13, 2019 (inception) to December 31, 2019, compared to $5.2 million for the year ended December 31, 2020. Collaboration revenue for the year ended December 31, 2020 consisted of $5.4 million of consideration received in the form of Beam shares in connection with the Beam Collaboration Agreement, offset by shares of our common stock that we issued to Beam with a then fair value of $0.2 million, and was recognized upon the first anniversary of the effective date of the agreement, when Beam elected to continue its collaboration with us.

Research and development expenses were $0.9 million for the period from September 13, 2019 (inception) to December 31, 2019, compared to $3.0 million for the year ended December 31, 2020. The $2.1 million increase in research and development expenses was primarily due to an increase of $1.1 million in facility and other related costs due to our laboratory space lease in Cambridge, Massachusetts that was signed in March 2020, a $1.0 million increase in personnel-related expense primarily due to increased headcount of nine new hires for research and development activities and an increase of $0.5 million in lab supplies due to the expansion of our research and development staff and increased discovery and preclinical activities. These increases were offset by a $0.7 million decrease in license and intellectual property fees primarily due to the consideration paid for the Broad License Agreement in September 2019, which consisted of upfront fees paid of $0.5 million, the initial recognition of the Anti-Dilution Obligation of $0.2 million and the issuance of shares of our common stock to Broad Institute, with a fair value of $39,000. Personnel-related costs, consisting of employees and non-employees, included stock-based compensation of $0.2 million and $0.4 million for the period from September 13, 2019 (inception) to December 31, 2019 and the year ended December 31, 2020, respectively.

General and administrative expenses were $1.3 million for the period from September 13, 2019 (inception) to December 31, 2019 compared to $3.2 million for the year ended December 31, 2020. The increase of $1.9 million in general and administrative expenses was primarily due to an increase of $1.0 million in personnel-related costs as a result of three hires, including our Chief Executive Officer, as we commenced our operations, an increase of $0.7 million in professional and consultant fees primarily due to the Broad License Agreement that we entered into which required us to reimburse Broad Institute for certain patent costs, and an increase of $0.2 million in facility-related and other expenses primarily due to an increase in our leased office space and other expenses primarily attributable to the increase in headcount. Personnel-related costs included stock-based compensation of $0 and $40,000 for the period from September 13, 2019 (inception) to December 31, 2019 and the year ended December 31, 2020, respectively.

The change in fair value of the preferred stock tranche right liability expense was $0.4 million for the period from September 13, 2019 (inception) to December 31, 2019, compared to $10.9 million for the year ended December 31, 2020. The increase of $10.5 million was related to the remeasurement to fair value of the Series A preferred stock tranche liability associated with the Series A preferred stock, which primarily was due to an increase in the fair value of the underlying preferred stock during the year ended December 31, 2020, used to determine the fair value of the preferred stock tranche right liability.

The change in fair value of the Anti-Dilution Obligation was zero for the period from September 13, 2019 (inception) to December 31, 2019, compared to $0.7 million for the year ended December 31, 2020. The increase of $0.7 million was related to the remeasurement to fair value of the Anti-Dilution Obligation associated with the Broad License Agreement, primarily due to an increase in the fair value of our common stock during the year ended December 31, 2020, used to determine the fair value of the Anti-Dilution Obligation.

The change in fair value of related party short-term investment is due to the change in fair value of the Beam shares held by us since October 6, 2020, which increased by $10.9 million during the period from September 13, 2019 (inception) to December 31, 2019 to the year ended December 31, 2020. The increase was primarily due to a $54.25 increase in the stock price of the Beam stock from October 6, 2020 to December 31, 2020.

Other expense was zero for the period from September 13, 2019 (inception) to December 31, 2019 compared to $0.1 million for the year ended December 31, 2020. The increase of $0.1 million was due to the change in fair value of the Beam shares we were entitled to receive on September 26, 2020 and the fair value of the shares we received from Beam on October 6, 2020.

For the period from September 13, 2019 (inception) to December 31, 2019 and the year ended December 31, 2020, we recorded an income tax provision of $4,000 and $1.9 million, respectively. The deferred income tax provision for the year ended December 31, 2020 was attributable to releasing our valuation allowance on our deferred tax assets as we were in a net deferred tax liability position, primarily due to our recognition of an unrealized gain on our related party short term investment.

Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we commence the clinical development of our programs and continue our platform development and early-stage research activities. We have not yet commercialized any products and we do not expect to generate revenue from sales of products for several years, if at all. To date, we have funded our operations primarily with proceeds from the sale of our convertible preferred stock. Through June 30, 2022, we had received gross proceeds of $315.8 million from sales of our preferred stock. As of June 30, 2022, we had cash and cash equivalents and short-term investments of $180.6 million, excluding our restricted cash, or $194.1 million, including restricted cash.

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

During the six months ended June 30, 2022, operating activities used $71.0 million of cash, resulting primarily from our net loss of $53.2 million and a change in deferred income taxes of $1.0 million, partially offset by a change in the fair value of related party short-term investment of $8.2 million, non-cash rent expense of $4.2 million, stock-based compensation expense of $2.5 million, depreciation and amortization expense of $0.7 million, and amortization of premiums and discount on short-term investments of $0.2 million. Net cash used by changes in our operating assets and liabilities for the six months ended June 30, 2022 was $32.7 million which primarily consisted of a decrease in accrued expenses and other current liabilities of $30.9 million, and a decrease in lease liabilities of $4.3 million, partially offset by an increase in accounts payable of $2.4 million. The decrease in accrued expenses and other current liabilities was primarily due to a $30.0 million payment that we made to Myeloid in January 2022 in connection with the Myeloid Agreement.

During the six months ended June 30, 2021, operating activities used $11.3 million of cash, resulting primarily from our net loss of $86.0 million and a change in the fair value of related party short-term investment of $9.4 million, partially offset by a change in fair value of preferred stock tranche right liability of $74.3 million, a change in fair value of anti-dilution obligation of $6.7 million, non-cash rent expense of $1.7 million, a change in deferred income taxes of $0.5 million, stock-based compensation expense of $0.3 million, and depreciation and amortization expense of $0.2 million. Net cash provided by changes in our operating assets and liabilities for the six months ended June 30, 2021 was $0.4 million which primarily consisted of an increase in accrued expenses and other current liabilities of $1.4 million and an increase in accounts payable of $1.0 million, partially offset by a decrease in lease liabilities of $1.7 million and an increase in prepaid expenses and other current assets of $0.3 million.

During the year ended December 31, 2021, operating activities used $34.1 million of cash, resulting primarily from our net loss of $165.4 million and a change in our deferred income taxes of $0.6 million, partially offset by a change in fair value of preferred stock tranche right liability of $74.3 million, non-cash research and development expense of $12.0 million, a change in fair value of anti-dilution obligation of $6.7 million, non-cash rent expense of $4.3 million, stock-based compensation expense of $1.7 million, amortization of premium and discount on short-term investments of $0.7 million, depreciation and amortization expense of $0.6 million and a change in fair value of related party short-term investment of $0.4 million. Net cash provided by changes in our operating assets and liabilities for the year ended December 31, 2021 was $31.2 million which primarily consisted of an increase in accrued expenses and other current liabilities of $35.2 million, and an increase in accounts payable of $1.2 million, partially offset by a decrease in lease liability of $4.3 million and an increase in prepaid expenses and other current assets of $0.9 million due to increased spending during the year.

During the year ended December 31, 2020, operating activities used $5.5 million of cash, resulting primarily from our net loss of $3.4 million, a change in fair value of related party short-term investment of $10.9 million and non-cash consideration received under related party collaboration arrangement of $5.4 million, partially offset by non-cash expenses related to a change in fair value of preferred stock tranche right liability of $10.9 million, deferred income taxes of $1.9 million, a change in fair value of anti-dilution obligation of $0.7 million, stock-based compensation of $0.4 million, non-cash other income (expense) of $0.1 million, and non-cash consideration paid to Beam of $0.2 million. Net cash provided by changes in our operating assets and liabilities for the year ended December 31, 2020 was $0.2 million which primarily consisted of a net increase in accounts payable of $0.3 million and accrued expenses of $0.3 million due to increased spending during the year partially offset by a $0.4 million increase in prepaid expenses and other current assets due to payment of deposits for new leases.

During the period from September 13, 2019 (inception) to December 31, 2019, operating activities used $1.3 million of cash, resulting primarily from our net loss of $2.5 million, partially offset by a change in fair value of preferred stock tranche right liability of $0.4 million, non-cash research and development expense for a Broad license of $0.2 million, and non-cash expenses related to stock-based compensation of $0.2 million. Net cash provided by changes in our operating assets and liabilities for the September 13, 2019 (inception) to December 31, 2019 was $0.5 million, which primarily consisted of an increase in accrued expenses due to timing of payments to vendors.

During the six months ended June 30, 2022, net cash provided by investing activities was $19.9 million, primarily consisting of purchases of short-term investments of $74.7 million, purchases of property and equipment of $6.5 million, and payments of security deposits of $0.7 million, partially offset by maturities of short-term investments of $62.0 million. The purchases of equipment were primarily related to laboratory equipment purchases, which increased as we expanded our discovery and preclinical activities.

During the six months ended June 30, 2021, net cash used in investing activities was $78.1 million, primarily consisting of purchases of short-term investments of $75.9 million, purchases of property and equipment of $1.9 million, and payments of security deposits of $0.3 million. The purchases of equipment were primarily related to laboratory equipment purchases, which increased as we expanded our discovery and preclinical activities.

During the year ended December 31, 2021, net cash used in investing activities was $73.6 million, primarily consisting of purchases of short-term investments of $82.0 million, purchase of property and equipment of $4.2 million and payment of security deposits of $0.5 million all of which were offset by $13.0 million from the maturities of short-term investments. The purchase of short-term investments consisted of U.S. treasuries using the proceeds from issuance of convertible preferred stock. The purchases of equipment were primarily related to laboratory equipment purchases, which increased as we expanded our discovery and preclinical activities. The payment of security deposits was due to our new leases signed during the period.

During the year ended December 31, 2020, net cash used in investing activities was $1.1 million, primarily consisting of payments of security deposit of $0.4 million related to our lab space and purchases of property and equipment of $0.6 million. The purchases of equipment during the period were primarily related to laboratory equipment purchases, which increased as we expanded our discovery and preclinical activities. The payment of security deposits was due to our new leases signed during the period.

During the period from September 13, 2019 (inception) to December 31, 2019, there were no cash flows from investing activities.

During the six months ended June 30, 2022, net cash used in financing activities was $1.9 million, consisting of $1.9 million in payments of deferred offering costs.

During the six months ended June 30, 2021, net cash provided by financing activities was $270.4 million, consisting of net cash proceeds received of $270.4 million from our issuance of Series A and B preferred stock in April 2021.

During the year ended December 31, 2021, net cash provided by financing activities was $269.3 million, primarily consisting of net proceeds of $270.4 million from our additional issuances of Series A preferred stock and issuance of Series B preferred stock in April 2021, net of issuance costs, partially offset by $1.1 million of deferred offering costs.

During the year ended December 31, 2020, net cash provided by financing activities was $35.0 million, primarily consisting of net proceeds from our additional issuance of Series A preferred stock in November 2020.

During the period from September 13, 2019 (inception) to December 31, 2019, net cash provided by financing activities was $10.0 million, primarily consisting of net proceeds from our initial issuance of Series A preferred stock in September 2019.

To date, we have not generated any revenue from product sales. We do not expect to generate revenue from product sales unless and until we successfully complete preclinical and clinical development of, receive regulatory approval for, and commercialize a product candidate and we do not know when, or if at all, that will occur. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and studies and initiate clinical trials. In addition, if we obtain regulatory approval for any product candidates, we expect to incur significant expenses related to product sales, marketing, and distribution to the extent that such sales, marketing and distribution are not the responsibility of potential collaborators. Further, upon the completion of this offering, we expect to incur additional costs associated with operating as a public company. The timing and amount of our operating expenditures will depend largely on the factors set out above. For more information, see “Risk Factors—Risks Related To Our Financial Position and Need for Additional Capital.”

We believe our existing cash and cash equivalents and short-term investments, together with the anticipated net proceeds from this offering, will be sufficient to fund our operating expenses and capital expenditure requirements into 2025. 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. We expect that we will require additional funding to: continue our current research development activities; identify product candidates; initiate preclinical testing and clinical trials for our future product candidates we identify; develop, maintain, expand and protect our intellectual property portfolio; further develop our Prime Editing platform; and hire additional research, clinical and scientific personnel. If we receive regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize ourselves.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of private and public equity offerings, debt financings, additional collaborations, strategic alliances, and marketing, distribution or licensing arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, ownership interest may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, strategic alliances or marketing, or distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, any 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, we may be required to delay, reduce or eliminate 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.

Under the Broad License Agreement, we are obligated to pay to Broad Institute an annual license maintenance fee ranging from the low to mid-five figures to the low six-figures, depending on the particular calendar year for the term of the agreement. Broad Institute is also entitled to receive clinical and regulatory milestone payments up to a total of $20.0 million per licensed product, depending on the patient population to be treated by the licensed product achieving the applicable milestone. If we undergo a change of control at any time during the term of the Broad License Agreement, certain of the clinical and regulatory milestone payments will increase by a specified percentage. Broad Institute is also entitled to sales-based milestone payments up to a total of $54.0 million per licensed product, depending on the patient population to be treated by the licensed product achieving the applicable milestone. Broad Institute is entitled to lower payments to the extent the clinical and regulatory milestones or sales-based milestones are achieved by enabled products, rather than licensed products.

Broad Institute is entitled to receive mid-single digit percentage royalties on net sales of licensed products, and low single-digit percentage royalties of enabled products. Royalties payable to Broad Institute are subject to customary offsets and reductions with respect to a product in a given country, to a floor.

Under the Beam Collaboration Agreement, Beam has the option to designate up to a mid-single digit number of licensed products for which we are not permitted to exercise our profit sharing right. If Beam exercises its option for a protected product, Beam will owe us a payment of $5.0 million if the product is developed for non-sickle cell disease or $10.0 million if the product is developed for sickle cell disease.

We are entitled to receive development milestone payments from Beam on Beam’s development of protected products (which, for clarity, includes any licensed product for which we have not exercised our profit share option) and collaboration products. For protected products, we are entitled to receive up to a total of $35.5 million on a protected product-by-protected product basis based on Beam’s development of such protected product and, for collaboration products, up to a total of $17.8 million on a collaboration product-by-collaboration product basis based on Beam’s development of such collaboration product outside of the United States, in each case, with such amounts lowered if such licensed product achieves a given milestone for use in treating an orphan disease. We are also entitled to receive sales-based milestone payments from Beam based on net sales of licensed products. For protected products, we are entitled to receive up to a total of $84.5 million on a protected product-by-protected product basis based on net sales of such protected product worldwide, and, for collaboration products, up to a total of $42.3 million on a collaboration product-by-collaboration product basis based on net sales of collaboration products outside of the United States.

Beam is obligated to pay to us tiered royalties ranging from a high-single digit percentage to a low double-digit percentage, but less than teens on net sales of protected products worldwide on a protected product-by-protected product basis and net sales of collaboration products outside of the United States on a collaboration product-by-collaboration product basis. Our royalties are subject to customary offsets and reductions, to a floor that takes into account any royalties we are obligated to pay to our third-party licensors, including Broad Institute. In addition, certain of the rights licensed under the Beam Collaboration Agreement are sublicensed from third parties, and Beam agrees to reimburse us for certain payments we are required to make to our third-party licensors attributable to Beam’s exercise of any sublicense we grant to Beam, including payments we make to Broad Institute under the Broad License Agreement.

If we develop a product that is covered by the technology, know-how or patent rights that Beam licenses to us under the Beam Collaboration Agreement, which we refer to as a Prime product, we are obligated to pay to Beam a low single digit percentage royalty on our worldwide net sales of such any product on a Prime product-by-Prime product and country-by-country basis, subject to certain customary reductions, to a floor.

If we exercise our option, we agree to (i) pay Myeloid an option exercise fee consisting of $80.0 million in cash and (ii) issue Myeloid shares of our common stock, with a fair value of $30.0 million. Additionally, if the research collaboration meets its goals, we exercise our option and proceed with the development and commercialization of a product that is covered by (a) the patent rights or know-how subject to our option or (b) the patent rights or know-how developed by one or both of the parties during the research term related to LINE-1 retrotransposon technology, or, collectively, a Prime Product, Myeloid would be eligible to receive, for the first five Prime Products, development and regulatory milestone payments of up to $120.0 million on a Prime Product-by-Prime Product basis and sales-based milestone payments of up to $210.0 million on a Prime Product-by-Prime Product basis.

Myeloid is also eligible to receive tiered low to mid single-digit percentage royalties on our annual aggregate global net sales of Prime Products on a Prime Product-by-Prime Product and country-by-country basis, subject to customary offsets and reductions to a floor.

Following the exercise of our option and for a period of two years thereafter, Myeloid will have the right to select up to three targets, subject to certain exclusions, for the development and commercialization of products directed at such targets in all fields and we will be eligible to receive development, regulatory and sales-based milestone payments and royalty payments as set forth above from Myeloid with respect to such products.

In February 2021, we committed to donate $5.0 million to Broad Institute and Harvard annually for 14 years, commencing in 2021 pursuant to the Pledge. The Pledge is intended to be used for research and development related to new genome editing technologies, for example Prime Editing, improve on existing genome-editing technologies, identify delivery mechanisms for these technologies and apply these technologies to the understanding and treatment of rare genetic diseases. We can terminate the Pledge at our discretion, subject to providing one year of funding from the date of termination. In August 2022, we amended and restated the Pledge to clarify that the funds may be used by the laboratory of David Liu, who is a member of Broad Institute and a faculty member at Harvard. For additional information, see “Business—Our License and Collaboration Agreements—Pledge to Broad Institute and Harvard.”

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses incurred during the reporting periods. 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 recorded revenues and expenses that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates.

While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing at the end of this prospectus, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services in accordance with ASC 606.

At contract inception, we assessed the goods or services promised within each contract, whether each promised good or service is distinct, and determines those that are performance obligations. In assessing whether promised goods or services are distinct, we consider factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on their own and whether the required expertise is readily available. In addition, we consider whether the collaboration partner can benefit from a promise for its intended purpose without the receipt of the remaining promises, whether the value of the promise is dependent on the unsatisfied promises, whether there are other vendors that could provide the remaining promises, and whether it is separately identifiable from the remaining promises. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied.

In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under our arrangements, we performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the assessment of the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations, and (v) recognition of revenue when, or as, we satisfy each performance obligation. As part of the accounting for arrangements under ASC 606, we must use significant judgment to determine: a) the performance obligations based on the determination under step (ii) above; b) the transaction price under step (iii) above; and c) the standalone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above. We also use judgment to determine whether milestones or other variable consideration, except for royalties and sales-based milestones where such payments principally relate to a license of intellectual property, should be included in the transaction price as described below. At the end of each subsequent reporting period, we re-evaluate the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment. The transaction price is allocated to each performance obligation based on the relative standalone selling price of each performance obligation in the contract, and we recognize revenue based on those amounts when, or as, the performance obligations under the contract are satisfied. We utilize key assumptions to determine the standalone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction, probabilities of technical and regulatory success and the estimated costs. Certain variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated to each performance obligation are consistent with the amount we would expect to receive for each performance obligation.

During the year ended December 31, 2020, we recognized revenue related to the Beam Collaboration Agreement. We concluded that the Beam Collaboration Agreement and the Beam Mutual Subscription Agreement should be combined and treated as a single arrangement for accounting purposes as the agreements were entered into contemporaneously and in contemplation of one another. We determined that the combined agreements are accounted for under ASC 606 and identified the following performance obligations: (i) exclusive, worldwide license to certain Prime patents, (ii) non-exclusive, worldwide license to CRISPR technology and (iii) joint research committee participation. We also evaluated whether the Beam Option and our right to elect collaboration products in the Beam Collaboration Agreement represented material rights that would give rise to a performance obligation and concluded that neither the Beam Option nor our right to elect collaboration products convey a material right to Beam and therefore are not considered separate performance obligations within the Beam Collaboration Agreement. There

We assessed the above promises and determined that the exclusive licenses for certain Prime products and non-exclusive license to CRISPR technology represent performance obligations within the scope of ASC 606. The exclusive licenses for certain Prime products and non-exclusive license to CRISPR technology are considered functional intellectual property and distinct from other promises under the contract. The exclusive licenses for certain Prime products and non-exclusive license to CRISPR technology are considered functional licenses that are distinct in the context of the Beam Collaboration Agreement as Beam can benefit from the licenses on its own or together with other readily available resources. As the exclusive licenses for certain Prime products and non-exclusive license to CRISPR technology are delivered at the same time, they are considered one performance obligation at contract inception. The joint research committee performance promise is immaterial in the context of the contract.

We recognized revenue for the license performance obligations at a point in time, that is upon the first anniversary of the effective date when Beam elected to continue its collaboration with us. As control of these licenses was transferred on this date, Beam could begin to use and benefit from the licenses, we recognized $5.2 million of license revenue during the year ended December 31, 2020 under the Beam Collaboration Agreement. We did not recognize any revenue under the Beam Collaboration Agreement during the year ended December 31, 2021 or the six months ended June 30, 2021 or 2022.

We measure stock-based awards granted to employees, directors, and non-employees based on their fair value on the date of the grant using the Black-Scholes option-pricing model for stock options or the difference, if any, between the purchase price per share of the award and the fair value of our common stock at the date of grant for restricted stock awards. Compensation expense for those awards is recognized over the requisite service period, which is generally the vesting period of the respective award. Compensation expense for awards to non-employees with service-based vesting conditions is recognized in the same manner as if we had paid cash in exchange for the goods or services, which is generally the over the vesting period of the award. We use the straight-line method to recognize the expense of awards with service-based vesting conditions. We account for forfeitures of stock-based awards as they occur. Compensation expense for awards to employees and non-employees with performance-based vesting conditions is recognized based on the grant-date fair value over the requisite service period using the accelerated attribution method to the extent achievement of the performance condition is probable. As of each reporting date, we estimate the probability that specified performance criteria will be met and does not recognize compensation expense until it is probable that the performance-based vesting condition will be achieved.

As there has been no public market for our common stock to date, the estimated fair value of our common stock has been determined by our board of directors as of the date of grant of each option or restricted stock award, with input from management, considering our most recently available third-party valuations of common stock and our board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which

The assumptions underlying these valuations represented management’s best estimate, which involved inherent uncertainties and the application of management’s judgment. As a result, if we had used significantly different assumptions or estimates, the fair value of our common stock and our stock-based compensation expense could have been materially different.

Once a public trading market for our common stock has been established in connection with the completion of this offering, it will no longer be necessary for our board of directors to estimate the fair value of our common stock in connection with our accounting for granted stock options and other such awards we may grant, as the fair value of our common stock will be determined based on the quoted market price of our common stock.

The following table sets forth by grant date the number of shares subject to options granted or number of restricted stock granted since January 1, 2020, the per share exercise price of the options or purchase price of restricted stock, the per share fair value of common stock on each grant date, and the per share estimated fair value of the options or restricted stock:

The fair value of our common stock of $0.07 per share as of February 26, 2020 was determined by us, based, in part, on the $0.07 per share value indicated in the retrospective third-party valuation prepared as of December 31, 2019. In particular, the valuation determined our enterprise value using an OPM market-adjusted backsolve approach that was primarily based on the $1.00 price per share paid by new and existing investors in the first closing of our Series A preferred stock in September 2019 less the value of the anticipated additional Series A tranche closings, which were treated as call options for the purposes of allocating value to the various equity securities. The market adjustment applied to the equity value considered the performance of guideline public companies and the biotech indices since the most recent sale of our preferred stock through the valuation date. A DLOM of the common stock was then applied to arrive at an indication of value for our common stock.

The fair value of our common stock of $0.10 per share from July 28, 2020 to October 27, 2020 was determined by us, based, in part, on the $0.10 per share value indicated in the retrospective third-party valuation prepared as of

The fair value of our common stock of $0.35 per share from January 16, 2021 to March 4, 2021 was determined by us, based, in part, on the $0.35 per share value indicated in the retrospective third-party valuation prepared as of December 31, 2020. In particular, the retrospective valuation determined our enterprise value using an OPM market-adjusted backsolve approach that was primarily based on the $1.00 price per share paid by new and existing investors in the first and second closings of our Series A preferred stock in September 2019 and November 2020, respectively, less the value of the anticipated additional Series A tranche closings, which were treated as call options for the purposes of allocating value to the various equity securities. The market adjustment applied to the equity value considered the performance of guideline public companies and the biotech indices since the most recent sale of our preferred stock through the valuation date. A DLOM of the common stock was then applied to arrive at an indication of value for our common stock.

The fair value of our common stock of $3.67 per share on August 4 and 31, 2021 was determined by our board of directors, based, in part, on the $3.67 per share value indicated in the third-party valuation prepared as of May 31, 2021. In particular, the valuation determined our enterprise value using an OPM backsolve approach that was based on the $4.3803 price per share paid by new and existing investors in the closing of our Series B preferred stock in May 2021. A DLOM of the common stock was then applied to arrive at an indication of value for our common stock.

The fair value of our common stock of $10.54 per share on October 27, 2021 was determined by us, based, in part, on the $10.54 per share value indicated in the third-party valuation prepared as of October 27, 2021. In particular, the valuation determined our enterprise value using the hybrid method, which included a PWERM, with an IPO scenario, and a sale scenario. Our enterprise value in the IPO scenario was based on guideline IPO transactions identified within the last one to two years, which was adjusted by a risk-adjusted discount rate. The IPO scenario also assumed an estimated timeline for the IPO to occur. Our enterprise value for the sale scenario was based on an OPM market-adjusted backsolve method based on the $4.3803 price per share paid by new and existing investors in the closing of our Series B preferred stock in May 2021. The market adjustment applied to the equity value considered the performance of guideline public companies and the biotech indices since the most recent sale of our preferred stock through the valuation date. A DLOM of the common stock was then applied to arrive at an indication of value for our common stock. In addition, the board determined that the fair value of our common stock remained at $10.54 per share through December 16, 2021.

The fair value of our common stock of $10.92 per share on January 24, 2022 and February 9, 2022 was determined by our board of directors, based, in part, on the $10.92 per share value indicated in the third-party valuation prepared as of December 24, 2021. In particular, the valuation determined our enterprise value using the hybrid method, which included a PWERM, with two IPO scenarios, short-term and long-term, and a sale scenario. Our enterprise value in the IPO scenarios was based on guideline IPO transactions identified within the last one to two years, which was adjusted by a risk-adjusted discount rate. Each IPO scenario also assumed an estimated timeline for the IPO to occur. Our enterprise value for the sale scenario was based on an OPM market-adjusted backsolve method based on the $4.3803 price per share paid by new and existing investors in the closing of our Series B preferred stock in May 2021. The market adjustment applied to the equity value considered the performance of guideline public companies and the biotech indices since the most recent sale of our preferred stock through the valuation date. A DLOM of the common stock was then applied to arrive at an indication of value for our common stock.

The fair value of our common stock of $7.96 per share on June 3, 2022 was determined by our board of directors, based, in part, on the $7.96 per share value indicated in the third-party valuation prepared as of May 20, 2022. In particular, the valuation determined our enterprise value using the hybrid method, which included a

In the course of preparing for this offering, we applied the fair values of our common stock from our retrospective fair value assessments in December 2019, September and December 2020 and October 2021 to determine the fair value of each of the February 2020, July 2020, August 2020, October 2020, January 2021, February 2021, March 2021 and October 2021 awards as of the respective grant date and calculated stock-based compensation expense for accounting purposes based on applicable fair values.

In connection with this offering, we will grant options for the purchase of an aggregate of 511,500 shares of common stock contingent on, and effective immediately following, the time the registration statement of which this prospectus is a part is declared effective by the SEC, subject to each applicable recipients’ continuous service relationship with us through such date and the IPO effective date occurring no later than a certain date this year. If the IPO does not close within five business days after the IPO effective date, then the stock options will be forfeited at such time. The stock options will have a per share exercise price equal to the price to the public (or equivalent) set forth on the cover page of the final prospectus included in the registration statement, which will be the fair market value of a share of our common stock on the grant date of the stock options. The stock options will be subject to the terms and conditions of the 2022 Stock Option and Incentive Plan, and the applicable stock option agreements thereunder. Based on an assumed exercise price of $17.00 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, we estimate that the aggregate grant-date fair value of the options granted is $6.0 million, which is expected to be recognized as stock-based compensation expense over a period of 3 to 4 years.

We classify the preferred stock tranche right as a liability on our consolidated balance sheets as each preferred stock tranche right is a freestanding financial instrument that may require us to transfer assets upon the achievement of certain conditions. Each preferred stock tranche right liability was initially recorded at fair value upon the date of issuance of each preferred stock tranche right and is subsequently remeasured to fair value at each reporting date, and immediately prior to any subsequent Series A preferred stock financing. Changes in the fair value of the preferred stock tranche right liability are recognized as a component of other income (expense), net in the consolidated statement of operations and comprehensive loss. Changes in the fair value of the preferred stock tranche right liability were recognized until the preferred stock tranche right was settled in full upon the satisfaction of certain conditions in April 2021. During the year ended December 31, 2021, we recognized $74.3 million as a component of other income (expense), net related to the change in fair value of the preferred stock tranche right liability.

As of December 31, 2020, the fair value of each Series A convertible preferred stock was $0.76 per share. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining estimated time period of achievement of the specified milestones underlying the preferred stock tranche right. As of December 31, 2020, an immediate 10 percent increase in the fair value of our Series A preferred stock would have resulted in a $3.3 million increase, and in the case of a 10 percent decrease, a $3.1 million decrease to the fair value of the preferred stock tranche right liability.

The fair value of the Anti-Dilution Obligation recognized in connection with the anti-dilution provisions set forth in our license agreement with Broad Institute was determined based on significant inputs not observable in the market, which represented a Level 3 measurement within the fair value hierarchy.

The fair value of the Anti-Dilution Obligation was estimated using a probability-weighted scenario which considered as inputs the probability of occurrence of events that would trigger the issuance of shares, including a (i) the closing of Series A convertible preferred stock, (ii) our initial public offering, and (ii) no future sale of equity securities. The weighted-average fair values of all scenarios were calculated utilizing the fair value per share of the underlying Series A convertible preferred stock and common stock. Changes in the estimated fair value of our common stock and the probability of achieving different financing scenarios can have a significant impact on the fair value of the Anti-Dilution Obligation. An immediate 10 percent change in fair value of our common stock would have had an insignificant impact on the fair value of fair value of the Anti-Dilution Obligation as of December 31, 2020. The fair value of our common stock was $0.35 per share as of December 31, 2020.

The Anti-Dilution Obligation was initially recorded at fair value upon entering into the license agreement with Broad Institute and was subsequently remeasured to fair value at each reporting date. Changes in fair value of the Anti-Dilution Obligation were recognized as a component of other income (expense), net in the consolidated statements of operations and comprehensive loss. Changes in the fair value of the Anti-Dilution Obligation were recognized until the achievement of $100.0 million in cumulative equity financing was raised by us in connection with the fourth Series A preferred stock closing. As a result, the Anti-Dilution Obligation was settled during the year ended December 31, 2021. During the year ended December 31, 2021, we recognized $6.7 million as a component of other income (expense), net related to the change in fair value of the Anti-Dilution Obligation.

In connection with the audit of our financial statements for the year ended December 31, 2020 and 2019, we identified a material weakness in our internal control over financial reporting that existed as of those periods, which remains unremediated as of June 30, 2022. See “Risk Factors—We have identified a material weakness in our internal control over financial reporting. If we fail to remediate this material weakness or identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting in the future, we may not be able to accurately report our financial condition or results of operations which may adversely affect investor confidence in us and, as a result, the value of our common stock.”

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements appearing at the end of this prospectus.

The Jumpstart Our Business Startups Act of 2012 permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to

We are exposed to market risk related to changes in interest rates of our investment portfolio of cash equivalents and short-term investments. As of June 30, 2022, we held cash and cash equivalents, and short-term investments of $180.6 million, excluding restricted cash, which consisted of cash, money market funds, equity securities and U.S. Treasuries, or $194.1 million, including restricted cash. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. The fair value of our cash equivalents, comprised of our money market funds, and U.S. Treasuries are subject to change as a result of potential changes in market interest rates, including changes resulting from the impact of the COVID-19 pandemic. Due to the short-term maturities of our cash equivalents and U.S. Treasuries and the low risk profile of our investments, an immediate 10 percent change in interest rates would not have a material effect on the fair market value of our cash equivalents or U.S. Treasuries.

As of June 30, 2022, we had no debt outstanding and are therefore not exposed to interest rate risk with respect to debt.

We are a biotechnology company committed to delivering a new class of differentiated one-time curative genetic therapies, Prime Editors, to address the widest spectrum of diseases by deploying Prime Editing technology, which we believe is a versatile, precise, efficient and broad gene editing technology.

Genetic mutations implicated in disease are diverse and can range from errors of a single base, known as point mutations, to errors that extend beyond a single base, such as insertions, deletions, duplications, or combinations thereof. Other mutations can affect regulatory sequences that control the function of genes and can affect the function of larger biochemical and genetic pathways. Furthermore, natural genetic variations, revealed by population-level genomic studies, are known to protect against or to increase risk of disease. To maximize the impact of these genetic insights, we believe the ability to alter the human genome at the foundational level may confer the greatest therapeutic impact on human disease.

Gene editing, including platforms such as Prime Editing, is a novel technology that is not yet clinically validated for human therapeutic use. Over the last decade, the field of genetic medicine has evolved tremendously, with groundbreaking advances in gene therapy, cell therapy, RNA therapy, and, more recently, gene editing. These technologies represent dramatic advancements for genetic therapies, but lack the versatility to precisely and efficiently correct the diverse range of mutations or DNA alterations implicated in disease. Non-targeted gene therapy, which involves introducing a new copy of a gene into a patient’s cell, lacks the ability to target a specific, desired genetic location, resulting in the risk of random genomic integration, potentially waning durability and lack of native physiological gene regulation. Nuclease gene editing technologies, such as CRISPR, zinc finger nucleases, or ZFNs, engineered meganucleases and transcription activator-like effector nucleases, or TALENs, create a targeted double-stranded break in the DNA, and then rely on cellular mechanisms to complete the editing process, thereby limiting their use. While such approaches can be efficient in the disruption of gene expression, they lack control of the editing outcome, have low efficiency of precise gene correction, and can result in unwanted DNA modifications with potentially deleterious implications. The recent emergence of base editing technology has made it possible for more precise gene editing at the single base level without making a double-stranded break in the DNA. Despite this promise, base editing can only edit four out of the twelve types of single point mutations, cannot address errors that extend beyond those single base changes and has the potential to make certain unwanted on-target by-products known as bystander edits.

In addition, in response to the Nature publication, more than 1,500 academic laboratories requested the substances, compounds, or sequences used to carry out the laboratory experiments, or reagents, from Dr. Liu’s laboratory to replicate the experiments described in Nature and to perform Prime Editing in their laboratories, demonstrating the impact this new technology has had on the gene editing academic community. We believe that the number of requests for reagents demonstrates the excitement in the academic community about the potential of Prime Editing as most scientific publications tend to generate a much smaller number of requests for reagents.

Prime Editing technology, as developed by Dr. Liu and Dr. Anzalone, has broad theoretical potential therapeutic applications. For example, Prime Editing technology has the ability to repair diverse mutations, including all types of point mutations, deletion mutations, insertion and duplication mutations and insertion-deletion mutations. Our analysis of more than 75,000 pathological, or disease-causing, mutations found in the National Center for Biotechnology Information ClinVar Database shows that those addressable by Prime Editing technology account for

Prime Editors also have the ability to create permanent modifications at their natural genomic location, resulting in durable edits that are passed on to daughter cells, and retain their native physiological control. Our next generation gene editing technology is capable of a wide variety of precise, predictable and efficient genetic outcomes at the targeted sequence, while minimizing unwanted bystander edits and off-target edits and avoiding double-stranded DNA breaks. Our Prime Editors are designed to make only the right edit at the right position within a gene.

If nuclease gene editing approaches are “scissors” for the genome, and base editors are “pencils,” erasing and rewriting a subset of single letters in the gene, then Prime Editing is a “word processor,” searching for the correct location and replacing or repairing a wide variety of target DNA.

Our novel Prime Editors have two main components that act together to edit DNA: (i) a Prime Editor protein, comprising a fusion between a Cas protein and a reverse transcriptase enzyme, and (ii) a pegRNA, that targets the Prime Editor to a specific genomic location and provides a template for making the desired edit to the target DNA sequence. Prime Editing leverages the established DNA-targeting capabilities of CRISPR-Cas proteins modified to nick, but not cause double-stranded DNA breaks, and combines these with the DNA synthesis capabilities of reverse transcriptase enzymes, which have been engineered to efficiently and precisely copy a pegRNA-encoded edited sequence into target DNA. This proprietary combination enables the precise and targeted editing of any single base pair of DNA to any other desired base pair, the precise insertion or deletion of DNA, and combinations of these edits, which has not been previously possible.

To maximize the potential of our Prime Editing technology to provide one-time curative genetic therapies to the broadest set of diseases possible, we have purposefully built a diversified portfolio organized around four strategic indication categories, each set of indications chosen to deliver a different strategic goal:

We believe our Prime Editing programs are well-positioned to leverage the clinical, regulatory, and manufacturing advancements made to date across gene therapy, gene editing, and delivery modalities to accelerate progression to clinical trials and potential approval. To unlock the full potential of our Prime Editing technology

We have constructed our portfolio of 18 therapeutic programs, including one partnered program, across our first two strategic indication categories in disease settings where the unique characteristics of Prime Editing could offer compelling advantages over current standard-of-care and novel therapeutic modalities in development.

Our current portfolio includes the following 18 programs:

In addition, we are continuing to optimize non-viral and viral systems for delivery and are demonstrating meaningful delivery of our Prime Editors to various target tissues in animal models; to demonstrate a superior “off

We began operations at Prime Medicine in the summer of 2020, after being co-founded by a world-renowned leader in the field of gene editing, David Liu, Ph.D. Dr. Liu was joined as co-founder by Andrew Anzalone, M.D., Ph.D., who conceived of and developed Prime Editing along with Dr. Liu and others. Dr. Anzalone joined Prime Medicine as Head of Platform Development with years of experience in Prime Editing. This has helped us to rapidly and effectively extend our Prime Editing technology beyond the academic research laboratory and into the company for drug discovery and development.

Drawn by the promise of Prime Editing’s ability to transform the field of gene editing, we have assembled a diverse team that has grown to more than 150 as of September 30, 2022. Our research and development team is comprised of experts in gene editing and Prime Editing, computational biology, automation, data sciences, off-target biology, structural biology, RNA chemistry, protein engineering and molecular evolution, genetics, pharmacology, translational medicine and the manufacturing and delivery of genetic medicines.

Our team has extensive industry experience in research and development, manufacturing and company building. Keith Gottesdiener, M.D., is our President and Chief Executive Officer and is an experienced executive and company builder with more than 26 years developing new vaccines and medicines, preceded by a 13 year career in academic medicine. Jeremy Duffield, M.D., Ph.D., our Chief Scientific Officer, is a physician scientist executive with over nine years of drug discovery experience in human genetics, innate immunity and regenerative medicine, business development and external innovation, preceded by a 20 year career in academic medicine.

Ann Lee, Ph.D., our Chief Technical Officer, is an accomplished leader with more than three decades of experience in manufacturing and technology innovation, where she contributed to the commercialization of 25 new vaccines and medicines across multiple modalities and has experience building global organizations. Meredith Goldwasser, Sc.D., SVP, Strategy and Corporate Operations, has over 18 years of experience developing new drugs in the biopharmaceutical industry, where she worked across all phases of development and in various leadership roles, including in project leadership, business development and company building. Karen Brown, Ph.D., J.D., is SVP of Intellectual Property and Legal Affairs, with more than 20 years of legal experience and leadership in the biopharmaceutical industry guiding global intellectual property strategy, negotiating complex partnership and collaboration agreements, and overseeing corporate legal matters. Carman Alenson, C.P.A., our interim Chief Financial Officer and Chief Accounting Officer, has more than 32 years of experience in corporate accounting and finance, with more than 17 in the life sciences industry. Richard Brudnick, our Chief Business Officer, has over 15 years of experience in the pharmaceutical industry, where he helped lead successful business development transactions across multiple stages of development and therapeutic areas. Niamh Alix, our Chief Human Resources Officer, has nearly 20 years of experience helping to grow teams from small, early-stage organizations to global enterprises in the life sciences industry. Fubao Wang, Ph.D., SVP, Head of Regulatory, has over 24 years of experience in the biopharmaceutical industry, leading product development of genomic medicine products and regulatory strategies and execution for both clinical and commercial-stage products.

We believe that our team’s considerable research and drug development expertise, together with our exclusive and non-exclusive licenses and intellectual property, as well as our depth of expertise in Prime Editing, has positioned us at the forefront of the field of advanced precision genetic medicines.

We benefit from a close working relationship with Dr. Liu. In addition to being a co-founder, Dr. Liu is the chair of our Scientific Advisory Board and a Board observer, meets regularly with Company representatives, and provides consulting services to us pursuant to a consulting agreement, or the Liu Consulting Agreement, related to any and all gene editing and related technology for any and all human or prophylactic uses.

Pursuant to the Liu Consulting Agreement, for the term of the Liu Consulting Agreement and six months thereafter, Dr. Liu cannot directly provide material services to any third party in the field of gene editing for therapeutics or become an owner, partner, shareholder, consultant, agent, employee or co-venturer of any third party that has committed, or intends to commit, significant resources to that field, with certain exceptions, including a previous commitment with respect to Beam Therapeutics Inc., or Beam. Dr. Liu’s preexisting commitment to Beam could result in, or may create the appearance of a conflict of interest.

We have also licensed certain improvements to Prime Editing from Dr. Liu’s laboratory at Broad Institute and Dr. Liu has entered into an agreement with us pursuant to which he is obligated to assign to us any inventions with respect to the services he performs for us. However, such obligations are subject to limitations and do not extend to his work in other fields or to the intellectual property arising from his employment with Harvard, HHMI and Broad Institute. To obtain such intellectual property rights, we would need to enter into license agreements with such institutions, including negotiations under the Broad Option Agreement, which may expire in November 2022, and such license agreements may not be available on commercially reasonable terms or at all. For more information, see the risk factors entitled “The gene editing field is relatively new and is evolving rapidly. We are focusing our research and development efforts on gene editing using Prime Editing technology, but other gene editing technologies may be discovered that provide significant advantages over Prime Editing, which could materially harm our business” and “Our rights to develop and commercialize our Prime Editing platform technology and product candidates are subject to the terms and conditions of licenses granted to us by others. If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.”

Dr. Liu is a member of the faculty of Harvard and Broad Institute and the Pledge funds may be used by Dr. Liu’s laboratory, consistent with the purpose of the Pledge. For more information, see “Business—Our License and Collaboration Agreements—Pledge to Broad Institute and Harvard.”

In December 2021, we formally assembled our Scientific Advisory Board, a group of prominent and highly accomplished scientists who are leaders in the field of genetic therapies to help us advance the technology and the pipeline. We are continuing to develop rules and procedures for our Scientific Advisory Board.

Focal points include: off-target genome biology, nucleic acid drugs, Prime Editing platform technology, Prime Editing delivery to target tissues and disease indications. The Scientific Advisory Board comprises of the following individuals:

Our goal is to transform the lives of patients with debilitating diseases through the application of our ground-breaking Prime Editing platform and technology. Our key focus is on patients. We are committed to developing safe and efficient therapeutics using Prime Editing approaches to address high unmet need across a broad spectrum of diseases, from rare genetic diseases to severe, chronic and acute diseases, and ultimately to prevent disease before it occurs. Key components of our strategy are as follows:

We are developing Prime Editors as a potentially new class of therapeutics with transformative potential to expand the application of curative precision genetic medicines to the broadest spectrum of diseases.

Genetic mutations implicated in disease are diverse and can range from errors of a single base, known as point mutations, to errors that extend beyond a single base, such as insertions, deletions, duplications, or combinations thereof. Other mutations can affect regulatory sequences that control the function of genes and can affect the function of larger biochemical and genetic pathways. Furthermore, natural genetic variations, revealed by population-level genomic studies, are known to protect against or to increase risk of disease. To maximize the impact of these genetic insights, we believe the ability to alter the human genome at the foundational level in a versatile, precise, efficient and broad manner may confer the greatest therapeutic impact on human disease.

Despite this progress, there remain considerable limitations to current genetic medicine approaches that impede their ability to truly deliver on the promise of a curative, one-time therapy to the broadest set of patients. While each gene editing technology differs, the barriers that prohibit one or more of the existing technologies from addressing genetic diseases widely include:

Due to these limitations, we believe that it is critical that new approaches be developed that can edit genes across most therapeutically relevant mutations, precisely at the edited site with minimal off-target, or unwanted, activity elsewhere in the genome, in clinically relevant organs, and at the physiological location to keep an edited gene under native gene control.

We believe our in-licensed and company-owned Prime Editing technology has the potential to address approximately 90 percent of known disease-causing mutations. By overcoming challenges associated with current methods in gene therapy and gene editing, we believe Prime Editing technology has the potential to provide life-long cures after a single treatment. Furthermore, we believe Prime Editing could accelerate progression of product candidates into clinical trials by leveraging the clinical, regulatory, and manufacturing advancements made to date in the field of genetic medicine.

Non-targeted gene therapy includes using viral vectors, such as Adeno-Associated Virus, or AAV, or retroviruses such as lentiviruses, to deliver new copies of genes, or transgenes, to cells. It also includes the broad field of mobile gene elements, such as retrotransposons and transposons. These approaches generally do not correct genes but insert new whole genes into cells in a non-targeted manner.

While having some important benefits, non-targeted gene therapy approaches can have many of the following key limitations:

First generation gene editing methods rely on a class of enzymes called nucleases, such as CRISPR, ZFNs, engineered meganucleases and TALENs, to create double-stranded breaks in DNA at a targeted location. The DNA can then be repaired by one of two naturally occurring DNA repair pathways: (1) non-homologous end joining, or NHEJ, which patches the broken ends of the chromosomes back together but can randomly insert indels, or unwanted insertions and deletions; or (2) homologous directed repair, or HDR, which can more precisely replace DNA at the target cut site with the delivery of a template of corrected DNA. However, given NHEJ is typically the dominant repair pathway in cells and due to the low efficiency of repair and complexity associated with HDR, most nuclease-based editing programs in the clinic have focused on an NHEJ-directed knock out approach to alter or silence gene expression.

Nuclease based gene editing approaches can have the following key limitations:

Base editing is an emerging gene editing technology that harnesses CRISPR-Cas9 to deliver a deaminase to a target DNA site, which can edit a single base efficiently. Base editing avoids double-stranded breaks and the deleterious effects associated with first generation nuclease editing.

Base editing can have the following key limitations:

In addition, in response to the Nature publication, more than 1,500 academic laboratories requested the reagents, from Dr. Liu’s laboratory to replicate the experiments described in Nature and to perform Prime Editing in their laboratories, demonstrating the impact this new technology has had on the gene editing academic community. We believe that the number of requests for reagents demonstrates the excitement in the academic community about the potential of Prime Editing as most scientific publications tend to generate a much smaller number of requests for reagents.

Prime Editors are designed to produce edits across many organisms, organs and types of cells and to work broadly across most types of gene mutations at the natural genomic location, while minimizing unwanted DNA modifications. This approach uses a process designed to produce a wide variety of precise, predictable and efficient genetic outcomes at the targeted sequence, which we believe will dramatically increase the impact of gene editing for a broad range of therapeutic applications.

If nuclease gene editing approaches are “scissors” for the genome, and base editors are “pencils,” erasing and rewriting a subset of single letters in the gene, then Prime Editing is a “word processor,” searching for the correct location and replacing or repairing a wide variety of target DNA.

The below image illustrates the potential of Prime Editing relative to some of the current genetic medicine approaches, using the example of correcting misspellings in a sentence from the Preamble to the U.S. Constitution. In this example, where the sentence represents a target of genetic code, gene therapy is unable to make a precise correction of the misspellings and instead inserts a new corrected sentence either randomly into the paragraph or outside of the paragraph (which is not shown below). In most cases, nuclease editing inserts or deletes letters (indels) within the existing sentence, which results in a sentence that has completely lost its initial meaning. Base editing enables the precise correction of specific letters within the existing sentence, but can only make specific changes like a G to an A, but cannot correct a C to an A. We believe Prime Editing allows for a much broader scope of corrections to the sentence, by either correcting all the misspellings or even modifying the meaning of the sentence by inserting and deleting whole words or groups of words.

The below table describes features of different gene therapy and gene editing methodologies, including Prime Editing, based on our assessment of publicly available data and our own data. It does not represent the results of head-to-head comparison studies and is not intended to represent superiority of any one methodology over any other in any of the displayed categories.

This table is based on our assessment of publicly available data, including representative citations listed below, as well as our own data. For Prime Editing references, see: Anzalone, et al. Genome editing with CRISPR–Cas nucleases, base editors, transposases and prime editors. Nat Biotechnol 38, 824–844 (2020); and Anzalone, A.V. et al, Programmable deletion, replacement, integration and inversion of large DNA sequences with twin prime editing. Nat Biotechnol (2021). For Non-Targeted Gene Delivery, see: Bulcha, J.T. at al, Viral vector platforms within the gene therapy landscape. Sig Transduct Target Ther 6, 53 (2021); and Tipanee, J. et al, Transposons: moving forward from preclinical studies to clinical trials. Hum Gene Ther 28, 1087-1104 (2017). For Nuclease-Based Gene Editing, see: Anzalone, A.V., et al, Nat Biotechnol Ibid (2020); Cox, D. et al, Therapeutic genome editing: prospects and

We believe Prime Editing is a versatile, precise, efficient and broad gene editing technology with the following key advantages:

Our novel Prime Editors have two main components that are designed to act together to edit DNA: (i) a Prime Editor protein, comprising a fusion between a Cas protein and a reverse transcriptase enzyme, and (ii) a pegRNA, that targets the Prime Editor to a specific genomic location and provides a template for making the desired edit to the target DNA sequence. Prime Editing leverages the established DNA-targeting capabilities of CRISPR-Cas proteins, which have been modified so that they do not cause double-stranded DNA breaks, and combines these with the DNA synthesis capabilities of reverse transcriptase enzymes, which have been engineered to efficiently and precisely copy a pegRNA-encoded edited sequence into target DNA. This proprietary combination enables the precise and targeted editing of any single base pair of DNA to any other desired base pair, the precise insertion or deletion of DNA, and combinations of these edits, all of which have not been previously possible with current gene editing technologies.

Our Prime Editor proteins contain two protein domains. The first domain is a programmable DNA binding domain, often a CRISPR-Cas domain, or Cas domain. Cas proteins enable targeting of specific DNA sequences, and they have been adapted and engineered to target desired genomic locations in human cells with high specificity, yet modified such that they do not cause a double-stranded break in the DNA. Our Prime Editors most often use Cas9 proteins, though other Cas proteins can also be used to target DNA and we have ongoing efforts to expand our selection of Cas proteins.

The second protein domain of Prime Editors is a reverse transcriptase enzyme domain, or RT, domain. Reverse transcriptases are DNA polymerase enzymes that write new DNA sequences by copying from an RNA template, provided by the pegRNA. In Prime Editing, the RT copies the edited DNA sequence directly into the target genomic site where the edit is made.

The other main component in Prime Editing is the pegRNA. The pegRNA contains a search sequence, also known as a spacer, which provides a target genomic address for the Prime Editor. This enables the Prime Editor to specifically target a desired gene sequence. The pegRNA also contains a second sequence unique to Prime Editing, a replace sequence, or edit template, which provides a blueprint for the edit that will be made to the target DNA sequence.

As shown in the second panel in the figure below, our Prime Editor and the pegRNA locate the DNA target site using the pegRNA’s search sequence. When the correct DNA target is found (referred to as “edit check 1,” as described below), the Prime Editor’s Cas domain cleaves, or nicks, one of the two DNA strands, creating a single-stranded 3’ flap. The other DNA strand remains intact and is not cleaved by the Prime Editor, thus avoiding the formation of double-stranded DNA breaks. Next, the 3’ flap binds to a region of the replace sequence in the pegRNA (“edit check 2”) and “primes” the DNA synthesis, which is shown in the third panel below. The Prime Editor’s reverse transcriptase, or RT, domain copies the pegRNA’s replace sequence, directly writing the corrected DNA sequence into the gene, as shown in the fourth panel. After the corrected sequence is fully copied, cellular DNA repair preferentially incorporates the corrective 3’ flap (“edit check 3”) while removing the excess original DNA sequence. The complementary DNA strand is also corrected, using the Prime-Edited DNA strand as a template. Incorporation of the correction into the complementary DNA strand can be made more efficient by adding a nicking guide RNA, or ngRNA, where the Prime Editor also transiently nicks the complementary strand. The overall result is a target gene sequence that is corrected on both strands of DNA.

A key feature of Prime Editing is that it is fully programmable, meaning that both (1) the location in the genome and the edit can be chosen specifically, and (2) the location targeted and the edit directed, can both be changed easily, based on simple design rules. By changing the search sequence of a pegRNA, we can quickly and precisely program our Prime Editors to different genomic locations based on their gene sequences. By changing the replace sequence of a pegRNA, we can control which edit is made. Therefore, to make a different correction edit in a new location in the genome, we can readily reprogram the Prime Editor to specifically target a new DNA sequence and to make the precise edit that is required, simply by changing the pegRNA sequence. Most often this will be performed by swapping out one pegRNA and replacing it with another, keeping other parts of the Prime Editor unchanged.

We believe Prime Editing’s unique and differentiated mechanism makes it an extremely versatile, precise, efficient and broad gene editing technology. We believe these features, along with its programmable nature, allow

We believe Prime Editing can make diverse sequence edits at nearly any desired location in the human genome, enabling multiple therapeutic applications. Prime Editors are able to change any base pair to any other base pair to correct all twelve types of single base pair point mutations, delete DNA sequences to correct insertion mutations, or insert DNA sequences to correct deletion mutations. We can also make combinations of these types of edits with the same Prime Editor. Notably, Prime Editors also have the ability to make direct corrections of DNA, alter the regulatory regions of genes, insert or create premature stop codons, and modify splicing sequences, differentiating the Prime Editing approach to addressing genetic disease.

For example, Prime Editing can be used to convert an A to either a C, G or T, to change a C to an A, G or T, to convert a G to an A, C or T, or to change a T to an A, C or G, as shown in the figure below, left. Prime Editing can also make larger insertions or deletions, such as the precise 18-base insertion or 80-base deletion shown in the figure below, right. By combining Prime Editors with proprietary recombinase technology, kilobase amounts of genomic DNA can be inserted, deleted, or inverted. All of these changes can be made with highly efficient and potentially therapeutically relevant levels of precise gene correction, which we believe are generally unachievable by other gene editing approaches.

Specifically, we believe that Prime Editing could be extended to additional therapeutic applications, including gene correction, gene modification, gene silencing and activation, multiplex editing, and hotspot editing. While we anticipate pursuing many of these applications as future programs, our current programs do not yet address all of these applications.

Prime Editing is designed to make only the right edit at the right position within a gene, which greatly minimizes on-target by-products at the site of editing, and results in low, or minimal off-target editing in other places in the genome. Importantly, our Prime Editors do not create double-stranded DNA breaks, which supports the precision of our technology. Prime Editing requires three “edit checks” or places where there must be a match between the editor and the target DNA in order to complete an edit. We believe that these “edit checks” also lead to highly specific and precise edits, as described above for our mechanism.

Prime Editing is precise in making corrections and edits at the target site in the genome. For example, as shown in the top panel of the graphic below, a specific pegRNA can be designed to edit only the first intended G to an A, and the bases before and after the target G are not edited, even if neighboring G bases are present. In the bottom panel, a different, specific pegRNA can be designed to edit only the second G to an A, again without affecting neighboring bases. With precise editing at the target site, Prime Editing minimizes bystander edits to nearby base sequences. Using the same graphic below, we see that only the intended G is edited, and the nearby G is not edited. This precision contrasts with base editing where it is challenging to selectively edit a single base pair when additional, similar target bases are present in the target window, such as GG in the graphic below, thus leading to bystander edits.

We have demonstrated that, following Prime Editing, more than 99 percent of the time, either a precise edit occurs in a cell or the uncorrected target DNA sequences remain unmodified and fully intact without production of unwanted by-products. Therefore, much of our approach to the optimization of Prime Editing at a target site is focused on increasing the relative percentage of edited cells to unedited, intact cells. We identify that information with “percent precise edits” on our graphs. In addition, we can also readily assess and optimize our choices, by screening and optimizing many pegRNA sequences, to reduce both on-target and off-target edits.

Prime Editing shows low to no evidence of off-target editing at other locations in the genome. As mentioned above, we believe this is also due to the lack of double- stranded breaks in DNA, as well as our three “edit checks” that are integral parts of our editing mechanism.

An example of the potential for off-target activity is shown in the figure below, which compares Prime Editing to CRISPR-Cas9 editing in a head-to-head comparison. In this figure, the top panel reports percent of off-target editing (from 0 to 100 percent of cells) by CRISPR-Cas9 nuclease editing, and the bottom panel by Prime Editing. The experiment involved four well-known genes that were selected for gene editing (labeled at the bottom of the figure). A single location was edited in each of these genes. For each edit, four different pegRNAs were designed, along with a matched single guide, or sgRNA, for CRISPR-Cas9. CRISPR-Cas9 makes unwanted edits at well-characterized sites elsewhere in the genome, known as “off-target sites.” For each gene that was edited, there are four off-target sites (#1, #2, #3, #4) where off-target gene editing activity was quantified. The sites are well-established sentinel sites, or sites where off-target editing has been demonstrated previously with CRISPR-Cas9 nuclease editing in preclinical studies. The graphic shows the expected, and in some cases quite extensive, resulting off-target edits caused by CRISPR-Cas9. In contrast, the results from Prime Editing using identical conditions generally was very low, minimal or at undetectable levels at all genes and sites. The only exception was off-target site #3 of the HEK4 gene locus, where Prime Editing resulted in some off-target edits. However, as described below, we believe Prime Editing has the ability to optimize guides and other parameters to improve editing. As is shown for pegRNA#1 at the same site and gene, an “optimized” pegRNA was selected with markedly less off target activity.

The actual significance of off-target editing activity is not fully understood, but we believe that the less it occurs, the more likely this will result in a long-term safety advantage to patients. Recent publications have shown that CRISPR-Cas9 editing can be optimized for limited off-target activity, but the ability to do that widely across programs is not clear. We believe that markedly lower levels of off-target activity, along with the greater opportunity to optimize pegRNAs to attain even lower levels, is a major advantage of the Prime Editing technology.

Our off-target validation approaches are described in more detail in Specificity in Prime Editing: On-and-off target unwanted edits below, where we also describe our unbiased genome-wide analysis of off-target editing for our chronic granulomatous disease program. As of the date of this prospectus, no off-target editing has been identified in this program. See "—Specificity in Prime Editing: On-and-off target unwanted edits."

Unlike first-generation nuclease-based technologies, Prime Editors do not generate double-stranded DNA breaks. Emerging literature supports that double-stranded DNA breaks can result in many disadvantages, including:

As shown below in a preclinical experiment, cell viability was observed to be similar with or without Prime Editing, which we believe means that Prime Editing does not affect cell viability.

In conclusion, Prime Editing is highly precise and specific, and we believe that these advantageous features of Prime Editing will potentially contribute to better patient outcomes and improved overall safety.

We believe that with a single treatment, Prime Editing could create permanent, positive corrections of disease- causing mutations, resulting in restoration of the gene back to its wild-type healthy sequence. A corrected gene would persist in an edited cell, working naturally and being passed along to daughter cells, resulting in a potentially durable cure or therapeutic outcome. Unlike some other gene editing approaches, Prime Editing occurs in situ, or at the site in a gene where they naturally occur, which preserves a normal number of copies of the gene in the cell, allows for normal physiology, or activity, and gene regulation, normal splice variants and proteins isoforms. All of these benefits have the potential for optimal gene regulation, which we believe could result in long-lasting benefits to patients.

Although Prime Editing is a developing technology and is not yet validated in clinical studies, it has been validated in extensive preclinical testing, both by our company and in over 50 papers published in primary scientific literature to date. Our Prime Editors have demonstrated in preclinical studies the ability to repair mutations with comparable or superior editing efficiency relative to nuclease-based approaches such as Cas9- initiated homology-directed-repair. Continued modifications and optimization aims to further increase the editing efficiency of Prime Editors.

Prime Editing is a compelling approach for a wide range of therapeutic applications at the genomic level, and can make precise, targeted edits in an array of cell types, tissues and organs. We believe this breadth in applications and ability to target multiple cell types will enable Prime Editing to bring potentially curative gene editing approaches to a broader set of diseases, beyond genetic disease and towards severe, chronic, and acute diseases.

Over the last two years since Prime Editing was first described, an increase in efficiency as well as an expansion in the scope of applications have been demonstrated and reported in multiple publications and abstracts as well as contributions from our team. The figure below summarizes some of these key advances. The versatile nature of Prime Editing allows for the selection of the right tools for a specific gene edit from up to ten thousand potential

An important element of our capability is leveraging high-throughput screening and machine learning, coupled with automation of workflow, to build a data-driven model for designing optimized Prime Editing systems that can potentially accelerate our therapeutic candidate development and enhance efficiency. We have also optimized individual subcomponents of our Prime Editors to enhance their capability beyond the first generation of Prime Editors. Some notable developments include engineered pegRNAs and DNA mismatch repair modulation to further enhance efficiency of our Prime Editors where appropriate and expanding the array of gene edits by incorporating recent innovations in Prime Editing, including dual-flap Prime Editing and targeted integration, deletion and inversion of gene-sized DNA, all of which are highlighted in the figure above.

We believe that we have built a leading position in Prime Editing by consolidating technology and intellectual property in the field as well as by establishing extensive internal capabilities to deliver on the promise of this next generation gene editing technology. It is our belief that performing Prime Editing with high efficiency and precision, unlocking its broad applications in different genetic settings, and rapidly progressing towards clinical therapeutics requires great skill, know-how, and knowledge of the intricacies of Prime Editing. We think this expertise differentiates us from the other gene editing platforms, and could allow us to rapidly and efficiently deliver on the promise of Prime Editing.

We are building a high-throughput automated screening engine to rapidly test up to thousands of pegRNAs and hundreds of ngRNAs, for every target edit of interest. Because pegRNA and ngRNA sequences can be chosen from a very large number of possible sequence designs, and since the choice of these designs can meaningfully influence Prime Editing efficiency, identifying the best performing molecules requires both expertise in pegRNA and ngRNA design as well as high- throughput screening capabilities for testing their activities. The figure below depicts the current screening and know-how acquisition engine, which continues to evolve. This process enables identification of optimized Prime Editing systems for a desired target edit, and it provides data that can be used to develop proprietary machine learning algorithms for pegRNA and ngRNA activity prediction, as described below.

PegRNAs contain multiple sequence elements that can be optimized in isolation or together to improve Prime Editing efficiency and specificity. For each target edit, there may be as many as tens of search sequence options, and for each of those, there exist tens to hundreds of possible replace sequences, tens of possible 3’ RNA motifs, and tens of additional options for varying other sequence elements. As a result, the combinatorial design space for pegRNAs that target a particular mutation could reach the tens of thousands. One arm of our approach to improving pegRNA design is to assemble our large collection of data derived from our high-throughput screening platform, then use those data to train machine learning algorithms that can accurately predict highly active pegRNA molecules. This algorithm, known as PEGASUS™, allows us to more quickly screen and identify highly active pegRNAs in silico starting from a vast sequence space containing tens of thousands of pegRNA designs. PEGASUS has already achieved a 76% reduction in testing of pegRNA during screening, and efforts to achieve further improvement are ongoing. This capability is greatly enhancing our ability to efficiently and rapidly identify pegRNA sequences with the highest activity and specificity.

We have developed several generalizable proprietary enhancements to our first-generation Prime Editor proteins, that on average have provided more than double the level of activity. We have developed a curated database of more than 30,000 reverse transcriptases, or RTs, which we have screened to identify novel and differentiated Prime Editing ability. The figure below shows 80 novel RTs that efficiently perform Prime Editing in conjunction with a pegRNA and Cas domain. Many of these have properties that differentiate from Moloney Murine Leukemia Virus, or MMLV-RT, and are as small as one-third the size of the MMLV-RT used in our first generation

Professor David Liu’s laboratory at Broad Institute recently developed epegRNAs that can improve Prime Editing efficiency by 3-fold or more in multiple human cell types, an enhancement that is now being incorporated into our research activities. In addition to the elements found in standard pegRNAs, epegRNAs have an extra element called a 3’ RNA motif. We believe that 3’ RNA motifs stabilize the replace sequence of pegRNA in cells, extending the duration of Prime Editing, and thereby leading to higher editing efficiency. Multiple classes and sequences of 3’ RNA motifs can be used in epegRNAs, and therefore represent another lever that we can apply to optimize Prime Editing efficiency. We have exclusively in-licensed and adopted the use of these epegRNAs and are actively developing our own classes of epegRNAs to enhance Prime Editing.

We have developed several other generalizable proprietary enhancements to our first-generation Prime Editing systems through optimization of our Prime Editor pegRNAs. By using powerful RNA engineering methods, we have established different generalized optimizations that can be applied to pegRNAs to improve their activity. As shown

We believe combining these enhancements and others will enable us to build next-generation Prime Editors that are optimized for efficiency, breadth, precision, and therapeutic delivery. We outline what we believe to be other, important additional improvements below.

We have in-licensed certain dual-flap Prime Editing technology developed by David Liu’s laboratory at Broad Institute, and expanded and improved on its uses. Compared to traditional Prime Editing, dual-flap Prime Editing uses two Prime Editors instead of one. In different places, each of the Prime Editors creates a nick in the DNA and creates a flap; the two flaps are designed to bind tightly to each other. This results in the looping out of the DNA between the Prime Editors, with replacement of new DNA. Dual-flap Prime Editing is designed to achieve efficient editing of a broader range of edit types, including the precise replacement or insertion of DNA sequences that are a hundred bases or more in length with potentially higher efficiency than standard Prime Editing. In addition, dual-flap Prime Editing can precisely delete up to thousands of bases of DNA, as shown in the data for repeat expansion diseases (see below in Portfolio section). In addition to its high efficiency, it achieves the same level of precision, and we believe it results in minimal off-target editing, as shown in preclinical studies, similar to the more standard forms of Prime Editing.

As illustrated in the figure below, dual-flap Prime Editing could be used to delete expanded repeat sequences like those that occur in repeat expansion diseases, to replace mutation hotspots with corrected sequences, or to insert sequences at safe harbor or other locations in the genome. The figure below depicts examples that use dual-flap Prime Editing to: replace a 64-base mutation hotspot in the gene that causes the metabolic disorder, Phenylketonuria, delete approximately 3,000 bases, or insert 38 bases at a targeted location in the genome.

We are excited about newly developed technology that allows us to expand our gene editing toolbox to include programmable insertion, deletion, or inversion of thousands of bases of DNA. This technology combines the programmability of Prime Editing with another class of genome editing tools called site-specific recombinase enzymes, or SSRs, also known as integrases. Although SSRs have long been used as biology research tools to insert large pieces of DNA into the genome, to perform large inversions of DNA, or to make large deletions of DNA, their use in therapeutic applications has been limited by the extremely challenging task of engineering SSRs to be programmable, or to target specific sequences, such as a desired DNA sequence in a gene or genome. While dual-flap can loop out very large pieces of DNA, up to many kilobases in size, currently it can only precisely insert a much smaller number of base pairs of DNA, approximately one hundred base pairs as of today. Therefore, in circumstances where a larger modification is required, this programmable technique is designed to insert or invert multi-kilobase-sized pieces of DNA. In addition, similar to dual-flap, this technique can also delete similarly large pieces of DNA.

Our technology leverages the programmability of Prime Editing to insert recombinase recognition sequences at precisely chosen targeted locations in the genome, as shown in the figure above. Then, an SSR, either fused to the Prime Editor, or transiently delivered as a separate enzyme into target cells, locates the recognition sequence or sequences and carries out DNA recombination at those recognition sequences, resulting in the desired large DNA

As shown in the figure below, Prime Editing can insert a recombinase recognition sequence at a targeted location in the genome, which can then be used by an SSR to insert DNA that contains a therapeutic gene, potentially such as a chimeric antigen receptor, or CAR. Using multiplex Prime Editing, two recombinase recognition sequences can be inserted so that SSRs can insert, replace, delete, or invert the intervening DNA sequences. We call this Prime Editing enhancement PASSIGE™ (Prime Assisted Site-Specific Integrase Gene Editing). Together, these editing capabilities enable therapeutic opportunities to potentially treat genetic variants that are caused by changes to large sequences of DNA sequences, and methods to engineer cell therapies to treat disease.

As shown in the figure below, short recombinase recognition sequences known as attB and attP, used by the site specific recombinase known as Bxb1, were inserted in introns flanking a 40 kilobase inversion mutation in the IDS gene that causes a serious childhood multisystem disorder, called Hunter syndrome. In this early proof-of-concept

Multiple enhancements to our Prime Editing platform, including engineered pegRNAs, enhanced Prime Editors, and DNA mismatch repair modulation, provide us with a versatile toolbox for applying Prime Editing to a wide range of diseases. In addition, our focus on high-throughput screening and machine learning are allowing us to grow our internal technical expertise for Prime Editing optimization, and are being used to develop Prime Editors that are both more efficient and more precise. Finally, we are broadening the types of edits that we can make by incorporating recent innovations in Prime Editing, including dual-flap Prime Editing, and programmable insertion, deletion, and inversion of gene-sized DNA sequence.

We believe these delivery technologies are foundational to successfully bringing our pipeline programs to the clinic and we are actively building capabilities and investing in development and optimization of the delivery technologies to accelerate our pipeline progress. Moreover, we also continue to evaluate and leverage the many

Our multi-pronged delivery strategy to enable our portfolio includes the following:

Overall, these preliminary experiments with two key delivery technologies planned for our clinical programs, demonstrate Prime Medicine’s expanding capabilities for delivery of our Prime Editors.

A key element of evaluating safety in gene-editing relates to the specificity of the edits: is the edit precise at the targeted site, and/or are there off-target edits, or unwanted edits, at more distant locations in the genome, that are the result of gene editing? In particular, the ability to demonstrate the absence of low, even minimal, levels of off-target editing is a major differentiator for Prime Editing compared to most other gene editing technologies, and we believe may result in a more benign safety profile for Prime Editing.

A robust and unbiased evaluation of all potential off-target activities is a critical element of our efforts. Our approach to minimizing off-target editing is to start by screening for Prime Editor candidates with very low off-target activity. We then use comprehensive, sensitive, and state-of-the-art methods to identify all putative off-target sites by identifying places where a Prime Editor has a possibility (no matter how small) to nick the DNA. We are developing multiple, complementary, but distinct, methods to measure such possible events. Our approach includes evaluation, among other methods, of: (a) off-target activity in the genome that is specific to the sequence of a particular pegRNA or the ngRNA; (b) similar activity that is independent of the pegRNA or ngRNA sequences; and (c) genomic rearrangements.

To establish a preliminary set of potential off-target sites, we initially evaluate our promising pegRNAs with computer algorithms that identify other sites in the genome with some degree of sequence similarity. In parallel, we identify a comprehensive set of putative sites where the Prime Editor could nick the DNA, as determined by several experiments performed in cell-free conditions with DNA. Combining these sets of sites, we then evaluate each of those locations extensively using sequencing methods to identify the potential for very low frequency off-target edits and perform the evaluation in cells that are relevant to the disease for which the Prime Editor is intended. From these parallel methods, there may be up to thousands of potential sites evaluated for off-target activity for each potential Prime Editor and we are able to quantify the absence or presence of Prime Editing at these sites.

As an example from our chronic granulomatous disease program, we have performed preliminary evaluation of a Prime Editor from the program using one of these key methods. We identified 569 potential off-target sites in the genome to evaluate for guide-dependent off-target activity, where the Prime Editor might be predicted to cause a

To evaluate off-target effects independent of the pegRNA or ngRNA sequences, we Prime Edit stem cells, and then expand populations of single cell clones, or cells that are genetically identical. From this large pool, we have the ability to evaluate very low frequency events, such as rare off-target edits, using unbiased methods. Each clone undergoes whole genome sequencing and is compared to appropriate controls, which allows evaluation of locations that are not predicted from the pegRNA sequence or genomic location.

Using this same type of approach, we also are employing a combination of methods to look for genomic rearrangements, including targeted or random rearrangements, using whole genome sequencing of clonally expanded Prime Edited stem cells.

Due to the breadth of potential therapeutic indications that can be served by Prime Editing, we are developing broad manufacturing capabilities and know-how needed to support the rapid advancement of parallel programs into clinical studies. We are investing in building a strong technical development and operations team with extensive Chemistry, Manufacturing and Controls or CMC experience providing a good line of sight to BLA and commercialization. This gives us the ability to develop the manufacturing processes and analytical controls needed to produce reliable and high-quality Prime Editing drug products focusing on the most critical CMC activities early.

Early and strategic CMC investment is critical for cell and gene therapy success. We have 3 key strategies that guide our early CMC investments described in the figure below.

Early CMC investment in areas such as identifying critical manufacturing process parameters and developing functional potency assays help to provide deep process and product knowledge that is crucial for facilitating tech transfer, troubleshooting manufacturing and supporting future regulatory comparability strategies. New manufacturing technologies may be incorporated to improve scalability, reliability, and cost of goods of the manufacturing process in the future. We are also employing automation, data management, and machine learning that will be important for gaining the insights needed to optimize and ensure reliable control of our manufacturing processes, as well as for supporting justification of specifications needed for product regulatory approvals. Collaboration and relationship building with external contract manufacturers and partners are underway.

For mRNA production, our efforts are focused on designing mRNA modifications to improve stability, half-life and expression, developing robust purification steps, and evaluating new technologies aimed at speed, purity, and reduced cost.

We have been focused on developing the manufacturing processes both internally and partnering with suppliers to ensure the quality of the Prime Editor components needed for preclinical studies, and IND submission. In the figure below, the high purity of our pegRNA is shown by high performance liquid chromatography, or HPLC. On the right panel, the electropherogram similarly shows the high purity of the mRNA that has been produced. We

We will continue to leverage the significant advances and progress that are being made in the field of manufacturing sciences and analytical controls of genetic medicines and therapies, while focusing specifically on the application and optimization of those technologies for Prime Editing. In addition, our collaboration with Beam allows us access to specified know-how, methods, and intellectual property in certain fields that we believe will be useful to these activities.

Our overall strategy is to design manufacturing platforms to make the Prime Editing components and associated delivery systems with high throughput, high quality and purity, modularity, and scalability. Manufacturing platforms will provide the framework for rapidly developing Prime Editors for subsequent new target indications. Modularity refers to a collection of components which can be rapidly recombined for the construction of a new product candidate. For example, we believe that once a Prime Editor is established, a new drug product candidate may only require the relevant pegRNA and ngRNA (or encoded for AAV) to be replaced. Similarly, we believe that the pegRNA and ngRNA will be able to be produced with modularity.

We intend to collaborate seamlessly with various strategic partners to license their technologies and leverage their capabilities and expertise. We intend to establish strategic partnerships with contract manufacturing organizations with established Good Manufacturing Practice, or GMP, manufacturing capabilities and relevant manufacturing experience in genetic medicines, and where we will bring our Prime Editing process and product knowledge and technical expertise. Over the longer term, we may decide to build our own manufacturing facilities, especially for critical Prime Editing components where we may decide to leverage our core capabilities in process and product characterization.

We believe that Prime Editing has transformative potential that could change the course of how disease is treated. To maximize the potential of Prime Editing to provide one-time curative therapies to the broadest set of diseases possible, we have purposefully built a diversified portfolio organized around four strategic indication categories, each set of indications chosen to deliver a different strategic goal. We have constructed our portfolio of 18 programs, including one partnered program, across our strategic indication categories in disease settings where the unique characteristics of Prime Editing could offer compelling advantages over current standard-of-care and novel therapeutic modalities in development.

Our immediate target indications were chosen as potentially the fastest, most direct paths to demonstrate technological success of Prime Editing in humans. We prioritized and advanced programs in this strategic category

Our differentiation target indications are focused on areas where Prime Editing can potentially overcome limitations of other gene therapies and editing approaches, with the ability to do precise and much more diverse, targeted edits, in a broader array of organs, tissues and types of cells. We also focus on areas where our technology has a special impact on a category of genetic diseases, such as the ability to loop out unwanted repeat sequences. While several potential indications in this category also rely on validated delivery methods, some of our longer-term targets may require novel delivery development.

Programs in this category include:

We have initiated four preclinical programs for repeat expansion diseases, including Friedreich’s Ataxia, Myotonic Dystrophy type 1, Amyotrophic Lateral Sclerosis and Fuch’s Endothelial Corneal Dystrophy. In addition we have programs in three undisclosed repeat expansion disease indications, and two additional undisclosed differentiation target indication programs in earlier stages of development. We believe these programs have the potential to address difficult and complex diseases of great unmet medical need, which are often not accessible to other forms of gene editing approaches.

Our “blue sky” target indications category pushes new and innovative technological developments in Prime Editing to extend its application outside of rare genetic diseases and towards our goal of broadly addressing human disease. We have already conducted a process of enhancements, some of which are being implemented in potential new programs, and we are committed to continue to push the frontier of innovation in genomic medicines by

While these programs remain in the early stages of conception, we expect this category to become an increasing focus for our company over the next few years.

As part of our commitment to patients, we envision a truly personalized medicine approach in which we can treat every individual patient with a given disease by "marching up a chromosome," correcting each individual mutation in a gene. Because Prime Editing can search and replace, by simply swapping out the pegRNA while keeping other elements of a program the same, such as clinical trial design and manufacturing, we believe we will be able to march from mutation to mutation, or from hotspot to hotspot, along a single gene, and eventually treat every individual patient with a specific disease, not just the few with the most prevalent mutations.

This effort will require a multi-year, multi-step strategic approach to identify a limited set of data to support registration across the set of mutations within a gene. This category can overlap with other strategic indication categories, where we are designing each of our previously-described strategic indications with this approach in mind. As such, most of our disclosed indications have a plan that can accommodate expansion opportunities to address additional mutations in that disease.

Our current portfolio is focused primarily on the first two strategic indication categories, and includes the following 18 programs, including the Sickle Cell Disease program which is partnered with Beam.

Chronic granulomatous disease, or CGD, is a rare inherited hematologic disorder that results in a failure of immune defense against extracellular pathogens. In CGD patients, myeloid cells lack a functional NADPH oxidase, or NOX2, complex, which renders patients susceptible to prolonged and recurrent bacterial and fungal infections and inflammatory complications. NOX2 is only produced by certain types of bone marrow-derived myeloid cells. CGD causative mutations occur in approximately one in 200,000 births in the United States, and most children are

For individuals with an HLA-matched donor, an allogenic CD34+ hematopoietic stem cell transplant, or HSCT, may provide a possible cure, but the three-year event-free survival rate for patients that receive HSCT may be as low as 70 percent and patients often experience many frequent, debilitating complications, such as graft versus host disease. Many patients are not able to find a suitable donor for the hematopoietic stem cells and, without transplantation, 50 percent of patients will die by the fourth decade of life. Antibiotics also provide important supportive care.

We have identified a series of Prime Editor complexes that demonstrate approximately 55 percent precise correction at the NCF gene copies in the target cells, or human primary HSCs, as shown in the figure on the left side. Following cloning of myeloid-differentiated clones after 14 days, in this study, clonal analysis showed that nearly 90 percent of clones had received at least one precise corrective edit to ΔGT, as shown in the figure on the right side

The same Prime Edited myeloid cells were tested for a normally functioning NOX2 protein complex by the ability of NOX2 to produce oxygen radicals (oxidase activity), the key functional activity that is missing in patients. As shown in the figure below, approximately 80% of the Prime Edited patient cells had fully restored normal NOX2 oxidase activity (right panel). This NOX2 assay measures directly the functional defect that causes the disease is used to diagnose patients with CGD, and we anticipate using this assay in the clinical trial for diagnostic as well as clinical efficacy evaluation. The results support that the genetic correction of the gene has the desired effect of restoring production of the missing protein and restoring the function of the missing protein complex.

The figure below outlines an experiment in rodents that demonstrates, we believe, the potential feasibility of a similar approach for CGD patients in clinical trials.

As shown in the figure, edited cells were shown to have long term duration with no decrease in the percent of precisely edited cells. This is a critical proof-of-concept that Prime Edited HSC cells successfully can engraft, and once engrafted, permanently populate the bone marrow. We believe these results greatly increase the probability of success of any HSC-based Prime Editing clinical indication.

Based on these results, we will select a development candidate from a selection of leading Prime Editors for this program and initiate IND-enabling studies. In addition, we will also evaluate alternative approaches to delivery, and have begun developing Prime Editors targeted to CYBB mutational hotspots or replace the whole CYBB gene using Prime Editing with recombinase approach known as PASSIGE.

We are partnering with Beam on the preclinical efforts related to the Prime-Edited Sickle Cell Disease, a program which they have licensed from us. Some of the results from these efforts provide important proof-of-concept for key aspects of our Prime Editing technology, which is the focus of the description below.

Sickle cell disease, or SCD, is a serious inherited autosomal recessive blood disorder caused by a single point mutation in the beta globin gene HBB at the sixth amino acid. The mutant protein is also known as hemoglobin S, or HbS. The mutation causes the beta globin protein to aggregate in long rigid biomolecules that bend red blood cells into a sickle shape when oxygen concentrations are low. The sickled red blood cells obstruct small blood vessels and have a shortened life span. This results in anemia, severe pain crises, tissue infarctions, local and systemic infections, stroke, and premature death. SCD is the most common inherited blood disorder in the United States affecting approximately 100,000 individuals. Current therapeutics are very limited.

To achieve proof-of-concept and demonstrate precision editing and safety in primary HSCs, we have screened pegRNAs and ngRNAs to identify guides and guide pairs that have high activity and perform precise editing at the HBB locus. We have created an SCD model using readily available healthy donor mobilized CD34+ HSCs to install the HBB E6V mutation, thereby creating the SCD mutation and phenotype and acting as a surrogate for Prime Editing at that unique location in the gene. As noted in the below, these Prime Editors have demonstrated approximately 60 percent precise edits at the HBB locus (left), and when differentiated into red blood cells, under various conditions, they retain the approximately 60 percent editing (middle), and contain more than 50 percent of hemoglobin as HbS, showing we have created the phenotype of SCD.

Importantly, the Prime-Edited SCD program demonstrated long-term and high-level engraftment of the edited HSCs in bone marrow. The figure below outlines an experiment in rodents that represents the approach planned for humans:

As shown in the figure, edited cells were shown to have long term duration with no decrease in the percent of precisely edited cells. This is a critical proof-of-concept that Prime Edited HSC cells can successfully engraft, and once engrafted, permanently populate the bone marrow. We believe these results greatly increase the probability of success of any HSC-based Prime Editing clinical indication, such as CGD described above.

Fanconi anemia, or FA, is a rare and life-threatening DNA repair disorder that arises from loss-of-function mutations in any of 23 genes whose protein products are involved in the Fanconi Anemia/Breast Cancer DNA repair pathway. The FA core complex comprises 10 individual proteins. Almost all cases of FA result from inactivation of FA genes on both chromosomes. The protein products of FA genes form the Fanconi complex, which responds to and repairs DNA breaks that occur naturally during cellular replication or in response to radiation or DNA crosslinking agents. Clinical presentation includes congenital anomalies, loss of many types of blood cells and progressive bone marrow failure, as well as a predisposition to cancers such as leukemia and head and neck cancers. The majority of FA patients show serious disease within the first decade of life.

Allogeneic hematopoietic stem cell transplant, or allo-HSCT, is currently considered the standard of care for FA and can result in hematologic correction of the disorder. However, HSCT is associated with both acute and long-term risks, including transplant-related mortality, graft versus host disease as well as increased risk of subsequent cancers. Additionally, the sensitivity of FA patient cells to DNA damage complicates allo-HSCT because of the reliance on alkylating agents and radiation for pre-transplant conditioning. Median survival for all FA patients, despite standard of care, is 24 years.

Our preliminary screening process has identified Prime Editors that achieve approximately 40 percent precise editing in preclinical studies.

Our initial Prime Editors have not yet been optimized for FA, nor have they been tested with enhancements such as ngRNAs. We intend to continue to optimize these Prime Editors to improve the efficiency of the edits. In addition, Prime Editors targeted at the second predominant mutation within the FANCC and the FANCA genes are currently under evaluation. Ultimately, we intend to develop Prime Editors to address all known mutations in FA across the three genes.

We plan to add additional hematology-related indications to our pipeline. In addition to establishing the indications above, the experience and methods developed with Prime Editing should enable our ability to advance other hematology programs. This highlights the versatility and modularity of our platform that potentially enables the rapid creation of new product candidates by merely replacing the pegRNA and ngRNA components.

Wilson’s disease, or WD, is a devastating rare disease of the liver, with manifestations throughout the body, that is caused by copper accumulation. Most people are diagnosed with WD between ages five and 35 years and with reported prevalence rates ranging between 1/10000 and 1/30000, it is expected to affect upwards of 35,000 to 100,000 patients in the United States and Europe. It is also understood that there may be significant under-diagnosis of WD, which could increase the prevalence substantially.

Normally, excessive copper is excreted through the liver as bile. For patients with WD, copper is not eliminated correctly and accumulates to toxic levels. While the key site of pathology is the liver, and many patients present with liver disease, patients often show persistent neurological problems including involuntary movements, tremor, gait disturbance, and kidney, hematological or psychiatric problems.

WD is caused by mutations in both genomic copies of the ATP7B gene, which encodes a copper transporter that removes excess copper. Two predominant mutations have been described in WD:

Both of these mutations lie adjacent to hotspots or areas with other pathogenic mutations, for which we are currently designing Prime Editors.

Genotyping of ATP7B is not routinely performed during diagnosis and is used to confirm the symptomatic diagnosis when necessary.

There are no therapies that target the underlying cause of WD. Current therapy includes removal of copper from the body using copper chelators d-penicillamine and Trientine and prevention of dietary absorption of copper in the intestine using zinc. In five to 10 percent of the patients that present with severe or sudden onset, or fulminant, WD, liver transplantation is the primary treatment option. The disease is fatal if undiagnosed and/or untreated. Most patients improve on chelator therapies; nevertheless, a lack of compliance is associated with rapid progression to death, and treatments can include significant and intolerable side effects. Patients are eligible for liver transplant if they have fulminant liver failure or severe progressive liver cirrhosis. Successful transplant has a good response with many patients but requires life-long immunosuppression, and five-year patient survival after transplant has been reported to be 65 percent.

Our initial approach to Wilson’s disease is to correct the prevalent mutations ATP7B H1069Q and R778L in hepatocytes of the liver at their genomic location. A Prime Editor that corrects R778L will also correct R778W and R778G mutations, rarer mutations that are seen in the U.S. and Europe. We have performed pegRNA and ngRNA screens and identified guide combinations that correct the disease-causing point mutations. Correction of the gene in the liver should address all aspects of the disease by normalizing the process in which the body removes copper in the liver.

In a hepatocyte cell line with the human Wilson’s disease mutation, we have identified Prime Editors that demonstrate precise correction of H1069Q ATP7B in 77 percent of cells as shown in the figure below on the left.

This high level of precise editing in primary hepatocytes meets our threshold of 25-50 percent for predicted clinically relevant effects. To support this, we performed a copper toxicity challenge in liver cells that are normal and liver cells with a pathogenic H1069Q mutation with varying degrees of precise editing correction. As shown in the figure below, we observed a marked difference in cell survival in the presence of high levels of copper between healthy cells (WT; left bar) and liver cells with a pathogenic mutation that are unedited (0 percent; 2nd bar). The third and fourth bars show that with different degrees of precise correction, such as 14 percent and 55 percent, the ability of Prime Edited cells to survive copper toxicity returns towards normal levels the greater the level of correction.

Glycogen Storage Disease 1b, or GSD1b, is a rare, serious progressive disease affecting approximately 1,500 patients and caused by impaired glycogen metabolism. This autosomal recessive disease is caused by mutations in the glucose-6-phosphate transporter, G6PT also known as SLC37A4. Deficiencies in this transporter result in hypoglycemia or low blood glucose levels which can be fatal if patients do not adhere to a strict regimen of slow-release glucose including overnight feeding. Most patients experience symptoms within the first six months of life presenting with hypoglycemia, lactic acidosis or with a large liver. They also can manifest seizures and low white blood cell levels, resulting in recurrent bacterial infections and oral and intestinal mucosa ulceration. Many patients have liver tumors, which can progress to liver carcinoma. Multiple other serious manifestations can occur.

Current care focuses on nutritional therapy to avoid fasting hypoglycemia with small, frequent feedings high in complex carbohydrates, and limitation of fructose, sucrose, and lactose. There are no disease modifying therapies for patients with GSD1b. Others are developing genetic therapies for patients with a similar disease, GSD1a.

Our initial approach to treating patients with GSD1b is to apply Prime Editing via LNP delivery to hepatocytes in the liver to correct the two most prevalent mutations that cause the disease, which are located very close to each other in the gene. In Caucasian populations, these two predominant mutations together are found in 45 percent of patients. Based on prevalence data we estimate there are approximately 650 patients in the United States and 1,450 patients in Europe with GSD1b, and we estimate there are approximately 950 patients with these mutations. Heterozygote carriers have no disease and animal studies of GSD1b suggest that little as 11 percent of normal activity has the potential to restore normoglycemia.

As shown in the figure below, in our initial screening studies, we have identified Prime Editors that demonstrate editing of the first mutation with approximately 80 percent efficiency (left), before any optimization. Similarly, initial screening studies have identified Prime Editors that demonstrate editing of the second mutation with approximately 50 percent efficiency (right), also prior to optimization.

We are currently evaluating whether a single Prime Editor could correct both prevalent mutations (hotspot editing) since the mutations are only 26 base pairs separated in the gene. We are establishing patient-derived hepatocyte cultures to establish a genotype-phenotype biomarker response, and have established novel mouse models harboring the human gene. We will use LNP delivery technology that we have demonstrated to efficiently

Now that we have established the ability to deliver Prime Editors via LNPs to hepatocytes, we could potentially advance other Prime Editing liver programs to the clinic quickly. This highlights the versatility and modularity of our platform, which potentially enables the rapid creation of new product candidates by merely changing Prime Editing guide RNAs. In addition, in each of our liver indications, our “march up the chromosome” personalized medicine approach allows expansion opportunities into the larger set of pathological mutations that exist in patients with these debilitating diseases.

Retinitis pigmentosa, or RP, is a subset of related inherited retinal diseases, or IRDs, where disease progression is characterized by loss of night vision in childhood or early adulthood, followed by loss of peripheral vision in adulthood characterized by constricting visual field and eventual loss of central vision leading to blindness later in life. One of the most common IRDs is autosomal dominant RP, or adRP, caused by mutations in RHO which encodes the light sensitive Rhodopsin protein, or RhoP, expressed by rod photoreceptors of the retina. The disease is dominant, or manifests even with mutations to just one of the two gene copies in the genome, because mutant RhoP is toxic to rod photoreceptors, resulting in loss of function followed by rod death. Approximately six to seven thousand patients have adRP in the United States caused by RHO mutations. We are initially focused on one predominant mutation, P23H, which is highly prevalent in the United States and has been identified as causing disease in approximately 30 percent of all patients (approximately 2,000-2,500 patients). As we advance our portfolio, we believe that hotspots and other frequent mutations may also be suitable targets for Prime Editing.

There are currently no disease modifying therapies for the P23H form of RHO, and patients are currently managed by supportive care.

Our initial approach to adRP is to correct the RHO P23H mutation in rod photoreceptors of the retina at their natural genomic location. We believe a Prime Editor that corrects P23H will also correct rarer, nearby P23L and P23A mutations. We have performed pegRNA and ngRNA screens and identified guide combinations that correct the disease-causing P23H point mutation. Natural history studies suggest that correction of only 25 percent of rod photoreceptors would have an important clinical impact, because when 25 percent or more of rods are preserved, there is full preservation of cone photoreceptors that are critical to central vision.

We have identified Prime Editors that demonstrate approximately 65 percent precise correction of the RHO P23H mutant locus.

To deliver our Prime Editors to the eye, we are initially leveraging the tropism of AAV capsids that efficiently transfect the retina to deliver our Prime Editor as a transgene along with our pegRNA (and ngRNA, if necessary) to rod photoreceptors. Given our lead Prime Editor is larger than AAV packaging capacity, we are using a split AAV system that delivers the Prime Editor with two AAV vectors. Once inside the rod photoreceptor, the two halves of the Prime Editor protein are recombined to create a functional Prime Editor protein.

We are currently conducting preclinical studies to confirm that Prime Editing of P23H will correct healthy donor human retinal explants. We also plan to evaluate our approach in non-human primate studies where the Prime Editors will be delivered by subretinal injections to mimic the anticipated route of administration in the clinic. In parallel, we are generating patient-stem cell derived human retinal organoids to evaluate Prime Editor potency in addressing the phenotypic changes in Rhodopsin localization and rod photoreceptor function. Finally, we have also generated new mouse models that have introduced the human RHO gene, replacing the mouse RHO gene.

While we are advancing the RHO P23H program, we are also identifying Prime Editors that can correct other prevalent mutations and hotspots in the RHO adRP gene as part of our “march up the chromosome” approach.

RP can also be caused by mutations in other genes different from RHO. Mutations in USH2A encoding the very large Usherin protein account for approximately 20 percent of autosomal recessive RP cases and can result in Usher syndrome. Approximately 14,300 patients in the United States have RP due to mutations in USH2A. While patients with various forms of RP present generally as described for RHO above, each type of RP has differences. In the case of Usher syndrome, patients present with ocular disease given normal usherin is involved in the regulation of protein transport in photoreceptors. Patients also present with severe hearing loss and potential vestibular defects, given normal usherin is involved in the maintenance of hair bundle formation during inner ear development in the inner ear.

In photoreceptors, usherin is involved in the regulation of protein transport, and in the inner ear, usherin is involved in the maintenance of hair bundle formation during inner ear development. The USH2A 2299delG mutation is the most prevalent mutation in the USH2A gene, accounting for approximately 16 to 44 percent of all USH2A mutant alleles. A second predominant mutation USH2A C759F accounts for approximately 15 percent of all

There are currently no treatments available for USH2A RP, or Usher syndrome. However, hearing aids or cochlear impanation can be used to support hearing loss.

Our Approach and Results: Directly correct prevalent mutations in the USH2A gene in photoreceptors of the retina.

Our initial approach to USH2A RP is to correct the USH2A 2299delG mutation in rod and cone photoreceptors of the retina at their genomic location. We have performed pegRNA and ngRNA screens and identified guide combinations that correct the disease-causing nucleotide deletion. As shown in the figure below, through our initial screening approach, we have identified Prime Editors that demonstrate approximately 54 percent precise correction of the USH2A 2299delG mutation. Like with adRP, many of the selected pegRNAs are able to install a silent mutation (which does not affect the amino acid code) to disrupt the target site, which prevents further editing once successful corrective editing has occurred.

Our approach for USH2A is similar to our approach for adRP. While we are advancing the USH2A 2299delG project, as part of our “march up the chromosome” effort, we are identifying Prime Editors designed to correct other prevalent mutations and hotspots in the USH2A gene.

We plan to add additional eye-related indications to our pipeline. Once we have established delivery to the retina of a Prime Editor through AAV delivery, there are numerous other retinal diseases where our editing technologies could be applied. By merely changing the pegRNA and ngRNA sequences, we may be able to rapidly create new product candidates using the same AAV production and delivery approaches pioneered in these retinitis pigmentosa programs.

Genetic hearing loss consists of a group of diseases with high unmet need, despite the availability of current therapies. These diseases result in learning difficulties, behavioral problems and social isolation. We estimate that there are approximately 6,000 new cases each year in the United States alone, and approximately 470,000 individuals in the United States with genetic deafness. These diseases are all caused by mutations in proteins that are expressed by specialized cells of the inner ear or cochlea. Although mutations in many different genes have been identified, mutations in a small number of genes cause hearing loss in the majority of patients. Many of these mutated genes have prevalent or closely-clustered mutations. Similar to our other immediate indications, well-characterized delivery methods are established for delivery of genetic therapies to the inner ear and can be applied to Prime Editing. Methods to objectively measure changes in appreciation of sound may facilitate early detection of benefit for patients. Our initial approach is to correct prevalent mutations in genes causing progressive hearing loss, targeting delivery to the cells of the inner ear where those proteins are expressed. We are currently performing screens to identify Prime Editors that precisely correct prevalent mutations in several genes that cause hearing loss.

We have two initial hearing loss programs.

Usher’s syndrome type III, or USH3, is characterized by progressive post-lingual hearing loss, variable vestibular dysfunction, as well as adolescent-onset progressive vision loss due to retinitis pigmentosa. The hearing loss is progressive during childhood years, resulting in complete deafness in adolescents or early adults, learning difficulties, behavioral difficulties, and social isolation. Usher syndrome is found in 4 to 17 per 100,000 children.

USH3 is inherited recessively and caused by mutations in the Clarin 1 protein encoded by the CLRN1 gene. Clarin 1 is produced in inner and outer hair cells of the inner ear and, to a lesser extent, by the spiral ganglion cells, where it plays an important function in the maintenance of structures of the hair cells. In certain populations USH3 accounts for 40 to 50 percent of all Usher patients. N48K is a mutation commonly found in patients of Ashkenazi Jewish descent, whereas S50fs is commonly found in those descended from Northern Europeans and Y176X is commonly found in individuals of Finnish descent.

There are no disease modifying therapies for these patients. Hearing aids and speech therapy provide support. Cochlear implants have offered limited benefit to patients, likely because the disease usually manifests post-lingually.

Our initial approach to treating patients with USH3 is to apply Prime Editing via dual AAV delivery to hair cells in the organ of Corti in the cochlea or the inner ear to correct the most prevalent mutations that cause the disease, N48K and S50fs.

As shown in the figure below, following optimization from our initial screening studies, we have identified Prime Editors that demonstrate precise correction of the N48K mutation with more than 90% efficiency. We are currently exploring similar Prime Editors to correct the neighboring S50fs mutation.

To deliver our Prime Editors directly to the cochlea by local injection, we are initially leveraging the tropism of AAV capsids that efficiently transduce the supporting cells and hair cells to deliver our Prime Editor as a transgene along with our pegRNA. Similar to the retinal programs, we will initially use a dual AAV approach to deliver both the Prime Editor protein and pegRNA.

We are currently building preclinical assays using patient stem cells differentiated into hair cells to confirm that Prime Editing of N48K will correct Clarin 1 expression and hair cell function. In parallel we are developing assays to optimize delivery of Prime Editors to the cochlea.

Two thirds of genetic hearing loss is non-syndromic and is inherited recessively. The GJB2 gene, which encodes the connexin 26 protein, is expressed by supporting cells of the cochlea and contributes to the normal production of endolymph in the cochlea. GJB2 is the most commonly-mutated gene in non-syndromic hearing loss, found in 1:2,000 live births and accounting for approximately 1,875 newly diagnosed patients each year in the United States and similar number in Europe, with a very common mutation, c.35delG, found on average in 57% of these patients. Additional mutations are found in patients of Asian (c.235delC, V37I), Indian/European (W24X) and Ashkenazi Jewish descent (c.167delG). Since the widespread adoption of newborn and pre-school hearing screening for early diagnosis, many patients are diagnosed with abnormal but preserved hearing and show progressive disease. Because the disease can lead to profound hearing loss (complete deafness) in the first few years of life, patients suffer learning difficulties, speech difficulties, social isolation and behavioral problems.

There are no disease modifying therapies. Current therapies include hearing aids, cochlear implants and speech and language therapies. These approaches do not treat the cause of disease, with limited but important benefits. In particular, cochlear implants provide a partial restoration of sound but require extensive speech and language retraining with variable outcomes. Moreover, implants require permanent wearing of large external devices.

Our initial screens are to find Prime Editors to precisely correct c.35delG. After identifying preliminary Prime Editors that show installation of the c.35delG mutation with good levels of efficiency, we are currently screening for Prime Editors to precisely correct this mutation.

We will leverage the work from our USH3 program to deliver Prime Editors to the cochlea with a focus on targeting support cells.

We are currently building preclinical assays using patient stem cells differentiated into inner ear cells to confirm that Prime Editing of c.35delG will correct GJB2 expression and connexin 26 function.

We plan to add additional hearing loss-related indications to our pipeline. Once we have established delivery to the cochlea of a Prime Editor through AAV delivery, we believe there are many other hearing loss diseases where our editing technologies could be applied. By merely changing the pegRNA and ngRNA sequences, we may be able to rapidly create new product candidates using the same AAV production and delivery approaches pioneered in these initial hearing loss indications.

Repeat Expansion Diseases, or REDs, are a collection of more than 50 progressive diseases, mainly affecting the CNS and musculoskeletal system. These diseases are all caused by mutations that are an expansion of repeat DNA sequences, often triplets of nucleotides, found in the normal genome. We believe these repeats can potentially be exponentially expanded from typically approximately five to 15 repeats in normal tissues to up to many thousands of repeats in diseased tissues. The repeats are found within parts of the coding region of genes, called exons; in non-coding regions of a gene between exons, called introns; and in non-coding regions of the gene, either at the beginning or end of a gene, that are not translated in RNA, called untranslated regions, or UTRs. In addition, sometimes REDs are described by the size of the expansion, ranging from short and medium repeats (often less than

In certain repeat expansion diseases, the repeats often cause a pathological gain-of-function, or a new deleterious impact, and are inherited dominantly. In other settings, the disease is inherited recessively. Prime Editing enables us to fix the underlying and fundamental causes of these diseases by precisely and completely removing the repeat expansion copies from the DNA, potentially replacing them with the normal, usually small number of healthy repeats, or possibly removing any repeats from the gene.

Our initial approach is to establish the utility and breadth of Prime Editing technology by precisely removing repeat sequences in the pathological target tissues. In settings where the repeats are in an exon, Prime Editing may be applied to remove the repeat and replace the repeat with the healthy coding sequence precisely. In other settings, such as repeats in introns, we have more flexibility to our approach.

To build the foundation for the potential correction of all 50 or more repeat expansion diseases, which would address a huge unmet medical need, we are evaluating many different types of these diseases to understand where Prime Editing can be efficient. For our initial studies, we broadly selected diseases of high unmet need with a path to deliver the Prime Editor to target tissues. We are studying repeats within exons, introns and the UTR regions, as well as diseases with small-to-medium and medium-to-very large numbers of expansion repeats. In each individual indication, beyond exploring the potential for Prime Editing to perform these precise corrections or completely remove the pathological repeats, we are also evaluating whether genetic correction will result in phenotypic or biochemical results consistent with a clinical improvement.

We have focused on REDs since inception of our initial preclinical program efforts. Independently published proof-of-concept of this idea was demonstrated in a repeat expansion disease called Fragile X syndrome, providing corroboration of the potential of this approach. More than 50 repeat expansion diseases are known to be pathogenic, and we believe our broad approach supports that most, if not all, of the diseases may be amenable to Prime Editing corrections of the target DNA, thereby potentially halting, preventing, or even curing such diseases.

In summary we have achieved predicted therapeutically relevant Prime Editing in almost all repeat expansion disease programs. The figure below shows the levels of editing achieved for each of the programs and current activity stage of these programs in our drug discovery work-flows.

Friedreich’s Ataxia, or FRDA, is a multisystem, autosomal recessive neurodegenerative disorder affecting the central and peripheral nervous system as well as the heart and other organs. FRDA significantly reduces survival for patients, with the mean age of death being 39 years. FRDA is characterized by progressive ataxia, or lack of muscle control or coordination of voluntary movements, with mean age at onset of approximately five to 16 years. A vast majority of patients progress to loss of unsupported sitting within two years and loss of ambulation on average 10 to 15 years from diagnosis. In addition, patients develop cardiomyopathy, or heart failure or dysfunction, which is the most common cause of premature death. In the United States, it is estimated that around 4,000 individuals are affected by FRDA, while there are estimated to be 15,000 to 94,000 patients globally.

There is no approved disease-modifying therapy, and current clinical management guidelines mainly focus on symptom management.

Our Prime Editing technology enables us to precisely remove the expanded repeat sequences that cause FRDA. Using the dual-flap technology with a Prime Editor targeted both upstream, or before the GAA pathological repeats, and downstream, or after the repeats, our goal is to precisely remove the repeat sequence from intron 1 of the FXN gene to restore normal FXN regulation and normal expression of frataxin; the approach is shown in the figure below. Removal of repeats from FXN in the myocardium is also highly desirable to prevent cardiomyopathy and reduce

We have performed screens to identify the pegRNA pairs that achieve highly efficient and precise removal of the expanded repeats. We have demonstrated removal of pathological repeats from healthy donors, who have only a short length of repeats. We show up to 77 percent precise editing which results in the total removal of the pathogenic repeat region, without errors, as shown in the figure below on the left, where each dot represents an individual candidate Prime Editor. In addition, the figure on the right shows approximately 66 percent precise editing in FRDA patient-derived induced Pluripotent Stem Cells, or iPSCs, which contain larger numbers of pathological repeats, numbering from 420 to 541 nucleotide triplet repeats. In later, preliminary experiments, some of our Prime Editors have achieved greater than 80 percent precise editing out of the pathogenic repeat region. Remarkably, the total length of sequence precisely removed can be more than 7,000 nucleotides, or seven kilobase, using dual-flap Prime Editing.

Our initial experiments are encouraging. In our models in donor- and patient-derived iPSCs we measure the amount of frataxin expression in both FRDA patient cells, as well as cells derived from healthy donors. As expected, and as shown in first panel of the figure below, we show that patient cells have low levels of frataxin (control; left bar), and healthy donor cells (both control and edited; right bars) have high levels of frataxin. When we Prime Edit the FRDA patient cells in this model, as indicated by the arrow, each of five individual Prime Editors, in association with high levels of precise correction, restore levels of frataxin towards that seen in healthy donor cells. As each data point, or dot, represents a different Prime Editor, our best candidate from this experiment can restore frataxin levels to approximately 80 percent of normal levels, which exceeds the 30 percent-of-normal threshold predicted to provide a potential clinical benefit to patients.

The objective of precisely removing expanded repeats from the FXN gene with Prime Editing is to restore normal expression of frataxin mRNA and protein. To test the effect of Prime Editors on frataxin expression, we edited patient cells with different Prime Editors and, as shown in the figure below, left panel. In addition, we have established a tight correlation between the efficiency of editing among different Prime Editors and the restoration of

The results below, right panel, demonstrate that when we isolated and cloned cells, so that the whole cell population had precise correction of the unwanted repeats, frataxin levels returned completely to normal without over expression.

Since we can correct the gene defect at the physiological site in the genome, an important element is to evaluate all different forms, or isoforms, of frataxin to determine if all potentially important mRNA messages from this gene are restored. We were able to demonstrate the key frataxin isoforms were restored in this experiment, providing confidence that we believe supports that this approach may potentially be able to provide a genetic cure by Prime Editing to patients with Friedreich’s Ataxia.

One of the hallmarks of Friedreich’s Ataxia is the degeneration of the dorsal root ganglia, or DRGs. These structures of the central nervous system contain sensory neurons transmitting information to the brain cortex. To evaluate the effect of Prime Editing on the ability of DRG sensory neurons to grow and function, we have developed DRG organoids derived from patient stem cells, a model for growth of the sensory nervous system. These DRGs are multicellular 3D structures and model the growth of a patient DRG. In the figure below, unedited patient DRG organoids (Patient) produce many fewer axons, shown as green fibers, than healthy donor organoids (Healthy Donor).

We next edited patient DRG organoids with one of our FXN Prime Editors. When we correct 100% of the copies of FXN gene there is complete restoration of the sensory axon growth from the patient DRGs (Patient 100% Corrected). Even, when we correct 50% of the copies of the FXN gene there is also complete restoration of the

Myotonic Dystrophy type I, or DM1, is a common autosomal dominant muscular dystrophy among people of European ancestry and is principally a muscle disease affecting skeletal and cardiac muscle with multisystem manifestations. Patients often initially present with muscle weakness. Recent newborn screening studies indicate that the true prevalence of DM1 is 1:2,100 (approximately 140,000 patients in the United States). Patients can be clinically divided into three groups: congenital DM1; childhood/juvenile DM1, and adult-onset DM1. Congenital DM1, where patients typically have more than 800 repeats, often occurs from asymptomatic parents and presents at birth with severe weakness, hyporeflexia, or lack of reflexes, and respiratory insufficiency, and has a 40 percent mortality, with cardiac conduction abnormalities accounting for approximately 70 percent of that mortality. Survivors have distal weakness, cognitive impairment, and neuropsychological disorders. Childhood/juvenile DM1 is more similar to adult disease presenting at ages of five to 15 years with developmental delays and speech and

Current therapy includes supportive care to manage symptoms, though many experimental approaches are under consideration.

Our dual-flap Prime Editing technology enables the removal of the expanded repeat sequences that cause disease. Our goal in DM1 is to leverage our Prime Editing technology to precisely remove the repeat sequence from the UTR region of the DMPK gene, to restore DMPK regulation and expression of DMPK protein back to normal levels. The primary target tissues are cardiac and skeletal muscle, which we believe could have a transformative effect on patients; CNS is an important secondary target tissue.

We have performed screens to identify pegRNA pairs that achieve highly efficient and precise removal of the expanded repeats and have demonstrated precise removal of pathological repeats from the DMPK gene. In the example provided in the figure on the left below, we have established precise removal of the smaller number of repeats in healthy cell lines with more than 80 percent efficiency. In a second set of experiments as shown in the figure on the right, in patient derived iPSCs, which contain approximately 1,600 pathological repeats, we have demonstrated precise removal of repeats, with our best Prime Editors achieving more than 90 percent precise editing and removal of the pathological repeats. These data are also shown in the figure on the right, with each dot representing the data of a different individual Prime Editor.

DM1 is primarily a disease of muscle. A key target tissue is the cardiac muscle, or myocardium of the heart comprising cardiomyocytes, a terminally differentiated cell-type. We developed systems to generate terminally differentiated and functioning cardiomyocytes from patient cells that rhythmically contract and relax, or beat. This patient tissue can be used to test our ability to achieve high efficiency of Prime Editing in these cells and to test the